This will help each company develop a strategy for the competition. Let us begin with the Research and Development Module. This practice exercise will help you understand the relationships between business strategy, tactics, functional alignment, and the Capstone® simulation. One basic strategy is Broad Differentiation. Erie may be able to increase the contribution margin in some of the other segments but an average of 25% contribution margin in all segments is pretty good. The promotion and sales budgets should be in the mid pricing range. Our original strategy had failing results and our team placed last at the end of the first round. Choose COMPXM strategy . • Strategy – Broad Differentiation • Presence in every segment (check) • Excellent design (5 of 5 segments) ... not what our strategy was. Chester’s performance product is Coat. When our cash position allows, we will establish a dividend policy and begin to retire stock. Design 2. © 1985 - 2011 Capsim Management Simulations, Inc. 16.1 Andrews - Cost Leader with a Product Lifecycle Focus, 16.2 Baldwin - Differentiation with a Product Lifecycle Focus. In the Capsim simulation course at Georgian Court University, Lakewood, NJ in summer session 2012, there are six companies are: Andrews, Baldwin, Chester, Digby, Eire and Ferris (Computer). After our products are well positioned, we will investigate modest increases in automation levels to improve margins, but never at the expense of our ability to reposition products and keep up with segments as they move across the perceptual map. This makes it easier to adjust to what the other companies are doing. In the Traditional and Low End segments the age of the product can be older. A Broad differentiation strategy maintains a presence in every segment of the market. It's a strategy that works better for larger companies than smaller ones. The industry simulation is the sensor industry. Fire was able to produce sales for 1,235 units with its capacity of 14. But more important and effective than this is how Nike makes its customers feel. Broad differentiation is a strategy that is applied across an industry, appealing to a broad range of shoppers. Hold reliability (MTBF) steady. Nothing personal, chumps! Explanation: Broad Differentiation strategy refers to building a business or a brand that differs significantly from that of the competitor. The prices of products are reduced by $0.50 each year. The first round ends December 31, 2013. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability. Prices are above average. Best strategy for Capsim? CAPSIM PRESENTATION-TEAM FERRIS 1. We expect to keep assets/equity (leverage) between 1.5 and 2.0. Currently my team is doing Niche Cost Leader (for practice rounds) but finding it very difficult and wondering if we should switch when the real simulation starts. Hold reliability (MTBF) steady. Each Industry segment makes up a percent of the market. The teams will play six rounds in the simulation. • Have a pre-grade option that would allow teams to send in their decisions to CAPSIM for a review and recommendations before official submit. The Secret to Capsim Success it’s all about the sweet spot… Team Andrews Fall I 2009 BUSN 6200 Presented By Team Andrews: Brad White, Tim Fish, Christina Vance, Stephanie Bogan, & Anthony Vatterott Team Approach Vision Statement To design and manufacture the world’s most cutting edge electronic sensors. In this manner Erie will have a better product then most of the other companies for the second half of each round (year). In CapSim, a firm should launch a new product if: The strategy calls for it in the Team Member or On-Line Guide. In order to achieve the broad differentiator strategy, a new product was introduced in the high segment i.e. We will develop an R&D competency that keeps our designs fresh and exciting. The Digby computer team will maintain a presence in both segments of the market. We will keep our existing product line, and introduce at least one more line, maintaining a presence in both segments. Hold reliability (MTBF) steady. Erie uses this basic calculation for the other product segments. Dell - Leave positioning alone, allowing the product to age further. Executive Summary The Digby team will adopt a Broad Differentiation strategy, maintaining a presence in every segment. We will price at a premium. Erie must analyze what the other companies have done with their segments. Erie does this calculation for the rest of the segment products: Low-Ebb, High-Echo, Performance-Ebb and Size-Egg. The main objective of implementing a differentiation strategy is to increase competitive advantage. When the round is complete Erie can compare the segment performance and size coordinates with the other companies’ segments in the Capstone Courier. In the Production Module Schedule the sales forecast carries over to the Unit Sales Forecast. R&D competency is developed that keeps designs fresh and exciting. Under the Unit Sales Forecast is the Inventory on Hand. There are actual market share units listed in the Capstone Courier. Capsim Simulation Broad Differentiation Strategy. We will gain a competitive advantage by distinguishing our products with an excellent design, high awareness, and easy accessibility. Erie makes improvements for each product to beat the competition in all five segments for the next round. A Differentiation Strategy with a Product Life Cycle Focus seeks to be known far and wide as the top producer of the best performing state-of-the-art products. Note that the highest to lowest market share in units in the competition is Low End, Traditional, High