Winner! Capsim

12 12 2008

My team Digby won the online strategy simulation game.

The game was full of fun and more importantly learning. A lot of the times in my classroom discussions, we have discussed how strategic management sounds like all abstract and gaseous. In this game, I could not only apply my lessons from the strategy course but also could see the results in the game’s simulated markets. Wow! Especially when I could define my winning strategies!

For those who are still wondering as to what is CAPSIM… It is a strategy simulation game hosted on CAPSIM.com and team members act as top management of their respective companies. The teams need to take decisions on R&D, Marketing, Production, TQM, HR and Finance in a simulated market conditions. The teams compete each year on their products in a simulated market.

For those of you who are looking for strategies that I applied in the game. My ten commandments :)

1. Take all types of loans in the initial rounds. These loans should be used in the initial rounds to fund your R&D and automation.
2. Release products in all segments such that they form a diagonal on the perceptual maps of high tech and low tech products. Ideally, one product should be launched each year till year 5
3. High tech products launched initially would slowly move to low tech segments. Keep launching newer ones in high tech
4. Production automation – gradual increase to 10. This is very important to increase contribution margins which are very helpful in later rounds
5. Target 100% awareness and keep spending on marketing till you reach this stage. The spending could follow this

Round when the product is launched – 1700
Subsequent rounds till awareness reaches 100% -  2500
After awareness reaches 100% -  1400 to maintain dominance

Target 100% accessibility and keep spending on sales till you reach this stage. The spending could follow this

Round when the product is launched – 2500
Subsequent rounds till awareness reaches 100% – 3000
After acessibility reaches 100% -  2000 to maintain 100%

6. 1000-1200 is the maximum market share for a product in a competitive market.
7. Sales forecast can be determined by taking the total of potentials for each segment of your product
8. No dividends should be given in any rounds
9. Whenever cash available, buy back the shares. This would increase your share price significantly
10. At each round, keep an eye on Balanced score card proforma. Your target in each round can be
Rounds 1-3 : 40+
Rounds 4-6: 70+
Rounds 7-8: 85+

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21 responses

28 01 2009
samia

thanx
it was useful, but could u be more specefic because now now am taking stratgic mangment cousre. me and my team don’t now what to do

8 02 2009
david

how did you determine the rates you used for success measures?

17 04 2009
uzma

could you xplain what should be the first step n the key to success in Capsim.
I am geting confused with this simulation. My decisions are due n i am not able to figure out what to do.

Thanx

28 04 2009
jcritt.blogspot.com

Your ten commandments.. are exaclty how i kicked THE SHIT out of the team called Chester. my team Andrews was dead last with chester. Both our teams really felt pitiful and started reading the book ALOT. I read the capstone manual from top to bottom, front to back about 10 times, and thought about using your methods to win the game, but chestnut had started doing what you did in the game, so i had take a different approach to the game. There were 6 teams in all and i initially spread myself in all markets with new products randomly scattered inbetween main bubbles. Then i placed two products in Size, no one was really in there, it wasnt saturated, and i had the smallest product in that segment. i took the profits that i made in size which were enormous cause, Costs, and Marketing, and Labor all goes down when you place more products in one segmetn at a time. after profiting and obtaining 60% i moved my Low product to High and made a new product with 10, 10 has its quality and size(the cheapest spot to make a new product on the R&D spectrum). While chester continued to make a new product in high and let it drift back to Low, i simply kept selling the most High end products. so i had to in size two in high, one in traditional and one in performance. Then another team put like 8 products in traditional and took over 100% of that segment while i owned 60% of high and size, and 50% of performance. chestnut profited mainly on just Low end but stayed strong in all segments really staying true to R&D excpet for when they got lazy and cheaped out by dropping products back through all the segments, having to spend more on marketing for everytime their product entered a new market.

The best way to win that game, is to own and specialize in one or two markets, that are untouched, and have the least competition… hence Performance and Size.
I actually had all 8 products running within 4 rounds, spent what was necessary in TQM and HR. The marketing kidna came last, and slowly grew as my costs declined.

Also Dividends increase your leverage rating, which should be around 2. I for the most part had like $60k or whatever in free cash, and actually only needed like $10k, but i realized i did not need all the Free cash, so i think i spent like $17 dollars on teh share and forked out HUGE hefty dividends to my shareholders. That was after i focused my attention on just a few segments though and cut costs by exiting two markets, Low and Traditional.

Eventually i had to borrow $100k in long term debt just to maintain a healthy cash leverage with the banks. The scoring inthe game, is not based on the Scoreboard, but actually Online in your Capsim Portfolio in I believe the Market Analysis tab. You should be awarded points for each goal you manage to successfully achieve. The scoreboard is more of future analysis of what you would get if your selling predicitions were correct.

