1. Course Intro & Overview
University of Alaska-Anchorage * College of Business & Public Policy
* Marketing Management Simulation *
Course Intro & Overview

2. Professor Ed Forrest ejforrest@alaska.edu Telephone: (cell) 854-8784

3. Review & Begin Situation Analysis/ Strategic Plan
Overview Course
Organize Companies
Review & Begin Situation Analysis/ Strategic Plan
1st set of Deliverables

4. Your “study” of business … piece-meal & in isolation!

5. Marketing
R&D HR
Production
Finance

6. Lecture-Learning

7. Learning & Retention 5%
75+%

9. THE CAPSTONE SIMULATION
Most widely used Business – Simulation Program in the World
Adopted by major Fortune 500 companies
..General Motors, General Electric, Honeywell, Dell, John Deere, Citibank, Alcoa, BP, Allstate, Samsung, Goldman Sachs, Microsoft…

10. Strategic Thinking the ten big ideas
Simulation proffers you opportunity to experience every key dimension of strategic thinking developed to date:
Strategic Thinking the ten big ideas

11. Your Product Line:
SENSORS:

12. You Da’ Boss
… run a $100M business ….

13. …success contingent on strategic integration of decisions across all domains:

14. You will Compete against other members of this class –running 5 other Corp’s ….
Andrews
Baldwin
Chester
Digby
Erie
Ferris

15. Plus-- You will Compete Against Everyone Else in the World
...your decisions & performance will be compared against other teams competing at other universities… around the world

16. & How –to date-- have we fared in this World-Wide Competition??

17. Spring Semester

18. Over last 2 years… 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

19. …41 times across last 16 years…
As Well As….previous “Top 10” Finishes :
Spring : th Profit
Spring : th Cum Profit
Fall : st Profit
Spring : th Cum Profit & 8th Profit
Spring : rd Profit
Fall : st Cum Profit & Stock Price
Spring : th Asset Turnover; 1st, 6th & 8th ROE
Fall : th Cum Profit
Spring : rd & 9th ROE; 8th ROS;  9th Cum Profit
Fall :   4 in & # 10 in profit  #5 in Stock Price  #6 in ROE  #3 & #7 in ROA   #8 in Asset Turnover
…41 times across last 16 years…

21. YOUR JOB: Make every decision In every Functional Domain
to create, produce & successfully market your products…

22. You’re will be responsible for:
As MARKETING MANAGER
You’re will be responsible for:
Planning, implementing & controlling your marketing strategy
Target
& Position
Product
Place
Promotion
Price

23. Marketing Managers become one-w/ Relationships betw
Price & demand
Price & margin
Promotion budget & awareness
Sales budget & accessibility
A/R policy & demand

24. MARKETING MANAGER
SIMULATION SPREADSHEET

25. Set price of your products in the marketplace
Set the sales forecast for our products
Build customer awareness through promotion
Establish a sales force and distribution channels
Set Credit Policies AR/AP

26. Marketing also selects media vehicles & message weights
AND determines composition of sales/distribution staff ..and allocation of their efforts by segment & Brand

27. As Production Mgr: Set automation levels Buy or sell capacity
Schedule production
Work overtime or automate

28. PRODUCTION MANAGER
SIMULATION SPREADSHEET

29. Buy or sell capacity of product lines
Schedule production for each line
Buy or sell capacity of product lines
Purchase machinery to automate our facilities
Establish your workforce complement

30. As R&D Mgr Responsible for: Product Position Age & Quality
Performance
SIZE
Responsible for:
Product Position
Age & Quality
New product development
High High Eight
<
<
<
Low Low One
Quality Age Prdt Line

31. R&D MANAGER
SIMULATION SPREADSHEET

32. Establish product positioning to meet customer demand
Build quality & reliability (MTBF) into products
Ensure age of product meets customer demands
Create new products

33. As Human Resource Manager--Responsible for:
Recruitment, Hiring, Training & Firing of all labor
2 groups:
Assemblers
Technicians
Wages
Benefits

34. SIMULATION SPREADSHEET

37. FINANCIAL MANAGER
SIMULATION SPREADSHEET

38. As FINANCIAL MANAGER Acquire Capital Set Dividend
Issue Stock
Short Term Debt
Issue Long Term Bonds
Set Dividend
Retire Long Term Bonds
Retire Stock
Responsible for Emergency Loans
Big AL The Loan Shark

41. 1st Organize Companies

42. Leaders responsible for assuring strategy links values & vision ...
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 ...

43. The Big Picture Company Consumers Competitors Conditions
Situation/SWOT Analysis
Strategic Planning
Functional Integration
Performance Assessment
Company
Consumers
Competitors
Conditions
PEST
Growth & Competitive Strategies
Finance HR
Production
R&D
Marketing
Functional Integration
Profits
Mrkt Share
ROA
ROS
ROE
Asset T/O
Stock
Mrkt Cap

44. You now run the Ship…
... How’s your Company doing?

45. Need Answers to 3 Critical Q’s:
1.Where are we now?
2.Where do we want to go
3.How do we get there?
= Situation Analysis

46. Begin Situation-Analysis
INTERNAL ENVIRONMENT
Your Company's
Strengths & Weaknesses:
Consumer
Company
Competitors
Conditions
EXTERNAL ENVIRONMENT
Opportunities & Threats

47. 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.

48. Find 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
Consumers
Competitors
Conditions

49. Economic Environment No outside competitors or product substitutes
Moderate growth, Low inflation, Averaged interest rates
No outside competitors or product substitutes
No economic downturns or other surprises ...

50. Sim designed this way for one reason:
Whatever happens will be result of your-tactical execution of strategies… not by external factors!

51. 1st Deliverable

52. 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

53. Consumer Buying Criteria

54. 5 SEGMENTS

55. 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 then round to the nearest whole number. This will give you a close approximation of Total Industry Demand for Round 1.

56. SENSOR INDUSTRY ONGOING GROWTH
..the entire market growing at around % per year.

57. Complete Demand Analysis @ CapSim
Intro |  Perceptual Map 1 |  Perceptual Map 2 |  Demand Analysis |  Capacity Analysis |  Margin Analysis |  Consumer Report

58. Drift Demo Cheaper too-$.50 drop in price/year Cheaper too-$.50 drop

59. 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)

60. Resources & Tutorials
Capstone Courier- Video Tutorial-Parts 1 & 2  / Decision-Making Resource: Courier/ Results - across full 8 round simulation
Help > On-Line Guide
Help > Tutorials and Animated Demonstrations

61. Reports Industry Reports Industry Conditions Report Capstone® Courier
  Debrief Reports
Analyst Report
Capstone® Debrief Rubric
Latest Round Debrief
Sim Results To Date
Ethics Debrief
Balanced Scorecard
Balanced Scorecard Top Ten
Round Analysis
Final Score Relative
Final Score Ranking
  Industry Reports
Industry Conditions Report
Capstone® Courier
Annual Reports
Ethics Reports
Financial Summaries

62. Questions?