Managing growth and profitability can be especially difficult in a market with learning curves and scale economies, where the market leader can often gain a cumulative advantage. Students must balance the benefits of a “Get Big Fast” strategy with the limits of such a strategy, including knowledge spillovers, aggressive competitors, new players with disruptive technologies, and long capacity adjustment delays. This simulation is based on the MIT Sloan case study SunPower: Focused on the Future of Solar Power.
Students play the role of senior management at a leading firm in the solar photovoltaic industry. They seek to maximize profits over a 20-year time horizon, setting product prices and budgets for process improvements. Students compete against other firms, including potential new entrants, played by the computer. Facilitators can set conditions of the market, competitor behavior, cost reduction, and industry demand.
- Explore the challenges of pricing and strategy in a market with significant learning curves
- Understand the market impacts of entry of competitors with radical new technologies
- Experiment with different strategies in the presence of learning curves and scale economies
- Pricing Strategy
- Technology Strategy
- Scale Economies
- Learning Curves
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