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IndustryConditionsReport

CapstoneIndustryConditionsReportForIndustryC81159
Yourinstructorcancustomizethesimulationscenario.Theinformationbelowisspecifictoyourindustry.
PrintableandDownloadablePDFVersionofThisReport
Thesensorsyourcompanymanufacturesareincorporatedintotheproductsyourcustomerssell.Your
customersfallintofivegroupswhicharecalledmarketsegments.Amarketsegmentisagroupof
customerswhohavesimilarneeds.Thesegmentsarenamedforthecustomer'sprimaryrequirementsand
arecalled:

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DriftRates
Eachyear,thesegmentsdriftthelengthofthehypotenuseofthetriangleformedbycustomers'desirefor
smallerandfasterproducts.

Table1SegmentCircleDriftRates:Everyyear,customers
demandincreasedperformance(Pfmn)anddecreasedsize.
Notethatthedriftratesvaryforeachsegment.

Pfmn

Size

Traditional
LowEnd

+0.7
+0.5

0.7
0.5

HighEnd
Performance

+0.9
+1.0

0.9
0.7

Size

+0.7

1.0

SegmentCenters
Table2SegmentCentersattheEndofEachRound:AsshowninthePerceptualMap
Formabove,sizeisontheverticalaxisandperformance(Pfmn)isonthehorizontal
axis.

Round
0
1
2
3
4
5
6
7
8

Traditional
Pfmn
Size
5.0
15.0
5.7
14.3
6.4
13.6
7.1
12.9
7.8
12.2
8.5
11.5
9.2
10.8
9.9
10.1
10.6
9.4

LowEnd
Pfmn
Size
2.5
17.5
3.0
17.0
3.5
16.5
4.0
16.0
4.5
15.5
5.0
15.0
5.5
14.5
6.0
14.0
6.5
13.5

HighEnd
Pfmn
Size
7.5
12.5
8.4
11.6
9.3
10.7
10.2
9.8
11.1
8.9
12.0
8.0
12.9
7.1
13.8
6.2
14.7
5.3

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Performance
Pfmn
Size
8.0
17.0
9.0
16.3
10.0
15.6
11.0
14.9
12.0
14.2
13.0
13.5
14.0
12.8
15.0
12.1
16.0
11.4

Size
Pfmn
3.0
3.7
4.4
5.1
5.8
6.5
7.2
7.9
8.6

Size
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
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TheinformationinTable2reflectsthesegmentcentersattheendoftheround.Therefore,theRound0
positionscanbeseenastheRound1startingpositions,Round2positionscanbeseenastheRound3
startingposition,etc.Eachmonthduringthesimulationyear,thesegmentdrifts1/12thofthedistancefrom
thestartingpositiontotheendingposition.

IdealSpots
Table3IdealSpotOffsets:
Customerspreferproducts
locatedthisdistancefrom
thecenterofthesegmentcircle.

Traditional

Pfmn
0.0

Size
0.0

LowEnd

0.8

+0.8

HighEnd

+1.4

1.4

Performance

+1.4

1.0

Size

+1.0

1.4

TheinformationinTable3showstheIdealSpot"offsets"ordistancesfromthesegmentcenter.Theideal
spotisthatpointwhere,allotherthingsbeingequal,demandishighest.Itisdifferentfromthesegment
center.Whyaresomeidealspotsaheadofthesegmentcenters?Thesegmentsaremoving.Froma
customersperspective,iftheybuyaproductattheidealspot,itwillstillbeacuttingedgeproductwhenit
wearsout.

2SegmentSizesandGrowthRates
Atthebeginningofthesimulation,TraditionalandLowEndsellmoreunitsthanthehightechnology
segments,HighEnd,PerformanceandSize.Page10oftheCapstoneCourier,theMarketSegmentReport,
displaystotalindustrysales.
Eachmarketsegmentgrowsatadifferentrate.Table4liststhebeginningsegmentgrowthratesforyour
industry.Thegrowthratesmightchangefromyeartoyear.ChecktheSegmentAnalysisreportsinthe
CapstoneCouriereachroundfortheupcomingyear'sgrowthrates.

