At this point in the game, we do not feel we need to make any adjustments to our business level strategy. Due to the high growth rates, we still feel that the high end, performance, and size segments are the best markets to target for our products; however, we will still carry a product in both the low end and traditional segments. Although our overall strategy will remain the same, we will need to make small changes in our functional level strategy to increase our market share and profit margin.Most importantly, our team needs to increase our contribution margin. To do that, we will need to focus on reducing costs in our functional units. Currently our labor and material costs are the greatest contributor to our cost of goods sold. We can reduce costs by using all of our capacity, so as to spread manufacturing costs over a larger amount of products then previously, thus reducing the manufacturing cost per product. As stated earlier, our plant currently is running at around 50% utilization. We may also want to look
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