1. Where are we?

2. S I M U L A T I O N M A R K E T I N G M G T. C onsumer C ompany C ompetitors C onditions Began Situation-Analysis EXTERNAL ENVIRONMENT Opportunities & Threats MARKET STRUCTURE CONSUMER DEMAND INTERNAL ENVIRONMENT Your Company's Financial Strengths & Weaknesses:

3. 5 SEGMENTS

4. SENSOR INDUSTRY ONGOING GROWTH..the entire market growing at around 14 - 15% per year. The Performance market alone will be growing at ~20%

5. BUSINESS PLAN GUIDELINE Page 1: Mission & Vision Statements – SECTION I : SITUATION ANALYSIS 1.1: External Environment - Opportunities & Threats: MARKET STRUCTURE MARKET SEGMENT SIZE & GROWTH MARKET SEGMENT VALUE MARKET SEGMENT DYNAMICS 1.2: Internal Environment- Analysis & Evaluation of Company's Strengths & Weaknesses Marketing Management Production & HR Management Financial Management 1.3: Situational Analysis Results: SWOT Analysis SECTION II: STRATEGY, OBJECTIVES & TACTICS 2.1: Select one of the Six Basic Strategies delineated in your Online Guide – Describe your Company's Growth & Competitive Strategy; be specific regarding any plans for new product development (What products? Which segments? What years?)Six Basic Strategies 2.2: Functional Domains- Objectives & Tactics Marketing + R&DMarketing + R&D- Production & HR FinancialFinancial- *

6. Cheaper too-$.50 drop in price/year Drift Demo

7. Next Big Q How good are your goods…

8. Portfolio Analysis Which Brands should receive more/ less/ no investment-Based on:  Product Position/ Potential  Profitability/ Margins  Market-Growth/Market- Share Matrix  Competitive Strategy Which Brands should receive more/ less/ no investment-Based on:  Product Position/ Potential  Profitability/ Margins  Market-Growth/Market- Share Matrix  Competitive Strategy

9. Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking Strategic Thinking- the ten big ideas Strategic Thinking- the ten big ideas Strategic Thinking Strategic Thinking 4. Portfolio theory- GE- (three-by-three matrix, using business strength & market attractiveness as variables). The Boston Consulting Group (BCG) introduced its two-by-two matrix- (invest in the stars, divest the dogs, milk the cows, and solve the question marks)

10. Boston Consulting Group’s Growth-Share Matrix High Relative Market Share HighLow LowDOGS CASH COWS Product-Market Growth (%) STARS PROBLEMCHILD 10x 4x 2x 1.5x 1x.5x.2x.1x

11. Strengths & Weaknesses: · Marketing & R&DMarketing & R&D

12. Evaluate Your Company’s Marketing Marketing

13. Next Big Q How good are you in making your goods…

14. S I M U L A T I O N M A R K E T I N G M G T.

15. S I M U L A T I O N M A R K E T I N G M G T. 1) Assess your Production Efficiencies- Plant Utilization & Automation: 2) Assess your Company's HR & Labor Force Productivity: 3) Assess levels of automation on each of your production lines:

16. FAIR SHARE ESTIMATES: 3-4 Rnds out: ROW #1

17. S I M U L A T I O N M A R K E T I N G M G T. ROW#2

18. S I M U L A T I O N M A R K E T I N G M G T. Utilize 2 nd Shift? ROW#3

19. S I M U L A T I O N M A R K E T I N G M G T. Why run 2 nd shift –when labor costs 50% higher?

20. S I M U L A T I O N M A R K E T I N G M G T. Why run 2 nd shift –when labor costs 50% higher? Answer by using your proformas: 1- On production spreadsheet build at capacity- if have 1000 units – build 1000 units 2-On Marketing display- FORECAST 1000 UNITS 3.-ON Proforma Income statement- note NET MARGIN – Answer by using your proformas: 1- On production spreadsheet build at capacity- if have 1000 units – build 1000 units 2-On Marketing display- FORECAST 1000 UNITS 3.-ON Proforma Income statement- note NET MARGIN – THE BIQ Q: If we double sales will we double our net margin?– Will we make less because labor costs are 50% higher for 2nd shift?

21. S I M U L A T I O N M A R K E T I N G M G T. Why run 2 nd shift –when labor costs 50% higher? Answer by using your proformas: 1- On production spreadsheet double output-run full 2 nd shift 2-On Marketing display- double forecast 3.-ON Proforma Income statement- NET MARGIN –will more than double Answer by using your proformas: 1- On production spreadsheet double output-run full 2 nd shift 2-On Marketing display- double forecast 3.-ON Proforma Income statement- NET MARGIN –will more than double THE BIQ Ar: When run 1 shift- must pay all fixed costs- 2 nd shift gets a free ride-only has to pay labor premium…

22. S I M U L A T I O N M A R K E T I N G M G T. Optimum Automation Levels? ROW#4

23. Evaluate Your Company’s Production & HR Production & HR

24. Situation SWOT Analysis C onsumer C ompany C ompetitors C onditions Final Assignment for the Week

25. SWOT Analysis Identifies: ©South-Western College Publishing S S W W O O T T Things the company does well Things the company does not do well Conditions in the external environment that favor strengths Conditions that do not relate to existing strengths or favor areas of current weakness Internal External