Capstone Situation Analysis

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Perceptual Map

Situation Analysis
The Situation Analysis will help your company understand current market conditions and how the industry will evolve over the next eight years. The analysis can be done as a group or you can assign parts to individuals and then report back to the rest of the company. An online version of the Situation Analysis is available in the Getting Started area.

(customers want better performing products) and for size is -0.7 (customers want smaller products). At the end of Round 1 the center of the Traditional segment will have a performance of 5.7 and a size of 14.3. 5.0 + 0.7 = 5.7 and 15.0 - 0.7 = 14.3 Table 2 displays the segment center locations at the end of each round. Print the Perceptual Map Form in the Industry Conditions Report then use Table 2 to find the location of each segment center for Rounds 1 through 8. Mark the approximate locations on the form (see the example in Figure 1). Remember, the locations in Table 2 are the centers of the segment circles, not product positions. Product positions are reported on page 4 of The Capstone Courier.

The exercises require two reports: The Industry Conditions Report and The Capstone Courier, which are available from the website’s Reports link. The Courier is also available from the Capstone Spreadsheet’s Reports menu bar. The Courier available at the start of Round 1 displays the results for Round 0, when all companies are equal. If you access the report from the website, use the Round 0 Courier for the Situation Analysis.

The locations in Industry Conditions Report Table 2 reflect the segment centers at the end of the round. Therefore, the Round 0 positions can be seen as the Round 1 starting positions, Round 2 positions can be seen as the Round 3 starting position, etc. Each month during the simulation year, the segment drifts 1/12th of the distance from the starting position to the ending position.

The Situation Analysis has five parts:

• Perceptual Map • Industry Demand Analysis • Capacity Analysis • Margin Analysis • Consumer Report 1 Perceptual Map
The Research & Development Department can use the Perceptual Map exercise to plan revision and invention projects that meet customers’ shifting size and performance expectations. The Marketing Department can use the results during forecasting as they compare competing products and when determining prices (in general, better positioned products can command higher prices). Each segment has a set of circles. The inner fine cut circles have a radius of 2.5 units. They represent the heart of the segments where demand is strong. In addition, each inner circle has an ideal spot, a location where demand is strongest. The larger outer rough cut circles have a radius of 4.0 units. They represent the outer fringe of the segments where demand is weak. 1.1 Segment Centers and Segment Drift

Tables 1 and 2 in the Industry Conditions Report display information about segment drift. Table 1 shows the yearly drift rates for each segment. For example, assume the center of the Traditional segment ends Round 0 (the year before the start of the simulation) with a performance of 5.0 and a size of 15.0, and the yearly drift rate for performance is +0.7

Example!
See your Industry Conditions Report for exact information.
Figure 1 Perceptual Map Form Example: Each year, customers expect smaller sensors with better performance. This causes the segment circles to “drift” to the lower right. The smaller dots represent the segment centers Rounds 0 through 8. The larger dots represent each segment’s ideal spot location at the end of Round 8.

1

Industry Demand Analysis

Form 1 Segment Ideal Spot Locations

Traditional Round 0 1 2 3 4 5 6 7 8 Pfmn Size Round 0 1 2 3 4 5 6 7 8

Low End Pfmn Size Round 0 1 2 3 4 5 6 7 8

High End Pfmn Size

Performance Round 0 1 2 3 4 5 6 7 8 Pfmn Size Round 0 1 2 3 4 5 6 7 8

Size Pfmn Size

1.2 Ideal Spots

Customer positioning preferences are...
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