Threshold Competitor Simulation Paper

Group 6

Professor Hayes

GBus 180

Threshold Competitor Simulation Paper

Our initial strategy was to sell a lot of items at low prices like Wal-Mart. We were not initially sure if this strategy would work but it seemed very successful for Wal-Mart so we tried it at first. During our first quarter we attempted to use this strategy and it worked for the most part. We came in 2nd place with an income of -29,182. We weren’t sure as to why we were not that successful income wise. We figured that it must have been because of the loan. The initial loan was $100,000 from the bank. For some reason we were not able to get our income over the amount that we had to pay back to bank. It also seemed like in ever quarter we had to keep receiving this loan. We were not too sure as to why but it was putting us in the negatives. Thankfully for our team, we were not the only team that was in the negative; every other team had an income below zero.

For the second quarter, we decided to take away the loan that we initially had from the bank. We put the loan to zero and we also increased product one. We also put more money into television ads instead of newspaper. Our logic behind this was that most people in this day and age do not read the news paper so it would be more beneficial to spend our money on things that people would more likely see. The result of our group’s repaying of the loan was second place and we also scored an income above zero (one of two groups to do so). This seemed like a pretty successful strategy but we knew we would have to change it up eventually in order to stay competitive and in the lead.

For the third quarter, we slipped because we tried a riskier strategy. We decided to put less money into our resources and we also decided to decrease our workers. We decided to do this because we knew that if we continued to do business the way that we were it would eventually lead to being unsuccessful. We figured that if we kept a slow and steady pace...