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Strategic Plan

Develop your team’s strategic plan. At the end of the simulation, you will see how well your team did in implementing the chosen strategy.

In parenthesis, you can find instructions and examples. They are only for illustration. Delete them before submitting your team’s Strategic Plan.

Your team’s strategic plan should include the following elements

Team name: Baldwin

( e.g., Andrews)

Chosen strategy: Differentiator Broad

( e.g., Local Niche Differentiator)

Strategic vision and goal: Vision: Become a brand that withstands the test of time by developing products that are on the cutting edge. Goal: To be the preeminent device provider by developing premium products for the industry across the globe

Strategic objectives: By the end of year five, achieve 60% of market share in the high-tech segment in the USA while providing products that keep up with the high-tech customers’ requirements in the industry across the globe.

Strategic Plan for Departments: R&D: By the end of year five have the most technically advanced product on the market in speed and accuracy. Marketing: Achieve the highest accessibility of product in the industry in the global market. Production: Develop automation in our factories to reduce labor costs and increase production. Finance: Ensure that the company is sufficiently arranged in finances for the following year.

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Project 3: Simulation as a Tool for Strategic Decision Making Step 5: Make Your Decisions

Your team is now ready to help MediCorp compete in the genetic testing device industry by making strategic decisions through the Capsim platform. Your decisions will direct five calendar years of your client’s operations. All decisions for each year will be made on the first day of the year (January 1st). On December 31 of each year in your simulation, Capsim will produce a report that reflects the results of your decisions. Your team will use these reports to make further decisions for the following calendar year. 

First, consult your Round 0 Report to understand the starting position of MediCorp’s business. Use  How to Find Reports in Capsim to locate the Round 0 Report and reports for all subsequent rounds. Then, create your Strategic Plan and begin making decisions for your client, consulting Capsim: A Systematic Approach to Making Strategic Decisions for direction. Inside this document in the “Business Areas” section click the links for each functional department (Research and Development, Marketing, Production, and Finance) to get more insights about their roles and responsibilities in the simulation.  

Meet with your team members and develop your overall Strategic Plan. Fill out the recommended  template. Later, it will help you to evaluate how your strategy evolved during the simulation. The team coordinator should post your team’s Strategic Plan in your team’s discussion area. This should be submitted before Round 1 of the simulation is processed.  

Tips

· Teams should make their decisions in the following order: (1) R&D, (2) marketing, (3) production, and (4) finance. In this simulation, your team is unlikely to be successful if it makes decisions in a different sequence. However, coordination between the four areas during all decisions is also critical, and you may have to revisit decisions based on input from other departments.

· For your benefit, it is advisable to individually take notes on the decision-making process, which may help you analyze your team’s results later in this project.

Fill out a Capsim Decision Record at the end of each round for each of the four functions (R&D, Marketing, Production, and Finance). This document will serve as a record of your thoughts and decisions in each of the functional areas.

Proceed to the next step for more information on finalizing your team’s decisions.

Step 7: Evaluate Your Contribution to the Team

When you have completed all five rounds, write a post of 250 - 300 words in your group discussion area explaining the decisions in which you were involved, the logic behind those choices, and how those decisions contributed to the team’s strategy and results.

Strategic Plan

Develop your team’s strategic plan. At the end of the simulation, you will see how well your team did in implementing the chosen strategy.

In parenthesis, you can find instructions and examples. They are only for illustration. Delete them before submitting your team’s Strategic Plan.

Your team’s strategic plan should include the following elements

Team name: _____________________

( e.g., Andrews)

Chosen strategy: _____________________

( e.g., Local Niche Differentiator)

Strategic vision and goal: __________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

(What does your company want to achieve during 5 years of operations? How do you see your success? e.g., Strategic Vision: Our brand is tested by time and defines the cutting edge. Strategic Goal: Be a leader in providing a premium product for high-tech customers in the USA .)

