The Market There are 4 Companies in the market engaged in the manufacture of Cold Drinks.

There product line are similar the details of which are given below: Cool Cool is high end product, which serves only the niche market. Its manufacturing cost is Rs.1000 per unit (10 /pack). The demand for this product is stable and this product is made only for the export market. It has a very good reputation in the market because of its quality. The best among the lot. Refreshers Refresher is a premium product and has a steady demand. The manufacturing cost is Rs.850 per unit (10/pack). The product is made both for the export as well as the domestic market. Has a good reputation, as the quality of the product is always consistent. Tango Tango is made purely for the domestic market. Its manufacturing cost is Rs.550 per unit (10/pack). The quality of the product is not as good as lion or dog but is consistent. This product serves the organized sector therefore the demand is known and steady. Punch Punch is a product whose quality is not that great but the manufacturing cost is very less which is Rs.350 per unit (10/pack). It servers the unorganized sector in the domestic market where the demand is huge but unstable.

Instructions You are required to make a 4 groups and decide a name for the company which is unique Each group member will decide their role in the company, eg: CEO, COO etc. There will be 4 Quarters and in each Quarter the scenario will be different, which depends upon the market conditions. Each company has a manufacturing capacity of 10,000 units Each company is required to choose 3 products that they can manufacture in which you can manufacture not more than 5000 units in each product line.

Market Scenario

1. 1st Quarter: Market conditions are normal. Launch of new products in the market. Market demand is high. Market demand for cold drinks (ignoring existing drinks in the market) 40000 units. The Company, which launches the product, first gets the first mover advantage.

2.

2nd Quarter: There is a change in the market conditions. The government has increased the taxes therefore the manufacturing cost has increased by 25% in all products line. The inventory storage cost is Rs.100/unit. You can improve the quality of tango by investing Rs. 100000, the benefit of which you will get in the 3rd Quarter. 3rd Quarter: As the drinks enter the growth stage, the demand in the market increases from 40000 to 60000 therefore the companies can increase their manufacturing capacity by 3000 units. For every 1000 units increase in manufacturing capacity an investment of Rs.10,00,000 have to be made. Other things remain the same.

3.

4.

4th Quarter: The government has decreased the taxes on COOL and REFRESHER. Their manufacturing cost decreased by 20%. However, it was found out that Punch negatively affected the health of the consumers, the government has therefore scraped the product. Any company manufacturing or selling the product will have to pay a fine of Rs.10, 00,000.

1St Quarter

Products COOL Refreshers Tango Punch

Units Domestic Export ______ _______ _______ _______ ________ _______ ________ ______

Selling Price Domestic Export _________ _______ _________ _________ _________ _______ _______ _______

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2nd Quarter Products COOL Refreshers Tango ______________ Punch Inventory Product COOL Refreshers Tango ______________ Punch Units _____________ ______________ ______________ ______________ ______________ Inventory Cost ______________ ______________ Units Domestic Export _ ___________ ______________ ______________ ______________ ______________ Selling Price Domestic Export ______________ ______________

3rd Quarter Products COOL Refreshers Tango ______________ Punch Inventory Product COOL Refreshers Tango ______________ Punch Capacity Increase Product Units Investment 1._________________________________-___________________________ 2._____________________________________________________________ Units _____________ ______________ ______________ ______________ ______________ Inventory Cost ______________ ______________ Units Domestic Export _____________ ______________ ______________ ______________ ______________ Selling Price Domestic Export ______________ ______________

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