The Strategy Adopted By the Capsim Company - Lab Report Example

The researcher states that the adoption of the niche cost leader (low technology) strategy has enabled the company to become effective in the achievement of its strategic and operational goals. Activity ratios are used in measuring the effectiveness of company goals. The company recorded a high accounts payable turnover ratio of 14.64, meaning that it takes around 15 days for the company to pay its suppliers. The Capsim Company has been paying its suppliers at a faster rate, a clear indication of how effective it has been in its operational strategies and goals.

High accounts receivable turnover of 24.33 recorded by the company is also an indication of how effective the company has been it its operational strategies. The high accounts receivable turnover ratio shows how effective the company has been in debt collection and has also been efficient in turning its inventory into sales, hence its effectiveness in the achievement of its strategic and operational goals. For the Capsim Company to increase and improve its operations in the future, it should change its strategy to adopt a more advanced strategy such as a cost leader with product lifecycle focus strategy.

The change in its strategy will enable the company reaps from sales of high products of each and every new product introduced into the segment. The increased sales from the high-end products will then enable the company to improve its profitability. The company can also change its strategy to niche differentiator (high technology) that will enable it shifts from low technology to high technology products in the low-end segments. This will enable the company to reap more sales and profits from each of the new high technology product it introduces into the segment.