Question
Omnitec Systems manufactures virtual computers. The total market for virtual computers is 10 million units. Its existing product Gallactic currently enjoys a market share of
Omnitec Systems manufactures virtual computers. The total market for virtual computers is 10 million units. Its existing product Gallactic currently enjoys a market share of 5 million units. Omnitec Systems wants to launch a new product Horizon at a retail price of $200. About 1 million of Gallactic's sales is expected to be cannibalized due to the launch of Horizon. Gallactic's average contribution margin from the cannibalized units was expected to be $20. Advertising and Promotion cost of Horizon is estimated at $5 million. The distribution channel margin was typically one-third of the retail price. Assuming a margin of 0.4, calculate the Breakeven Market Share for Horizon. The question is not incomplete.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started