Capstone Industry Conditions Report For Industry C44321

1: Segment Locations and Drift Rates:

Each year, the segments drift the length of the hypotenuse of the triangle formed by customers desire for smaller and faster products. Table 1: Segment Circle Drift Rates: Every year, customers demand increased performance and decreased size.

Segment Traditional Low End High End Performance Size

Performance +0.7 +0.5 +0.9 +1.0 +0.7

Size -0.7 -0.5 -0.9 -0.7 -1.0

Perceptual Map
Perceptual Map Form: The segment fine cut circles and centers for Round 0 are shown below.

Table 2: Segment Centers at the End of Each Round: Note the drift rates vary for each segment. Traditional Performance Size 5.0 15.0 5.7 14.3 6.4 13.6 7.1 12.9 7.8 12.2 8.5 11.5 9.2 10.8 9.9 10.1 10.6 9.4 Low End Performance 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 High End Performance 7.5 8.4 9.3 10.2 11.1 12.0 12.9 13.8 14.7 Performance Performance Size 8.0 17.0 9.0 16.3 10.0 15.6 11.0 14.9 12.0 14.2 13.0 13.5 14.0 12.8 15.0 12.1 16.0 11.4 Size Performance 3.0 3.7 4.4 5.1 5.8 6.5 7.2 7.9 8.6

Round 0 1 2 3 4 5 6 7 8

Size 17.5 17.0 16.5 16.0 15.5 15.0 14.5 14.0 13.5

Size 12.5 11.6 10.7 9.8 8.9 8.0 7.1 6.2 5.3

Size 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0

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Capstone Industry Conditions Report For Industry C44321

The information in Table 2 reflects the segment centers at the end of the round. Therefore, the Round 0 positions can be seen as the Round 1 starting positions, Round 2 positions can be seen as the Round 3 starting position, etc. Each month during the simulation year, the segment drifts 1/12th of the distance from the starting position to the ending position. Table 3: Ideal Spot Offsets: Customers prefer products located this distance from the center of the segment circle. Segment Traditional Low End High End Performance Size Performance Size 0.0 -0.8 +1.4 +1.4 +1.0 0.0 +0.8 -1.4 -1.0 -1.4

2: Segment Sizes and Growth Rates

Your customers fall into five groups which are called market segments. A market segment is a group of customers who have similar needs.Each market segment grows at a different rate. Table 1.1 lists the beginning segment growth rates for your industry. The growth rates might change from year to year. Check the Segment Analysis Reports in the Capstone Courier each round for the upcoming year's growth rate. Table 4: Industry Conditions Beginning Segment Growth Rates Growth Rate Traditional Low End High End Performance Size 9.2% 11.7% 16.2% 19.8% 18.3%

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Capstone Industry Conditions Report For Industry C44321

3: Buying Criteria By Segment
Customers within each market segment employ different standards as they evaluate sensors. They consider four buying criteria: Price Age, MTBF (Reliability) Positioning. The buying criteria for each segment, in order of importance, displays below. Positioning and Age score information also display. Please see Chapter 3 of the Capstone Team Member Guide for explanations of Positioning, Age, Price and MTBF scores.

3.1 Traditional Segment Buying Criteria (Round 0) Traditional customers seek proven products at a modest price. Age, 2 years importance: 47% Price, $20.00-$30.00 importance: 23% Ideal Position, performance 5.0 size 15.0 importance: 21% MTBF, 14,000-19,000 importance: 9% Industry Conditions Figure 3.1: Traditional Buying Criteria

Traditional customers give higher position scores to sensors located in the center of the segment circle.

Traditional customers give higher scores to sensors in the 2 year range

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Capstone Industry Conditions Report For Industry C44321

3.2 Low End Segment Buying Criteria (Round 0) Low End customers seek low prices and well proven products. Price, $15.00-$25.00 importance: 53% Age, 7 years importance: 24% Ideal Position, performance 1.7 size 18.3 importance: 16% MTBF, 12,000-17,000 importance: 7% Industry Conditions Figure 3.2 Low End Buying Criteria

Low End customers prefer inexpensive sensors with slower performance and larger size.

Low End customers give higher scores to sensors in the 7 year range.

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Capstone Industry Conditions Report For Industry C44321

3.3 High End Segment Buying Criteria (Round 0) High End customers seek cutting-edge technology in size/performance and new designs. Ideal Position, performance 8.9 size 11.1 importance: 43% Age, 0 years importance: 29% MTBF, 20,000-25,000 importance: 19% Price, $30.00-$40.00 importance: 9% Industry Conditions Figure 3.3 High End Buying Criteria

High End customers demand cutting edge sensors with high performance and small size.

High End customers give higher scores to newer sensors.

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Capstone Industry Conditions Report For Industry C44321

3.4 Performance Segment Buying Criteria (Round 0) Performance customers seek high reliability and cutting edge performance technology. MTBF, 22,000-27,000 importance: 43% Ideal Position, performance 9.4 size 16.0 importance: 29% Price, $25.00-$35.00 importance: 19% Age, 1 year importance: 9% Industry Conditions Figure 3.4 Performance Buying Criteria

Performance customers emphasize performance over size.

Performance customers want sensors in the 1 year range.

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Capstone Industry Conditions Report For Industry C44321

3.5 Size Segment Buying Criteria (Round 0) Size customers seek cutting edge size technology and younger designs. Ideal Position, performance 4.0 size 10.6 importance: 43% Age, 1.5 years importance: 29% MTBF, 16,000-21,000 importance: 19% Price, $25.00-$35.00 importance: 9% Industry Conditions Figure 3.5 Size Buying Criteria

Size customers emphasize size over performance.

Size customers prefer sensors in the 1.5 year range.

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Capstone Industry Conditions Report For Industry C44321

4. Projected Interest Rates

Prime Interest Rate Round 1: 7.0%

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