The Business Competency Stimulation for Andrews Company provided an immersive platform for students to explore and implement effective strategies to maximise profit. During the simulation, the student embarked on five rounds of decision-making, aiming to identify the optimal approach that would lead Andrews Company towards profitability. The initial round involved reducing prices and utilising long-term debt; however, this strategy yielded little profitability. To better understand competition within the industry, a comparison was made between Honeywell International, an honest company, and Andrews in the simulation. This analysis encompassed external factors using Porter's Five Forces model and internal factors through SWOT analysis. By employing these tools, valuable insights were obtained regarding competitive strategy and challenges faced by Andrews (Umid, 2023). Based on the findings from this comprehensive evaluation, it is recommended that Andrews explore alternative financing options, such as retained earnings or equity, rather than relying solely on long-term debts. Adopting this approach would support financial stability while avoiding unnecessary liabilities impeding future growth prospects.

Furthermore, given the nature of their sector, price competitiveness remains crucial for establishing a solid market presence. Therefore, it is emphasised that Andrews must strive to maintain competitive pricing strategies alongside other necessary initiatives to secure a substantial share within their target market. Leveraging insights from successful marketing strategy implementation and effective research and development practices are paramount for sustained success in this dynamic business environment. These practices will enable Andrews Company to remain adaptable while continuously enhancing its products.

Table of Contents Executive Summary ….2 Introduction 4 Part One 5 Research and Development Department 9 Marketing 10 Finance 11 Specific Group Strategies and Decisions. 13 Part Two 16 Part Three 18 Part Four 25 Conclusion 29 Bibliography 31 Glossary 33

Introduction

In today's ever-evolving and fiercely competitive sensor industry, Andrews confronts stiff competition from four other firms. These formidable opponents, each catering to one of the five distinct markets, pose an ongoing challenge to Andrews' growth and sustainability. However, amidst this cutthroat environment, the implementation of business simulation tools emerges as a powerful aid in assisting businesses like Andrews in facing such intense rivalry. Harnessing the potential of these simulations allows companies to navigate through complex market dynamics by providing invaluable insights into various strategic decisions that impact their success. By utilising these sophisticated virtual platforms, executives can simulate real-world scenarios within specific market segments while using historical data and market trends to guide their decision-making process effectively. Business simulations offer an avenue for testing diverse strategies without risking substantial financial investments or suffering irreversible consequences in the marketplace. This empowers firms like Andrews to understand competitor behaviour comprehensively and its implications on pricing strategies, marketing campaigns, product development initiatives, and brand positioning efforts; fostering adaptability and innovation becomes imperative when striving for differentiation against rivals. Through business simulations' immersive experiences and dynamic feedback systems, tracking company performance against competitors' actions in multiple markets simultaneously promptly enables proactive adjustments based on emerging opportunities or threats. Thus, this ensures maximum competitiveness within every aspect of operations across all five markets Andrew inhabits.

In this exercise, business simulation aims to provide students with an engaging environment where they can compete against one another while attempting to turn around failing businesses. Students learn and practice business management by participating in a business simulation. In this performance, students are given multiple options depending on their analysis of the current situation. Capsim challenges its participants to imagine the future of a fictitious firm as it strives to satisfy its consumers and improve its financial standing. As a result, individuals improve their business acumen and capacity to make prudent choices. Andrews faces competition from four other firms in the sensor industry, spread over five distinct markets. Eight cycles were completed, with each new process commencing with a review of the previous year's report to determine where resources should be allocated. Thus, the simulation was designed to simulate real-world business scenarios and test decision-making skills that can affect businesses positively or negatively. By analysing various aspects such as market fluctuations, resource allocation, marketing strategies, et cetera through varying simulated conditions, this report will offer valuable insights into optimising Andrews Company's overall performance while providing practical solutions tailored specifically for them based on data-driven analytics derived from these simulations.

Part One

In this section of the report, examining and analysing the intricacies of the Strategy, Tactics, and Decisions taken by our ingenious team throughout the immersive Capstone® Business Simulation is imperative. A comprehensive understanding of their implications emerges as we delve deep into evaluating the success or failure of these crucial elements employed across various segments within our purview. The Strategy implemented was meticulously crafted, incorporating long-term objectives aligned with market dynamics while considering internal expertise and external opportunities. Through astute analysis of industry trends coupled with insightful forecasting, our team derived Tactics that allowed us to seize advantageous positions within each segment we operated in. Such tactics encompass product positioning strategies, pricing models tailored for optimal profitability and customer appeal, and effective marketing campaigns designed to increase brand visibility. Last but not insignificantly are the Decisions our dynamic team members made, who demonstrated an exceptional aptitude for critical thinking under daunting circumstances presented in this high-stakes simulation exercise. These decisions were informed by meticulous data analysis and intuition honed through experience; they effectively transformed conceptual ideas into tangible actions that propelled us towards targeted goals.

