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Capstone Simulation Digby Nov 30,2008 Group10 : 

Capstone Simulation Digby Nov 30,2008 Group10 Mike 1000-630-856 (CEO) Angus 1000-650-409 Milly 1000-630-856 Zrank 1000-610-152

Digby Strategy : 

Digby Strategy Focus on Niche Differentiation strategy for instance: “size” and “high end” segment (Dune and Dixie) Keep profitable product such as “traditional” (Daze) to maintenance totally gain Issue bond

Round 1 Investment : 

Round 1 Investment Strategy - Distinct both high technology product and traditional segment. Implementations - Expand capacity in high end product line - Invested traditional product line becomes automatically - Issued both long term and short term bond Performance -stock price $10.71 -sales $108M -profit $-6.9M

Round 2 Promotion : 

Round 2 Promotion Strategy - Distinct both high technology product and traditional segment. Implementations - Increased promotion and sales budget -Increased R&D budget Performance -stock price $7.27 -sales $119M - profit $-13.1M

Round 3 Focus : 

Round 3 Focus Strategy - Distinct both high technology product and traditional segment. Implementations -decreased “Daze” and “Dell” productive -switched finance to the segment which we focus on (“Dixie” and “Dune) -to meet the request of employee Performance -stock price $5.77 -sales $133M -profit $-7.3M

Round 4 Crisis : 

Round 4 Crisis Strategy -Distinct both high technology product and traditional segment. -Consolidated the finance problems Implementations -Cut all unneeded expense and budget -Add sales and promotion in a high level to keep market share Performance -stock price $3.62 -sales $101M -profit $-10.9M

Round 5 Survival : 

Round 5 Survival Strategy - Distinct both high technology product and traditional segment. - Keep the finance in black Implementations - Cut all unneeded expense and budget - Reduce inventory costs. - Maintenance promotion to secure market share in “Dixie” and “Dune” Performance -stock price $1 -sales $117M -profit $-0.17M

Round 6 Conservation : 

Round 6 Conservation Strategy -Distinct both high technology product and traditional segment. -Decrease all kinds of expense Implementations -Decreased R&D budget = adjusted price to capture market share -Decreased the marketing budget to be more conservative -To meet the request of employee on a minimum level -Reduce holding inventory costs Performance -stock price $12.22 -sales $127M -profit $4.98M

Round 7 Gamble! : 

Round 7 Gamble! Strategy -Distinct high end and size segment. Implementations -Expand high end “Dixie” capacity -Pay R&D budget to “Dixie” and “Dune” than others -Pay 0.5% stock profit to stockholder Performance -stock price $10.81 -sales $137M -profit $0.29M

Round 8 Wrap-up : 

Round 8 Wrap-up Strategy - Distinct both high technology product and traditional segment. Implementations - Expand high end “Dixie” capacity - Pay R&D budget to “Dixie” and “Dune” than others - Pay dividend $1 to stockholder - Retire long term debt Performance -stock price $26.65 -sales $111M -profit $15.6M

Market share : 

Market share

Reflection Point : 

Reflection Point Lack of consistent Implementations Excessive borrow leading finance crisis Spent huge investment in uncertainly segment from bond Finance crisis leading “Big Al” appear! (emergency loan occur) Enormous loan results unreturned situation follow the market moving by each round

Slide 15: 

Q & A

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