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Terms in this set (411)
In Capstone, there are _____ basic strategies for starting your own strategy.
The _____ is a marketing tool used to track the position of the company's products against those of the competitors.
The Mean Time Before Failure is measured in _____.
- The product's automation level on the production line.
- The # of R&D projects underway at the same time.
- The proximity of the product's new location to an existing product in your company's line.
These factors drive _______________.
Math and Logic
Forecasting sales requires _____ and _____.
Six Basic Strategies
Niche Cost Leader
Cost Leader w/Product Lifecycle Focus
Differentiator with Product Lifecycle Focus
Mean Time Before Failure
MTBF is _____.
The _____ are Price, Positioning, Age, and MTBF
Customer survey scores are calculated _____ times per year.
Price ranges in all segments drop by _____ much per year?
The _____ report of the Capstone Courier can help you diagnose stock outs and their impacts.
Financial, Internal Business Process, Customer, Learning and Growth
Balance Scorecard allows companies to gauge their performance by assessing measures in these categories.
Age of a Product
_____ is the length of time since a product was revised or invented.
Positioning and Price
_____ and _____ change every year. Age and MTBF criteria always remain the same.
Positioning and price change every year. _____ criteria always remain the same.
Age and MTBF
The _____ is the position on the Perceptual Map where demand is highest.
A _____ is a group of customers who have similar needs.
5 Market Segments
The _____ are Traditional, Low End, High End, Performance and Size.
Each year, customers demand ___________ performance and decreased size.
Each year, customers demand increased performance and ___________ size.
The ___________ segment has the fastest drift rate.
The _________ segment has the slowest drift rate.
Each month during the year, the segment drifts _____ of the distance from the starting position to the ending position.
Segments are moving
Some ideal spots are ahead of the segment centers because _____.
Traditional and Low End
The __________ and ____________ sell more units than the high technology segments, High End, Performance and Size.
Growth rates for each of the segments can be found in the _________.
___________ market segment seeks proven products at a modest price.
The most important buying criteria for the Traditional segment is _____.
The least important buying criteria for the Traditional segment is _____.
The traditional customers give higher position scores to sensors located in the ______ of the segment circle.
The ______ market segment seek low prices and well proven products.
The most important buying criteria for the Low End segment is _____.
The least important buying criteria for the Low End segment is _____.
Low end customers prefer inexpensive sensors with _____ performance and _____ size.
Behind the center
The low end customers give higher position scores to sensors located _____ of the segment circle.
_____ market segment seeks cutting-edge technology in size/performance and new designs.
The most important buying criteria for the high end segment is _____.
The least important buying criteria for the high end segment is _____.
High end customers demand cutting edge sensors with _____ performance and _____ size.
Ahead of the center
The high end customers give higher position scores to sensors located _____ of the segment circle.
_____ market segment seeks high reliability and cutting edge performance technology.
The most important buying criteria for the performance segment is _____.
The least important buying criteria for the performance segment is _____.
Performance customers emphasize performance over _____.
Performance customers want sensors in the _____ range.
Traditional customers give higher scores to sensors in the _____ range.
Low end customers give higher scores to sensors in the _____ range.
High end customers give higher scores to _____ sensors.
The _____ market segment seeks cutting edge size technology and younger designs.
The most important buying criteria for the size segment is _____.
The least important buying criteria for the size segment is _____.
Size customers emphasize size over _____.
Size customers prefer sensors in the _____ range.
The prime interest rate in round 1 is _____%.
The companies that manufacture sensors were created when _____.
government split a monopoly
The companies are in a _____ market, not a direct-to-consumer market.
business 2 business
Industry Conditions Report
The _____ outlines the beginning business environment, including customer buying criteria.
The _____ is an industry newsletter that has an extensive year-end report of the sensor industry.
The _____ includes customer buying patterns, product positioning, public financial records and other information that will help you get ahead.
The Capstone Courier reports _____ year's results.
_____ must ensure their product meets the demand of the intended segment. They concentrate on the specifics of their product and how it relates to the segment. They are not directly involved in Sales and Promotion decisions.
