16 Foundation® Computer Strategies
Many Tournament and all Footrace simulations include Computer Driven companies (see Section 2.3.3 Number of Competing Companies Within an Industry).
The strategies the Foundation® computer companies use are summarized here. The Foundation® Sample Business plans in Section 13, which instructors can distribute to students, parallel the strategies in this section.
Participant Teams are not required to follow these strategies. Unless instructors tell them otherwise, they are free to construct strategies of their own.
The Andrews computer team will adopt a Cost Leader with a Product Lifecycle Focus strategy, and will seek to minimize costs through efficiency and expertise. Products are allowed to age and change in appeal from High Tech to Low Tech buyers.
Reliable products for mainstream customers: Andrews brands offer value. Our primary stakeholders are bondholders, stockholders, customers, and management.
We will have low R&D spending with very little repositioning on existing products. We will introduce a new product to the High Tech segment every 2-3 years.
The Erie team will spend modestly on promoting and selling products in our targeted segment. Our prices will be lower than average.
We will significantly increase automation levels early in the product's life-cycle.
We will finance our investments primarily through long-term bond issues, supplementing with stock offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are not adverse to leverage, and expect to keep debt/equity between 2.0 and 3.0. We measure performance in terms of stock price, ROE, and ROS.
The Baldwin computer team will adopt a Differentiation Strategy with a Product Life Cycle Focus, and gain competitive advantage by distinguishing products through high awareness and easy accessibility, while minimizing R&D costs by allowing products to change in appeal from High Tech to Low Tech buyers over time. Prices are above average. Capacity is expanded as higher demand is generated.
Premium products for mainstream customers: quality you can count on. Our primary stakeholders are stockholders, customers, employees, and management.
We will have multiple product lines in both segments. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability.
The Baldwin team will spend aggressively in promotion and sales. We want every customer to know about us, and we want to make our products easy for customers to find. We will price at a premium.
We will grow capacity to meet the demand that we generate, avoiding second shift/overtime when possible. After our products are well positioned, we will investigate modest increases in automation levels to improve margins.
We will finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are somewhat adverse to debt, and prefer to avoid interest payments. We expect to keep assets/equity (leverage) between 1.5 and 2.0. We measure performance in terms of stock price, ROS, Asset Turnover, and ROA.
The Chester computer team will adopt a Broad Cost Leader strategy, and will maintain a presence in both segments of the market. Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Automation levels are increased to improve margins and to offset second shift/overtime costs.
Low priced products for the industry: our brands offer solid value. Our primary stakeholders are bondholders, customers, stockholders and management.
We will keep our existing product line and introduce at least one new line, maintaining a presence in both segments. We'll work to keep our products up to date in each segment despite high automation levels, without sacrificing our cost/price advantage.
The Chester team will spend modestly on promoting and selling products in our industry. Our prices will be lower than average.
We will significantly increase automation levels on all products. However, because automation sets limits upon our ability to reposition products with R&D, we automate more in the slower moving Low End segments than in the fast moving High End. We will prefer second shift/overtime to capacity expansions.
We will finance our investments primarily through long-term bond issues, supplementing with stock offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are not adverse to leverage, and expect to keep debt/equity between 2.0 and 3.0. We measure performance in terms of market share, market cap, ROE, and profits.
The Digby computer team will maintain a presence in both segments of the market. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. R&D competency is developed that keeps designs fresh and exciting. Products keep pace with the market, offering improved size and performance. Prices are above average. Capacity is expanded as higher demand is generated.
Premium products for the industry: our brands withstand the tests of time. Our primary stakeholders are customers, stockholders, management, and employees.
We will keep our existing product line, and introduce at least one more line, maintaining a presence in both segments. Our goal is to offer customers products that match their ideal criteria for positioning, age, and reliability.
The Digby team will spend aggressively in promotion and sales in both segments. We want every customer to know about our superb designs, and we want to make our products easy for customers to find. We will price at a premium.
We will grow capacity to meet the demand that we generate, avoiding second shift/overtime when possible. After our products are well positioned, we will investigate modest increases in automation levels to improve margins, but never at the expense of our ability to reposition products and keep up with segments as they move across the perceptual map.
We will finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are somewhat adverse to debt, and prefer to avoid interest payments. We expect to keep assets/equity (leverage) between 1.5 and 2.0. We measure performance in terms of market share, market cap, ROA, and profits.
The Erie computer team will adopt a Niche Cost Leader Strategy and concentrates primarily on the Low End segment. Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Automation levels are increased to improve margins and to offset second shift/overtime costs.
Reliable products for low technology customers: Erie brands offer value. Our primary stakeholders are bondholders, stockholders, customers, and management.
We will concentrate our existing product line in the Low Tech segment, initiating projects as necessary to prevent total obsolescence. We will also introduce at least one new product to our Low Tech customers.
The Erie team will spend modestly on promoting and selling products in our targeted segment. Our prices will be lower than average.
We will significantly increase automation levels on our products. We will prefer second shift/overtime to capacity expansions.
We will finance our investments primarily through long-term bond issues, supplementing with stock offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are not adverse to leverage, and expect to keep debt/equity between 2.0 and 3.0. We measure performance in terms of ROS, stock price, and ROE.
The Ferris computer team will adopt a Niche Differentiation strategy that focuses upon on the High Tech Segment. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, easy accessibility, and new products. R&D competency is developed to keep designs fresh and exciting. Products will keep pace with the market, offering improved size and performance. Prices are above average. Capacity is expanded as higher demand is generated.
Premium products for technology oriented customers: our brands define the cutting edge. Our primary stakeholders are customers, stockholders, management, and employees.
We will have multiple product lines in the High Tech Segment. Our goal is to offer technology oriented customers products that match their ideal criteria for positioning, age, and reliability.
Our Company will spend aggressively in promotion and sales in the High Tech segment. We want every customer to know about our superb designs, and we want to make our products easy for customers to find. We will price at a premium.
We will grow capacity to meet the demand that we generate, avoiding second shift/overtime when possible. After our products are well positioned, we will investigate modest increases in automation levels to improve margins, but never at the expense of our ability to reposition products and keep up with the High Tech segment as it moves across the perceptual map.
We will finance our investments primarily through stock issues and cash from operations, supplementing with bond offerings on an as needed basis. When our cash position allows, we will establish a dividend policy and begin to retire stock. We are somewhat adverse to debt, and prefer to avoid interest payments. We expect to keep assets/equity (leverage) between 1.5 and 2.0. We measure performance in terms of ROE, Asset Turnover, and ROA.