Business strategy simulation: task 2.2

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Individually, write a report on the performance of your group during the Capsim® Capstone simulation that includes the following information:

  1. Briefly explain the main decisions and strategies that you have taken in each department (research, production, marketing, finance).
  2. Explain how the different departments are interconnected in the game and what are the relationships between them in the simulation. Was there any miscommunication, some issues of coordination, one view overcoming the rest of the opinions?
  3. Use the reports available from Capsim® Capstone (The Courier, for example) to explain your results and compare them to those of your competitors. What significant differences have you identified?
  4. Provide examples of what you consider where wrong /right decisions and explain how you corrected this errors in subsequent rounds.
  5. Enumerate the learning points that you have taken from the simulation in terms of developing your transferable skills, all of which are in promoting graduate employability, including:
    a. Collaboration;
    b. Communications;
    c. Problem Solving;
    d. Planning;
    e. Time Management;
    f. Negotiation and Conflict Resolution; and g. Leadership

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  • C141422
    • Annual Report
      • Erie
        • Balance Sheet
        • Income Statement

Your instructor can customize the simulation scenario. The information below is specific to your industry.

Printable and Downloadable PDF Version of This Report

The sensors your company manufactures are incorporated into the products your customers sell.
Your customers fall into five groups which are called market segments. A market segment is a group
of customers who have similar needs. The segments are named for the customer’s primary
requirements and are called:

Drift Rates

Each year, the segments drift the length of the hypotenuse of the triangle formed by customers’
desire for smaller and faster products.

Table 1 Segment Circle Drift Rates: Every year, customers
demand increased performance (Pfmn) and decreased size.

1 of 8

Capstone® Industry Conditions Report For C141422

demand increased performance (Pfmn) and decreased size.
Note that the drift rates vary for each segment.

Pfmn Size
Traditional +0.7 -0.7
Low End +0.5 -0.5
High End +0.9 -0.9

Performance +1.0 -0.7
Size +0.7 -1.0

Segment Centers

Table 2 Segment Centers at the End of Each Round: As shown in the Perceptual
Map Form above, size is on the vertical axis and performance (Pfmn) is on the
horizontal axis.

Traditional Low End High End Performance Size

Round Pfmn Size Pfmn Size Pfmn Size Pfmn Size Pfmn Size
0 5.0 15.0 2.5 17.5 7.5 12.5 8.0 17.0 3.0 12.0
1 5.7 14.3 3.0 17.0 8.4 11.6 9.0 16.3 3.7 11.0
2 6.4 13.6 3.5 16.5 9.3 10.7 10.0 15.6 4.4 10.0
3 7.1 12.9 4.0 16.0 10.2 9.8 11.0 14.9 5.1 9.0
4 7.8 12.2 4.5 15.5 11.1 8.9 12.0 14.2 5.8 8.0
5 8.5 11.5 5.0 15.0 12.0 8.0 13.0 13.5 6.5 7.0
6 9.2 10.8 5.5 14.5 12.9 7.1 14.0 12.8 7.2 6.0
7 9.9 10.1 6.0 14.0 13.8 6.2 15.0 12.1 7.9 5.0
8 10.6 9.4 6.5 13.5 14.7 5.3 16.0 11.4 8.6 4.0

The information in Table 2 reflects the segment centers at the end of the round. Therefore, the
Round 0 positions can be seen as the Round 1 starting positions, Round 2 positions can be seen as
the Round 3 starting position, etc. Each month during the simulation year, the segment drifts 1/12th
of the distance from the starting position to the ending position.

Ideal Spots

Table 3 Ideal Spot Offsets:
Customers prefer products
located this distance from

2 of 8

Capstone® Industry Conditions Report For C141422

the center of the segment circle.

Pfmn Size

Traditional 0.0 0.0
Low End -0.8 +0.8
High End +1.4 -1.4

Performance +1.4 -1.0
Size +1.0 -1.4

The information in Table 3 shows the Ideal Spot “offsets” or distances from the segment center. The
ideal spot is that point where, all other things being equal, demand is highest. It is different from the
segment center. Why are some ideal spots ahead of the segment centers? The segments are moving.
From a customer’s perspective, if they buy a product at the ideal spot, it will still be a cutting edge
product when it wears out.

