Capstone
Computer
Based
Simulation
The Playing Field
• $100M electronic sensor
manufacturer.
• Market dominated by handful of firms.
• No outside competitors or substitutes.
• Benign environment.
Strategic Map
Large
Size
Small
Slow
Performance
Fast
Product Segments
Large
LowEnd
Performance
Traditional
Size
Size
High-End
Small
Slow
Performance
Fast
Perceptual Map
Each Segment has a Sweet Spot
Low
Large
2
4
1
Size
5
Size
Perf
Trad
Sweet Spot
3
High
Small
Slow
Performance
Fast
Perceptual Map
Segments drift over time
Large
Low
Perf
Size
Trad
Size
High
Small
Slow
Performance
Fast
Perceptual Map
Two Stage Purchase Decision
Stage 1 - Match Product to Market
1. Product must plot within the segment.
Able
Size
Able
2. Product must fall within
Price
price guidelines.
Performance
Able
Segments
Quality
3. Product must fall
within quality guidelines
Segments
Two Stage Purchase Decision
Stage 2 - Rank Best Product
Position
Quality
1. Positioning
3
AB
2. Age
Age
0
Yrs
Sweet
Spot
1
3. Quality
Price
HIGH END
20000
25000
4. Price
$30
$40
Segment Criteria Ranking
Traditional
Low End
High End
Pfmn
Size
Age
Price
Position
Quality
Position
Price
Age
Age
Position
Age
Position
Position
Quality
Price
Quality
Quality
Quality
Price
Age
Price
Functional Areas
Production
R&D
Marketing
Finance
HR
Research & Development
• Set Product coordinates (Position)
AB
AB
• Set MTBF rating (Quality)
High
• Drives Perceived age (Age)
High
Eight
<
<
<
• Drives breadth of product line
Low
Quality
Low
One
Age
Breadth
R & D Factors on Existing
Products
• Cycle time affected by:
– Automation level of production line
– Number of projects underway
– Distance moved on perceptual map
High
High
<
High
<
Low
Low
Automation Number of
Level
Projects
Long
<
<
Low
Distance
moved
Short
Cycle Time
Marketing
• Price
• Promotion Budget
• Sales Budget
• Set Sales Forecast
• Set Credit Policies
AR/AP
Production
• Set automation level
• Buy or sell capacity
• Schedule production
• One year lag to
add capacity or
automate
Finance
• Acquire Capital
– Issue Stock
– Short Term Debt
– Issue Long Term Bonds
•
•
•
•
Set Dividend
Retire Long Term Bonds
Retire Stock
Emergency Loan
CAPSTONE STRATEGIES
STRATEGY
Mission Statement
Goals
PERFORMANCE
ASSESSMENT
Success Measurements
Ratios
Statistics
• Business-level strategy:
ANALYSIS
S.W.O.T Analysis – Overall Cost Leader
Competitor Analysis – Cost Leader with
Competitive Analysis
Focus (Low Tech or
Product Life-Cycle)
– Differentiator
– Differentiator with
Focus (High-Tech or
Product Life-Cycle)
FUNCTIONAL PLANNING
Marketing
Production
Finance
R&D
HR
Success Measurements
• Choose at least TWO prior to Round 3
• Ending Stock Price must be weighted
no less than 20%
• Others:
– Cumulative Profit
– Avg. Market Share
– Asset Turnover
– Avg. ROA
– Avg. ROE
– Avg. ROS
• Criteria and Weights will remain
proprietary throughout the simulation
Situation Analysis
• Perceptual Map
• Demand Analysis
• Capacity Analysis
• Margin Analysis
Pre-Game Strategy Memo
• Intended Strategy
– Corporate: In which segments will you compete?
– Business: How will you compete in each segment?
• Situation Analysis
• Specific Goals
• Strategies and Tactics
– R&D actions
– Marketing actions
– Production actions
• One (1) page of text; one (1) page of exhibits
• Due: Monday Nov. 4 @ 2:00 p.m.
Capstone Schedule
Monday 11/4:
Wednesday 11/6:
Year 2000 Decisions 12:00 p.m.
Year 2001 Decisions 9:00 p.m.
Monday 11/11:
Thursday 11/14:
Year 2002 Decisions 12:00 p.m.
Year 2003 Decisions 12:00 p.m.
Monday 11/18:
Wednesday 11/6:
Year 2004 Decisions 12:00 p.m.
Year 2005 Decisions 9:00 p.m.
Monday 11/25:
Year 2006 Decisions 12:00 p.m.