Strategic objectives: ______________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

(Set your team’s strategic objectives in terms of products, markets, customers, and financial performance [for example, revenue, contribution margin, profit, market share, market capitalization, return on assets, etc.]. e.g., Strategic Objectives: (1) annually modify current product (Able) to keep up with the high-tech customers' requirements in the USA. (2) by the end of the 5th year (round 5) achieve 60% of market share in the high-tech segment in the USA…)

Strategic Plan for Departments: _____________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

(Set your strategic plans for each of the functional departments (R&D, Marketing, Production, Finance) for 5 years perspective. e.g., R&D: by the end of round 5 have the best product on the market in terms of speed and accuracy… Marketing: achieve the highest accessibility of product Able in the USA market… Production: gradually increase automation to reduce labor costs... Finance: ensure the sufficient arrangement of finances for the company’s operations during each round… )

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Practice Round Strategies in Capsim

The table below differentiates four different global strategies:

KTSDESIGN / Science Photo Library / Getty Images

Global
	Niche	Broad
Differentiator	Focus on the high-tech segment across two or three countries.  Competitive advantage is gained by distinguishing products with excellent design, high awareness, easy accessibility, and new products—any of which may be tailored to the individual local market’s needs. R&D competency is developed to keep designs fresh and exciting. Products will keep pace with the market, offering improved accuracy and speed. Tailoring products with specific region kits is considered. Prices are above average. Regional and product branding and sales efforts are given a larger budget to work with. Capacity is expanded as higher demand is generated. Vision statement: Premium, tailored products for technology-oriented customers across the globe; our brands define the cutting edge.	Maintain a presence in both segments of the market across two or three countries. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. R&D competency is developed to keep designs fresh and exciting. Products keep pace with the market, offering improved accuracy and speed—and sometimes tailored region kits. Prices are above average. Regional and product branding and sales efforts are given a larger budget to work with. Capacity is expanded as higher demand is generated. Vision statement: Premium products for the industry across the globe; our brands withstand the test of time.
Cost Leader	Concentrate primarily on the low-tech segment across two or three countries. Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Regional and product branding and sales efforts are below average. Automation levels are increased to improve margins. Vision statement: Reliable products for low technology customers across the globe; our brands offer value.	Maintain a presence in both segments of the market across two or three countries (global). Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Regional and product branding and sales efforts are below average. The plant automation level is increased to improve margins. Vision statement: Low priced products for the industry across the globe; our brands offer solid value.

MBA 670 Project 3

Individual Analysis

[Name]

[Team Name]

[Product Name or Names]

[Market Country or Countries]

[Course Name]

[Course Section Number]

[Instructor]

[Date Submitted]

Project 3 Analysis Directions: Write your answers below each question. Please do not delete the questions.

1. What strategy was your team implementing? Give examples of one or two decisions in each functional area over the five rounds that were consciously driven by the chosen strategy. Explain.

2. Which countries (The USA, Germany, &/or China) and customers (high tech, low tech, or both) did your team target with your products and why? What did your customers want most? Did your market share change over the five rounds for the countries where your products were sold? Comment on how it changed and why.

3. Based on Section 1 (High Level Overview) of the Round 1 Report, how did your team’s sales results compare to those of the other five teams? What decisions in Round 1 might have caused your sales to excel or suffer in comparison to your competitors? In other words, explain what factors affected your revenue.

4. Did your team meet the potential demand in each of the simulation rounds? Hint: Look at the Marketing Sections (3-8) of the report. If you observed a stockout (inability to meet demand) in one or more rounds, pinpoint the reasons behind each instance. If you didn’t have a stockout, explain why.

5. Explain your team’s capacity decisions, including whether or not to use a second shift in each round. How were production decisions aligned with market demand? 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? Were there any issues with overproduction? Is it possible that you could have used capacity more efficiently? Explain why or why not.

6. Calculate Return on equity (ROE) for all five rounds, using Dupont Formula ROE [Note: In the DuPont equation, ROE is equal to profit margin multiplied by asset turnover multiplied by financial leverage.] What does each component tell you about your team’s performance? What conclusions could you draw from your data?

7. Adequate cash flow is required for a company to support operations, invest in the future, pay down long-term debt and reward shareholders with dividends. Analyzing the Cash Flow Statement for each round identify the change in cash flow from the previous round and identify the major causes of this change. What conclusions could be drawn from your analysis?

8. Assess your team’s competitive position at the end of Round 5. What strengths and weaknesses does your team have in comparison with your competitors in terms of products, marketing, production, and finance? How could you be more successful? Explain.

9. How did your team balance short-term profitability with long-term sustainability in decision-making? Were there any unexpected challenges or opportunities that emerged, and how were they addressed?

10. Compare your team’s initial strategic goal and objectives with the achieved results. Did your team’s decisions in Rounds 1–5 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.