End, Size and Performance. In the High End, Performance and Size segments customers want new and better products. Access The Broad Differentiation Sample. In order for this strategy to work a company has to be aware of what the competition is doing every round. If a company overestimates sales or spends too much money, current debt may increase. Moreover, the company will gain a competitive advantage by distinguishing products with an excellent design, high awareness and easy accessibility. James Cage (author) from Orlando, FL on November 15, 2013. Although the Capstone Team Member Guide recommends a 30% contribution margin in each segment, this is very hard to accomplish during competitive rounds. Enjoy! It is essential in most companies and have exemplary impact on consumers, thus a good remedy for the Capsim. Products keep pace with the market, offering improved size and performance. Two competitors are pursuing Broad Differentiator strategies. After the practice rounds, you are free to pursue any strategy you wish, and can abandon the Broad Differentiation strategy entirely. Automation costs money but a small increase in automation, 0.3 per year may be enough to stay competitive. Erie must make a comparison to see what the other companies are promoting. A Broad Differentiator strategy … As a broad differentiator in the market, the performance segment focuses on the reliability and ideal position of the product. Erie keys off of the Industry Conditions Report Performance and Size Centers for each round listed for the following segments: Traditional-Eat; Low End-Ebb; High End-Echo; Performance-Edge and Size-Eat. In the practice rounds the individual companies get an idea of the strategy performed by the other teams and the computer team Ferris. The first round ends December 31, 2013. Fire. (During the practice rounds, each company is assigned a different strategy.) We will finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. The Digby computer team will maintain a presence in both segments of the market. In the Workforce complement a second shift is not added until the first shift reaches its needed complement. The number 1,231 is placed in the box. Not hard to do, since they were incompetent, but it was fun! Dot - Improve positioning and reduce age. Andrews has decided to adopt features from several different basic strategies to form our own hybrid strategy. In the Marketing Module Erie must improve the price of segment products round by round. There are six basic team strategies listed on page 24 in the Capstone Team Member Guide 2012. In the Capsim simulation course at Georgian Court University, Lakewood, NJ in summer session 2012, there are six companies are: Andrews, Baldwin, Chester, Digby, Eire and Ferris (Computer). A final note, this is a competition among teams. It is best for Erie to price products at a mid-range in order to be competitive. Even though High, Size and Performance sell fewer units these segments sell at higher prices. Capacity is expanded as higher demand is generated. Our primary stakeholders are customers, stockholders, management, and employees. 15.4 Digby - Broad Differentiation. In this case, I mean making adjustments, especially on thrift segment, to sell at a lower price than the industrial average to maximize your market share. Example: Increase Daze ' s performance by 0.8 and reduce size by 1.0. Hence an innovative strategy is highly recommended in order to achieve high business growth, in case you are willing to expose you to a higher degree of risk. capsim report 4555 Words | 19 Pages. CHANGING STRATEGIES TO MAKE BETTER PRODUCTS• Original Strategy: • Cost Leadership • Differentiation Strategy• New Strategy • Focus Cost Leadership Strategy • Differentiation Strategy 4. We measure performance in terms of market share, market cap, ROA, and profits. I usually go for broad differentiation because it is more flexible. 1. The Digby computer team will adopt a Broad Differentiation strategy, maintaining a presence in every segment. Areas we excelled: Standardized and proprietary tools & processes Positioning, forecasting (early rounds) Functional expertise & strong communication Early, aggressive TQM investments - able to lead our segments and achieve higher margins Management Decision Process Cross This Broad Differentiation Strategy only works if Erie compares its segment products to the other teams’ products and adjusts pricing, promotion and sales. Note that Erie may be able to charge a better price for the High-End, Performance and Size products but the Traditional and Low-End products have to have a more modest price. This is a competition and Erie has to adjust to the marketplace. We are somewhat adverse to debt, and prefer to avoid interest payments. This is a rule of thumb when making a Sales Forecast. Premium products for the industry: our brands withstand the tests of time. Broad Differentiation. basic capsim strategies.pptx - cost leadership life cycles product developm ent operating factors differentiation market segment factors size broad cost These strategies are Broad Cost Leader; Broad Differentiation; Niche Cost Leader (Low Technology); Niche Differentiation (High Technology); Cost Leader with Product Lifecycle Focus and Differentiation with Product Lifecycle Focus. We chose broad differentiation as a a strategy. Improve reliability (MTBF) to enhance demand. Capsim Team Strategy Report Our team decided to choose the “Broad Differentiation” strategy as the basic strategy for our company. Firm Profile: Multiple product lines in targeted segments (High End, Traditional, and