Course Resource

Eight Strategies in Capsim

The following questions can help guide MediCorp’s choice of strategy:

  • Will MediCorp be local or global?

  • Will MediCorp be niche or broad?

  • Will MediCorp be a cost leader or a differentiator?

The two tables below differentiate local strategies from global strategies. For the purpose of Projects 3 and 4, we will use the following terminology for the eight strategy choices:

Skyline of a town or small city

NicolasMcComber / E+ / Getty Images

Local
 NicheBroad
Differentiator

Focus on the high-tech segment in only one country (local). Competitive advantage is gained by distinguishing products with excellent design, high awareness, easy accessibility, and new products—any of which may be tailored to the individual local market’s needs. R&D competency is developed to keep designs fresh and exciting. Products will keep pace with the market, offering improved accuracy and speed. Tailoring products with specific region kits is considered. Prices are above average. Regional and product branding and sales efforts are given a larger budget to work with. Capacity is expanded as higher demand is generated.

Vision statement: Premium, tailored products for technology-oriented customers in the local region; our brands define the cutting edge.

Maintain a presence in both segments of the market in only one country (local). Competitive advantage is gained by distinguishing products with excellent design, high awareness, and easy accessibility. R&D competency is developed to keep designs fresh and exciting. Products keep pace with the market, offering improved accuracy and speed – and sometimes tailored region kits. Prices are above average. Capacity is expanded as higher demand is generated.

Vision statement: Premium products for the local country: our brands withstand the test of time.

Cost Leader

Concentrate primarily on the Low Tech segment in only one country (local). Competitive advantage is gained by keeping R&D, production, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Automation levels are increased to improve margins.

Vision statement: Reliable products for low technology customers in the local region: our brands offer value.

Maintain a presence in both segments (broad) of the market  in only one country (local). Note: For the purpose of this project, the market for the company’s products could be different from where the plant is located.  Competitive advantage is gained by keeping R&D, production, shipping and raw materials costs to a minimum, enabling the company to compete on the basis of price (cost leader). Prices are below average. The Plant Automation level is increased to improve margins.  Any international selling must be done with an eye on margins, first and foremost.

Vision statement: Low priced products for the local country: our brands offer solid value.

 

Portion of a world map

KTSDESIGN / Science Photo Library / Getty Images

 

Global
 NicheBroad
Differentiator

Focus on the high-tech segment across two or three countries.  Competitive advantage is gained by distinguishing products with excellent design, high awareness, easy accessibility, and new products—any of which may be tailored to the individual local market’s needs. R&D competency is developed to keep designs fresh and exciting. Products will keep pace with the market, offering improved accuracy and speed. Tailoring products with specific region kits is considered. Prices are above average. Regional and product branding and sales efforts are given a larger budget to work with. Capacity is expanded as higher demand is generated.

Vision statement: Premium, tailored products for technology-oriented customers across the globe; our brands define the cutting edge.

Maintain a presence in both segments of the market across two or three countries. Competitive advantage is gained by distinguishing products with an excellent design, high awareness, and easy accessibility. R&D competency is developed to keep designs fresh and exciting. Products keep pace with the market, offering improved accuracy and speed—and sometimes tailored region kits. Prices are above average. Regional and product branding and sales efforts are given a larger budget to work with. Capacity is expanded as higher demand is generated.

Vision statement: Premium products for the industry across the globe; our brands withstand the test of time.

Cost Leader

Concentrate primarily on the low-tech segment across two or three countries. Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Regional and product branding and sales efforts are below average. Automation levels are increased to improve margins.

Vision statement: Reliable products for low technology customers across the globe; our brands offer value.

Maintain a presence in both segments of the market across two or three countries (global). Competitive advantage is gained by keeping R&D costs, production costs, and raw materials costs to a minimum, enabling the company to compete on the basis of price. Prices are below average. Regional and product branding and sales efforts are below average. The plant automation level is increased to improve margins.

Vision statement: Low priced products for the industry across the globe; our brands offer solid value.