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Welcome to the Foundation® Business Simulation
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School: CBU Professor: Dr. Cayce Lawrence Class: MGMT 498
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Objectives Demonstrate effectiveness of multi-discipline teams working together. Use strategic thinking. Test your business acumen. Understand overall interaction and impact of various parts of a business on one another. Grow the awareness of competition. Take away practical know-how to improve the effectiveness of your business.
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Why Simulate? Risk Free View Alternative Strategies Enjoyable Compresses Time (1 Round=1Year) Selectivity Integration
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SENSORINDUSTRYOVERVIEW
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Customers (OEMs) need sensors for their products Initially one segment, now breaking into two Very different customer demands developing between the segments Diversification in the use and utility of the sensors The Marketplace Low Tech High Tech
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In our industry we track the changing customer demand on a perceptual map Over 8 years customers will demand much faster and smaller sensors Market Segments will continue to diverge Low Tech High Tech The Marketplace
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You’re not giving me what I want “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 doesn’t have to be cutting edge.” Low Tech Customers
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And I’m not getting what I want! “These sensors have to be small, like micro, and fast” “I need them to be right out of R&D, I’m talking ZERO years on the market” “I’m willing to pay more to get what I want.” “I like a pretty high reliability.” High Tech Customers
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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!”
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COMPANYOVERVIEW
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The Competition $40 Million in Sales 1 Product Line 2 Segments Closed Marketplace 6 Companies AndrewsDigby BaldwinErie ChesterFerris
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Welcome To Your New Company
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Students need to coordinate strategy and tactics across the following areas of their company:
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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.” R&D
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Set the price of our products in the marketplace Build customer awareness through promotion Establish a sales force and distribution channels Set the sales forecast for our products Set Credit Policies AR/AP “Our products are not priced optimally. And many of our customers don’t even know our product exists.” Marketing
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Purchase machinery to automate our facilities Buy or sell capacity of product lines Schedule production for each line Manage the majority of the companies fixed assets Establish your workforce complement “We are paying too much for labor costs. Very soon we will run out of capacity to meet demand.” Production
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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.” Finance
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A great management tool driven by forecasts and projections. Allows “What if” Scenarios by the company. Balance Sheet Profit & Loss Cash Flow Financial Ratios Proformas
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Scoring Methods
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Success Measures: Select a minimum of two criteria to be measured by: o ROE o ROS o ROA o Cumulative Profit o Stock Price o Market Capitalization o Asset Turnover o Market Share o Weight each selection
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Analyst Report
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Running your Company
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Establish business strategy for your company Analyze Foundation FastTrack 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 company’s strategic goal. Things to do on an Annual Basis
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Good Luck and Enjoy!
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