Podcast
Questions and Answers
How many basic strategies can be the starting point for your own custom strategy?
How many basic strategies can be the starting point for your own custom strategy?
6
What are the 6 basic strategies?
What are the 6 basic strategies?
Broad Cost Leader, Niche Cost Leader, Broad Differentiator, Niche Differentiator, Cost Leader with Product Lifecycle Focus, Differentiator with Product Lifecycle Focus
What defines a Broad Cost Leader strategy?
What defines a Broad Cost Leader strategy?
Maintains a presence in all segments of the market by keeping costs to a minimum.
What is characteristic of a Niche Cost Leader strategy?
What is characteristic of a Niche Cost Leader strategy?
What defines a Broad Differentiator strategy?
What defines a Broad Differentiator strategy?
What is a characteristic of a Niche Differentiator strategy?
What is a characteristic of a Niche Differentiator strategy?
What does 'Cost Leader w/ Product Lifecycle Focus' strategy emphasize?
What does 'Cost Leader w/ Product Lifecycle Focus' strategy emphasize?
What is the Differentiator w/Product Lifecycle Focus strategy?
What is the Differentiator w/Product Lifecycle Focus strategy?
What does MTBF stand for?
What does MTBF stand for?
What is the purpose of a Perceptual Map?
What is the purpose of a Perceptual Map?
The Age Score: The age criteria does NOT have a rough cut.
The Age Score: The age criteria does NOT have a rough cut.
What is the most important criteria for 'High End Segment' customers?
What is the most important criteria for 'High End Segment' customers?
What factors drive project length?
What factors drive project length?
It is easier for High Tech companies to re-enter the Traditional and Low End segments than it is for Low Tech companies to re-enter the high tech segments.
It is easier for High Tech companies to re-enter the Traditional and Low End segments than it is for Low Tech companies to re-enter the high tech segments.
Forecasting sales requires what two components?
Forecasting sales requires what two components?
A good way to determine this year's demand is to multiply last year's demand by the growth rate then adding the result to last year's demand.
A good way to determine this year's demand is to multiply last year's demand by the growth rate then adding the result to last year's demand.
What document should you view to review your projections for the upcoming year?
What document should you view to review your projections for the upcoming year?
What is a proforma?
What is a proforma?
What are the buying criteria for customers?
What are the buying criteria for customers?
Customer survey scores are calculated how many times a year?
Customer survey scores are calculated how many times a year?
Price ranges in all segments drop by how much each year?
Price ranges in all segments drop by how much each year?
What can help you diagnose stock outs and their impacts?
What can help you diagnose stock outs and their impacts?
What are the four categories used in Balanced Scorecards?
What are the four categories used in Balanced Scorecards?
The simulation charges a what percentage inventory carrying cost?
The simulation charges a what percentage inventory carrying cost?
The age of a product is defined as?
The age of a product is defined as?
Positioning and price change every year or remain the same?
Positioning and price change every year or remain the same?
What position on the Perceptual Map has the highest demand?
What position on the Perceptual Map has the highest demand?
What does SMART goals stand for?
What does SMART goals stand for?
Margin points are earned in which areas?
Margin points are earned in which areas?
What triggers an emergency loan?
What triggers an emergency loan?
What are the criteria for earning Working Capital points?
What are the criteria for earning Working Capital points?
Why do you want a high market share?
Why do you want a high market share?
What are the requirements for earning forecasting points?
What are the requirements for earning forecasting points?
What must a product do to earn Customer Satisfaction points?
What must a product do to earn Customer Satisfaction points?
How are Productivity points earned?
How are Productivity points earned?
What determines Financial Structure points?
What determines Financial Structure points?
How is wealth created on analyst reports?
How is wealth created on analyst reports?
What are the 4 key departments in a company?
What are the 4 key departments in a company?
How do you raise money?
How do you raise money?
Awareness decays by what fraction each year?
Awareness decays by what fraction each year?
What is the maximum capacity you can schedule for each product?
What is the maximum capacity you can schedule for each product?
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Study Notes
CapSim Exam Study Notes
- There are 6 basic strategies that can serve as a foundation for custom strategies in CapSim.
Basic Strategies
- Broad Cost Leader: Competes across all market segments through low prices and cost efficiencies. Focuses on minimizing research, production, and material costs.
- Niche Cost Leader: Targets traditional and low-end market segments. Aims for cost advantages similar to Broad Cost Leader but within specialized segments.
- Broad Differentiator: Stands out in all segments by offering products with superior design and accessibility, ensuring products keep pace with market changes.
- Niche Differentiator: Focuses on high-tech segments (High End, Performance, Size) by delivering innovative products with excellent design.
- Cost Leader with Product Lifecycle Focus: Centers on High End, Traditional, and Low End segments, promoting new products in High End that transition through lifecycle.
- Differentiator with Product Lifecycle Focus: Similar to Cost Leader focus but emphasizes product innovation across all segments with premium pricing.
Key Metrics and Tools
- Mean Time Before Failure (MTBF) is measured in hours, crucial for assessing product reliability.
- Perceptual Map: A marketing tool used to visualize the positioning of products relative to competitors.
- Customer satisfaction is assessed through survey scores processed 12 times a year.
Product Management
- Age criteria does not restrict product purchases; products cannot be too new or too old for consideration.
- Positioning is the most critical factor for High End segment buyers.
Project Length Factors
- Automation levels, R&D project volume, and product location affect the length of product development projects.
Financial Management
- The simulation enforces a 12% inventory carrying cost. Strong working capital relationships are essential to avoid emergency loans, which happen during negative cash positions.
- Proformas are dynamic financial statements that forecast future projections and assess feasibility of strategic decisions.
Sales Forecasting
- Effective forecasting employs both math and logic to predict demand.
- Common pitfalls include relying on previous year's growth rates without adjustments.
Customer Satisfaction Metrics
- Achieve customer satisfaction by selling at least 50,000 units annually, avoiding stockouts, and securing a customer survey score of a minimum of 30.
Wealth Creation Assessment
- Wealth creation is evaluated through cumulative profits, free cash flow, and market capitalization.
- Leverage should ideally be maintained between 1.8 and 2.8 for optimal financial structure points.
Departmental Responsibilities
- R&D: Innovates and revises products, exploring new introductions and enhancements.
- Production: Manages product assembly, automation increases, and production planning.
- Marketing: Sets pricing strategies and promotional budgets, forecasts sales.
- Finance: Ensures funding for growth through stock issuance and debt management.
Strategic Insights
- Customer buying criteria include price, positioning, age, and MTBF, influencing market entry decisions.
- Awareness of the product decays by one-third annually, necessitating continuous marketing efforts.
Operational Capacities
- Up to double the first shift capacity can be scheduled for each product, utilizing two shifts to maximize production efficiency.
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