Company Strategy

Company Strategy

Mission

To provide the public with better-quality products and services by offering differentiated selection and support.

Company Strategy

Our strategy is to maintain profitable growth through superior broad product differentiation of electronic sensors in five market segments. We will differentiate our products from our competition rather than most of our competitors who plan on competing through pricing. We have a different strategy for each market segment to allow our strategy to succeed.

Large investments into automation of our plant combined with strategic and aggressive marketing will allow our customers to be aware, and have access to our products. The capital for these ventures will come via bank loans and issued stock.

Individual Strategies for Each Market Segment

Low end

In this segment age is the most important attribute and price is the second most important attribute to the customer. This means that we don’t want to make any changes to our product so the age will not change. The only thing we changed in our product was MTBF and we lowered that to 12000. To get an advantage in this segment we will maximize automation as soon as we can and also concentrate on getting an advantage in customer’s awareness and accessibility

Traditional

This is our strongest market segment; we decided to offer two different products in this segment. One of them will offer customers ideal position that will allow us to seize a large market share, while the other will stay near the back end of the circle on perceptual map. The second product will get us higher margins but lower sales. We will automate both products to level 6; this will allow us to cut down costs while still giving us enough flexibility to make regular modifications to our products.

Performance

For this market we decided not to try to compete for a large market share because profit margins in this market are the lowest of all industries. Customers want to get very high MTBF and perfect position which makes our product very costly. To reduce the cost and increase our profit margins we decided to keep the product near the back end of the circle on perceptual map. This will lower our sales because we are not providing customers with a perfect product, but it will reduce the cost and increase our profit margins.

Age

In this segment we will try to provide the customers with an ideal product. We will keep our product on the front edge of the circle on the perceptual map. We will also invest aggressively into marketing of this product.

High End

In this segment customers want the newest product and perfect position at the front edge of the circle on the perceptual map. We will get an advantage by introducing a completely new product into the market that will have an age of 0 which allow us to be ahead of the age curve for several rounds. Since age is very important to the customers in this segment, having the newest product should give our company a competitive advantage.

Competitive Analysis

In this simulation we are dealing with five competitors, one of which being a computer team. We will be analyzing each competitor’s position in the market, product offerings, and strengths and weaknesses. Additionally, we will provide a competitor array which will compare the competition based upon how well they are following what we believe to be the key success factors in our industry. It should be noted that all information for this analysis was obtained from the most recent round results. We’ll start by going over each competitor individually.

The first competitor we will be analyzing is Andrews. Andrews has chosen to compete in the Low, Traditional and Size markets while dropping out of the Performance and High end markets. Overall this strategy has not been serving them very well. They have current market share of 12.1%, 20.6% and 7% in the Traditional, Low End, and Size markets respectively. Additionally, Andrews has had to take several emergency loans over the past few rounds which has hurt their performance significantly. Their bond rating of DDD reflects the market’s uneasiness to loan them money. Sales for round four were just above $100 million. Even with these problems Andrews did make roughly $17.5 million from operations. However by paying off too much current debt they ended up needing an emergency loan. Andrews’s contribution margins also seem to be low which puts them at a disadvantage especially in the Low and Traditional markets which is primarily where they are competing. Additionally, Andrews stocked out of their highest margin product, Acre, which no doubt hurt them. Strengths: Their two products in the Low End segment will be maturing in the next few rounds, possibly increasing sales. They have almost maxed out TQM investment. Weaknesses: Low bond rating, involvement in markets which are saturated, inventory management/forecasting. Continuing to receive emergency loans.

The next competitor to be analyzed is Baldwin. Baldwin is currently competing in all markets and has two new products ready to enter the market. One of these new products appears to be targeted towards the high end market. Baldwin has much better margins than Andrews and is currently enjoying over 50% contribution margin in all but the Size and High End segments. They are utilizing greater than 100% of their plant for all product lines and have added automation to their Traditional and Low end product lines to further increase margins. Inventory management is being handled very well with only the product Bead having excessive stock left over. They had no stock outs in the most recent round. Baldwin currently has the