Final Strategy Evaluation of

Limitless in Marketplace Live

Antonia Torfs-Leibman i6177196

Sofia Discacciati i6193113
Introduction to Business Administration
SSC1030
University College Maastricht
Course Coordinator/Tutor: Peter Bollen
Word Count: 3945
Introduction
The complex and realistic nature of Marketplace Live, paired with the theory gained from the
course’s academic material, allowed us to make an educated and vehement series of
decisions. We divided tasks equally, given that we were only a team of two and such a small
number did not call for a more detailed division of responsibilities. We both put in the same
amount of effort in Marketplace Live without need for hierarchy. Our team also approached
every quarter with an overall strategy of differentiation, which required us to base all our
decisions around unique and valued products. We also knew the potential pitfalls of this
strategy, and experienced many of them. Namely, we dealt with uniqueness that is not
valuable, too high a price premium, and differentiation that is easily imitated. However, by
overcoming these drawbacks and subsequently keeping the lead, our company Limitless was
able to excel in Marketplace Live. A more detailed explanation of how this was done is given
in this paper from quarter to quarter.

Quarter 1
We knew that our decisions in quarter 1 would set the foundation for all quarters to come,
thus every choice was carefully and attentively made. We named our company Limitless to
embody the above and beyond spirit we hoped to employ every quarter. With a non-
hierarchical team structure, all decisions had to be voted on unanimously by the two of us.
This motivated us to set our team norms to be: mandatory attendance at all meetings, equal
opportunity to participate in all discussions, active listening and refrain from interruption, and
openness to giving/receiving feedback. From these norms we created personal as well as team
goals, a mission statement, and strategy.
We decided for our target segments to firstly be Mountain, secondly be Speed, and
thirdly be Recreation. Our rationale for this was that we wanted to promote an atmosphere of
sustainability and environmental consciousness as best as we could, and we thought that
mountain bikers were most likely to care about these values (with speed being the second
most to care and recreation being third). Given these targets and our differentiation strategy,
our strategic directions were to focus on smaller, high margin segments, focus on geographic
markets which are in the middle of the cost/size continuum, build a market position and
defend it, take the lead and keep it, be first to market, be the technology leader, and be the
high service provider in the market. The most important to note here are the first two strategic
directions, given their heightened tangibility and alignment to our differentiation strategy.
Our mission statement was to provide the highest quality bicycle for the fairest price that
ensures a unique experience on the trail. With this mission, customers could be reassured for
our pledge to the environment and a sustainable future.
We opened our first shop in Rio because, despite there being less demand, there was a
higher willingness to pay and appreciation for good quality. We saw this demand/cost ratio as
being adequate for our differentiation strategy and first two strategic directions. In the first
quarter we did not open a web sales office because we wanted to hone in on our niche before
expanding. This allowed us to spend more time curating our initial round of brands: Rolling
Thunder, Rolling Light, Earth Rider, and Ice Rider. We knew creating four brands without
much knowledge about our competitors or demand was a risk, but we wanted to stay true to
our strategic direction of being first to the market, at least for our priority segments, given
that all of these bikes were in the Mountain or Speed segments. Rolling Thunder and Rolling
Light were our more elite brands, with higher prices and more features to attract a more niche
set of customers. For instance, Rolling Thunder had the highest amount of gears available (24
speed) to meet the needs of mountain biking customers, as well as standard disk brakes, a
basic straight handlebar, and high grip mountain tires. Rolling Light had colorful thin
brushstrokes because we knew that customers in the speed segment valued this more than in
the mountain segment, and we also gave this bike basic drop-down handlebars, the second
highest amount of gears (14 speed), and speed racing tires. Earth Rider and Ice Rider were
more simple and affordable brands in the same segments to still ensure we had an accessible
company.
There was no fixed capacity available in quarter 1, but we planned to increase this by
24 units per day. This we thought was adequate for getting started in Rio, which did not have
too high a demand, in addition to us not having a web sales center yet. We knew we were not
in a position yet to take risk with a higher fixed capacity. Lastly, we added 550,000 to our
certificate of deposit because we felt we were not risking going negative and requiring a bank
loan, given we hadn’t actually started to sell yet.

Quarter 2
In the second quarter we did not design any new brands or modify old brands because we felt
we did not need more than four brands at this point, and we were still in the early stages of
marketing research, advertising, and initial financing. Because of our wanting to ensure
Rolling Thunder and Rolling Light as elite bikes, we set their prices at 1,310 and 1,422
respectively. Earth Rider and Ice Rider were set at 1,220 and 1,280 respectively. We knew
that all of our prices might be on the higher side, so to remain competitive we gave price
rebates of 70, 75, 60, and 65 respectively. All of these numbers were decided based on a
combination of information given from the customers’ willingness to pay and cost of
production, as well as from the study tasks for this quarter.
In this quarter we also designed our first round of advertisements, however we only
did so for Rolling Thunder and Rolling Light because to us they were our more important
brands that showcased the quality of the company more. Below is an overview of our
advertisement components regional media placements.

