Essay about Capsim Final Report

3928 Words May 19th, 2014 16 Pages
1. Initial Strategy
The initial strategy was to maintain a competitive presence in each segment by keeping our prices aligned with the average for each target market, while maintaining costs low. Specifically, it was our goal to become the leader in Traditional and low-end segments of the sensor business by allocating significant resources to R&D, marketing and promotions for these products. Our differentiator would be the result of a high investment in R&D to ensure our products were the best available.
The board decided that the company should be judged on its ability to make a profit, gain market share, provide positive ROA and make money for our shareholders with an increasing stock price. Our target was a stock price of $38
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For instance, in the Low End market, other groups refrained from updating products each year, once this was identified we too, stopped advancing our products to save money. Since the entire market held their products constant sales did not decline.

Once the decision was made to transition our Performance and Size products to Low End and Traditional we had to decide on an approach. We could make gradual changes that were done by December each year and allowed us to update product specifications annually, or we could use the forecast and make the change in one adjustment. The latter would not allow us to revise the product for several years but it also would not allow the other teams to know what we were doing until the products finished their move. We decided that the surprise positioning was the better option as it wouldn’t allow the other competitors time to mimic our decision if it turned out to be successful.

When it comes to pricing we always strived to provide one of the lowest prices in the market. We decreased product prices by $0.50 on each product each year to appeal to consumers. Since providing a low cost product was one of our strategic goals we did not stray from decreasing prices. Looking back, perhaps we shouldn’t have been so loyal to our strategy when we were unable to turn a profit. While a strategy is important to stick to, being a profitable company is the ultimate goal.

3. Discussion…

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