Simulation of Capsim

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After analyzing the external environment, internal organization should be also concerned about the development of firms. Talking about the weakness of Ferris, we did our best on inventing perfect products for customers and build strong relationship with suppliers. However, the ignorance of R&D cost and revision date made us issued $29,337,351 emergency loan in round 5 and pushed Ferris to the brink of insolvency. Besides, in the first 4 round, our firm neglected on employees training and balanced scorecard, which cost our firm more expenses on labor cost compared with other competitors. For example, Digby spent $11.12 and $7.64 on material and labor cost of producing one unit of high-end products. While Ferris spent $14.45 and $10.52 on material and labor cost in the same round. This defect made our firm change our strategy on high-end segment for we lost the core competence in creating value and gaining profit margin.

Sales and promotion are vital for a firm’s sales revenue and market share, especially in a competitive environment. Meanwhile, company should also study customers’ preferences in different segment. Our firm carefully evaluated and made good use of sales and promotion budgets. Besides, we will forecast the ideal position for our products according to the trend and customers’ preferences in the target market. For example, in Round 6 and Round 7, we invent high quality products in Size and Performance segments. Through implementing this strategy, we successfully achieved number two in sales revenues three times.

- Conclusion

In the last two month, our groups run 11 times of simulation and each round may took us two or three hours for discussing. This Capsim system provides us a fully virtualized environment and helps us understand what Strategic Management knowledge are and how to makes use of them in real life. Though we did experience a hard time in Round 5 and Round 6 for struggling kept our firm from bankruptcy. Most of us, except the free rider, really enjoy this game and the time we are associated with each other in the Ferris Company. Really appreciate for your teaching and this valuable practice opportunity. Our teammates are all looking forward to the presentation next week and we can’t wait to learn from other classmates who did really well during the simulation.