We based the decisions regarding our advertisement components on Marketplace Live’s

customer needs and use pattern, which we looked at in order to understand what exactly
would attract our customers in our priority segments. As for regional media placement, all we
had to do was look at the information regarding media preferences for customers in our
priority segments. This helped us to see where would be the most effective media placements
for our targeted customers.
We did not change our priority segment because we still did not have enough
information about our brand performance or on our competitors, nor did we expand to
Recreation for similar reasons. We did, however, decide to open up a new sales channel in
New York City, as well as a web sales center for next quarter that would reach the world
market. These decisions were made in order to reach new customers with our current four
brands in their respective segments. We felt that we had made good brands in our priority
segments, and wanted to reach as many customers as we could while remaining within our
financial constrictions (although we were not too constricted because of how much we had
put in our certificate of deposit from the previous quarter, thus we could open a new physical
as well as a web store). In this quarter we were also able to hire sales people for Rio, which
we set at 5 with an annual salary of 29,035. We had one in general service, two in mountain
sales, and one in speed sales. These numbers were chosen based on which segment was
priority (mountain), and what our financial means were. As mentioned before, we were not
too financially constricted so we were also able to provide many benefits for our staff. We
thought this was important to do in order to retain as high a worker productivity as possible.
Below is an overview of such benefits.

From this we projected a high worker productivity (70), which we used then to estimate our
fixed and operating capacities. We kept fixed capacity at 24 units per day because we had not
made any changes to our number of brands. To play on the safer side, however, we set our
operating capacity to 6 units per day. We were confident in our brands, but had not been
given enough information yet on our performance or competitors’ performances to want to
make our operating capacity any higher than that. We were sure of these decisions, so we set
our maximum overtime per day to only one hour, because we felt we had projected a good
amount for our fixed/operating capacity.
Quarter 3
In the third quarter we could finally see how well we did in the various components of our
company, as well as judge these components against our competitors. Concerning total
performance, we were second (with a score of 1.962). We did particularly well in financial
performance (6.478), marketing effectiveness (0.760), investment in future (13.654), human
resource management (0.808), asset management (0.322), and manufacturing productivity
(0.938), yet we were lacking in wealth (0.735). This is likely because we had invested so
much in future and human resource management, and we were not perfectly productive with
manufacturing or effective with marketing.
We did know for sure that one reason was because we had projected a lower demand
than what was reality. At first we projected 50 per salesperson and ended up getting 107,
which caused us to lose sales due to stockouts. These stockouts may have caused ill wills. For
this reason we projected a higher demand for the following quarter, but not too much higher
because we expect some customers to have a negative impression of our brand (110 per
salesperson in our physical stores, and 70 per salesperson in our web sales center). Changing
our projected demand also called for us to change our manufacturing capacity. We kept our
fixed capacity to 24 units per day, but increased our operating capacity to 8 units per day. We
hoped that in doing so, we would combat stockouts and subsequent ill will. To keep up with
heightened projected demand and operating capacity, we increased our maximum overtime to
2 hours and projected our worker productivity to 82. However, we did not change anything in
terms of production worker or sales force benefits because we were already dominating
human resource management as it was.
Our price judgment was also 100, meaning we could raise our prices without
decreasing demand (1,350 for Rolling Thunder, 1,462 for Rolling Light, and 1,230 for Earth
Rider). We took out Ice Rider from our stores because it performed poorly on the market and
we felt we could save money by getting rid of it. However, we did not design a new brand in
its place or modify old brands because we were satisfied with how our other brands were
performing.. Instead, we opened up our segments to include Recreation, since we saw that
actually many of our current bikes were being bought by recreation customers (mainly Earth
Rider). To do this, we made a new advertisement for Earth Rider that targeted more
recreation customers. Below is our new ‘Best Buddy’ ad for Earth Rider.
We inserted one ‘Best Buddy’ ad into Leisure & Entertainment, Health & Fitness Magazines,
and Biking Magazines because we saw that these media placements were most visited by
Recreation customers. We hoped that these advertisement changes would attract more
customers.
Given that our New York sales center had opened, we placed six total sales and
service people at this location-- one in general service, one for recreation, two for mountain,
and two for speed. This is one more than in Rio because we knew that there was more
demand in New York. For our web sales center, we hired four total people-- three for web
sales and one for web support. We thought such a ratio would be adequate in meeting the
needs of our customers when just starting out. We did not open up a new physical location
because we did not want to spread ourselves too thin financially. We also did not change our
priority of segments because we thought creating a new recreation-based advertisement
would be enough.