_____ are strategists. They have more freedom than product managers to make strategy and policy recommendations. They present recommendations that set overall strategy.
A _____ job is to optimize the efficiency of the assigned function and to coordinate strategy across functional boundaries. They assume responsibility for an entire department (R&D, Marketing, Production, Finance).
Projects can only begin on _____. Projects that did not finish last year will "lock out" a new project for that product this year.
As promotional and sales budgets increase, they experience _____.
Competitive Intelligence Officer
The _____ task is to see the market, and especially their company, through the eyes of the competitor.
_____ are projections for the upcoming year. _____ are the results from the previous year.
Proformas, Annual Reports
Research & Development
_____ designs your product lines. The department needs to invent and revise products that appeal to your customers' changing needs.
_____ prices and promotes your products. It interacts with your customers via its sales force and distribution system. It is also responsible for sales forecasts.
_____ determines how many units will be manufactured during the year. It is also responsible for buying and selling production lines.
_____ makes sure your company has the financial resources it needs to run through the year. The department can raise money via one-year bank notes, 10-year bonds or stock issues. They can also issue stock dividends, buy back stock, or retire bonds before their due dates.
_____ works with _____ to make sure products meet customer expectations.
_____ works with _____ to ensure assembly lines are purchased for new products.
If _____ discontinues a product, it should notify _____.
Marketing, Production, Production
_____ works with _____ to make sure manufacturing quantities are in line with forecasts. It's market growth projections also help _____ determine appropriate levels of capacity. If it decides to discontinue a product, it tells the other to sell its production line.
_____ works with _____ to project revenues for each product and to set the Accounts Receivable policy.
Accounts Receivable Policy
The _____ is the amount of time customers can take to pay for their purchases.
_____ tells _____ if it needs money for additional equipment. If they cannot raise enough money, it can tell them to scale back its requests or perhaps sell idle capacity.
_____ acts as a watch dog over company expenditures.
The _____ is a complete trail of all team decisions. It will help you identify your decision making strengths and weaknesses.
The Industry Conditions report is published _____.
The Perceptual Map measures size on the _____ axis and performance on the _____ axis.
Drift rates can be found in the _____.
Industry Conditions Report
Customers will _____ to buy a product positioned outside the circles.
Assuming it does not run out of inventory, a product with a higher customer survey score will _____ a product with a lower score.
_____ reflects how well a product meets its segment's buying criteria.
Customer Survey Score
Perfect Customer Survey Score (100)
_____ requires the product be at the ideal position, be priced at the bottom of the expected range, have the ideal age and have an MTBF at the top of the specified range.
Rough Cut Circle
The _____ is the dashed outer circle that defines the outer limits of the segment. Customers will not purchase products positioned outside this boundary.
Fine Cut Circle
_____ is the solid inner circle that defines the heart of the segment. Customers prefer products within this circle.
The radius of the rough cut circle is _____.
The radius of the fine cut circle is _____.
Customer Survey scores drop by _____% just outside of the fine cut circle.
Customer Survey scores drop by _____% half way across the rough cut circle.
Customer Survey scores drop by _____% for products that are almost to the edge of the rough cut.
Every segment has a $_____ price range.
At $5 outside the price range, demand for the product is _____.
Sensors lose approximately _____% of their customer survey score for each dollar above or below the guideline.
Each segment sets a _____ range for MTBF.
Customer survey scores drop by _____% for every 1,000 hours below the MTBF guideline.
At _____ hours below the range, demand falls to zero.
Material costs increase by _____ for every 1,000 hours of MTBF.
The _____ buying criteria does not have a rough cut. A product will never be too young or too old to be considered for purchase.
Customer Survey Scores drive _____ for your product.
_____ is calculated by dividing your Customer Survey score by the sum of all scores.
_____ is the percentage of people who know about your product.
_____ is the number of customers who can easily interact with your company.
Awareness is built over time by the product's _____.
Accessibility is built over time by the product's _____.
A _____ happens when a product generates high demand but runs out of inventory.
Research & Development
_____ oversees invention and redesign.
All R&D projects begin on _____.
