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Business Strategy Simulation
Business Strategy Simulation
Business Strategy Simulation
In Capstone® your managers form into a Team. Each Team has 4-5 members. Each Team owns
a business of its own. At the outset they set out their financial objectives, i.e. purpose of running
the business. They assign priority weights across ROE, ROS, ROA, Stock Price, Market Cap,
Market Share, Asset Turnover or just Profit. They now come up with a dovetailing business
strategy that would support their stated financial objectives. They have the option to pick any of
the six strategies, as recommended by Prof. Porter. There are six functional areas viz. R&D,
Marketing, Production, Finance, HR and TQM. The market has five segments. Each member to a
Team manages one function area and one market segment round after round by rotation. There
are eight rounds. They begin with one product in each segment. They can launch three new
products in segments of their choice.
Having run the business as part of a team in Capstone®, they now run a business individually.
The Comp-XM® is miniaturized version of Capstone®; here they would run their own business
individually. While they are doing so they would simultaneously answer questions that are
customized to the way they are running the business. Based upon their answer to the questions
they would get a report, an individual report. The report shall capture their
competency/deficiency areas across four parameters of Balanced Scorecard i.e. Finance,
Customer, Internal Business Process and Learning & Innovation.
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
Rounds Each seminar shall have a maximum of 6 teams. There are six
functions in the simulation viz. R&D, HR, TQM, Production,
Marketing and Finance. There are five market segments with one
product each on the day one of the simulation. Participants can
introduce another three new products (NPD) in market segments of
their choice. They may also opt not to continue with any of the
original 5 products during the simulation depending upon their
financial and business strategy. They may even opt to exit from
market segment(s).
3. Individual
roles in a Team The simulation’s target group is senior managers and potential
decision makers whose decisions impact your company’s bottom
line. We recommend that each individual in a team should have two
responsibilities. One as function head and second as market
segment head. There are 6 functions and 5 market segment. Another
responsibility that each member should take up is that of
Competitive Intelligence Officer. The role rotation imparts a great
understanding of cross functional integration. Managers learn to
understand financial impact of their seemingly non-financial
decisions.
Teams can come up with their own format with regard to individual
roles. Above is a mere recommendation. It is their business and
how they want to run it is their call.
4. Time commitment
per Total about 25hrs as part of a team. Each round would take on an
participant/team average about 2.5hrs of brainstorming among the Team members to
come up with business decisions for that round.
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
(beyond accounting parameters capturing customer satisfaction,
forecasting, productivity etc.), several other reports.
5. Duration
of the The simulation is totally flexible in terms of its delivery format. Its
Simulation delivery format determines the duration of the simulation. Please
look at following delivery formats:
6. Prof. interface
The workshop is delivered in a mix of ‘Lab’ and ‘Test’ format. It
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
with begins with Test format where teams start running their business on
participants their own. There could be certain teams that need a bit of a Lab
methodology at times. Under Lab methodology, facilitator would
do a bit of hand holding until participants are able to get on with it
on their own.
7. Pre-simulation
briefing Each participant is given a copy of the Capstone® Corporate
Manager Guide. Through their ID/password they have the option to
do Tutorials and Rehearsal rounds of the simulation. We, however,
would do a pre-simulation briefing session with the participants so
that they leverage the most out of the simulation. Pre-simulation
briefing session would normally last for about 3hrs. It will, inter-
alia, cover:
8. Round
debriefing Round debrief would occur after every round. It is part generic and
part specific, to each team. It would, inter-alia, cover:
- round analysis
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
- analysis of various decisions made by teams and their
impact on their company’s performance
9. Post-simulation
de-briefing When we run the workshop we take note of various decisions taken
by teams in different rounds in different areas of simulation from
the word go. These decisions impact their businesses during
following years. They are usually/sometimes unaware of it.
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
11. Post-round Reports
After each round there are several reports generated on the
performance of each team and the way the entire market performed.
Some of the reports are as follows:
Star Report – this report gives one star to each team on five
management criteria i.e. Contribution margin, Profit, Stock price,
Inventory Management and Cash flow management. It is possible
that a team may receive all the stars but it may be nowhere in terms
of financial performance.
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
These assignments come in only on-line delivered programs that are
spread over a period of time. These can be customized to meet a
particular requirement for a particular group.
13. Peer Evaluation At the end of the simulation. Team members evaluate other team
members’ contribution/attitude towards the simulation. These
inputs are fresh and spontaneous. This definitely is a block buster.
Peer Evaluation Results/reports have proven to be an HR
Head/CEO’s dream tool to assess their managers. Interestingly,
managers’ behavior/contribution during the simulation is largely
reflective of their real world conduct.
