Capsim guide 2022 - Free Winning Guide and Tips to win 8 Rounds
Step by Step for each round to win all 8 roundsWin with top sales and profit, BSC 800-960/1000Free Capsim Winning Guide and Tips for MBA, updated 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
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Free support for Rounds 1 and 2You can gain a lot of knowledge and skills from this business simulation.
Of course, this guide and tips can help to remove all this the stress, anxiety, sleep deprivation, and social isolation due to this business simulation.
Save several weeks or a month of research by just 8 hours reading this guide and apply step by step decisions making, for all the 8 roundsIf you are looking for some help with Capsim, this is the Best Free Guide with helpful Capsim tips per round to help you get through this MBA Capsim Capstone course.
Before you begin, remember, this is long term strategy game with 8 rounds.
The general strategy for this game is investing heavily in R&D, Promo and Sales, Production Capacity Expansion, Increase Automation, HR, TQM, using long-term liabilities in the earlier rounds (1-3) and gain top sales and profit all rounds from 4-8. If this is a group assignment, need to consider:
- A team leader to review all decisions
- R&D is the key to win, if there is mistake, need 2-3 rounds to fix, then can not compete with other teams. So, again, R&D is the key.
- Marketing face only 4 decisions: Price, Promo and Sales and most important, Sales Forecast Calculation
- Production face only 3 decisions: Production plan calculation, Production capacity expansion and Automation. (Note that Production depends on Marketing sales forecast)
- HR with only 2 decisions
- TQM with 10 simple decisions
- Finance with 3-5 decisions (do not fear them).
If you have free time, you can read all Financial reports, it is very details.
To win the game, you just need to look at Sales and Profit.
So, do not put too much hope on Finance member, their key job is to get enough funds for 3 first rounds and pay dividends in later rounds.
Capsim Tips Per Capsim Round
Note to reduce prices by $0.50 every year to keep products more competitive.
Make sure to add enough capacity for production for each segment, if not, competitors will sell more, then lose customers.
Key to win is new products: If a new product is invented, invest in capacity, and set automation for new products.
If funds are available, in Production, invest in automation for new invented products.
Changing a product size and or performance, every round based on perceptual map or Courier report
Low end product does not require re-positioning
Spend an hour to read the instructions booklet to get a better understanding of the game. It is simple but useful knowledge.
Research and Development (R&D) Decisions Capsim Tips Round 1
Invented a new product (in Low End segment, to double sales and profit from Round 4 to 8)
Marketing Decisions Capsim Tips Round 1
Paid for accessibility (1200-1400, Low End 2000)
Paid for awareness (1200-1400, Low End 2000)
Production Decisions Capsim Tips Round 1
Purchased automation for new product and existing products.
Purchased capacity for new product invented and existing products.
Sell surplus capacity for Traditional (-600)
Sell surplus capacity for High End (-300)
Add new capacity for new R&D product (600, automation 5)
Increase automation for Traditional to 5 and Low End to 6.5
Finance Decisions Capsim Tips Round 1
Issued stocks (MAX)
Issued bonds (MAX)
Changed Accounts Receivables due date to 90 days or 46 days
Changed Accounts Payable payment date to 30 days
Sample strategy for Round 1
Research and Development (R&D) Decisions Capsim Tips Round 2
Repositioned segments: traditional, high-end, performance and size.
Marketing Decisions Capsim Tips Round 2
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Tips Round 2
Purchased more automation.
Purchased more capacity.
Finance Decisions Capsim Tips Round 2
Issued stocks.
Issued bonds.
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Tips Round 2
Recruiting costs: $5,000.
Training: 80 hours.
Negotiated new labor terms.
Research and Development (R&D) Decisions Capsim Round 3
Repositioned segments: high-end, performance, size and high-end (invented product).
Marketing Decisions Capsim Round 3
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Round 3
Purchased more automation.
Purchased more capacity.
Finance Decisions Capsim Round 3
Issued stocks.
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Round 3
Recruiting costs: $5,000.
Training: 80 hours.
Research and Development (R&D) Decisions Capsim Tips Round 4
Repositioned segments: traditional, high-end, performance, size and high-end (invented product).