The trailing edge of the Low End fine cut has the lowest positioning cost of approximately _____.
The leading edge of the high end fine cut has the highest positioning cost of approximately _____.
Material costs displayed in the spreadsheet and reports are the combined _____ and _____ costs.
Segment circles on the Perceptual Map move at speeds ranging from _____ to _____.
Project lengths can be anywhere from _____ to _____.
3 months, 3 years
Six month projects cost $_____.
One year projects cost $_____.
You want repositioning projects to finish in less than _____.
Changing MTBF alone _____ affect a product's age.
The _____ department is in charge of sales forecasting.
From one year to the next, _____ % of customers who knew about a product forget about it.
=Last Year's Awareness-(33%*Last Year's Awareness)
Once your product achieves 100% awareness, you can scale back the product's promotion budget to around $_____ to maintain 100% awareness year after year.
New products are newsworthy events and create _____% awareness at no cost.
If you have one product in a segment, there is no additional benefit to spending more than $_____ on the sales budget.
To achieve 100% accessibility, you must have two or more products in the segment's _____.
Once you have achieved 100% accessibility, you can scale back the combined sales budgets to around $_____ to maintain 100%.
First Shift Capacity
_____ is defined as the number of units that can be produced on an assembly line in a single year with a daily eight-hour shift.
An assembly line can produce up to _____ its first shift capacity with a second shift.
Second shift labor costs are _____ higher than the first shift.
Capacity can be sold at the beginning of the year for _____ on the dollar value of the original investment.
Sell all but one unit of capacity
When discontinuing a sensor, if you want to sell all your inventory at full price, you must _____.
The lowest automation rating is _____.
The highest automation rating is _____.
As automation levels increase, the number of labor hours required to produce each unit _____.
Each additional point of automation decreases labor costs approximately _____%.
Labor costs increase each year because of an ______ in the worker's contract.
Automation costs $_____ per point.
Raising automation makes it increasingly _____ for R&D to reposition products short distances.
While reduced automation will speed R&D redesigns, by and large, it _____ to reduce an automation level.
is not wise
=(Savings*Remaining Rounds)/Automation Cost
As a general rule, companies fund short term assets like accounts receivable and inventory with _____ offered by banks.
Last year's current debt is always paid off on _____.
Bankers will loan current debt up to about _____% of your accounts receivable.
Bankers will loan current debt up to about _____% of this year's inventory.
Current debt is issued in _____.
1 year notes
All bonds are issued in _____.
10 year notes
Your company pays a _____% brokerage fee for issuing bonds.
The first three digits of the bond represent _____.
In a bond serial number, the last four digits indicate the _____.
Year the Bond is due
As a general rule, bond issues are used to fund long term investments in _____ and _____.
Bondholders will lend total amounts of up to _____% of the value of your plant and equipment.
When issuing new bonds, the interest rate will be _____% over the current debt interest rates.
You can buy back outstanding bonds before their due date and a _____% brokerage fee applies.
_____ range from AAA (best) to D (worst) and are evaluated by comparing current debt interest rates with the prime rate.
Current Market Price
Stock issue transactions take place at the _____.
Your company pays a _____% brokerage fee for issuing stock.
New stock issues are limited to _____% of your company's outstanding shares in that year.
As a general rule, stock issues are used to fund long term investments in _____ and _____.
_____ is driven by book value, the last two years' earnings per share, and the last two year's annual dividend.
=Common stock + retained earnings
EPS (Earnings Per Share)
=net profit/shares outstanding
_____ is the amount of money paid per share to stockholders each year.
Stockholders _____ to dividends beyond EPS.
do not respond
Dividends have _____ upon stock price.
When retiring stock it cannot exceed lesser of either _____% of your outstanding shares or your total equity.
You are charged a _____% brokerage fee to retire stock.
_____ cost one year's worth of current debt interest on the loan and a 7.5% penalty fee.
Emergency loans _____ stock prices.
A 60 day accounts receivable policy reduces the customer survey score by _____%.
A 30 day accounts receivable policy reduces the score by _____%.
A 90 accounts receivable policy produces _____ to the customer survey score.