Quarter 4
At the beginning of quarter 4 our company was number one in our first priority segment
(Mountain), and second in our second priority segment (Speed), however, we had a very
small share of the Recreation segment. Moreover, we realized that the Recreation segment
was under-targeted as there were only two brands, produced by two different companies, that
addressed this segment. For this reason we decided to design Urban Rider. We designed this
brand with almost all the components possessed by our best competitor in the Recreation
segment, but with a lower price to attract this segment’s customers, who seem to be more
price sensitive.
Since we had created a new brand, we decided to also design an ad for it. The details
of the ad can be seen in the image below.
We also modified the ads for our top brands, namely Rolling Light and Rolling Thunder.
During this quarter our ad Best Buddy for the brand Earth Rider had a bad rating, hence, we
discontinued it. However, in retrospect, it would have been more beneficial to only have one
ad targeting the Mountain segment in general, without identifying any brand or discontinuing
Earth Rider altogether. This is because in this segment we had two brands which were quite
similar. Moreover, the brand Earth Rider was, between our bikes, the least demanded.
Therefore, discontinuing its ad could not have benefited in any way its popularity. In
addition, because our company’s strategy is to take the lead and keep it, in quarter 4 we
improved our probability of purchase on the web store by adding a toll-free phone number
and by making the website secure.
Since in this quarter we had also increased the number of ads and decided to start
using paid strategies to increase search visibility, we expanded the number of the sales force
in the brick and mortar stores from 11 to 14 and in the web sales center from 4 to 8. Due to
the changes in the ad content and placement, and the design of a new brand, we expected
demand to increase. For this reason, along with increasing the number of salespeople, we also
increased the expected demand per salesperson. This was also done because in the previous
quarter we had created ill-will corresponding to a penalty of 222 units. Therefore, we set the
demand projection at 2,015 and the operating capacity at 31. In this quarter we made accurate
predictions regarding the demand projection for the next quarter. For example, we estimated
a demand projection of 33.1% for Rolling Thunder and in quarter 5 we noticed that the
demand for this brand was 33.3%. Moreover, we decided to expand the fixed capacity by
adding 16 units per day in order to meet future demand.
 Since our goal was to be the technology leaders, we decided to invest heavily in
R&D, namely in the two most expensive features: carbon fiber material and performance bike
computer. We decided to do this because we contacted three different companies to know
which features they were going to invest in, and none of them was going to develop the
carbon fiber material and the performance bike computer. This ensured that our competitors
were likely interested in exchanging their developments with ours. Secondly, both these
features were compatible with all the bike types, which was useful to us since we now had
brands in every segment. Thirdly, our company had the highest financial performance in the
balanced scorecard, therefore, we could afford to spend 1,705,542.
Finally, since we had deposited a lot of money in quarter 1, we decided to withdraw
500,000 from our account as we knew that in the following quarter we were going to invest in
more R&D and, therefore, we needed more money.

Quarter 5
In quarter 5 our company had the highest market shares in all the segments. Our new
Recreation bike Urban Rider had a brand judgment of 71. Nevertheless, the bike Earth Rider
was still the least demanded out of all of our brands, and it was also rated very low in brand
judgement (52). For these reasons, we finally discontinued the brand. Although this was the
right decision, we should have already done so in quarter 3 or, at the latest, in quarter 4.
In quarter 5, the developments in which we had invested in the previous quarter were
ready. Hence, we created two new brands: Stormy and Windy. The design of both bikes
included the carbon fiber material and the performance bike computer. These two new brands
were supposed to be the most expensive yet best quality bikes amongst those produced by our
company. However, we made a mistake regarding their pricing as we set the price for Stormy
and Windy over the segment customers’ willingness to pay. Indeed, we priced Stormy at
1,600, while the maximum price willing to pay for the Mountain segment is 1,365, and
Windy at 1,735, while the maximum price willing to pay for the Speed segment is 1,580. This
resulted in a price judgement of 87 and 80 respectively. Moreover, we modified the
Recreation brand Urban Rider by including the carbon fiber material and renaming it Street
Rider.
In this quarter we were also able to license our developments to competitors. We
licensed the carbon fiber material to Lightning Cycling in exchange for their Mountain tires
along with 500,000, and to Cycle for Change in exchange for their Racing tires and 11 speed
gears along with 150,000. Moreover, we licensed the Performance bike computer to Lighting
Cycling. Initially, we were also supposed to exchange licenses with Peregrine Carbon, but
unfortunately the negotiation did not go through. For this reason, in this quarter we also
invested in the development of a carrier, compatible with comfort bikes, which we were
supposed to obtain in an exchange with Peregrine Carbon. One mistake we did in this quarter
was not to invest in more developments, apart from the carrier. Indeed, although we aimed at
being the technology leaders, our company was always second to last in the balanced
scorecard’s investment in the future.
Since we had created two new brands and modified a previous one, we needed to
create new ads. We created the ads Wind Power, which promoted the brand Windy, and
Storm Power, which promoted Stormy. Both these ads included information regarding the
newly developed features. Wind Power was particularly successful as it received a very high
ad copy judgement in the speed segment (89). Moreover, we modified the ad named Dust
Devil, emphasizing that the brand Rolling Light was the highest rated speed bike, and the ad
named City Adventure, mentioning that it had the lowest price in the market. We almost
doubled the total number of inserts, from 19 to 39, which was the highest number amongst all
companies. In addition, in this quarter we opened a store in Amsterdam. Due to these changes
we also increased the expected demand per salesperson from 115 in the stores and 60 in the
web sales centers to 145 and 80, respectively.

