Guide to Capsim - New strategy to win all 8 roun
Round by Round guide and tips
This is step by step guide for 8 rounds of Capsim Capstone
It requires about 15 minutes to complete each round and understand decisions you make
This guide will have you and your team to avoid mistakes (especially in early rounds)
Follow this guide will have better start and gain competitive advantage.
Free support for Round 1 and 2, email to: mbahelp2002@gmail.com
Good Luck and Success !
Free Excel file to support calculation for R&D, Marketing, Production for 8 rounds
Free Step by Step Guide for Round 1 (all decisions in R&D, Marketing, Production, Finance)
1- R&D
- Change MTBF for all our products to the maximum amount we can.
MTBF is the duration of the sensor products (higher is better, but also higher cost)
Traditional to 17000 - 19000
Low End to 14000 - 17000
High End to 23000 - 25000
Performance to 27000 (max for this product)
Size to 20000 - 21000
- For PFMN and SIZE
Higher Performance is better
Lower Size is better
In the Courier report, each segment shows different customer preference
You can use the Free excel file to calculate PFMN and SIZE for all 8 rounds
And keep track of all decisions for 8 rounds and win easily
Modify each product according to the spreadsheet on each segment.
Each round update PFMN and SIZE for all products
DO NOT UPDATE 2nd product, because it is LOW END, it requires 7 years old to sell best (The the Low End product, customer prefers it is old, stable performance)
For R&D, after update products, check launching date, it should be in the same year, so new products can start selling
Launching date should be from June to Sep
Again, update product every round.
THE ONLY ONE PRODUCT THAT DOES NEED UPDATE IN ROUND 1-2 IS LOW END
UPDATE IT ONE TIME IN ROUND 3
THEN CAN UPDATE 2ND TIME IN ROUND 7
ALL OTHER PRODUCTS REQUIRE UPDATE RIGHT FROM ROUND 1 (OR CAN NOT SELL - BECAUSE WITH NO UPDATE, THEY WILL BE FAR FROM CUSTOMER PREFERENCE, AND CAN NOT SELL)
IMPORTANT NOTE FOR R&D - If you or your team make a mistake in R&D, for example wrong PFMN and SIZE, it will require 2-3 rounds to fix that product, then it can not sell well in 2 rounds.
Sample decisions for R&D in round 1
Before you move to Marketing decisions, note that R&D is the Key to Win, the most important part
2- MARKETING
PRICE
You can use excel file to keep track of prices for all products, for 8 rounds
Sample prices for all products for 8 rounds
- For traditional you want to start your pricing as close as your competition, eg. 29.50 or can reduce by USD 50 to make it more competitive. From Round 2, check courier report to see competitors prices and set it close to top competitors.
- For low end, set it as low as possible but have to gain some contribution margins. Price is most important for Low End. In Round 1, set it USD 20.50 or USD 20. Check contribution margin to make sure it will bring good profit.
- For high end, performance and size segments, can set high prices because it affects only 10% of buying decisions. Therefore, just check Courier report to see max prices, and set it lower than max prices by USD 0.50
For example, High End: USD 39.50, Performance: USD 34.50 and Size: 34.50
Then for later round, each round reduce prices by USD 0.50 to keep all products more competitive
And can check prices of competitors to make sure better prices than competitors
DO NOT DUMP PRICES TO SELL MORE
AGAIN, DO NOT DUMP PRICES JUST TO SELL MORE THAN COMPETITORS
BECAUSE, PROFIT IS MORE IMPORTANT - NEED TO KEEP GOOD PRICES TO GAIN PROFIT, SO NEXT ROUNDS CAN INVEST AND GROW THE MARKET
FOR ROUND 1:
- Traditional at $29.5
- Low End at $21 or 20.50
- High End at $39.50
- Performance $34.50
- Size at $34.50
PROMO BUDGET & SALES BUDGET
- Do not spend more than $2000 on promotion and sales
- Diminish returns start at $2000, higher spending is not effective
- In round 4 and later, when Customer awareness and accessibility reaches 100%, can reduce Promo and Sales to 1400
FOR ROUND 1
- Spend $2000 in Traditional and Low End.
- Or just spend $2000 for Low End
- High End: 1200
- Performance: 1200
- Size: 1200
Or you can select between $1000 and $1500 a number you like to spend.
DO NOT SPEND ALL $2000 for all products, you can do that, but will get some loss, because ROUND 1 still have low sales and only some profit. Note that if you spend all $2000 for five products, cost higher about $8000 (000) when profit in round 1 only a few millions.
SO, AGAIN, DO NOT SPEND TOO MUCH FOR PROMO AND SALES IN ROUND 1.
Round 1 can spend $1200
Round 2 can spend $1400
Round 3 can spend $1600
Round 4 can spend $2000
When Customer awareness and accessibility reaches 100 % (see in Courier report), can reduce back to $1400
Low End can spend $2000 right from round 1 to sell max
Sample Round 1 - Marketing
FORECASTING (SALES FORECAST)
- This is a key to win, R&D is the most important, then this is the 2nd most important
- This can bring Sales and Profit
- This can avoid stock out or high inventory
- This is simple calculation but can help to win competition
Method 1.
Check Courier report
Production part
Last Round Sold units x Segment Growth rate = Sales forecast
Method 2.
