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Electronic City


 This essay is a case study of story, Tupelo’s Dilemma, about a certain person who worked at the ElectronicCity electronics store in New York, (Prasad, n.d.). The essay will address some specific questions regarding the story.


 $11.      Type of competitive environment faced by ElectronicCity:

ElectronicCity being a business for electronic appliances and equipments faced a stiff competition for market share in the high-end, flat-screen, high-definition television (HDTV) sets. The presence of the competition is evidenced by the fact that there were several businesses in same locality that sold the HDTV sets. All these businesses offered high quality HDTV sets which made competition very high. 


 $12.      Management style of the VP of marketing in ElectronicCity:

The high competition in the HDTV business affected the sales of these TV sets. This made the vice president of the marketing department of ElectronicCity to introduce the approach of extended warranty for the HDTV sets. In a business point of view, the approach is appropriate since the method managed to persuade more customers to buy the HDTV sets from the ElectronicCity store. This is indicated by the fact that Phil obtained high incentives for the sale of the extended warranties. However, in a realistic perspective, the extended warranties are not necessary since they are far beyond the service life of the TV sets and hence the customers will be wasting money on buying the extended warranties. This is supported by the fact that learned people who understood this concept refused to buy the extended warranties.


 $13.      Ethical issue in the scenario:

One ethical issue that is evident in this scenario is the professional courtesy. This is seen in the way Dr. Smith and Father George respond to Phil’s narration of his experience at the ElectronicCity. Dr. Smith understands that those who purchased the HDTV sets with extended warranties at the ElectronicCity did it because they never understood demerits of the extended warranties, but not due to the skilled persuasion of Phil. However, he avoids discouraging him and applies several questions to make him get his point. Likewise, Fr. George uses a question to show Phil that his approach was questionable.


 $14.      Phil’s prediction on the likelihood of customers to buy the warranty:

Phil was able to some extent to predict those customers who would accept to buy the extended warranties. It will help if masters this art of predicting since he will be able to identify the customers to invest his time on persuading them to buy. This will save him the time he wastes trying to convince customers who can never buy the warranty to accept it and he will use this time to make more warranty sales.


 $15.      Effects of people on Phil’s perception about his job:

a). Maria- her reaction makes Phil value his job since desires to have the same experiences in the near future.

b). Dr. Smith- his response is challenging as he makes Phil to discover that it is not is efforts that moved the warranty customers.

c). Fr. George- his response is also challenging but somehow discouraging as he makes Phil to start feeling uncomfortable.


 6. Phil’s next week’s activity at the job:

He is likely to try new tips to convince the learned to buy the warranties, and observe the behavior of the customer to get the answer to Fr. George’s question.


 $16.      Dollar amount of warranty extensions sold by Phil in Jan 2007:

He received $ 360.40  in Jan 2007 which was 8% of extended warranty sales. Hence he had sold 108% of $ 360.40 which is $ 4,505.00.


 $17.      Estimates of dollar amount of HDTV sales in Jan 2007:

Given that his dollar amount of warranty extension sales was 55%, it means that $4,505.00 represents 55% of the units sold. Hence the total amount of units sold were 155% of 4,505 which is 8,190 units. Since 320,000 units cost $710,700,000 in 2006, it means each unit costs $ 2,220.94. Therefore the estimates of dollar amount of HDTV sales in Jan 2007 is the product of $2,220.94 and 8,190 units to get $ 18,189,498.60.


 $18.      Profit expectation per-store in 2007 with total sales rising by 4%:

The units sold in 2007 will be 104% of those sold in 2006. That is 104% of 320,000 which gives 332,800 units.

The warranty sales expectation is 75% total sales which is 75% of 332,800 multiplied by $2,220.94 , the cost per unit. This gives $ 554,346,624.00 sales nationally.

ElectronicCity has 160 store and so there will be $ 554,346,624.00/160 to give $ 3,464,666.40 per store.


Reference:

S. Prasad (n.d) Tupelo’s Dilema

 
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