Introduction
An overview of the Capstone® Simulation
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© 2012 Capsim Management Simulations, Inc.
Webster University
Dr. Bert Turner
www.capsim.com/webster/
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Why Simulate?
Risk-Free
View
Alternative
Strategies
Compresses Time
Enjoyable
(1 Round=1Year)
Selectivity
vs
Integration
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Objectives of the Capstone Simulation
Demonstrate
effectiveness of multidiscipline teams working
together.
Use strategic thinking.
Test your business
acumen.
Get your first ten combat
missions behind you!
Understand overall
interaction and impact of
various parts of a
business on one another.
Grow the awareness of
competition.
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Take away practical skills
in business management.
© 2012 Capsim Management Simulations, Inc.
Industry Overview
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The Story: Background on Your Company
FTC required Sensors Inc. to be broken
up into separate companies:
Andrews
Baldwin
Chester
Digby
Erie
Ferris
Started as a single corporation named Sensors, Inc.
Sold sensors as main product
Corporation was shut down by FTC due to
monopolistic operations
Your job: Operate one of the
companies and make it successful.
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The Start
When Sensor Inc. breaks up, each of the new companies
starts off with the following scenario:
$100 Million in
Sales
5 Market
Segments
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5 Product Lines
Closed
Marketplace
© 2012 Capsim Management Simulations, Inc.
Sensors: An Overview of Your Company’s
Product
Customers (OEMs) need sensors for
their products to function.
Used for diverse applications
Five clear market segments
• Low End—like electronic door sensors
• Traditional—like traffic sensors
• High End—like facial recognition
• Performance—like in spacecraft
• Size—like in cell phones
Customer demands vary between
the five segments.
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The Marketplace: A Look Into The Segments
Round 1 Consumer Segment
Expectations
Perceptual map used
to track changing
consumer demands in
size and performance
Market segments
continue to diverge
over time
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Each year, consumers
will expect faster
(higher performance)
and smaller products
(lower size)
Round 8 Consumer Segment
Expectations
•This causes the segment
circles to drift to the lower
right constantly
*Note the drift
towards the lower
right(expectations of
faster and smaller
products). Also note
the divergence of the
segments.
© 2012 Capsim Management Simulations, Inc.
Low End Consumer Characteristics
What the customers say
•Price sensitive.
Prefer price to
be lowest
possible.
I want to
spend as
little money
as possible!
•Prefer less
cutting edge
products (Bigger
Size & Low
Performance)
Price
Reliability
I want them
to have been
around for a
while…no
beta testing!
Positioning
They have to
be
moderately
reliable…but
not enough
to drive up
the price!
Age
•Ideal MTBF:
12000-17000
•Ideal Age: 7
years
The
technology
doesn’t have
to be cutting
edge.
Low End—like electronic door sensors
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Traditional Consumer Characteristics
What the customers say
•Price sensitive,
but willing to
spend more
than Low End
consumers
• “Average”
Performance
and Size
Price
Reliability
I want them
to have been
around for a
while…no
beta testing!
Positioning
They have to
be
moderately
reliable…but
not enough
to drive up
the price!
Age
• Ideal MTBF:
14000-19000
I want these
sensors to be
moderately
cheap.
• Ideal Age: 2
years
I want good
sensors… not
cutting edge,
but reliable.
Traditional—like traffic sensors
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High End Consumer Characteristics
What the customers say
•Not price
sensitive,
willing to pay
highest prices.
•High
Performance
and Small Size
Price
Reliability
I want the
newest
sensors you
have!
Positioning
We need the
total package.
High
performance and
miniaturized for
our products.
Age
•Ideal MTBF:
20000-25000
Price is not
an issue. I
want the
best sensors
in the
market!
•Ideal Age: 0
years
Only the
most cutting
edge
products will
satisfy me!
High End—like facial recognition
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Performance Consumer Characteristics
What the customers say
•Not price
sensitive, willing
to pay
moderately high
prices
•Highest
Performance
and Less
important Size
Price
Reliability
I want them
to have been
around for a
while…no
beta testing!
