Capsim Winning Strategies and Simulation Tips
Before starting the 2022 simulation game, there are a couple of Capsim Winning Strategies and Simulation Tips you need to have in mind. You need to ensure the capacity is enough for production in the high-tech and low-tech segments. This is true, especially with new products. Automation is also key for new products. This will be possible if funds are available. You also need to be aware changing product size or performance will reposition it on the perceptual map. Not repositioning a product has the effect of moving the product to the low-end market segment. The instruction booklet is key hence you should be thorough in reading it as this will give you a better comprehension of the game.
Strategy is Key! For example, Niche differentiation (high tech) includes high end performance and size. Here, This market strategy gives your product a higher standard to lead the industry in quality and value. On the other hand, the broad cost leader strategy targets both high-tech and low-tech market segments. It seeks to minimize R&D costs. The niche cost leader as opposed to the broad cost leader strategy targets price sensitive market sectors. Here you focus on the low-tech segment and your product should be the one with a low price. Broad differentiator concentrates on both segments, high-tech and low-tech with a focus on marketing strategy and staying current with technologies.
If you are being assessed in any specific area, you need to have a good understanding of that area. Carefully look at the strategy, which segment you are focusing on, and what impact those numbers will have in Research and development, Marketing, Production, and Finance.
When developing a strategy, you should have an end in mind. This means you should have a clear goal of where you want to be after eight rounds when you are running 8 rounds. Failure to plan is planning to fail. I can liken this to superball teams. Each team starts with a goal of winning the prestigious trophy and then follows a developed path to achieve that under the guidance of a coach. The coach is you here.
Whichever strategy you pick, stick with it. It can be hard to mix different strategies. A common tactic most people use to achieve a great score, They issue as much common stock or borrow as much debt as they can in the early rounds. High automation is another great strategy no matter what strategy you choose. In Choosing a low-cost route, which is usually the safest, invest heavily in automation in order to save as, much as possible and maintain a positive cash flow.
For a winning strategy, you also need to know the cause and effect of various moves. A promotional budget increases awareness whereas a Sales budget increases accessibility. A product’s awareness percentage reflects the number of customers who know about the product. For example, an awareness of 50% indicates half of the potential customers know it exists. You should also be aware from one year to the next, a third of those who knew about a product forget about it. Your goal hence should be to reach 100% awareness in the shortest period of time.
Product accessibility is also very important and the accessibility percentage indicates the number of customers who can easily interact with your company via salespeople, customer support, delivery, etc. Like awareness, if your sales budgets drop to zero, you lose one-third of your accessibility each year. Unlike awareness, accessibility applies to the segment, not the product. If your product exits a segment, it leaves the old accessibility behind. When it enters a different segment, it gets that segment’s accessibility. You should therefore not be too frugal when it comes to the sales budget. It drives accessibility, which governs everything during and after the sale.
Products
Next is the products. Here, Winning simulation tip is putting multiple products in a market segment, the more you can spread out your marketing and sales cost the better. You need at least two products in any segment that you seriously want to compete in.
Sales Forecasting
Sales Forecasting is also important as this will be used by the production department to set production levels for the year. It also informs the finance department to calculate the Proformas or Projected results. This will ensure you ace it and come out on top. A formula for forecasting is using last year’s actual sales and multiplying by 1plus the segment’s current round growth rate. Having an accurate sales forecast is a great capsim strategy.
Production
For production as I earlier mentioned. High automation is a great strategy no matter what strategy you choose. As automation levels increase, the number of labor hours required to produce each unit falls. This saves costs a great deal and reduces the chances that you might apply for an emergency loan. However Keep in mind, The higher your automation level, the longer it takes your products to be revised by Research & Development. Due to the massive costs of tailoring product development to robotic manufacturing, at an automation level of 10.0, any changes to your products will take at least one year to complete. With this in mind, A winning tip: Keeping your automation at 10%.
Finance
When it comes to Finance, I reiterate that choose to issue as much common stock or borrow as much debt as you can in the early rounds. Avoid emergency loans like plague as these carry interest rates that are extremely high. Despite the temptations of a quick fix to keep your company afloat when you run out of money during the year, Keep away from emergency loans! This is the best capsim strategy. Use cash forecasting to decrease the need for emergency loans. In short, have prudent cash flow policies and you will never fall into this rabbit hole.
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- Marketing Help Sheet. (n.d) Capsim. Retrieved from https://ww3.capsim.com/modules/GIA/files/1_0/0/CapsimCore/EN/PDF/UserGuide.pdf
- Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61–78 Production Help Sheet. (n.d.). Capsim. Retrieved from https://ww3.capsim.com/modules/GIA/files/1_0/0/CapsimCore/EN/PDF/UserGuide.pdf
- Research & Development Help Sheet. (n.d.). Capsim. Retrieved from https://ww3.capsim.com/modules/GIA/files/1_0/0/CapsimGlobal/EN/PDF/R&DHelpSheet.pdf
- Singh, V. (2015). Significance of Working Capital Turnover Ratio: A Case Study of BHEL and Crompton Greaves. International Journal of Management (IJM), 6(3), 1-7.
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