COMM 401 Study Guide - Final Guide: Inflection Point, Competitive Advantage, Profit Margin
201 views50 pages
Comm$401$Final$Exam$Review$
Shannon$Bailey$
!
Review&Capsim&
Review&of&Readings&
Review&of&CPAs&
&
Session$1$–$Course$Intro$
Capstone&Business&Simulation&
• 5!advanced!modules!–!Marketing,!HR,!TQM,!Labour!Negotiations,!Ethics!Plug@
in!
• Started!as!a!single!corporation!named!Sensors!Inc.,!and!sold!sensors!as!main!
product!
• The!industry!was!deregulated!to!facilitate!competition!for!the!benefit!of!
customers!
• Each!of!the!new!companies!starts!off!with!the!same!scenario:!5!product!lines,!
$100MM!company,!5!market!segments!(Low@End,!Traditional,!High@End,!
Performance,!Size),!closed!marketplace!
• Customers!need!sensors!for!their!products!to!function!(diverse!application)!
• Over!8!years!(rounds)!customers!demand!faster!(higher!performance)!and!
smaller!(size)!sensors!and!market!segments!drift!and!diverge!
Ex.&Several&Segment&Consumer&Characteristics&
Traditional!Consumer!Characteristics:!
Price:!Price!sensitive,!but!less!so!than!low@end!consumers!
Positioning:!Looking!for!‘average’!performance!and!size!
Age:!Ideal!age!is!2!years!
Reliability:!MTBF!is!14,000@19,000!
High@End!Consumer!Characteristics:!
Price:!Not!price!sensitive,!pays!the!highest!prices!
Positioning:!Looking!for!high!performance!and!small!size!
Age:!Ideal!age!is!0!years!
Reliability:!MTBF!is!20,000@25,000!
!
• The!balanced!scorecard!uses!a!point!system!to!gauge!company!performance!
based!on!four!perspectives:!The!Customer,!Internal!Business!Process,!
Innovation!and!Learning,!and!Financials!
• The!analyst!report!evaluates!your!company!in!ten!categories:!margins,!
profits,!emergency!loans,!working!capital,!market!share,!forecasting,!
customer!satisfaction,!productivity,!financial!structure!and!wealth!creation!
!
Session$2$–$Strategy$Fundamentals$
The!conclusion!resulting!from!strategy!formulation!+!the!process!underlying!
strategy!execution!leads!to!company!health!
• Creates!a!capacity!for!continuous!improvement!
!
Financial&Road&Map&to&Success&
!
!
Definitions:$
Strategy$–$an!integrated!set!of!choices,!and!accompanying!trade@offs,!which!position!
a!company!within!an!industry!with!the!intent!of!delivering!superior!financial!
returns!over!the!long@term!
The!most!effective!way!of!developing!strategy!involves:!
• Deliberately!planning!for!the!collision!between!strategic!intent!and!reality!
• Developing!and!procuring!the!company’s!resources!and!capabilities!in!a!way!
that!achieves!specified,!measurable!results!
• Recognizing!the!fundamentals!of!internal!and!dynamic!(external)!consistency!
Value$–$the!difference!between!a!customer’s!perceived!benefits!and!perceived!price.!
The!higher!the!perceived!benefit!and/or!the!lower!the!price!charged,!the!higher!the!
value!
Value$Map$
Example:!
! !
• Value!mapping!is!only!as!good!as!the!results!driven!by!value!curve!analysis!
Return!on!
Invested!Capital!
Net!Income!
Unit!Margins!
Price!
Cost!
Unit!Volumes!
Market!Share!
Market!Size!
Assets!Deployed!
Divided!By!
Multiplied!By!
Minus!
Times!
• Market!disruption!occurs!when!rivals!(new!or!existing)!disrupt!the!Value!
Equivalency!relationship!within!a!sector!
Value$Curve$–$a!tool!to!see!how!well!your!strategy!works!in!relation!to!competitors.!
Plot!factors!of!competition!on!the!x@axis!and!value!on!the!y@axis!and!plot!how!your!
company!invests!in!these!factors!of!competition:!
!
Granulation$–$segmentation!to!the!nth!degree.!I.e.!Shoppers!drug!mart’s!optimum!
lotalty!program!creates!loyalty!and!allows!company!to!collect!a!lot!of!data!and!
employ!a!dynamic!pricing!model.!!
!
TradeHoffs$–$there!are!three!fundamental!conclusions!which!drive!‘trade@offs’!
Concept!of!Internal!Consistency:!
• Simple!consistency!(maximization!of!competencies)!
• Mutually!reinforcing!
• Optimization!of!effort!–!cost!efficiencies!
Competitive$Advantage$–$can!be!easily!defined!by!the!acronym!VRIN:!valuable,!
rare,!imitation!(difficult!to!imitate)!and!non@substitutable.!A!firm’s!ability!to!