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It has been all about meeting the goal of this scenario. Hitting the operating profit target was easy but getting the revenue to $1bn required expanding to other products. With Gold out of the question already, Timber was the next choice as it gave a wide range of products. In simple terms, One Raw Material Many Finished Products.
Lessons learned in this episode:
1. Use a product to its entire extent
One Raw Material Many Finished Products is the name of the game. If you want to expand quickly don’t let anything go to waste. From Timber, I went into beds and then tissue. Paper was an option too which would open a different can of worms. The idea is, use your resources to their maximum potential and don’t let anything go to waste.
2. Don’t oversell an item in a shop
I believe part of the reason why a lot of my firms were incurring a loss was simply due to selling 4 bread slots. I assume there is only so much bread you can sell in one place.
3. Close down unnecessary firms
At some point, you need to decide how much energy you want to put into your products. In my case, as I was expanding rapidly, I wanted to avoid overproducing, having extra factories not being used and losses everywhere. Since I had other products I also decreased my 4 bread slots to hopefully turn a lot of my firms’ negative performances. Ultimately it only meant that I lost out on sales of Bread and decided to shut down some factories and warehouses to decrease my costs. When there is no demand in 2 factories, you might as well get rid of 1 and use that one to fulfil the demand.
What do you think? Leave a comment below.
Also See: Mistakes to avoid in the Food and Beverage Scenario
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