MOTOR MANUFACTURING BUSINESS SIMULATION

Motor Manufacturing Business Simulation



Motor Manufacturing Business Simulation

Introduction

At the outset of incorporation, Company's management decided that it would concentrate on a strategy of being a Cost Leader with Product Lifecycle Focus. In this strategy, we will focus on keeping our R&D, production and material costs low and compete with the other companies in our industry on the basis of cost. We will introduce new products into the High Tech market every other year or so and allow them to move through the perceptual map into the Low Tech market and then eventually become obsolete. We will measure our performance in terms of Stock Price, ROE and ROS.

Environmental Analysis

Motors are used in a wide variety of industries and applications and are in constant need of modifications to meet customer demands. The customers usually like to purchase smaller motors with higher performance, especially so in the High Tech Market. In the Low Tech Market, larger, slower sensors are the customer's choice. A sensor is a device that will sense a change, such as in atmospheric pressure, that will then change voltage and transmit the information to another device such as a thermometer. After much research, the company decided to enter this market and with the use of specialized software, Executive business simulation, make critical decisions about R&D, Marketing, Production, Finance, TQM and HR.

Way back in 2008, each of the companies in the motor industry was on an even keel. Along with Company's division, there were five other identically situated companies. Each of the six companies produced one sensor that sold in both the High and Low tech markets. As time went on, these companies began to differentiate their motors in the areas of price, age, reliability and positioning (size and performance).

Customers within the Low Tech market had specific buying criteria that they were interested in for the motors they purchased. They mainly focused on price but age, reliability and positioning, in that order, were important to them as well. The customers within the High Tech market also had specific buying criteria but they focused more so on positioning with age, price and reliability, in that order, not being as important to them.

The other division competed against these six other companies over a seven year period and during this time, the Low Tech market created more demand for product than did the High Tech market. Low Tech started out demanding 70% leaving High Tech with 30% of the market. When the seven year period was over, Low Tech Customers still demanded a greater portion of the production; they had 56% of the market leaving High Tech with 44%. As you can tell from this reduction in market for the Low Tech and increase for the High Tech, they each had different growth rates. Low Tech's growth rate was 10% where High Tech's was 20%. These growth rates corresponded to the demand for units produced.

Internal Analysis

Round 0 - ending December 31, 2008

The ending of this round was the start of the ...