Report on Competitors of Chester co.

Overall, the main competitor for Chester was Digby.  Digby was the only company that was close to Chester in cumulative profit all game, and was the only other team that ended up having a cumulative profit at the end of the simulation.  Overall, Digby had some very similar strengths to Chester, maintaining similar contribution margins, and having a better average market share than Chester did.  They also did a great job of adding another sensor to the High End market in order to secure a bigger market share there, and did it while adding atomization in order to make sure that they would still be making a profit with their units sold.  Digby’s strategy actually made it so in the later rounds they were losing less money than Chester was, and even managed to make a profit in one of the rounds before 8.  The main weakness Digby had was at the start, taking out several significant emergency loans in the first few rounds, this can most likely be attributed to the fact that they expected to sell more in those rounds than they actually due to the several millions of dollars they had in inventory on their balance sheets at the end of those rounds.  They did fix the problem later into the simulation and stopped taking emergency loans, so they figured it out eventually.  They were pretty even with everyone in all the markets, and were the main competition for Chester in all the markets Chester was strong in.

            Although Digby was the main competitor overall, the way Capsim was structured made it so that each market would create different main competitors.  This means that Digby was not the biggest competitor for Chester in every single market, but rather the competitor depended on which market is being discussed. 

Company’s Future

            Chester’s future as of the last round would not be great, most of the capacity was sold off so they would not be able to produce the amount of sensors demanded.  Therefore, the company would most likely be unable to continue.  On the other hand, even if the company had continued as normal, Chester was losing money every year instead of making it.  Unless it was some sort of government needed company, Chester would most likely go bankrupt soon.  The only thing that could save Chester would be that since they lost the least amount of money in round 8, the other companies would most likely go bankrupt first   allowing Chester to sell more products with less competition. This would drive prices   up which might cause Chester to actually make a profit. 

What we Learned

            Our team learned a few things during this simulation, the first being that just because you make good business decisions, it does not guarantee that the company will make a profit.  We also learned how important it is to pay attention to one’s competition that way you are not too surprised about what happens in the future.  There are also several strategies that companies can use, and each can be successful depending on the market they are implemented into.

            As for how the departments interact, each business decision made had an impact on the other departments.  For instance if we wanted to research our sensors, we had to finance it, and this research would affect how much we would be able to sell, which affects how much we should produce of each sensor.  How much we would be able to sell was also effected by its price, sales and promotion budget, and capacity, all of which affected how much money the company would need from its financial department.  It was extremely important that after decisions were made to go back and double check that all the numbers were right in other departments because, as we learned, if we input one number wrong it could have a significant negative effect on the company.