Israeli entrepreneur Dov Moran and inventor envisages the creation of a mobile phone which was a small, autonomous, fully functional phone that can slide in a variety of enclosures, or “jackets” that would include and better reflect the personality of its users. As the development of the Modu phone began to take shape, Moran and his team decided that to ensure the success of the highly anticipated launch of the new phone is to develop and commercialize Modu jackets accessories. The question now is which of the eight vests to develop and what factors should be taken into account in this decision. The case focuses on how to estimate optimal extensions of product lines after taking into account the experience curve and the effects of cannibalization of products that have similar characteristics, cost and price. This will require a quantitative analysis, which considered the effect of the learning curve and chop the cost, revenue, and ultimately the outcome. The question is how to maximize profits by choosing an ideal set of products.
Source: Kellogg School of Management
May 11 2012: release date. Prod #: KEL651-PDF-ENG
Modu: Optimization of the solution of the case of the product line