Podcast
Questions and Answers
What is the purpose of the Foundation FastTrack?
What is the purpose of the Foundation FastTrack?
The FastTrack contains information about buying criteria for various segments.
The FastTrack contains information about buying criteria for various segments.
True
What is highlighted as critical for making decisions each round?
What is highlighted as critical for making decisions each round?
The customer survey score
The FastTrack is a year-end report of the ______ industry.
The FastTrack is a year-end report of the ______ industry.
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Match the following sections with their corresponding focuses:
Match the following sections with their corresponding focuses:
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Which section is NOT listed in the provided content?
Which section is NOT listed in the provided content?
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The average cell phone contains few sensors for touch, spatial orientation, and signal strength.
The average cell phone contains few sensors for touch, spatial orientation, and signal strength.
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What are examples of new sensor businesses mentioned?
What are examples of new sensor businesses mentioned?
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The __________ Scorecard helps in performance measurement.
The __________ Scorecard helps in performance measurement.
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Match the sections to their corresponding page numbers:
Match the sections to their corresponding page numbers:
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What should you focus on to compete effectively in the post-monopoly era?
What should you focus on to compete effectively in the post-monopoly era?
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Marketing efforts should be prioritized even when financial management is weak.
Marketing efforts should be prioritized even when financial management is weak.
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What are two key aspects that should be addressed to improve a company's competitive position?
What are two key aspects that should be addressed to improve a company's competitive position?
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In the Rehearsal Tutorial, companies are encouraged to ___ and ___ products.
In the Rehearsal Tutorial, companies are encouraged to ___ and ___ products.
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Match the following actions with their descriptions:
Match the following actions with their descriptions:
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What consequence might arise if a company ignores product quality?
What consequence might arise if a company ignores product quality?
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Financial management is considered a vital area for improvement in a struggling company.
Financial management is considered a vital area for improvement in a struggling company.
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What is one major challenge companies face in the post-monopoly era?
What is one major challenge companies face in the post-monopoly era?
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What is a key factor in evaluating a company's performance?
What is a key factor in evaluating a company's performance?
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Stock outs are beneficial in a seller's market.
Stock outs are beneficial in a seller's market.
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What is one method mentioned for estimating forecasting?
What is one method mentioned for estimating forecasting?
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The _____ Survey Score can be found in Chapter 3.
The _____ Survey Score can be found in Chapter 3.
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Match the following chapters with their main topics:
Match the following chapters with their main topics:
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What does R&D stand for in a business context?
What does R&D stand for in a business context?
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Forecasting is used to predict future business conditions.
Forecasting is used to predict future business conditions.
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What type of device is mentioned as observing physical conditions?
What type of device is mentioned as observing physical conditions?
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What is the primary responsibility of the Marketing Department?
What is the primary responsibility of the Marketing Department?
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Proformas are primarily used to analyze last year's results.
Proformas are primarily used to analyze last year's results.
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Which department coordinates company activities?
Which department coordinates company activities?
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The Finance Department interacts with _____ to project revenues for each product.
The Finance Department interacts with _____ to project revenues for each product.
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Match the departments with their primary responsibilities:
Match the departments with their primary responsibilities:
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What happens if Finance cannot raise enough money?
What happens if Finance cannot raise enough money?
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Annual reports help to project future revenues.
Annual reports help to project future revenues.
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What is the function of proformas?
What is the function of proformas?
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What is the ideal spot in a segment based on?
What is the ideal spot in a segment based on?
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Customers prefer products positioned towards the bottom of the range.
Customers prefer products positioned towards the bottom of the range.
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What is MTBF?
What is MTBF?
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Demand scores fall rapidly for products with MTBFs beneath the segment's __________.
Demand scores fall rapidly for products with MTBFs beneath the segment's __________.
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What will Marketing generally do with prices set at the beginning of the year?
What will Marketing generally do with prices set at the beginning of the year?
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Segments on the Perceptual Map move at random each month.
Segments on the Perceptual Map move at random each month.
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What represents products inside the fine cut?
What represents products inside the fine cut?
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Study Notes
Course Road Map
- Students should register at capsim.com/register using a provided User ID and Password.
- Follow these steps to register and get started:
- Review the Rehearsal Tutorial
- Open the Foundation Spreadsheet
- Form a company
- Practice Rounds (as instructed by instructor)
- Competition Rounds (decisions count and include additional tasks)
- Competition Rounds include:
- Optional Homework Assignments
- Peer Evaluations
Introduction
- The student controls a multi-million-dollar sensor manufacturing company.
- This company was created by splitting a former monopoly.
- The company faces challenges with outdated products, poor marketing, outdated facilities, and poor financial management.
