Team Baldwin
Melissa Berasaluce
Kirby Chenkin
Edgar Colunga
Executive Summary and
Vision Statement
Executive Summary
Vision Statement
 To adopt a Differentiation
Strategy with a Product
Lifecycle Focus.
 To develop premium
products for mainstream
customers willing to spend
more on quality and
innovation.
 To create a competitive
advantage by
distinguishing our products
with excellent quality and
design, high awareness,
and easy accessibility,
always pricing at a
premium.
 Our primary stakeholders
are our customers,
stockholders, employees,
and the environment.
Intended and Emergent Strategies
Intended Strategy
Emergent Strategy
 Maintain steady
movement of products
from high to low tech
segments
 Reduce costs and prices to
remain competitive in low
tech segment
 Sustain highest market
share in the high tech
segment
 Sustain moderate market
share in low tech segment
 Continuously reposition
older products to retain
market share in both
segments
SWOT Analysis
Internal
Strengths
Weaknesses
• Ability to capture and
maintain market share in high
tech segment
• Placement of low tech
products and products in
transition
• Ability to maintain high
customer awareness and
accessibility year over year
• Ability to meet customer
buying criteria
• Ability to meet or exceed
potential market share in
both segments
• Forecasting
SWOT Analysis
External
Opportunities
Threats
• Growing market in both low
and high tech segments
• Competitors with similar
intended and emergent
strategies
• Competitors whose strategies
did not develop until mid
rounds
• Competitors who were
reluctant to spend money or
price high
• Competitors with effective
forecasting models
• Competitors who recognized
and responded to trends
Intended Strategy
Differentiation with Product Lifecycle Focus
 Research and Development  Finance
 Introduce one new high tech
product every other year for a
total of 3-4 products
 Allow high tech product to drift
into low tech segment and
eventually phase out
 Place products at the highest
end of each segment
 Marketing
 Price products at a premium
 Invest aggressively in product
promotion and sales
 Production
 Increase capacity and
automation as budget permits
 Fund investments with early stock
issuance and long term debt
 Buyback shares, reduce
borrowing, and pay dividends
once healthy cash flow is
established
 Human Resources and Total
Quality Management
 Invest aggressively in specific
areas of HR and TQM until point
of diminishing returns is reached
Emergent Strategy
Combination with Balance Scorecard Focus
 Research and Development  Finance
 Introduce a total five products
to keep up with market trend
 Decrease material costs by
decreasing product quality
 Inability to phase out low tech
products due to potential loss of
market share
 Marketing
 Reduce spending on product
promotion to increase
contribution margin
 Production
 Increase capacity and reduce
production to control second
shift and overtime expenses
 Fund investments with
continuous long and short term
borrowing
 Human Resources and Total
Quality Management
 Invest aggressively in all areas of
HR and TQM
The Competitive Market
 Team Chester – Broad Differentiator
 Closest overall competitor
 Strong financial statistics year over year
 Team Digby – Combination
 Significant market share in both segments
 Introduction of five products
 Team Erie – Cost Leader
 Moderate market share in both segments
 Team Ferris – Combination
 Maintained only two products for six rounds
Market Share Trend
Total Market Share Over Time
30
Percent Market Share
25
20
15
10
5
0
1
2
3
4
5
6
7
Round
Andrews
Baldwin
Chester
Digby
Erie
Ferris
8
Strategic Decisions
 Round 4 – Emergency Loan
 Stronger focus on customer buying criteria
 Conservative forecasting for rounds 5 – 8
 Rounds 2, 7 and 8 – Product Stock-out
 Round 5 - 7 – Competitors Introduce Several Products
 Cost and price reductions within low tech segment
 Introduction of fifth product in Round 8
Overview
 Lessons Learned
 Small changes in each area had a significant effect on overall
performance
 Good understanding of the effects of each decision creates advantage
 What Worked Well
 Strong early performance
 Reliance on balance scorecard to dictate decisions in later rounds
 What We Would Do Differently
 Follow the balance scorecard metrics more closely from the beginning
 Prepare a better forecasting model
Capsim® Evaluation
 Appropriate level of difficulty for a senior level course
 Enjoyable and competitive game
 Class time was insufficient to analyze and execute all
decisions
 Suggested changes:
 The ease of imitating competitors’ strategies
 The emphasis on metrics and the balance scorecard