Hacking the CapSim!
Updated: Jan 23, 2021
I know how hard it is to read the tediously long capsim courier handbook. I also know how convenient it is to enter random numbers and still pass. But, you do have a lot at stake in the CapSim game - A 20x7 bar of chocolate…. For each member!!
I would also like to mention that the title is not click-bait, there is an actual way to abuse the rules to gain an easy victory. If you are only interested in the final exploit, jump to the last section.
Capsim courier tries it’s best to hide the most critical information in a jungle of useless words. However, these rules are kind of important to be able to properly understand this article. So I would recommend readers to go through the rule book once before/after this article.
Capsim rules (the ones worth reading)
The Capsim game follows this cycle of main ideas: Make decisions, understand the impact, improvise and repeat.
Decision Avenues - The game essentially needs you to make decisions on 5 avenues:
Logically, this is the very first decision you need to make in every round. Try to keep the tech up-to-date with the sector requirements for the round. (Ahead of centre in High end, performance and size; at the centre in traditional, behind the centre for low end).
Keep in mind the time required for launch, and starting new products (especially in the first 3 rounds) and you should be set.
This or Marketing decisions are second in line. Production decisions require to predict the market demand, which can easily be calculated as (product sales)*(sector growth rate). For the first 4 rounds, over-producing by 5% can help you quickly capture market share.
Make labour decisions based on the requirements mentioned on the platform. Definitely invest in automation in the initial rounds, with this priority order Low end > Traditional > Size, Performance > High-end. Automation investments will earn you significant cost benefits in later rounds.
This where a lot of teams get into fights within themselves with most points raised being completely arbitrary. The guidelines for pricing is simple:
Low-end - Keep the price as close as possible to the lowest price competitor or reduce the cost by 0.5 in the next round. (Use the desired price from CC for round 0)
Traditional - Stick to the average value in the price range mentioned in CC, normally this sector is so huge so under-cutting doesn’t make a lot of sense as all products are usually sold off.
Nothing much to do here. Set equity to maximum, and take long term loans to cover the rest of the expense. Make sure to have an additional cushion while taking loans (5-10% extra), unless you are obnoxiously confident of your analysis.
In later rounds (round 3 or 4) sales decision is split into specific channels. Don’t forget to check out the sector-wise division of benefits for each sales channel. You can see the ℹ️ icon for each sales channel.
Make sure to keep an eye out for this sneaky one (it should probably open up in round 3 or 4). Allot maximum 1,500/round to all initiatives you think would help (Don’t go below 1,000 though, that gives no benefit). Don’t spend more than 4,500 in any initiative overall.
Focus on reducing costs (labour, material & administrative) in the initial stages before looking for increasing market share. Make staggering investments in initiatives to avoid overshooting the 4500 limit.
Mostly useless, unless you are planning a party for your virtual employees :P. This sector only comes into play if some team has increased the pay of their employees. That rarely ever happens. Don’t waste time in training employees, the returns kick in too late.
The Aam Strategies (that Capsim wants you to follow)
There are 4 broad strategies (which are the same as Porter's broad strategies) that Capsim wants you to follow:
Broad cost leader - cost leader in most segments
Broad differentiator - high quality, high margin, 2-3 segments (mostly size, performance and high-end), difficult to sustain beyond this
Niche cost leader - cost leader in 1-2 segments with full market control, can be in any segment but most common in low-end and traditional because of the importance of low prices
Niche differentiator - very high quality and full market control in 1-2 segments, have to maintain high margins, so high-end, performance and size would be the logical choices.
Most teams start with both broad differentiator and cost leader strategies in mind. But as soon as the first profit drop strikes (commonly in round 2 or 3), they shift to one of the above 4 strategies.
There are some basic tactics, which can be used to avoid a mishap, get out of a pinch, or simply get a lead over teams which didn’t read this article.
1. Loans: Fill up on equity first, then go for long-term loans. Never ever go for short-term loans.
2. Defaults: When you have defaulted in round x, fill it up with long term loans in round x+1. Double down on marketing, and fix production accordingly. Don’t try to curtail production or R&D spend by a lot, otherwise, you will end up in a downward spiral.
3. Sales: Sales expenses (not marketing) are cumulative within the sector. So if you have 2 products in some sector (say Traditional) and have spent 1500 as sales expense of each, you actually get a benefit of 1500+1500 = 3000 of sales expense for both of these Traditional products.
4. R&D drift: Given that High products need very frequent R&D updates, it makes sense to start a new product in High segment in earlier rounds. The older product can then be allowed to drift back into the Traditional segment.
However, make sure to reduce the MTBF value to avoid the extra production cost. The same funda can be applied to Traditional products (drift to Low-end)
5. Low-end: Only research this segment once, preferably sometime in Round 2 or 3.
Now to the crux of this article, the strategy that supersedes all these strategies and guarantees a win.
The Cheater Strategy
Generally, teams go through this pipeline:
R&D > Production/Marketing > TQM > HR > Finance
This is in-line with real-life business logic. Financial decisions only play a role in covering the expenses or clarify that they can’t be covered.
Most of the teams get too serious about the game and treat the game as an actual company (or are fooled by Capsim to believe so). However the Capsim doesn’t emulate real-life financial risks precisely, not even close, and that is where our hack comes in.
The Loophole: The long term loan payment timeline is 10 yrs, which is much greater than the timeline of the game. Thus, you never have to completely payback the loan. This might seems like a very innocent clause, but it has colossal implications for the game.
The Hack: Since we don’t have the burden to payback the whole long-term loan within the time frame of the game, the risk is significantly lowered. Our strategy should now be:
1. Take the max equity and max possible long-term loans in rounds 1,2 and 3, and maybe in later rounds too.
2. Make heavy investments in automation and go all out in marketing and advertisement spends (don’t spend over 2000 per round).
3. When TQM starts, make heavy investments in TQM too (within the 1500 per initiative per round limit obviously)
4. Start a new product in the first round itself to gain a lead in the High-end market.
Since you will be under-performing in the first 2-3 rounds, most teams will ignore you. But starting from round 3 you will see a sudden exponential growth, putting your opponents in shock. And before they can even think of recovering from this, you would have already captured a significant chunk of the market in all the sectors.
So there you have it, the ultimate exploit to win Capsim. Since you would have a lot of time left when using this strategy, I suggest you utilize them to make gleeful faces at your opponents. :P