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Rehearsal Industry Conditions Report

This sample report is only for the Rehearsal. Your Dashboard links to the Industry Conditions Report you will use for your
simulation.

Print the Report

The sensors your company manufactures are incorporated into the products your customers sell. Your customers fall into five
groups which are called market segments. A market segment is a group of customers who have similar needs. The segments are
named for the customer's primary requirements and are called:

· Traditional · Performance

· Low End · Size

· High End

Customers within each market segment employ different standards as they evaluate sensors. They consider four buying criteria:

· Price · MTBF (Mean Time Before Failure)

· Age · Positioning

1 Positioning

Perceptual Map

Each market segment has different positioning preferences. This is illustrated by the sets of dashed and solid circles in the graphic
below. Over time, these preferences will shift (see Section 2.1.5 in the Team Member Guide for more information).

Perceptual Map Form: Segment circles and ideal spots

for Round 0 are shown below (see Section 3.1
in the Team Member Guide for more information
about segment circles and ideal spots).

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Drift Rates

Each year, the segments drift the length of the hypotenuse of the triangle formed by customers' desire for smaller and faster
products.

Table 1 Segment Circle Drift Rates: Every year, customers

demand increased performance (Pfmn) and decreased size.
Note that the drift rates vary for each segment.

Pfmn Size
Traditional +0.7 -0.7
Low End +0.5 -0.5
High End +0.9 -0.9
Performance +1.0 -0.7
Size +0.7 -1.0

Segment Centers

Table 2: Segment Centers at the End of Each Round: Note the drift rates vary for each segment.

Table 2 Segment Centers at the End of Each Round: As shown in the Perceptual Map Form above, size is on the

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vertical axis and performance (Pfmn) is on the horizontal axis.

Traditional Low End High End Performance Size

Round Performance Size Performance Size Performance Size Performance Size Performance Size

0 5.0 15.0 2.5 17.5 7.5 12.5 8.0 17.0 3.0 12.0

1 5.7 14.3 3.0 17.0 8.4 11.6 9.0 16.3 3.7 11.0

2 6.4 13.6 3.5 16.5 9.3 10.7 10.0 15.6 4.4 10.0

3 7.1 12.9 4.0 16.0 10.2 9.8 11.0 14.9 5.1 9.0

4 7.8 12.2 4.5 15.5 11.1 8.9 12.0 14.2 5.8 8.0

5 8.5 11.5 5.0 15.0 12.0 8.0 13.0 13.5 6.5 7.0

6 9.2 10.8 5.5 14.5 12.9 7.1 14.0 12.8 7.2 6.0

7 9.9 10.1 6.0 14.0 13.8 6.2 15.0 12.1 7.9 5.0

8 10.6 9.4 6.5 13.5 14.7 5.3 16.0 11.4 8.6 4.0

The information in Table 2 reflects the segment centers at the end of the round. Therefore, the Round 0 positions can be seen as the
Round 1 starting positions, Round 2 positions can be seen as the Round 3 starting position, etc. Each month during the simulation
year, the segment drifts 1/12th of the distance from the starting position to the ending position.

Ideal Spots

Table 3 Ideal Spot Offsets:

Customers prefer products
located this distance from
the center of the segment circle.

Segment Performance Size

Traditional 0.0 0.0

Low End -0.8 +0.8

High End +1.4 -1.4

Performance +1.4 -1.0

Size +1.0 -1.4

The information in Table 3 shows the Ideal Spot "offsets" or distances from the segment center. The ideal spot is that point where,
all other things being equal, demand is highest. It is different from the segment center. Why are some ideal spots ahead of the
segment centers? The segments are moving. From a customer’s perspective, if they buy a product at the ideal spot, it will still be a
cutting edge product when it wears out.

2: Segment Sizes and Growth Rates

At the beginning of the simulation, Traditional and Low End sell more units than the high technology segments, High End,
Performance and Size. Page 10 of the Capstone Courier, the Market Segment Report, displays total industry sales.

Each market segment grows at a different rate. Table 4 lists the beginning segment growth rates for your industry. The growth rates
might change from year to year. Check the Segment Analysis reports in the Capstone Courier each round for the upcoming year's
growth rates.

Table 4: Industry Conditions Beginning Segment Growth Rates

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Table 4 Industry Conditions

Growth Rate
3: Buying Criteria By Segment
Traditional 9.2%
These are your products and the primary segments they sell into at the beginning of the simulation. These can change according to
your decisions
Low End and as the simulation11.7%
evolves.

High End
Able Traditional 16.2%
Acre Low End
Performance 19.8%
Adam High End
Size Performance
Aft 18.3%
Agape Size

The buying criteria for each segment, in order of importance, are displayed below. Positioning and Age score information also
display. Passing your cursor over a graphic will enlarge the graphic. See Chapter 3 of the Team Member Guide for explanations of
Positioning, Age, Price and MTBF scores.

Price
Age,
MTBF (Reliability)
Positioning.

3.1 Traditional Segment Buying Criteria (Round 0)

Traditional customers seek proven products at a modest price.

Age, 2 years – importance: 47%

Price, $20.00-$30.00 – importance: 23%
Ideal Position, performance 5.0 size 15.0 - importance: 21%
MTBF, 14,000-19,000 – importance: 9%

Industry Conditions Figure 3.1: Traditional Buying

Criteria

Traditional customers give higher position scores to

sensors located in the center of the segment circle.

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Traditional customers give higher scores to sensors in the 2

year range.

3.2 Low End Segment Buying Criteria (Round 0)

Low End customers seek low prices and well proven products.

Price, $15.00-$25.00 – importance: 53%

Age, 7 years – importance: 24%
Ideal Position, performance 2.5 size 17.5 - importance: 16%
MTBF, 12,000-17,000 – importance: 7%

Industry Conditions Figure 3.2 Low End Buying Criteria

Low End customers prefer inexpensive sensors with

slower performance and larger size.

Low End customers give higher scores to sensors in the 7

year range.

3.3 High End Segment Buying Criteria (Round 0)

High End customers seek cutting-edge technology in size/performance and new designs.

Ideal Position, performance 7.5 size 12.5 - importance: 43%

Age, 0 years – importance: 29%
MTBF, 20,000-25,000 – importance: 19%

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Price, $30.00-$40.00 – importance: 9%

Industry Conditions Figure 3.3 High End Buying Criteria

High End customers demand cutting edge sensors with

high performance and small size.

High End customers give higher scores to newer sensors.

3.4 Performance Segment Buying Criteria (Round 0)

Performance customers seek high reliability and cutting edge performance technology.

MTBF, 22,000-27,000 – importance: 43%

Ideal Position, performance 8.0 size 17.0 - importance: 29%
Price, $25.00-$35.00 – importance: 19%
Age, 1 year – importance: 9%

Industry Conditions Figure 3.4 Performance Buying

Criteria

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Performance customers emphasize performance over size.

Performance Age Preferences: Performance customers

want sensors in the 1 year range.
Performance customers want sensors in the 1 year range.

3.5 Size Segment Buying Criteria (Round 0)

Size customers seek cutting edge size technology and younger designs.

Ideal Position, performance 3.0 size 12.0 - importance: 43%

Age, 1.5 years – importance: 29%
MTBF, 16,000-21,000 – importance: 19%
Price, $25.00-$35.00 – importance: 9%

Industry Conditions Figure 3.5 Size Buying Criteria

Size customers emphasize size over performance.

Size customers prefer sensors in the 1.5 year range.

4 Projected Interest Rates

Prime Interest Rate Round 1: 7.0%

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