Offering no credit terms for accounts receivable reduces the customer survey score by _____%.
Suppliers withhold _____% at a 30 day accounts payable lag.
Suppliers withhold _____% at a 60 day accounts payable lag.
Suppliers withhold _____% at a 90 day accounts payable lag.
Suppliers withhold _____% at a 120 day accounts payable lag.
Suppliers withhold _____ at a 150 day accounts payable lag.
CPI (Continuous Process Improvement) Systems
The _____ TQM program reduces material costs and to a lesser degree labor costs.
The _____ TQM program reduces material costs and administrative overhead.
QIT (Quality Initiative Training)
The _____ TQM program reduces labor costs.
Channel Support Systems
The _____ TQM strategy increases the effectiveness of the sales budget and in turn, demand.
_____ reduces R&D cycle time and in turn R&D costs.
UNEP Green Program
The _____ TQM strategy increases the effectiveness of the sales budget and therefore increases demand. Also reduces waste and therefore material costs.
The _____ TQM strategy reduces administrative overhead.
Quality Function Deployment Effort
This TQM strategy _____ reduces R&D cycle time and enhances the effectiveness of the promotion and sales budgets.
CCC (Concurrent Engineering)/Six Sigma
The _____ TQM program reduces material costs and labor costs.
GEMI TQEM Sustainability
_____ reduces labor costs as it minimizes environmental risks. Includes methods that protect employee health and redesign of products to have fewer toxic by-products. Also reduces material costs through recycling and material use efficiencies.
If you spend less than _____ on a TQM/Sustainability initiative in a single round you will see little return.
An investment of _____ on a TQM/Sustainability initiative in a single round will produce a cost-effective impact.
An investment over $_____ on a a TQM/Sustainability initiative in a single round will produce absolutely no additional benefit.
Expenditures beyond $_____ a TQM (total quality management)/Sustainability initiative over two to three years pushes well into diminishing returns.
_____ is the number of workers in the workforce.
_____ is the number of workers required to fill the production schedule without overtime.
Recruiting Spend budgets start at _____ per worker.
You can spend up to an additional $_____ per worker on the recruiting spend budget.
Higher Productivity, Lower Turnover
Training leads to _____ and _____ but takes people off the job while they are in the classroom.
Training costs _____ per hour per worker.
Investments in recruiting and training raise your _____ which in turn lowers your per unit labor costs.
The productivity index can never fall below _____%.
Second shift and overtime workers cost _____% more per hour than workers on first shift.
_____ is the percentage of work performed on overtime.
_____ is the percentage of workers who left the company last year, excluding downsizing.
About _____% of turnover is rooted in unavoidable factors like retirement, relocation, and weeding out poor workers. Remaining turnover is a function of employee dissatisfaction.
_____ are the employees recruited this year.
_____ are the employees that are lost because of downsizing or increases in automation.
_____ is the extra amount budgeted per worker to recruit high caliber workers.
Recruiting spend base amount is $_____.
_____ is the number of hours each year that each individual worker is taken off-line for training and development.
_____ indicates how the general workforce compares with the workers employed in Round 0.
_____ is the amount spent to recruit new workers. It is calculated by the number of workers recruited*($1000+Recruiting Spend).
_____ is the cost to fire workers.
Separation packages are worth _____.
The _____ is driven by training hours.
Training costs _____ per hour.
Total HR Admin Costs
_____ are incorporated into the income statement's admin bottom line and are allocated based on the product's complement.
Labor and Management
_____ negotiate over four separate categories: hourly wage, benefits, profit sharing percent, annual raise.
Starting Position for wages
_____ cannot be less than 80% or more than 150% of your current contract.
Starting Position for benefits, profit sharing and annual raise can be between _____% and _____% of your current contract.
Labor will ask for a _____% across the board wage and benefit increase.
Adjust Demand Upward
If any of the Starting Position offers is higher than the 10% increase, labor will _____ to match it.
If labor's demand is within the company's Starting Position and Negotiation ceiling, negotiations lead to _____.
The maximum length of a strike is _____ at which point both sides accept arbitration.
