Capsim Intended Strategy

A company situation analysis can be defined as “matching the company’s strategy to external market circumstances and to internal resources and competitive capabilities.” We believe that our company, Chester Electronic Sensors, is currently in a position to spring ahead in the Electronic Sensor market. The industry in 2011 (round 0) consists of six competitors in very similar positions, holding virtually equal market share. We will use indicators in the industry to help determine our position and build our marketing, production, R&D and financial strategy. The situation analysis, as outlined by Capsim, will help provide us with a picture of the current conditions of the market and how it will develop in the next 8 years (rounds). This

The sensor industry is an attractive industry due to its’ rapid growth rates and high entry barriers. Additionally, there are no close substitute products. The bargaining power of suppliers is not a factor affecting the sensor industry at this time. However, the bargaining power of buyers is extremely strong, due to the fact that switching costs are low, and most product segments are fairly standardized. The sensor industry is also characterized by intense rivalry among six strong competitors.

In the marketing section, Andrew being a differentiator would want to concentrate in manufacturing a technologically advanced product with a slightly higher focus in the high-tech niche market. It is also essential for Andrew to have an accurate sales forecast. This is because manufacturing too many sensor units results in extra time and material costs being incurred. On the other hand, manufacturing too few or little sensor units would lead to stock outs and loss sales which can be even more costly. Prepare for the sales forecast by looking at industry demand for the next round, the number of products in the particular segment, comparing with other company’s products based on their accessibility and awareness and whether the products (sensor)

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.

Chester chose to enter the sensor industry in 2016 as the niche cost leader. Our mission is to providing trustworthy products to our customer base. Our goal is to offer these products at a cutting edge price, with low overhead, at a high volume. By focusing on the Traditional and Low End segment of the market, Chester’s ability to achieve our mission made it possible to gain market share. Many aspects went into the logistics of the supply chain in order to carry out our operation. While the cost leader strategy is not always an opportune circumstance for the traditional segment, it allows us to offer lower prices to entice customers to purchase our products over other companies in the industry.

The majority of our available resources, approximately 60%, will be allocated to High End and Performance sensors, as at the end of six years our goal is to control 35% market share in these two categories to become industry leaders. As mentioned above this will be done by increasing the amount of spending in research and development, production, and the marketing and sales budgets to match the projected sales forecast. The remaining resources, around 40% total, will then be distributed among the other three products as we would like to maintain a market share between 20-30% in each of the remaining categories. Being active in the secondary markets allows us to offset the

The team’s unique reasoning behind the choice of strategy that we executed throughout the simulation played a significant role and set the tone toward the effort and attitude that each team member maintained during the process. The strategy of the broad differentiator was the teams choice, because we thought that it would be the most difficult to accomplish, would take the most time, and provide us all with a well rounded learning experience because we would be able to learn how to be successful in both the low and high tech segment with our products instead of just one of the segments. With our previous knowledge about running a business we all were in agreement that if we could sacrifice and work harder to participate in both segments it would lead to some great competitive advantages. As mentioned by Lui, (2013), “the only competitive global business strategies would be based on differentiation by unique specialization in terms of quality, product, service technology, or cost leadership” (p.2824). The great execution of the strategy by our team enabled us to find success and gain different competitive advantages with each of our sensors, in turn accomplishing our goal of meeting the needs and expectations of both the low and high tech segment.

During the course of the simulation, my team’s strategy was to adopt and stick to the Niche Differentiator strategy. To accomplish our mission, we focused on high end, performance and size sensors and hoped to seize a dominant presence in the industry. This approach allowed us to reduce prices in low end and traditional while positioning to better take over High End and Performance industry segments.

With this analysis, we will be familiar with the competitive forces that could significantly impact the success of this product. By analyzing these threats, we will be able to create more accurate planning strategies.

1. If you or your team decides to introduce a new sensor product, when should capacity and automation be purchased?

Competitor analysis is a serious part of the organization therefore; Target must identify and address all issues pertaining to the business. Target must pinpoint the tangible competitors, and substitutes, evaluate opponents’ objectives, strategies, strengths and weaknesses, and opportunities and threats, and uncover what opponents Target should take on or stand clear of. Therefore, Target must analyze the company’s economic, sociocultural, technological, political, and future.

In this area, four different companies will compete in four different segments: Thrift, Core, Nano and Elite. Each of the firms use its own tactic to attract and retain their customers. While Baldwin focus on high-tech segment and Chester focus on low-tech segment, we choose the broad differentiation strategy to entice the potential customers. Therefore, Digby will be our main competitor as

* 1. Understand business strategy and competitive environment. - There is plenty of room for growth of this market, only 5% of the market has been penetrated and Sensormatic is the leader in security surveillance system sales. To invest in throw away tags would be an innovative position relative to cost.

Andrews Corporation is a multimillion dollar company that was designed when the parent company was mandated by the SEC in a monopoly settlement. This action resulted in six smaller companies. Along with the other five companies when the government split a monopoly into identical competitors, Andrews manufactures and sells sensors in five diverse market segments. As a monopoly, operating inefficiencies and poor product offerings were not addressed because increasing costs could be passed onto customers. Secondly, mediocre products would sell because customers had no other choices. Although last year’s financial results were decent, it is now our job increase product sales, marketing strategies, efficient production, and proper financial management to achieve financial greatness.

“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).