{"content":{"sharePage":{"page":0,"digests":[{"id":"48147176","dateCreated":"1323828492","smartDate":"Dec 13, 2011","userCreated":{"username":"keittenbach","url":"https:\/\/www.wikispaces.com\/user\/view\/keittenbach","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/48147176"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Review","description":"Time Warner was offered as an example of when to say or exit a market. Time Warner was faced with this decision when entering the Kansas city market where their company offered a very similar product at a cheaper price to consumers than could Time Warner would prefer under their current price structure.
\nThis example was translated into a current situation in the mobile phone industry in Japan that is facing a saturated market with low profits. However, pride in this country prevents companies for exiting this industry although economic metrics tell them they should.
\nOverall this was a great summary that used realistic examples and theories to make the topic interesting and relevant.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47943180","dateCreated":"1323495840","smartDate":"Dec 9, 2011","userCreated":{"username":"JasonYoungBSU","url":"https:\/\/www.wikispaces.com\/user\/view\/JasonYoungBSU","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47943180"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Summary","description":"The author taught us how product sales prices and cost to produce those products affect decisions to stay or leave a market.
\n
\nWhen your sales price is less than your average variable costs, or when your total revenue is less than your total variable costs, you should consider ending operations in that market.
\n
\nAdditionally, the author provided description and study results suggesting that companies with economies of scope (diversification?) are more likely to be able to defy these rules, at least in the short term.
\n
\nThe greatest part of this article was the examples provided regarding Time Warner Cable in the Kansas City market and phone manufacturers in Japan. These really helped build on the basis of understanding for this topic.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47606902","dateCreated":"1323114047","smartDate":"Dec 5, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47606902"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Graphs and Equations","description":"A company should shut down\/exit the market in the following situations (as represented by the pink area):
\nTotal Revenue < Variable Cost
\nPrice < Average Variable Cost
\nA company should remain open in the following situation (as represented by the shaded grey area):
\nPrice > Average Variable Cost","replyPages":[{"page":0,"digests":[{"id":"47607038","body":"I can't get the graph to post.. will post in final write up of topic. Please see page 272 of text book for the image.","dateCreated":"1323114124","smartDate":"Dec 5, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"}},{"id":"47607096","body":"http:\/\/highered.mcgraw-hill.com\/sites\/0073375969\/student_view0\/index.html<\/a>","dateCreated":"1323114175","smartDate":"Dec 5, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"}}],"more":0}]},{"id":"47583356","dateCreated":"1323098887","smartDate":"Dec 5, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47583356"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Synergy vs Retrenchment ","description":"A study completed by INSEAD, a university in France, examined two hypotheses in market exit strategies: 1) \u201cThe higher the synergy, the less likely firms will exit a market.\u201d 2) \u201cThe larger the retrenchment scope, the more likely firms will exit a market.\u201d What exactly do these hypotheses mean? I believe the first hypothesis is in regards to companies who have high economies of scope. For example, they would be a diversified company who uses similar technologies and ideologies for each of its products. The second hypothesis is actually quite the opposite of the first. Retrenchment typically deals with downsizing and reorganizing to better make do with the resources that are available. This means that a company could decrease the breadth of product and reduce the number of employees. After taking a sample size of 657 markets, the y arrived at the following conclusions. A company is has a high level of synergy (economies of scope), they were 28% less likely to exit a market than the base case, a company who has neither a high synergy nor a large retrenchment scope. On the other hand, a company who has a large retrenchment scope is 20% more likely to exit a market than the base case.
\n
\nhttp:\/\/www.insead.edu\/facultyresearch\/research\/doc.cfm?did=44320<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"45772118","dateCreated":"1320684499","smartDate":"Nov 7, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/45772118"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Dropped Call: Why Japan lost the mobile-phone wars","description":"One might think of Japan of having quite a bit of success in the global mobile phone market. However, in recent years, this apparent success may just be an appearance. Japan is actually losing its position in the global mobile phone market. There are few reasons for Japan's slipping numbers. The first is that the Japanese market is overly saturated. All major electronic firms make and sell phones. This results in 11 different domestic phone manufacturers selling phones in a saturated market. They manufacture and sell phones as a sense of corporate pride; if they do not compete in the phone industry, they are considered weak. Most of them are losing money as a result of their company pride. Secondly, the Japanese focused on the domestic market at the expense of expanding internationally. Typically, the mobile operators design the features of the phone and the manufacturers must comply. This is easier to do in a domestic market than an international market. A few companies tried expanding, but were reluctantly pushed back. Thirdly, since the manufacturers designed products around the mobile operators needs, the special features are not always able to be used outside of the country. If the Japanese companies wanted to work with international markets, the cost would be higher and the margins would be lower, thus creating an unattractive business plan. Finally, high end customers who want sophisticated phones drive the Japanese market. However, the largest growth is found in the emerging markets, who are after cheap phones. In the hardware business, competition over price funnels down to scale: firms with high volume and produce products at a cheaper price. This causes a viscous circle for many of the Japanese companies. Because they are not selling to the emerging markets, their volume stays low which keeps prices high, which makes selling to emerging markets nearly impossible.
