CAPSIM Capstone team simulation project - Case Study Example

Capstone Team Simulation Project Opportunities There is an opportunity to increase sales realized by the company. Currently the profits of the company are hurt by the stock-out costs. The less market share taken by the company could be due to the poor inventory policy. The customers could have gone to buy competitors’ products because the item was not present at the time the customer needed that product. The company should adopt a good inventory policy that will ensure that there is sufficient stock to meet the demand.

If the company takes advantage of this opportunity, the sales will increase tremendously. In addition, the market share of the company will increase. Moreover, there is an opportunity of improving the cash management. There should be a reduction in the days given for the debtors to pay the amount outstanding. This is because they are currently holding cash. Quicker payment will make cash more readily available in running the company. In addition, it would avoid situations where the company will need emergency loans to sustain the business.

Furthermore, there is an opportunity of increasing profit by reducing the variable costs of the company. In addition, the company has an opportunity to increase its market share in the low-end segment. It has the potential of having a market share of 29 percentage as compared to the current market share of 18 percentage. Besides, it has an opportunity to expand its market share in the high-end and size segment. Ultimately, the company has an opportunity to increase the efficiency of workers.

It can achieve this by allocating money in the budget for quality initiative training. In addition, there is an opportunity to gain acceptability by the community by allocating funds for the UNEP Green program. The program will make the company to exercise social responsibility, which will have positive effects to the company. Customers will feel more attached to the products of the company.Threats The market share has reduced this year as compared to other years. This means that competitors have an edge over the Chester Company.

The consumers have shifted to other products over the years. This is a threat because if the situation continues then the company will again start making losses due to poor sales. In addition, the firm’s financial structure is currently poor for the last 2 years.There is a threat of having excessive inventory levels. The company when setting an inventory policy may set a policy that will retain some stock at the end of the period. Inventory consumes cash and eats up profits made by the company.

In extreme cases, it may make a company to opt for emergency loans. For instance, in the 3rd year, it made the company to incur losses. Moreover, there is a production threat. Chester’s production capacity is excessively low as compared to Baldwin, Digby and Erie companies. Due to the less capacity, Chester achieves less production as compared to its competitors. Greater capacity and production by the competitors is a threat because they are able to meet customer needs by producing more products.

In turn, this increases the competitors’ sales. Moreover, this limits the Chester’s chance to increase its market share to exceed those of the competitors. Work Sited"Business Simulations to Develop and Assess Business Acumen Capsim." N.p., Web. 3 June 2014.