Another SIGNIFICANT thing to look at is the Markets Growth, and current Market Demand. always remember if there is six teams your competing with, then a safe estimate is to only make 1/6 of the current market demand.

Don’t try to overproduce and spend alot on production if you don’t need as much as your going to contorl in the market. that was another problem the other team had… to much production, when i clearly outnumbered them in selling methods.

If you really want to understand the game, then get out a calculator and do some math, and read the book to get an understanding of what cost allocations will benefit you the most. I always only spent $2000 for marketing costs, and never anymore… why? because $2500 barely increases the Credibility and Accessbility of a product compared to $2000 so save yourself 500 bucks. and for every product you make, you could use that $500 to increase TQM costs, to lower the overall costs. HR is Extremely vital as well. TQM and HR will pay you back within the very next round, almost twice what you put into it.

I FUCKING LOVED THAT GAME BTW, AND WANT IT JUST TO PERSONALLY FUCK AROUND WITH.

12 07 2009
Michelle

Can i get some help from you

15 07 2009
PROF. N@sH

Darn…. another kiddies try to share their so called “best practice” winning the capsim simulation!!!

Listen all you udergrates and master wanna be. the essence of this game is about “countering your opponents” strategy. Lucky you if your fellow competitors in your fuckin industry are a little soft on their head. But if you guys are put in a pool of competitive students, it would be darn hard to muscle in others’ turf.

I’ve played this kindda simulation a lot!! Capsim has a rather dull portrait of what the “Fcukin Re@l Industry” looks alike. Another simulation game called COUNTRY MANAGER performs far better than CaPSim. WHY??

1. CAPsim HAS NO new entrants!!! Remember your old porter five force model??? basically you just compete with your predetermine teammates…. duh… nothing fascinating when you eventually recognise how and when your competitors will react…

2. CAPSIM has NO so called RANDOM events..!!! yeah everything on your capsim student manual really fukcing self full filing. The customers will ALWAYS shift their perception every year… Then so What??… just use your mother fucka TQM, Labour Negotiation, Advance Marketing module every year. Then your variable costs reduce gradually year after year.

3. If you know a bit about finance….. CAPSIM doesn’t have ideal Debt to equity ratio… This will make the strategy from the owner of this blog has the opportunity to borrow HEAVY DEBT. duh!!! remember guys… your credit rating can only fall into triple c (CCC) at most, and the benovalent lender -Big Al- will always ready to lend his Emergency loans. This means no bankruptcy cost at all!!! and it turns out You can buyback your bonds using the profit.

Enough gibber jabber…. If you understand my very first senctence i would like to remind you about “COUNTERING YOUR OPPONENTS” strategy stuff…

1. FIRST MOVE ADVANTAGE
If your opponents so darn slow to realise the Capsim simulation limitation (this is because they might have to do another subjects, assignments, presentations, and not to mention to reread all the marketing, supply chain, accounting, and finance theories) you better do everything at the start of the game.. yes just like the author of this blog…. he used his first move advantage by: BORROWING FIRST, LAUNCHING NEW PRODUCT FIRST, PROMOTION first….

why he did all of those?? THIS IS BECAUSE THE FIRST MOVER CAN CAPTURE THE BIGGEST MARKET SHARE !!!!! when you just on your feet by having adequate market share, even a mediocre CEO can do JUST FINE…..

2. “Read” your opponents’ strategy. Using the “annual courier report” you can debunk what your opponents “general” strategy: some are workin piece by piece by introducing new product every year, some are blunt player-launching the maximum amount of product line (i.e 8 product lines). Use every possible method…. eavesdropping other teammates discussing the strategy, sleeping with other team member and record your “pillow talk”… EVERYTHING!!! in fact this is what really happens in REAL life………

Just for your interest…. i’ve tutored other grads students how effective this “COUNTERING YOUR OPPONENTS” strategy works!!! we’ve successfully attained around 470k after 8th rounds… the second rank only got 150k… the rest of company went south….lol

In short, if you wanna win Capsim GLOBAL challenge…. try to simulate your movement and the outcome of you and your opponents. Yes microeconomics 101……….

fufufu…..470k…. can you imagine…. i can upload my courier report… but…….you guys should try to beat that first

22 09 2009
Brigon

I have tried this several times and cannot seem to avoid having my company plummet. If you could even show me how to work the first couple of rounds that would be great.

10 09 2011
Vadym Palamarchuk

thanks a lot for your help and advice!