Marketing Decisions Capsim Tips Round 4
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Tips Round 4
Purchased more automation.
Purchased more capacity.
Finance Decisions Capsim Tips Round 4
Issued stocks.
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Tips Round 4
Recruiting costs: $5,000.
Training: 80 hours.
Total Quantity Management (TQM) Capsim Tips Round 4
Costs: $1,500 per category.
Research and Development (R&D) Decisions Capsim Tips Per Round 5
Repositioned all segments.
Marketing Decisions Capsim Tips Per Round 5
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Tips Per Round 5
Purchased more automation.
Finance Decisions CapsimTips Per Round 5
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Tips Per Round 5
Recruiting costs: $5,000.
Training: 80 hours.
Total Quantity Management (TQM) Capsim Tips Per Round 5
Costs: $1,500 per category.
Research and Development (R&D) Decisions Capsim Tips Per Round 6
Repositioned segments: traditional, high-end, performance, size and high-end (invented product).
Marketing Decisions Capsim Tips Round 6
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Tips Round 6
Purchased more automation.
Purchased more capacity.
Finance Decisions Capsim Tips Round 6
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Tips Round 6
Recruiting costs: $5,000.
Training: 80 hours.
Total Quantity Management (TQM) Capsim Tips Round 6
Costs: $1,500 per category.
Research and Development (R&D) Decisions Capsim Tips Round 7
Repositioned segments: traditional, high-end, and high-end (invented product).
Marketing Decisions Capsim Tips Round 7
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Tips Round 7
Purchased more capacity.
Finance Decisions Capsim Tips Round 7
Retired stocks.
Retired bonds.
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Tips Round 7
Recruiting costs: $5,000.
Training: 80 hours.
Negotiated new labor terms.
Research and Development (R&D) Decisions Capsim Round 8
Repositioned segments: traditional, high-end, performance, size and high-end (invented product).
Marketing Decisions Capsim Round 8
Paid for accessibility.
Paid for awareness.
Production Decisions Capsim Round 8
No more automation and capacity purchased.
Finance Decisions Capsim Round 8
Retired stocks.
Retired bonds.
Accounts Receivables due date to 90 days (same from the previous round).
Accounts Payables payment date to 30 days (same from the previous round).
Human Resource Decisions Capsim Round 8
Recruiting costs: $5,000.
Training: 80 hours.
FREE PERSONAL SUPPORTFREE WINNING GUIDES AND TIPSFOR ROUND 1 & ROUND
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Email to: winMBAsim@gmail.com
FREE Excel Filefor R&D,Sales forecastand Production
New update 2020
How to win Capsim?
How to increase days of working capital in Capsim?
What’s the best position on the perception map?
How to reposition products in Capsim?
What’s the importance of repositioning products in Capsim?
How to invent products in Capsim?
What effect age revision has on a product?
How to do products drift or age in Capsim?
When should capacity be purchased in Capsim?
What’s the best Capsim automation strategy?
Do you have Capsim cheat sheet to download?
How to increase leverage in Capsim?
How do you calculate Capsim sales forecast?
Do you have to create a Capsim SWOT analysis?
How to pay Bonds due in Capsim?
What are Capsim emergency loans?
How to avoid Capsim emergency loans?
Make it rain in the earlier rounds by investing heavily in product invention, capacity, and automation, because it takes money to make money.
The concept is to increase the amount of current assets and/or to decrease the amount of current liabilities.Days of Working Capital = Working Capital / (Sales/365)Working capital can be improved by:
Being profitable
Issuing stock for cash
Replacing short-term debt with long-term debt
Selling long-term assets for cash
Settling short-term debts for less than the stated amounts
Collecting more of the accounts receivables than was anticipated
Reducing the balance required in the current asset account Allowance for Doubtful Accounts
This section includes Capsim questions based on repositing products in Capsim.
Changing a product size and or performance repositions a product on the perceptual map. In fact, improving a product performance’s and decreasing the size moves the product towards the lower right on the perceptual map.
