One of the cool things we’re doing this term is the Capstone Business Simulation game (www.capsim.com). Our teams each is tasked with managing a fictional company in the sensor industry. There are six teams in the class, and we are split into two industries. We are competing against two other teams, and two computer simulated teams.
In the game, we need to make decisions regarding R&D, sales and marketing, production, and finance. The R&D decisions are used to improve products or create new ones, sales and marketing sets advertising and sales budgets as well as product prices, production is used to manage production capacity and overtime (which impacts product margin), and finance is where we manage debt and raise capital.
Each week, we have to input our decisions for each of the areas. The system then simulates a year of customer purchases, and our results are calculated. Our team had the highest sales and profits after Year 1. The competition in the class makes things interesting!!
It is an interesting game, and certainly has a lot of benefit in terms of looking at all the decisions that go into making a company. Hopefully we’re able to keep our early lead over the next few weeks!
4 responses so far ↓
1 The Man from Chicago // Feb 9, 2007 at 4:42 pm
So are you winning or what? If not, your dead to me.
2 The MBET Experience » Blog Archive » Capstone Update // Feb 13, 2007 at 2:23 pm
[…] A few weeks ago, I introduced the Capstone business simulation game. This has been a very interesting experience. So far, in our pool, we are the only student-managed team (two teams are controlled by the computer) to not have needed an “emergency loan” to keep from running out of cash. […]
3 Utica, NY // Feb 19, 2007 at 7:25 pm
What did you guys do that you were successful so quickly? Our team spent alot of money right off the bat on R&D and adding new products, but we tanked pretty quickly and never seemed able to recover from that
4 Dan // Feb 20, 2007 at 2:14 am
Not sure how much I should say, but I guess most of this info is available to our competition. We took a slightly different approach than you did. We invested a little in R&D in the beginning to position our products, but we sold off some production capacity in the lower-volume lines to raise cash. We also pumped cash into building awareness in the early years, and now have 100% awareness for most of our product lines. We held off on launching a product in the first year, in order to stay profitable. We also raised money by issuing shares to fund our growth. This ensured we didn’t need to make a dreaded visit to “Big Al” for an emergency loan in the years we were doing heavy R&D. We have managed to remain profitable and cash flow positive while growing reveunes and market share significantly.
Hope that helps! Send me an email at dan[at]dandonovan.ca if you want more details.