The Nature of CAPSIM

Report
Overview
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You are now MBA’s
You are the experts.
You have had the training.
Top 5% of Educated People in the World
You make the rules.
If you don’t like the rules, change them.
You write the books.
If you don’t like what a book says, change it.
You teach the classes.
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Simulation
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Used to Learn Real Life
 Airline Pilots
 Astronauts
 Businesses
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Games
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Fun
Entertainment
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Not a Class To Teach Skills
Class to Apply What You Already Know
BUSN 6120 Economics
 MRKT 5000 Marketing
 BUSN 6110 Production and Operations
 FINC 5000 & 5880 Finance
 HRMG 5000 Human Resources
 Others
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Sensors
Identical Competitors
Monopoly Breakup
Everyone Begins the Same
Oligopoly Market Structure
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The Team Member Guide is your definitive
resource for what happens in the simulation.
Know it well.
Everything in it is important
It is overwhelming at first.
It will get better as we go.
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Everyone must do the rehearsal tutorial before
we start the simulation.
Where you get familiar with how the simultion
works.
It is a tutorial on how to use the simulation.
It is not a practice round.
It is not a competition round.
It is not the COMP-XM exam.
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Important step
Don’t leave it out.
Tells about
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Current Market Conditions
How the Industry Will Evolve
Operational Planning
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The Industry Conditions Report (One Time)
The Capstone Courier (The Newspaper)
Rubric Debrief Report (Understanding
Mistakes)
Many Others
Like a Real World Business
Information is Everywhere.
 You must find what is useful.
 No one is going to tell you where to look.
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Use the Online Spreadsheet
Let One Student do all the Updating
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Research and Development
Marketing
Production
Finance
Other
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Human Resources (later in simulation)
Information Technology (Spreadsheets)
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Designs Product Lines
Invents New Products
Revises Current Products
Pay attention to Lead Times
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Sets Prices
Promotes Your Product
Very Important
 Spend a Lot of Money on Promotion
 Creates Customer AWARENESS
 One of the things beginners get wrong.
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Sales Forecast
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How Many Units You Will Produce
Determines Production Capacity
Discontinues Lines
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Sells all inventory at half price
Sets Automation Levels
Labor Costs go down as automation increases
 Takes Time
 Possible to Over-automate
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Buys and Sells Production Lines
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Raises Money to Run the Business
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Bank Notes
Bond
 Issues
 Retirements
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Stock Issues
 Dividends
 Buy Back Stock
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The HR Module Begins in Round 2
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Allows you to manage the people you have.
The TQM Module Begins in Round 3
TQM is your Friend
 Use it to Lower Your Costs
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Rehearsal Tutorial
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Practice Rounds
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8 Rounds, Team Play
Competition Rounds
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Individual
8 Rounds, Team Play
Comp-XM (Exam Rounds)
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5 Rounds, Individual
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Each Round
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Each Team Uploads their Round Info
Spin the Round
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Represents One Year
Takes 1-2 Hours to Complete
Happens for all teams at the same time
Analyze The Results
Upload the Next Round
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Published Once at the Beginning
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Price
Age
MTBF
Positioning
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Size
Performance
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Deals with Positioning
See Page 4 of Team Member Guide
Drift (Industry Conditions Report)
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Fine Cut
Rough Cut
Outside
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Extremely Important
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Understand Your Customer Survey Score
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See Section 3.2 of the Team Member Guide
Product Demand is Based on the CSS.
Build a Spreadsheet!!
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Broad Cost Leader
Broad Differentiator
Niche Cost Leader (Low Tech)
Niche Differentiator (High Tech)
Cost Leader with Product Life Cycle Focus
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High end, traditional, and low end focus
Differentiator with Product Life Cycle Focus
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High end, traditional, and low end focus
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Borrowing money at high interest rates because
you didn’t have enough cash to run the
business.
Remember: Retained Earnings is not a cash
account.
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Stock outs are bad
Understand them and avoid them when
possible
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Marketing – Conservative
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In case sales don’t materialize
Production – Aggressive
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Because Finished Goods Inventory is a Liquid Asset
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Awareness – Customers are Aware of Your
Product
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Accessibility – Customers Can Find Your
Product
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Promotion Budget
Sales Budget
Spend Lots of Money on Both of These
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Your competitors are Good
The Computer Teams are Good
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Don’t Make Mistakes Early
You can easily get behind and go bankrupt.
There is NO RESET BUTTON.
You live with the consequences of your
decisions.
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See the Six Basic Strategies
Pick One
Stick with it.
If it doesn’t Work, Change it.
There are Other Strategies
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See the Strategic Planning Process Presentation
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Companies pay employees lots of money to
spend full time dealing with these issues
If you run out of things to do in this 1-2 hour
exercise, you are doing something wrong.
There is always more you can do.

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