//A risky move. Do you think you have the financial capabilities to expand internationally when the market has you pinned in terms of profit margins? You can't afford any more costs at this point.\n\nThe market figuratively laughs in your face. Your efforts are so pathetic. You have a failing product at too low a price point to make any significant money, and now you try to expand. \n\nGranted, getting into other markets could increase your customer base and generate more sales, but at this point you are spread too thin.//\n\nYour attempt at expansion fails. You're worthless. Basically pack up and go cry to yourself while eating alone at a Burger King. Your business is going to be finished no matter what you decide to do.\n\nToo bad. Start over.\n
//You decide that getting your product out in the market as soon as possible is the right move. Creating demand for your product is important, and it isn't going to generate sales if the idea is still just sitting in that big ol' head of yours.//\n\n[[Hire an independent manufacturer]]\n\n[[Obtain a loan and start manufacturing your product in-house]]\n
//You decrease the price of your product. You gave in to market pressure.\n\nYour sales increase, and revenue keeps coming in, but your margins slip. Customers seem to respond to the price decrease initially, buying more of your product, albeit at a lower price.\n\nIn the long run, you cannot sustain company growth with profit margins this thin. You need to make a change.//\n\nWhat do you do?\n\n*[[Move into other markets]]\n*[[Decrease costs]]
//Sure. You think you can do this. You aren't just an idea person. You're the complete package. You can develop, manufacture and distribute your product all with your own little new startup company.\n\nExcept you can't. You can't even a little bit. You soon realize this. You should have partnered up with a manufacturer. ''whooops''. Even with the capital obtained from the loan, this has all become too much for you to handle.//\n\n[[You sell your business to the highest bidder]]\n\n[[You try to outsource your manufacturing to an independent contractor]]
//Establishing independence is crucial. If you manage and operate your own supply chain, that's effectively cutting out the middle man, which increases profits.\n\nThis was a smart move. You are now more efficient. Even with the large up front investment necessary to do this, your supply chain costs go down dramatically, and your company is much more efficient.//\n\nWhat do you do now? You can take the risk of going into international markets, or you can play it safe and stay domestic.\n\n*[[Expand internationally]]\n*[[Stay domestic]] \n
//You think this is a clear choice. Penetrate new markets, increase sales and profit. Easy.\n\nHowever, your shareholders, the owners, see this move as premature and risky. They panic and sell off shares of your company. Share price dips dramatically. You lose assets. The moment you decide to set foot in international soil, the public abandons you. \n\nMany companies thrive while being publicly traded. Yours was young and had little historical evidence to point towards an indication that you were a solid investment. Any sign of risk, and investors flee.\n\nYou are past the point of no return, however. You have put up the investment already, which was a huge amount of money. Without the ownership to back it up, you're international progress is dead in the water.//\n\nYou think back about what you could have done differently. You decide that you should have waited and established more dominance in the domestic market before going public, or waited to expand internationally, since, granted, that was a risky decision.\n\nBut it's too late. You lost so much money that you can't recover. You made a great run, but weren't successful. Start over.
//Really? You've got a powerhouse of a company and you don't want to expand? What's stopping you? Risk? \n\nSuccessful business have a "high risk, high reward" mentality. That's the driving force of growth. To take a big leap forward, you're going to have to take risks. Since you don't want to do that, where is your company going to go?//\n\nYour sales peak and then steady out, the domestic market is saturated with your product. Your company is immensely successful, but if it's not going anywhere anytime soon, what's the point?\n\nYou should start over. Wimp.
