Capstone: Capsim Team Member Guide

Business-to-Business Market Type
The type of market your company is in. Your company is in a market that manufactures a product, so that this product, i.e. sensors, can be incorporated into the products your customers sell. [Instead of a direct-to-consumers market]
Industry Conditions Report
Outlines the beginning business environment, including customer buying criteria. This report is available from your simulation Dashboard.
The Rehearsal Tutorial
This portion will show the students how to invent and revise products, make marketing decisions, schedule production and buy/sell equipment. It will also show you how to ensure that your company has the financial resources it needs for the upcoming year. [Happens at the very beginning and can be found on the simulation Dashboard]
The Capstone Courier
The industry newsletter, which is an extensive year-end report of the sensor industry. This report includes: Customers Buying Patterns, Product Positioning, and Public Financial Records. This is where your team will evaluate their company’s performance or analyze their competitors (i.e. other companies within the sensor industry).
The Courier Report’s “Last Year’s Results” Style System (i.e. How does it display results from round to round)
This report available at the start of Round 1 displays results from Round 0, when all companies were equal just after the monopoly’s breakup. At the start of Round 2 it will display the results from Round 1, etc.
The Capstone Courier
This report is available from two different locations: 1) from the Capstone Spreadsheet, Click Reports in the menu bar, 2) on the website, log into the simulation and click the Reports link
The Situation Analysis
Completing this section will enable you to understand current market conditions and how the industry will evolve in the next few years (i.e. helps for operational planning). Available from the simulation Dashboard.
Proformas and Annual Reports
These two documents are very specific to your company and help in a lot of decisions
Proformas
Projections for the upcoming year are called this. They will help you envision the impacts of your pending decisions and sales forecasts. This is only available from the Capstone Spreadsheet’s menu.
Annual Reports
Results from the previous year are called this. You can access these from two locations: 1) from the Capstone Spreadsheet, click Reports in the menu bar, 2) on the website, log into your simulation then click the Reports link.
The Capstone Spreadsheet
This is where you formulate and finalize management decisions for every department. After you log in this is available from the Decisions link.
Just In Time Information
This symbol is an upper square shaded in red. Clicking it will give you detailed information about the area you are viewing.
Four Main Departments
1.) Research & Development, 2) Marketing, 3) Production, 4) Finance (Companies use the Capstone Spreadsheet to enter departmental decisions)
Research & Development Department
This department designs your company’s product line. It is important that this department focuses on inventing and revising products that appeal to your customer’s changing needs.
Marketing Department
This department prices and promotes your products. They interact with your customers via the sales force and distribution system (i.e. responsible for sales forecast)
Production Department
This department determines how many units will be manufactured during the year. It is also responsible for the buying and selling of production lines.
Finance Department
This department can raise money via one-year bank notes, 10 year bonds, or through stock issues. This department can also issue stock dividends, buy back stock, or retire bonds before their due dates.
Inter-Department Coordination between R&D and Marketing Departments
Make sure products meet customer expectations
Inter-Department Coordination between R&D and Production Departments
Ensure assembly lines are purchased for new products. If Production discontinues a product, it should notify R&D.
Inter-Department Coordination between Marketing and Production Departments
Make sure manufacturing quantities are in line with forecasts [market growth productions help Production determine capacity]. If Marketing discontinues a product, it tells Production to sell the product’s production line.
Inter-Department Coordination between Marketing and Finance Departments
Project Revenues for each product and to set the Accounts Receivable policy [this policy is the amount of time, customers can take to pay for their purchases]
Inter-Department Coordination between Finance and Production Departments
Production tells Finance if it needs money for additional equipment [If Finance cannot raise enough money, Production must scale back or perhaps sell idle inventory]
Practice Rounds
These are different from the Rehearsal Tutorial Round. During this round you can experiment with your decisions in a competitive environment. It consists of four trial and error periods. After these the simulation is reset and companies will compete for 8 rounds (i.e. each round is one full year)
Decision Audit
A complete trail of all team decisions. This is available from two locations: 1) from the Capstone Spreadsheet, click Help in the menu bar 2) on the website, log into your simulation then Click on Decision Audit link
The Five Market Segments
(*Customers within a certain market segment have similar needs)
1) Traditional 2) Low End 3) High End 4) Performance 5) Size
Industry Conditions Report
Lists market segment sales percentages and projected growth rates. It is published once at the beginning of the simulation- and it is available in the Dashboard.
Buying Criteria
The information a company uses to know how customers within each market segment value different standards as they evaluate products.
The Four Buying Criteria
1) Price 2) Age 3) MTBF 4) Positioning
Price
Each segment has different expectations for this buying criteria. One segment might want inexpensive products, while another seeking advanced technology might be willing to pay higher prices.
Age
The length of time since the product was invented or revised.
MTBF (Mean Time Before Failure)
The rate of reliability measured in hours.
Positioning
Combining size and performance creates a product attribute called this.
The Perceptual Map
A tool used to track the position of their products and those of their competitors. It plots the the product size and performance characteristics. (i.e. size is measured on the vertical axis and performance is measured on the horizontal axis)
Low End Segment
This segment describes inexpensive products that are large in size and slow performing. (i.e. products that fall inside the upper-left set of dashed and solid circles)
High End Segment
This segment describes products that are fast in performance and smaller in size. (i.e. products of this type fall inside the lower-right set of dashed and solid circles)
Drift Rates
Overtime, customers expect products to be smaller and faster–this will cause segments to move a little each month down and toward the right. The numbers that describe this are called? (i.e. by the end of the 8th year the segments will not be overlapped)

These are usually located in the Industry Conditions Report.

Positioning and Price
Two certain buying criteria that change every year.
Age and MTBF
Two buying criteria that remain the same.
Customer Survey Score
A product’s demand is driven by this monthly number. Assuming that the product does not run out of inventory, a product with a higher score in this will likely outsell a product with a lower score. These numbers are calculated 12 times a year (i.e. scores are calculated once a month because a product’s age and positioning change a little each month). It shows how well a product meets its segment’s buying criteria.
The Industry Conditions Report and Courier’s Market Segment Analysis Pages
Both of these help to break down each segment’s criteria in order of importance.
Rough Cut Circle or Rough Cut Boundary
The dashed outer circle that defines the outer limit of the segment (i.e. customers are saying, “I will NOT purchase a product outside this boundary.” These circles have a radius of 4.0 units.
Fine Cut Circle
The solid inner circle that defines the heart of the segment. Often customers prefer products within this circle. These circles have a radius of 2.5 units.
The Ideal Spot
The point in the heart of the segment where all other things being held equal, demand is the highest.
Positioning in the Rough Cut
Products placed in these dashed circles are poorly positioned and they have reduced customer survey scores. [Just beyond the fine cut, customer survey scores drop 1%, halfway across the rough cut, scores drop 50 %. Scores drop 99% for products that are almost on the edge of this position]