Workers will strike for _____ for every $1 difference in wages, $300 difference in benefit package, and percentage point difference in Profit Sharing and Annual Raise.
Companies with _____ will want to control labor costs.
_____ is the potential number of customers who would see the message.
_____ is the number of times a message is repeated.
Traditional and Low End Segments
_____ and _____ respond good to print media.
High End, Performance
_____ and _____ segments respond poorly to print media.
_____ responds fairly to print media.
In print media, the cost to gain additional awareness becomes prohibitive beyond $____.
Traditional, Low End
The _____ and _____ segments respond good to direct mail.
_____ and _____ segments respond poorly to direct mail.
The _____ segment responds fairly to direct mail.
In direct mail, the cost to gain additional awareness becomes prohibitive beyond $____.
Traditional and Low End
_____ and _____ segments respond poorly to web media.
_____ and _____ segments respond good to web media.
High End Segment
_____ responds fairly to web media.
For web media, the cost to gain additional awareness becomes prohibitive beyond $____.
Traditional, Low End
_____ and _____ segments respond poorly to email.
_____ and _____ segments respond good to email.
The _____ segment responds fairly to email.
For email, the cost to gain additional awareness becomes prohibitive beyond $____.
The _____ segment responds good to trade shows.
Traditional, Low, Performance
_____, _____, and _____ segments respond fairly to trade shows.
The _____ segment responds poorly to trade shows.
For trade shows, the cost to gain additional awareness becomes prohibitive beyond $____.
Outside sales people cost _____ per person.
Diminishing returns for outside sales are reached at _____ per segment.
Inside sales people cost $_____ per person.
Diminishing returns for inside sales people are reached at _____ people per segment.
Distributors cost _____ per year.
Diminishing returns for distributors are reached at _____ distributors per segment.
Low, Medium, High
Sales channel effectiveness for traditional segment customers is _____ for outside sales, _____ for inside sales, and _____ for distributors.
Medium, Low, High
Sales channel effectiveness for low end segment customers is _____ for outside sales, _____ for inside sales, and _____ for distributors.
High, Medium, Low
Sales channel effectiveness for high end segment customers is _____ for outside sales, _____ for inside sales, and _____ for distributors.
Medium, High, Low
Sales channel effectiveness for performance segment customers is _____ for outside sales, _____ for inside sales, and _____ for distributors.
High, Medium, Low
Sales channel effectiveness for size segment customers is _____ for outside sales, _____ for inside sales, and _____ for distributors.
Time allocations must equal _____.
The simulation charges a _____% carrying cost for inventory.
Broad Cost Leader
A _____ strategy maintains a presence in all segments of the market. Competitive advantage is gained by keeping R&D, production and material costs to a minimum, enabling the company to compete on price. Automation levels will be increased.
A _____ strategy maintains a presence in every segment of the market. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. Products keep pace with the market, prices will be above average. Capacity is expanded as demand is generated.
Niche Cost Leader (Low Technology)
A _____ strategy concentrates primarily on the Traditional and Low End segments of the market. Competitive advantage is gained by keeping R&D, production, and material costs to a minimum, price will be below average. Automation levels will be increased.
Niche Differentiator (High Technology)
A _____ strategy focus on the High End, Size, and Performance segments. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, easy accessibility and new products. R&D competency keeps designs fresh. Price is above average. Capacity is expanded as demand is generated.
Cost Leader with Product Lifecycle Focus
A _____ strategy centers on the High End, Traditional, and Low End segments. Competitive advantage is gained by keeping R&D, production and material costs to a minimum. Sales are kept for many years as products are moved to different segments.
Differentiator with Product Lifecycle Focus
A _____ strategy centers on High End, Traditional, and Low End segments. Competitive advantage is gained with excellent design, high awareness, easy accessibility and new products. R&D competency keeps designs fresh, price is above average. Capacity is expanded as demand is generated.
