WELCOME To Capstone An Interactive Business Simulation Why

WELCOME To Capstone ® An Interactive Business Simulation

Why Simulate? • Risk Free. Innovate and explore alternative strategies and tactics. • Big Picture. Decisions and their impacts will be examined within the context of overall business operations - across functional boundaries. • Develop Critical Thinking Skills. You will analyze, assess, plan, make decisions, evaluate, and adjust. • Compresses Time. Several years worth of decision-making will play out during the term.

The Business • $100 M electronic sensor manufacturing firms. All teams begin with an identical profile. • Oligopoly - market dominated by handful of firms. • No outside competitors or product substitutes. • Benign environment – no recessions, no disruptive new technologies. Focus on competition.

Defines five market segments There are five distinct segments of the market: • Traditional • Low End • High End • Performance • Size The customers in each segment have different priorities and evaluate the product according to their own needs. Large Low End Performance Traditional Size High End Small Slow Fast Performance Perceptual Map

Segments Differentiated By Name Large Low Pfmn Trad Size High For example, Low End Segment customers look for large, slow sensors, representing nearly obsolete technology. Their primary concern is price. While High End Segment customers want the latest & greatest technology. They’re willing to pay more to get very small, high performance sensors. Small Slow Fast Performance Perceptual Map

Segments drift over time Large Low Trad Size Pfmn High Small Fast Slow Performance Perceptual Map

Customers Go Through a Two-Stage Purchase Decision Process Stage 1 - Match Product to Market 1. Product must be positioned within the segment. Able Size Able 2. Product must fall within Price price guidelines. Able Segments 3. Product must fall Performance Reliability within reliability guidelines Segments

Two-Stage Purchase Decision Stage 2 - Rank Best Product Position Reliability 1. Positioning AB 2. Age Price HIGH END 0 Yrs Ideal Spot 1 3. Reliability 20000 4. Price $30 25000 $40

Product Ranking Criteria by Market Segment Traditional Segment Low End Segment High End Segment Performance Size Segment 1 - Age 1 - Price 1 - Position 1 - Reliability 1 - Position 2 - Price 2 - Age 2 - Position 3 - Reliability 3 - Price 3 - Reliability 4 - Price 4 - Age 2 - Age Listed in order of importance for each market segment.

Optional Modules TQM Labor Negotiations Advanced Marketing HR

Decision Making • Each firm begins with identical profile • Decisions are made January 1 st each year • Tactical plan should align with chosen success measurements (Profit, Stock Price, ROE, ROS, ROA, Asset Turnover, Market Share, Market Capitalization) • Responsibilities may be divided up by Product Manager, Functional Manager, or Market Segment Manager roles • Every member of the firm is able to create and upload decisions - communication and teamwork is vital!

Proformas Created Automatically in Decision Software • • Sample Proforma Income Statement Balance Sheet Income Statement Cash Flow Financial Ratios Print Proformas from software after making decisions each round, then compare to actual results

Student Resources • Team Member Guide • Website (www. capsim. com) - Demo’s - Tutorials - Help Files - Round Analysis - Tech Support Staff 1 -888 -472 -7554 or techsupport@capsim. com Sample Student Website Page