Situation Analysis Team Assignment

Situation Analysis The Situation analysis will help your company understand the current market conditions and how the industry will evolve over the next eight years. There are five parts: Perceptual Map Demand Analysis Capacity Analysis Margin Analysis Consumer Report These exercises require The Foundation FastTrack industry newsletter.

Perceptual Map High Tech Low The Perceptual Map can be used to plan revision and invention projects that follow customer's changing expectations as well as assist in comparing products for forecasting. Each segment is represented by a pair of circles. The smaller, fine cut (solid) circle represents the heart of the segment. There is a larger rough cut (dashed) circle that represents the outer fringe of the segment where there are still customers, but in lower quantities.

Perceptual Map High Tech Low Customer positioning preferences are reported in the Buying Criteria boxes in The Foundation FastTrack's Market Segment Analyses. These locations, or ideal spots, drift with the segments and have different levels of importance to different segments for example, the High Tech segment cares more about positioning than Low Tech. The Buying Criteria report the preferred size and performance for each segment as of December 31 of the previous year.

Perceptual Map Low Tech Customer Buying Criteria   Expectations Importance Price $15.00 - 35.00 41% Age Ideal Age = 3.0 29% Reliability MTBF 14000-20000 21% Positioning Pfmn 4.8 Size 15.2 9% High Tech Customer Buying Criteria  Expectations Importance 1. Positioning Pfmn 7.4 Size 12.6 33% 2. Age Ideal Age = 0.0 29% 3. Price $25.00 - 45.00 25% 4. Reliability MTBF 17000-23000 13%

Perceptual Map Segment Centers at the End of Round 1 2 3 4 5 6 7 8 Low Tech Performance 4.8 5.3 Size 15.2 14.7 High Tech 6.0 6.7 14.0 13.3 Segment Ideal Spots at the End of Each Round 1 2 3 4 5 6 7 8 Low Tech Performance 4.8 Size 15.2 High Tech 7.4 12.6 Ideal Spot Locations Relative to Segment Centers Segment Performance Size Low Tech 0.0 High Tech 1.4 -1.4

Demand Analysis The Demand Analysis will help your team anticipate future demand. It will also help attain a starting point for sales forecasting by taking the industry demand and dividing that by the number of products in the segment In addition, this exercise is useful when making purchase decisions for capacity. You will need the Segment Analysis pages (5 - 6) of The Foundation FastTrack for Round 0. To analyze the demand for each segment, find the demand at the start of the simulation (Round 0), then calculate demand for Rounds 1 through 8. Segment Round 0 Growth Rate Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8 Low Tech   10.0% High Tech 20.0%

Cost to Double Capacity Cost to Maximize Automation Capacity Analysis The Capacity Analysis will help your team anticipate the cost of adding Capacity and Automation to capitalize on the growth predicted in the Demand Analysis. The information needed for this exercise is on the Production page of the Foundation FastTrack. Use the information for your company (the first letter of your company's name is the first letter of all of your products names) to complete the exercise. Product Name Capacity (000) Overtime Capacity (000) Automation Level Cost to Double Capacity Cost to Maximize Automation   Firm Industry

Contribution Margin / Unit Margin Analysis Healthy margins, the difference between a product's manufacturing cost and its price, are critical to company success. The Margin Analysis will help your team understand the cost of material. It will also help your team understand the effect automation has on labor costs. It will also demonstrate the importance of adequate pricing, and the upper limits of profitability. You will find the necessary information on the Production Analysis, page 4 of The FoundationFastTrack. Price Material Cost Labor Cost Overtime (Y/N) Contribution Margin Margin Potential Segment Upper Price Limit Lowest Material Cost Lowest Labor Cost Automation Level Contribution Margin / Unit Contribution Margin % Low Tech High Tech

Consumer Analysis Low Tech High Tech Price Quality Age Positioning Awareness  Accessibility Overall   

Consumer Analysis The Consumer Report will help your team understand the need to design quality product and the importance of adequate pricing, sales budget and promotion budget decisions. You will need The Foundation FastTrack Market Segment Analyses Buying Criteria and the Production Analysis. Enter you answers in form provided using G for Good, F for Fair, and P for poor. Price: Award a Good if your product's price is in the bottom third of the expected price range, Fair if it is in the middle third and Poor if it is in the top third. Reliability: Award a Good if the MTBF specification is in the top third of the range, Fair if it is in the middle third and Poor if it is in the bottom third. Age: Award a Good if the age on December 31 is within .5 years of the ideal age, Fair if the age is .6 to 1 year away and Poor of the age is beyond 1 year away. Positioning: Award a Good if your product is within .5 units of the segment's ideal spot, Fair if it is .6 to 1.5 units away and Poor if it is beyond 1.5 units. Awareness: Award a Good if your product's awareness exceeds 80%, Fair if it is 50% to 80% and Poor if it is below 50%. Accessibility: Award a Good if your product's accessibility exceeds 80%, Fair if it is 50% to 80% and Poor if it is below 50%. In the Overall row, give your products a Good only if the top two attributes in the Buying Criteria rate Good, and if the awareness and accessibility ratings are at least fair.