A guide on how to win CapSim and understand all of its parts and win the simulation in MBA course

How to win CapSim – Introduction

CapSim is a Chicago based company that developed a business strategy simulation about the fundamentals of business management. The simulation was launched in August 1998 and had 3000 undergraduate students registered in the first year. The simulation covers a wide range of business knowledge and it challenges students to apply what they have learned in school in a real-world perspective.

For the first time playing the demo round, I did not do very well and I even got bad result for the first round. However, after nights reading many kinds of reports from Industrial report to Courier reports and tried to understand what are they about, I ended up dominating other teams and got about $450 million of revenues, $330 million of cumulative profits and $80 million profits in Round 8 and top 1% of results for that semester. And I believe not so many team can do that. Normally a cumulative of $160-200 million in profits and a well-maintained Balanced Scorecard are enough to win the simulation.

Generally, students would be working in a team to compete against other teams to become the most successful company in terms of market share, size, and profits. They would need to analyze the industry in which competitors would have different planning and strategies and to make decisions on R&D, Production, Marketing and Finance.

So in order to Win CapSim, you should understand how all these major functions of your company work and the effect of each decision you will make. Also, you will need to read A LOT of industrial report to figure out what your competitors are doing and try to be one step ahead of them. For instance, your product in Low end segment is the best-selling one in Round 1 and you see one team buys more capacity for their Low end product. IMO you should R&D one more Low end product, buy capacity for both of your products and ram Automation up to dominate other teams since you should have a very high Customer Buying Criteria.

Another option would be how much you should invest in R&D and Production in Round 1? Should you try to enter the market slowly or just go aggressive and dominate the market since the beginning of the simulation? This is a hard question and it depends on many aspects. If you want to go aggressive just go all-in in investments and leave just enough cash to prevent Emergency loans. This, along with very carefully calculations should bring a huge advantage to your team right from the start. For example, for Round 1 I got revenues of $140 million, which was about 20-ish% of the market share and in Round 8 my company captured 35-40% of market share. If you want to play it safe and avoid Emergency loans that is fine and you can invest ahead to gain advantage in Round 3 or 4 and it will be good enough for the first place.

In the next article I will analyze some aspects of Products and R&D just so you guys will have an idea of why you should upgrade your Products every year and how to gain the maximum benefits from R&D.