Capsim Strategy

876 words 4 pages
We chose Broad Differentiator as the basic strategy for our company. Through this strategy, our company will attempt to differentiate our product line in several distinct dimensions. By providing products that are vastly superior and unique from our competitors and pricing the products affordably, we can gain customers’ loyalty and awareness. Since our company’s main focus is premium products we will aim for high contribution margins, around 50%, on average, over all five products. After establishing our company brand and products within the market we will look to increase contribution margin to be between 55%-60% over all five products. Our company’s optimal balance is to have variable costs outweigh fixed costs unless our …show more content…
We have many positive attributes by being a premium company intermixed within every segment. Since we are not issuing debt as a financing strategy, we don’t have to worry about interest payments, so we will be able to fund more in all areas of our products including R&D, Marketing, etc. Although it is costly to keep our products fresh and new, by developing a loyal clientele from the start we will be able to leverage those costs and make them profits in the long term. To leverage those costs, we could invest more on those products who that are performing the best later in the simulation. The products not performing as well will not have those same costs for Production or Marketing, since fewer of them need to be produced. Thus, the fewer costs for those products can lead to more money available to be invested in our best selling products. By taking advantage of those premium value products, outshining the rest, we are able to mitigate those weaknesses of costly finances to our benefit by investing in those products. Moreover, we will continually improve all 5 products in the areas that are most important to our customers in those segments. By doing this we are still able to keep our designs new, exciting and fresh, and keep our loyal clientele happy in each

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