capsim cheat sheet draft. Western Governors University MBA HEALTH C216 .

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1. Avoid loans at all costs during the initail rounds. These will weigh your company down in later rounds and destroy your future margins. 2. Release products in low tech segments such that they for... m a horizontal perceptual map of high tech and low tech products. Ideally, one product should be launched before year 3 and 2 after that. 3. Low tech products launched initially would move to low tech segments. Keep revising old products to hold market share 4. Production automation - AVOID!!! this is a waste of money because the simulation does not allow for a long enough time period to offset the costs of further automation 5. Target 75% awareness, this will provide you with the greatest cost to awareness ratio, and the additional awareness will not benefit you adequately. Round when the product is launched - 900 Subsequent rounds till awareness reaches 75% - 1200 After awareness reaches 75% - 1800 to maintain dominance Target 75% accessibility and keep spending on sales till you reach this stage. The spending could follow this Round when the product is launched - 3000 Subsequent rounds till awareness reaches 75% - 3500 After acessibility reaches 75% -3000 to maintain 75% 6. 1500-1800 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 * 2 (this is the secret to winning because you cannot underrate the amount of product that you will sell. It will hinder you in early rounds and you will not be able to catch up) 8. Give dividends immediately, this will keep shareholders happy and provide you a positive boost to your initial stock prices which will allow it to be sold for a high price. 9. Whenever cash available, give additional dividends. These are key to getting a high score on this simulation. 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+ READ THE TEAM MEMBER GUIDE I cannot stress the above more. Whether you follow my strategies or not, you NEED to read the team member guide because it provides you with invaluable information. A lot of capsim can be applied to real life business. Since you WILL need to learn those things, you may as well start now. 1) R&D R&D is the backbone of your company. Whatever strategies you use, you need to R&D something every year. If you're ever not R&Ding something, then you're doing something wrong. First of all, do NOT R&D your products according to the Capstone Courier. Why? Because Capstone Courier gives you the data for LAST YEAR's products. If you follow it, then your products are outdated. You should R&D the products to its ideal spots 1 or 2 year in advance, according to several factors. Invent new products in the least competitive segment. This is self-explanatory. At Round 1 or 2 you may not know which segment is the least competitive, but by Round 3 you should be able to with the help of Courier. The more products you have earlier, the greater advantage you'll be in in the future. However do NOT invent all 4 additional products in Round 1 because you won't have the budget for it. 2) Marketing This section is probable the most important aspect of Capsim. It deals with your pricing, marketing & sales budget as well as your sales forecast, which will be shown in Proforma Income Statement. Pricing: Price your Low End at the bottom third of the price range, your Traditional at middle range and your High End/Size/Performance at max price. Try not to get into price war early because it'll kill both you and your competitors. Lose-lose. Some of you may wonder why not simply set the lowest price for Low End, considering price is 47% of the Buying Criteria. During my simulations, I found out it is not decision. For example the price range is $10 - 20. My competitors set price at $10 while I set mine at $11.50. He sells 2800 units while I sell 2600 units. Yes his sales is bigger, but I rake a lot more profits than him. It is simply not worth to set the lowest price while getting only a bit more sales. This also works in reverse on why I said set max price for High End/Size/Performance products. By lowering the price you can sell a bit more, but your overall profit will go down. Promo & Sales Budget: Promo budget raises your product's awareness while Sales budget increase your product's segment accessibility. Noticed the difference? Promo budget is according to EACH product while Sales budget for each SEGMENT. If you've 4 products in Traditional segment, you may need to spend $1400 Promo budget for each product, but you can set $1000 Sales budget for a combined $4000 Sales budget in Traditional Segment. There is a diminishing amount for both budgets. Found out more in your Team Member Guide. I purposely do not include the figures to force you to read (you'll thank me). If Advanced Marketing module is activated, do not worry because it is essentially the same thing. Refer to the end of this entry for more info. Sales Forecast: NEVER EVER USE the computer prediction for your sales forecast, except may be in Round 1 but even then it is not reliable. How do you do a sales forecast then? This depends on so many variables that it's impossible for me to provide you with a magic formula. However there is one simple way to set a benchmark. Here's how: [Show More]

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