Andrew’s goal is to be the leader in the sensor industry by offering quality products at a reasonable price. We will pursue this goal by implementing efficient, cost minimizing primary and support activities. The cornerstone of these activities will be our pursuit of achieving an experience curve, i.e. lowering costs as we gain experience. Two strategies we will utilize to achieve an experience curve are minimizing employee turnover and maximizing employee productivity through effective training programs.
Andrews will strive to serve a broad market by spreading our resources across all of the industries market segments. Given the nature of the sensor industry it is relatively easy for competitors to mimic each other’s products, resulting in an unsustainable competitive advantage. For this reason we are avoiding a more focused, differentiated approach. Our business plan will consist of two overarching strategies. Early in the simulation process we will invest heavily in promotion and sales to raise awareness of our products. Once our market share has been established we will ease off promotion and sales funding to a degree. Second, we will closely monitor consumer buying criteria and invest enough money in R&D to meet the most important criteria. Through this two fold approach of capturing market share, and tailoring our products to consumer preferences, we intend to become the leading seller of sensors in the industry.
Segments and product positioning- seeks to gain a sustainable competitive advantage in the sensor industry through cost leadership and, when advantageous for a particular segment, differentiation of our products. Each market segment’s customers have a different buying criteria. It is essential that we cater to these preferences for each of our products.
Traditional - Product age is the most important characteristic to traditional customers. Andrews will do the best it can to bring to the market at the ideal age. The second most important criteria to this segment is price. Our cost minimizing activities should result in the lowest prices on the market. In terms of Able’s performance and size we will follow the market trends and land somewhere in the middle of the pack.
Low End - The low end market segment is extremely important to the industry as it has the highest total industry unit demand. This segment is tailor-made for Andrew’s low cost business model. To lead in this segment we must offer the lowest possible price at all times.
High End - The high end segment is where we can afford to deviate from our low cost strategy. As the customers in this segment are wealthy, product price is of very little importance. We will invest more heavily in R&D as product performance and size is the most influential buying criteria. If we shy away from incurring these costs Adam’s performance in the segment will suffer. To help cover these costs we will mark up Adam’s price. It is important to remember the total high end unit demand is low. We need to be careful not to overdue our R&D investment as we might not see profitable returns.
Performance - The performance segment looks for reliability and performance from sensors. Finding balance between increasing performance and reliability and offering the lowest industry price will be key to gaining market share in this segment.
Size - The size segment looks for small and compact sensors. Much like the performance segment, managing the tradeoff between price and meeting the buying criteria will be key for this segment. Investing in R&D just enough to produce a competitive sensor at the lowest industry price is crucial. It’s important to keep in mind that price is not hugely important to this segment.
Forecasting, capacity and inventory levels-
Forecasting will be a very important aspect of our strategy, as we will rely on our calculations to come up with a production schedule. Although no forecast is