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Capsim Capstone Six Strategies

 

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Table of Contents 12.1 Broad Cost Leader 1 Mission Statement 1 Tactics 1 12.2 Broad Differentiator 2 Mission Statement 2 Tactics 2 12.3 Niche Cost Leader (Low Technology) 3 Mission Statement 3 Tactics 3 12.4 Niche Differentiator (High Technology) 4 Mission Statement 4 Tactics 4 12.5 Cost Leader with Product Lifecycle Focus 5 Mission Statement 5 Tactics 5 12.6 Differentiator with Product Lifecycle Focus 6 Mission Statement 6 Tactics 6

 

 

 

 

12.1 Broad Cost Leader

A Broad Cost Leader strategy maintains a presence in all segments of the market. The company will gain a competitive advantage by keeping R&D, production and material costs to a minimum, enabling the company to compete on the basis of price, which will be below average. Automation levels will be increased to improve margins and to offset second shift/overtime costs.

Mission Statement

Low-priced products for the industry: Our brands offer solid value. Our stakeholders are bondholders, customers, stockholders and management.

Tactics

Research & Development: We will keep our existing product line, maintain a presence in every segment, and work to keep our products up to date in each segment despite high automation levels.

Marketing: Our company will spend modestly on promoting and selling products in our industry. Our prices will be lower than average. After we establish our cost leadership position, we will revisit our situation to explore options to improve awareness and accessibility.

Production: We will significantly increase automation levels on all products. However, because automation sets limits upon our ability to reposition products with R&D, we automate more in the slower moving Traditional and Low End segments than in the fast moving High End, Performance, and Size segments. We will prefer second shift/overtime to capacity expansions.

Finance: We will Finance our investments primarily through long-term bond issues, supplementing with stock offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are not adverse to leverage, and expect to keep assets/equity between 2.0 and 3.0.

12.2 Broad Differentiator

A Broad Differentiator strategy maintains a presence in every segment of the market. The company will gain a competitive advantage by distinguishing products with an excellent design, high awareness and easy accessibility. The company will develop an R&D competency that keeps designs fresh and exciting. Products keep pace with the market, offering improved size and performance. Prices will be above average. Capacity will be expanded as higher demand is generated.

Mission Statement

Premium products for the industry: Our brands withstand the test of time. Our stakeholders are customers, stockholders, management and employees.

Tactics

Research & Development: We will keep our existing product line, maintaining a presence in every segment. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability.

Marketing: Our company will spend aggressively in promotion and sales in all segments. We want every customer to know about our superb designs, and we want to make our products easy for customers to find. We will price at a premium.

Production: We will grow capacity to meet the demand that we generate. After our products are well positioned, we will investigate modest increases in automation levels to improve margins, but never at the expense of our ability to reposition products and keep up with segments as they move across the perceptual map.

Finance: We will Finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are somewhat adverse to debt, and prefer to avoid interest payments. We expect to keep assets/equity (leverage) between 1.5 and 2.0.

 

12.3 Niche Cost Leader (Low Technology)

A Niche Cost Leader Strategy concentrates primarily on the Traditional and Low End segments of the market. The company will gain a competitive advantage by keeping R&D, production and material costs to a minimum, enabling the company to compete on the basis of price, which will be below average. Automation levels will be increased to improve margins and to offset second shift/overtime costs.

Mission Statement

Reliable products for low technology customers: Our brands offer value. Our stakeholders are bondholders, stockholders, customers and management.

Tactics

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