Project digby

33 %
67 %
Information about Project digby
Business & Mgmt

Published on March 7, 2014

Author: TeamPramkaew



The learning journey from Capsim business simulation

1 DIGBY 8 YEARS 16 LESSONS Team | Preeti |Swapnil | Anshika | Ajinkya


Key Learning 1: Realise your true potential and plan your capacity accordingly

Problem: O Suboptimal Utilization Causes: O Huge unused asset O Capacity exceed industry demand Effects: O Higher depreciation O Low plant utilisation Digby Plant utilisation Depreciation Ferris 70% 154.6% 9.7 Mil 5.6 Mil

Key Learning 2: Your mistake = competitor’s profit

Problem: O Conservative sales forecast and production Cause: O Underestimate our own products Effect: O Stock out O Loss of potential profit

Produc Potential market Actual market t share share Pot-Actual MS Total demand Units not produced Price Loss Daze 17.90% 15.20% 2.70% 8067 217.809 28.00 6098.652 Dell 20.00% 16.30% 3.70% 10009 370.333 20.00 7406.66 Dixi 21.00% 20.00% 1.00% 2967 29.67 40.00 1186.8 Dot 22.70% 15.90% 6.80% 2294 155.992 34.00 5303.728 Dune 17.50% 17.30% 0.20% 2347 4.694 35.00 164.29 25684 778.498 20160.13

Key Learning 3: Analyse the products and cut off the tail

Problems: O Products have low contribution margin Causes: O High variable cost Effects: O Low margin

O Performance segment – least profitable segment O Net margin of Dot = (0.6) mil O Baldwin realized this from round 1 and retired from this segment to focus on other segments which are more profitable

Key Learning 4: Accurate sale forecasts will lead to maximum profit

Problems: O Over-stocking Causes: O Overestimating our products O Underestimating our competitors O Aggressive prediction Effects: O Negative cash flow from operating activities

Products Daze Dell Dixie Dune Dude Dexter Dik EXCESS STOCK Inventory 1208 1025 88 13 98 146 431 3009

Key Learning 5: Making profit does not mean your business is doing well

Problems: O Positive profits but Negative cash flow from operating activities Causes: O Excess inventory due to poor sale forecasts Effects: O Your business is not making money

Key Learning 6: Give the customers what they want

Problems: O Dik did not sell in high segment Causes: O Over-engineering of product for high segment Effects: O Huge inventory O Negative contribution margin O Negative cash from operation

Performance What customers want? What we deliver? Products Dik Size 12.5-13.4 7.5-6.6 14.7 5.3 units sold 13 inventory production 431 444

Dik (,000) Sale $500 Total variable $1710 Contribution margin ($1210) Total Period cost $4360 Net margin ($5570)

Key Learning 7: Avoid Myopic Vision

Problem: O Insufficient Automation as compared to competitors Cause: O Estimated cost of automation to be too high vs reduction in labor costs Effects: O Higher labor costs and thus high variable costs in following rounds

Key Learning 8: Who’s Richer? You or Ambani?

Problem : O Paid off long term debt of $ 25 millions in Round 6 Causes: O Conditioned to pay off long term debt as soon as possible Effects: O Emergency Loan of $ 22 millions O Landed into trouble Erie Ferris Total liabilities 4.8 19 Profit 24 31.5

ODon’t let Finance drive your Business. Let your Business drive your Finance.