I will beat you tho, I am aiming for 500k…)))

13 08 2009
shane

Wow, this discussion is really interesting. I can’t wait to start this sim. I have to say though, for a bunch of college undergrad and grad students, most of you seem to have a lot of trouble writing a fucking coherent sentence.

I’m not a grammar and spelling perfectionist by any means, but shit, most of your guy’s writing hurts my eyes!

Thanks for the tips though.

23 08 2009
E.

Any Capsim winner can give some mentoring for me? What are the most important thing that need to be pay attention to in each department?

9 09 2009
Samantha

Hey this information is going to very helpful. I am in my Strategy class right now and the prof just threw this on us. No one has any idea what is going on so im just looking for any advice you could possibly give.

12 09 2009
Walt

So I started this thing too and my team put me and another guy in charge of production. Do you have any hints or advice for where I should make my next move with production?

12 10 2009
alik17

Hello all,
I just start playing this game, so I am sort of scared because I have never seen anything like this. Can you pls give me some advices at the beginning? I start with Balwin… Thanks a lot…Hope I will enjoy it:)

19 10 2009
Confused

I’m really struggling with this game. Our predictions are not churning the kind of profit we expect. We took a 54mil emergency loan despite having a high tech in the sweet spot. Our production is high and capacity kind of low. We are in round 4. Any suggestions? We took a 16k loan of long term debt. We havent given any dividends. Our marketing and promotion for two products are 25-2800. I don’t know whats going on. If anyone is willing to help, I can give more info on our numbers and what not.

1 11 2009
Auburn0player

this game is easily to pick up, the only thing that can;t be control is other team production and decision. just mess around with the game and everyone can win this game easy.

15 02 2010
Allrin

Thanks for the tips. I’m in a lucky bind right now with having to do both Capsim AND Country Manager. We’re doing ok in Capsim, but now we’re so lost in Country Manager… Anyone willing to give some times for it? Thanks!

4 03 2010
SuzieQ

I have worked with the simulation for 6 years. I started as a student and then continued forward as an instructor in the University. I created learning material for students. I have started created learning material for use with Capsim and will release it for use soon.
Some basic pointers that I can give you right now to help with direction are:

1. If you are being graded on specific areas, become an expert in that area. (ie If you are being graded on Return on Assets or Leverage – learn those equations and look at what impacts those numbers).

2. When creating a strategy, don’t look at where we are now and how to get through the next round. If your school is running 8 rounds, look at where you want to be at the end of 8 rounds. Then map out how to get there. It’s the same when you go to college. You choose a major (this what I want to get a degree in) and then a path is developed for you to follow.

3. An ideal strategy. Everyone wants to know which market segments are the best ones to go into and win!! If all teams decided to go into the Low, Traditional and High end – then the Performance and Size segments are not being taken care of. The teams that are in the Low, Traditional and High End will be in a blood bath. Some teams that try to divide themselves between all market segments have a harder time – all of their resources are divided across 5 market segments. If a team has 2 products in one market segment, they can increase their accessibility (run by the sales budget amounts). Remember, you can manufacture up to 8 products.

4. After printing the Courier – which everyone gets the same one – print out the financial reports for your company. This will show Confidential information about your company’s products. Make sure that each product is bringing in enough money (the contribution margin) to cover the “fixed costs” of that product line.

I hope this helps. If you need any more information, please feel to post!!

28 03 2011
AngieK

hey guyz, i think this blog is pretty helpful.
During our first real round, we scored the highest profit but only because we lowered production for low end and traditional and increased their prices, we didnt spend much r&D , but we did revise all 5 products enough so customers would buy them. So basically the lower production lowered our costs, and higher prices drove profits skyrocketing. We have an INCREDIBLYYYYY competitive class, and everyone’s out to get us for next round. I reallllyy want to kick ass next round as well, so I need a bit of help as I am kinda lost now, see everyone has better R&D so if they increase price and sell more they’ll eat us alive.. I though leave traditional unrevised and lower price a bit.. What do u guyz think? Help me kick some ass please..?

10 04 2011
kim

my business has decided to adopt the niche cost strategy.
our profits and market share is very low.can you plz tell us how can we get more market share? i believe that we can sell more capacity to improve our situation.But are there more options that exist that can help us gain more market share?

26 08 2011
david

I NEED MORE ADVICE OR TIPS ON CAPSIM…PLEASE POST.

9 09 2011
Laura Barnes

Thank you everyone for your time and energy!! I haven’t started the sim yet – I consider reading through blogs like this part of the “market research” – when we finish – I will share insights and pass it forward

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