Frequently asked questions about Global Management Challenge
- What if I would like to cut costs and stop sell products in low-margin markets?
In common, in 99,9% of cases there is no situation where such strategy can be optimal. When company decided to stop selling product in exact market, then other companies get more free space for selling there own products. A "little and tight" market becomes more freely, and allows your opponents to earn more money. Also such decision will lower your goodwill (because you lose market share) and investment perfomance value. It is always better to minimize costs and continue selling product.
- What is an optimal value of advertising to use in the decision?
Optimal value of advertising is calculated as share of revenue, for example 6%. It means that, if revenue is 1.000.000, then optimal advertising is 1.000.000 * 6% = 60.000
For agressive market capture strategy optimal percent of advertising is up to 9%. For conservative market share strategy optimal percent of advertising is 4-5%.
- We did not have enough space to hire more workers. What can we do to get more free space?
Space for factory is limited by scenario settings. If you want to get more free space, that you have to dismantle something. For example, it can be several machines. When machines will be sold, company will get free space and can hire more workers. Production of details can be outsourced instead of production on machines.