Capsim Simulation Competitive Analysis

The capsim simulation course is a multidisciplinary task that requires students to actively apply the knowledge learnt in the classroom in real business solutions. This course is mostly done by business final year students to prepare them for the corporate business world. Access the best capsim simulation  competitive analysis assignment assistance from our expert tutors. We also help students to analyze the capsim courier reports which contain valuable information for decision making. Place your ORDER NOW.

Participants in the capsim simulation competition are required to understand and apply several concepts learnt in class in the capsim decision making process. Porter’s Five Forces, Balanced Scorecard, Industry cycle model , macro-environment analysis and Strategic Group Map are some examples of regularly used strategy models in capsim decision making. Let us take a keen look at some of these models used in capsim simulation.

Strategic Group Map

A strategic group map is a technique that is used to analyse the competitiveness of individual performance against a common group. The strategic group mapping involves choosing the best performing entity out of a group of companies operating with the same strategies. This strategy can be used by the business analysts and instructors to establish the best performing entity in the industry.

Capsim simulation participants can use a strategic group map to increase their industry competitiveness and to improve their aggregate capsim simulation score. The following steps can be followed to analyze the competitiveness of the business:

Step one

This involves pinpointing the competitors and evaluating their business strategy. Analyzing the competitor’s profiles by establishing their line of service, value chain and what makes them remain relevant in the market.

Step two

Point out the internal business factors that have helped your business to succeed over the period the business has existed. Are those business factors still relevant? Are they in line with your business objectives?

Step three

Analyze two business strengths that make your business to thrive and compare them to those of the competitors. What makes your business perform the way it does? How are the competitors doing things differently? Can emulating their steps impact your business positively? The answers to these questions form the axis of the strategic group map. Some of these factors could include your pricing and marketing strategies and product differentiation.

Step four

Plot the competitors identified in step one on the two-strengths variables identified in step three. Firms that fall under the same variable belong to a similar strategic group. Such firms need a common strategic approach to beat their competitiveness. However, the approaches also depend on the size of the companies in form of their market share.

Porter’s Five Forces Model of Industry Competition Analysis

The Michael porter model is also used for analyzing the competitiveness of a firm. Analyzing the Five Forces model correctly can also help the capsim simulation participants to identify the strengths and weaknesses of their business strategy. The five forces model consists of the following elements:

The Degree of competitiveness

This is the central focus of the Porter’s Five Forces model. The extent of competition rivalry is affected by the other four forces stated by Michael Porter. In capsim simulation, competition analysis is influenced by the number of competitors, product differentiation and exit barriers.

The Bargaining Power of Suppliers

This element involves the analysis of the supplier’s ability to bargain prices up thus inflating the cost of production and the subsequently raising the final price of products. The bargaining power of suppliers influenced by factors such as the number of buyers, availability of substitute raw materials and the ability to switch prices.

The Bargaining power of buyers

Buyers with strong bargaining power can affect the performance of individual firms and the industry at large. Such buyers have the ability to bargain for significant price reduction through discounts and additional product features which increase costs. Such buyers are a threat to the performance of the capsim business because they are likely to reduce the Return on Equity which a major determinant of the final score.

The threat of new entrants into the Market

Potential competitors gather surmountable resources to enter the market thus posing a major threat to existing businesses. The capsim simulation management must stay vigilant to potential actions of new entrants because they can snatch the market segment of the latter. The impact of potential competitors is majorly dependent on the economies of scale of the existing businesses, their brand images and the absolute cost advantage.

Threat of substitute products

The threat of substitute products is a major issue because the new products might limit the price making decision of existing firms. Introduction of cheap substitutes reduces the demand for existing products warranting the old producers to adjust their prices accordingly.

Industry Life cycle model

This model is used for analysing the industry competitiveness of a firm by evaluating the four stages of a business . The four stages are emergence, growth, maturity and decline. The capsim simulation business managers must understand this model because it is a survival tool for business to actively participate and survive in a competitive industry.

The Emergence/Introduction stage

This is the period when the businesses enter the market full of uncertainties. A company at this stage struggle with launching it product and creating brand awareness campaigns. Capsim simulation businesses at this stage need careful evaluation to avoid making decisions which cannot be easy to rewind. When the industry is at this level, there are usually many unexploited opportunities which existing and new businesses can take advantage.

The growth Stage

The growth stage of a business describes a situation of temporary stability of the business. The target customers identify the value of the new products and start developing customer loyalty to the business. At the growth stage of the industry, Competition deepens at as more companies enter the market and produce substitute goods. There should be a recurrent evaluation of sales trends and growth strategies at this stage to maintain the life of the business and the industry at large.

The Maturity stage

This is a period during which the growth of the businesses slows down. The management also shift their efforts from growth and expansion to cost monitoring, achieving economies of scale and increasing the market capitalization. A capsim business simulation industry that reaches this stage is likely to survive the onslaught of market dynamics.

The Decline Phase

This is the period where the industry growth becomes stagnant because it cannot support any more business entrants. The existing businesses devise ways to remain relevant in the industry by increasing their market capitalization and through mergers and acquisitions. Such activities force the weak competitors out of the business. Capsim business management teams must be able to analyse the various industry cycles so that they can take necessary actions.

Macro-environment Analysis Model

This model focuses on the external factors affecting the business. The macro-environment analysis model is based on the evaluation of the following aspects:

-Technological factors

-Social and cultural aspects of the environment

-Political factors and the legal framework

-The natural environment of the business

-The prevailing economic conditions.

Why perform competition analysis in capsim simulation?

The analysis of the above models and other competitive analysis models such as the balanced score card and value chain analysis models enables the capsim simulation students to understand their businesses and the industry in which they operate. Clear understanding of the models and their correlation with decision making translates to great success in capsim simulation.

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