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Learnings
from
Capsim
 Our Strategy
Team learnings
Real-world applications
Agenda Examples
 Product Place
Maintained a presence in every We spent heavily on
segment offering customers accessibility to ensure
products that match their ideal close to 100%
criteria for positioning, age, penetration in the first
and reliability. two rounds

BROAD 4P 's
Differentiation
Price Promotion
Our prices varied for Spent aggressively on
different segments promotion and sales in all
but was around the segments. We want every
mid-point of ideal customer to know about our
range superb designs, and we
want to make our products
easy for customers to find.
Team learnings
With 65 million
members, it’s the
world’s largest retailer
of specific products By mixing traditional
such as organic food, marketing with
rotisserie chicken, and inbound marketing,
prime beef. they show consumers
Broad-cost the “why” of their
differentiators products in terms of
health benefits and
wholesomeness.

Samsung has a different

smartphone range for every
segment. They innovate majorly
in their high-end ranges
Stick to the strategy
Our decision was to go for the
Broad differentiation strategy.

But focus shifted to increasing

market share by keeping prices
lower which reduced profitability.

A competitive industry can shift

focus & strategy to short term
gains leading to further chaos in
decision making.
Conflicts arise but can be solved
using proper laying down of
facts and group consensus Get
For example, losses in initial
rounds prompted members to Team
Consensus
focus on cost reduction, reduced
R&D, increasing prices
comprising the strategy.

We learnt how to get team

consensus and stick to one
strategy
Prioritize Profitability
Even though we decided on a broad-
differentiation strategy, we often found ourselves
spending considerably high on R&D and keeping
prices lower.

After the first 3 rounds, we ensured that our

R&D spends are just enough to tweak products
and have the best possible specifications within a
year.

R&D is not a charity, the expenses have to be

borne by the customers eventually and hence
higher, justifiable prices are a must to keep the
company profitable
 R&D Learnings
Age Profile of Daze and Duck

Long R&D cycle

Skipped R&D of Daze
R&D Specifications analysis: https://www.desmos.com/calculator/l1n3lfsmsl
 R&D Learnings
High R&D costs in initial years
Real World Example of high R&D along with
Price Premium

Apple has positioned itself as a luxury and exclusive

brand. They showcase themselves as a company which
makes high technology products along with elegant
design. They have promoted it in such a way that Apple
has made a perception in the mind of the customers that
it is a luxury brand providing elegant gadgets with the
latest high end technology along with exceptional
customer experience
THE TOP LINE IMPROVES BY R&D AND
MARKETING BUT THE BOTTOM LINE IMPROVES
BY EFFICIENT MANAGEMENT OF RESOURCES

TQM Costs Incurred Reductions in Cost through Percentage changes in different

TQM cost centres

The bottom line improved when we increased our

Company grows by both sales growth and
automation, HRM & TQM but even this could have
been more efficient if marginal improvements were cost reduction.
factored.
Real World Example of Cost Redutions to
increase profit
Godrej Dabur Whirlpool
We changed We had inhouse We reduced our
sourcing, looked media planning raw material
for alternatives, agency which cost by 8.5% by
made import saved 20-25% using alternative
substitutions on marketing materials and
and hedged risk costs reengineering
to reduce costs

Good Forecasting is key

Bad forecasting led to more production in earlier
rounds which led to high inventory carrying costs.

It led to stock-outs leading to opportunity loss

It led to the poor prediction of cash flows and

cash balance which led to emergency loans and
reduced credit ratings

Conservative Forecasting through market growth prediction, market share

based on customer surveys and factoring product specifications can reduce
costs and better manage cash flows.
 Other learnings

Working Inter-
capital department
Management communication
Considering changes in Subordination of
sales to predict whether departmental
any short-term borrowing objectives to overall
was required or not. This goals
could have prevented
emergency loans.
Real-world
examples
Real World Example of Sales Forecasting
Amazon AWS has developed a new tool as AWS forecast
which is used by many companies to forecast demand
and predict sales. More Retail Ltd. (MRL) is one of the
India's Top 4 grocery retails having revenue of several
billion dollars. They used automated Machine learning
process to decrease stakeouts, excess inventory and costs.
It is of immense importance to predict the demand in
fresh category (F&V) to reduce shrinkage. With the help
of demand forecasting MRL gained the ability to
categorize products based on factors like shelf life,
promotions, price, type of stores, affluent cluster,
competitive store, and stores throughput.
Finance Learnings

Emergency Loans incur

high Interests

They reduce the share

price of the company.
Real World Example of Financing
The compostion of debt and equity in the
capital structure is through careful planning.

Companies like Adani Group are expanding

through high debt while companies like
Dabur, India Hotels, Reliance want to be
debt-free.

While new startups are raising money

through private equity, venture capital, both
new and old companies like Zomato & LIC
respectively went the IPO route.
Thank you