Capsim Guide 2021 - Free Winning Guide and Tips
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
Or email to: mbahelp2002@gmail.com to get Free support for creating excel file.
Free Personal Support for Rounds 1-2
Email: mbahelp2002@gmail.com
R&D
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.
MARKETING
PRICE
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
Note:
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.
FORECASTING
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
Note:
- 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
- Inventory
Can multiple each by 10-12 % to get some reservation to avoid stock out.
PRODUCTION
PRODUCTION SCHEDULE
((Units Sales Forecast) * (1.2) – Inventory on Hand))We want to have cushion of inventory in case we sell more units than we forecast
AUTOMATION RATING
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
Note:
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)
WORKFORCE COMPLEMENT
Always at 100%
BUY/SELL CAPACITY
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
Note:
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
HUMAN RESOURCES
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
FINANCE
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.
TQM
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
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
Free Personal Support for Rounds 1-2
Email: mbahelp2002@gmail.com
21. For Finance, how much should the projected cash at least be?
Use max three sources of investment in round 1-2-3
Use max short and long term loans in round 4-5
Use max long term in round 6
Round 7-8 will retire stocks and long term loans
22. Quick question, about the Issue Stock, recommended that start to retire stock since the company has "enough money". Is this something you would recommend? I see that you issued stock (I would assume, in an effort to have more cash available)
It is good to retire stocks, but only from round 7-8 of this game. When having very high sales and cash in hand.
If you do now, cash will be shortage when competitors reduce prices to compete.
So, again, do that in round 7 and 8 to increase EPS (earning per share)
24. Can we change the MTBF of Low End to 12000 and of the Traditional to 14000 (also in the new product)?
If we apply MTBF 12000 (<14000) for Low end
14000 (<17000) for Traditional
Will sell much less (because competitors new often use 17000 and 14000)
So, keep 17000 and 14000 (a bit higher cost, but sell much better)
25. Is it possible to get a brief summary of the strategies plan ? because I need to explain this decision. the strategy (cost leader, differentiator etc) Furthermore, how do you come up with the forecasting, production and financing numbers?
- Apply broad differentiation strategy with 8 products in 5 segments, focus more on Low End, Traditional and Performance, and keep good market share in High End and Size
- Calculate sales forecast = last round sold x segment growth rate (check courier report)
- Calculate production = sales forecast - inventory then x 110%
26. What strategy we are doing?
USE BROAD DIFFERENTIATION STRATEGY
USE 8 PRODUCT IN 5 SEGMENTS
LOW END, TRADITIONAL AND PERFORMANCE WILL HAVE 2 PRODUCTS TO CONTROL THE SEGMENT
HIGH END AND SIZE 1 PRODUCT, KEEP GOOD MARKET SHARE
27. Why we add 10% to production?
2 REASONS
- R&D BETTER NOW
- BETTER INVENTORY THAN STOCK OUT
- ALSO GOOD PRICE AND PROMO, SALES BUDGET
28. When is the best time to sell and buy capacity or how can you calculate it?
150% CAPACITY IS OPTIMAL
SELL THE SURPLUS
SALES FORECAST X 110%
AGAIN, KEEP SOME INVENTORY IS BETTER THAN STOCK OUT (COMPETITORS WILL SELL)
29. Why we have good sales in round 1-2 but still low net profit?
AGAIN, ROUND 1-2-3 (AND 4 IN THIS CASE) FOR INVESTMENT, R&D, PROMO AND SALES
WILL HAVE GOOD SALES BUT LOW NET PROFIT
BUT NEED INVESTMENT FOR LATER ROUNDS
ROUNDS 5-6-7-8 WILL LEAD THE GAME WHEN 8 PRODUCTS SELL WELL, BOTH HIGH SALES AND PROFIT
30. Changes in strategy (2019):
- We apply broad differentiation strategy
- High quality for value, good prices, high volume of production and sales
- Therefore, round 1-2-3 need strong investment, good sales but low net profit
- Rounds 4-5 good sales, some profit and all rounds 6-7-8 lead the game with top sales and profit
- For 4 rounds practice, use 5 products, for 8 rounds game, use 8 products and add 3 new products in round 1-2-3 to double sales and profit in from round 4-8
16. Should we adjust R&D every round?
Adjust Pfmn and Size each round
Keep launching date from Jun to Oct to have enough time to sell
Again, need to update product every round (out of date products can not sell)
17. How many contribution margin should we maintain for each product?
Is it ok to maintain 30% for budget product and 40%
Keep top sales and profit can always win the game
Contribution margins depends on each competitive situation.
18. Contribution will increase to 30% 40% from round 4 to 8
Early round 1-2-3 only focus in invest to have good products by R&D, Marketing, promo and sales
Keep update to have good selling products in round 1-2-3
Add new products, they will double sales and profit from round 4
19. How to do promotion? How many percent should awearness and accessbility be respectively?
Just keep 8-10% estimated sales for promo and sales
Or spend 1.000 - 1.200 - 1.400 - 2.000 until reach 100% customer awareness then back to 1.400, can spend 2.000 for one or two products from round 1
20. Finance, what accounting policy should it be? (A/P. A/R)
Keep 30 days in round 1-2-3
Increase AR to 46 days in rounds 4-5-6
Increase AR to 61 days to sell more when leading the game
11. In Production module there is a part for Workforce settings, what is complenent stand for? why do we assign 100% value to it
JUST KEEP IT AS DEFAULT 100%
13. What strategy is the most potential winning strategy?
- R&D is most important
- 2 LOW END, AND 2 budged and 2 performance products will always win from round 5-6-7-8
- Invest in round 1-2-3 and gain winning from round 4
14. Marketing, how to set the price for different products?
Keep price as high as possible to gain good profit margin
Reduce 50 cent from top price each round
15. Should the price of Performance product be as high as possible but not beyond the ceiling price of custome expected?
No
Keep track of prices for each segment, each round
Also keep track of prices from competitors
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