Write an Eight- to Ten-page analysis on Mediocre

This report is not reflective of your team’s (Baldwin) performance or decisions in the Capsim Project 3 exercise. It appears that you uploaded the wrong report or that you didn’t participate with your team in the assignment.

Donald Ruffin

University of Maryland Global Campus

Professor Thomas Douglas

1. What strategy were you implementing? Give examples of any three decisions over the four rounds that were consciously driven by your chosen strategy. Explain.

Since the past and recent projects had certain similarities, the approach used in this project is referred to as the Niche Cost Leader. The strategy was applied and focused on the segment of low-tech operators in the three countries. The Niche Cost Leader course of action is significant because it enables us to take total control over the price ranges in the market segments. Based on the report, it is evident that a competitive benefit can only be gained via minimizing the costs of raw materials, costs of production, and costs meant for research and development. For this reason, this will ensure that the organization competes against other companies founded on the markets' price. Comment by Thomas Douglas: Not true, your team only focused on the U.S. market.

Additionally, considering a secondary group resource, I explored the production and marketing and presented a product as a backup to the used strategy. The introduced product is described as "Bold," which was mostly presented in China. We also made three significant decisions that were influenced by the strategy. As an illustration, for research and development in round one, the costs had to be minimized to give room for new products. This phase helped the company understand what the consumers had in mind regarding the product. Furthermore, we had a long-term objective of mitigating production costs, and the move to China helped fulfill this goal. Comment by Thomas Douglas: I’m not following this paragraph. There is no evidence that you entered the market in China with this or any product.

2. Which country and customer(s) did you target with your product (high tech, low tech, or both)? Why? Give examples of two decisions in R&D and two decisions in marketing that you implemented over the four rounds to enable your desired targeting.

The product was associated with success in several nations, but the three countries considered for this project include China, Germany, and the United States of America. Our team adhered to the Niche Cost Leader course of action, which focused on the market segment with low-tech operators. Based on the market reports, the countries selected presented similar product expectations among customers. Our team's objective was to offer significant value and rival prices in the markets. The sales outcome indicated that we managed to accomplish our goal. However, we made sure we understood the cost, quantity, and quality of several elements, including energy, labor, and raw materials, among other agents in the chosen nation.

Additionally, we also evaluated economic infrastructure's cost, such as ports, communications, and transportation. These aspects had to be considered because they have an important impact on our entry decision. Even though we strictly focused on the low-tech markets, our product managed to sell in other segments, including the high-tech market. Furthermore, in research and development, we opted to invested more to ensure the product presented to the market was affordable and reliable. In this sense, from round one to round four, our product must undergo several modifications. One modification made to the product was reducing the product cost per unit of material used as an illustration. We also decided to establish a secondary good whose parent producer was in the Chinese sector.

3. In the market segment that you were focused on, what do your customers want most? Did your market share for the country where your products are sold change over the four rounds? Comment on how it changed and why.

One of the most critical elements in our team's chosen market segments entails the price because it is considered a consumer purchasing determinant in the three markets. China, Germany, and the US were contemplated by our team based on the high demand for products under the low-tech segment. An important aspect that we noted involves the varying sales and prices in these selected segments. First, from round one to round four, the United States price rose to $34.50. This market was under the high-end specification, meant to allow for a reduction of cost and flexibility. Secondly, in the second round, the low-tech segment sales record was 978, representing a growth rate of 6%.

On the contrary, the high-tech division indicated a record of 605, which represented a 13% growth rate. Additionally, in Germany, the price was 34 euros (roughly $37 US) at the start. From 2019 to 2020, the demand in the market increased to 20%. Actual unit sales recorded in the first round under the high-tech division were 137, based on a growth rate of 35%. China's market also allowed for flexibility by incorporating the high-end range where the market size presented 823, with a 45% growth rate in demand. This information indicated the specific reaction of products in the selected nations.