- The post-monopoly era requires companies to innovate as competitors offer better products or lower prices.
- The company manufactures sensors that other businesses incorporate into their products.
Industry Conditions Report
- Each sensor industry simulation has unique conditions.
- The Industry Conditions Report outlines the initial business environment, including customer buying criteria.
Management Tools
- Rehearsal Tutorial: Guides students on managing the company. Includes product development, marketing decisions, production scheduling, and financial management.
- Foundation FastTrack: An industry newsletter that provides insights into customer buying patterns, product positioning, and financial records to help students gain a competitive edge.
- Situation Analysis: Helps students analyze current market conditions and industry trends. Available online as well as a downloadable PDF.
Proformas and Annual Reports
- Proformas: Upcoming year financial projections. Students can use these to visualize the impact of their decisions and sales forecasts.
- Annual Reports: Past year's results. Provide insights into previous performance and help students analyze past outcomes.
Company Departments
- Research & Development (R&D): Designs and revises product lines based on customers' needs.
- Marketing: Sets prices, promotes products and makes sales forecasts.
- Production: Determines production quantities, buys and sells production lines.
- Finance: Manages company finances, raising capital via various methods.
Inter-Department Coordination
- Different departments frequently work together to ensure alignment of operations and decision-making.
Practice and Competition Rounds
- Practice rounds help experiment with decisions in a competitive environment.
- These rounds use a unique simulation model.
- The decisions made in practice rounds determine how the simulation model proceeds.
- The simulation is reset after practice rounds to begin real competition against other businesses.
Company Success
- Successful companies analyze the market, implement their strategy, and coordinate their actions.
Industry Conditions
- The Industry Conditions Report helps students understand their customers' needs and preferences.
- Customers are grouped into market segments with similar requirements.
- The report includes market segment sales percentages and projected growth rates for each simulation.
Customer Survey Score
- Product demand is driven by its customer survey score in each segment.
- Higher scores result in more sales.
- The score considers product positioning, price, mean time before failure (MTBF), and product age.
- Different segments prioritize these criteria differently.
Forecasting
- Students use last year's sales as a starting point for forecasting next year's sales (plus any relevant segment growth rate).
- A qualitative assessment of the product against other competitors helps fine-tune the forecast.
- A December Customer Survey Score can help compare a company's product performance against the competition.
- Realistic price estimations are essential for generating accurate proforma financial reports. Forecasts should be compared and adjusted to account for competitor actions and industry trends.
Worst Case/Best Case Forecasting
- Worst case scenario forecasts help identify the lowest possible expected financial outcome.
- Best case scenario forecasts help identify the best possible outcome.
- These estimations can facilitate adjustments to sales forecasts and company goals.
Balanced Scorecard
- The balanced scorecard assesses company performance in different categories, including financial performance, operational efficiency, customer satisfaction, and employee growth.
- By considering all these aspects, companies improve their performance and ensure long-term success.
Six Basic Strategies
- Broad Cost Leader: Minimizes R&D, production, and material costs to compete based on low prices.
- Broad Differentiator: Distinguishes products with excellent design, high awareness, and easy accessibility.
- Niche Cost Leader (Low Tech): Targets the Low-Tech segment, keeping costs low and focusing on this niche market.
- Niche Differentiator (High Tech): Targets the High-Tech segment, focusing on advanced products and unique features.
- Cost Leader with Product Lifecycle: Prioritizes cost leadership with product lifecycles focusing on early High-Tech products into products meant for both segments.
- Differentiator with Product Lifecycle: Differentiates itself with excellent design, high awareness, and accessibility, managing product life cycles from High-Tech to Low-Tech.
Finance
- Current Debt: One-year loans from a bank.
- Bonds: Long-term (10-year) debt, carrying interest.
- Stock: Shares issued at a market price.
- Emergency Loans: Short-term loans for bridging cash flow gaps.
- Credit Policy: Sets payment terms (accounts receivable) and delays payments (accounts payable). This affects customer and supplier relations.
Additional Modules
- Some simulations include modules like HR (Human Resources) or TQM/Sustainability, requiring further management decisions.
Plug-ins
- Plug-ins impact the company by posing dilemmas like those related to ethics, requiring group discussion and decision-making.
Situation Analysis
- The Situation Analysis evaluates strengths, weaknesses, opportunities, and threats of a business.
- This analysis considers perceptual mapping, demand, capacity, margin, and consumer reports.
Forecasting (Detailed)
- Methods include simple growth rate calculations and qualitative comparison with competitors.
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Description
This quiz covers the foundational steps and industry context for the Capsim business simulation, where students manage a sensor manufacturing company. Participants will learn to navigate company formation, competition rounds, and the challenges of innovation in a post-monopoly market.
