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Capsim Executive Summary

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Chester is following a global and differentiation strategy. By performing a VRIO Analysis on our company, Chester, we are now able to see what our greatest internal capabilities are. I have found that customer survey is high and a valuable resource for Chester. We also have a high market share compared to the rest of the industry, making this a rare resource for the company. Our differentiation strategy allows us to keep a high but competitive price in the industry, making it a valuable resource. Also, low labor costs for Chester are also a hard and costly to imitate resource that is helping the company maintain a high contribution to the margin. Customer Survey in the Sensors is Valuable I evaluated the changes of customer survey over …show more content…

This allows us to keep a competitive price, but not extremely low. Chester is no competing on price, but instead on differentiation. Chester tries to meet customer’s product criteria for each product in each segment to make it more attractive to the consumer. Once these criteria are met, it allows us to not have to make our prices very low and still increase our market share. There are also considerable investments going into marketing techniques like promotion to keep attracting customers to our products. By making our product more attractive to consumers than the rest of the industry, we can keep a more premium price, which will increase our profits, and increase our market share. Our current average price is $29.82, compared to the industry which is $28.12. It is higher than the industry average, but since we are not competing on price and we are making the product more attractive in other ways, this allows us to increase profits and also increase our market share. Yet, in order to keep a competitive advantage over the other companies are prices have gone from an average of all segments of $30.60 in Round 0 to $29.82 in Round …show more content…

This has been because of the high automation that the company has. Chester invests money into automation gradually each round, since in the long run high automation decreases labor costs. The money invested is made back by the money saved due to the lower labor costs. The money invested into higher automation makes low labor costs a hard and costly to imitate resource for Chester. The labor costs in round 5 were $6.66 compared to the industry’s average which were $7.04. The closest competitor in round 5 is Digby with $5.58 labor costs. Labor costs is also a valuable resource since it allows the company to make more products at a cheaper rate and allows for a higher contribution to the margin. In Round 5, Chester has the highest contribution to the margin with 46.10% compared to the rest of the industry with 39.40%. As of round 5, our closest competitor when it comes to contribution to the margin is Erie with 46.20%. This is something we need to keep in mind to keep our competitive advantage over the

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