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The Strategy Adopted By the Capsim Company

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According to the research findings, it can, therefore, be said that both the profitability and activity ratios of the Capsim Company show how successful the company has been in terms of the timing and outcomes of its strategic and operational decisions. The timing and outcomes of Capsim Company strategic and operational decisions have been positively influenced by competitive factors such as competitor limited production capacity and competitor dominated segment. The company competitors lack the production muscles to compete in the production of low technology products for low technology customers.

Most of its competitors are not willing to invest in the production of low technology products for fear of risks that are associated with such a strategy. However, even though the company deals with low technology products, it has been able to produce those products that offer value to its stakeholders by virtue of the reliability of the product, which has resulted in the increased company profitability. Most of the Capsim Company competitors have dominated in the high technology segment leaving the company with few competitors in the low technology market. This has given the company a competitive advantage in the market, which then explains its outcomes in terms of profitability.

The timing and outcomes of Capsim Company have also been influenced by financial factors such as its operating cash flows and low margin products. Unlike its competitors, the company deals with low margin products, where it sells its products at lower prices. However, the lower prices for its low technology products attracts a large number of customers in the low-end segment leading to increased sales and consequently increased profitability.

The low margin technological products have positively influenced the timings and outcomes of the strategic and operational decisions of Capsim Company. Capsim Company recorded an operating cash flows ratio of 3.76, which shows that it has been efficient in the generation of positive cash flow for maintenance and growth of its operations. The company has also gained a competitive advantage by keeping R& D on its low technology products, and this enables the company to produce products that are of high quality and reliable to its low-end consumer market segment.

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