WELCOME TO CAPSTONE BUSINESS SIMULATION. The Marketplace Customers (OEMs) need sensors for their...

WELCOME TO CAPSTONE BUSINESS SIMULATION

The Marketplace Customers (OEMs) need sensors for their products

Initially one segment, now breaking into five

Very different customer demands developing between the segments

Diversification in the use and utility of the sensors

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

Over the 7 years, the customers will demand much faster and smaller sensors

Market Segments will continue to diverge

LowTech

Traditional

HighTech

Performance

Size

Low Tech & Traditional Segment Customers

“I want these sensors to be cheap”

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

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

“They have to be moderately reliable.”

You’renot giving me what I

want

High Tech, Size & Performance Segment 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 like a pretty high reliability.”

“I’ll pay more to get what I want.”

And I’m not getting what I

want!

Strategic MapLarge

SmallSlow Fast

Size

Performance

Large

Small

Slow Fast

Low

Trad

Size High

Perf

Sweet Spot

Each Segment has a Sweet Spot

Price

Two Stage Purchase DecisionStage 1 - Match Product to Market

1. Product must plot within the segment. Size

2. Product must fall within price guidelines.

3. Product must fall within quality guidelines

Quality

Two Stage Purchase DecisionStage 2 – Competitive Rankings of

Best Products

Position

Age

Quality

Price

1. Positioning

2. Age

3. Quality

4. Price

Sweet Spot

0 1Yrs

20000 25000

$30 $40HIGH END

Segment Criteria Ranking

Traditional SizePerfHigh EndLow End

• Age• Price• Position• Quality

• Price• Age• Position• Quality

• Position• Age• Quality• Price

• Quality• Position• Price• Age

• Position• Age• Quality• Price

Functional Areas and Value Creation

R&DR&D

MarketingMarketing

ProductionProduction

FinanceFinance

HRMHRM

http://green.kchang.net/~koling/ftp/money-large.jpg

SupportActivities

Primary Activities

Value Chain Analysis

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Technology Development

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Human Resource Management

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Headquarters Activities

Technological Development


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Capstone Value Chain Activities

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Raw materials and components receiving

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Materials handling

Inbound Logistics



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Relatively Few Management Layers to Reduce Overhead

Effective Training Programs to Improve Worker Efficiency and Effectiveness

Timing of Asset Purchases

Efficient Plant Scale to Minimize Manufacturing Costs

Selection of Low Cost Transport Carriers

Delivery Schedule that Reduces Costs

Products Priced to Generate Sales Volume

Small, Highly Trained Sales Force

Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes

Frequent Evaluation Processes to Monitor Suppliers’ Performances

Policy Choice of Plant Technology

Organizational Learning

Efficient Order SizesO

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Capacity and production levels

Production schedule

Automation levels

Labor force utilization levels

Improve efficiency

Production



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Delivery Schedule that Reduces Costs

National Scale Advertising

Products Priced to Generate Sales Volume

Small, Highly Trained Sales Force

Effective Product Installations to Reduce Frequency and Severity of Recalls

Frequent Evaluation Processes to Monitor Suppliers’ Performances

Efficient Order Sizes

Interrelationships with Sister Units

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Inventory management

Shipping and distribution

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Sales forecasting

Pricing strategy

Marketing strategy and budget

Sales force management

Marketing



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Vendor relations

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Establish the specification of the products to meet customer demand

Build the quality and reliability (MTBF) into the products

Create new products to meet the changing marketplace

Manage new product cycle times

R&D

Research & Development

• Set Product coordinates (Position)

• Set MTBF rating (Quality)

• Drives Perceived age (Age)

• Drives breadth of product line

Quality Age Breadth

High High Eight

Low Low One

<<

<

Cycle time affected by:• Automation level of production line

• Number of projects underway

• Distance moved on perceptual map

R & D Factors on Existing Products

High

LowAutomationAutomation

LevelLevelNumber ofNumber ofProjectsProjects

High

Low

High

LowDistanceDistancemovedmoved

< < <Short

Long

Cycle TimeCycle Time

<



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Production line staffing

Recruiting and training of new employees

Wages and benefits for employees

Negotiate with labor union

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Strategy and decision making

Finance and Accounting

Government relations

Public relations

General Counsel

HQ Activities

Success MeasurementsPractice Rounds: All criteria equally weighted

Competitive Rounds: YOU choose at least TWO• Ending Stock Price must be at least 20%• Others – Your choice:– Cumulative Profit– Avg. Market Share– Asset Turnover– Avg. ROA– Avg. ROE– Avg. ROS

• Criteria and weights will remain proprietary throughout the simulation

Capstone Scoring Report

0

1

2

3

4

5

6

Andrews

BaldwinChester

Digby

Erie FerrisW

inne

r !

Win

ner

!

Assignments & Grading

ITEM WEIGHTFinal Simulation Score 70%Initial Strategy eMemo 10%Board of Directors Briefing 20%

Computers and Facilities

31 AUGWeds

SIM: Round 2 Decisions DUE 11:00

Meet: Rounds 1-2 Debrief 1:00



Meet: Rounds 1-2 Debrief 2:00


Industry 1SimId: C12084

Industry 2SimId: C12085

A typical “day” of Capstone

Assignments for This Week MONDAY-TUESDAY• Subscribe to Capstone

– See pg. 2 of syllabus• Tutorials (esp. Spreadsheet Demonstrations)• Solo Rehearsal

WEDNESDAY• Upload Practice Round 1 decisions by 11:00 a.m.• Results available 12:00 p.m.• Meet for Debriefing at 1:00 p.m. or 2:00 p.m.• Round 1 (for real!) decisions due by 6:00 p.m.• Submit Strategy eMemo by 7:00 p.m.

Good Luck and Enjoy!

WELCOME TO CAPSTONE BUSINESS SIMULATION. The Marketplace Customers (OEMs) need sensors for their...

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