Strategy Capsim

MGT 322

ADVANCED STRATEGIC MANAGEMENT

Submitted: 24. August 2010

Prepared by:

Patrick Reiter # 1053711

Executive Summary

This report was commissioned to find a strategy for the strategy game Capsim by selecting one of the ten schools of strategic management. To fulfil this purpose, the report gives a theoretical background to the ten different approaches of strategic management. After considering different options for the most suitable strategy school to gather the best approach for the game, the Positioning School was chosen to assist in finding a strategy for Capsim as it is based on demonstrating hard economic facts. Within the Positioning School Porter’s five forces were used to evaluate the arena of competition which lead to the conclusion of a generic strategy. The identified forces affecting the company within the market are rivalry amongst competitors and bargaining power of customers. A differentiation strategy with product lifecycle was selected after evaluating the five forces of Porter to aim for a competitive advantage within the selected market. The strategy focused only on the High End, Traditional and Low End segment of the market to gain the desired competitive advantage through mainly focusing on R&D and Marketing. However, it was only possible to note positive results in all three selected market segments through an increase in the market share from round 0 to round 1. Fatal errors in the Finance Department lead to an emergency loan for all three rounds because no capital was provided as current debt, bonds or stock issues were negatively affecting the financial results. The High End Segment was the only segment which grew constantly due to past R&D incentives. To gain a competitive advantage in the other two sectors and to maintain the already established competitive advantage within the High End Segment in Capsim, it is strongly recommended to maintain the differentiation strategy but with more focus on the interaction between...