Finally, in this quarter we realized that we weren’t retaining the highest position in
human resource management anymore. Indeed, although we retained the second highest
percentage of satisfaction in our industry sales force compensation, our industry production
worker’s compensation satisfaction was amongst the lowest. By increasing the sales force
and production worker’s compensation, in quarter 6, our company’s satisfaction level
increased significantly.

Quarter 6
Based on the licensing agreements we had previously made, in quarter 6 new features were
available, hence we modified three of our five brands in production: Street Rider, Windy and
Stormy. In this round we had noticed that Street Rider wasn’t doing well as it was the fifth
out of the five comfort bikes in the market. For this reason, we modified the brand by adding
similar components and pricing to the most successful bike in the Recreation segment, but
with the addition of the carrier and computer bike that we had developed. The modified
brand, now named The Rider, turned out to be very successful as in quarter 7 it was the
highest rated recreation bike, along with Easy Cruiser. Moreover, we modified Stormy and
Windy by imitating the most successful brands in the Mountain and Speed segment and
adding the features that we had developed. In addition, since in the previous quarter we
priced the two bikes over customers’ price willing to pay, we lowered the brands’ prices in
this quarter. The modified bikes were renamed Storm Bike and Wind Bike. Furthermore, in
order to boost our investment in the future, and since we had plenty of cash available, we
invested in two new developments, namely the suspensions and the puncture resistant slime
in tires. This turned out to be a very good choice as in the following quarter our rate
representing investment in the future in the balanced scorecard increased significantly.
In quarter 6 we also realized that we had created some ill will as we were not able to
meet demand in the previous quarter. This was mostly due to the fact that we had made some
confusion regarding operating capacity. Thus we matched as closely as possible the Effective
operating capacity after adjustment for worker productivity to the Effective operating
capacity needed for demand projection, as can be seen in the image below.

By doing so we managed to meet the demand in quarter 6, resulting in no penalty in quarter

7. In addition, we expanded our fixed production capacity to meet future demand of 24 units
per day, resulting in a total of 96 units per day available in quarter 7.
In this quarter we opened the store in Bangalore, making our company available in
four markets in quarter 7. In addition, we noticed that our company had amongst the lowest
number of sales force. For this reason, we increase the total number of sales and service
people in New York from 9 to 13. A total number of 12 sales and service people was instead
set for Amsterdam, as we expected the demand in this shop to be slightly lower than in New
York.
Finally, we withdrew all the money that we had deposited in the 3-months certificate
of deposit. We believe that doing so was a very good choice as, in quarter 7, Limitless had the
highest wealth and financial performance. However, the balanced scorecard in quarter 7 also
shows that our company was only third in human resource management. Therefore, in
hindsight, we should have increased the industry sales force and production worker
compensation.

Conclusion
Throughout the Marketplace Live simulation our company, Limitless, had made several
mistakes, most of them related to the company’s demand and operating capacity. Moreover,
we encountered drawbacks regarding brand design and pricing. However, each round we
learned from our mistakes and tried to improve our choices. We have analyzed our
competitors, imitating their successful choices and understanding their errors. Since the very
beginning our goal was to take the lead and keep it by maintaining an aggressive posture. We
have achieved our goal as our company came out on top. Overall, we believe that our
committed effort to get our company off the ground throughout the Marketplace simulation
provided us with great knowledge about the business world.