3ObjectivesDemonstrate effectiveness of multi-discipline teams working together.Use strategic thinking to an advantage.Test your business acumen.Understand overall interaction and impact of various parts of a business on one another.Grow an awareness of competition.Take away practical know-how to improve the effectiveness of your business.
4Why Simulate Risk Free View Alternative Strategies Enjoyable Compresses Time (1 Round=1Year)Selectivity <> Integration
6The Marketplace Customers (OEMs) need sensors for their products Initially one segment, now breaking into fiveVery different customer demands developing between the segmentsDiversification in the use and utility of the sensors
7The MarketplaceIn our industry we track the changing customer demand on a perceptual mapLowTechPerformanceTraditionalHighTechSizeOver 8 years the customers will demand much faster and smaller sensorsMarket Segments will continue to diverge
8not giving me what I want Low Tech & Traditional CustomersYou’renot giving me what I want“I want these sensors to be cheap”“I want them to have been around for a while – no Beta Testing!”“They have to be moderately reliable.”“The technology doesn’t have to be cutting edge.”
9And I’m not getting what I want! High Tech, Size & Performance CustomersAnd I’m not getting what I want!“These sensors have to be small, like micro, and fast”“I need them to be right out of R&D, I’m talking ZERO years on the market”“I’ll pay more to get what I want.”“I like a pretty high reliability.”
10SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH Sees the next 8 years as consistent growth. All market segments increase at a nice “clip,” according to market analyst.“I see the entire market growing at around 14% or 15% per year. The High Tech market alone will be growing at a whopping 16%.”I hope those companies out there are ready for that kind of expansion!”
12SEC ANNOUNCES BREAKUP OF MONOPLOY FOR IMMEDIATE RELEASEWilliam Donaldson, Chairman of the SEC, took dramatic action today by breaking up the monolithic corporation Sensors, Inc.In a statement to the press Chairman Donaldson outlined the reason and the outcome of this move.“We cannot allow monopolies of this sort to impact an entire industry!” stated Donaldson. “The customers that utilize these sensors are being held hostage.“Effective immediately Sensors, Inc will be dissolved into the Andrews, Baldwin, Chester, Digby, Erie and Ferris companies.”
13The Competition 4 Companies $100 Million in Sales Erie 5 Product Lines ANDREWSDIGBY4 Companies$100 Million in SalesBALDWINErie5 Product LinesClosed MarketplaceCHESTERFerris
14SHAKE UP IN SENSOR INDUSTRY Company Fires Management TeamAfter poor results, lackluster sales and angry customer reports, the Chairman of the Board of Directors has announced the immediate termination of the Management Team.“This is a black day for our company,” said Chairman Shook, “We need to hire a dynamic leadership group who will be able to take this company into the future!”“Due to this immediate need I have hired the Dream Team to start on January 1st. I expect to see great things from this Executive Team!
17Research & Development Establish the specification of the products to meet customer demandBuild the quality and reliability (MTBF) into the productsEnsure the perceived age of the product meets customer demandsCreate new products to meet the changing marketplace“Our productsare not wellpositioned inthe marketplace.”
18are not priced optimally. MarketingSet the price of our products in the marketplaceBuild customer awareness through promotionEstablish a sales force and distribution channelsSet the sales forecast for our productsSet Credit Policies AR/AP“Our productsare not priced optimally.And many of ourcustomers don’teven know ourproduct exists.”
19“We are paying too much for labor costs. will run out of capacity to ProductionPurchase machinery to automate our facilitiesBuy or sell capacity of product linesSchedule production for each lineManage the majority of the companies fixed assetsEstablish your workforce complement“We are paying too much for labor costs.Very soon wewill run out of capacity tomeet demand.”
20Finance Acquire capital to fund capital expansions Issue Stock Short Term DebtIssue Long Term BondsIssue dividend to our shareholdersBalance our debt portfolioManage our proformas“We have poor cash flow andsubstandard financial ratios.We have no financial policy statement.”
21Proformas Balance Sheet Profit & Loss Cash Flow Financial Ratios A great management tool driven by forecasts and projections. Allows “What if” Scenarios by the company.Balance SheetProfit & LossCash FlowFinancial Ratios
22Scoring the Game Higher of Rank or Relative Score ROE ROS ROA CUM PROFITSTOCK PRICEMARKET CAPITALIZATIONASSET TURNOVERMARKET SHARE
23RUNNING YOUR COMPANYTHINGS TO DO ON AN ANNUAL BASIS
24To Do List Establish business strategy for your company Analyze Capstone Courier to see industry resultsMake tactical decisions across each functional area (aligned to strategy!)Upload official results and confirm on the websiteAwait results when Professor processesRejoice in your superior capitalistic acumenBegin the process again by confirming alignment of your results with your company’s strategic goal.