The Situation Analysis will help your company understand current market conditions and how the industry will evolve over the next eight years. The analysis can be done as a group or you can assign parts to individuals and then report back to the rest of the company.
An online version of the Situation Analysis is available in the Getting Started area.
(customers want better performing products) and for size is -0.7 (customers want smaller products). At the end of Round 1 the center of the Traditional segment will have a performance of 5.7 and a size of 14.3. 5.0 + 0.7 = 5.7 and 15.0 - 0.7 = 14.3 Table 2 displays the segment center locations at the end ...view middle of the document...
The Situation Analysis has ﬁve parts:
• Perceptual Map • Industry Demand Analysis • Capacity Analysis • Margin Analysis • Consumer Report
1 Perceptual Map
The Research & Development Department can use the Perceptual Map exercise to plan revision and invention projects that meet customers’ shifting size and performance expectations. The Marketing Department can use the results during forecasting as they compare competing products and when determining prices (in general, better positioned products can command higher prices). Each segment has a set of circles. The inner ﬁne cut circles have a radius of 2.5 units. They represent the heart of the segments where demand is strong. In addition, each inner circle has an ideal spot, a location where demand is strongest. The larger outer rough cut circles have a radius of 4.0 units. They represent the outer fringe of the segments where demand is weak.
1.1 Segment Centers and Segment Drift
Tables 1 and 2 in the Industry Conditions Report display information about segment drift. Table 1 shows the yearly drift rates for each segment. For example, assume the center of the Traditional segment ends Round 0 (the year before the start of the simulation) with a performance of 5.0 and a size of 15.0, and the yearly drift rate for performance is +0.7
See your Industry Conditions Report for exact information.
Figure 1 Perceptual Map Form Example: Each year, customers expect smaller sensors with better performance. This causes the segment circles to “drift” to the lower right. The smaller dots represent the segment centers Rounds 0 through 8. The larger dots represent each segment’s ideal spot location at the end of Round 8.
Industry Demand Analysis
Form 1 Segment Ideal Spot Locations
Traditional Round 0 1 2 3 4 5 6 7 8 Pfmn Size Round 0 1 2 3 4 5 6 7 8
Low End Pfmn Size Round 0 1 2 3 4 5 6 7 8
High End Pfmn Size
Performance Round 0 1 2 3 4 5 6 7 8 Pfmn Size Round 0 1 2 3 4 5 6 7 8
Size Pfmn Size
1.2 Ideal Spots
Customer positioning preferences are reported in the Segment Analysis pages of The Capstone Courier. Within each analysis, the Buying Criteria box displays the ideal performance and size as of December 31 of the previous year. The ideal position is also called the ideal spot. If all other criteria are equal, a customer will prefer a product that is located nearer the ideal spot over a product that is located farther from it.
Some segments place a higher level of importance on positioning than others.
Use Tables 2 and 3 to determine each segment’s ideal spot for Rounds 1 through 8. Enter the results in Form 1. On the Perceptual Map Form, mark the Round 8 ideal spot for each segment.
2 Industry Demand Analysis
The Industry Demand Analysis will help the Marketing and Production Departments understand future demand. Marketing can use the total demand for each segment as it createsforecasts. Production can use the results when making capacity buy and...