PGDM : 2019-21 (Section A)

Trimester-IV
Course Name and Code : Capstone Business Simulation

Instructor
Name Prof Rajeev Sharma Credits 2.5 Teaching Hours 25

COURSE DESIGN AND LEARNING GOALS (CLGS)

The Capstone Business Simulation Experience is designed to measure how well students can integrate
and use the knowledge and skills gained from the management courses. This course provides you with
the unique opportunity to gain hands-on experience running a business as a member of the company’s
top management team. In the head-to-head battle for market share and profit in a simulated industry,
your team will formulate and implement strategies that require the effective integration of various
business functions – production, marketing, R&D, HRM, and finance – within a practical strategic
decision-making framework. You will be able to experience decision making under conditions of
uncertainty, the trade-offs necessary among different business functions, and the impact of decisions on
your company’s performance in a highly competitive marketplace. The simulation and the course is
designed towards exposure and learning to;
• Increase understanding of the relationship among the functional areas of a business
• Introduce the top management team’s perspective of management decisions relative to
these functional areas
• Introduce the strategic planning process
• Develop the ability to view the business organization and its strategy as a system consisting
of interrelated functions
• Develop an appreciation for competitive interaction

The capstone experience is based on a management simulation in which teams of students compete
against each other for business success within an industry. Students practice using newly acquired skills
and bring them to a new level. Teams must analyze the economic conditions of the simulated
environment, insure smooth production, understand their products relative to their customers, use
accounting data to evaluate results and make decisions pertaining discipline like finance, operations,
marketing, Human resource, economics etc to determine research and development targets, market
products, manage employees and the team and respond to the competition. The Capstone Simulation
program allows for “real-world” decision making, strategy formulation, problem-solving and competitive
challenges. One should be able to understand and learn about Cross functional understanding of
business; Linkage between Strategy and Finance; Significance of forecasting; Significance of Team-Work;
Role of risk taking ability and gut feel in running a great business; Do I have the ability to take the team
along?; Acquire ability to read a report and make smarter decisions thereof.
COURSE INTENDED LEARNING OUTCOMES (CLGS)
 Students will be able to complete an external and internal analysis of a firm.
 Students will be able to identify the strategic problems of a firm.
 Students will be able to develop solutions to a firm’s strategic issues.
 Students will be able to integrate skills acquired in finance, accounting, marketing, production
and MIS courses to create a successful firm strategy.
 Participants will demonstrate integrated and strategic thinking.

INSTRUCTOR CONTACT
Email: rajeev.sharma@bimtech.ac.in

READING/STUDY MATERIAL
Students will be given a reading material in printed form.

PEDAGOGY
It is based on briefing, practices, discussions’ and simulations.

EXPECTATIONS, TIPS & SUGGESTIONS

Involvement and participation…
 You are expected to attend all scheduled class and team meetings
 Create a sensible division of labor among team members for efficient analysis and decision
making
 Each team member is required to subscribe to the simulation
Getting things done…
 Learn the “rules of the game” before the competition rounds begin
o Skim, then carefully re-read Participants Manual
o Take on-line tutorials
o Take solo rehearsal round
 Efficient decision-making
o Conduct necessary analysis and make core decisions away from the computer
 In other words, don’t make and up-load decisions incrementally while entire
team sits around a single terminal with Participant’s Manuals sitting in your
laps
o Trust your teammates to develop functional strategies/decisions that support your
team’s overall strategy
o Meet to achieve strategic/decision consensus
o Independently up-load functional decisions
o Meet once more to reconcile inconsistencies, etc.
 Strictly adhere to simulation rounds decisions, uploading, and processing schedule, you don’t
get second chance or revision time. Once results are processed, no scope of re-submission or
re-working.
SIMULATION ROUNDS AND PROCESS

SIMULATION MODULES IN MARKET

Module Rd 1 Rd 2 Rd 3 Rd 4 Rd 5 Rd 6 Rd 7 Rd 8
HR off on on on on on on on
TQM off off on on on on on on
Labor off off off off off off on off
Marketin off off off off off off on on
g

ASSESSMENT CRITERIA

Criteria Marks/Weightage Date /Week #

Preparation of strategy Continuous evaluation

document & Playing simulations Every round
based on specified parameters, 50%
Group discussions and
discourse with faculty.
Comp- XM 50% End of Trimester

Total 100%

Absence in class participation End of trimester ( On the basis

Faculty discussion (10%) (minus) - 20% of online and offline records)
/attendance in workshops (-
10%)

EXPECTATIONS FROM THE STUDENTS

1. Read the study material before workshop and during the simulations.
2. Attending all the debriefing sessions and workshops
3. Keep track of deadlines
4. Participation in decision making process
SCHEDULE/ WEEKLY PLAN