From the Market Share page in the Capstone Courier
Check last year’s market share x the next year demand of each segment.
Next Year Demand = current demand x segment growth rate
(Method 1 is better, because some cases, a product is sold in some segments)
Sample for Round 1 Production
3 - PRODUCTION - PRODUCTION SCHEDULE CALCULATION
Production = Sales Forecast * 110% then – Inventory on Hand
Sales forecast comes from Marketing, calculated above
Inventory comes from Courier report, Production part
AGAIN, YOU CAN USE EXCEL FILE TO CALCULATE FOR ALL 8 ROUNDS
Free Excel file to support calculation for R&D, Marketing, Production for 8 rounds
Free Step by Step Guide for Round 1 (all decisions in R&D, Marketing, Production, Finance)
Free support for Round 1 and 2, email to: mbahelp2002@gmail.com
TIP:
- Keep some inventory in case we sell more units than we forecast
- Inventory is better than stock out, when stock out, competitors will sell more and get our customers
AUTOMATION RATING
- Traditional, increase its automation by 1 points each round until you reach 8 (5-6-7-8)
- Low End, increase to 10, first round to 6.5 then 8.0 then 9 and 10.
- High End, leave it 3.0 to round 4 then increase to 4-5-6-7
- Performance, leave it 3.0 to round 4 then increase to 4-5-6-7
- Size, leave it 3.0 to round 4 then increase to 4-5-6-7
(Or can increase 0.5 or 1.0 each round to max 7)
WORKFORCE COMPLEMENT
Always at 100%
BUY/SELL CAPACITY
- Keep 2nd Shift Production % between 20% and 50%,
- Use the 2nd Shift is more effective than only full capacity
- Use 150% capacity seems to be most effective
IMPORTANT
THINK CAREFULLY BEFORE SELLING CAPACITY
- If you have less than 20%; you have to sell capacity (but do not suggest, because in later rounds may have to buy back when demand increases)
- If you more than 50% you have to buy capacity, always suggested.
TIPS:
- Sell Capacity only 1 time in Round 1
- Sell surplus capacity of Traditional
- Sell surplus capacity of High end
(Again, do this only one time in round 1)
TIPS:
- After making decisions on production, check right low corner of Production screen to see how much capital investment have spent and how much can spend.
- If we have capital investment leftover, try to spend it in Automation or Capacity
- If we are spending more than allowed, try to sell capacity or not invest as much.
TIPS
- In Round 1, sell some capacity on the first round so you can finance Automation, sell on the traditional, high end, (do not sell Low End, do not sell Performance and Size products).
4- HUMAN RESOURCES
Sample HR: Round 1-2-3 spend 3000 and 40, later rounds spend 5000 and 80
For HR, it is also long term strategy, spend as much as possible in human capital
Therefore we can invest the maximum on recruiting and the maximum of training hours.
Because Round 1-2-3 still have low sales and limited investment, use 3000 and 40
From Round 4-8:
- Recruiting Spend; $5000
- Training Hours; 80 Hours
5- FINANCE
Keep enough cash to avoid emergency loan.
Keep it simple, round 1 keep about $10.000 (000) and plus $10.000 each round, eg. round 8 keep $80.000 (000)
Again, Sales may be not as high as planned, make sure to avoid an Emergency Loan by keeping enough cash
- Get as much “Issue Stock” as possible
- Get as much “Issue Long Term Debt”
- Get whatever you need left from “Borrow” or Short term loans (use only in round 1, 2 and 3 may be 4)
- From Round 6, when having high sales and high profit, can Retire stocks, and pay dividends
- Pay dividends can increase stock prices
- Rounds 7-8 can Retire Long Term Debt (this usually decreases interests expense)
TIPS
- Finance its very tricky if you are focusing in Maximizing your scorecard score
- To keep this simple, focus on Sales and Profit first, then Balanced Score Card will increase in later rounds
NOTE AGAIN, that this is long term strategy game with 8 rounds
Round 1-2-3 focus on R&D, new products development, invest in production expansion, promo and sales... then will have good sales and some profit.
Round 4-5 will have good sales and profit
Round 6-7-8 lead the game with top sales and profit
ROUND 1 and ROUND 2 are most important
R&D is the most important of each round
Mistake is R&D requires 2-3 rounds to fix, then will have low sales and profit. Can only get back from round 5 to 8.
So, spend enough time right from Round 1.
AGAIN:
- THIS IS LONG TERM STRATEGY GAME, DO NOT GET SCARED IF YOU DO NOT MAKE MONEY ON THE FIRST ROUND.
- R&D IS THE MOST IMPORTANT DECISION TABLE
- COMPANIES NEVER MAKE MONEY ON THE FIRST COUPLE OF YEARS, WILL HAVE GOOD SALES, BUT ONLY SOME PROFIT
- TAKE YOUR FIRST YEARS AS INVESTMENT, AND GAIN GOOD SALES AND PROFIT IN LATER ROUNDS
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AGAIN, YOU CAN USE EXCEL FILE TO CALCULATE FOR ALL 8 ROUNDS
Free Excel file to support calculation for R&D, Marketing, Production for 8 rounds
Free Step by Step Guide for Round 1 (all decisions in R&D, Marketing, Production, Finance)
Free support for Round 1 and 2, email to: mbahelp2002@gmail.com