Low End) Minimum focus in other segments A rule of thumb is to keep the contribution margin above 25%. Wondering what the easiest strategy is for Capsim and why. All five segments: Traditional, Low, High, Performance and Size equals 100%. Example: Increase Dixie 's performance by 1.2 and reduce Size by 1.0. Erie must check in the Capstone Courier to see which teams are automating. It may be necessary to increase automation gradually over the rounds of the competition. In the real world companies buy back stock. As the game progresses, you can change it to a hybrid of broad differentiation. The industry simulation is the sensor industry. SHAREHOLDER MEETING 3. The first customer buying criterion is reliability (measured in hours) as Mean Time Before Failure (MTBF) rated importance of 43%. CAPSIM-Team Ferris Nikita Motkur, Howie Hehrer, Cori Porasik, Priscilla Gonzalez & Neha Noonemunthala December 8, 2016- BUS 6990 Strategy Formulation and Org. We will grow capacity to meet the demand that we generate, avoiding second shift/overtime when possible. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. Let’s take the Traditional segment which has industry unit sales of 7,387,000 units or 32.4% of the market in round zero. R & D Round 1 . The computer will then calculate the unit Production after Adjustment. In the computer simulation I would recommend not to buy back stock unless your company has a great over surplus of funds. Dixie - Improve positioning and reduce age. The computer will automatically give a company a BIG AL LOAN and the vig (interest) is 7.5%. Erie should divide the 7,387,000 units by 6 and make a prediction that Erie will sell approximately 1,231,167 units. 12.4 Broad Differentiation. Mission Premium products … Broad Differentiation. Erie should keep their revision dates before July 1 of the current round. We have six teams in the simulation: Andrews, Baldwin, Chester, Digby, Erie and Ferris. When a company pays back bonds the company’s S&P rating will improve. R&D competency is developed that keeps designs fresh and exciting. We will use the Digby team for this example. When you sell stock in the marketplace this will decreases the price per share of your company’s stock. In this simulation there are the following modules: Research and Development; Marketing, Production and Finance. Our team's original strategy was broad differentiation. Broad Differentiation Capsim. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. Broad Differentiation Strategy is quite unique and brings about many Examples. Ideal Automation Rates and New Products Broad Differentiation Strategy I have read so many different automation strategies and would like to know with reasons which is best. Erie must adjust the Production Schedule for Traditional-Eat to equal 1,231,161 units. opportunity for success, as they enable a company to create a competitive advantage by having differentiated products, services or business models. Differentiation Strategy with a Product Life Cycle Focus. Daze - Slightly reduce reliability (MTBF) to … The teams played two practice rounds before beginning the actual competition. This improves the position of the product, making it more appealing to our customers. It received a market share 15% within 3 rounds of execution. These revisions change the Age at Revision for each segment. A differentiation strategy is an approach businesses develop by providing customers with something unique, different and distinct from items their competitors may offer in the marketplace. Capsim Strategic Management Simulation: First Place. CAPSIM SIMULATION WINNERS!BY: MINHEE HUH, MOLLY MCGOWAN, AND KING TAN 2. We simulated developing silicon wafers for 6 rounds representing 6 years. The Digby team will spend aggressively in promotion and sales in both segments. Erie Company has to implement a plan to upgrade the performance, size and Mean Time before Failure (MTBF) of its products. The only way to improve your company’s performance is to analyze what the other teams are doing each round and make adjustments for all modules. 16.4 Digby - Broad Differentiation. In the Physical Plant Section, Erie wants to make sure they have enough 1st shift capacity not to pay overtime to employees. We will attempt to differentiate our product line … The Human Resources Module will be added in the third round. CAPSIM ANALYSIS: FERRIS 14 700 by the end of Round 8 with a plant utilization of 184%. Examp… In the Production Margins Area we have listed the total unit cost and contribution margins. Less stock on the open market will increase the price per share of the company’s stock. In the Pro Forma Income Statement make sure each product has a net profit. Daze - Improve positioning and reduce age. Example: No change required. Follow the decision guidelines below unless directed otherwise by your instructor. We shall use team Erie as an example. CAPSIM - Winner Presentation (An example of utter dominance) Here is the presentation of my CAPSIM simulation team (Team Baldwin), in which we mercilessly destroyed, decimated, and demoralized our competitors into oblivion! In the Finance Module, as a basic rule of thumb keep accounts receivable at 30 days lag and accounts payable at 30 days lag. We will gain a competitive advantage by distinguishing our products with an excellent design, high awareness, and easy accessibility. At the end of the round, Erie can do a comparison price check against the other companies’ products in the Capstone Courier. We want every customer to know about our superb designs, and we want to make our products easy for customers to find.