Chester Group: Capstone Strategic Plan

Chester Group: Capstone Strategic Plan

I. The Environment

The business environment in the simulation is unique because everybody starts at the same place. Every team or "company" has a product in each of the five market segments with the same market share. For the purposes of this simulation, Chester has chosen a business-level strategy as a differentiator with a high-tech focus. Our team has chosen this strategy to take advantage of the high tech markets and the customers who desire higher performing products. In the rehearsal simulation, our team focused on products in the traditional, high-end, and performance segments. We believe the other companies competing in the simulation are going to choose varying strategies so it would be best to choose one that we feel fairly comfortable with.

A differentiation strategy with a high-tech focus could be a competitive advantage in a market where other companies are utilizing a low-cost or low-end product focus. Likewise, it could be a liability in a market where other companies are trying a similar focus. From week to week, we will be able to view the results of the other groups. By critically examining their results, we should be able to relatively determine what business strategies these teams are trying to capitalize on. If it becomes clear that another company is directly competing with us on a high-tech differentiation strategy, we can adjust the prices, sizes, and mean times between failures of our products accordingly to gain more of the market share.

The strategy we have chosen should enable our company to grow quickly and realize more up-front returns on our investments. Low-cost strategies take a considerable amount of time to realize real returns on investments. As a high-tech differentiator, certain customer segments will be positively influenced by a higher price. Perceived value certainly has influence over buying decisions of customers who only want the latest and greatest products available. While it is important to stay competitive with similar companies, it is less important to minimize profit margins on high-end and performance products. We will maintain competitive price, size, and reliability measures with our competitors, and gain the most market share we can within the high-tech, size, and performance segments.

II. Business-Level Strategy & Pricing Strategy

As previously stated, Chester's business-level strategy will be a product differentiator with high-tech focus. Therefore the primary products our company will be focusing on are Cid, Coat, and Cure which compete in the high-end, performance, and size market segments respectively. Our differentiation will be based on providing customers with cutting edge technology that is perceived by our customers as being valuable.

Since our primary focus will be on the high-end, performance, and size segments, minimal focus will be given to the traditional and low-end market segments. Monitoring the environment for new entrants and competing products will be essential as we contend for