Welcome to the Foundation® Business Simulation

School: Bloomsburg University Professor: Dr. Lam Nguyen

Class: MGMT 481-Business Policy

Objectives Demonstrate effectiveness of multi-discipline teams working together.

Use strategic thinking.

Test your business acumen.

Understand overall interaction and impact of various parts of a

business on one another.

Grow the awareness of competition.

Take away practical know-how to improve the effectiveness of your

business.

Why Simulate?

Risk Free

View Alternative Strategies

Enjoyable

Compresses Time (1 Round=1Year)

Selectivity <=> Integration

SENSOR INDUSTRY OVERVIEW

Customers (OEMs) need sensors

for their products

Initially one segment, now

breaking into two

Very different customer demands

developing between the segments

Diversification in the use and

utility of the sensors

The Marketplace

Low Tech

High Tech

In our industry we track the

changing customer demand on a

perceptual map

Over 8 years customers will

demand much faster and smaller

sensors

Market Segments will

continue to diverge

Low

Tech

High

Tech

The Marketplace

You’re not giving me what I want

“I want these sensors to be cheap”

“I want them to have been around

for a while – no Beta Testing!”

“They have to be moderately

reliable.”

“The technology doesn’t have to be

cutting edge.”

Low Tech Customers

And I’m not

getting what I

want!

“These sensors have to be small, like

micro, and fast”

“I need them to be right out of R&D,

I’m talking ZERO years on the market”

“I’m willing to pay more to get what I

want.”

“I like a pretty high reliability.”

High Tech Customers

0

2000

4000

6000

8000

10000

12000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Sensor Industry

Low Tech High Tech

SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH

Sees the next 8 years as consistent growth. All market segments increase at a nice “clip,” according to market analyst.

“I see the entire market growing

at around 14% or 15% per year.

The High Tech market alone will

be growing at a whopping

20%.”

I hope those companies out

there are ready for that kind of

expansion!”

COMPANY OVERVIEW

SEC ANNOUNCES BREAKUP OF MONOPOLY

FOR IMMEDIATE RELEASE

The SEC, took dramatic action today by breaking up

the monolithic corporation Sensors, Inc.

In a statement to the press, the SEC outlined the

reason and the outcome of this move.

“We cannot allow monopolies of this sort to impact an

entire industry! The customers that utilize these

sensors are being held hostage.”

“Effective immediately Sensors, Inc will be dissolved

into the Andrews, Baldwin, Chester, Digby, Erie and

Ferris companies.”

The Competition $40 Million in Sales

1 Product Line

2 Segments

Closed Marketplace

6 Companies

Andrews Digby Baldwin Erie Chester Ferris

SHAKE UP IN SENSOR INDUSTRY: Company Fires Management Team!!!!

After poor results, lackluster sales and angry customer reports, the Chairman of the Board of Directors has announced the immediate termination of the Management Team. “This is a black day for our company,” said Chairman Dr. Lam Nguyen, “We need to hire a dynamic leadership group that will be able to take this company into the future!” “Due to this immediate need I have hired the Dream Team to start on January 1st. I expect to see great things from this Executive Team!

Welcome To Your New Company

Students need to coordinate strategy and tactics across the following areas of

their company:

Establish the specification of the

products to meet customer demand

Build the quality and reliability

(MTBF) into the products

Ensure the perceived age of the

product meets customer demands

Create new products to meet the

changing marketplace

“Our products are not well

positioned in the marketplace.”

R&D

Set the price of our products in the

marketplace

Build customer awareness through

promotion

Establish a sales force and

distribution channels

Set the sales forecast for our

products

Set Credit Policies AR/AP

“Our products are not priced

optimally.

And many of our customers don’t even know our product exists.”

Marketing

Purchase machinery to automate

our facilities

Buy or sell capacity of product

lines

Schedule production for each line

Manage the majority of the

companies fixed assets

Establish your workforce

complement

“We are paying too much for labor costs.

Very soon we will run out

of capacity to meet demand.”

Production

Acquire capital to fund capital

expansions

•Issue Stock

•Short Term Debt

•Issue Long Term Bonds

Issue dividend to our shareholders

Balance our debt portfolio

Manage our Proformas

“We have poor cash flow and substandard

financial ratios.

We have no financial policy

statement.”

Finance

A great management tool driven by forecasts and projections. Allows “What if” Scenarios by the company.

Balance Sheet

Profit & Loss

Cash Flow

Financial Ratios

Proformas

Scoring Methods

Success Measures: oBalanced Scorecard

oROE

oROS

oROA

oCumulative Profit

oStock Price

oMarket Capitalization

oAsset Turnover

oMarket Share

oWeight each selection

Analyst Report

Running your Company

Establish business strategy for your company

Analyze Foundation FastTrack to see industry results

Make tactical decisions across each functional area (aligned to

strategy!)

Upload official results and confirm on the website

Await results when Professor processes

Rejoice in your superior capitalistic acumen

Begin the process again by confirming alignment of your results

with your company’s strategic goal.

Things to do on an Annual Basis

Good Luck and Enjoy!