Finance and Short-term Debt

Topics: Finance, Investment, Decision making Pages: 3 (907 words) Published: November 12, 2013
We are team Baldwin, and we used two main strategies while playing Capsim. We focused on being broad cost leaders, and we were aggressive. During the practice rounds, we did not do well because of our lack of knowledge of the simulation and also did not really take the time to make appropriate decisions. When the real decisions started, we wanted to be broad cost leaders; dominant in all segments of the market, which included: Baker, Bead, Bid, Bold and Buddy. We were profitable, because we were competing against the other teams in all segments of the market. For this reason, we were able to compete against everyone and had captured 25.75% of the market share at the end of decision six. Additionally, we used an aggressive strategy; one of the ways in which we were aggressive was by taking on short-term debt. This strategy was more risky because we depended on sales to repay debt. If our sales forecasts had been wrong and we had not sold as much as we wanted, our team would have not been profitable because we would have not been capable of paying our short-term debt. Due to the lack of team communication, we forgot to confirm our decision so the computer made the decision for us. As a team, we met and discussed exactly how we wanted to come back from the first decision. We decided to read the manual and make sure that each of us knew exactly how the simulation worked. Furthermore, we discovered that the simulation provided different strategies on how to play the game. We utilized our new knowledge in order to make profitable decisions. After decision one, we decided that we were not necessarily trying to win but were trying to come back from the first decisions. Since we were not focused on the competition, we focused on making decisions that would allow our company to be profitable. We invested heavily in research and development (R&D) and sales and promotions in order to have the best products and to recover from the first decision. Additionally, we focused...
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