Why Simulate?

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Welcome to the Foundation®

Business Simulation

School: CBU

Professor: Dr. Cayce Lawrence

Class: MGMT 498

Objectives

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 know-how to improve the effectiveness of your business.

Why Simulate?

Risk Free

View Alternative Strategies

Enjoyable

 Compresses Time (1 Round=1Year)

 Selectivity <=> Integration

SENSOR

INDUSTRY

OVERVIEW

The Marketplace

Low Tech

 Customers (OEMs) need sensors for their products

 Initially one segment, now breaking into two

 Very different customer demands developing between the segments

 Diversification in the use and utility of the sensors

High Tech

The Marketplace

Low

Tech

High

Tech

 In our industry we track the changing customer demand on a perceptual map

 Over 8 years customers will demand much faster and smaller sensors

 Market Segments will continue to diverge

Low Tech Customers

 “I want these sensors to be cheap”

 “I want them to have been around for a while – no Beta Testing!”

 “They have to be moderately reliable.”

 “The technology doesn’t have to be cutting edge.”

You’re not giving me what I want

High Tech Customers

 “These sensors have to be small, like micro, and fast”

 “I need them to be right out of R&D, I’m talking ZERO years on the market”

 “I’m willing to pay more to get what I want.”

 “I like a pretty high reliability.”

And I’m not getting what I want!

SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH

Sees the next 8 years as consistent growth. All market segments increase at a nice “clip,” according to market analyst.

“I see the entire market growing at around 14% or 15% per year.

The High Tech market alone will be growing at a whopping

16%.”

12000

10000

8000

Sensor Industry

6000

I hope those companies out there are ready for that kind of expansion!”

4000

2000

0

Year 1 Year 2 Year 3 Year 4

Low Tech

Year 5

High Tech

Year 6 Year 7 Year 8

COMPANY

OVERVIEW

The Competition

$40 Million in Sales

1 Product Line

2 Segments

Closed Marketplace

6 Companies

Andrews

Baldwin

Chester Ferris

Digby

Erie

Welcome To

Your New

Company

Students need to coordinate strategy and tactics across the following areas of their company:

Establish the specification of the products to meet customer demand

Build the quality and reliability

(MTBF) into the products

Ensure the perceived age of the product meets customer demands

 Create new products to meet the changing marketplace

R&D

“Our products are not well positioned in the marketplace.”

Marketing

“Our products are not priced optimally.

And many of our customers don’t even know our product exists.”

Set the price of our products in the marketplace

Build customer awareness through promotion

Establish a sales force and distribution channels

Set the sales forecast for our products

Set Credit Policies AR/AP

Purchase machinery to automate our facilities

Buy or sell capacity of product lines

Schedule production for each line

Manage the majority of the companies fixed assets

 Establish your workforce complement

Production

“We are paying too much for labor costs.

Very soon we will run out of capacity to meet demand.”

Finance

“We have poor cash flow and substandard financial ratios.

We have no financial policy statement.”

Acquire capital to fund capital expansions

Issue Stock

Short Term Debt

Issue Long Term Bonds

Issue dividend to our shareholders

 Balance our debt portfolio

 Manage our Proformas

Proformas

A great management tool driven by forecasts and projections. Allows

“What if” Scenarios by the company.

 Balance Sheet

Profit & Loss

Cash Flow

Financial Ratios

Scoring Methods

Success Measures:

Select a minimum of two criteria to be measured by: o ROE o ROS o ROA o Cumulative Profit o Stock Price o Market Capitalization o Asset Turnover o Market Share o Weight each selection

Analyst Report

Running your Company

Things to do on an Annual Basis

Establish business strategy for your company

 Analyze Foundation FastTrack to see industry results

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

Upload official results and confirm on the website

Await results when Professor processes

Rejoice in your superior capitalistic acumen

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

Good Luck and Enjoy!

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