The MBET Experience

The University of Waterloo – Master of Business, Entrepreneurship and Technology Program

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Capstone Update

February 13th, 2007 · 1 Comment

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.

As I mentioned, we had a solid first year and were in the lead. We continued our success in the second year, and again were the leaders in overall market share and profitability. Year 3 was more challenging. Some of our earlier decisions caught up to us and we were short of capacity on a couple of our high margin lines, costing us money. We lost our leadership in market share (though were still second), and due to some high expenses, our profits were down significantly. However, we were still cash flow positive and should be well positioned for future years.

One of the cool things introduced to use this year was a “Total Quality Management” module. This allowed us to invest in initiatives that will reduce manufacturing and administrative costs in years to come. It was cool to play around with this and see what we can do.

Something I find interesting is how this game makes it seem so “easy” to manipulate the variables. Invest a little in promotion, and your awareness goes up. Invest in Six Sigma, and your manufacturing costs go down. In real life, it takes a lot more than just spending some money to make changes in an organization. It takes execution and a solid team. However, the game provides an interesting perspective on what levers management has to play with when making strategic decisions.

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  • 1 The MBET Experience » Blog Archive » Capstone - Back in First Place // Feb 20, 2007 at 2:02 am

    […] Time for another Capstone update. After losing our lead in market share and profits last week, we needed to come back strong in Year 4. The results are in, and we had an awesome year. Our sales were up from $168 million in 2010 to over $230 million in 2011, while profits jumped from $4.1 million to $14.6 million – don’t I wish this were real life? These were the highest figures in the “industry”, and I am proud to say that Team Chester (that’s us) is also back in the lead in overall market share, capturing over 30% (our closest competitor is at 24%). […]