© 2012 capsim management simulations, inc. unforgettable business learning introduction ® an...
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© 2012 Capsim Management Simulations, Inc.Unforgettable Business Learning Unforgettable Business Learning
IntroductionAn overview of the Capstone® Simulation
Webster UniversityDr. Bert Turner
www.capsim.com/webster/
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Why Simulate?
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Risk-FreeView
Alternative Strategies
Enjoyable Compresses Time (1 Round=1Year)
Selectivity vs
Integration
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Objectives of the Capstone Simulation
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Demonstrate effectiveness of multi-
discipline teams working together.
Use strategic thinking. Test your business acumen.
Understand overall interaction and impact of
various parts of a business on one another.
Grow the awareness of competition.
Take away practical skills in business management.
Get your first ten combat missions behind you!
Industry Overview
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The Story: Background on Your Company
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Started as a single corporation named Sensors, Inc.
Sold sensors as main product
Corporation was shut down by FTC due to monopolistic operations
FTC required Sensors Inc. to be broken up into separate companies:
Andrews Baldwin
Chester
Erie
Digby
Ferris
Your job: Operate one of the companies and make it successful.
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The Start
When Sensor Inc. breaks up, each of the new companies starts off with the following scenario:
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$100 Million in Sales
5 Product Lines
5 Market Segments
Closed Marketplace
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Sensors: An Overview of Your Company’s Product
Customers (OEMs) need sensors for their products to function.
Used for diverse applications
• Low End—like electronic door sensors• Traditional—like traffic sensors• High End—like facial recognition• Performance—like in spacecraft• Size—like in cell phones
Five clear market segments
Customer demands vary between the five segments.
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The Marketplace: A Look Into The Segments
Round 1 Consumer Segment Expectations
Round 8 Consumer Segment Expectations
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Perceptual map used to track changing
consumer demands in size and performance
Each year, consumers will expect faster (higher performance) and smaller products (lower size)• This causes the segment
circles to drift to the lower right constantly
Market segments continue to diverge
over time
*Note the drift towards the lower
right(expectations of faster and smaller
products). Also note the divergence of the
segments.
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Low End Consumer Characteristics
What the customers say
•Ideal Age: 7 years
•Ideal MTBF: 12000-17000
•Prefer less cutting edge
products (Bigger Size & Low
Performance)
•Price sensitive. Prefer price to be lowest possible.
Price Positioning
AgeReliability
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I want to spend as
little money as possible!
I want them to have been around for a
while…no beta testing!
They have to be
moderately reliable…but not enough to drive up the price!
The technology
doesn’t have to be cutting
edge.
Low End—like electronic door sensors
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Traditional Consumer Characteristics
• Ideal Age: 2 years
• Ideal MTBF: 14000-19000
• “Average” Performance
and Size
•Price sensitive, but willing to spend more than Low End consumers
Price Positioning
AgeReliability
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I want these sensors to be moderately
cheap.
I want them to have been around for a
while…no beta testing!
They have to be
moderately reliable…but not enough to drive up the price!
I want good sensors… not cutting edge, but reliable.
What the customers say
Traditional—like traffic sensors
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High End Consumer Characteristics
•Ideal Age: 0 years
•Ideal MTBF: 20000-25000
•High Performance
and Small Size
•Not price sensitive, willing to pay highest prices.
Price Positioning
AgeReliability
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What the customers say
Price is not an issue. I want the
best sensors in the
market!
I want the newest
sensors you have!
Only the most cutting
edge products will satisfy me!
We need the total package.
High performance and miniaturized for
our products.
High End—like facial recognition
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Performance Consumer Characteristics
•Ideal Age: 1 year
•Ideal MTBF: 22000-27000
•Highest Performance
and Less important Size
•Not price sensitive, willing to pay moderately high prices
Price Positioning
AgeReliability
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What the customers say
I am willing to pay for
what I need.
I want them to have been around for a
while…no beta testing!
Reliability and Performance
are very important
and must be high.
I prefer newer
technology!
Performance—like in spacecraft
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Size Consumer Characteristics
•Ideal Age: 1.5 years old
•Ideal MTBF: 16000-21000
•Average Performance
but Maximum Miniaturization
•Not price sensitive, willing to pay moderately high prices
Price Positioning
AgeReliability
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What the customers say
I am willing to pay for
what I need.
I want them to have been around for a
while…no beta testing!
They must be miniature to
fit our technology
I prefer newer
technology!
Size—like in cell phones
Segment Growth
According to a Market Analyst, there will be
continuous growth in the sensor market.
I see the entire market growing at around 14% or 15% per year. The high tech market alone will be growing at 16%.
Your goal: Prepare your company’s products to meet the needs of the growing market.
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The Decision Making Process
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Decision Areas
Coordinate strategy and tactics across the following areas of the company:
Additional Modules
- HR (turned on Round 2)- TQM (turned on Round
4)
- Labor Negotiations (Off)- Advanced Marketing
(Off)
R&D Marketing
Production Finance
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R&D
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Determine the specifications of the products to meet customer expectations
Build the quality and reliability (MTBF) of the products
Ensure the perceived age of the product meets customer demands
Invent new products to address the changing marketplace and take advantage of new opportunities
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Marketing
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Set the price for each product
Build customer awareness through investing in promotion
Establish a sales force and distribution channels
Set the sales forecast for each product
Set Credit Policies(A/R and A/P)
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Production
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Purchase machinery to automate production facilities
Buy or sell capacity on product lines
Set production schedule
Manage the majority of the company’s fixed assets
Staff your facility with workers
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Finance
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Acquire capital to fund growth and operations• Issue Stock• Short-Term Debt• Issue Long-Term
Bonds
Issue dividends to shareholders
Balance debt portfolio
Manage Proformas
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Proformas: A Look Into the Future
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Proformas use decisions made in the current year
to project company
performance for the next
year
Analyzing them is
critical for company success
The following proformas are available:• Balance Sheet• Income
Statement• Cash Flow
Statement• Financial Ratios
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Scoring Methods
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Success Measures
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Board of Directors Established Success Measures By Which Your Performance Will Be Measured
•Stock Price (25%)•Market Capitalization (25%)•ROE (25%)•Market Share (10%)•Cumulative Profit (10%)•ROS (5%)
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Balanced Scorecard
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• Improving company financial picture in preparation for final debrief
• Point System
• Gauges company performance based on four perspectives•The Customer• Internal Business Process• Innovation and Learning• Financials
• In the simulation, a Proforma Balanced Scorecard is available to project results for the upcoming year.
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Analyst Report
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Analyst Report
• Evaluates your company in ten categories:• Margins• Profits• Emergency Loans• Working Capital• Market Share• Forecasting • Customer Satisfaction• Productivity• Financial Structure• Wealth Creation
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Things to do each year (each round)
Establish business strategy for your company
May NEVER Change
Analyze Capstone Courier to see industry results
Make tactical decisions across each functional
area (aligned to strategy!)
Upload official decisions and confirm on the
website
Await results of processing the round
Rejoice in your superior business acumen
(or bring out the crying towel)
Begin the process again by confirming alignment of your results with your
company’s strategic goal.
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Capsim Management Simulations Inc.55 E. Monroe, Suite 3210
Chicago, IL 60603
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Chicago, IL 60603
Good Luck and Enjoy!
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