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CAPSIM ROUND 1: LOW-TECH LEADERS

Capsim Round 1: Low-Tech Leaders

Carlos Pagan
Bellevue University
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CAPSIM ROUND 1: LOW-TECH LEADERS

This week’s assignment was to conduct round 1 of our Capsim with a very specific
business plan. The business plan sought to gain profits by focusing on the low-tech market,
lowering the cost of materials, reducing costs, and increasing automation. This plan is great for a
first round because it seems that the company wants to start off on the lower end and capture a
specific market while generating a profit as opposed to going all in on a product that may under
perform in the high-tech market. The downside is that by starting of on the lower end it will take
longer to improve the product, increasing the sensor performance takes time, and we want the
project to be done by years end.
I believe that competitors will respond to my actions by wanting to take any part of the
market share that I have obtained. If a high-tech leader wanted to venture a new sensor into the
low-tech sector, they could potentially steal my market share. The way I see it is if Samsung sold
a low-tech TV vs RCA selling a low-tech TV, more people would want to purchase the Samsung
tv because the company is known for making products of quality. One way to prevent this is
provide a quality product for a value price. While we do sell sensors, a good example of how a
less reputable company made a name for itself would come from Vizio. Vizio was a no-name
brand that sold quality products at value prices, and according to an article from 2010, they had
toppled television giant Samsung for the number one spot in flat screen tv sales (Olivarez-Giles,
2010). If we can produce exactly what the customers demand, at a price they can afford without
taking a loss, then we can reduce our direct competition. Others will choose to target other
markets that we are not tapping into.
Our Vision Statement is “The Low-Tech Experts. For cost conscious customers – Erie
brands offer the best value…” This is the foundation for what the business plan was built upon.
Every single action and decision were made with the vision statement in mind, as well as the
executive summary. “Our products will keep pace with the market, offering improved size and
performance. We will price below average.” This statement shows that Erie as a company wants
to play the market conservatively. They have no desire to dominate the low-tech market, but they
do want to be part of it.
In the end Erie has a good game plan for conservatively staying in the market and turning
a profit. Reduce all costs to produce their sensors, make it more affordable, but continue to
develop the sensors so they grow with the demand of the market. If Erie is profitable, they
should venture out into the high-tech market once they pay off the short-term loan. With the
higher interest rate, I wouldn’t want to create to much more debt creating a new sensor.
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CAPSIM ROUND 1: LOW-TECH LEADERS

References

Olivarez-Giles, N. (2010, December 24). TV maker Vizio rising fast in electronic peripherals.
Retrieved from https://www.latimes.com/business/la-xpm-2010-dec-24-la-fi-vizio-20101225-
story.html.