April 04, 2017

A Team Finally Cracks The Top Five As Strategies Evolve!!

Here's the results after year one:

And here are the results after year two:

One might think that Beanies would cruise to a victory. Not so. They spent a ton on marketing, however, their pricing strategy continued to be "more expensive" than other companies, and given the mix in strategies Beanies actually suffered a modest sales decline. Look at the results.

Let's look at the overall averages, because with only p&l style metrics, the audience was able to continue to optimize the business.

  • Gross Margins increased.
  • Ad-To-Sales Ratios decreased.
  • Staffing shifted modestly toward the Online channel.
  • Prices increased.
  • % Off Promotions increased.
  • One team dipped their toe into free shipping 24/7/365 (WBT).
Here are the leaders after year three:
  • Widgwon = $1.6 million.
  • Beanies = $1.5 million.
  • Pickaxe = $1.4 million.
  • Octagon = $1.4 million.
  • Wiggies = $1.3 mililon.
Octagon is a new entrant into the top five. Over the three year period, Octagon steadily increased prices, steadily increased promotional levels, shifted ad spend online, and shifted staffing levels online. They appear to have found a strategy that leads to success. Will their strategy continue to push them toward the top of the heap??

As you can see, teams really studied "the big board" to understand how different strategies impacted profitability.

Start thinking about how I might run a different version of this simulation for your company, ok?

More tomorrow.

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