Capstone

This week we finally started the business simulation with Capstone. In this simulation we have to think about managing the products the company produces, marketing, financing, etc. One of the options that we have in the program is to come up with new products and do all the activities necessary so it can a success. While we were deciding with my group if it was a good idea to come up with a new product, the things that came to my mind were, how big of a scope to we want to have? Are we going to come up with a low cost product or a differentiated product? I thought about the trading that we would have to do, like, if we create a differentiated product the cost would be high and only some customers would be able to afford, but at the same time, it would be something different, something that would create a more close relation with those who do get the product. Just like in the Ducatti and Apple case, both differentiated product, both high price product, but still both products have loyal customers because they bring something different to the table, something that customers cannot get from other companies. Companies have to take risk, and that is what we did with my group, we went after the product we thought would make a difference (in the differentiated segment) and we hope it works.

"When innovation, too, is made in China"

"When innovation. too, is made in China" is an article I read that talked about the new strategy China is planning. China's past strategy had been to be a cheap labor force that can imitate every product but at a cheaper cost. This country's economy is based mainly in cheap products exports. Lately their government has decided that it is time for them to create their own patents, instead of just imitate products. Basically with this decision they are going from being a country that has operating effectiveness, to actually have a strategy. They are not planning on doing something better, but instead on doing something different. They are planning on mainly attack the technology industry. This is an industry that has a lot of entry barriers. Many companies have had their company name out for many years, and so there are many loyal customers who would be hard to gain. The buyer power that customers have is higher that the supplier power. There are many products that do the same things and the more supply there is, the cheaper it gets. China could only achieve supplier power if they really create patents that only they would have the right to produce. One of the pros of China's decision is that because they have a cheap labor force, the products they would create would be cheaper, and so people would prefer to buy them  Rivalry in this industry is high, there is Apple, Sony and many others. For China to achieve the level of this companies, it would require high investments in research and development, and marketing. Still, all this is not stopping China. Now one of the strongest economies, is planning on creating twice as much patents as the United States. China's economy is growing and these changes in their strategy, may make them unstoppable.