Week # Topics Covered Assessment / Case

Deadlines Studies/Articles/Exercises
Learning Outcomes/ Skills
Modul  
e0

Modul  
e 01

Modul  
e
02

1 Module 1 - Pre-Simulation  Will be  Reading the study

Homework announced material and
regularly instruction
 Register on through manual.
www.capsim.com emails sent by
 Download Capstone.xls and the course
complete ‘SOLO Rehearsal instructor and
Rounds” coordinator
 Complete various Tutorials for Capstone.
under ‘Help’
 Complete reading the
‘Student Guide PDF’
 Developing teams ( 6
member per team, 6 teams
every Industry)
2 Module 2 - Pre-Simulation  Will be  Reading the study
Workshop announced material and
Pre-simulation briefing, Success regularly instruction
Measurement, Simulation Exercise, through manual.
Understanding the strategies, emails sent by
domain specific tactics and the course
measurements tools. instructor and
coordinator
for Capstone.
3 Module 3 - In- Simulation  Will be  Reading the study
coursework announced material and
 Arriving at a Business regularly instruction
Strategy, through discussion through manual.
within the team, to emails sent by
achieve your financial goals the course
as set out. instructor and
 Writing Team’s Mission coordinator
Statement. for Capstone.
 Assign individual roles
among Team members by
rotation, across rounds. E.g.
Individual members can be
assigned following roles:-
CEO, Function head, Market
Segment Manager,
Competitive Intelligence
Officer.

4-8 Module 4 - Playing simulation  Will be  Reading the study

 8 rounds of game, announced material and
distributed over weeks with regularly instruction
debriefing by the professor through manual.
every week. emails sent.

9-10 Module 5 - Post-simulation  Will be  Reading the study

debriefing (workshop) announced material and
 Presentation by each team regularly instruction
to the stock-holders. It through manual.
willcapture how they ran the emails sent.
business over the last 8 years
of their stewardship of the
business and their plan for
the next four years.)
 Module 6 - COMP-XM- End
term exam to be played
individually.

SIMULATION KEY ASPECTS

Balance Scorecard*
What Is a Balanced Scorecard?
Since its introduction in 1992, the Balanced Scorecard approach to enterprise management has enjoyed a
rapid rate of adoption in a variety of industries. More than just a grouping of financial measures, it is a
strategic assessment tool that can accurately portray a business unit's strategic progress. The Balanced
Scorecard asks managers to consider their business from four perspectives:
 The Customer
 Internal Business
 Innovation & Learning
 Financial

Note that only one perspective focuses on the financial metrics. The implication: Focusing only on financial
assessments of performance is not enough to improve an organization. Your industry includes many
measurable and actionable variables — exactly the type of metrics used in the Balanced Scorecard.
Customer Perspective
Robert Kaplan, one of the originators of the Balanced Scorecard, says customers concerns can generally be
broken down into four areas:
 Quality
 Time
 Performance
 Service

Within each of these areas there are a number of sub-elements. Take time for example: A customer might be
concerned with the amount of time a manufacturer takes to introduce new designs (design cycle), or in how
quickly the manufacturer can deliver a product (production cycle).
One of the goals in this perspective is to be perceived as the most innovative supplier to the industry. Clearly
then, new product introduction cycle time is a vital statistic, as is the portion of revenues generated by
products or services that are less than two years old.  Innovators would *not* want the additional perception
of a low cost leader because low cost is inconsistent with innovator’s goals.
Measures for your customer perspective include:
 Overall Awareness
 Overall Accessibility
 December Customer Survey for a particular segment
 Weighted Average of the December Customer Surveys (the Customer value for each segment
divided by the number of units sold in that segment and added across all segments)
 Accounts Receivable Lag (your credit policy)
 Weighted Average Price (weighted average as for December Customer Survey)
 Cumulative R&D Cycle Time Reduction (the percentage by which new product design time has
decreased)
Unit Share for the segments in which you are focused is also a key metric.

Internal Business Perspective

The Internal Business perspective asks: "What do we need to correct within our own business to ensure we
deliver the value propositions the market needs and expects?" Say a manufacturer wants to be the low price
leader in the market place. It needs to drive down all internal costs of production and marketing. To meet
this goal, a manufacturer would need lower labor and material costs than its competitors. Even marketing
costs would have to be reduced. Questions about the Internal Business Perspective need to be
uncompromising. Perhaps the question should be "What must we be excellent at?" Or, in the words of Jim
Collins, "What must we be best in the world at?"

Innovation and Learning Perspective

Nothing in business is static; the Innovation and Learning perspective asks "how do we develop and grow in
order to continue to create value?" In 1903 the economist Joseph Schumpeter coined the term "the creative
destruction of capital." He was referring to the need for corporations to regularly tear down much of what
they have built, reconfigure and move forward with new, different and more highly developed value
propositions. This process is more necessary to success than ever. Businesses that fail to "creatively destroy"
will inevitably give way to business that can.

To achieve the cultural change that allows "creative destruction," manufacturers turn to initiatives that
improve innovation/learning cultures, redesign/manufacturing processes, and sales/administration
efficiencies.

Financial Perspective
In this perspective, we ask: "how is our strategy and tactical execution translating into profitability and
economic viability?" Some feel there is actually no need to review financial measures as they are merely an
outcome. Instead, they argue that if the other measures of the Balanced Scorecard are all carefully watched,
financial success will naturally follow. This may be true in some cases, but it is not always true. For
example, low cost companies might watch their cash position all but evaporate if there were not enough
buyers for their products — no matter how efficiently they are produced.

Therefore, the Financial Measures Perspective asks two distinct questions:

 Are we making a profit in the activities in which we are engaged and therefore growing the
company/increasing shareholder value?
 "Do we have the appropriate levels of cash to operate both in the short term and the long term?"