Low Tech Prime Spot
Center of circle; Performance + 0, Size +0
High Tech Prime Spot
Lower right; Performance +1.4, Size -1.4
High Tech Drift Rate
+.7 Performance, -.7 Size
Low Tech Drift Rate
+.5 Performance, -.5 Size
Low Tech Market Growth Rate
High Tech Market Growth Rate
Low Tech Price Criteria
Between $15-$35; Importance 41%
Low Tech Age Criteria
3 years old; Importance 29%
Low Tech MTBF Criteria
Between 14,000 and 20,000; Importance 21%
Low Tech Starting Ideal Position Criteria
Performance 4.8, Size 15.2; Importance 9%
High Tech Starting Ideal Positioning Criteria
Performance 7.4, Size 12.6; Importance 33%
High Tech Age Criteria
0 years old; Importance 29%
High Tech Price Criteria
Between $25 and $45; Importance 25%
High Tech MTBF Criteria
Between 17,000 and 23,000; Importance 13%
Projected Interest Rate
Rough Cut Circle
4 unit radius, customers will not purchase outside
Fine Cut Circle
2.5 unit radius, customers prefer to purchase within
1,000 Hours of MTBF Costs...
$.30 per unit
Each time a product is repositioned, its age is cut in...
__% of customers forget about the product each year
New products create __% awareness
Unit of Capacity Cost =__
$6 + $4*Automation Rating
Sensors lose approximately __% of customer survey score for each $1 above guidelines
Products 1,000 MTBF hours below criteria lose __% of customer survey score
Demand in a month is calculated by...
Taking your product's customer survey score and dividing it by the sum of all scores
Accounts receivable score
90 days = No reduction
60 days = .7% reduction
30 days = 7% reduction
0 days = 40% reduction
Highest and Lowest Positioning Costs
Lowest = $1.50
Middle = $5.75
Highest = $10.00
Broad Cost Leader
Both segments, keeps costs and prices low, high automation
Both segments, good positioning, high awareness, accessibility, and prices
Niche Cost Leader
Cost leader focused on low tech market
Differentiator focused on high tech market
Cost Leader with Product Lifecycle Focus
Cost leader with products that start high tech and mature into low tech
Differentiator with Product Lifecycle Focus
Differentiates products, products start high tech and keep pace with market
After 100% awareness, promo budget of __ will keep awareness constant.
After 100% accessibility, sales budget of __ will keep awareness constant.
Capacity can be sold for...
65% of original investment
$4 per point
Banks will loan current debt up to __% of accounts receivable and __% of years inventory, then __% is added on top
20% borrowing added
Bonds are __ years, __ reflect the interest rate that is __% over current interest rate, __ indicates when bond is due, and you pay a __% brokerage fee to issue and a __% brokerage fee to buy back
first three digits of serial number
1.4% over current rate
last four digits indicates maturity date
5% brokerage fee issue
1.5% brokerage fee buy back
Bondholders will lend up to...
80% of plant and equipment value
Each __% over prime debt rate lowers bond rate one category
Stock issues are limited to __% of outstanding shares, with a __% brokerage fee. Stock can be retired up to either __% of outstanding shares, with a __% brokerage fee, or the amount of __
20% issue limit
5% brokerage fee issue
5% outstanding shares
1.5% brokerage fee retire
Emergency loans: you must pay __, with a __% penalty
One year's current debt rate cost,
When opening the Excel version of Capsim, you should do what to Macros?
If there are two identical products, one that has 100% accessibility and one that has 0% accessibility?
the product with 100% accessibility will outsell the other 2 to 1 providing all other attributes are identical
How many products does every team start with?
What are three of the five Segments?
Traditional, low end, performance
A segment manager's task is to?
verify the products entering and leaving a segment, the margin potential for those products, capacity level and the distribution system as compared to competitors
What is the difference between the market segments at the beginning of the round to the final round?
The fine cuts overlap in the beginning and in year 8; only the rough cuts overlap
In order for a team to win at CapSim, they need to..
have a proactive strategy, contingency plan, open communications, strong knowledge of the industry and have a strong understanding of the analyst report
After you have uploaded your decisions to the website, you can change your official decisions as many times as you want prior to the processing date and time of the round.
