Foundation Broad Cost Leader
FOUNDATION® BROAD COST LEADER
This practice exercise will help you understand the relationships between business strategy, tactics, functional alignment, and the Foundation® simulation. We will use the Chester Company for this example. (During the practice rounds, each company is assigned a different strategy.)
You will execute your plan by inputting the decisions described below. At the same time, your competitors will execute their assigned plans. The practice exercise will take three rounds As each round is processed, you will evaluate the results and then input the next round’s assigned decisions.
Upon completion of the practice rounds, the simulation will be reset to the beginning. You can then create and implement your own strategic plan for the actual competition.
Executive Summary
The Chester team will adopt a Broad Cost Leader strategy, maintaining a presence in both segments. We will gain a competitive advantage by keeping R&D costs, production costs, and raw material costs to a minimum, enabling us to compete on the basis of price. Our Cost Leader orientation will allow us gain a competitive advantage based upon low prices. We will increase automation levels to improve our margins and to make it acceptable to run overtime (which we can also view as a second shift).
Vision Statement
Low priced products for the industry: Chester brands offer solid value. Our primary stakeholders are bondholders, customers, stockholders and management.
Research and Development (R&D)
We will keep our existing product line and launch one new product in order to maintain a presence in both the Low Tech and High Tech segments. We will work to keep our products up to date (i.e. Size and
Performance) in each segment despite high automation levels.
Marketing
We will maintain awareness and accessibility. After we establish our cost leadership position we will revisit our situation to decide whether sales and promotion budgets should be reduced or if we
This practice exercise will help you understand the relationships between business strategy, tactics, functional alignment, and the Foundation® simulation. We will use the Chester Company for this example. (During the practice rounds, each company is assigned a different strategy.)
You will execute your plan by inputting the decisions described below. At the same time, your competitors will execute their assigned plans. The practice exercise will take three rounds As each round is processed, you will evaluate the results and then input the next round’s assigned decisions.
Upon completion of the practice rounds, the simulation will be reset to the beginning. You can then create and implement your own strategic plan for the actual competition.
Executive Summary
The Chester team will adopt a Broad Cost Leader strategy, maintaining a presence in both segments. We will gain a competitive advantage by keeping R&D costs, production costs, and raw material costs to a minimum, enabling us to compete on the basis of price. Our Cost Leader orientation will allow us gain a competitive advantage based upon low prices. We will increase automation levels to improve our margins and to make it acceptable to run overtime (which we can also view as a second shift).
Vision Statement
Low priced products for the industry: Chester brands offer solid value. Our primary stakeholders are bondholders, customers, stockholders and management.
Research and Development (R&D)
We will keep our existing product line and launch one new product in order to maintain a presence in both the Low Tech and High Tech segments. We will work to keep our products up to date (i.e. Size and
Performance) in each segment despite high automation levels.
Marketing
We will maintain awareness and accessibility. After we establish our cost leadership position we will revisit our situation to decide whether sales and promotion budgets should be reduced or if we