Table4BeginningSegmentGrowthRates
Traditional
LowEnd
HighEnd

9.2%
11.7%
16.2%

Performance
Size

19.8%
18.3%

3BuyingCriteriaBySegment
Theseareyourproductsandtheprimarysegmentstheysellintoatthebeginningofthesimulation.These
canchangeaccordingtoyourdecisionsandasthesimulationevolves.
Eat

Traditional

Ebb

LowEnd

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Echo

HighEnd

Edge
Egg

Performance
Size

Thebuyingcriteriaforeachsegment,inorderofimportance,aredisplayedbelow.PositioningandAge
scoreinformationalsodisplay.Passingyourcursoroveranimagewillenlargeit.SeeChapter3oftheTeam
MemberGuideforexplanationsofPositioning,Age,PriceandMTBFscores.

3.1TraditionalSegmentBuyingCriteria(Round0)
Traditionalcustomersseekprovenproductsatamodestprice.
Age,2yearsimportance:47%
Price,$20.00$30.00importance:23%
IdealPosition,performance5.0size15.0importance:21%
MTBF,14,00019,000importance:9%

IndustryConditionsFigure3.1:TraditionalBuyingCriteria

Traditionalcustomersgivehigherpositionscorestosensorslocatedinthecenterofthesegmentcircle.

Traditionalcustomersgivehigherscorestosensorsinthe2yearrange.

3.2LowEndSegmentBuyingCriteria(Round0)
LowEndcustomersseeklowpricesandwellprovenproducts.
Price,$15.00$25.00importance:53%
Age,7yearsimportance:24%
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IdealPosition,performance1.7size18.3importance:16%
MTBF,12,00017,000importance:7%

IndustryConditionsFigure3.2LowEndBuyingCriteria

LowEndcustomerspreferinexpensivesensorswithslowerperformanceandlargersize.

LowEndcustomersgivehigherscorestosensorsinthe7yearrange.

3.3HighEndSegmentBuyingCriteria(Round0)
HighEndcustomersseekcuttingedgetechnologyinsize/performanceandnewdesigns.
IdealPosition,performance8.9size11.1importance:43%
Age,0yearsimportance:29%
MTBF,20,00025,000importance:19%
Price,$30.00$40.00importance:9%

IndustryConditionsFigure3.3HighEndBuyingCriteria

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HighEndcustomersdemandcuttingedgesensorswithhighperformanceandsmallsize.

HighEndcustomersgivehigherscorestonewersensors.

3.4PerformanceSegmentBuyingCriteria(Round0)
Performancecustomersseekhighreliabilityandcuttingedgeperformancetechnology.
MTBF,22,00027,000importance:43%
IdealPosition,performance9.4size16.0importance:29%
Price,$25.00$35.00importance:19%
Age,1yearimportance:9%

IndustryConditionsFigure3.4PerformanceBuyingCriteria

Performancecustomersemphasizeperformanceoversize.

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Performancecustomerswantsensorsinthe1yearrange.

3.5SizeSegmentBuyingCriteria(Round0)
Sizecustomersseekcuttingedgesizetechnologyandyoungerdesigns.
IdealPosition,performance4.0size10.6importance:43%
Age,1.5yearsimportance:29%
MTBF,16,00021,000importance:19%
Price,$25.00$35.00importance:9%

IndustryConditionsFigure3.5SizeBuyingCriteria

Sizecustomersemphasizesizeoverperformance.

Sizecustomersprefersensorsinthe1.5yearrange.

4ProjectedInterestRates
PrimeInterestRateRound1:7.0%

Phone:8774778787|Email:support@capsim.com|Address:55EMonroe,Suite3210Chicago,IL60603
CapsimManagementSimulations,Inc.2013AllRightsReserved.CapsimandCapsim.com.

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