Capsim report

Chester Square Public Ltd.

Presented By :

Aman Mahajan

Anshul Prabhakar

Antriksh Dadhich

Tushar Bhardwaj

Objectives & Strategy

• To be the top seller in Specialty Segments – High End, Performance & Size

• To maintain a steady overall market share with optimum focus on traditional & low end segment

• Strategy – Broad Differentiation to Niche Differentiation (Round 4)

Change in Strategy - Midway

• Tried to maintain market share in Traditional Segment (Volume vs. Price)

• Automation of the segment

• Increased Spending in TQM (despite loss)

• Extended support to brands

Did it Work?

• Partially

• 2nd Seller in High End Segment

• Competitive in Size and Performance Segment

Contribution Margin Comparison

Increased Contribution Margins

Comparison- Round 4 Vs. Round 7High End Segment

Performance Segment

Size Segment

High End

R R R R R R

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

12.0%13.5%

19.3%18.4%

15.2%

17.7%

Cookie

lau

nch

ed

Deale

r an

d F

luke

lau

nch

ed

Performance

Ro

Ro

Ro

Ro

Ro

Ro

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

6.5%

13.7% 14.4%

18.2%

13.0%14.3%

Bold

-no a

ccess

ibil

ity

Aft

–cap

acit

y so

ld

2 n

ew

pro

du

ct

by

Ferr

is

Aft

Exit

Bold

sp

ecifi

cati

on

Size

Ro

Ro

Ro

Ro

Ro

Ro

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

8.6%6.5%

22.1%

17.9%19.4%

17.7%

Ideal

Ag

e d

idn

't h

it

Ch

ak

De

Lau

nch

ed

Mu

ltip

le p

rod

uct

lau

nch

Why Competition fared better?

• Higher Contribution Margins

• Stronghold in Low End & Traditional Segment , expansion into specialty

• Better positioning in certain products

• R&D – Products coming early till parity achieved

Major Point of Difference

StarsCid,

Cookie, Coat Cake

Question Marks

Cid, Cure, Coat,

Cookie ChakDe.

Cash CowsCake

Dogs

Stars

Products in Specialty Segment

Question Marks

Traditional & Low

Segment

Dogs

Cure,Chakde

Cash

High Relative Market Share

Hig

h

Gro

wth

Dealer(Presumed)

Round 4 Income Statement

Round 7 Income Statement

Mistakes – Areas of Improvement

• Automation – Playing conservative in first two rounds

• R&D -3.1 – Cedar 3rd Round

• Launching two products – Capacity issue?

• Cure in 3rd round – Ideal Age

• Awareness & Accessibility in initial rounds

• Support to our brands – Cookie, ChakDe & Coat

• TQM spending

• Unutilized Capacity , Less than 100% in Round 4 & 6

Finance overview• Raising capital

Forms R1 R2 R3 R4 R5 R6 R7

Stock Issued

2,000 0 5,000 0 5,000 2,000 -3870

Long Term Debt

Issued

0 0 10,000 0 0 0 8,000

Current Debt

Issued

0 0 0 22,000 24,000 10,000 22,465• Understanding in the beginning was to raise long term capital for both

short term and long term cap-ex

• We had to play conservatively in round 2 due to Product updating

schedule

• Emergency loan in Round 3

• Thus, Profitability was expected to be low for some rounds

Capital Usage

Positives • Stayed back in anticipated seller’s market

• Launch of multiple products

• Maintained Leverage

• Spending in HR - Despite a crunch situation

• Revival after emergency loan

• Productivity Index

Spending in HR

0 1 2 3 4 5 6 7 894

96

98

100

102

104

106

108

110

112

114

Productivity index

Market Capitalization

0 1 2 3 4 5 6 7 80

20

40

60

80

100

120Market Capitalization (Mn Dollars)

Major Blunder Reviva

l

Parameter Results Round 4

Results Projected Round 8

Final Result

Market Share14.85% 15% 11.19%

ROA-1.8% 5% 8.1%

ROS -1.6% 4-5% 6.25%

Leverage2.4 1.8 1.6

Asset Turnover

1.13 1-1.2 1.25

ROE-4.2% 10-11% 12.9%

Learnings from Simulation

• Is taking loan a bad thing?

• Supporting multiple products – You can let go!!!

• Customer Satisfaction

• Importance of balance scorecard

Round 5 vs. Round 6

Thank You