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Case 6: Future Cars Inc. Product Strategy Decision
Decision Support Using Excel
Future Cars Inc. is a high-tech, alternative-energy automobile company based in the Northeast United States.
The company has already designed and built an Ultra-Low Emission Vehicle (ULEV) that is selling well, but
Future Cars must make a major decision about what kind of car to build and market in the future. The two
basic car designs under consideration are an electric-gas hybrid vehicle similar to those on the market today,
and a hydrogen fuel cell-powered vehicle that does not use gasoline.
Each design has its advantages and drawbacks. The hybrid technology is mature and proven, but it has
the added complexity of a gasoline engine, a battery pack, and an electric motor in the drive power train.
The fuel-cell technology is simpler in theory and requires fewer parts (the power train includes a fuel-cell
stack, a battery pack, and an electric motor), but the technology is still experimental, and the parts are more
expensive. The labor costs to assemble the fuel-cell vehicle will be lower than those of the electric hybrid.
From a marketing standpoint, the electric hybrid is not as innovative as the fuel-cell car, making it a
product in a market with dozens of other hybrids. The fuel-cell car has the potential to generate more
demand, particularly from environmentally conscious consumers. An ever-present influence on the demand
for alternative-energy cars is the price of gasoline.
The Finance, Sales, and Operations managers of Future Cars Inc. have created some initial inputs for
you to develop an investment decision model using an Excel workbook. Your finished decision model will be
instrumental in helping Future Cars Inc. choose a wise product strategy.
Review the spreadsheet concepts discussed in class and in your textbook.
Your instructor may assign Excel exercises to help prepare you for this case.
Tutorial C has an excellent review of IF and nested IF statements that will help you with this
Review the file-saving instructions
it is always a good idea to save an extra copy of your work
on a USB thumb drive.
Reviewing Tutorial F will help you brush up on your presentation skills.
Because Future Cars Inc. uses a strategic investment decision model, you will calculate the
internal rate of return (IRR) in the decision model. If you are unfamiliar with the IRR function
in Excel, this case includes a section that explains how to set it up.
You are an information analyst for Future Cars Inc. The company president has asked you to prepare a
quantitative analysis of financial, sales, and operations data to help determine which technology path would
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