MBA QUIZ AND CASE STUDY GUIDES 2017 - 2020 - 2021
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Guide to Capsim 2020
This is step by step guide to help you avoid the kind of mistakes that makes you lose when you start Capsim and also tips to get you win the game.
Good Luck and Success!
You should do before start the Capsim
1 - Log in and read Industry Condition Report (Top menu, report tab, last row)
2 - Read Courier Report of last round (to get Market overview, Pricing, Production and Competitors analysis)
3 - Prepare an Excel file to calculate R&D, Sales Forecast and Production for each round.
You can download free Excel file here - LINK TO ALL EXCEL FILES
or Download Capsim Capstone Excel file here - LINK 2
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Change MTBF for all our products to the maximum amount we can.
Traditional to 19000 or 17000
Low End to 17000 or 14000 (need 7 years to sell best)
High End to 25000 or 23000
Performance to 27000 (Should be 27000 to sell best)
Size to 21000 or 20000
Modify each product according to the spreadsheet on each segment. You want to increase performance and reduce size as much as you can without the revision date reaching July. (26th of June is the best date to release products)
THE ONLY PRODUCT THAT DOES NOT MOVE, IT’S THE PRODUCT IN LOW END SEGMENT. LEAVE THIS PRODUCT AT ITS ORIGINAL SPECIFICATIONS.
For traditional you want to start your pricing as close as your competition, undercut if possible.
For low end, you have to have the lowest price you can afford without going below 40% in your contribution margin. And without sacrificing demand.
For high end, performance and size segments, place your price the highest possible.
Recommendation for round 1
Traditional at $29.5
Low End at $21 or 20.5
High End at $39.50
Performance and Size at $34.50
(Check Courier Report for each segment, prices and customer preference)
PROMO BUDGET & SALES BUDGET
Do not ever expend more than $2000 on promotion in any product in any give year. (diminish returns start at $2000)
For the first year you want to spend $2000 in Traditional and Low End.
For High End, Performance and Size; spend between $1000 and $1500
Do not ever expend more than $2000 on promotion in any product in any given year. (diminish returns start at $2000)
For the first year you want to spend $1500 in Traditional and Low End.
For high End, Performance and Size; Spend around $1000 - $1500
If you like to get profit from round 1, 2, and 3 you can use 2.000 for Low End, and other 1.200 and then 1.400 and 1.600
From Round 4 use 2.000 for all products.
From the Market Share page in the Capstone Courier, take your last year’s market share and multiple it by the next year demand of each segment.
To calculate Next Year Demand, you take current demand and multiple it by the growth rate
Multiple your Market Share by Next Year’s Demand
- Most simple is to check Courier report, find Production page, find Unit sold and Inventory
- Sales forecast = last round sold units x Segment Growth- Production = Sales forecast
Can multiple each by 10-12 % to get some reservation to avoid stock out.
((Units Sales Forecast) * (1.2) – Inventory on Hand))We want to have cushion of inventory in case we sell more units than we forecast
Traditional, increase its automation by 2 points each round until you reach 8 (or 10)
Low End, you want to reach 10 as soon as possible (first round you can move to 8 or 9, and make sure you have 10 by the 2nd round) Eg. 5.0 to 6.5 then 8.0 then 10.0
High End, increase by 0.5 or 1 point each round, you do not want to go over 6.
Performance, increase by 1 or 1.5 each round, until you reach 7
Size, increase by 0.5 or 1 point each round, until you reach 7
Most simple, increase Low End to 10
Increase Traditional to 8
And increase other 3 products (HE, PE, SZ from round 4, to 4-5-6 in rounds 4-5-6)
Always at 100%
You want to keep 2nd Shift Production % between 20% and 50%
If you have less than 20%; you have to sell capacity
If you more than 50% you have to buy capacity
Use 150% is most effective
Just sell capacity of TR and HE in round 1, will not need so high capacity
Add capacity for LE
Then from round 4, add capacity for HE, PE and SZ when having high sales
After you make you decisions on production, check how much capital investment you have;
If you have capital investment leftover, try to spend it in Automation or Capacity
If you are spending more than you should, try to sell capacity or not invest as much.
I highly recommend that you sell some capacity on the first round so you can finance Automation, sell on the traditional, high end, performance and size products.
NOTE:- Sell capacity of TR and HE in Round 1, to invest in LE and new capacity for new LE2
You want to spend as much as possible in human capital, therefore you want to invest the maximum on recruiting and the maximum of training hours.
Recruiting Spend; $5000
Training Hours; 80 Hours
You want to have at least $10,000 in December Cash Position just to make sure you do not enter an Emergency Loan
We will source money until we reach this $10000 Cash position in the first year in the following order:
Get as much “Issue Stock” as possible
Get as much “Issue Long Term Debt”
Get whatever you need left from “Borrow”
Retire stock it’s for when you have a good cash position and you have some money left over to purchase stock back from the market
Dividends per share it’s for when you have cash leftover in capital investment to give to your shareholder.
Retire Long Term Debt it’s for when you want to pay your debt early (This usually decreases your interests expense)
**NOTE:**THIS IS LONG TERM STRATEGY GAME, WITH 8 ROUNDS
ROUNDS 1-2-3 FOR INVESTMENT, NEW PRODUCT DEVELOPMENT, R&D, PROMO AND SALES, PRODUCTION EXPANSION... THEREFORE, WILL NEED STRONG INVESTMENT, AND WILL HAVE GOOD SALES BUT LOW NET PROFIT
ROUNDS 1-2-3 USE ALL THREE SOURCES OF INVESTMENT, STOCK ISSUE, SHORT TERM, AND LONG TERM LOANS
ROUNDS 4-5-6-7-8 WILL HAVE BOTH TOP SALES AND PROFIT.
When TQM Starts, you want to spend $1500 on the first round, then $1500 on the second round, and then finally $1000 on the third round.This expenditure would be for every single aspect in TQM
Finance its very tricky if you are focusing in Maximizing your scorecard score, these recommendations are just for your first round.Most simple, round 1-2-3 use max stock issue, short term and long term loans for investment
Rounds 4-5-6 use stock issue and long term loans
Rounds 7-8 can retire stocks, pay dividends and retire long term loans
Important: IF YOU DO NOT MAKE MONEY ON THE FIRST ROUND, IT IS NORMAL. COMPANIES NEVER MAKE MONEY ON THE FIRST COUPLE OF YEARS, TAKE YOUR FIRST YEARS AS INVESTMENT AND LAYING DOWN YOUR STRATEGY. ROUNDS 1-2-3 FOR INVESTMENT, IN LATER ROUNDS 4-8, WILL LEAD THE GAME WITH TOP SALES AND PROFIT
Strategy Last Updated on: JUNE 2021
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