Computer Simulation of Business: Pinnacle Company

Subject: Management
Pages: 5
Words: 1387
Reading time:
5 min
Study level: College

The era of computerization and innovation is one of the main characteristics of the modern world. People got used to the fact that they are able to get information or communicate being in the most remote territories. The increase of the computers use propelled many companies to the idea of inventing the computer of small size. Having the same qualities and properties, small computers are more mobile and can be taken anywhere. Pinnacle Company is the one that specializes in development and production microcomputers. The main purpose of the paper is to consider the main points of the business plan and conduct a research whether the plan was followed and whether it was possible to implement all the items mentioned in the business plan; furthermore, the justification for the departures and the firm’s performance since the plan was presented are going to be discussed with the strong pointing to the long-term plan with stressing whether the company is ready to it or not.

A summary of the original plan

Pinnacle Company is the one that was founded in 2010. The main specialization of the company is the development and production of microcomputers. The company is run by 5 executive members who are responsible for all the processes that take place in the company. The mission of the company is to meet customers’ needs and desires in microcomputers of the highest quality paying attention to the changes that occur in the world. The company is oriented on the Workhorse, Traveler, and Mercedes markets. The Workhorse market is aimed at satisfying the needs and desires of the larger group of the customers who want to use microcomputers in office and do not pay too much for it. The other segment is the Mercedes. The customers on this market want the high quality equipment to use in manufacturing and engineering. There are three brands the company uses, Summit, Crown, and Zenith.

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Relating to the financial expectations and plans, the company is aimed as increasing in fixed capacity through quarter six, continuing R & D investment “in the next two quarters to enable 4 new features across 3 brands” and create “2 additional brick and mortar sales offices over the next 2 quarters” (Burns et al, Pinnacle MicroCom, 2010, p. 4). The planes of the company require additional investments and the Pinnacle counts on the outside investments as it is a stable company with strong market position, with $2.3 million in cash and $500K in savings. Offering the products all over the world, the company expands its market influence. The company is aimed at introducing a new brand named Zenith to the Travelers market. Thus, the company is developing and being rather young defines the goals both daring and still realistic.

Departures from the plan

Pinnacle managed to achieve a lot during the five quarters. The main items predicted at the business plan were reached, while there are a number of items that remained uncompleted. There are a number of reasons for it and each failure to reach the desired aim has its own reason. Turning to the departures of the pan, the end of the fifth quarter will be mostly analyzed as the main changes would have occurred till that time. Thus, the company wanted to open new offices in New York and in Tokyo by the end of the 5th quarter. The company failed to do it. One of the main reasons for this could be the reduction of the market share. Particularly, having captured 52% of the market share at the end of the 3rd quarter, the 4th quarter was not so successful and the company market share reduced to 37% by the end of it. During the 5th quarter, the company managed to retain 32% of the market share. Thus, there is no necessity to open new markets without reaching the desired market share. Even though, the market share of the company reduced in the percentage correlation, Pinnacle remained on the fourth place in this market segment (Burns et al, Executive briefing, 2010).

The company managed to bring to the market several new brands but the stock out for two older brands managed to take away the customers from the newer brands. One of the main reasons for such a step could be the wrong products promotion or the weak advertizing campaign. Furthermore, the company desired to attract huge investments, but the company had to use an emergency loan bu the end of the 5th quarter. This could happen in a number of reasons.

Nevertheless, there were the long-term plans the company managed to achieve, such as the increase of in fixed capacity. By the end of the 2nd quarter the manufacturing capacity of the Pinnacle increased to 25 units per day. Still, it is not the summit of its desires. The company managed to increase the investments in advertising by 300% till the end of the 2nd quarter. Another long term plan was the creation of 2 additional sales offices within the next two brands and the company managed to reach this aim having opened two offices in Paris.

Justification for the departures

Business plan is created wit the relation to the company’s opportunities and when some departures occur, the main justification may be the wrong research conduction. The company representatives failed to analyze the market in an appropriate way. That is why, the company failed to create the reliable business plan and the predictions were not justified. Furthermore, it is impossible to predict the competitors’ activity in the whole volume. Business plan includes the competitors and their activities. Thus, there are cases when competitive companies act faster and more aggressive. Furthermore, the wrong segmentation and failure to identify the market share can also negatively influence the company performance.

The firm’s performance since the plan was presented/accepted

To achieve the long-term plans, the company should come through 5 quarters each of which is aimed at different intermediate targets. Thus, the company had to come through several stages to achieve the final goal. The company’s results were as follows. By the end of the 2nd quarter, the company reached 17% of market share overall and took the 4th position, remaining there till now. Overall, the company had to resort to some strategic changes to strengthen its positions on the market. The third quarter was full of changes, the technologies were improved that led to the increase of customers’ satisfaction in general. Furthermore, the new offices were opened and the capacity increased. All the changes occurred on the background of the 52% market capture. By the end of the 4th quarter, the company occupied the strong forth position in the rate of the market share with 32%. CompLeo became the strongest competitor of the company brands.

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How well the company is prepared to compete in the future

Looking at the analysis conducted after the finish of the 5th quarter, it is possible to conclude that the company is ready to compete in future. It now occupies 32% market share. It has a string focus on taking $3M emergency loan for marketing and promotion of the new brands and reminding the customers about the existing ones. Due to rise of the revenue and gross margins, the company desires to return the emergency loan in the nearest future. The new brands brought to the market while these five quarters are ready to rival with the existing companies.

Lessons learned from participation in the exercise

In conclusion, it should be noted that the exercise done at class was extremely useful for students as for the future managers who will have to make up personal decisions. Participating in the exercise, a number of lessons were learnt. First of all, the marketplace business simulator program became familiar with its peculiarities. Furthermore, the simulator taught make up the decisions in the business sphere. Following the example that was offered it is going to be easier to make up the personal decisions in future. Still, one of the main importances of the exercise is the consideration of the outcomes of the decisions made. It is impossible to check a number of ways before making a decision in real life. Thus, the simulator helps to consider the outcomes of the made decision and follow the changes in the results with the change of the decision made.

Reference List

Burns, M., Moltamore, M., Needham, K., Reid, S., & Vega, P. (2010). Executive briefing: Quarter 5. Pinnacle.

Burns, M., Moltamore, M., Needham, K., Reid, S., & Vega, P. (2010). Pinnacle MicroCom: Business plan. Regis University.