11 Jul Response 1: For our CapSim simulation I will be part of team Andre
Response 1: For our CapSim simulation I will be part of team Andrews. Andrews is an organization that manufactures sensors which are used in much of what is produced today; like vehicles, medical equipment, and many more products. The conditions within this industry are unique and have recently undergone some pretty major changes. Until now, the sensor industry has been dominated by one firm, which was considered a monopoly. Because of this, the dominant organization has been split into four companies: Andrews, Baldwin, Chester, and Digby. These four organizations are all starting with the same amount of products with identical positioning and market share. These organizations also have equal resources with which to create a competitive advantage, and are operating under the assumption that there barriers to entry that will make it impossible for a new competitor to emerge. Some threats associated with this industry are, because the organizations are so new, and without established competitive advantages, it will be difficult to predict their strategies. We can also assume, because of the nature of the industry and introduction of four competitors, that there will be a high degree of demand elasticity associated with the sensors produced. Along with threats come opportunities. The technology needed to produce, and improve, the sensors we create is getting better every single year. This means that we can constantly find new ways to innovate, and differentiate, our products while also finding ways to produce them more efficiently. We also know that our sensors are becoming more and more necessary in the products that people use every day. For us this indicates that the demand for our products are likely to continue to increase year over year. The products we produce typically fall under 5 segments: Traditional, low end, high end, performance and size. While the customers may weight buying criteria differently, depending on what is most important to them, the four buying criteria considered remains constant: Price, Age, mean time before failure, and positioning (combination of size and performance). As mentioned these criteria will be weighted differently by the various segments, however the general trend will have the products increasing speed and performance while reducing size. In order to find success it is important that the Andrews organization apply and customize one, or more of the six basic strategies: Broad cost leader, broad differentiator, niche cost leader, niche differentiator, cost leader with product lifecycle focus, and differentiator with product lifestyle focus. I believe it is likely that Andrews will pursue a broad differentiator strategy as this implies we will maintain a presence in all segments. However, we may also apply these strategies to our specific product lines. For example, we c where we keep costs low in order to compete on the basis of price.Response 2: CAPSIM Introduction and OverviewCurrent situation in the CapSim simulation and the recent changes to the industry and competitive environment: Our business is electronic sensors. We are selling sensors in a competitive market. Within the CapSim simulation the current situation is that there are departments that must work together; research and development, marketing, production and finance. (CAPSIM, 2014) The companies to be successful must compete in the now competitive market. The Government has deregulated the electronic sensor market and now we have a perfect market or perfect competition in that we can compete for market shares. (CAPSIM, 2014)What competitive challenge:The competitive challenge of each company is staying ahead of the other companies and to make as much money as possible. The business to business companies must develop business strategies to meet business success factors. (Pettus, 2012) Along the way changes may be needed to remain competitive in the perfect market. What are the opportunities and threats:Cost and uniqueness tends to be the competitive scope that allows firms to achieve advantage. At this point all companies are equal in shares of the market however along the way the object is to find our niche in the market and develop our strengths, know our weaknesses remain competitive and to increase our bottom line.Business level strategies:The “Broad Cost Leader “strategy maintains a presence in every segment of the market. Keeping R&D, production and material cost to a minimum allows this strategy a competitive edge. The use of automatic equipment to manufacture the sensors will cut down on manpower hours. (CAPSIM, 2014) The Broad Cost Leaders can keep prices below average in this method. The “Broad Differentiator” strategy maintains a presence in every segment of the market. Keeping R&D’s position is to keep the product new and improved. It gains interest of the buyer when it continuously adjusts to remain competitive in the market. The cutting edge allows the product to sell at an above average rate. (CAPSIM, 2014)The “Niche Cost Leader” strategy focus on low technology. Considered Traditional and low-end segments of the market. (CAPSIM, 2014) R&D, production and materials cost are kept to a minimum and enable the company to compete based on price. (CAPSIM, 2014)The “Niche Differentiator” focus on high-end product. The competitive edge of this strategy having an excellent design, high awareness, easy accessibility and new products. The R&D competency must continuously keep new and innovative ideas to keep up with the pace of the market. This strategy will price above average and will expand as the market generates higher demand. (CAPSIM, 2014) The “Cost Leader with Product Life cycle Focus” strategy allows for life cycles. Products will start out high end, mature into traditional and finish as a low-end product. (CAPSIM, 2014)This strategy allows company to reap sales on each new product that is introduced to the market however the product can be phased out and during the decline of market needs this strategy can reap benefit has the product transition from high-end to low-end demand. Cost leader with product focus mainly on price and staying below average to remain competitive.The “Differentiator with Product Life cycle Focus “strategy will start out high end, mature into traditional and finish as a low-end product. (CAPSIM, 2014) This strategy allows company to reap sales on each new product that is introduced to the market however the product can be phased out and during the decline of market needs this strategy can reap benefit has the product transition from high-end to low-end. The difference from cost leader with product life cycle is that the R&D will continue to develop designs that are fresh and exciting. This product will keep pace with the market and will generate a price above market due to innovations. Possible StrategiesI would be amid strategist who would try and conquer the best of all aspects of the segments. The “Differentiator with Product Life cycle Focus” most interest me as the strategy to research more. Creating a sensor that is high in innovation but can be phased out once it has gone through the phases from high-end to low-end status. I think this strategy will catch the eye of the shareholders and keep a competitive edge in the market.
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