Microsoft Capstone Case Analysis

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Competitive Strategy: Umbrellite strives to become the lowest-cost producer in the industry by attaining large economies of scale. The Sunbrella provides high quality at an affordable price which contains all the features of all umbrella competitors and much more. We also differentiate ourselves from other umbrella brands because Sunbrellas are more technologically advanced, have more and better features, and provides personalized and customized services. Sunbrellas will be priced at a lower than anticipated amount to easily penetrate the market and earn a larger market share. Market Action Plans Activities and Responsibilities Our core objective is to “deliver the best and the unexpected” to our customers. Umbrellite plans to utilize opinion…show more content…
With an estimated demand of 11,000 units and a price set at $39.99, we expect our revenues to be $439,890. The methodology deriving this quantity demanded is based on data collected from various Amazon Umbrella sellers. In terms of product costs, we expect the fixed costs to be $45,000, based from rent, fixtures, and equipment estimates. Our variable cost, which includes labor and materials, are estimated to be $25 per unit. As a result, we expect the total cost to be $320,000. We expect to see a positive accounting profit of $119,890 in the first year. To break-even, we would need to sell 3,002 units, or $120,050, to cover all expenses and begin to make a…show more content…
This advertisement campaign will be repeated for 12 weeks, and the total expenditure is $4800 for each year. To create one successful YouTube ad, the cost will be about $2,000. In addition, we will give our YouTube partner 20 Umbrellite umbrellas to give away to his or her new followers, which costs a total of $200. We expect this action will generate brand awareness and an opportunity for word-of-mouth marketing. To reach our objectives, we will need about $7,000 in our marketing budget, which is 1.6% of our revenue. This gives us the competitive parity over our competitors who spend about 2-3% of their revenue on

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