NMIMS Hyd

Capstone Simulation
Compete with your Company
Discussion: Rules of the Game

Instructor: Dr Rajnandan Patnaik

Objectives
Demonstrate effectiveness of multi-discipline teams working together. Use strategic thinking to an advantage. Test your business acumen. Understand overall interaction and impact of various parts of a business on one another. Grow an awareness of competition. Take away practical know-how to improve the effectiveness of your business.

Why Simulate
Risk Free View Alternative Strategies Enjoyable Compresses Time (1 Round=1Year) Selectivity <> Integration

Sensor Industry Overview

The Marketplace
Customers (OEMs) need sensors for their products Initially one segment, now breaking into five Very different customer demands developing between the segments Diversification in the use and utility of the sensors

The Marketplace
In our industry we track the changing customer demand on a perceptual map Over 8 years the customers will demand much faster and smaller sensors Market Segments will continue to diverge

Low Tech

Performance

Traditional High Tech

Size

Low Tech & Traditional Customers

I want these sensors to be cheap I want them to have been around for a while no Beta Testing! They have to be moderately reliable. The technology doesnt have to be cutting edge.
Youre not giving me what I want

High Tech, Size & Perform. Cust.

These sensors have to be small, like micro, and fast I need them to be right out of R&D, Im talking ZERO years on the market Ill pay more to get what I want. I like a pretty high reliability.
And Im not getting what I want!

SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH

Sees the next 8 years as consistent growth. All market segments increase at a nice clip, according to market analyst. I see the entire market growing at around 14% or 15% per year. The High Tech market alone will be growing at a whopping 16%. I hope those companies out there are ready for that kind of expansion!
70000 60000 50000 40000 30000 20000 10000 0 Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8

Company Overview

SEC ANNOUNCES BREAKUP OF MONOPLOY

FOR IMMEDIATE RELEASE

William Donaldson, Chairman of the SEC, took dramatic action today by breaking up the monolithic corporation Sensors, Inc.
In a statement to the press Chairman Donaldson outlined the reason and the outcome of this move. We cannot allow monopolies of this sort to impact an entire industry! stated Donaldson. The customers that utilize these sensors are being held hostage. Effective immediately Sensors, Inc will be dissolved into the Andrews, Baldwin, Chester, Digby, Erie and Ferris companies.

The Competition
ANDREWS DIGBY

6 Companies $100 Million in Sales

BALDWIN ERIE

5 Product Lines
Closed Marketplace
CHESTER FERRIS

SHAKE UP IN SENSOR INDUSTRY

Company Fires Management Team

After poor results, lackluster sales and angry customer reports, the Chairman of the Board of Directors has announced the immediate termination of the Management Team.

This is a black day for our company, said Chairman Professor Patnaik, We need to hire a dynamic leadership group who will be able to take this company into the future!
Due to this immediate need I have hired the Dream Team to start on January 1st. I expect to see great things from this Executive Team!

Welcome to your New Company

Basic Functions

R&D

Production

Marketing

Finance

 Establish the specification of the products to meet customer demand Build the quality and reliability (MTBF) into the products Ensure the perceived age of the product meets customer demands Create new products to meet the changing marketplace
Our products are not well positioned in the marketplace.

Marketing
Set the price of our products in the marketplace Build customer awareness through promotion
Our products are not priced optimally.

Establish a sales force and distribution channels

Set the sales forecast for our products Set Credit Policies AR/AP

And many of our customers dont even know our product exists.

Production

Purchase machinery to automate our facilities Buy or sell capacity of product lines

We are paying too much for labor costs.

Very soon we will run out of capacity to meet demand.

Schedule production for each line Manage the majority of the companys fixed assets Establish your workforce complement

 Acquire capital to fund capital expansions Issue Stock Short Term Debt Issue Long Term Bonds Issue dividend to our shareholders Balance our debt portfolio Manage our proformas
We have poor cash flow and substandard financial ratios. We have no financial policy statement.

A great management tool driven by forecasts and projections. Allows What if Scenarios by the company.

Balance Sheet Profit & Loss Cash Flow Financial Ratios

 Select a minimum of two criteria to be measured by: ROE ROS ROA CUM PROFIT STOCK PRICE MARKET CAPITALIZATION ASSET TURNOVER MARKET SHARE Weight each selection.

Running your Company Things to do on an Annual Basis

To Do List
Establish business strategy for your company Analyze Capstone Courier to see industry results Make tactical decisions across each functional area (aligned to strategy!) Upload official results and confirm on the website Await results when Professor processes

Rejoice in your superior capitalistic acumen

Begin the process again by confirming alignment of your results with your companys strategic goal.

Play to Win and Enjoy the Fun