Positioning
Reliability and
Performance
are very
important
and must be
high.
Age
•Ideal MTBF:
22000-27000
I am willing
to pay for
what I need.
•Ideal Age: 1
year
I prefer
newer
technology!
Performance—like in spacecraft
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Size Consumer Characteristics
What the customers say
•Not price
sensitive, willing
to pay
moderately high
prices
•Average
Performance
but Maximum
Miniaturization
Price
Positioning
Reliability
Age
•Ideal MTBF:
16000-21000
I am willing
to pay for
what I need.
I want them
to have been
around for a
while…no
beta testing!
They must be
miniature to
fit our
technology
•Ideal Age: 1.5
years old
I prefer
newer
technology!
Size—like in cell phones
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Segment Growth
According to a Market
Analyst, there will be
continuous growth in the
sensor market.
Your goal: Prepare your
company’s products to
meet the needs of the
growing market.
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I see the entire
market growing at
around 14% or 15%
per year. The high
tech market alone
will be growing at
16%.
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The Decision
Making Process
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Decision Areas
Coordinate strategy and tactics across the following areas of the
company:
R&D
Marketing
Additional Modules
- HR (turned on Round 2)
- TQM (turned on Round 4)
- Labor Negotiations (Off)
- Advanced Marketing (Off)
Production
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Finance
© 2012 Capsim Management Simulations, Inc.
R&D
Ensure the perceived age of the
product meets customer
demands
Build the quality and reliability
(MTBF) of the products
Invent new products to address
the changing marketplace and
take advantage of new
opportunities
Determine the specifications of
the products to meet customer
expectations
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Marketing
Set the price for each
product
Build customer awareness
through investing in
promotion
Establish a sales force and
distribution channels
Set the sales forecast for each
product
Set Credit Policies
(A/R and A/P)
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Production
Purchase machinery to
automate production facilities
Buy or sell capacity on product
lines
Set production schedule
Manage the majority of the
company’s fixed assets
Staff your facility with workers
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Finance
Acquire capital to fund
growth and operations
• Issue Stock
• Short-Term Debt
• Issue Long-Term
Bonds
Issue dividends to shareholders
Balance debt portfolio
Manage Proformas
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Proformas: A Look Into the Future
Proformas
use decisions
made in the
current year
to project
company
performance
for the next
year
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Analyzing
them is
critical for
company
success
© 2012 Capsim Management Simulations, Inc.
The
following
proformas
are available:
• Balance Sheet
• Income
Statement
• Cash Flow
Statement
• Financial Ratios
Scoring Methods
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Success Measures
Board of Directors Established Success
Measures By Which Your Performance
Will Be Measured
•Stock Price (25%)
•Market Capitalization (25%)
•ROE (25%)
•Market Share (10%)
•Cumulative Profit (10%)
•ROS (5%)
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Balanced Scorecard
• Improving company financial picture in
preparation for final debrief
• Point System
• Gauges company performance based
on four perspectives
•The Customer
•Internal Business Process
•Innovation and Learning
•Financials
• In the simulation, a Proforma Balanced
Scorecard is available to project results
for the upcoming year.
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© 2012 Capsim Management Simulations, Inc.
Analyst Report
Analyst Report
• Evaluates your company in ten
categories:
• Margins
• Profits
• Emergency Loans
• Working Capital
• Market Share
• Forecasting
• Customer Satisfaction
• Productivity
• Financial Structure
• Wealth Creation
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Things to do each year (each round)
Establish business strategy
for your company
May NEVER Change
START
Begin the process again by
confirming alignment of
your results with your
company’s strategic goal.
Rejoice in your superior
business acumen
(or bring out the
crying towel)
Await results of
processing the round
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Analyze Capstone Courier
to see industry results
Make tactical decisions
across each functional
area (aligned to strategy!)
Upload official decisions
and confirm on the
website
© 2012 Capsim Management Simulations, Inc.
Good Luck and Enjoy!
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