SituationExercise II

SituationExercise II

PartOne: Vision Statement

OptiLightSensors Inc. deals with traditional and performance customers. Thecompany’s vision statement includes “constantly surpassing ourcustomers, shareholders and employees’ expectations through ourcommitment to quality.” The company is committed to providing valueto customers by selling value-added and tailor-made sensors that suitconsumer needs. Moreover, the strategy aids consumers escape profoundprice competition. The organization considers adding value andcreating product differentiation as a crucial way of edging outcompetitors and having sustainable development. Each segment hassimilar products, which are faster and more sophisticated to give thecustomers value for their money. These products include lasersensors, analog output, slot sensors, radar sensors, full-sizephotoelectric sensors, light gauging sensors, miniature photoelectricdevices, mid-size photoelectric sensors and compact sensors. Thecompany’s capacity and automation levels in every segment remainhigh in every segment to best serve the customers. Nevertheless, thecompany should invest around $16 million by the last round/ roundeight to ensure its success.

Anorganization financial structure is a term used to describe thesource of funds used by a company to pay its expenses and acquireassets. Financial structure consists of sources of funds that includeequities and debt financing. In order to grow the company a mix ofthese two sources of funding must be balanced to avoid the companydependence on debts (reduce the degree of leverage). The companykeeps its profits that are used to fund the organization expansionprojects. To avoid the higher interests that may be accrued due todebt the company usually furnish its debts regularly. The firm ratiosare expressed as 3%Accounts Payable, 10% Short Debt, 20% Long Debt, 15% Stock and 60%Retained Earning.Additionally, the company is biased towards cost leadership ratherthan differentiation to avoid price increment that would be passed tothe consumer.

PartTwo: Vision Statement Critique

OptiLightSensors Inc. concentrates on traditional and performance customers.Therefore, the company has given up on high-end, size and low-endmarkets. The decision to avoid venturing in these markets includedthe increased amount of investment required to succeed in the firsttwo (high-end and size). It is likely that competitors will selectthe same vision as OptiLight Sensors Inc. because they are workingwith the same information. However, the company will ensure that itpursues its vision statement to guarantee quality and more affordableproducts (Adair, 2010). Moreover, the company will find out about thecompetitors, their products and their USP (unique selling point) torecognize the areas that OptiLight Sensors Inc. should compete andalso get a differentiating platform. Secondly, OptiLight Sensors Inc.will study its customers and know what matters, such as lower price,the cutting-edge products, and more flexible services (Adair, 2010).Moreover, the company will differentiate by giving consumers goodreasons to buy our products instead of the competitors. The company’sUSP will tap into the needs of consumers and remain obvious and clearwithout making the customers ask many questions. OptiLight SensorsInc. will improve its marketing strategy in an effort to informconsumers its operations, products, and why it is crucial to buy fromthem (Adair, 2010). Lightly, the sensor firm will update its imagethrough business cards, branded packages and its website.

Thevision will require more investments as the customers necessitatemodern and high-performance products that are achieved throughadditional investments. However, the vision is simple to executebecause more customers are opting to purchase sensors in theirprivate lives. However, every market location possesses variousrisks. For example, modern technology is allowing hackers to tamperwith the sensors, hence, compromising with consumers’ security.Additionally, competition is high in the industry because of the vastnumber of sensor companies.

However,it will take several months for OptiLight Sensor Inc. to execute itsvision relative to other plans. Considering the growth rates, themarket will remain less attractive for the first four months as thecompany will be starting and looking for new customers. At the sametime, navigating through a new market is a continuous process thatrequires time before the company can cement its position in theindustry.

PartThree: Strategy Outline

Traditionaland performance market segments are crucial for OptiLight SensorsInc. However, every segment must have a 55% market share to become an“average competitor” in the industry. To achieve that marketshare, OptiLight Inc. will combine two strategic approaches namelycost leader with the merchandise life cycle emphasis anddifferentiation strategy with a product life cycle emphasis. Theformer aims to reduce expenses through expertise and efficiency(Lussier, 2008, p.141). The company will let products age and changein appeal from traditional to performance customers. However, thelatte strategy will allow the sensor firm to be known extensively asthe best manufacturer of modern products (Lussier, 2008, p.141).

Basedon profit, the company is likely to experience high versus low costpressures because of the increased expenditure. Moreover, the companyis likely to experience high versus low demand for localcustomization as most customers in the performance market segmentrequire high-performance and customized products unlike thetraditional ones.

Thecreation of new products takes two years to introduce to the marketwhile their improvement takes several years as well. However, thisform of differentiation is crucial if the company wants to increaseits market share in the industry. At the same time, the modernconsumer is techno-savvy and wants unique products that meet his/herdemands without problems. Lastly, OptiLight Sensor Inc. provides avariety of products, such as analog output, slot sensors, radarsensors, light gauging sensors, full-size photoelectric sensors,laser sensors, miniature photoelectric devices, mid-sizephotoelectric sensors and compact sensors.

References

Adair,J. (2010). EffectiveInnovation REVISED EDITION: The Essential Guide to Staying Ahead ofthe Competition. London,UK: Pan MacMillan.

Lussier,R. (2008). ManagementFundamentals: Concepts, Applications, Skill Development. Boston,Massachusetts: Cengage Learning.