Technology Advances At Andrews Corporation

• Tremendous price and wage competition in a recurring industry will lead to additional losses in profits.

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 key determinant of Chester’s’ success was the management commitment to superior business processes. Chester has a state of the art facility. Management increased capacity in the years after the government split and will continue to add capacity as growth dictates. However, capacity will be expanded at a lower rate than previously, in an attempt to avoid cash flow shortages seen in prior years. Chester has enhanced automation and quality processes in order to gain production efficiencies and cost savings. Chester has invested in labor recruiting and training; developing core competencies in it’s’ workforce. The firm has and will continue to maintain investment in research and development, as product improvements will continue to be demanded by the customers. The other key factor of the corporation’s success was the superior growth of the industry. It would have been much more difficult to sustain profitable growth in this extremely competitive market without the superior volume growth of the sensor industry.

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.

Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.

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

As we continue to move toward the end our quarterly objectives. I wanted to take the time to explain some of our costs. In our particular field of designing and manufacturing products, we are always engaging in ways that we can mitigate loss and improve our processes. Performing such changes will give a stronger presence in the market by allowing us to remain competitive.

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.

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

Without question the new technology can be paid for by this fall’s increase in revenues alone. At 1.5 million per system, it takes 3 million to install the systems. Our revenues projected for the fall is 31 million with net income being approximately 10% of sales revenue the investment will be paid back almost immediately. The question still remains if it makes sense long term.

The framework used in this note is organized around the estimates of industry demand, market share, costs, and performance. All data

I am writing this memo as a member of the Andrews management team to notify you of the developments made on a preliminary business strategy that we are anticipating to be both successful and exciting. The sensor industry has experienced increasing product demand recently, as well as a universal desire for smaller and faster sensors in both the low and high tech market segments. Through the conduction of an external analysis, we have identified five major competitors within this industry, all sharing a similar control of suppliers and buyers to our company. The main goal of our strategy is to gain an advantage

We aimed to win market share by appealing to cost-conscious or price-sensitive customers, which we felt that the majority of consumers consisted of. This would be achieved by having the lowest prices in the target market segment, or at least the lowest price to value ratio (price compared to what customers receive). To succeed at offering the lowest price while still achieving profitability and a high return on investment, it was evident that we had to be able to operate at a lower cost than our rivals. We aimed to achieve this goal though a combination of two methods, the first being achieving a high asset turnover. In the manufacturing of our cameras, we wanted to achieve the production of high volumes of output. In theory this approach meant fixed costs would be spread over a larger number of units of the product or service, resulting in a lower unit cost. We hoped to take advantage of economies of scale and experience curve effects[3]. We hoped and realised that higher levels of output both required and resulted in a higher market share, and created an entry barrier to potential competitors, who may be unable to achieve the scale necessary to match our low costs and prices.