MARKET SELECTION AND FOREIGN ENTRY MODE/STRATEGY IMPLEMENTATION AND MONITORING

MARKET SELECTION AND FOREIGN ENTRY MODE
For your final SLP, pretend that an American corporation hired you to write a report on whether or not they should enter the country that you have been researching for your Modules 1-3 SLP assignments. You have already done a lot of research on many of the cultural, financial, legal, and political aspects of doing business in your country, which you can use as part of your overall recommendation. However, you also need to consider other factors, such as the potential size of the market that your country has to offer. If your country has very few consumers, then it will not be a wise decision to enter the country no matter how strong the legal or political system.

One resource to use for your report is Michigan State University’s Market Potential Index (http://globaledge.msu.edu/mpi/2014). This index focuses mostly on various aspects of the size or growth of the consumer market in each country, which should provide some valuable information in making your recommendation. But don’t rely just on this index. Do some additional research on factors that you think make your country an attractive or unattractive market for an American company and use some of de Kluyver’s (2012) guidelines on country selection as part of your paper.

When you have finished your research, write a 2- to 3-page paper with the following information:

What are the positive aspects of your country that would make it an attractive market for an American corporation? Consider all of the main factors that you researched regarding your country for Modules 1-3 plus additional research for Module 4 on market potential.
What are the negative aspects of your country that would make it an unattractive market for an American corporation? Consider all of the main factors that you researched regarding your country for Modules 1-3 plus additional research for Module 4 on market potential.
Overall, what is your recommendation for the American company that hired you to write this report? Do the positives outweigh the negatives? Or vice versa? Explain your reasoning.
SLP Assignment Expectations
Answer the assignment questions directly.
Stay focused on the precise assignment questions. Don’t go off on tangents or devote a lot of space to summarizing general background materials.
Make sure to use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the internet, make sure they are from credible sources.
Reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations.
MGT 499 SLP

STRATEGY IMPLEMENTATION AND MONITORING
The Module 4 SLP requires that you run a simulation entitled: “The Platform Wars: Simulating the Battle for Video Game Supremacy.” Visit the Forio site, and access the simulation here:

https://forio.com/simulate/mit/video-game/simulation/

Click on “Play as an individual.”

Enter your first name as the “Screen ID,” then click “Login.”

In this web-based simulation, you are a senior manager of a video game hardware platform producer. Each year, you have three decisions to make:

Determine the price of the video game console;
Determine the number of video games that your company will subsidize to enhance the development of new video games (and that can be played on your company’s video game console); be sure to note that the subsidy of each new game costs you $16.2M each year; and
Determine the royalty percentage you will require game makers to pay you (the higher the royalties, the more revenue you earn on new games, but the less inclined game makers are to develop new games).
At the start of the simulation, your market share is 50%. The price of your video game console is $250.00 (note that your competitor’s market share is 50%, but your competitor’s console price is $370.00 (hint: you are vastly underpriced to begin the simulation).

As the CEO, it is your task to make decisions one year at a time. As you do so, note how key data are changing, and take note of how your pricing, changes made to royalties, and new game subsidies change your profits and your market share. You may need to go through at least one practice run of the simulation in order to become familiar with it.

One way of becoming familiar with the simulation is to change only value, leaving the others constant. This will isolate the impact of one variable, and will give you a sense of how the change in a single variable impacts revenue, market share, etc. (use the Dashboard and the financial statements to determine this). For example, if I leave all variables unchanged in Year 1 (price = $240; Game titles to subsidize = 3, and Royalties = 15%), my market share becomes 69% at the end of Year 1 (and my net profit is $48.0M). In contrast, if I reduce the console price to $230, my market share becomes 71% at the end of Year 1 (and my net profit is $33.6M). Importantly, if I increase my console price to $330, my market share at the end of Year 1 is 58%; however, my net profit is $140.8M!

As the CEO, your task is to find the best combination of changes in the three variables that both increases your market share and earns a maximum net profit. Remember that the changes are relative; there are no right or wrong answers. Your goal is to use the knowledge you have acquired from previous courses (Accounting, Marketing, Finance, etc.), and allow the various statements and the Dashboard to guide you in your analysis, accumulating high market share and revenue. Be sure to take note of how the statements may be used to “control” your strategy! Remember that you need to cover your costs, while simultaneously turning a profit and increasing your market share.

SLP Assignment Expectations
As the CEO, you are asked to run the simulation a minimum of three (3) times, noting the changes made each year, as well as your final results. Then, write a 2- to 3-page memorandum to your Board of Directors, informing them of how changes in the variable (e.g., the price of the console; royalties paid by the game maker; and changes in the number of game titles subsidized) affect total market share, revenue per year, and net profit per year. Be creative, and include some tables and graphs in your written analysis to show your changes and/or results.

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