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Capstone Simulation
Strategy for your Company
Discussion: Overall Approach
Eric Banabeau says strategy should emerge from the bottom-up in a sort of dance with the marketplace, and that the goal of strategy should be to apply simple rules.
Introduction
A strategy is one of four organizational time drivers.
Mission Statement (timeless) Strategy (3-5 years)
TIME IN YEARS
Capstone Strategies
Strategies are declared in corporate mission statements Capstone firms may develop and execute any strategy (or none at all - though that isnt advisable). Basic strategies include:
STRATEGY Mission Statement INDUSTRY AND MARKET ANALYSIS S.W.O.T Analysis Competitor Analysis Competitive Analysis PERFORMANCE ASSESSMENT Success Measurements Analyst Report Round Analysis - Star Summary
Overall Cost Leader Cost Leader with Focus (Low Tech or Product Life-Cycle) Differentiator Differentiator with Focus (HighTech or Product Life-Cycle)
Porter Curve
ROI
High
Firms with High ROI / Low Overall Market Share would likely have a clearly defined focused strategy
High Overall Market Share / High ROI firms would likely have a strong position in all segments risky, but effective when executed properly
Low
High
Market Share
Porter Curve
ROI
High Firms in the middle have a less definable identity, and a hard time competing.
They might have a number of sofa-bed product lines: Not great sofas not great beds.
Low
High
Market Share
Market Growth
The Boston Consulting Group Growth-Share Matrix was developed in the 1960s as a tool to assess a firms Strategic Business Unit (SBU) or product
Long-term success is achieved by having a mix of high-growth potential products that require lots of cash, and low-growth cash cows that generate the required $$
Low
High
Capstone Strategies
The Situation Analysis generated an overview of the forces at work within the Capstone market place.
Now you must decide how to use that information to gain a competitive advantage. There are many different approaches - all of which can be successful depending on how well they are implemented tactically.
Differentiator
A Differentiator will seek to create maximum awareness and brand equity. They want to be well known as makers of high quality/highly desirable products.
Firm Profile: High R&D spending to keep products fresh Maintain a presence in all market segments Spend heavily on advertising and sales to create maximum awareness and accessibility Prices tend to be higher Focus on Market Share, Profits, and Stock Price
Strategies Evolve
Todays shift is tomorrows nightmare
Poor tactics undermine a good strategy Good tactics can overcome a poor strategy
There is no "magic bullet," guaranteed winning strategy. Each simulation has unique competitive dynamics.
Successful firms will focus on planning, strategic alignment, teamwork, competitor analysis, and tactical adjustments.