Products in segments must be repositioned to keep up with the drifts by making them smaller and faster each year. Positioning affects material cost. Therefore, the more advanced the position is the more expensive the cost of materials will be. In addition, repositioning also cuts products age in half.Repositioning cost may include:
Low-end position cost $1.00
High-end position cost $10.00
MTBF 1,000 house add $0.30 to material cost
Improving positioning and reliability and reliability will make a product more appealing to customers, however doing so increases material costs.
Age revision is the age of a product after the product has been updated. This is one way you can manipulate the product cycle of your products in the game. So if you want an older product to look newer then reposition it. However, understand when a product is repositioned on the perceptual map during the year its age will be cut in half. If no repositioning is done the product will age by one year.Generally, you would allow products to age into whatever segment you want to dominate and keep the products in that segment by repositioning the product based on what the customers in that product segment want.For example, if your strategy entails dominating the low-end segment then you would just allow the products in the other segments to drift to the low-end segment. Plus you would invent products in the earlier rounds to replace these low-end products if your intention is minimizing Research and Development expense.Remember, once low-end products drift out of the dashed circle customers will no longer buy them. Thus, to keep on dominating that segment you will require new low-end products. If you fail at supplying the demand you created your competitors will be happy to take your market share.Therefore, you could either reposition the product by revising the product or you can let that product drift out of the dashed circle then replace it with one of the products you invented in the earlier rounds. However, for this to work you must invent products in the earlier rounds because it takes a while for new products to drift/age into the low-end segment. So plan accordingly.
The name of invented products must start with the first letter similar to the products already created by the game. Example, if you are on team Andrews and you decided to create three products they should be labeled Acted, Awag and Abat.
Production department must purchase production capacity to build the new product one year in advance. Invention projects take at least one year to complete. Example, if one product was invented then capacity would be ordered as follows:Invent Product ActedIn Year 1: Schedule Acted for manufacturing and Purchase capacity for ActedYear 2: Launch Acted
Traditional: 8-8.5
Low-end: 10 towards the end of the game
High-end: 6-7, and 6.5 for other product segments
Note, increase automation slowly because you need Total Quality Management (TQM) module to become effective at the beginning of the fourth round.
No cheat sheet available. However, questions are welcomed.
You issue stock and bonds.
Last year’s sales units multiple by the segment growth rate for the upcoming year. Therefore, if you ran out of stock in the previous year adjust the sales unit by adding the additional inventory you would have sold if you didn’t run out of stock. Then multiply that figure by the new growth rate for the upcoming year for that product segment.
So for example, if you in 2018 you sold 2,000 units in the high-end segment but your stock out was 100 units, and the growth rate for the upcoming year is 5%. Now assuming everything stays relatively the same as last year then your sales forecast for the upcoming year 2019 would be:
[(2,000 units+100 units) x 0.05] + [(2,000 units+100 units)]= $2,205 OR
(2,000 units+100 units) x 1.05 = 2,205
Note, calculating the sales forecast is only the first step in predicting the sales forecast. As always things never stay the same, so there are other factors you need to consider then adjust that number base on these factors.
For instance, if are you currently dominating this segment and based on your competitor’s last year performance there is no way they will be able to retaliate then 2,205 might be too low. Which means that there is a possibility you might stock out.In this situation consider the overall demand for that product segment then adjusts sales forecast accordingly. *Word of caution: don’t forecast sales units over the total demand in any product segment even if you are dominating that segment.*However, if you’re not dominating that segment you wouldn’t want to go up above your original calculated sales forecast. You also need to consider capacity, labor, and finance. Do you have enough capacity, labor, and finance to produce these units? In brief, always ensure you are also financially capable of producing products.Overall, your sales forecast starts with a calculation. However, this figure is later on adjusted based on your competitor’s past performance and whether you believe they can retaliate, plus your ability to produce these units.
To keep you on track create a SWOT analysis. In addition, adjust the SWOT analysis at the end of each round to reflect your company’s current positions externally and internally.
All bonds due at the end of the year are automatically converted into current debt. This debt is paid on January 1st. However, ensure you have funds available to make the payment when it is due to avoid triggering an emergency loan.
This section includes Capsim questions based on Capsim emergency loans and how to avoid Capsim emergency loans.
