CAPSIM PRESENTATION2 (3)

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CAPSIM PRESENTATION
Business Strategy • To gain an advantage over competitors and maximize returns for shareholders, Topnotch company uses business strategies to guide their day-to-day operations and long-term planning. This strategy is crucial to the success of any organization and must be in place before any goods or services can be created or delivered. • The business plan is the blueprint for a company's future. It gives companies an advantage in the market and helps executives reach their objectives. It determines a variety of operational factors, including as pricing, sourcing, resource allocation, and personnel selection.
Business Strategy (Contd.) • The Topnotch corporation ventured to implement a plan at the corporate level. A plan that is long-term, proactive, coordinated, and comprehensive in scope is known as a corporate-level strategy. • This plan is developed by senior management. In other words, it creates the business lines (product lines), stability, growth, mergers and acquisitions, product diversification, integration, and new investment sectors, among other things.
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Vision and Strategy Making a profit and beating the competition were the top priorities. Topnotch started with low-tech sensors to get this done. Cost-effective solutions for certain markets with low levels of technological sophistication. Aged products that are still relevant to consumers. Make the product more widely available. Get as much money as possible.
Product’s Characteristics Product is price sensitive and products at lower prices are preferred in this segment. It is moderately reliable. ❖ The ideal age is 3 years. ❖ Bigger size and lower performance.
Round 1: R&D: ★ Positioned Daze perfectly in the perceptual map. ★ Daze specifications : Pfmn-5.7, Size-14.6, MTBF-18000 ★ Kept the revision date below 3 years.
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Marketing The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives. Business success is built on an appropriate amount of investment, sure, but it's also built on talent, on strategy, on hard work and often on a little bit of luck. The five critical success factors are strategic focus, people, operations, marketing, and finances.
Marketing Cont…’ • The key factors leading to the company’s failure include; 1. Poor cash flow management 2. Losing control of the finances 3. Lack of strategy and poor planning 4. Weak leadership 5. Overdependence of few big customers 6. Lack of resources
Production We initiated with 1473 units of Daze. The automation rating was at 3.0. Entire production capacity was used.
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Finance ★ No long term loan taken. ★ Issued stock. ★ Maintained better cash position for future rounds.
Outcomes of Round 1 ★ Achieved a market share of 14.7% ★ Made a profit of over $3 million ★ Zero debt ★ Closing stock of $16.38(2 nd position) ★ Market cap of $35 million(2 nd position)
Round 2 R&D: ★ We have decided to continue with same product. ★ Made changes in revision date according to requirements of low tech segment. Marketing: ★ Decreased price of Daze based on our analysis ($33.95) ★ Increased the promo and sales budget to $1.5 million respectively.
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Round 2(Contd.) Production: Increased production to 1761 units as the product was in demand. Automation Rating remained the same as Round1. Finance: We didn't take any debt. Maintained good cash position to use in upcoming rounds. Issued common usage stock worth $7 million.
Outcomes of Round 2 • Market increased from 14.7% to 15.63%. • Sold more units as we reduced the price. • Had no short-term and long-term debts. • Closing stock of $22.51 • Market cap of $58 million
Round 3 R&D: We had introduced a new product Did changes in the specifications of the existing product Revised the age of the product Marketing: Shuffled the price to maximise sales. Invested more in Promotion & Awareness
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Round 3 (Contd.) Production: • Even after the shuffle in Round 2 we still had some inventory • Decided to produce a tad bit less. • Did no changes to AR • Half the capacity of the 1st shift Finance: • Avoided taking long term loan instead issued shares • Were happy with the future cash position • Kept an eye on EPS
Financial and Pro Forma Strategy Projections A pro-forma forecast is a financial prognosis constructed using pro-forma financial statements. The purpose of a pro-forma forecast is to show how a potential positive change can affect a company's finances. Predictions made on a pro-forma basis are not subject to the regulations of GAAP. To project future performance, a pro forma financial statement may include estimates or hypothetical data concerning prospective values.
Outcomes of Round 3 ★ Continued to make profits. ★ No Debt - no long term or short term loan taken ★ Had a healthy cash position to begin round 4
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Organizations use strategic positioning to set themselves apart from rivals by providing superior value to clients. This may help them get an edge over other businesses and, eventually, boost earnings. Strategic positioning may complement more conventional approaches to selling, such as raising product standards and streamlining operations.
Financial Management • In business, "cost leadership" is offering goods and services at the market's lowest attainable cost. The cheaper pricing makes the firm stand out from the crowd, which might lead to an increase in sales. • In order to stay competitive, it's possible that other firms will have to follow suit.To be a cost leader, it helps to have one of the lowest manufacturing costs in the business. A lower than average cost of production might allow the corporation to sell the product at a discount without jeopardizing its bottom line.
Differentiation To provide a premium item or service and charge more for it is a business approach known as differentiation. Because of this, uniqueness might be seen as the opposite of the cost leadership approach. This method involves marketing to customers who are willing to spend extra for what they perceive to be a superior service or experience. \This can indicate improved product quality, outstanding customer service, or a better social status associated with the purchase. To practice distinction, a corporation may combine marketing strategies with technological advances in product creation.
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Niche markets Another example of strategic positioning is locating a niche market that rivals aren't yet looking to enter and providing a service or product designed especially for clients. To do this, market research is important in order to comprehend various prospective niche markets and the merchandise preferences of consumers in such sectors. Additionally, while concentrating on a certain niche market, you can choose whether a cost leadership approach or a differentiation strategy would be the most beneficial, and then pair the two tactics accordingly.
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Financial Projections In business, to forecast means to make an educated guess about the future. Capsim's players may avoid taking out expensive loans by making the most informed business decisions thanks to the game's robust forecasting tools. A reliable forecast cannot be made without reliable data. In the second year of business, you can generate an estimate based on last year's results. Performance within the first year of company is the strongest indicator of future success. You may expect your company to expand by around 15% annually, as the market typically expands by around 10% for low-tech items and around 20% for high-tech ones. To estimate this year's sales, double what you made last year. Competing teams' expanding product offerings make accurate forecasting more difficult, forcing you to adjust your approach.
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