2 Registering a Course - 2.3 Creating Industries

2.3 Creating Industries

2.3.1 Simulation Parameters And Customization

Scenarios

Instructors can select one of three "scenarios." The yearly growth rates and prime finance interest rates vary in each:

• Standard Scenario: This is the tried and true Capstone/Foundation scenario. Market segments grow at constant rates and the Prime Interest rate starts at 6.5% (Round 0) then increases 0.5% per year.
• Growth Scenario: Some instructors will feel more comfortable explaining this real world uncertainty. At the end of eight years the segment demand increases as much as the Standard scenario, but yearly growth rates vary each year within a range of 4.0%. Segment growth rates for the upcoming year are published in the industry newsletter, The Capstone Courier or The Foundation FastTrack. Participants do not know if growth rates will increase or decrease the following year.
• Recession Scenario: The Recession scenario starts off similar to the Growth scenario, however, in Year 5 the simulation economy tanks, the average industry growth rate will be a staggering -7.0%. In Year 6 the economy is stagnant with an average 0.0% growth. In Year 7 the industry begins to recover and in Year 8 life returns to normal with pre-recession growth rates. During the recession the prime rate is lowered to 4.0% then returns to normal when the economy recovers.

Capsim instructional materials do not telegraph to participants their scenario type nor details such as what year to expect a growth variance or recession. Participants only know about the growth rates and interest rates for the upcoming year as published in the Courier/FastTrack. The published rates hold true for the year; surprises can come the following year when the new rates are published.

For example, when the recession starts, participants know how much each segment is going to contract, but not when they will recover. It is up to each instructor to decide how much uncertainty their class can handle. For upperclassmen, graduates and corporate participants, a complete surprise may be appropriate. For underclassmen it may be appropriate to announce "warning signs of a recession" two years in advance so participants do not overspend on capacity.

Parameter Setup

The Standard, Growth and Recession scenarios can be customized. All the industries within each course (a course can have multiple industries) will face the same customized environment.

Customization options allow the creation of snowflake simulations from course to course, essentially the same, but looking different.

Customization options can create a unique twist but remain familiar to the instructor. Customization also reduces the ability of previous participants "coaching" current participants.

• Monte Carlo (Randomized): Growth rates, interest rates and segment locations are randomized by slight amounts. All industries within the course have the same randomization. (If you want two or more industries to have different randomization, you will need to establish separate courses.) The growth and interest rates vary within a few percent of the base scenario. The segment centers are shifted up to 1.4 units on the Perceptual Map plus all segments and their ideal spots shift as a group, preserving the overlaps (see 11.3 Perceptual Map). Segment drift rates remain the same. Randomization makes it virtually impossible for decisions used by previous participants to be shared with any success.
• Custom: Instructors can override the interest rate for each year, each segment's individual growth rate (between -10.0% and +25.0%) for each year and the starting segment centers up to 1.4 units on the Perceptual Map (plus or minus 1.0 unit in size and 1.0 unit in performance). Segment drift rates remain the same. We strongly recommend that only instructors with experience use the Custom option. Capsim support on a custom scenario will be limited because the support team has never seen an industry like it, and won't have a lot of experience to impart to your class.

Once the courses are setup, scenarios and customizations cannot change. If a different scenario or customization scheme is needed, launch a new course then move your participants into it. Tournament instructors can use the Team Assignment feature to do this. (see 3.3.1 Team Assignment (Tournament Only)).

Participants will see the parameters of the selected scenario and customization in their Industry Conditions Report (see 4.7.1 Simulation Reports).

2.3.2 Tournament Or Footrace?

Capstone and Foundation have two modes of play, Tournament and Footrace.

If you wish a competitive atmosphere, where participant teams compete against one another, select Tournament.

If you wish to compare your companies across a level playing field, where each participant team competes against a common set of computer teams, select Footrace.

Team Assignment Options

Instructors can specify whether:

• Tournament participants can join companies on their own or if the instructor alone can assign participants to companies; or
• Footrace participants can create or join companies with multiple participants or be restricted to one participant per company. 

2.3.3 Number Of Competing Companies Within An Industry

Capstone and Foundation Tournament simulations can have a maximum of six participant companies per industry. Footrace simulations can have one to many hundred participant companies playing in individual sub-industries.

Participant, Computer and Inactive Companies

In Tournament, companies are run by participants or computer, or set to inactive. Each Tournament industry must have at least one participant and one computer company.

In Footrace, each sub-industry has a single participant company and at least one computer company. The remaining four companies can be set to computer or inactive.

Industries with inactive companies are disqualified from Top Ten Eligibility (see Top Ten and the Capsim Balanced Scorecard).

2.3.4 Number Of Participants Per Company

Each company can be run by as few as one or as many as eight participants. Most instructors choose to have three to six participants per company. This evenly distributes the workload and teaches group dynamics.

2.3.5 Number Of Industries In Tournament Courses

Tournament users with classes of 30 or fewer participants generally will need only one industry.

Tournament users with larger classes will need multiple industries. Assigning these industries under a single course allows the creation of a single schedule and a single set of optional assignments, such as homework or peer evaluations. If you have sections that need separate schedules, please create a separate course for each schedule. If you have a large course with a single schedule, assign all the industries under one course.

Participants are not assigned to companies at this time. See 3.3 Assigning Teams.

2.3.6 Additional Modules

Additional Modules can be activated at this time. Instructors can also add or remove modules when Industries are restarted. See 3.4.3 Schedule Restart (Tournament) and 3.5.6 Restart Industries (Footrace Only).

TQM (Total Quality Management)/Sustainability

The TQM (Total Quality Management)/Sustainability Module allows companies to invest in areas that produce administrative savings, reduce costs, increase demand or reduce time required for Research & Development projects. This gives companies the ability to invest in areas that complement their strategies. All TQM/Sustainability areas can affect Balanced Scorecard measurements (see Top Ten and the Capsim Balanced Scorecard). We recommend adding the TQM/Sustainability module to the simulation in Round 3 or 4. Starting TQM/Sustainability in Rounds 1 or 2 disqualifies the industry/industries from Top Ten Eligibility.

Human Resources Module

The Human Resources (HR) Module introduces opportunities to improve organizational learning and growth as measured in the Balance Scorecard, which is used by the Top Ten Rankings (see Top Ten and the Capsim Balanced Scorecard). We recommend adding the HR Module in Rounds 2 or 3. Starting HR in Round 1 disqualifies the industry/industries from Top Ten Eligibility.

Advanced Marketing Module (Capstone Only)

The Advanced Marketing module explores the marketing mix through a variety of media and sales channels. Companies tune their promotion budget among five media (Print Media, Direct Mail, Web Media, Email and Trade Shows) and three sales channels (Outside Sales, Inside Sales and Distributors).

Labor Negotiation (Capstone Only)

The Labor Negotiation module allows companies to control labor costs (at the risk of a strike) or impose higher labor costs on their competitors. Unlike the other modules, Labor Negotiations are scheduled for one or more rounds, for example, a single negotiation in Round 4 or two negotiations, the first in Round 3 and the second in Round 6.

2.3.7 Industry Ids

Industry IDs are unique numbers that differentiate simulations. Each course has at least one Industry ID. Tournament courses will typically require one Industry ID for every 30 participants.

Footrace industry numbers will end with a suffix of _000. As each participant company forms, a sub-industry will be created and assigned a unique suffix, for example _123.

Please ask your participants to register in the "master" Footrace industry with the _000 suffix.