1. Business Simulation Seminar
Introduction to the Simulation

2. Business Simulation
The worst day you will ever have in business is when you have to fire someone due to your fault.
In simulations, only electrons, not people. Learn.
In class, I will use your mistakes as examples in front of your competition. Everyone learns.

3. The Industry Electronic sensor industry
Sell the sensors to OEMs (original equipment manufacturers)
Put your sensors in their products

4. Sensor Industry Market Segments
Traditional
Low End
High End
Performance
Size

5. Customer Needs Customers evaluate the product on
Positioning (size and performance)
Reliability
Age
Price
These needs differ for each segment

6. Perceptual Map Graphically shows market needs
Can be used to position products
Capstone perceptual map
NOTE: it is absolutely critical to your success to understand the perceptual map. If you do not, you will fail. If you have questions, ASK!

7. Your Business Formed when a monopoly was broken up
All companies start the same
Four main functional areas
R&D
Marketing
Production
Finance

8. Simulation – Six Basic Strategies
Broad cost leader
Broad differentiator
Niche Cost Leader (low tech)
Niche differentiator (high tech)
Cost leader with product life cycle focus
Differentiator with product life cycle focus

9. R&D Controls the product line Customers concerned with
Currently 5 models, can grow to 8
Customers concerned with
Size – weight and size
Performance – how fast it is
Reliability – how long it lasts before failure
Age – how long it has been available
The bigger the change in the product the longer it takes to develop it
New sensors take more than a year

10. Marketing Manages Bigger budgets mean more sales Price
Promotion budget
100% awareness means that all customers know about your product
Sales budget
100% accessibility means that every customer can locate your product
Bigger budgets mean more sales

11. Production Each product has own manufacturing line
Need to schedule production run for year
Can buy new capacity year in advance
Two shift capacity for each line
Second shift has 50% higher labor costs
Each line has automation rating
Automation is expensive but replaces workers
The higher the automation, the longer the R&D

12. Finance Ensures all activities are funded Sources of funds
Stock
Bonds
Current debt – bank loans
Declares dividends
Retires stock
Retires bonds

13. Getting Started
Team building activity
Assign people to corporations

14. Group Assignment Assign groups Groups should
Determine operating logistics
Read strategies in the Guide
Create a mission and strategy
Write a press release

15. The Website Steps to register Navigate the site Intro/Getting Started
Homework
Guide
Capstone simulation