Essay About Decision Cambridge Software And Small Business

Cambridge Software Corporation
Cambridge Software CorporationIf Cambridge Software offers only one version of Modeler, which version should it offer? At what price? What will be the company’s profit?  You are expected to do detailed computational analysis to answer this question.  Explain all your assumptions and your approach in detail.Cambridge software corporation has developed a new “modeler” . The company divided the market into 5 different segments large multidivisional corporations, corporate R&D, students, consultants and professionals .  The company is thinking about launching 3 versions of the Modeler:- student version, Industrial version and Commercial version. The decision Cambridge software has to make is if they decide to sell one of the three versions of modeler which one would it be?  first need to calculate unit contribution, price and total contribution. The decision  will depend on the size of the various segments, the willingness to pay, and the costs of developing those three versions.Student Version modelerPriceSegmentsUnit contributionSeg dev.costDemandTotal(in billions)$200Consultants$185$200,00020,000 $ 3,500$175Consultants small business$160$400,00035,000$ 5,200$150Consultants , small business and large corporations$135$550,00040,000$ 4,850$100Consultants, small bus, large coorporation and R&D$85$650,00042,000$ 2,920$50Consultants, small business, large corporation ,R&D and students$35$950,000542,000$ 8,020Given for student version Cambridge  would sell through college book stores, with the bookstore getting a 40% commission and Cambridge software netting 60% of the selling price (Case)