Once you upload your official decisions during a round, how many times can you change them before the end of theround?
as many times as you want
The economic environment for this simulation game will include
a favorable environment featuring modest growth, low inflation, and reasonable interest rates
MTBF is measured in
Customers that want low prices and are willing to sacrifice miniaturization and performance are in the
low end segment
Customers that want small products and are willing to sacrifice performance are in the
In Capsim, pricing standards are set by
the consumer, market segment
In the Rough Cut buying stage, "reliability" is expressed in terms of:
MTBF measures what?
reliability, size, market segment
The two characteristics that the perceptual map evaluates are
The Perceptual Map is
A marketing tool used to compare products against customer perceptions
The segments all drift to the lower-right section of the perceptual map. Why does this drift take place?
Customers want smaller faster products
Over time, the segments will drift in which direction on the Perceptual Map?
When tracking market segments on the performance and size perceptual map, which segment moves or "drifts" the slowest?
What happens to a product priced at $1 above or below the segment guideline when a segment's product supply outstrips demand?
it loses 20% of its appeal
What's the measure for product reliability?
expected time a product lasts
At what dollar amount above the segment guidelines is all consumer appeal lost?
The prices in each segment
drop by .50 each year
MTBF in the segments should be
MTBF (Performance) > MTBF (High End)
MTBF (Low End) < MTBF (Size).
Which of the following are not considered in the Fine Cut?
Inside each fine cut circle,
segments have an ideal spot where demand is at its highest.
The Traditional ideal spot is
near the center of the circle
Increasing a product's reliability will result in which of the following changes to production costs?
higher material costs
Age refers to:
What happens to a product's Perceived Age when it is repositioned in R&D?
its reduced by 50%
The preferred product perceived age for each sector peaks at:
0 years for high end, and 7 years for low end
At which point does the perceived age of a traditional product peak?
pricing plays a role when:
in the rough cut stage of the purchase decision, in the fine cut stage of the purchase decision
What are the top buying criteria that low end customers most value?
The top two buying criteria for each segment is:
price for low end, positioning for high end
Low Tech customers emphasize buying criteria in which order?
price, age, positioning, reliability
Each segment places?
a different emphasis on the 4 buying criteria
Which market segment places the most importance on price?
If you are marketing to High End customers, which criteria are most important to them in order of importance?
1. Positioning 2. Age 3. MTBF 4. Price
When an R&D effort started in 2001 completes on September 15, 2002, the product revision kicks in
immediately upon completion
The relative cost of a product's material cost increases as
MTBF goes up
Which Automation rating requires the longest time to reposition a product?
When a product is moved to a new location on the Perceptual Map, the Perceived Age (or Age) is:
divided in half
Changing MTBF will:
have no impact on perceived age
If your team decides to introduce a new product, when should capacity and automation be purchased?
one round pior to product release
If you purchase production capacity and automation:
it is available in the next year
Marketing is concerned with 4 things. What are they?
price, place, promotion, product
An increase in promotional budgets have:
decreasing returns over time
promotion efforts are resulted from?
Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?
How is the strength of the sales channel measured?
accessibility on a scale from 0 to 100%
If you drop your sales budget to zero, accessibility drops to 0% in how many years?
how can assembly lines double their capacity?
add a second shift
If you increase automation from 2.0 to 5.0, the cost is
12 dollars per unit of capacity
What is one drawback of increasing automation?
The product requires increased time/expense for subsequent short-move repositioning.
If you reduce automation in the production component of Marketing, you will:
incuur a retooling cost
If you want to add 500,000 units of capacity to an assembly line with an automation rating of 5, how much will itcost?
If a line has a capacity of 100,000 units, the cost of changing the automation level 1 unit either up or down is
Depreciation is calculated:
over a straight line 15 year period
Which three factors drive labor cost?
Wage and benefit rates, Automation levels, Second shift/Overtime costs
If current wages are set at $10/hour, what would be the minimum starting pay that your company would offer?
Which three customer groups "ride the wave of technology" and are considered to be in the high technology segments?
performance, high end, size
When plotting the segment locations for each round
the goal is to determine the ideal spot location for each segment during the 8 years.
if you are currently producing 100,000 units and your automation level is 10, how much will it cost you to double your capacity?
