Capsim Memo 2 Guidelines
This memo should be about 1 page in length and should thoughtfully discuss your progress in different product markets in the Capsim simulation. Please start by filling out the table outlined on Page 2 with respect to your company’s products and your company’s performance after the 6th Competition Round.
Contribution Margin % = (sales – variable cost)/sales x100
Net margin %= (contribution margin (in $) – total period costs) /sales x100
The rest of the memo should address and analyze the following issue:
#1. After completing the table, please discuss the performance of your products in market segment that you are competing in based on Round 6 performance. As a rule of thumb, the Contribution margin (%) should be greater than 30% and the Net Margin (%) should be greater than 20%. If the product’s Margins values (Contribution and/or Net Margin) are lower than these benchmark figures, there is room for improvement. For these products, please identify some of the root contributing factors that are causing your margins to be low for that specific market and come up with concrete strategies to fix those issues.
Selected Product: Goober, Goose , Graft.
|Market Type||Low end||High end||Size||Performance||Size|
|#1. Contribution margin (in %)||62%||27%||20%||20%||8%|
|#2. Net margin (in %)||42%||42%||4%||1%||-46%|
|#3. Actual Market share (in %)||11%||12.2%||5.4%||12.6%||4.3%|
|#4. Potential Market share (in %)||13%||15%||7%||20%||7%|
|#5. Customer satisfaction rating||16||47||14||47||6|
|#6. Product age||9.6||1.1||0.9||1.4||3.5|
|#7. List the market leader(s) (product with the highest market share) in this market||13.7%||15%||14.2%||24.7%||14.2%|