Capsim: Overall Company Performance

Introduction

The Capstone business simulation or Capsim is a business simulation which provides the ability to run a company through the creation of sensors and using them in the sale of products from other manufacturers. Sensors are essential in the maintenance of product physical condition through the identification of various products such as vehicles or phones. The capsim company develops through the act of government which involves the splitting of monopoly to develop identical competitors (Capsim 2018). The companies involved in the simulation include the Andrews, Baldwin, Chester and Digby and other computerized simulations companies which are Erie and Ferris. 

The companies rising from a monopoly base consists of many unresolved issues that enhance competitions. The goal of the company is to employ different strategies with the focus of improving the products, diversification of the marketing strategies, production and financial operation in the years which form the different rounds (Pasewark 2009). The company focuses on decision making in the areas of research and development, marketing production, and in finance (Sitomer, 2010). In the later rounds, the human resources and total quality reintroduced. The analysis of the companies’ performance includes the evaluation of the different companies’ products in various segments which consists of the traditional, low-end, high end, performance and size sections.

Industry conditions before the start

Before the start of the business, the industry operated at a different level which required an upgrade to capture market shares and maintain a competitive advantage. The value proposition for the company was in its ability to strive for market leadership through the provision of excellent service to the customers and meeting the needs. The operations also aimed at the provision of new products to offer more choice and cater for different preferences. Initially, the goal was to keep all products at the middle of the product line allowing them to drift to the high segment to conquer the traditional sector.

Strategies 

The company uses different approach in its effort to achieve its goal and in the differentiation of the product lines. The strategies include the broad differentiator strategy as the basic, Niche Cost Leader, Cost Leader w/Product Lifecycle Focus, Differentiator with Product Lifecycle Focus and lastly the Niche Differentiator (French & Kavanagh, 2015). The basic strategy being the broad differentiation allows the differentiation of products into various product dimensions. The plan aims at providing superior and unique products to consumers (Sitomer, 2010). The strategy eliminates consumers through the pricing system which allows affordability and creates customer loyalty and brand awareness for the future. However, the strategies are subject to change and are dependent on the performance in the particular round in comparison to those of the competitors. 

Research and development

The strategy used in Research and Development is concerned with the product line. In this sector, the company focus on the invention and innovative packaging of products to ensure that the products re-appealing to the diverse and dynamic consumer needs.

Marketing

The different companies comprise of a marketing department which develops marketing strategies which deal with pricing and promotion of the products. Through marketing, companies can evaluate their customers through their interactions. The department is concerned with the introduction of a different sales force and a distribution system. It also holds the responsibility of conducting sales forecasts in the company ensuring that it meets its goals and sales targets.

Production

Each company operates a production sector which is responsible for the determination of the quantities to be produced. It determines the commencement of the manufacturing process by outlining the units to be delivered in each round or year. The decisions made are based on the forecasts originating from the marketing and sales as well as the unsold inventory for the previous years. The department is also tasked with the purchasing and sales of production lines. The companies are also concerned with automation on the production line which determines labor and its associated costs.

Finance

The companies maintain the critical and essential finance department for the funding of the different projects. The significant department concerns are the sources of capital to fund its operations and activities. The finance department focuses on the various sources o money such as the stock issues, the current debt and bonds. Other duties of the companies finance sector are the issuance of dividends, determination of accounts receivable and accounts payable (Capsim 2014). It also facilitates the provision of emergency loans to keep the business afloat which grow into current debt in the following years and consequently reduce the stock price of the company.

The human resources department is introduced form the second round of running the organization and works in cooperation with other departments. Others like Total quality management are essential for companies’ analysis. It provides an avenue for capacity expansion and also helps in the automation of upgrades. Other analyses conducted in the total quality management involve the investment in research and development as well as in production. Maintenance of the critical departments and areas help the companies to keep up with new designs in the market as the conditions direct. Such decisions include careful monitoring and prediction of the capital needs of the company such as the dealing with the emergency loans.

State of the company at the end of the eight rounds 

The companies employ different strategies and show differentiated results at the end of the eight rounds. For example, the Baldwin Company makes mistakes in the second round which leads it to financial constraints. The errors lead to the company to taking an emergency loan amounting to 12.7 million dollars in the second year and later took another loan in the fifth year amounting to 29.8 million dollars. The effect was the rise of the Long-term bond rate from 12.8% in the first year to 15.1% after the second year. 

