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1 C APSTONE ® D IFFERENTIATION S TRATEGY WITH A P RODUCT L IFECYCLE F OCUS This practice exercise will help you understand the relationships between business strategy, tactics, functional alignment, and the Capstone® simulation. We will use the Baldwin Company for this example. (During the practice rounds, each company is assigned a different strategy.) You will execute your plan by inputting the decisions described below. At the same time, your competitors will execute their assigned plans. The practice exercise will take three rounds As each round is processed, you will evaluate the results and then input the next round’s assigned decisions. Upon completion of the practice rounds, the simulation will be reset to the beginning. You can then create and implement your own strategic plan for the actual competition. Executive Summary (R & D) We will adopt a Differentiation Strategy with a Product Lifecycle Focus, concentrating on the High End, Traditional, and Low End segments. We will gain a competitive advantage by distinguishing our products with an excellent design, high awareness, easy accessibility, and new products. We will develop an R&D competency that keeps our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. We will price above average. We will expand capacity as we generate higher demand. Vision Statement Premium products for mainstream customers: Baldwin brands withstand the tests of time. Our primary stakeholders are customers, stockholders, management, and employees. Research And Development (R & D) We will reposition our Size and Performance segment products (Buddy and Bold) to the Traditional segment. We will allow our present Traditional segment product to become a Low End segment product as the segments drift. We will eventually introduce a new product to the High segment and will ultimately have at least two products each in the High, Traditional, and Low End segments. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability. Marketing We will spend aggressively in promotion and sales in our targeted segments (High, Traditional, and Low). We want every customer to know about our superb designs, and we want to make our products easy for customers to find. We will price at a premium. Production We will grow capacity to meet the demand that we generate, avoiding a second shift when possible. After our products are well positioned, we will investigate moderate increases in automation levels to improve margins, but never at the expense of our ability to reposition products and keep up with segments as they move across the perceptual map (higher automation levels increase the time required for R&D projects to complete). Finance
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