//What do you think this is? This isn't kindergarten. This is business, and business is brutal. People are going to take advantage of every opportunity they can get their hands on, and in this case, your successful, patentless product. Your competitor just laughed so hard at you that you went home and laid down in your shower and cried until you fell asleep.\n\nYour competitor, who has been in the industry longer than you have, crushes you. They start selling your product at a lower price. They capture your market. You're without a source of revenue. You are so screwed.//\n\n...yes this means you lose. Start over.\n\n
//Alright. You've got the domestic market right where you want them. You have high profit margins, and you have all the capital you could imagine. With all of that said, it makes sense to expand into international markets. \n\nYou begin penetrating the international markets, the costs are high, but the reward is great. Your sales skyrocket. While your margins dip slightly, you aren't even slightly concerned since you know the long-term pay-off will be extraordinarily significant.\n\nYour company is now so large and efficient that you can do anything you want. You can put other companies out of business with one advancement into their market. That's how much of a threat you are. People fear you. They're afraid of what you're capable of.// \n\nYou've created an empire. Nicely done.\n\n\n<html> <img src="https://gs1.wac.edgecastcdn.net/8019B6/data.tumblr.com/tumblr_m5h2z2uCNP1qjlm9go1_400.png"/> </html>
//This definitely sounds like your most feasible option at this point. Your margins are spread razor-thin. Your product isn't selling well. You seemed destined for Chapter 11 if you had continued along the same path.\n\nSo you decrease costs. How? You reduce your supply chain, reducing manufacturing and distribution costs. However, this also alienates some of your market share. Competitors with substitute products jump in. You lose customers. You lose sales.\n\nYou can only decrease costs by so much. And doing so is only effective for so long. Eventually, you're gonna need to find a way to generate revenue and increase margins.\n\nBut it's too late. Your competitors have already taken your previously held market share. That's revenue forever lost. Any company's nightmare come true.//\n\nWell you see where this is going. In the long run, you could not sustain this business structure. Low margins, low revenues, low chance of prolonged successful in a capitalistic market.\n\nNice try though. You made a decent run. Start over.
//So you've taken the long-term approach. Rather than getting your product out in the market prematurely, you obtain a patent protecting you from product infringement. Maybe you are actually smart.//\n\nYou have a few options for your next move. \n\nYou could start marketing your product at this point. It is an investment for which you don't know the exact payoff quite yet. However, it is certain that a successful marketing campaign will increase your product's sales. The only question is by how much.\n\nYou could start manufacturing and distributing your product. Get it on store shelves. Get that money in your hands.\n\n*[[Marketing campaign]]\n*[[Manufacture and distribute]]
//The initial public offering. You decide to take your company public. There are many advantages to this. For one, you raise ''so much money'' for your company from investors. People can not only just buy your product, they can invest in your ''company'' itself, pretty much anytime they want.//\n\n//Your IPO is successful. You generate large amounts of capital. Your company is now publicly traded and well known.\n\nBut there are some downsides to becoming public as well. You lose control. You're controlled by the shareholders. They control your destiny. If you don't maintain a level of business that shareholders are satisfied with, your company immediately loses value. All of your finances are now public information, and the public now controls your company.//\n\nNow it's time to grow. You have the resources. What's your next move?\n\n*[[Expand into international markets]]\n*[[Invest in your own supply chain]]\n
//Classic economics. You increase supply to satisfy demand, hopefully pushing the market for your product toward equilibrium.\n\nThere was risk associated with this decision, however. Over time, high enough increase in supply could drive down the market price for your product. In other words, customers are not willing to pay your previously established price for your product.\n\nFor some time sales do well. The people who waited for the product initally have already purchased it. Sales slow after that. At the current price, the market is already saturated. \n\nWhat do you do?//\n\n*[[Decrease the price]]\n*[[Don't change the price]]
//You decide to negotiate a contract with a manufacturer and distributor to get your product on shelves as quickly as possible. The negotiation involved a deal in which the manufacturer will receive 35% of all future revenues from sales of your product that this manufacturer produces and distributes. \n\nYour product makes it onto store shelves successfully, and more importantly, your product starts leaving those shelves to paying customers. You start making that green. You're feeling good. You're feeling great.\n\nThat is until another company, a competitor, sees your product as such a great idea. This competitor creates a strikingly similar product. It starts taking away your market share. You quickly realize this. You quickly decide that you need to//\n\n*[[get your lawyers on the case]]\n*[[politely ask your competitor to stop]]
//You smile and laugh maniacally as the market greedily anticipates more of your company and your product. But you don't back down. You don't give in. You look at mindless consumers and see potential for even higher profit margin. They want your product, and if you wait long enough, demand will become so inelastic that they will pay anything to get it.\n\nCompetition is basically nonexistent at this point. Even though your product had no direct competetitors to begin with, you have now established your dominance in the market to the point where nobody will even try to compete with you, and potential threats don't emerge for the forseeable future.//\n\nWhat's your next move?\n\n*[[Create and maintain your own supply chain]]\n*[[Declare an IPO]]
//Establishing independence is crucial. If you manage and operate your own supply chain, that's effectively cutting out the middle man, which increases profits.\n\nThis was a smart move. You are now more efficient. Even with the large up front investment necessary to do this, your supply chain costs go down dramatically, and your company is much more efficient.//\n\nWhat do you do now?\n\n*[[Expand internationally]]\n*[[Stay domestic]]
//Well. There's nothing you can really do at this point. Your lawyers have no case. Your product was not protected by a patent. You're basically screwed. Your business is losing revenue and there is nothing you can do to stop it. \n\nSo much for a successful start up. Your business and your marriage are in shambles. Better start resorting to alcohol; you're in for a rough life.//\n\n\n...yes this means you lose. Start over.