4. Did you meet your potential demand in Round 1? Round 2? Round 3? Round 4? Hint: Look at Section 3 of the report (marketing). If you observed a stockout (inability to meet demand) in one or more rounds, pinpoint the reasons behind each instance.

The strategy presented in the marketing section was meant to offer competition and value based on the selected price. The three countries were part of the marketing section, and they indicated a varying sales pattern. For instance, for the United States, there was an increase in spending on research and development, which led to a rise in price. The rise in spending was meant to ascertain that we could offer products that fit market expectations, including demand. Additionally, the spending increase was meant to ensure consumers became aware of the products we provided to them. As a result, the low-tech unit sales went up by 6%, where the sales increased to 1238 units. The increased sales were based on the increase in spending on research and development. Rounds two, three, and four also indicated a rise in unit sales. Our report also showed that there were minimal price fluctuations due to increased sales at the initial cost. In Germany, high-end goods' introduction led to unit demand rising by 30%, which brought about a desirable net margin. Additionally, in China, a similar strategy was applied, which was intended to raise the price and bring about flexibility. From round one to round four, China's market size increased to 45%, which led to a boom in unit sales.

5. Based on Section 1 (High Level Overview) of the Round 1 Report, how did your sales results compare to those of the other five teams? If your sales results were extreme (top two or bottom two among the six teams), explain what other than sheer luck, caused that to happen. In other words, what decisions in Round 1 might have caused your sales to excel or suffer in comparison to its competition?

Founded on the high-level chart, our team managed to raise sales compared to other groups. As an illustration, we recorded a total of$159,520 in sales, which pushed us to the fourth position. Several factors contributed to the sales increase for our group. For example, the potential to invest significantly in research and development contributed to the rise in sales. As a team, we understood that we had to start operations in the international market.

Additionally, we applied a similar approach as our immediate project regarding maintaining product price under the customer range, making it easier to sell more units. Secondly, improving customer awareness concerning our product also played a central role in increasing sales. The more aware customers are about a product, the more customers will purchase that product. Thirdly, managing promotion costs and ensuring the products are available for the customers were crucial actions that increased sales. Compared to other teams, our activities generated more due to the careful assessment of demand in the three markets. According to Capsim (n.d), product success in the market is influenced by company needs and satisfying customer expectations. For example, the Baldwin team focused on meeting company and customer needs and made some changes, which benefited the team.

6. Based on the Round 4 Report, were your sales after Round 4 higher or lower than your sales after Round 3? How do you explain this change in sales in view of your team's decisions in Round 4?

The three selected markets, including China, Germany, and the United States, will provide a selling platform for the products after extensive consumer demands. Our marketing team explored customer awareness of our products in the three markets and decided to carry out a 75% increase in customer awareness. The attention played a central part in sales increase. Notably, we ensured that we did not move in a rush without considering what we were getting ourselves into. The global market is a complex platform, and misguided activity may compromise the business and lead to unsuccessful entry.

For this reason, we ensured that we did not make moves that would jeopardize our entry. Moreover, our research and development group maintained the speed and accuracy from rounds three and four for the low- and high-end goods. Manufacturing products based on market demand is essential because it ascertains the presentation of actual outcomes to consumers. An increase in automation plants by our manufacturing team also influenced profit margins positively by bringing about mitigation of labor costs. Our marketing group was responsible for applying the strategy of competing and offering value based on price. In this sense, sales were recorded based on the investments and activities our team resorted to during market entry.

7. Did you need an emergency loan in any of the four rounds? If so, why? If you did not need an emergency loan in any of the four rounds, explain your company's decisions to ensure that your company would not need an emergency loan to survive.

