Running head: CAPSIM ROUND FINAL
Capsim Round Final
Trevor D. Rasmusson
American Sentinel University
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Capsim Final
Having already gone through business simulation course as an undergraduate student, I
thought that this would be a much easier exercise than it was. I was pleasantly surprised how
much I learned in this course because of the increased complexity of this simulation product in
comparison to the previous one that I had used. Throughout this reflection, I plan to discuss the
variety of strategies that we implemented throughout the course and the reasoning behind them.
Initial Strategy
Carmen and I had quite a few live discussions on what we really wanted to focus on with
this simulation. Initially, we came to the conclusion that we wanted to really focus in the areas
of Performance, Size, High End and Traditional. We didn’t want to work toward pleasing every
category and then have to share those markets with the other teams. By selecting some key areas
to focus in, we thought that we would have the ability to be a bit more aggressive with the moves
that we made because we would have more money to dedicate toward product development,
production and marketing for those key sensors.
Practice Round
Our team did not perform well, at all, in the practice rounds. This was mainly due to a
large emergency loan that was needed to fund excess costs. When we entered all of our
decisions, I think we may have not saved the financial portion and therefore the loan money did
not go through. However, we learned some valuable lessons through the practice round and was
able to go into Round 1 with more clarity on what exactly was going to be needed to do well
with the simulation.
In the practice round, we were a bit too aggressive in some areas; so much so that we
were $50,000+ in debt when we got to the Financial Decisions page. In retrospect, I’m glad that
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we tried this approach in the practice round. This gave us a good gage for how aggressive we
could be when making decisions for Round 1.
Actual Strategy
Due to our poor performance in the practice round, Team Digby went into Round 1 as
underdogs. Similarly to our strategy in the practice round, we wanted to give each product a
rating according to its current levels of Performance, Size and Age.
Research and Design
Early-on in the simulation, we categorized Dell in the low category, and therefore
this would be a product that we would not focus too much energy in. Daze and Dune were
categorized as Medium. Dixie and Dot were categorized as High level products. We made the
decision, that Daze would be our highest performing product. This is due to the fact that we
were able to plot Daze in an area that would incorporate the outer circles of 3 segments (Highend; Performance; Size) while being in the “sweet-spot” of the traditional segment. Our second
highest performing product, we anticipated will be Dixie. We were able to plot this sensor so
that it would incorporate the outer circles of 2 segments (Traditional; Performance) while being
close to the “sweet-spot” in the High-end category.
Later in the simulation, we ended up changing our strategy considerably based on what
the other teams were doing. There were some major products in the Traditional sector from the
other teams. We figured that we could position three key products in that area in an effort to
push the other teams out of that category. By the end of that simulation, we were very
successful in this effort; however, it may not have been the best decision to make in order “win”
the simulation exercise. The reason it may not have been the best plan, was the fact that the
traditional segment just didn’t seem to be large enough for us to wipe out the other competitors.
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We needed to be in other segments to make the most of the customers that were looking for
products outside of the Traditional area.
Ultimately we had aligned all of our products in a diagonal line to follow the route of the
simulation over the course of the class. As we got further into the simulation, we anticipated
having to alter this strategy slightly based on how much of the markets we had to share with the
other teams.
Marketing
When it came to the promotional and sales portion of the simulation, we wanted to plan
to have considerably larger budgets in promotions due to the fact that our customers really did
not know about our products yet. As we began to move through the various rounds of the
simulation, we planned for the sales budget to grow gradually. Originally, we wanted to set our
sales budget to equal or promotional budget about halfway through the simulation. However, we
discovered that our strategy needed to be a little more complex than that. We actually needed to
keep an eye on our Customer Awareness, Customer Satisfaction and Customer Survey ratings,
and use that information to make these decisions. This was a valuable lesson in the simulation.
Our pricing strategy was a little simpler. We kept an eye on the suggested price ranges
for each sector for the first round to assure that we were falling just slightly below the middle.
After round one, we used the other teams’ prices to determine the price of our products. Our
goal was to just slightly undercut each of our competitors with price since we felt that it may be a
differentiating factor for our customers.
Our sales forecasts were simply based on our success of the previous round. If we sold
out of the product, then we would try to be more aggressive with the forecast. If we had a lot of
inventory leftover, we would be more conservative with our sales forecasting.
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Production
Team Digby set-up our production decisions based, again, on the key products that we
wanted to focus on while trying to keep our costs down. We know that Daze (Traditional) will
be our highest selling product and therefore planned generously for that with the capacity and
automation rating. Throughout the simulation, there was little competition in the Low-end
segment. So about halfway through the course, we decided to stop modifying Dell and to let it
just gradually float back into the Low-end category. In contrast, we wanted to assure that Dixie
was ahead of the pack in the high-end segment. We had high hopes for Dixie’s performance,
but I think the simulation ended just early of Dixie hitting its peak.
One of our biggest goals with production was increase automation ratings on the products
that we thought that we would succeed with. This would help us to keep labor costs down
because the production would be more automated. In rounds that we had extra money, we
found ourselves investing in increasing automation ratings across the board.
Finance
The finance portion of the simulation was one of the most difficult for our team. In fact,
if there was one area that I thought I could have learned more about, it was Finance.
I just
didn’t have a clear understanding of what I was doing when I was addressing many of the
categories within this section.
For example, if we finished the other sections of the simulation and came to the finance
page and saw that we were in the “red”, we would borrow money by Issuing Stock. Throughout
the whole simulation, there wasn’t an instance where we borrowed money outside of issuing
stock. Typically, we wanted to borrow enough money that we would be $10,000 in the positive.
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However, there were a few rounds in which this did not keep us from still needing an emergency
loan. I think this was mainly due to poor forecasting.
We also experimented with dividends a little bit, thinking that this would help with our
customer satisfaction and our customer surveys. We didn’t notice a huge difference by
experimenting with this strategy, and therefore didn’t continue with it and instead kept our
promo and sales budgets up to help in those categories.
Final Thoughts
There were many key course objectives that I will be taking from this experience. One
of the first is the fact that a business person’s strategy depends so much on its competition. An
operator can have a clear strategy going into a business venture, but their success greatly depends
on the decisions that his/her competitors are making and his/her ability to modify strategy based
on them. In our situation, we had a clear strategy going into the simulation but had to modify it
based on the moves made by our competition.
The other main concept that I will be taking from this experience has to do with
production. I was able to relate production costs to my degree challenge due to the fact that time
is money, and I will need to assure that I am being as efficient as possible in an effort to save
labor costs with my Student Success Plans. This may mean that I will want to find ways to
automate the creation of these plans so that they take less time. This may free me up to increase
efficiency in other areas of the business.
Because of the nature of my degree challenge, I was a bit concerned about how well this
simulation course would apply to my project. However, I found that many areas were very
applicable; specifically the areas of Marketing, Production and Finance. I am thankful that I had
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an opportunity to go through this course with several co-workers, as it helped us all to reflect on
how these concepts could be applied to many of our current projects.
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