Unit 1 DB 2

SteelTiger4

CapstoneIntro20142.pptx

Home >Business & Finance homework help >Operations Management homework help >Unit 1 DB 2

Unforgettable Business Learning

Introduction

An overview of the Capstone® Simulation

Why Simulate?

Risk-Free

View Alternative Strategies

Enjoyable

Compresses Time

(1 Round=1Year)

Selectivity vs

Integration

Unforgettable Business Learning

OPTIONAL PAGE

Objectives of the Capstone Simulation

Demonstrate effectiveness of multi-discipline teams working together.

Use strategic thinking.

Test your business acumen.

Understand overall interaction and impact of various parts of a business on one another.

Grow the awareness of competition.

Take away practical skills in business management.

Unforgettable Business Learning

Industry Overview

Unforgettable Business Learning

The Story: Background on Your Company

FTC required Sensors Inc. to be broken up into separate companies:

Andrews

Baldwin

Chester

Erie

Digby

Ferris

Your job: Operate one of the companies and make it successful.

Unforgettable Business Learning

Started as a single corporation named Sensors, Inc.

Sold sensors as main product

Corporation was shut down by FTC due to monopolistic operations

The Start

When Sensor Inc. breaks up, each of the new companies starts off with the following scenario:

$100 Million in Sales

5 Product Lines

5 Market Segments

Closed Marketplace

Unforgettable Business Learning

Sensors: An Overview of Your Company’s Product

Unforgettable Business Learning

Customers (OEMs) need sensors for their products to function.

Used for diverse applications

Five clear market segments

Low End

Traditional

High End

Performance

Size

Customer demands vary between the five segments.

The Marketplace: A Look Into The Segments

Round 1 Consumer Segment Expectations

Round 8 Consumer Segment Expectations

Unforgettable Business Learning

Perceptual map used to track changing consumer demands in size and performance

Each year, consumers will expect faster (higher performance) and smaller products (lower size)

This causes the segment circles to drift to the lower right constantly

Market segments continue to diverge over time

*Note the drift towards the lower right(expectations of faster and smaller products). Also note the divergence of the segments.

Low End Consumer Characteristics

What the customers say

Unforgettable Business Learning

Price

Price sensitive. Prefer price to be lowest possible.

Positioning

Prefer less cutting edge products (Bigger Size & Low Performance)

Age

Ideal Age: 7 years

Reliability

Ideal MTBF: 12000-17000

I want to spend as little money as possible!

I want them to have been around for a while…no beta testing!

They have to be moderately reliable…but not enough to drive up the price!

The technology doesn’t have to be cutting edge.

Traditional Consumer Characteristics

What the customers say

Unforgettable Business Learning

Price

Price sensitive, but willing to spend more than Low End consumers

Positioning

“Average” Performance and Size

Age

Ideal Age: 2 years

Reliability

Ideal MTBF: 14000-19000

I want these sensors to be moderately cheap.

I want them to have been around for a while…no beta testing!

They have to be moderately reliable…but not enough to drive up the price!

I want good sensors… not cutting edge, but reliable.

High End Consumer Characteristics

What the customers say

We need the total package. High performance and miniaturized for our products.

Unforgettable Business Learning

Price

Not price sensitive, willing to pay highest prices.

Positioning

High Performance and Small Size

Age

Ideal Age: 0 years

Reliability

Ideal MTBF: 20000-25000

Price is not an issue. I want the best sensors in the market!

I want the newest sensors you have!

Only the most cutting edge products will satisfy me!

Performance Consumer Characteristics

What the customers say

Unforgettable Business Learning

Price

Not price sensitive, willing to pay moderately high prices

Positioning

Highest Performance and Less important Size

Age

Ideal Age: 1 year

Reliability

Ideal MTBF: 22000-27000

I am willing to pay for what I need.

I want them to have been around for a while…no beta testing!

Reliability and Performance are very important and must be high.

I prefer newer technology!

Size Consumer Characteristics

What the customers say

Unforgettable Business Learning

Price

Not price sensitive, willing to pay moderately high prices

Positioning

Average Performance but Maximum Miniaturization

Age

Ideal Age: 1.5 years old

Reliability

Ideal MTBF: 16000-21000

I am willing to pay for what I need.

I want them to have been around for a while…no beta testing!

They must be miniature to fit our technology

I prefer newer technology!

Segment Growth

According to a Market Analyst, there will be continuous growth in the sensor market.

I see the entire market growing at around 14% or 15% per year. The high tech market alone will be growing at 16%.

Your goal: Prepare your company’s products to meet the needs of the growing market.

Unforgettable Business Learning

The Decision Making Process

Unforgettable Business Learning

Decision Areas

Coordinate strategy and tactics across the following areas of the company:

Additional Modules

TQM

Labor Negotiations

Advanced Marketing

Unforgettable Business Learning

R&D

Marketing

Production

Finance

R&D

Determine the specifications of the products to meet customer expectations

Build the quality and reliability (MTBF) of the products

Ensure the perceived age of the product meets customer demands

Invent new products to address the changing marketplace and take advantage of new opportunities

Unforgettable Business Learning

Marketing

Set the price for each product

Build customer awareness through investing in promotion

Establish a sales force and distribution channels

Set the sales forecast for each product

Set Credit Policies

(A/R and A/P)

Unforgettable Business Learning

Production

Purchase machinery to automate production facilities

Buy or sell capacity on product lines

Set production schedule

Manage the majority of the company’s fixed assets

Staff your facility with workers

Unforgettable Business Learning

Finance

Acquire capital to fund growth and operations

Issue Stock

Short-Term Debt

Issue Long-Term Bonds

Issue dividends to shareholders

Balance debt portfolio

Manage Proformas

Unforgettable Business Learning

Proformas: A Look Into the Future

Unforgettable Business Learning

Proformas use decisions made in the current year to project company performance for the next year

Analyzing them is critical for company success

The following proformas are available:

Balance Sheet

Income Statement

Cash Flow Statement

Financial Ratios

Things to do each year (each round)

Unforgettable Business Learning

Establish business strategy for your company

Analyze Capstone Courier to see industry results

Make tactical decisions across each functional area (aligned to strategy!)

Upload official decisions and confirm on the website

Await results when Professor processes

Rejoice in your superior business acumen

Begin the process again by confirming alignment of your results with your company’s strategic goal.

Good Luck and Enjoy!

Unforgettable Business Learning

Capsim Management Simulations Inc.

55 E. Monroe, Suite 3210

Chicago, IL 60603

Unforgettable Business Learning

Capsim Management Simulations, Inc.

55 E. Monroe, Suite 3210

Chicago, IL 60603