Situation Analysis
Team Assignment
Situation Analysis
• The Situation analysis will help your company
understand the current market conditions and
how the industry will evolve over the next eight
years. There are five parts:
–
–
–
–
–
Perceptual Map
Demand Analysis
Capacity Analysis
Margin Analysis
Consumer Report
• These exercises require The Foundation
FastTrack industry newsletter.
Perceptual Map
Low
Tech
High
Tech
• The Perceptual Map can be
used to plan revision and
invention projects that
follow customer's changing
expectations as well as
assist in comparing
products for forecasting.
• Each segment is
represented by a pair of
circles.
– The smaller, fine cut (solid)
circle represents the heart
of the segment.
– There is a larger rough cut
(dashed) circle that
represents the outer fringe
of the segment where there
are still customers, but in
lower quantities.
Perceptual Map
• Customer positioning
Low
Tech
High
Tech
preferences are reported in the
Buying Criteria boxes in The
Foundation FastTrack's Market
Segment Analyses.
• These locations, or ideal spots,
drift with the segments and have
different levels of importance to
different segments
• for example, the High Tech
segment cares more about
positioning than Low Tech.
• The Buying Criteria report the
preferred size and performance
for each segment as of
December 31 of the previous
year.
Perceptual Map
Low Tech Customer Buying Criteria
Expectations
1.
2.
3.
4.
Price
Age Ideal
Reliability
Positioning
Importance
$15.00 - 35.00
Age = 3.0
MTBF 14000-20000
Pfmn 4.8 Size 15.2
41%
29%
21%
9%
High Tech Customer Buying Criteria
Expectations
1. Positioning
2. Age Ideal
3. Price
4. Reliability
Pfmn 7.4 Size 12.6
Age = 0.0
$25.00 - 45.00
MTBF 17000-23000
Importance
33%
29%
25%
13%
Perceptual Map
Segment Centers at the End of Round
0
Low
Tech
Performance
High
Tech
Performance
Size
Size
1
4.8
5.3
15.2
14.7
6.0
6.7
14.0
13.3
2
3
4
5
6
7
8
Segment Ideal Spots at the End of Each Round
0
Low
Tech
Performance
High
Tech
Performance
Size
Size
1
2
3
4
5
6
4.8
15.2
7.4
12.6
Ideal Spot Locations Relative to Segment Centers
Segment
Performance
Size
Low Tech
0.0
0.0
High Tech
1.4
-1.4
7
8
Demand Analysis
• The Demand Analysis will help your team anticipate future demand. It will
also help attain a starting point for sales forecasting by taking the industry
demand and dividing that by the number of products in the segment In
addition, this exercise is useful when making purchase decisions for capacity.
• You will need the Segment Analysis pages (5 - 6) of The Foundation
FastTrack for Round 0. To analyze the demand for each segment, find the
demand at the start of the simulation (Round 0), then calculate demand for
Rounds 1 through 8.
Segment
Round
0
Growth
Rate
Low Tech
10.0%
High Tech
20.0%
Round 1
Round 2
Round 3
Round 4
Round 5
Round 6
Round 7
Round 8
Capacity Analysis
• The Capacity Analysis will help your team anticipate the cost of adding
Capacity and Automation to capitalize on the growth predicted in the
Demand Analysis. The information needed for this exercise is on the
Production page of the Foundation FastTrack. Use the information for
your company (the first letter of your company's name is the first letter
of all of your products names) to complete the exercise.
Product
Name
Capacity (000)
Firm
Industry
Overtime Capacity (000)
Firm
Industry
Automation
Level
Cost to
Double
Capacity
Cost to Maximize
Automation
Margin Analysis
•
•
Healthy margins, the difference between a product's manufacturing
cost and its price, are critical to company success. The Margin Analysis
will help your team understand the cost of material. It will also help
your team understand the effect automation has on labor costs. It will
also demonstrate the importance of adequate pricing, and the upper
limits of profitability.
You will find the necessary information on the Production Analysis, page
4 of The FoundationFastTrack.
Price
Material Cost
Labor Cost
Overtime
(Y/N)
Contribution Margin
Margin Potential
Segment
Low Tech
High Tech
Upper
Price Limit
Lowest
Material
Cost
Lowest
Labor Cost
Automation
Level
Contribution
Margin /
Unit
Contribution
Margin %
Consumer Analysis
Low Tech
High Tech
Price
Quality
Age
Price
Quality
Age
Positioning
Awareness
Accessibility
Overall
Positioning
Awareness
Accessibility
Overall
Consumer Analysis
•
•
The Consumer Report will help your team understand the need to
design quality product and the importance of adequate pricing,
sales budget and promotion budget decisions.
You will need The Foundation FastTrack Market Segment Analyses
Buying Criteria and the Production Analysis. Enter you answers in
form provided using G for Good, F for Fair, and P for poor.
– Price: Award a Good if your product's price is in the bottom third of
the expected price range, Fair if it is in the middle third and Poor if it
is in the top third.
– Reliability: Award a Good if the MTBF specification is in the top third
of the range, Fair if it is in the middle third and Poor if it is in the
bottom third.
– Age: Award a Good if the age on December 31 is within .5 years of the
ideal age, Fair if the age is .6 to 1 year away and Poor of the age is
beyond 1 year away.
– Positioning: Award a Good if your product is within .5 units of the
segment's ideal spot, Fair if it is .6 to 1.5 units away and Poor if it is
beyond 1.5 units.
– Awareness: Award a Good if your product's awareness exceeds 80%,
Fair if it is 50% to 80% and Poor if it is below 50%.
– Accessibility: Award a Good if your product's accessibility exceeds
80%, Fair if it is 50% to 80% and Poor if it is below 50%.
– In the Overall row, give your products a Good only if the top two
attributes in the Buying Criteria rate Good, and if the awareness and
accessibility ratings are at least fair.