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According to the Capsim simulation, several changes occur in the industry as a result of the actions of each player. This paper gives a conclusion that lists all of the significant and essential movements that occurred in rounds 0-8 which was successful. Are you looking for Best Capsim assignment help? Worry no more! We got you covered!
Each of the industry’s firms started off with a 16.7 percent stake of the market when they first opened their doors. The most important step in round one was to set the prices high at the outset in order to maximize profits right away. This resulted in a significant increase in Baldwin’s market share, which rose to 20.68 percent, establishing the company as the industry leader. It is also clear that, other from Baldwin, everyone else was out of supply, necessitating higher marketing investment in order to attract and maintain customers.
Furthermore, due to the availability of product flexibility, Baldwin was able to reduce the cost of production by expanding capacity rather than automating the production process. During Round 2, this action assisted Baldwin in cutting operating costs, which resulted in an increase in net profits to $10,042,856 dollars. Consequently, the return on sales (ROS) grew to 16.6 percent, the highest in the industry, meaning that the company was more profitable than its competitors in the same industry.
In Round 2, Baldwin’s market share decreased as a result of a price reduction from $40 to at least $35 in order to diversify away from the high-tech sector in order to compete. But in Round 2, the total amount of money sold climbed from $60,457,658 in Round 1 to $75,529,195 in Round 2. This means that the company’s profitability has increased despite the fact that it has lost some market share to its competitors.
Because of the transition from the low-tech sector to the high-tech market, which has a lower level of rivalry, the improvement in profitability can be linked to the lower level of competition. As a result, the demand for high-tech products climbed from 2592 in Round 1 to 3110 in Round 2, indicating a positive trend. This is due to the fact that the company was in perfect competition in terms of research and development and, as a result, created high-quality, affordable items that were in high demand.
When it came to cycle three, the most significant and essential moves were a significant amount of investment in Baker, which is the company’s core strength. Because of this shift, Baldwin saw a rise in sales from $75,529,195 in Round 2 to $96,300,824 in Round 3, resulting in an increase in market share from 24.73 percent to 24.73 percent in Round 3. Aside from that, Baker had an excellent performance at the end of Round 3.
This suggests that Baldwin made investments in the long-term growth of its products, which resulted in increased consumer attraction and retention. Because of this, Baldwin’s stock price grew by $15.92 in Round3, showing an improvement in the company’s overall performance. In spite of the fact that Baldwin had a low accessibility budget in Round 2 due to the fact that it did not invest in Round 1, the company was still able to separate itself from the competition by providing what the clients wanted in an efficient manner.
When the organization entered Round 4, it decided to go with a high-cost strategy in order to respond to the changing market dynamics while targeting the high-tech industry. Because there has been a progressive increase in the demand for high-tech products, the company has boosted its capacity to take advantage of this trend. As a result, the company enhanced automation by 4.5 times while increasing capacity by 400 times.
As a result, Baldwin had a significant increase in market share in Round 4, and as a result, the company’s return on sales improved by 19.3 percent. Baldwin was able to maximize market demand by charging a higher price in Blitz, despite the fact that their production capacity was 500 units and the demand was 670. The reduction in production costs by $3 per unit, as a result, assisted the company in boosting their sales volume even more significantly. Due to the fact that the company charged the second lowest price relative to most other items in the sector, the company was able to attract and keep a greater number of customers.
Due to an increase in low-tech competitors, the organization reduced the baker price while increasing the promotional and sales expenditure in round 5. In addition, the corporation made investments in automation and reduced labor costs in order to more effectively compete with other counterparts. Thus, Baldwin was awarded the greatest market share of 28.32 percent, as well as a significant increase in sales income to $143,870,299 in the fifth round of competition.
Round Six to Seven
This resulted in a return on investment (ROI) of 15.3 percent, which was the greatest in the industry. Although Baldwin’s market share and sales revenue decreased in Round 6 despite the decision to reduce the promotion budget due to 100 percent customer awareness and increase Baker automation from 6 to 7 in order to reduce labor costs, the company’s market share and sales revenue increased in Round 5. This is due to the fact that the company paid a higher Blitz price in the market, which resulted in customers fleeing to Digby, whose stock price jumped by $19.23 as a result.
Additionally, the most significant and pivotal action in Round 6 was the issuance of shares for $14,000, which enabled the company to finance their investments as well as pay for everything associated with the sales, resulting in a slight decrease in the company’s financial position. Because of the firm’s great financial performance and the increase in demand for its stock as a result of its positive future outlook, the stock price of the company increased by $16.15 as a result of this shift.
As a result of receiving an emergency financing and growing investments in Round 7, the company became high-tech. Additionally, the decision to cut the price of Baker while increasing the company’s sales and promotion budget assisted the company in regaining market share.
Baldwin, on the other hand, received an emergency loan in the amount of $13,936,460, which appears to have caused its shares to fall to $94.17, so impacting the company’s overall profit. Consequently, the corporation should have taken a more conservative approach to its operations and avoided investing everything to improve its liquidity situation.
Finally, Round 8 reveals that the corporation obtained an emergency loan, which resulted in a decrease in the value of their stock. Additionally, the decision to drop the price of Baker to $23 was essential in the company regaining market share in the low-tech industry. The corporation paid a $2 dividend, which resulted in a $4000 loss for the company; yet, the move was critical in driving the stock price higher.
Baldwin had 88 percent customer awareness and 42 percent customer accessibility in Round 8, both of which were critical in boosting its market share in the last round. Baldwin, on the other hand, was badly affected by Blitz because it was a low-tech product masquerading as a high-tech product. Due to the fact that the company’s capacity exceeded its production in Round 8, it suffered a net loss of $2,303,612 in that round.
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