Thursday, February 18, 2010

How to Win at Capsim in BGSU

My team Ferris won the online strategy simulation game.
The game was kind of lame and more importantly about learning. A lot of the times in class, we have discussed how strategic management sounds like all abstract and gaseous. In this game, I could not only apply my lessons from the strategy course but also could see the results in the game’s simulated markets. Wow! Especially when I could define my winning strategies!
For those of you who are looking for strategies that I applied in the game specifically under professor Rohrs at BGSU.

The following are important strategic keystones that provided my team with a dominating win in the fall 2009 simulation.

1. Avoid loans at all costs during the initail rounds. These will weigh your company down in later rounds and destroy your future margins.

2. Release products in low tech segments such that they form a horizontal perceptual map  of high tech and low tech products. Ideally, one product should be launched before year 3 and 2 after that.

3. Low tech products launched initially would  move to low tech segments. Keep revising old products to hold market share

4. Production automation - AVOID!!! this is a waste of money because the simulation does not allow for a long enough time period to offset the costs of further automation

5. Target 75% awareness, this will provide you with the greatest cost to awareness ratio, and the additional awareness will not benefit you adequately.
Round when the product is launched - 900
Subsequent rounds till awareness reaches 75% - 1200
After awareness reaches 75% - 1800 to maintain dominance
Target 75% accessibility and keep spending on sales till you reach this stage. The spending could follow this
Round when the product is launched - 3000
Subsequent rounds till awareness reaches 75% - 3500
After acessibility reaches 75% -3000 to maintain 75%
6. 1500-1800  is the maximum market share for a product in a competitive market.

7. Sales forecast can be determined by taking the total of potentials for each segment of your product * 2 (this is the secret to winning because you cannot underrate the amount of product that you will sell. It will hinder you in early rounds and you will not be able to catch up)

8. Give dividends immediately, this will keep shareholders happy and provide you a positive boost to your initial stock prices which will allow it to be sold for a high price.

9. Whenever cash available, give additional dividends. These are key to getting a high score on this simulation.

10. At each round, keep an eye on Balanced score card proforma. Your target in each round can be

Rounds 1-3 : 40+

Rounds 4-6: 70+

Rounds 7-8: 85+