Welcome to the Capstone

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Welcome to the Capstone Business Simulation
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Objectives

• Demonstrate effectiveness of multi-discipline
  teams working together.
• Use strategic thinking.
• Test your business acumen.
• Understand overall interaction and impact of
  various parts of a business on one another.
• Grow the awareness of competition.
• Take away practical know-how to improve the
  effectiveness of your business.

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Why Simulate?

• Risk Free
• View Alternative Strategies
• Enjoyable
• Compresses Time (1 Round1Year)
• Selectivity ltgt Integration

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SENSOR INDUSTRY OVERVIEW
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The Marketplace

• Customers (OEMs) need sensors for their products
• Initially one segment, now breaking into five
• Very different customer demands developing
  between the segments
• Diversification in the use and utility of the
  sensors

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The Marketplace

• In our industry we track the changing customer
  demand on a perceptual map
• Over 8 years customers will demand much faster
  and smaller sensors
• Market Segments will continue to diverge

Low Tech
Performance
Traditional
High Tech
Size
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Low End Traditional Customers

• I want these sensors to be cheap
• I want them to have been around for a while
  no Beta Testing!
• They have to be moderately reliable.
• The technology doesnt have to be cutting
  edge.

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High End, Size Performance Customers

• These sensors have to be small, like micro, and
  fast
• I need them to be right out of RD, Im talking
  ZERO years on the market
• Im willing to pay more to get what I want.
• I like a pretty high reliability.

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SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH
Sees the next 8 years as consistent growth. All
market segments increase at a nice clip,
according to market analyst.
I see the entire market growing at around 14 or
15 per year. The High Tech market alone will be
growing at a whopping 16. I hope those
companies out there are ready for that kind of
expansion!
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COMPANY OVERVIEW
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SEC ANNOUNCES BREAKUP OF MONOPOLY
FOR IMMEDIATE RELEASE
The SEC, took dramatic action today by breaking
up the monolithic corporation Sensors, Inc. In
a statement to the press, the SEC outlined the
reason and the outcome of this move. We cannot
allow monopolies of this sort to impact an entire
industry! The customers that utilize these
sensors are being held hostage. Effective
immediately Sensors, Inc will be dissolved into
the Andrews, Baldwin, Chester, Digby, Erie and
Ferris companies.
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The Competition
100 Million in Sales 5 Product Lines 5
Segments Closed Marketplace
6 Companies
Andrews Digby Baldwin Erie Chester Ferris
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SHAKE UP IN SENSOR INDUSTRY
Company Fires Management Team!!!!
After poor results, lackluster sales and angry
customer reports, the Chairman of the Board of
Directors has announced the immediate termination
of the Management Team. This is a black day for
our company, said Chairman Dorado-Banacloche,
We need to hire a dynamic leadership group who
will be able to take this company into the
future! Due to this immediate need I have
hired the Dream Team to start on January 1st. I
expect to see great things from this Executive
Team!
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Welcome To Your New Company
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Students need to coordinate strategy and tactics
across the following areas of their company
RD

• Additional Modules
• HR
• TQM
• Advanced Marketing
• Labor Negotiations

Marketing
Production
Finance
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RD

• Establish the specification of the products to
  meet customer demand
• Build the quality and reliability (MTBF) into the
  products
• Ensure the perceived age of the product meets
  customer demands
• Create new products to meet the changing
  marketplace

Our products are not well positioned in the
marketplace.
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Marketing

• Set the price of our products in the marketplace
• Build customer awareness through promotion
• Establish a sales force and distribution channels
• Set the sales forecast for our products
• Set Credit Policies AR/AP

Our products are not pricedoptimally. And many
of our customers dont even know our product
exists.
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• Purchase machinery to automate our facilities
• Buy or sell capacity of product lines
• Schedule production for each line
• Manage the majority of the companies fixed
  assets
• Establish your workforce complement

Production
We are payingtoo much forlabor costs. Very
soon we will run outof capacity to meet demand.
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Finance

• Acquire capital to fund capital expansions
• Issue Stock
• Short Term Debt
• Issue Long Term Bonds
• Issue dividend to our shareholders
• Balance our debt portfolio
• Manage our Proformas

We have poorcash flow and substandardfinancial
ratios. We have nofinancial policystatement.
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Proformas
A great management tool driven by forecasts and
projections. Allows What if Scenarios by the
company.

• Balance Sheet
• Profit Loss
• Cash Flow
• Financial Ratios

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Scoring Methods
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• Success Measures
• Select a minimum of two criteria to be measured
  by
• ROE
• ROS
• ROA
• Cumulative Profit
• Stock Price
• Market Capitalization
• Asset Turnover
• Market Share
• Weight each selection

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Analyst Report
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(No Transcript)
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Running your Company
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Things to do on an Annual Basis

• Establish business strategy for your company
• Analyze Capstone Courier to see industry results
• Make tactical decisions across each functional
  area (aligned to strategy!)
• Upload official results and confirm on the
  website
• Await results when Professor processes
• Rejoice in your superior capitalistic acumen
• Begin the process again by confirming alignment
  of your results with your companys strategic
  goal.

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Good Luck and Enjoy!