Firstly, avoid emergency loans at all cost. In brief, the Capsim game gives you emergency loans when you manage cash poorly. Therefore, Capsim emergency loans affect your stock prices even when your company is profitable, plus the interest rate is just ridiculous – it’s 7.5% plus whatever the current debt rate is. In general, once again avoid emergency loans.
Ensure you have enough cash to cover short term debts for the upcoming rounds before starting that round. If you realize there is a chance of you running out of cash at the beginning of the next round issue more stocks to raise funds. In addition, try your best to meet your sales projections by forecasting properly then producing products customers want better than your competitors. In general, excessive inventory and capacity and automation purchase without proper funding usually trigger Capsim emergency loans.
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Use these Capsim tips as a guide to help you formulate your own strategy. Good luck!
Research and development decisions directly impact your marketing and production plans.
Marketing and Research and Development decisions address product repositioning on the perceptual map, the number of products in each segment, age of products and MTBF.
Production and Research and Development decisions impact the cost of materials, purchase of new and automation levels. Note, the higher the automation level the longer it takes to complete Research and Development projects.
Your first product needs to be completed before another one can be started. So if a product is not completed in the first year it goes into the second year and the other product cells will be locked.
Project Management: 6 Month project cost $500,000, 1 Year project cost $1,000,000.
Unsold units built prior to revision date are reworked free of charge to match the new specs.
Project completion time increases if the company put two or more products in Research and Development at the same time.
Develop a strategy before you start developing any products. Are you going to maintain a presence in every single product segment or focus on low-end products only or focus on high-end only or dominate high-end but still maintain a presence in the other segments and so on. Once you determine what’s your overall strategy then you may start developing and reposition products based on that strategy.
Increase Customer Survey Score: Increase accounts receivables to 90 days to improve your customer survey score. Note, TQM also helps increase the customer survey scores but it isn’t available until later on in the game.
Beware a product with the highest customer survey score will outsell the competitor’s product.
Increase Awareness: In Capsim awareness is increased by spending the promotional budget which finances advertising and public relations campaigns expenses.
Increase Accessibility: Accessibility is built over time by utilizing the product’s sales budget. Capsim sales budget finances salespeople and the distribution systems serving customers.
Pricing Products in Capsim: Don’t price products $5 above or below the price range. Also remember, the price range decreases by $0.50 on the low and upper range every year.
Achieving 100% accessibility is difficult. In order to achieve 100% accessibility for any product segment, you must have two or more products in that product segment. Once 100% accessibility is reached you can use a combine the sales budget of $3,500,000 to maintain 100% accessibility.
Note, accessibility is concerned with the product segment and not the product so once a product leaves a product segment then it no longer benefits. Also unless the product segment still has two products that segment will no longer benefit from the combined budget.
Sales budget are less effective when products are not positioned within the solid circle and when the product’s price and MTBF are not following the product segment guideline.
New products invented creates a buzz so 25% awareness is given for free. Therefore, inventing products is highly highly recommended.
Use a promotional budget of $3,000,000 annually in the earlier rounds until product awareness is 100%. Then scale back to $1,400,000 annually to maintain 100%.
Depending on your strategy allow products to drift/age into other product segments to achieve 100% accessibility.
Follow product pricing and MTBF guidelines for each product segment.
Use no more than $4,500,000 sales budget for two products in a product segment and use no more than $3,000,000 sales budget for one product in a product segment.
The production module is where the action happens – products are scheduled for manufacturing.
The production units for each product line needs to be adjusted to your forecasted sales units.
Allocating Capacity in Capsim: Always ensure there is enough capacity for each product for the next round before ending your current round.
Capacity must be purchased for every product invented.
Invest heavily in capacity and automation in the earlier rounds.
Avoid selling capacity and automation because there’s a loss involved.
Short term assets like accounts receivables and inventory are funded with current debt offered by banks.
Investments in capacity and automation are funded by bonds and issuing stock.
Issue stock and long term debt in the first three rounds to invest heavily in capacity and automation.
Retire stocks once you have excess cash, low debt leverage, and excess working capital.
