Capsim Simulation: Realignment of Segment Products
After four rounds of play in the Capsim Simulation at Georgian Court University, Lakewood, NJ Summer Session 2012 the companies are positioned as follows.
On page 1 of the Capstone Courier at the end of Round 4 December 31, 2016, Cumulative Profit Statistics display:
Ferris $51,103,697; (Ferris is the computer generated company)
All companies are profitable, but a recession occurs in Round 5, therefore each team must be careful with segment unit sales forecasts. Overall Andrews is more profitable than Ferris the computer simulation company.
Andrews’ product Able dominates the Traditional segment with 35% profit share. Andrews’ product Acre leads in the Low End segment with 27% market share. Ferris has cornered the High End market with two products, Fist 31% market share and Fox 21% market share. Thus Ferris has 52% of the High End market with Andrews in third position with 18% market share. For the Performance segment Ferris product Foam has 33% market share. And finally in the Size segment Ferris product Fume has 37% market share.
In the second round, Ferris invented a new product Fox for the High End segment. To save expenses, Ferris never upgraded its Traditional product Fast. Fast’s Performance remained at 5.5 and Size at 14.5, throughout the simulation. Thus the product Fast has been realigned from the Traditional Segment to the Low End segment. Ferris has two products in the Low End segment Fast and Feat.
Team Chester is not competitive in the Traditional segment. Its Traditional product Cake has only 4% sales. The customer buying criteria, Ideal Position, in the Low End segment is 16%. Chester’s strategy for Round 5 and Round 6 is not to spend money for Research and Development to improve Cake’s Performance or Size. By not improving R&D, Cake will age and approach the ideal position of 7.0 years over the next two rounds. Age is 24% in importance for Low End customer buying criteria.
For Round 5 there is a negative 7.4% growth rate in the Low End segment. Industry sales demand for Low End sensors is the highest for all segments. The most important customer buying criteria in the Low End segment is Price at 53%. Thus Chester will lower the price of Cake to be competitive in the Low End market. If Chester prices Cake properly they will increase their market share in the Low End segment with two products Cedar and Cake.
At the end of Round 4, Chester is not competitive in the High End market with its product Cid. Cid has only 2% sales. In the High End segment the most important customer buying criteria is Ideal Positioning at 43%. Cid’s Performance coordinate is 8.5 and Size coordinate is 11.2. These coordinates are far below the fourth round’s High End, ideal position of Performance 12.5 and Size 7.5.
Since Ferris has realigned Fast from the Traditional segment to the Low End segment and Chester has removed Cake from the Traditional segment to the Low End segment there are only four products in the Traditional Segment. These products are: Andrews-Able, Baldwin-Baker, Digby-Daze and Erie-Eat. The Traditional Segment has large unit sales even in a recession.
Chester moves High End product Cid into the Traditional Segment by not making any R&D improvements. Ideal Positioning is 21% in importance. Cid will have the best Performance and Size in the Traditional segment in Round 5 and Round 6. The Ideal Age of 2.0 years is the most important criteria at 43% in the Traditional segment. Cid’s age will increase and be greater than the 2.0 years position. However, Chester will lower Cid’s Price to be competitive. Price is 23% in importance in the Traditional segment.
Andrews, Baldwin, Digby and Erie are competitive in all segments.
In Conclusion the Realigned Products to begin Round 5 are:
Ferris realigns Traditional product Fast to Low End.
Ferris invents product Fox for High End.
Chester realigns Traditional product Cake to Low End.
Chester realigns High End product Cid to Traditional.