Effects of international simulation on the companies 

The introduction of an international and global simulation on the companies would have impacted the company’s marketing, finance, and human resources in various ways. Human resources are affected by the recruitment and training of employees. The human resource section includes recruitment spending and training hours (Capsim 2016). The sections are interpreted to the employees’ qualifications. Thus, this means that a high recruitment budget is reflected in the company through better workers. The simulation outlines the returns for recruitment in spending where increased spending diminish the returns. The implication of the recruitment spending budget on the companies is that a higher budget ensures a better workforce which results in an increase in productivity as well as a decrease in the rate of employee turnover (French & Kavanagh, 2015). At the global simulation level, the human resource of the companies is affected by the need for training. Taking time off to train impacts the forms in various ways due to the demand for complementary services and can become expensive for the companies. The training process, however, has positive effects which increase productivity and lowers the rate of turn over.

Finance

At the international level of simulation, the companies will have more significant financial needs for the expansion of the market and customer base. International operation requires a vigorous and well-planned finance department which ensures that decisions are made to the research and development, marketing, production, human resource and total quality management departments (Pasewark 2009). International simulations provide financial opportunities and investment lessons by undertaking a more in-depth economic analysis strategy.

Marketing

In the global arena, marketing tactics for the companies change as the companies target a bigger market. The responsibilities of the marketing sector such as pricing forecasting of sales and promotions and sales of the product are more defined and pronounced requiring a transformation of companies operations (Rubin, 2017). More critical decisions are made on the setting of prices, product promotions and sale investment. Other choices include the preparation of an international promotional budget and awareness programs to determine the number of customers aware of the product. Such activities are essential as they help the companies in the determination of the effort to put in place to access a broader market and audiences for their products.

Social responsibility

As an essential factor in the determination of the effectiveness and impact of the companies, social responsibility plays a critical role in bringing the shareholders on board (Rubin, 2017). In helping the community to understand the companies’ social responsibility, it is essential to consider its effect in production and research and development.

Social responsibility in Production 

The companies have a social responsibility to its shareholders in production. The companies should ensure that they produce products that suit customers’ needs and preferences. It is the companies’ social responsibility to pay careful attention to the customer buying criteria (Capsim 2018) and performing an evaluation of product attributes regarding product performance, reliability, and size (Rubin, 2017). Since decisions on production affect consumers, it is the company responsibility to ensure that output is of the right capacity to eliminate chances of the limited supply of products. To achieve the correct results companies should adhere to their planned production schedule using the right amount of resources.

Social responsibility in Research and development 

Social responsibility to the shareholders is guided by the knowledge that changes in research and development affects the marketing of products through the provision of strategies and avenues (Pendlebury & Groves, 2004). Research and development affect the marketing mix of a product as it influences the price promotion place and sale distribution. It is the company’s social responsibility to provide favorable prices, promote products by offering adequate information on the product and its use and avail the products to customers at the convenient place and enhance their distribution following the demands and customers preferences (Capsim 2018).

Different Approach 

The capsim business simulation process presents a challenge that can enable a turn around for a poor performing business. Given a second chance to run the companies I would put certain aspects into consideration that would trigger a change in performance and operations. The main goal of the business would be to maximize the wealth of the shareholders which can only be achieved through efficient customer service and satisfaction (Pasewark 2009). For different results the companies would concentrate in meeting customers’ demands through the production of high quality products with affordable pricing and the ability to favorably compete in the market.

Conclusion 

He capsicum business simulation experience provides an opportunity for companies to improve their business by employing new strategies and facilitating learning. The simulation equips companies with skills and knowledge on marketing, finance production as well as in research and development. By engaging in different rounds equivalent to one year, companies work to meet customer’s expectation through production engagement in marketing through promotion and sales forecasts for proper determination of production capacity. Al the departments work together with the finance department to administer the companies’ expenditure and watch over the finances which determine the outcomes for the year showcasing the right decisions and mistakes made by the company management.

References

Capsim. (2014). Foundation: a Hands-On Introduction to Business Fundamentals.

Capsim. (2016). Intro to Business: a Primer: Companion Text to CapsimCore Business Simulations.

Capsim. (2018). Comprehensive Business Review: Concepts and Cases with Capstone Business Simulation. 

French, J. A., & Kavanagh, M. (2015). Enhancing Student Learning Outcomes through the Integration of Team Projects into Instruction. In  Advances in Exemplary Instruction . CreateSpace.

Pasewark, W. R. (2009).  Understanding corporate annual reports: A financial analysis project . New York, NY: McGraw-Hill.

Pendlebury, M. W., & Groves, R. E. V. (2004). Company accounts: Analysis, interpretation and understanding. London: Thomson Learning

Rubin, R. S. (2017). TeamMATE (Capsim Management Simulations, Inc., www. capsim. org).

Sitomer, A. (2010). The Capsim Capstone Simulation: A Student's Perspective.