What is the right formula for capacity investment?
Investment = Capacity x [$6 + ($4 x Automation)]
If you are currently producing 100,000 units at an automation level of 5, how much would it cost to maximize automation?
As a manager you need to change the automation level of your segment from 2 to 5. The line has a capacity of $2million. How much would it cost?
Rapid movement of an existing product on the Perceptual Map requires
low automation levels
If a product's Price was $20, its Material $8, and its Labor $7, the Margin Per Unit would be:
The reliability component cost of a product with a 17,000 hour MTBF rating is:
minimum time it takes to create a new product?
The marketing spreadsheet is used to set which of the following:
price, promotional budget, sales budget
The A/R lag is
a marketing spreadsheet definition.
the accounts receivable lag (in days).
the time between customers receiving products and when they are expected to pay for them.
Cash position is
the cash position at the beginning of the round and a projection of the cash position at the end of the round
Which customer group or market segment seeks proven products using current technology?
Which customer group or market segment seeks proven products, are indifferent to technological sophistication, and are price motivated?
Which customer group or market segment seeks cutting edge technology in both size and performance?
Which customer group or market segment seeks high reliability, advanced technology products that emphasize high performance?
Which customer group or market segment seeks advanced technology products that focus on small size?
Repositioning moves a product on the Perceptual Map from its old location to a new one. When does the new location become active?
the day the R&D project completes
If a product's Automation rating is substantially increased, it will:
no longer move along the perceptual map
This strategy attempts to gain a competitive advantage by keeping R&D costs, production costs and raw materialcosts to a minimum in order to compete on the basis of price. The product life cycle focus will enable sales for many years on each new product introduced into the High End segment. Products will begin their lives in the HighEnd, mature into Traditional and finish as Low End products before they are retired and their assets harvested.
Cost Leader with Product Life Cycle Focus
This strategy will allow us to maintain a presence in every market segment. Competitive advantage will be gained by keeping R&D costs, Production costs and raw material costs to a minimum, enabling us to compete on the basisof price. We will price below average. We will increase automation levels to improve our margins and to make itacceptable to run second shift/overtime.
Broad Cost Leader
This strategy will allow us to maintain a presence in every market segment. Competitive advantage will be gained by distinguishing our product with an excellent design, high awareness, and easy accessibility. We will develop anR&D competency that keeps our designs fresh and exciting. Our products will keep pace with the market, offeringimproved size and performance. The price of the products will be above average and capacity will expand as wegenerate higher demand.
This strategy will concentrate on the Traditional and Low End segment. Competitive advantage will be gained bykeeping R&D costs, Production costs, and raw materials costs to a minimum, enabling us to compete on the basis of price (low prices). The product will be priced below average and automation levels will be increased to improvecontribution margins and make it acceptable to run second shift/overtime
niche cost leader
This strategy will focus on the high technology segments (High End, Performance and Size). Competitiveadvantage will be gained by distinguishing our products with excellent design, high awareness, easy accessibility,and product extenders. Our R&D competency will keep our designs fresh and exciting. Our products will keep pace with the market, offering improved size and performance. The prices of our products will be above averageand we will expand capacity as we generate higher demand.
The Promotion part of marketing in CapSim allows teams to allocate their time based on
In forecasting, it is not likely that you will take half of the sales unless
the price is at the low end of the range and the positioning, age and MTBF are superior.
customer demand is driven by
the customer survey score is driven by the?
Combining size and performance creates a product attribute known as
This strategy will gain competitive advantage by distinguishing our products with an excellent design, highawareness, easy accessibility, and product extenders. We will develop R&D competency that keeps our designsfresh 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 in our markets: High, Traditional and low end
Differentiation Strategy with a Product Life Cycle Focus
What section of the perceptual map is considered ideal for the low end segment?
In order to achieve 100% accessibility, a team must:
have at least two products in a segment
What is the most important criteria to a "Traditional Segment" consumer?
It takes ______ years to invent a product.
More than 1 year but no more than 3 years
how many market segments are there?
How much does it cost for MTBF per 1,000 hours of reliability?
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