Round 1:
When we first started Capsim game, our team sets an objective
which is to balance between profitability and being a marketing
leader on products that has the highest growth potential. However,
we had a major setback because we didnt finalize our decision on
time. The result for round one was quite disappointing. Our sales
revenue was only $90.4 million with $15.2 million of excess
inventories, and declined a stock price ($34.25 to $30.50). Because
we didnt have enough cash reserve to covered all of our outflow,
this has forced our company to take out $1.6m of emergency loan
that had the highest interest rate. Based on the
ratiocomparison
with Round 0, it may seem that our current ratio is much better
than previous round but actually
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We can clearly
see that from looking at quick ratio. In fact, 3.2% of expenses
were directly cause by overstock on 4 out of 5 products. Our main
problem with round one was not generated enough sales to covered
our obligations. The result was bad, but not the worse!!!!
Round 2: Although the result for round one was disappointed,
but round two was the main reason that put us even further from our
original objective. We make the wrong strategic move by thinking
that lowering the price on all products would give us a better
chance of making a comeback. However, it was the opposite. Not
realizing that we have other variables that need to be considered
before making such a dramatic price adjustment. The first
disadvantage for us was the fact that our products position was
not align with customer expectation, to catch up with the
competitors we had to invest on R&D (Reposition) and automation
at the same time. This is a substantial capital
expenditure
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