During the first lecture, we were given an enlightening overview of the Capsim program, a powerful tool that MBA candidates can utilise to simulate and explore real-world corporations' intricate decision-making and strategy-formulation processes (Buil et al., 2019). Recognising its immense potential for learning and growth, our group of five individuals embarked on this captivating journey together. As each member registered for the Capsim platform, we eagerly engaged in numerous productive discussions regarding our approach. However, being novices at operating this novel program posed a significant challenge as we struggled to familiarise ourselves with its intricacies. Determined to overcome this hurdle collectively and maximise our potential for success, we ultimately committed to collaborating with Andrews within the immersive world of Capsim. By doing so, we gained insightful exposure to their research and development endeavours alongside critical insights into their marketing strategies, manufacturing processes, and financial management choices after strategically hiring them onto our team.

In preparation for a practice round, we brought our sensors up to date to meet the "ideal criteria" outlined in the Capsim guide. Andrews intended to expand its activities in both the low-tech and high-tech markets. Because of what we know, we have concluded that we need to differentiate ourselves somehow. As part of this plan, we broadened the scope of categories that were already in place. This is why we focused much on Able rather than its component pieces. Each team member hesitated to decide because they still determined which course of action would result in the most favourable outcomes. However, we experimented with every team member contributing to the activity's success to understand the situation better.

Practice Rounds Results

Feelings:

The team collaboration studied various aspects of the products, including how they are utilised. It was natural for us to be nervous, given that none of us had ever worked with simulation software. We have been glued to the Capsim Videos to obtain the information we require concerning the Capsim program (Hernández-Lara et al., 2019). In addition, because each member approached the situation with a unique tactic and point of view, our group engaged in several heated discussions throughout the preliminary round.

During the initial round of the Business Simulation Capsim Exercise for MBA students, the group encountered various challenges that required a diligent and strategic approach to overcome. Firstly, they needed help comprehending and utilising all the detailed financial reports and market data provided by the simulation software. However, through meticulous analysis of these resources, they made informed decisions about product pricing, promotional strategies, and investment in research and development. Secondly, as there was limited capital available at the start of the simulation, they had to allocate funds among different departments while ensuring smooth operations. This necessitated effective communication and collaboration within the team to reach a consensus on expenditure priorities. Furthermore, competing against other teams posed another challenge as it demanded constant monitoring of competitors' actions and swift adjustments in marketing tactics or production volumes when necessary.

Despite initially experiencing setbacks due to miscalculations or incorrect forecasting assumptions, both individually made errors without confirming each other's thoughts; the group eventually learned from their mistakes by thoroughly analysing performance metrics in subsequent rounds. By leveraging their collective knowledge gained from prior experiences as well as adapting swiftly to dynamic market conditions, such as adjusting production levels based on customer demand fluctuations or identifying untapped segments for targeted advertising campaigns, the group managed not only to surpass their projected sales goals but also achieving higher profitability than anticipated. It is worth mentioning that this exemplary performance was achieved partly due to exploiting opportunities presented by changes in consumer preferences during certain rounds combined with continuous learning through reviewing competitors' moves. Their ability emphasised cultivating an adaptive

Evaluation:

Research and Development Department

Customer requirements and drift rates were gleaned from the Capsim courier and industry report. It was our first order of business to ensure that all of our product lines remained in step with one another. Age, drift rate, and revision pace were all carefully considered. Able, Acre, Adam, Aft, and Agape are all different products with their niches and target audiences inside R&D. Aft, catering to the conventional market analysis, dominated the industry and outsold all others by a wide margin.

After much consideration, we settled on 9.4 and 15.5, providing Aft with a significant edge. Reliability is the most essential quality in this respect. According to the courier's assessment, the level of trustworthiness was 22,000-27,000. The Most Time Before Failure (MTBF) of 27,000 was agreed upon. The specified MTB, size, and performance are taken into account. According to the courier report, the optimal age for a revision is 1, so the actual age at revision was 2. The price tag for this product's R&D was a hefty $80. Adam: Adam was initially in the top performing and most significant market share. The performance and size drift rates for this sub-segment are both 0.9. We deliberated long and hard before increasing the MTBF to increase the product's reliability.