14. Success in the Just as in the real business situation, success in the simulation is
Simulation determined by:
15. Benefits
Following are some of the ways through which participants shall
benefit:
Cross-functional alignment
Risk analysis
Experience in setting and executing tactics and strategy,
Helps mine the intelligence from financial information,
Importance of aligning all business functions towards a
clear goal.
Demonstrates the financial impact of non- financial
decisions.
Allows managers to ‘live’ the financials in their own
business.
Better communication of strategy to co-workers and team
members
Closer attention to, and understanding of, competitors’
behavior
Increased focus and skill in team dynamics
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
16. Discover Participants, during the course of simulation, discover:
17. Balanced Scorecard The Comp-XM® is an independent software that comes along
(Post program assessment) with Capstone®. Similar to Capstone® but much simpler. Here, a
participant undertakes an exam towards the end of Capstone®
Business Simulation workshop. Runs a business as CEO. At the
end of the exam an individual report is generated on each
participant capturing her areas of Competency and Deficiency
across Balanced Scorecard viz. Finance, Internal Business
Processes, Innovation and Learning, and Customer Satisfaction
etc. The Comp-XM® answers the question "What did they
learn?” The exam changes to reflect decisions and results for
each individual participant who uses the Capstone® or
Foundation® Business Simulations. Each student's exam is
unique, yet all exams are comparable.
18. Ethics module The Capsim® Ethics Plug-in presents students with ethical
dilemmas to be solved in the context of their simulated
company, considering the long and short-term impacts on all
relevant stakeholders.
19. EQ and IQ While the Peer Evaluation tool captures the EQ profile of a
participant, the Comp-XM® brings out the business acumen
competencies.
20. Logistics
1. One table big enough to accommodate participants, for
each team
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
3. One white board, LCD Projector/screen, for each team
Decision List
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
Strategy is the central theme of the Simulation; the participants shall have comprehensive
exposure to Financial and Business strategy. Under Financial strategy, they shall have the option
to select anyone or a combination of more than one from the following as their primary,
secondary… goal:
The participants shall determine, at the beginning of the simulation, how much weight to
be given to each of the above goals while evaluating their performance at the end of the Seminar
simulation.
Under Business Strategy, the participants shall have the option to pursue anyone or a
combination of more than one from the following as their business strategy:
cost leader with a product life cycle focus
differentiation strategy with a product life cycle focus
broad cost leader
broad differentiation
niche cost leader
niche differentiation
Participants shall learn to dovetail their financial goals with their business strategy and
vice-versa.
The Seminar allows students to revise and invent industrial sensors products. Products are
assigned a:
Size
Performance
Reliability Rating
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
R&D efforts vary in length and cost, depending on the parameters of the project. The participants
make, inter-alia, following decisions:
Marketing
Production
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
- Labor contract vs. automation
- HR practices vs. production/productivity
Finance
Balance Sheets
Cash Flow Statements
Income Statements
Students examine capitalization using both stock and bond markets, and explore ratio
analysis in detail.
Experience
Group process is as important as a team's strategy. The Seminar offers methods for groups
to organize by function, by product, by segment, or as a board of directors. Much thought has
gone into shaping the conversations within a team. For example, tactical questions are resolved
through what-if analysis, while the spreadsheets graphs and charts foster discussion of the
strategic implications.
The Web site includes several additional resources:
Simulation Purpose
Malcolm Knowles, a leading theorist in adult education, said there were four key elements to
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
successful adult education programs. Each of those elements is integral to the Capstone®
Seminar simulation:
Adults have lifetime experiences that should be tapped and built upon.
Adults need to apply new knowledge and skills immediately to aid retention.
At the end of the Simulation, participants come to acquire a strategic business mind-set and have
a holistic perspective of the business. They cease to look at issues from merely their function
perspective.
Corporates:
Alcatel-Lucent MASTEK
Allergan Microsoft
BMC NIIT
BreakThrough Oracle
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
Central Bank of India Polaris
INTUIT Thinksoft
JCB Wanbury
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
Business Schools and others:
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550
IMT - Ghaziabad XIMB – Bhubneshwar
XLRI - Jamshedpur
XVJIM - Hyderabad
Professor Profile-
Dharam is a corporate banker by training and a strategic management trainer by accident!
Dharam pioneered simulation based Business and Management teaching among top-end of
corporates and b-schools in India by introducing CAPSIM® Simulations (CAPSTONE® Business
Simulation) in '2003. He honed his business, financial and credit analysis skills as a corporate
banker in India (SBI) and Singapore (DBS).
Trendset Winz, G-804, Nanakramguda, Hyderabad – 500 008, India, Phone - +91-98850-13550