(Cost management and strategy; writing) You are the product manager at a silicone chip…

(Cost management and strategy; writing) You are the product manager at a silicone chip manufacturer. One of your products is a commodity chip that the electronics industry widely uses in cell phones, printers, digital cameras, and computers. As product manager, you have full profi t responsibility for the commodity chip. The commodity chip is a “cash cow” for your company and enjoys an enviable market share in the industry. Because your company’s chip has approximately the same features and functionality as chips available from competitors, market competition for this product is primarily based on price. Because of your success in managing the commodity chip, you were recently promoted to product manager of ZX chip, the most innovative chip your company has ever developed because of its data-processing speed, miniature size, and incredible functionality. The ZX chip has just completed fi nal testing and will be ready to be presented to the market in two weeks.  You were successful in managing the commodity chip because you kept unit production cost low by achieving high volume and effi cient production. Identify and discuss the key variables you will try to manage to make the ZX chip as successful as the commodity chip. Discuss whether your eff orts to manage costs will be similar to or diff erent from your eff orts to manage costs of the commodity chip.

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