From department performances, I understand that there was a need for modifications to the project. Our team's chances depended on giving common stock to ensure we limit any seeking emergency funds (loan). Additionally, our team explores using the available debt that offered us the ability to spend during rounds one and two. First, we ensured that we had significant cash to cater for temporary debts for rounds three and four. We discovered that investing heavily could trigger a reduction in cash and, for this reason, we opted to provide more stocks for cash. Issuing stocks was a core boost for every department, which brought about higher access to consumer demand. We avoided using emergency loans because it could present extreme problems and could lead to more organizational issues. The simulation site (Capsim) states that emergency loans indicate the existence of inevitable mistakes. For example, a sudden expansion of inventory and expanding plant automation will create long-term problems for the company (Capsim, n.d). For our project, we settled for temporary debts and used common stock to raise funds for use. Our course of action focused more on ensuring our team does not lose money and successfully generate sales and expand globally.

8. Explain your capacity decisions, including whether or not to use the second shift in each round. Compare the available plant capacity in each round (first and second shift) versus the number of units produced. Was there idle capacity in any round? Is it possible that you could you have used capacity more efficiently while increasing your plant utilization? Explain why or why not.

The last project's information defines the first shift as the total amount of sensors presented in a year based on an assembly line in eight hours (Capsim, n.d.). Our product's demand by the customers went up in China, Germany, and the United States. This process became a crucial aspect of our international market operations, which marked the beginning of the expansion. In this sense, we decide to move individual plants to China, a procedure that cost over $2 million (USD). Despite the higher initial costs, our permanent objective of alleviating production costs was accomplished via working personnel labor costs.

Additionally, for the production of a new product, plant application was increased in all the nations. As an illustration, the units of Total Baker in all the markets improved. However, the product capacity was mitigated as a result of introducing a new product to the market. The organization incurred additional costs for capacity purchase to accommodate the new product. In this case, capacity refers to the number of funds the company invests in the countries and the overall potential to produce the desired products in each market. Moreover, an increase in automation levels was necessary to support the cost leader strategy. Nonetheless, due to required investments for the new product, production levels were kept at a minimum.

9. See Finance Section of the Round 4 report. At the end of Round 4, do you have any current debt? Explain the presence or absence of current debt at the end of Round 4. At the end of Round 4, do you have any long-term debt? Explain the presence or absence of long-term debt at the end of Round 4.

Every department managed to utilize the temporary debt available for the team. The team also managed to assess the required processes, making viable decisions regarding each market's product demands. For example, our team focused on establishing a product to be presented in the Chinese market. In rounds one and two, the finances available for us were from acquiring temporary debt and issuing common stock. These finances helped us ensure we avoided emergency loans that could create problems for us in the future. The utilized deficit in the first round ensured that we had enough finances to run every department during the expansion phase. We considered early investment the best option for long-term operations. In the third round, we also used the temporary debt to produce actual units that matched the forecasted demand. However, in round four, our team did not require seeking short-term debt. We used more stock in round four to avoid falling into a more considerable debt that negatively affected our operations. The avoidance of emergency loans contributed to the organization's ability to invest in more critical areas, such as production. Therefore, I consider our choices and decisions rational, and we had a wise run in this simulation.

10. Did your team's decisions in Rounds 1–4 always align with the chosen strategy? If you found yourself deviating from your strategy, explain why. In hindsight, what decisions would you have made differently? Explain.

Our team's strategy indicated that we managed to offer affordable and reliable products in the three markets. An investment in a universal market is a significant transformation in operations that calls for intense focus and outstanding decisions. Our wise utilization of the available funds helped us expand our operations and ascertain that every department had significant production resources. However, we should have assessed our entry point before venturing into the three global markets despite our success. Using a structured agreement for entry would allow the team to market its products following certain factors, including partnerships and marketing activities. Furthermore, I understand that evaluating other external elements like environmental elements and market aspects would significantly impact operations. Our team needs to be considerate of the assessment step to improve our productivity and comprehend competitor movements.

Reference

Capsim. (n.d.). Advice to Struggling Teams. Retrieved 24 February 2021 from https://ww3.capsim.com/guides/professor/professor-guide/10-advice-to-struggling-teams.cfm