References

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Hello Team,

Please see attached Word document for my detailed analysis and proposed changes in CAPSIM. I provided a detailed report based on data from Round 3 which was used as my justification to make changes in Round 4. Below the report I included my proposed changes in CAPSIM. Note: I did not save my changes on CAPSIM so not to overwrite anything until we are 100% sure to submit. Again, all proposed changes are in the document I attached. Feel free to suggest changes and/or make tweaks if necessary. Enjoy the rest of your weekend.

On Aug 20, 2024, at 8:35 AM

Team,

Good morning, I hope all is well with you all.  We are now onto round 3.  As a reminder, Matthew if you could have your adjustments saved by the end of today that'd be awesome so we can look at it and discuss it tomorrow and Wednesday morning if need be.  Please send out your summary email of changes and why, plus when you'd like feedback by.  Again, have an awesome Tuesday and we'll chat soon.

On Monday, August 19, 2024 at 03:08:41 PM

Sending another follow up; I think I should go in and set the production for the US? Happy to step in and do that.

 

I did when I sent the email…thanks for the note though! We have plenty of time so just let me know how to proceed.

Team, sorry for the late email. I am checking on the new product that I put in - buzz  - and it looks like there are a few additional things we can go in and set prior to the next round.

 

· I think we should sell it in another market (probably Germany and perhaps China too), if we do that then we will need to set the marketing budgets for those two markets.

· Regardless we need to set production for buzz in the US because there is a forecast, but we didn’t set the production budget.

 

Sorry for the late email and I can go in and set these if you would like me too prior to the round.

Team,

 

The second round of the sim takes place this evening at 8 p.m..  After taking a look at the adjustments made by Ms. Negron, I don't have any major heartburn with any of the changes.  We shall see how the changes work out.  Do any of you have any suggestions, or items that you would like to discuss?  Ms. Negron asked that we have comments to her by this morning.....

 

For round 3, Matthew, you are next up with your turn at the wheel.  Please have your adjustments and roll up email out to us by tomorrow, Tuesday 20 August in the evening.  Once you have done so, we will all take a look and provide feedback by when you would like to have it based on your schedule.  

 

Ms. Negron, thank you for your return email I look forward to seeing how this round turns out.

Round 2 update: This is what I did. 

 

The speed and accuracy values were adjusted to 5.7, positioning the product at the center of the perceptual map. Additionally, the unit price was reduced, which decreased the "revision date", making the product more appealing to the Chinese and German markets, which have a lower acceptance rate than the United States at 19%.

To maintain consistency with the strategy of offering high-quality products that “stand the test of time,” a service life of 18,000 hours was established. This adjustment reduced the unit cost to $10.73 while ensuring the continued production of quality products. The promotion budget was increased by 75%, exceeding the recommended 60%. This increase aims to enhance the product’s visibility relative to competitors and improve accessibility. Production capacity and automation were slightly increased, which is expected to generate savings in labor costs. In the finance area, a loan was secured, and shares were issued to ensure a positive closing cash position. These measures aim to guarantee future financial stability and maintain strategic consistency across all departments.

Good evening everyone,

Thank you for your patience in getting round 3 changes and recommendations done. Please review the following:

R&D Changes Made:

· Baker

· Speed and Accuracy updated from 5.7 to 6.3 which are the ideal positions for each in the low tech segment.

· There was still a lot of time available in the calendar year till the end of 2027, so I propose adding region kits to USA and China. 

· With the remaining time of revision date still available, increased the service life to the upper end of the service life range placing Baker in the center of the low tech perceptual map.

· Buzz

· Speed and Accuracy updated from 9.0 to 9.5 which is the ideal position for each.

· Service life is already at the top of the range so that is kept the same.

· Region Kits were made for Germany and China with a resulting revision date still within 2027. 

Marketing Changes Made

· Baker and Buzz both optimized to the top end of price range

· Promo budget maximized to foster 100% awareness

· Sales budget unchanged as it was already maxed. Adjusting the sliders didn't seem to yield any change so I am a bit confused on that one.,

· Buzz sold in Germany and China now so lots of changes were made there.

Production

· Had some difficulty with Baker due to budgetary and plant restrictions so I maximized production while still remaining on budget.

· I think we are well on our way to meet demand for Buzz and still remain under budget. Capacity increased to meet production demand. Remaining available funds are allocated to investments in automations.

Finances:

· Production for Buzz automation investments was limited to 3 to end the year with a positive cash position. Remaining cash position used to pay down long-term debt.

· Remaining Closing Cash position is used to retire debt,  buy back stock, and Issue a small dividend to shareholders.

· Closing Cash position is $10 (in 000's).