The marketing division of a company is crucial to its success because it is in charge of publicising the company and boosting product sales. Determining a marketing plan relies heavily on data gleaned from studies of product demand, market size, and buyer motivations. Each product's price is defined in this division. To stimulate initial interest, we initially set our prices low. Price cuts effectively attracted more customers, but they may have hurt profitability. Each pricing range is decreasing by about half a dollar each year, which puts additional stress on businesses to find ways to cut costs.

The scope of the market was also taken into account here. Decisions on pricing and projections were made with the target price range and market share in mind. For instance, we decided to charge $21 for our standard product, $39.5 for the luxury market, and $34.50 for the economy market.

Table 3: Liabilities and Owner’s Equity

The chart above shows that in the first round of the simulation, the company had a large segment of retained earnings and a more significant long-term debt.

Andrews Business issued $18,994 in long-term debt at an interest rate of 11.3 per cent to secure quick cash for operating expenses. We opted for long-term debt as a source of funding rather than current short-term debt because of the lower borrowing costs associated with the former. Since we did not know our opponents' financial standing at the outset, we held off on making any first investments (Barker & Davy, 2019). We were still trying to come up with a firm plan. We decided not to invest in the initial round because of this possibility.

Financial Statement Analysis

The outcomes of the first round were unexpectedly different from what we had anticipated. We had thought that Adam and Aft could help us generate a profit margin for our business. There was more than one way to look at the situation, including the observation that our ROA and ROS were far lower than anticipated. According to the income statement presented earlier, the total sales revenue in 2023 was $ 101,073 million; of this figure, 64% came from the low-end sector (Acre and Able product), and the remaining 36% came from the high-end segment. These two goods are responsible for 73% of the overall contribution margin of $11,996 ($8,766,000,000), totalling $11,996. According to their break-even point calculations, Acre produced less money than the other four items, except Acre produced enough money by the end of the year to achieve financial stability.

The results of the experiment were analysed and visualised in a comprehensive chart. The findings indicated that in the initial round of the simulation, the company had a considerable amount of retained earnings along with significant long-term debt. With hopes pinned on Adam and Aft to help generate profitable margins for our business, we eagerly awaited positive outcomes. However, upon closer inspection, it became apparent that our return on assets (ROA) and return on sales (ROS) fell well below our expectations. This realisation prompted multiple perspectives on the situation at hand. One angle acknowledged that despite having high retained earnings and substantial debt investments initially, we could have capitalised more effectively on these resources. This led to unsatisfactory returns on both assets and sales. Despite this setback, another noteworthy observation emerged from the analysis. Within this complex landscape came an encouraging discovery – Able and Acre products captured a significant profit share among all offerings presented during the exercise. Though our overall performance fell short of the desired levels due to lower ROA and ROS figures than anticipated; however, within this realm lay potential opportunities worth exploring further for future iterations or strategies. With an official tone befitting professional discourse surrounding such exercises in MBA programs like ours', these insights shed light onto essential aspects regarding profitability management within simulated business environment scenarios.

In the Business Simulation Capsim exercise for MBA students, our group carefully deliberated on the decisions and strategies we made to achieve optimal results. Recognising the importance of pricing strategies, we strategically set our prices low to gain a competitive edge in the market. By doing so, we aimed to attract a more extensive customer base and ultimately increase our overall revenue. Although price cuts effectively garnered more customers, we needed to consider their potential impact on profitability. Nonetheless, we believed such measures would enhance our position within the industry. We meticulously analysed all available options when pondering debt versus equity as a funding source. Considering the lower borrowing costs associated with long-term debt compared to current short-term debt, it became evident that opting for this alternative would be financially advantageous for us. Hence, mitigating unnecessary expenses while seeking avenues for growth through financial prudence became one of our primary objectives. Understanding that research and development are cardinal components in sustaining competitiveness in today's dynamic business landscape, establishing an efficient research and development department was paramount for us right from the start. We recognised that aligning all product lines with each other was pivotal in maintaining consistency throughout our operations within all segments of our simulated company. As such, nurturing innovation and keeping abreast of emerging technologies were integral to ensuring sustained success during this remarkable experience.

The first and most important choice I made for the research division was assembling a group of highly qualified experts who could conduct customer analysis, product development, and market research. This team would remain current with market trends, monitor client needs and wants, and create new items valuable to our customers. Before products are made available on the market, this group would also ensure they comply with legal criteria.