Human resource management is one of the modules that’s added later on during the game. For this module ensure you negotiate when you are asked to. Most importantly, don’t be cheap – ensure you try your best to please your workers to avoid strikes.
Side note, if you invest in automation during the earlier rounds you reduce your dependence on manual labor, which allows you to save money on hiring workers, so plan accordingly.
Managing recruiting and training is the top priority in this module. The minimum recruiting cost is $1,000 and the maximum $5,000. Never spend more than $5,000 on recruiting because there isn’t any additional benefit. In fact, there is diminishing returns when $5000 is spent on recruiting. In terms of training, 80 hours is highly recommended.
Spending top dollar on recruiting and training produces a higher productivity index and a lower turnover rate. This, in turn, reduces the need for more workers thereby lowering labor cost per unit.
Hire employees at $5,000 and with 80 hours of training. However, this can be adjusted depending on your level of automation and sales units forecast for the upcoming year.
TQM module helps reduce the cost of your business operations, shortens the length of time required to complete R&D projects and increase demand for the products.
Invest $1,500 per category in the first and second round then $1,000 the third round of TQM.
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Capsim rounds 1 to 3 are critical to how successful you will be at Capsim simulation. Remember the path dependence theory which basically means decisions made in the past limits the decisions you can make in the future. In this game, this theory takes center stage since you can’t undo the decisions once you advance to another round.Therefore, if you mess up the earlier rounds it will be difficult to bounce back since the type of decisions you need to make in the later rounds can be restricted or limited due to the decisions you made in the earlier rounds. Hence it is important to make the best decisions, especially during the first three rounds to set a strong foundation you can build on. Use the Capsim guides below to help you fortify your strategy. Good luck!
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FREE Excel Filefor R&D,Sales forecastand Production
New update
There are various strategies you can use to beat Capsim as long as the core of each strategy is based on giving customers what they want. This Capsim winning strategy involved dominating the high-end product segment while still maintaining a presence in each segment until the end of the game. Overall this strategy worked – Andrews successfully dominated the game at the end of 8th round.
This strategy is far from perfect – I messed up my product cycle in this simulation. I completely ignored the fact every product has a life cycle that cannot be ignored. Moreover, keeping products in a product segment requires constant repositioning which is costly. Overall, it’s cheaper to allow a product to drift downwards to the low-end product segment without repositioning while newly invented products replace them.If I had to play another round I would be in big trouble. Don’t make that mistake. Plus also remember that your company is producing sensors for a company like Apple. So your sensors have to be ready for market by the end of June every year in order to get the best sales.In the end, your performance will be determined by:
How much risk you are willing to take in the earlier rounds AKA how much you are willing to make it rain using bonds and shareholders money.
Your ability to forecast sales thereby accurately supplying sensors based on market demands.
Most importantly, your ability to effectively analyze your competitor’s last move in order to better predict your competitor’s next move.
Don’t be afraid to walk on the shoulder of giants for this one. Yes, research! You need to know what others have done and the possibilities. This will help you avoid pitfuls and also help you formulate your own strategy to help you win Capsim.
In this game, if you fail to give the customers what they want in comparison to your competitors you will lose. Now there are some situations where you may not be able to give them exactly what they want. Nevertheless, it’s your job to satisfy the customer better than your competitor as much as you can with the resources you have available.
Always monitor your competitor’s strategy. The capstone courier shows you the decisions your competitors made during the prior round. Monitoring their strategy will help you better determine decisions for each department for upcoming rounds.
There are two main things you should definitely do before you start the game: First, read the Capsim booklet from front to back until you gain a better understanding of the purpose of the game and what’s your purpose in it all. The booklet is very resourceful – it explains the modules well. If you don’t read the booklet you are walking in this game blind and most likely you won’t like the results neither will your professor. Secondly, if this is a group assignment ensure every team member is placed in the right position. For example, a marketing person shouldn’t be in charge of finance and a finance person shouldn’t be in charge of marketing unless they have exceptional experience in both areas. Jim Collins said it best “the right people in the right seats“. However, if you are playing this simulation game alone don’t worry it’s doable just go through the booklet and research before you start playing the game. Good luck!
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: 25 Dec 2019
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