University of Alaska-Anchorage * College of Business & Public Policy * Marketing Management Simulation* Course Intro & Overview
Professor Ed Forrest • Telephone: (cell) 854-8784 • Email: firstname.lastname@example.org
Overview Course • Organize Companies • Review & Begin Situation Analysis/ Strategic Plan • 1st set of Deliverables
Marketing R&D HR Production Finance
Learning & Retention 5% 75+%
THE CAPSTONE SIMULATION Most widely used Business – Simulation Program in the World • Adopted by major Fortune500 companies ..General Motors, General Electric, Honeywell, Dell, John Deere, Citibank, Alcoa, BP, Allstate, Samsung, Goldman Sachs, Microsoft…
Simulation proffers you opportunity to experience every key dimension of strategic thinking developed to date: Strategic Thinkingthe ten big ideas
Economic Environment • Moderate growth, Low inflation, Averaged interest rates • No outside competitors or product substitutes • No economic downturns or other surprises ...
Sim designed this way for one reason: Whatever happens will be result of your-tactical execution of strategies… not by external factors!
You Da’ Boss …run a $100M business ….
Your Product Line: SENSORS:
YOUR JOB: • Make every decision • In every Functional Domain • to create, produce & successfully market your products…
…success contingent on strategic integration of decisions across all domains:
You will Compete against other members of this class –running 5 other Corp’s …. • Andrews • Baldwin • Chester • Digby • Erie • Ferris
Plus-- You will Compete Against Everyone Else in the World ...your decisions & performancewill be compared against 1000+ other teams competing at other universities… around the world
& How –to date--have we fared in this World-Wide Competition??
Spring 2016 • 1st & 6th in ROA • 3rd & 4th in profit; • 8th & 9th cum profit, • 5th ROE; • 4th & 8th ROS; • 5th in Stock Price • 4th in Asset Turnover
As Well As….previous “Top 10” Finishes : • Spring : 2001- 5th Profit • Spring : 2003- 9th Cum Profit • Fall : 2005- 1st Profit • Spring : 2006- 5thCum Profit & 8th Profit • Spring : 2007- 3rd Profit • Fall : 2009- 1stCum Profit & Stock Price • Spring : 2010- 9th Asset Turnover; 1st, 6th & 8th ROE • Fall : 2010- 6th Cum Profit • Spring :2011- 3rd & 9th ROE; 8th ROS; 9th Cum Profit • Fall : 2013- 4 in & # 10 in profit #5 in Stock Price #6 in ROE #3 & #7 in ROA #8 in Asset Turnover
1stOrganize Companies Register @ http://ww2.capsim.com/login/
Strategic Thinking- the ten big ideas Prof Thomas/ Penn St. able to predict final standings w/in 1 place 90% of time –after observing initial group interaction... • 7. Corporate culture & • 8. Leadership craft... • Leaders responsible for assuring strategy links values & vision ...
You are now theCaptain… ... How’s your Company doing?
Situation/SWOT Analysis Strategic Planning Functional Integration Performance Assessment • Company • Consumers • Competitors • Conditions • PEST Functional Integration • Profits • Mrkt Share • ROA • ROS • ROE • Asset T/O • Stock • Mrkt Cap Marketing Growth &Competitive Strategies R&D Production HR Finance The Big Picture
Strategic Plan Answers 3 Critical Q’s: 1.Where are we now? 2.Where do we want to go 3.How do we get there? = Situation Analysis
Situation/SWOT Analysis Strategic Planning Functional Integration Performance Assessment • Company • Consumers • Competitors • Conditions • PEST Functional Integration • Profits • Mrkt Share • ROA • ROS • ROE • Asset T/O • Stock • Mrkt Cap Marketing Growth &Competitive Strategies R&D Production HR Finance Assignment #1
Consumer Conditions Company Competitors Begin Situation-Analysis INTERNAL ENVIRONMENT Your Company's Strengths & Weaknesses: EXTERNAL ENVIRONMENT Opportunities & Threats
Consumers Competitors Conditions You are finding answers re: • How the market is segmented & the relevant criteria that influence consumers use in their purchasing decisions • The nature & magnitude of the competition • Existing & emerging Economic & Technological trends that will impact demand, pricing, product design & positioning
Strategic Thinking- the ten big ideas • Long-range planning-considers the external factors that affect success & integrates the various functional strategies. • Strategic analysis • Industry structure • Market segmentation • The lifecycle. • SWOT analysis.
Market Segments: • Big, old & cheap • high-reliability & performance • proven sensors w/ current tech • advanced sensors w/ focus on small size • cutting-edge in both size & performance
DEMAND ANALYSIS:How Many Sensors / Segment want to buy across next 8 years: Multiply the Round 0 demand by the growth rate and add the result to the Round 0 demand. This will give you a close approximation of Round 1 demand. Copy this number into the Demand cell for Round 1. If you prefer, you can use the following shortcut. For example, assume the Traditional growth rate is 9.2%. Convert the percentage to a decimal (9.2% = 0.092) and add 1 to it (1.092). Multiply the Round 0 Traditional demand by 1.092 then round to the nearest whole number. This will give you a close approximation of Total Industry Demand for Round 1.
SENSOR INDUSTRY ONGOING GROWTH ..the entire market growing at around 14 - 15% per year.
Complete Demand Analysis @ CapSim Intro | Perceptual Map 1 | Perceptual Map 2 | Demand Analysis | Capacity Analysis | Margin Analysis | Consumer Report
Cheaper too-$.50 drop in price/year Cheaper too-$.50 drop in price/year Drift Demo
MARKET SEGMENT DYNAMICS Intro | Perceptual Map 1 | Perceptual Map 2 | Demand Analysis | Capacity Analysis | Margin Analysis | Consumer Report Calculate each Segment's IDEAL SPOT LOCATION -- rounds 1 thru 8 ( @ Getting Started/ Complete Online Situation Analysis/ Perceptual Map 2)
MARKET SEGMENT VALUE Herein- is an example of relative dollar value of each segment at present (year 0) and 5 years out.
Calculate the relative $-value that each segment could/would generate for your company in Round 4 & 8... based on: The Probable $-Contribution margin in each SegmentXYour projected unit sales based on Fair Share (which is 1/6th of total Demand)