P 4 CDR

P 4 CDR

Capsim Decision Record

Directions: This document is intended to help you record your thoughts as you apply your team’s chosen strategy through the rounds in Capsim. You will not need to submit this document, but the notes you take here will likely be useful for your final analysis. Find your assigned department below. Listed in each department are the action items given in Capsim: A Systematic Approach to Making Strategic Decisions. Explain your decisions for each action item in your department. Be sure to update this form after each round and evaluate your prior decisions.

Chosen strategy:

Research and Development

Speed

Example: For round 1, because my team chose a local niche differentiator stragegy, I did not increase speed. Right now, speed seems to be in a good spot on the perceptual map. Next round, if the sweet spot changes more than 1 point, we might need to spend some money to improve speed.

Round 2, the spot on the round 2 perceptual map shifted but not enough (less than 1 point). So, we saved some money by not unnecessarily updating the speed. I’ll keep it at this speed for one more round and see where this product is on the perceptual map.

Accuracy

Service Life

Marketing

Regions Selected for Sales

For each region selected:

Price

Promotional Budget

Sales Budget

Forecast

Production

Plant Location

Order

Capacity

Automation

Finance

Borrow

Issue

(Borrow)

Retire

Issue

Buy Back

Issue Dividend

The Chester computer team will adopt a

Broad Cost Leader

strategy, maintaining a presence in every segment. We will gain a competitive advantage by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling us to compete on the basis of price. Our Cost Leader orientation will allow us gain a competitive advantage based upon low prices. Our products will keep pace with the market, offering improved size and performance. We will price below average. We will increase automation levels to improve our margins and to make it acceptable to run overtime (which we can also view as a second shift).

Marketing

The Chester team 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.

The Erie computer team will adopt a Niche Cost Leader Strategy, concentrating on the Traditional and Low End segments. We will gain a competitive advantage by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling us to compete on the basis of price. Our Cost Leader orientation will allow us gain a competitive advantage based upon low prices. Our products will keep pace with the market, offering improved size and performance. We will price below average. We will increase automation levels to improve our margins and to make it acceptable to run overtime (which we can also view as a second shift).

The Erie team will spend modestly on promoting and selling products in our targeted segments (Traditional, and Low). Our prices will be lower than average for those segments. While Edge and Echo are being repositioned, we will price somewhat below and discontinue sales budgets as we exit the specialty Performance and Size segments. After we establish our cost leadership position, we will revisit our situation to explore options to improve awareness and accessibility in the Traditional and Low End segments.

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.

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