A1: The first decision that was made was which of the three markets would be targeted. The decision was made to focus on the Mercedes and the Traveler market. This was due to the fact that the Workhorse segment is already highly competitive and the profit margins were the lowest. The Mercedes and Traveler markets were also more similar in the survey of the customer needs and wants. They were also more similar in the price that they were willing to pay. The features for the products in each of the target markets were added based on a ranking of the importance from the customer survey and how closely it brought the product to the price the customers were willing to pay. If the feature was very important to the customer it was placed in the design first. The features that weren’t as important were added only if they would be able to fit within the target price.
A2: The target markets that were selected were based on competitiveness and profit margins. The Workhorse segment was already extremely competitive and the profit margins were very low compared to the Mercedes and Traveler segments. In order to make a profit and compete in the workhorse segment the upfront manufacturing facilities and production capabilities would have required a much higher initial investment. Not to mention the higher number sales representatives and offices required to sell the products made in the manufacturing facility and sell enough to turn a profit. Focusing on the other two segments required only a relatively small manufacturing facility, a low rate of production, small number of sales offices, and small sales staff. Because of these items the company was able to make a profit in Q2 and receive a higher rating on the balanced scorecard.
A3: The sales office location decisions were made in three parts. The first part was proximity to the manufacturing facility. The manufacturing