Key Learning 9: Right Decision at the Right Time

O Ideal Age for Low Segment: 7 yrs O Competitors did not reengineer low segment products O We re-engineered Dell in Round 3 to match Round 6 specs O Highest Market Share in Round 6: 31 %

Round 4 Round 6

Key Learning 10: “Never invest in a business you can’t understand” ~ warren buffet

Learning • Never read the guide = lack of preparations lead to lack of understanding of the game • No rehearsal = one step behind competitors • Man of principle = no cheating • In reality, the more information you have, the more cutting edge you have in the industry O “Learn from other people’s mistakes”

11. Playing the blame game when things go wrong O Everybody wants to be included for success O But O Nobody wants to be responsible for the failures O FROM WE TO YOU

12. In war everyone loses except… O There is enough pie for everyone O Going for a price war O You earn lesser so ----- you lost O competitors’ profit go down ----- they lost O So who win? OConsumers

13. Blinded by greed O Problem: O Pricing 4.50 $ above the normal price range on D Day. O O O O Causes: Wrong approximation of a Seller’s market Greed to maximize profit in Low Segment on D Day. Impatience to exploit Low Segment O Effects: O Very Low Sales (857 units) O Market Share of 7 %

14. Are you working for Digby or the Marketing Company ? Problems: High expenditure on sales and promotion wrt profit Causes: Lack of business understanding Effects: Wastage of resources in one segment , i.e. an Unprofitable Product

Key Learning 15: Exploit Seller’s Market

O In Performance Segment, we priced Dot higher than the range by 4.49 O Made huge profits due to seller’s market O We overestimated our competitors but they did not take advantage of seller’s market

16. Key Learning O When your competitors team up against you, remember they are scared of you and your product.

O Problem: Ferris & Erie go for a Cartel O Causes: Very good specs of our product Poor age of their products O Effects: No major impact on us, but they won’t trust each other ever.



Add a comment

Related presentations

Canvas Prints at Affordable Prices make you smile.Visit http://www.shopcanvasprint...

30 Días en Bici en Gijón organiza un recorrido por los comercios históricos de la ...

Con el fin de conocer mejor el rol que juega internet en el proceso de compra en E...

With three established projects across the country and seven more in the pipeline,...

Retailing is not a rocket science, neither it's walk-in-the-park. In this presenta...

What is research??

What is research??

April 2, 2014

Explanatory definitions of research in depth...

Related pages

Projekt: Digby Road Tower -

Der eigenwillige Grundriss des Appartment-Komplexes, gegliedert in einen 6-stöckigen und einen 13-stöckigen Baukörper, ist dem Triangel-förmigen ...
Read more

PROJECTS WITH DIGBY – Digby Dontas, Ocean Adventurer.

Purchase your copy for only $14.99. Help protect our ocean with knowledge. Close
Read more

Digby Wind Power Project - Nova Scotia

Digby Wind Power Project Environmental Assessment Report Report Prepared for: SkyPower Corp 250 Yonge Street Toronto, ON M5B 2L7 Project No.1030972.01
Read more


DIGBY WIND POWER PROJECT ADDENDUM Addendum to Environmental Assessment Registration Document Report Prepared for: SkyPower Corp. 250 Yonge Street
Read more

Rebecca Digby - Project Manager - Terrapinn | XING

XING ist Deutschlands größtes berufliches Netzwerk: Mit XING finden Sie Ihren Traumjob, knüpfen wertvolle Kontakte, tauschen Wissen aus – und haben ...
Read more – Projects

Projects. All I Want For; All I Want For (Old) - Old Firebase version; Advent Calendar; Traffic - Just to get me to work; Monkey Puzzle - Teaching the ...
Read more

Rupert Digby - Project Manager - Nortel Networks | XING

Anmelden und ganzes Profil ansehen Anmelden und Profil ansehen. E-Mail. Telefon. Adresse. Messenger. Fax. Website
Read more

Digby Project - YouTube

Digby Project based off of the CAPSIM Simulation.
Read more

Digby Pier - $15,000 Prize Winner - The National Trust for ...

Digby Pier Lighthouse. Nova ... of a building following a restoration project and make the waterfront of Digby a place for tourist ... National Trust for ...
Read more

Digby - Three Counties Dog Rescue

three counties dog rescue ... Re homing 50 mile radius of Bourne Lincolnshire. High fencing required. Viewing by appointment only in between 10-3pm
Read more