Demand factor - Agents and distributors number
In this topic, we will analyze the dependence of demand on changes in the number of agents and distributors. The effect on demand from a change in the number of agents occurs only in the next period.
Elasticity of demand from number of agents and distributors
Dependence is power function. Almost no influence on demand from competitors in the group, control points lie quite close to the trend line. For Nafta market, dependence of demand on number of agents change is almost identical with data for EU market. Given that the commission of agents and distributors equally affects on demand in EU and Nafta markets, it can be concluded that number of agents and distributors also has the same impact on demand in EU and Nafta markets too. In fact, the only difference between EU and Nafta is the name - “agents” in the EU market and “distributors” in Nafta market, otherwise impact is equal.
In previous version of Global Management Challenge simulator, effect on demand from change in number of agents and distributors from competitors in the group was significantly higher. The more was the difference in number of agents and distributors between your company and opponents, the greater demand increase you received. For several seasons it was favorite strategy of Asian teams - Swing: in 1 period teams were hiring up to 20 agents in EU market, which then were dismissed in 2 period. Costs increasing for hiring agents and distributors was offset by great increase in demand in 2 and next periods. In new version of GMC simulator, due to changes in calculation of payments to agents (maximum commission and support for previous and current period is used in calculation), possible bonus from swing strategy has come to naught.
- Dependence of demand on the number of agents and distributors is expressed by a power function
- Effect on demand from the number of agents and distributors is equal for all markets and products
- Dependence of demand on the number of agents and distributors is not influenced by competitors in the group