Business Strategy Project Capsim PDF

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Business Strategy Project...

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Business Strategy During the course of our simulation, our group focused on providing low cost and dependable products while differentiating ourselves from the competition. We were able to succeed and stay afloat with our competitors because we implemented a differentiation strategy into our simulation. It worked out well when we were figuring out the cost of supplies and what we wanted to charge for our product. Our price was low to the point where we were still able to see profits while also paying less for our supplies. A big focus was having a competitive advantage over our competition and that entailed providing the quality and affordability that all customers are looking for.

Functional Level Strategies Similar to identifying and implementing the right external factors it was difficult to pinpoint a specific functional strategy. Marketing, production, sales and finance were the four areas within our functional level strategies. To start our marketing strategy is similar to the overall model of our business: create a product that has a price affordable for consumers but not too low that it would hurt our bottom line. Through awareness and attraction of our product we were able to market it to those who are in need of it. As for production we believed it was important to produce somewhere between the demand level of our product with a percentage left over in case it was needed. After we realized we were producing too many products in relation to our consumers' demand we cut back to a level strategy of production. By doing this we were able to save money and allocate to where it was really needed. Our sales strategy involved budgeting, forecasting and properly timelining the sale of our products. This was slightly tricky but its based goal was to secure long term revenue growth. Lastly, our finance strategy was to decipher what areas of our company needed money and what areas could be budgeted. This helped us find

financial stability and meet our objectives at hand. From looking at our cash, debt, equity, and dividends we were able to better implement the other three functional strategies using whatever capital was available. Overall, the functional strategies were helpful in growing our company and each week was new but in the end they all worked hand in hand. Cycle Theory The simulation really demonstrated the product life cycle and how it is constantly changing its current stage. The product life cycle is composed of four main stages, Introduction, Growth, Maturity, and Decline. Introduction is when the product first hits the market. It is composed of a lot of marketing and growth in product awareness. The second stage is growth, which is primarily composed of watching the results of the marketing and product awareness. You begin to see the product have more traction in the market and make more sales. The third stage is maturity, and this is where you see the product’s peak performance. In this stage it is crucial to try and improve the product, to hopefully enter a previous stage, because the final stage is Decline. In Decline the product begins to die off and lose its footing in the market. This is when the company needs to get rid of as much of its inventory as possible.

How were the strategies implemented? How was the group structured? Did the group have a leader? Was the leadership changed over the simulation? Did the group divide the responsibilities along functional lines or product lines? The group was structured with two co-leaders in JohnLuke and Drew. These co-leaders were not changed at all throughout the entire simulation. The strategies implemented were to have the items sold low and focus highly in promotion and trying to never have overtime hours be implemented. The group was afraid to have too low product prices that they would need overtime hours for the workers which would drive the cost of everything up. JohnLuke was assigned to focus mainly in the R&D department as Drew focused on production, marketing,

and finances. Drew’s main goal was to have a profitable business in which the stock would be a decent one to buy. At the end of the simulation the stock rating moved all the way up to an A which was a big accomplishment for the group. Every member of the group helped out by tossing their ideas out and it was a group effort. The other strategy was not to get too deep into loans and debt as the group was afraid of their stock price falling below zero. The group mainly divided the responsibilities along functional lines as each member of the group worked together on each product throughout the entire simulation. In the beginning of the simulation each group member attempted different ideas for prices and production size during the practice rounds to figure out which worked best. The group had a lot of obstacles to overcome early on with figuring out what prices worked as well as other functions in the simulation. Overall, I strongly believe the group did a great job with the simulation as their goal was to have a solid stock price and ended with a rating of A. The group would have loved to have a rating of AAA or AA but is still happy with the rating....