//Ok. This could have been the right call. If this is what you did before leveraging your company before you had any real, tangible assets to back up that debt. Without any long-term source of revenue, you're dead in the water. You can't get a manufacture to work with your company with so much debt. You are too risky an investment for them.\n\nNow you have nothing. Your idea is now worthless. Your significant other left you for your best friend. Your dog ran away.//\n\nYou lose. Start over.
//So you take the plunge. You go right into the manufacturing and distribution process. You hire an external company to take care of these responsibilities. You had the immediate cash on hand to do so. Your product hits store shelves. You eagerly anticipate all of the revenues to start pouring in. You're gonna jump into a pile of money.\n\nExcept you don't. There isn't a large demand for your product yet. Sales are slow, and even though you didn't take out a loan, you start feeling the pinch from a slow revenue stream that doesn't meet your manufacturing and development costs.//\n\nSo you can either lower the price to try to create some demand for your product, or you can maintain your current price and hope that demand catches up.\n\n*[[Decrease the price]]\n*[[Don't change the price]]
//Cool. You had an awesome idea. Then you made some poor decisions. It's become too much for you to bear. It's time to hand the torch to the next victim. \n\nToo bad nobody in their right mind would want to buy a mismanaged supply chain, a patentless product, or a business that is insolvent up to its eyeballs. \n\nYou thought short-term, and you overestimated your capabilities. When you try to exit the market, you can't even do that.//\n\nYou're a failure. Start over.
//You choose to start marketing your product, increasing awareness in the market. It is a choice that has no immediate benefit financially. You are just going to have to hope that in the long run, the marketing efforts will come to fruition.\n\nWhile the market gains awareness of your product, you start building plans for the manufacturing distribution of your product. However, with the marketing efforts, you have used up your immediate funding. You have no choice but take out a loan to continue building your business.\n\nSo you're highly leveraged now, but whatever, so are other entities, right? Sure, but they don't last too long. Unless you're the U.S. government, but sovereign leverage is an entirely different animal than private leverage.\n\nYou hire an external company to handle the manufacturing and distribution. Your product starts making it's way into the market, with substantial evidence of high demand. Turns out, stores don't have enough of your product to satisfy demand.//\n\nWhat's your next move?\n\n*[[Increase Production]]\n*[[Corner the market. Increase the price.]]\n
''Hello. This is a game that I made. Make good decisions. Thanks for playing.''\n\n//Look. You're smart. You graduated college. You've made good decisions. Now you're at the helm of a potentially successful start-up company with some great product ideas. Isn't that fantastic?\n\nIt might be, but there are many stressful and multifaceted decisions with far-reaching consequenses that you must make. They will shape the course of your business, the course of other businesses, and potentially the course of entire international industries if you play your cards right. Isn't that terrifying?\n\nIt might be, but hey, don't get overwhelmed. let's start out small. You have a product idea already. For purposes of this story, what your product is doesn't matter. What matters is that you have one. Now get it out there. Start making that granola.//\n\n* [[Start manufacturing your product.]]\n* [[Obtain a patent for your product.]]\n\n
//You stick with your current strategy. Maintain current pricing. The demand will come if you keep producing, right?\n\nNope. The market doesn't want more of the same thing at the same price. You didn't play by the rules of the market, and you suffer because of it.\n\nYour business doesn't have the capital to move forward. Growth is at a standstill.//\n\nYou know you have reached the end. You can either liquidate your assets or declare bankruptcy, but obviously both of those options mean the end of your company. \n\nYou had a good run. You made some tough calls, and you called them wrong. Start over.
by Cody Royals