(1,000,000×10)×0.

8=8,000,000

8,000,000×36=288,000,000

R=88%

D=10%

0.88/(1+0.1-0.88)

CLV=72,000,000

By the end of the first year, AnswerDash had lost about 12,000 customers and gained
approximately 9,000 new customers.

In order to earn back their original investment at the current   Retention Rate 

the company needs to earn the original investment of $2.54 million the company needs to
approximately 250,000 paying customers.
The current conversion rate for the company is 65%. This therefore means for every 100
prospective clients approached, only 65 will become paying customers. With the current
customer number standing at 100,000, it means that the company requires 150,000 more
customers. So the company will require approaching 6,337,500 more clients in order to recoup
the initial investment.

The three options available for AnswerDash include concentrating their focus on smaller
corporate organizations with huge growth potential. The other option available to the company is
minimizing the costs for the company so as to reduce prices for consumers. The third option for
AnswerDash is the option of differentiating to develop new products and increase its product
portfolio so as to increase its revenues and profit levels. the options available to AnswerDash
are strategic options that the company can use to improve its market position and increase the
number of customers to help the company break even.(Goodman 2009) The strategic options
available to the company are in line with the goals and objectives of the company.
The Advantage Of Focus Strategy For AnswerDash

The focus strategy of AnswerDash will help the company to concentrate on serving the market
needs of the small businesses which are not fully established. Concentrating on this market
segment will help the company to have a huge number of potential clients and therefore it will
be able to achieve its objectives (“The Investigation of Effect of Customer Orientation and Staff
Service-Oriented on Quality of Service to Customer Satisfaction and Loyalty in Hyperstar
Stores" 2016).

The strategy by the company will help the company since its capital and infrastructure is limited
and therefore limiting its capacity to serve more sophisticated clients.

The strategy of focusing on the specific market segment will help the company to position itself
in the market and create a recognizable brand for itself.

Disadvantages Of The Focus Option

The focus option limits the customer base to customers belonging to only the chosen focus
market segment. By limiting itself to the young and growing business organizations,
AnswerDash will have limited its options to clients with low capacity and therefore the bigger
customers will not be given the necessary attention.

Focus on the market segment of low capacity business organizations mean that bigger
organizations will not have confidence in the ability of the company to offer them the services
per their high expectations (Heaton 2012). This limits the growth potential of the company since
both sets of customers are required to maximize growth.

The other disadvantage of this option is that focusing on one segment increases the risk for the
organization. This is because, in case of failure in the segment, the operations of the whole
company will be affected and this may lead to total collapse for the company.

Concentrating on the small business organization will cause the company to lose revenue. This
is because, the big companies have more consumers, and therefore the company will have to
pay more for the services provided.