Situation Analysis

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Situation Analysis

• Team Assignment

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Situation Analysis

• The Situation analysis will help your company
  understand the current market conditions and how
  the industry will evolve over the next eight
  years. There are five parts
• Perceptual Map
• Demand Analysis
• Capacity Analysis
• Margin Analysis
• Consumer Report
• These exercises require The Foundation FastTrack
  industry newsletter.
• Due February 8th

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Perceptual Map

• The Perceptual Map can be used to plan revision
  and invention projects that follow customer's
  changing expectations as well as assist in
  comparing products for forecasting.
• Each segment is represented by a pair of circles.
• The smaller, fine cut (solid) circle represents
  the heart of the segment.
• There is a larger rough cut (dashed) circle that
  represents the outer fringe of the segment where
  there are still customers, but in lower
  quantities.

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Segment Centers and Segment Drift

• Size
• Reduced
• 0.5 Units
• Each year, the segments drift the length of the
  hypotenuse of the triangle formed by customers
  desire for smaller and faster sensors.
• In the Low Tech segment, size decreases and
  performance increases by 0.5 units
• In the High Tech segment, size decreases and
  performance increases by 0.7 units

Segment Drifts 0.7 Units
Performance Increased 0.5 Units
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Perceptual Map

• Low Tech Customer Buying Criteria
•   Expectations Importance
• Price 15.00 - 35.00 41
• Age Ideal Age 3.0 29
• Reliability MTBF 14000-20000 21
• Positioning Pfmn 4.8 Size 15.2 9

• High Tech Customer Buying Criteria  Expectatio
  ns Importance
• 1. Positioning Pfmn 7.4 Size 12.6 33
• 2. Age Ideal Age 0.0 29
• 3. Price 25.00 - 45.00 25
• 4. Reliability MTBF 17000-23000 13

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Perceptual Map
Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round Segment Centers at the End of Round
0 1 2 3 4 5 6 7 8
Low Tech Performance 4.8 5.3 5.8 6.3 6.8 7.3 7.8 8.3 8.8
Low Tech Size 15.2 14.7 14.2 13.7 13.2 12.7 12.2 11.7 11.2
High Tech Performance 6.0 6.7 7.4 8.1 8.8 9.5 10.2 10.9 11.6
High Tech Size 14.0 13.3 12.6 11.9 11.2 10.5 9.8 9.1 8.4
Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round Segment Ideal Spots at the End of Each Round
0 1 2 3 4 5 6 7 8
Low Tech Performance 4.8
Low Tech Size 15.2
High Tech Performance 7.4
High Tech Size 12.6
Ideal Spot Locations Relative to Segment Centers Ideal Spot Locations Relative to Segment Centers Ideal Spot Locations Relative to Segment Centers
Segment Performance Size
Low Tech 0.0 0.0
High Tech 1.4 -1.4
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Demand Analysis

• The Demand Analysis will help your team
  anticipate future demand. It will also help
  attain a starting point for sales forecasting by
  taking the industry demand and dividing that by
  the number of products in the segment In
  addition, this exercise is useful when making
  purchase decisions for capacity.

Segment Round 0 Growth Rate Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8
Low Tech   10.0                
High Tech   20.0                

• You will need the Segment Analysis pages (5 - 6)
  of The Foundation FastTrack for Round 0. To
  analyze the demand for each segment, find the
  demand at the start of the simulation (Round 0),
  then calculate demand for Rounds 1 through 8.

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Capacity Analysis

• The Capacity Analysis will help your team
  anticipate the cost of adding Capacity and
  Automation to capitalize on the growth predicted
  in the Demand Analysis.

Product Name Capacity (000) Capacity (000) Overtime Capacity (000) Overtime Capacity (000) AutomationLevel Cost toDouble Capacity Cost to Maximize Automation
  Company Industry Company Industry
 

• The information needed for this exercise is on
  the Production page of the Foundation FastTrack.
  Use the information for your company (the first
  letter of your company's name is the first letter
  of all of your products names) to complete the
  exercise.

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Margin Analysis

• Healthy margins, the difference between a
  product's manufacturing cost and its price, are
  critical to company success. The Margin Analysis
  will help your team understand the cost of
  material. It will also help your team understand
  the effect automation has on labor costs. It
  will also demonstrate the importance of adequate
  pricing, and the upper limits of profitability.

Price Material Cost Labor Cost Overtime(Y/N) Contribution Contribution Margin

Margin Potential Margin Potential Margin Potential Margin Potential Margin Potential Margin Potential Margin Potential
Segment Maximum Price Minimum Material Cost Minimum Labor Cost Automation Level Contribution Margin Contribution Margin
Low Tech
High Tech

• You will find the necessary information on the
  Production Analysis, page 4 of The
  FoundationFastTrack.

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Consumer Analysis
Low Tech High Tech
Price   Price  
Quality   Quality  
Age    Age   
Positioning  Positioning 
Awareness  Awareness 
Accessibility Accessibility
Overall    Overall   
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Consumer Report

• The Consumer Report will help your team
  understand the need to design quality product and
  the importance of adequate pricing, sales budget
  and promotion budget decisions.
• You will need the Buying Criteria from the
  Segment Analyses in the Round 0 FastTrack and the
  Production Analysis in the Round 0 FastTrack.
• Price Award an A if your products price is in
  the bottom third of the expected price range, B
  if it is in the middle third and C if it is in
  the top third. You can find the price in the
  Production Analysis.
• Reliability Award an A if the MTBF specification
  is in the top third of the range, B if it is in
  the middle third and C if it is in the bottom
  third.
• Age Award an A if the age on December 31 is
  within 0.5 years of the ideal age, B if the age
  is 0.6 to 1 year and C if the age is beyond 1
  year.
• Positioning Award an A if your product is within
  0.5 units of the segments ideal spot, B if it is
  0.6 to 1.5 units away and C if it is beyond 1.5
  units.
• Awareness Award an A if your products awareness
  exceeds 80, B if it is 50 to 80 and C if it is
  below 50.
• Accessibility Award an A if your products
  accessibility exceeds 80, B if it is 50 to 80
  and C if it is below 50.
• In the Overall row, give your products an A only
  if the top two attributes in the Buying Criteria
  were rated A, and if the awareness and
  accessibility were rated at least a B.