Friday, February 13, 2009

My strategies for Capsim simulation game

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 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+


Anonymous said...

Seriously...... what a loser would just rewrite what the book says!......boom goes the dynamite!

Anonymous said...

Strategy seems kind of weak to me, especially on launching a new high end product every round. That would cost a fortune. Its way better to use R&D to keep a single high end product in the ideal'll never get the age to 0, but you should be able to average it around 1 - 1.5.

Also, its more efficient to spend less on marketing efforts, especially in the early rounds before you're making tons of profit, because you are having some seriously diminished returns at $2500. A group in our sim has been spending $3000-$4000 in sales and promo in every round...they're getting a ton of sales, but the money they're wasting in marketing has their contributions in the negative.

JohnCritt said...
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Anonymous said...

absolutely pointless to as the second dude said to go about 2M/2.5M on marketing and it's beyond impossible/efficient to launch products every year. Not only do you need R&D but you'd need the production for each product. That cash could be much better used improving your current items.

StocksOn.Blogspot said...
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Anonymous said...

I can't say we owned the game but i'm going to detail my groups strategy for what became a 2nd place win.

1. Initially, spend money on automation for low and traditional sectors. Concentrate on marketing and accessibility


3. In TQM, place 2mil in all areas. Next round, put 2mil in all areas again but go through one by one and deduct until there is a change in %'s

4. Labor negotiations = make your staff OVERLY satisfied

5. Strike Days + Excessive stock

6. 2x Size, 2x Traditional that one can drop back to low if need be, 1x Low and 1x High to drop back to traditionl

時間 said...


StocksOn.Blogspot said...
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微笑每一天 said...

Better say nothing than nothing to the purpose. ........................................

Jason said...

The person who wrote in Chinese is translated as "Must cherish hope, will live in happiness, life passes before a full, meaningful, vigor and confidence." So I doubt you would get my Capsim help with this person.

d said...

For tips and strategies on how to win the Capsim and CompXM simulations check out

Tyler said...

When I worked through Capsim I created a very handy Excel Spreadsheet. It is uploaded here at the link. Good luck!

StocksOn.Blogspot said...
This comment has been removed by the author.
Ulaanbaatar electron baraa said...

How I priced my name products???

Anonymous said...

this guy doesn't know what he's talking about, the reason he says you shouldn't give dividends out is because he's not making enough money to even give out dividends lol

go to the 'capsimgame' blogger, it's much better than this