\n
\nIn recent years and months, some of the competing Japanese companies have dropped out of the mobile phone industry because the losses they were receiving were much more valuable than the corporate pride they found in selling phones. However, not all of the companies receiving losses have felt this way. To some, the corporate pride is more important than any losses they may come across.
\nhttp:\/\/www.economist.com\/node\/10830025<\/a>","replyPages":[{"page":0,"digests":[{"id":"45801258","body":"Sounds like Japanese mobile-phone makers might have a lot in common with General Motors.","dateCreated":"1320706253","smartDate":"Nov 7, 2011","userCreated":{"username":"Steve_Speece","url":"https:\/\/www.wikispaces.com\/user\/view\/Steve_Speece","imageUrl":"https:\/\/www.wikispaces.com\/user\/pic\/1316392514\/Steve_Speece-lg.jpg"}},{"id":"47607094","body":"Beyond pride, if a company can make\/maintain it's brand through the mobile market, could losses in that market be considered advertising for its more profitable offerings?","dateCreated":"1323114173","smartDate":"Dec 5, 2011","userCreated":{"username":"JasonYoungBSU","url":"https:\/\/www.wikispaces.com\/user\/view\/JasonYoungBSU","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"}}],"more":0}]},{"id":"43984182","dateCreated":"1318283709","smartDate":"Oct 10, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/43984182"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"The Decision to Shut Down","description":"According to the text book, a business should only shut down if their price per unit is less than the average variable cost. If the price per unit is greater than the average variable cost, then they should remain open. If a company were to continue producing items when the price is below the average variable cost, then they are losing money everytime an item is produced. No company wants to experience this tough decision to remain open or to close the doors, but in today's economy, many companies face this daunting task. In weeks to come I will focus on companies who are facing these decisions and how they chose to proceed.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"43601376","dateCreated":"1317686944","smartDate":"Oct 3, 2011","userCreated":{"username":"bnmiddleton","url":"https:\/\/www.wikispaces.com\/user\/view\/bnmiddleton","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/43601376"},"dateDigested":1532762609,"startDate":null,"sharedType":"discussion","title":"Time Warner Solution to Memo 2: How Low Can We Profitably Go?","description":"This case discusses Time Warner's goal to target a market share of 65% in the Kansas City Area. The company invested nearly $500 million to upgrade the infrastructure of the city so they could provide a full line of services including cable, broadband internet, and phone services. The $500 million is considered a sunk cost while variable operation costs consist of monthly, per subscriber programming of $32.50 and maintenance fees of $7.60. (Total variable monthly cost of $40.10).
\n
\nTime Warner's largest competitor in the Kansas City market is Everest, a company who provides similar bundled services at a price of $84.95 per month. The key to Time Warner's success in this market is how they price their product since the two companies off almost identical product bundles. To best price their product, Time Warner first figured out what their average total cost is to determine at what price they lose profit. To figure out ATC, they first calculate the monthly average fixed costs. They came up with $10.85 per monthly subscriber. They also figured in the average variable costs which came to $40.10. Time Warner determined that they will be profitable at any price over $50.95, well below the current price of their competitor.
\n
\nWhile profitability is non-existent at a price below $50.95, if hard times were to fall in the area, Time Warner should not exit the Kansas City market until their price falls below $40.10 per monthly subscriber. At any point between $50.95 and $40.10, the subscription costs would cover all of Time Warner's variable costs and a portion of its fixed costs. When the price falls below $40.10, the company would be losing more money than they would be making, thus causing for a detrimental business plan.","replyPages":[{"page":0,"digests":[],"more":0}]}],"more":false},"comments":[]},"http":{"code":200,"status":"OK"},"redirectUrl":null,"javascript":null,"notices":{"warning":[],"error":[],"info":[],"success":[]}}