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Capstone Strategies
The Situation Analysis provided an overview of the forces at work within the Capstone market place. Now you must decide how to use that information to gain a competitive advantage. There are many different approaches - all of which can be successful depending on how well they are implemented tactically.
OBJECTIVES
Learn how organizational strategy relates to the simulation Gain an understanding of the issues surrounding business planning Make business planning functional decisions for current year
PROCESS
Develop a corporate strategy and mission statement for your team (review your Situation Analysis) Outline your companys Marketing, Production, R&D, and Financial intents
CAPSTONE STRATEGIES
STRATEGY Mission Statement INDUSTRY AND MARKET ANALYSIS S.W.O.T Analysis Competitor Analysis Competitive Analysis PERFORMANCE ASSESSMENT Success Measurements Ratios Statistics
Strategies are declared in corporate mission statements Capstone firms may develop and execute any strategy (or none at all - though that isnt advisable). Basic strategies include: Overall Cost Leader Cost Leader with Focus (Low Tech or Product Life-Cycle) Differentiator Differentiator with Focus (High-Tech or Product Life-Cycle)
Firm Profile:
Minimum presence in specialty segments (Size & Performance) Low R&D spending (very little re-positioning & new product every 2-3 years) Invest in automation early in the products life-cycle
High spending on promotion and sales Focus on ROE, ROS, and Profits
OVERALL DIFFERENTIATOR
A Differentiator will seek to create maximum awareness and brand equity. They want to be well known as makers of high quality/highly desirable products.
Firm Profile: High R&D spending to keep products fresh Maintain a presence in all market segments Spend heavily on advertising and sales to create maximum awareness and accessibility Prices tend to be higher Focus on Market Share, Profits, and Stock Price
SUMMARY
There is no magic bullet strategy in Capstone. Successful teams will develop a cogent longrange plan, align their internal functions in support of the plan, and adjust as dictated by the opportunities and realities of the market place.
Lessons of Importance
Prepare the Situation Analysis master schedule with Sweet Spot locations, max price ceilings, basic demand analysis, and investment points for each segment. Use this master schedule to develop a comprehensive strategic plan for the 8 years of the simulation. Align your strategy with the vision and mission statement for the company, and the performance goals with your strategy. Remember strategy balances planning formulation and implementation with industry opportunity and threat recognition (dont lock in on one while ignoring the other). Recognize and account for the Rough & Fine Cut characteristics for segment; Performance, Size, Reliability, Age & Price. Keep track of major decisions and outcomes; you will be preparing a stockholders report based on these decisions.