Regarding production decisions, I focused on creating an efficient system that allowed us to produce high-quality goods at lower costs. To do this, I invested in state-of-the-art equipment and technology to streamline our processes while maintaining high standards for quality control. Additionally, I worked closely with suppliers to ensure the timely delivery of raw materials needed for production runs. Finally, I put into place systems designed to reduce waste by tracking inventory levels accurately and reducing unnecessary labour costs wherever possible.

For marketing strategies, my goal was to increase brand awareness and generate more sales leads through effective campaigns across multiple channels such as print media ads or digital advertising platforms like Google Ads or social media networks like Facebook or Instagram. To achieve this goal effectively without spending too much money upfront on traditional advertising strategies such as TV commercials or radio spots. I leveraged influencer marketing tactics which involved working with famous bloggers who already had established fan bases within our target demographic groups so their influence could help spread the word about our brand quickly among potential buyers online. Furthermore, I also implemented SEO techniques into website design & content creation activities to create organic search engine traffic toward the company's website, thus generating more qualified leads from targeted audiences.

Regarding finance-related decisions & strategies, my focus has been on cost-cutting initiatives while maintaining overall business growth objectives. To ensure financial discipline & efficiency, internal controls were established over expenditures & investments along with implementing automated accounting software solutions, which can provide real-time visibility into financial data, allowing us to make better-informed decisions when managing cash flows efficiently. Furthermore, I have set up periodic meetings between senior management members to review the company's performance metrics against budgeted goals, helping us identify areas where corrective actions must be taken immediately.

In conclusion, we should have thoroughly reviewed the market conditions at the end of the first round, and our situational analysis needed to be revised. We looked at the Capsim Courier market research report but quickly recognised that we had not given it the thorough investigation it deserved. Our expectations were highly lofty, especially in light of our estimates, which were much too optimistic. Despite this, we were eager to try something new and taste this experience because it was our first time using the simulation software.

The student discovers many significant differences between the competitive ecosystems of the Capstone simulation and the Comp-XM simulation, all of which have the potential to impact the success of their ideas. By familiarising themselves with these distinctions and drawing on the knowledge they gained from the Capstone simulation, the student can bring their company's performance in the Comp-XM simulation to its full potential.

The student makes some observations and comparisons regarding the industry structures of the two different models. They take into account a variety of criteria, including competition, product distinctiveness, and market concentration. Students analyse the influence that recent structural shifts in their chosen industry may have had, if any, on the effectiveness of the strategies they have employed in the past as part of their Capstone project.

The student can explain how the Comp-XM and Capstone simulations each uniquely approach the question of market demand and segmentation. The investigation is conducted into particular facets of the Comp-XM simulation, such as consumer preferences, purchasing patterns, and general market tendencies. The learner considers how the changes might influence the effectiveness of their previous strategies and then modifies their approach to those considerations.

In the Capstone simulation, the student evaluates the significance of the student's competitive advantages and investigates their applicability in the Comp-XM simulation. They consider the one-of-a-kind competitive environment that the Comp-XM simulation presents and assess whether or not the same sources of competitive advantage can be utilised or whether or not new ways need to be discovered.

The student thinks about how the two scenarios have drastically different resources. The following aspects are considered: general labour, production capability, and accessible capital. For the students to achieve the best possible results in the Comp-XM simulation, they need to carefully analyse how the modifications might impact the feasibility and efficiency of the techniques they have used in the past.

The student subsequently develops a set of objectives and strategies for their organisation to use in the Comp-XM simulation by using the completed analysis and the information they learned from the Capstone simulation. The following are some instances of such methods:

During the Comp-XM simulation, students learn how to define and segment their target market, and they are then tasked with developing successful methods for satisfying the requirements of those segments. They consider the clients' demographics, psychographics, and purchasing behaviours while deciding whom to sell to maximise their effectiveness.

Total Score

Product differentiation is the process through which a student strives to develop a good or service that is distinguishable from similar offerings on the market to achieve a competitive advantage in the Comp-XM simulation. They concentrate on the most significant aspects of the audience they are aiming for and work diligently to provide more value overall than their rivals. Students pay particular attention to cost management strategies to maximise the effectiveness of their organisation and the revenues it generates. They investigate the processes of manufacturing, the management of supply chains, and the pricing structures to look for ways to reduce costs and increase productivity.

Positioning Your Business Wisely in the Market Before selecting where to place their company, the student investigates the competitive landscape presented by the Comp-XM simulation. They do this by assessing pricing, brand image, and market placement to differentiate themselves from competitors. The student knows that devoting resources to research and development is r