Market Size Model The first step is to model the entire market. The company manufacturers two...

 

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Market Size Model The first step is to model the entire market. The company manufacturers two products (A and B) so each market must be modeled. Modeling the market requires establishing growth rates for each of the products. Complete the model by entering formulas in the green cells below. The exercise is designed such that an error early in the assignment will not adversely impact later grading. The market size of each product can be forecast based on growth expectations. Product A's growth will decelerate, declining linearly by .5% every year. Product B's growth will be stable at 10% annually. Hint: When financial analysts adjust a growth rate or market share you do not compound the adjustment. If the growth rate is 10% and it declines by 3%, the adjusted growth rate is 7%. Please use this clarification to understand how to forecast throughout this Sheet. Market Size Units Product A Product B Market Unit Growth Rate Product A Product B Market Share Product A Product B 2020 Company's Unit Sales Product A Product B 1,005 503 503 10.0% 10.0% 2020 30% 60% 2021 1,005 503 503 452 151 302 0% 2021 2022 1,005 503 503 0 0% Company Sales Model The sales of the company for each product can be calculated based on an outlook for its market share of the product. The company's market share of Product A is expected to be flat. The company's market share of Product B is expected to decline by 5% this year because of a new entrant but will then remain flat thereafter. 2022 2023 1,005 503 503 0 0% 2023 2024 0 1,005 503 503 0% 2024 2025 1,005 503 503 0 0% 2025 0 2026 1,005 503 503 0% 2026 0 2027 1,005 503 503 0% 2027 0 2028 1,005 503 503 0% 2028 0 2029 1,005 503 503 0% 2029 0 2030 1,005 503 503 0% 2030 0 Market Size Model The first step is to model the entire market. The company manufacturers two products (A and B) so each market must be modeled. Modeling the market requires establishing growth rates for each of the products. Complete the model by entering formulas in the green cells below. The exercise is designed such that an error early in the assignment will not adversely impact later grading. The market size of each product can be forecast based on growth expectations. Product A's growth will decelerate, declining linearly by .5% every year. Product B's growth will be stable at 10% annually. Hint: When financial analysts adjust a growth rate or market share you do not compound the adjustment. If the growth rate is 10% and it declines by 3%, the adjusted growth rate is 7%. Please use this clarification to understand how to forecast throughout this Sheet. Market Size Units Product A Product B Market Unit Growth Rate Product A Product B Market Share Product A Product B 2020 Company's Unit Sales Product A Product B 1,005 503 503 10.0% 10.0% 2020 30% 60% 2021 1,005 503 503 452 151 302 0% 2021 2022 1,005 503 503 0 0% Company Sales Model The sales of the company for each product can be calculated based on an outlook for its market share of the product. The company's market share of Product A is expected to be flat. The company's market share of Product B is expected to decline by 5% this year because of a new entrant but will then remain flat thereafter. 2022 2023 1,005 503 503 0 0% 2023 2024 0 1,005 503 503 0% 2024 2025 1,005 503 503 0 0% 2025 0 2026 1,005 503 503 0% 2026 0 2027 1,005 503 503 0% 2027 0 2028 1,005 503 503 0% 2028 0 2029 1,005 503 503 0% 2029 0 2030 1,005 503 503 0% 2030 0

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To model the market size for each product we need to establish the growth rates and apply them to th... View the full answer