2 Segment Sizes and Growth Rates

At the beginning of the simulation, Traditional and Low End sell more units than the high
technology segments, High End, Performance and Size. Page 10 of the Capstone Courier, the
Market Segment Report, displays total industry sales.

Each market segment grows at a different rate. Table 4 lists the beginning segment growth rates for
your industry. The growth rates might change from year to year. Check the Segment Analysis
reports in the Capstone Courier each round for the upcoming year’s growth rates.

Table 4 Beginning Segment Growth Rates

Traditional 9.2%
Low End 11.7%
High End 16.2%

Performance 19.8%
Size 18.3%

3 Buying Criteria By Segment

These are your products and the primary segments they sell into at the beginning of the simulation.
These can change according to your decisions and as the simulation evolves.

Eat Traditional
Ebb Low End
Echo High End
Edge Performance
Egg Size

3 of 8

Capstone® Industry Conditions Report For C141422

The buying criteria for each segment, in order of importance, are displayed below. Positioning and
Age score information also display. Passing your cursor over an image will enlarge it. See Chapter 3
of the Team Member Guide for explanations of Positioning, Age, Price and MTBF scores.

3.1 Traditional Segment Buying Criteria (Round 0)

Traditional customers seek proven products at a modest price.

Age, 2 years – importance: 47%
Price, $20.00-$30.00 – importance: 23%
Ideal Position, performance 5.0 size 15.0 – importance: 21%
MTBF, 14,000-19,000 – importance: 9%

Industry Conditions Figure 3.1: Traditional Buying Criteria

Traditional customers give higher position scores to sensors located in the center of the
segment circle.

Traditional customers give higher scores to sensors in the 2 year range.

3.2 Low End Segment Buying Criteria (Round 0)

Low End customers seek low prices and well proven products.

Price, $15.00-$25.00 – importance: 53%

4 of 8

Capstone® Industry Conditions Report For C141422

Age, 7 years – importance: 24%
Ideal Position, performance 1.7 size 18.3 – importance: 16%
MTBF, 12,000-17,000 – importance: 7%

Industry Conditions Figure 3.2 Low End Buying Criteria

Low End customers prefer inexpensive sensors with slower performance and larger size.

Low End customers give higher scores to sensors in the 7 year range.

3.3 High End Segment Buying Criteria (Round 0)

High End customers seek cutting-edge technology in size/performance and new designs.

Ideal Position, performance 8.9 size 11.1 – importance: 43%
Age, 0 years – importance: 29%
MTBF, 20,000-25,000 – importance: 19%
Price, $30.00-$40.00 – importance: 9%

Industry Conditions Figure 3.3 High End Buying Criteria

5 of 8

Capstone® Industry Conditions Report For C141422

High End customers demand cutting edge sensors with high performance and small size.

High End customers give higher scores to newer sensors.

3.4 Performance Segment Buying Criteria (Round 0)

Performance customers seek high reliability and cutting edge performance technology.

MTBF, 22,000-27,000 – importance: 43%
Ideal Position, performance 9.4 size 16.0 – importance: 29%
Price, $25.00-$35.00 – importance: 19%
Age, 1 year – importance: 9%

Industry Conditions Figure 3.4 Performance Buying Criteria

6 of 8

Capstone® Industry Conditions Report For C141422

Performance customers emphasize performance over size.

Performance customers want sensors in the 1 year range.

3.5 Size Segment Buying Criteria (Round 0)

Size customers seek cutting edge size technology and younger designs.

Ideal Position, performance 4.0 size 10.6 – importance: 43%
Age, 1.5 years – importance: 29%
MTBF, 16,000-21,000 – importance: 19%
Price, $25.00-$35.00 – importance: 9%

Industry Conditions Figure 3.5 Size Buying Criteria

Size customers emphasize size over performance.

7 of 8

Capstone® Industry Conditions Report For C141422

Size customers prefer sensors in the 1.5 year range.

4 Projected Interest Rates

Prime Interest Rate Round 1: 7.0%

8 of 8

Capstone® Industry Conditions Report For C141422

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