Introduction
Our organization aims at delivering the services of the most exceptional quality to its end customers. The company produces and sells cameras to a wide range of customers in several regions, including Asia, Europe, and America. Even though the firm has been experiencing a steep rise in its performance over the past few years, due to the avoidance of a low-cost strategy as the means of retaining customers, DGo-Bro has witnessed a particular drop in its popularity and profit margins recently.
Therefore, a reconsideration of the existing approach to pricing, as well as other aspects of the firm’s functioning, including communication, production (mainly, waste management), and other issues, will have to be considered. Rebranding the product to make it appealing to a broader range of customers should also be viewed as an essential step toward making the organization more successful and encouraging consistent growth. The identified solution will lead to a steep rise in the company’s profit margins due to an array of opportunities that will open in front of it.
Observations
DGo-Bro has entered a range of markets in different states quite successfully and has been operating in them with a fairly impressive result. The company’s operating reports indicate that DGo-Bro has been experiencing rather steady progress up until the organization exhausted its financial resources, at which point the lack of a low-cost approach in managing its pricing issues became evident (Exhibit 1).
The current state of DGo-Bro’s performance, thus, leaves much to be desired due to the lack of a coherent approach toward managing the needs of its customers and appealing to a wider range of clients. Furthermore, opportunities for both customer and product diversification should be viewed as not only a possibility but also a necessity. Thus, the firm will be able to attract a more substantial number of buyers and make its product even more popular. For instance, making it more memorable by exploring the opportunities for a better quality-price correlation should be seen as important for DGo-Bro.
Analysis
As the current results show, the application of a low-cost strategy seems to be a mistake since it has led to a significant drop in the company’s profit margins. It is noteworthy that the company’s profit margins have shrunk over the past few months (particularly, the previous year was rather unfortunate for the organization given a rapid shift from approximately $600 per share to a much less impressive $500 per share).
Nevertheless, the organization’s EPS ratio has increased significantly from $3.48 to $9.31 (Exhibit 2). The specified phenomenon can be attributed to the introduction of a framework that contributes to the sustainability of the company. As a result, the opportunities for being ranked as second among its competitors have been created. With an overall score of 91 and the total G-T-D score of 94, the organization has been experiencing gradual growth, yet the current pricing approach is what keeps it at a comparatively low revenue level (Thompson, Peteraf, Gamble, & Strickland, 2018, p. 10).
Seeing that the company’s progress in different markets has been rather uneven, it is also desirable to establish a stronger presence in the environment where the firm has been feeling most comfortable. In other words, it is recommended that DGo-Bro should expand into the Asia-Pacific environment to ensure its further economic growth (Exhibit 3). As soon as the company gains enough attention in the identified setting and starts earning more significant revenue, expanding further into the European, African, and American markets can be viewed as a possibility. Therefore, the current approach toward marketing could use a certain improvement.
Suggestions
According to the recent changes in DGo-Bro’s business performance, the progress that the company has been making can be described as rather uneven. Although the general tendency seems to be comparatively positive, the lack of consistency in the changes of DGo-Bro’s market shares and profit margins indicates that the company needs to establish a more elaborate price segmentation framework.
Thus, opportunities for meeting the needs of different types of customers can be built. Moreover, the specified approach provides an opportunity to attract new buyers from backgrounds that are different from the initially targeted ones. For instance, with the introduction of a differentiated pricing framework, DGo-Bro will be able to offer its products to buyers with higher and lower incomes than the ones to the needs of which the company is currently catering.
Therefore, it is strongly suggested that a more elaborate approach toward pricing should be designed. Notably, an increase in the prices for the offered goods and services should be deemed as a necessity so that the company’s revenue streak could continue. The identified step may imply significant resistance among target customers unless appropriate measures are taken. For this reason, it is recommended to create a set of discounts for recurrent customers to not only maintain but also increase their loyalty.
Furthermore, the opportunities for reducing production costs should be viewed as a necessity. Given the lack of consistency in the sales rates, one must ensure that opportunities for using available resources, especially financial ones, reasonable and sustainable. It should be noted, though, that the drop in production costs should not affect the quality of the end product. In other words, purchasing cheaper materials should not be regarded as an option. Instead, DGo-Bro should consider redesigning its approach toward managing its resources. Mainly, the introduction of lean management standards should be viewed as a necessity. The identified technique will lead to a significant drop in the amount of waste produced, thus, leading to a considerable rise in the firm’s financial resources (Thompson et al., 2018, p. 275).
It should also be borne in mind that, to attract new customers, DGo-Bro will have to consider enhancing the quality of its product. Seeing that the firm offers technology-related items, it will be essential to retain relevance in the target market. Indeed, because of the rapid pace at which technological progress is currently taking place, adjusting to the ever-changing environment of the target market and ensuring the quality and relevance of products is crucial. Therefore, investing in R&D and promoting the search for possible improvements of the product should be viewed as a necessity. Accordingly, DGo-Bro will build the competitive advantage that will allow it to remain successful in its target markets (Thompson et al., 2018, p. 7).
Moreover, even though the present-day state of DGo-Bro’s performance can be seen as passable, slight changes in its market share and the success of its products in different markets show that the low-cost strategy mentioned above needs to be changed to attract a broader range of customers. As a result, new opportunities for attracting a wider range of buyers will be created.
Learning Experience
Considering things that I have learned, it is necessary to observe that our team had to operate virtually, communicating through the simulation website. It is one of the most challenging aspects because every member of the company has a set of particular responsibilities, which are to be implemented without delays and errors. In the virtual environment, it is considerably harder to communicate meaningfully and productively since people appear to be more detached from the process. However, this challenge has motivated me to develop a more work-oriented style of communication, which would be very useful in my future work environments.
Conclusion
It is strongly recommended that DGo-Bro should alter its current pricing strategy and switch to the use of the low-cost approach instead of setting prices high. Although the specified framework may work for some of the markets where luxury products are valued as an attribute of social status, the general tendency among customers to choose products that offer the same quality for lower prices is evident.
Therefore, it is reasonable to incorporate lower prices into the current approach toward managing financial issues at DGo-Bro. The specified change can be balanced out by offering customers additional options for higher prices, as well as providing long-time clients with discounts to keep retention rates high. Furthermore, the adoption of the principles of waste management and lean manufacturing must be deemed crucial (Thompson et al., 2018, p. 107).
The opportunities for restructuring the current financial approach should be regarded as a means of improving the firm’s operations. With the reconsideration of the pricing approach, changes for enhancing the production values and improving the quality of cameras can be obtained. Therefore, DGo-Bro will receive an opportunity to increase its revenue streak significantly. Thus, diversification of products and a more elaborate customer segmentation approach should be deemed as the steps that need to be taken to encourage the further growth of the organization.
Focusing on the needs of key stakeholders and allocating the available resources is what DGo-Bro currently needs to retain its competitive advantage. Also, the firm should seek ways to rebrand its product so that it could appeal to a wider range of customers. The resulting rise in the firm’s profit margins will help DGo-Bro succeed.
Reference
Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, A. J. (2018). Crafting and executing strategy (21st ed.). New York, NY: McGraw-Hill.
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