Capsim Tips - Top 10 Winning Tips to win all 8 rounds - Part 1

 Capsim Tips - Top 10 Winning Tips to win all 8 rounds - Part 1

Q&A

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1. What strategy can you suggest?

We apply Broad Differentiation strategy. 

Focus on all the five segments to meet diversified demands of customers (business customers). 

For products, we focus on Traditional, Low End and Performance, with 2 products for each segment, and also keep maintain good product in High End and Size. 

For Pricing, we apply good price for high quality, strong promo and sales.

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2. How to set prices for five segments?

Prices are based on: Production cost, Competitors prices and also last round prices.

So, as high as possible to get good contribution margins.

Also, need to lower than competitors to sell better, control market share

And, consider production cost, actually looking at contribution margins is better, because it shows not only production cost, but also other cost, such as admin, sales, promo...

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3. What is the principal strategy for each module? We know is a long term strategy but what implies that for the modules?( R&D, Finance, etc)

WE APPLY BROAD DIFFERENTIATION STRATEGY

R&D:

ADD NEW PRODUCTS (IN THIS HIGH TECH INDUSTRY, NEED NEW PRODUCTS)

MARKETING

Use 1200, then increase to 1400, 1600, then 2000. 

Reduce back to 1400 when reaching customer awareness and accessibility of 100%

PRODUCTION

Add new capacity for new products

Increase Automation

Low end to 10

Traditional to 8

Other products to 6

FINANCE

Use all three sources of investment in early rounds, including stock issue, short and long term loans.

In later rounds, eg. 7-8 can retire stock, pay dividends and pay back long term loans

TQM: 

We use $ 1000 in each item for each round.

TOTAL 4000 WILL GET MAX BENEFIT (FROM THE GUIDES)

EACH ROUND 1000 FOR 4 ROUNDS

HR:   We use  $5000 in recruiting expenses and 80 hrs of training. For early rounds, can use $3000 and 40 hours to save cost.

THIS IS ALSO FROM THE GUIDES

MAX 5000 - MAX 80

FOR LONG TERM BENEFIT

GOOD WORKERS, HIGHER QUALITY OF PRODUCTS

 

4. Production: How much more of our installed capacity can we produce? We always saw that we produced a lot more that the capacity we had?

WE CAN PRODUCE MAX 200% FOR 2 SHIFT, MEANING THAT WORKERS HAVE TO WORK 2 SHIFTS (16 HOURS)

SHOULD USE 150%

 

5. Accounts Receivable: Why did you decide to change the AR from 30 to 46 days? In which round did you change it?

TO GIVE CUSTOMER LONGER TIME TO PAY

SO THEY WILL BUY MORE OR CAN SELL MORE

 

 

6. Age: Have you ever change the Age of the products? where did you set that?

CAN NOT CHANGE AGE DIRECTLY.

ONLY CHANGE IN R&D TABLE

JUST CHANGE PFMN AND SIZE --> Then Age change!

Tips: For Low End Products, they require 7 years old to sell best. 

Therefore, do not have to update every round. Only one time in round 3, and one time in round 7.

Other products require update regularly

 

7. Promo & Sales Budget: How did you decide how much we have to set as promo & sales budget? 

When did you decide to change the amounts of your 1st decision?

INCREASE FROM 1000 TO 1200 - 1400 - 1600 - 2000 AND BACK TO 1400 WHEN REACHING 100% CUSTOMER AWARENESS AND ACCESSIBILITY

Note: 

Round 1-2-3 can use 1.200, then 1.400 and then 1.600 to save cost and get good profit

Round 4 can use 2.000 then from round 5-8 back to 1.400 when reaching 100% customer awareness.

 

8. Revision Date: can you decide the date on which your new product comes out? (Or the simulator just give you the date?) 

On the 1st round, you created a new perfect product for round 4, you decided the date? where did you set that?

SET IN R&D

NEW PRODUCT WILL SELL WELL FROM ROUND 4 AFTER 2-3 ROUNDS OF LAUCHING

Note: for new products, they can sell from next round. Note to add new capacity for new product so we can start production from next round (set new capacity in Production tab) and also have to set automation for new product.

 

9. How do you decide to have loans / issue stocks (how long?)

NEED STRONG INVESTMENTS IN ROUNDS 1-2-3 TO SELL WELL IN LATER ROUNDS

THIS IS LONG TERM STRATEGY GAME

ROUNDS 1-2-3 FOR INVESTMENT

ROUNDS 4-8 WILL LEAD THE GAME.

IF WE DO NOT INVEST EARLY, COMPETITORS STILL DO, AND THEY WILL ACQUIRE MARKET SHARES FROM ROUND 4-8. AT THAT TIME, STARTING INVEST IS TOO LATE.

SO, INVEST IN R&D NEW PRODUCTS EARLY IS THE RIGHT STRATEGY TO WIN THE GAME.

 

10. Why do you recommend us to increase only 10% in production each round.

IN CASE OF SELLING WELL DO NOT RUN OUT OF STOCK

IT IS NOT GOOD TO STOCK OUT

BECAUSE, IF WE DO NOT SUPPLY, CUSTOMERS WILL BUY FROM COMPETITORS THEN DEMANDS FOR OUR PRODUCTS NEXT ROUND WILL BE REDUCED.

ALSO, IF COMPETITORS CAN SELL MORE, NEXT ROUNDS THEY CAN SELL MORE, AND LOWER PRODUCTION COST, THEN THEY CAN SET LOWER PRICES, IN THAT CASE WE WILL SELL LESS.

THEREFORE, KEEP 5%-10% OF INVENTORY IS BETTER THAN RUNNING OUT OF STOCK

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

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