Executive Summary:

In Capstone your managers form into a Team. Each Team has 4-5 members. Each Team owns a
business of its own. At the outset they set out their financial objectives, i.e. purpose of running the
business. They assign priority weights across ROE, ROS, ROA, Stock Price, Market Cap, Market
Share, Asset Turnover or just Profit. They now come up with a dovetailing business strategy that
would support their stated financial objectives. They have the option to pick any of the six
strategies, as recommended by Prof. Porter. There are six functional areas viz. R&D, Marketing,
Production, Finance, HR and TQM. The market has five segments. Each member to a Team
manages one function area and one market segment round after round by rotation. There are eight
rounds. They begin with one product in each segment. They can launch three new products in
segments of their choice.
Having run the business as part of a team in Capstone, they now run a business individually.
The Comp-XM is miniaturized version of Capstone; here they would run their own business
individually. While they are doing so they would simultaneously answer questions that are
customized to the way they are running the business. Based upon their answer to the questions
they would get a report, an individual report. The report shall capture their
competency/deficiency areas across four parameters of Balanced Scorecard i.e. Finance,
Customer, Internal Business Process and Learning & Innovation.

1. Financial objectives
and Business Strategy

Every business is run with a financial objective. In Capstone

Business Simulation managers shall form into a team. Each team
owns a simulated business of its own. They, as a team, would first
decide on their business financial objectives from among Profit,
Market Share, ROS, ROA, ROE, Asset Turnover, Market Cap,
Stock Price.
Having determined their business financial focus areas they need to
come up with a dovetailing business strategy that would support
their stated financial objective.
In Capstone they have following strategic choices as advocated
by Prof. Michael Porter:
Niche cost leader
Differentiation with a Product Life Cycle Focus
Cost leader with a Product Life Cycle Focus
Broad Differentiation
Broad Cost Leader
Niche differentiation
They, however, are free to come up with a strategy of their own that
they think would support their financial objectives the best.

2. Seminar
Teams &

Capstone business simulation is delivered in a seminar format.

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Rounds

Each seminar shall have a maximum of 6 teams. There are six

functions in the simulation viz. R&D, HR, TQM, Production,
Marketing and Finance. There are five market segments with one
product each on the day one of the simulation. Participants can
introduce another three new products (NPD) in market segments of
their choice. They may also opt not to continue with any of the
original 5 products during the simulation depending upon their
financial and business strategy. They may even opt to exit from
market segment(s).
Each team shall have a maximum of 6 participants; 4-5 would be an
optimal number. There could be just one person in a team running
the entire business by herself as CEO! Each Team shall own a
business of its own. We recommend that each participant to head a
different function in each round and to manage a different market
segment in each round. That is where they get the TOTAL feel of
the business. They get into the shoes of other function heads which
they can not do in the real world business situation.
Each seminar shall have a maximum of 8 rounds. Each round is
equal to one simulated financial year. By 6 th round participants
would have gone through all the function responsibilities. They are
now veteran managers. Hence, we recommend that for round 7 and
8 they cease to be function heads. Instead, they form into a board of
directors or executive committee and make consensus decisions.

3. Individual
roles in a Team

The simulations target group is senior managers and potential

decision makers whose decisions impact your companys bottom
line. We recommend that each individual in a team should have two
responsibilities. One as function head and second as market
segment head. There are 6 functions and 5 market segment. Another
responsibility that each member should take up is that of
Competitive Intelligence Officer. The role rotation imparts a great
understanding of cross functional integration. Managers learn to
understand financial impact of their seemingly non-financial
decisions.
These roles are rotated round after round.
Teams can come up with their own format with regard to individual
roles. Above is a mere recommendation. It is their business and how
they want to run it is their call.

4. Time commitment
per
participant/team

Total about 25hrs as part of a team. Each round would take on an

average about 2.5hrs of brainstorming among the Team members to
come up with business decisions for that round.
After each round there are several detailed and comprehensive
reports generated. These include Capstone Courier (industry
journal), round analysis report, 5 Star Report, Analysts report

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

(beyond accounting parameters capturing customer satisfaction,

forecasting, productivity etc.), several other reports.
Each participant is expected to run through these reports
individually to contribute in making smarter decisions for the next
round.
Usual schedule, over three days, is as follows:

5. Duration
of the
Simulation

Day 1 Forenoon-

Pre-simulation briefing

Day 1 Afternoon onwards-

Simulation (up to min 8pm)

Day 2 Entire day-

Simulation (up to min 8pm)

Day 3 Forenoon-

Simulation

Day 3 Afternoon-

Post-Simulation de-briefing

The simulation is totally flexible in terms of its delivery format. Its

delivery format determines the duration of the simulation. Please
look at following delivery formats:
1. On-site program- (3 days) - your managers would come
together at a business center for a 3 days exhaustive
program. They would complete all 8 rounds during that
period. Here the Prof. shall be with them on-site.
Participants shall have the benefit of comprehensive Q&A
etc. with the Prof. before-during-after each round. Besides,
there will be detailed pre-simulation briefing and postsimulation de-briefing sessions.
2. Online delivery- your managers can choose the pace at
which they would like to do the simulation. They may opt
to go for one or two rounds a week. That would mean that
they would complete the Simulation between 4 weeks to 8
weeks. Or even an intensive three day online program just
as in the case of on-site program.
Under online delivery format the participants could come from
different locations to compete for market share, profit, stock
price etc. The participants need not be disturbed during their
working hours. They can opt convenient time to meet up as
team members to run through the brain storming session to
make business decisions for each round. The convenient time
could well be outside the working hours and may even be at a
location outside office.

6. Prof. interface

The workshop is delivered in a mix of Lab and Test format. It

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

with
participants

begins with Test format where teams start running their business on
their own. There could be certain teams that need a bit of a Lab
methodology at times. Under Lab methodology, facilitator would
do a bit of hand holding until participants are able to get on with it
on their own.
The simulation is akin to a trans-Atlantic flight with no halts. We
would like your managers to run their business on their own. If they
were to get drowned into the Atlantic (i.e. their company performs
badly) they would now understand under what circumstances for
making what decisions they could go down-under. Post-simulation
de-briefing session, however, shall capture all of it.
Prof. interface with participants is very intense. We would
customize the interface to participants profile and the industry they
belong to. It will also depend upon how the simulation is being
played out by different teams round after round. Hence, Prof.
interface with the participants is real, spontaneous and situational.
That is where Capstone is completely different from any other
business simulation. Purpose of Prof. interface is to raise the level
of learning by queering the pitch of the simulation so that it
becomes more and more challenging, educative and interesting for
the participants.

7. Pre-simulation
briefing

8. Round
debriefing

Each participant is given a copy of the Capstone Corporate

Manager Guide. Through their ID/password they have the option to
do Tutorials and Rehearsal rounds of the simulation. We, however,
would do a pre-simulation briefing session with the participants so
that they leverage the most out of the simulation. Pre-simulation
briefing session would normally last for about 3hrs. It will, interalia, cover:
-

parameters of the Simulation

strategic options available to the participants with

regard to Financial Strategy and Business Strategy

marriage of 30,000 ft view and operational excellence

various relevant management concepts

other logistical details of the simulation

Round debrief would occur after every round. It is part generic and
part specific, to each team. It would, inter-alia, cover:
-

round analysis

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

9. Post-simulation
de-briefing

analysis of various decisions made by teams and their

impact on their companys performance

Are their operational intents in tune with their stated

financial and business goals?

Does their business strategy dovetail with the financial

strategy/goals?

competition behavior analysis and their reaction thereto

When we run the workshop we take note of various decisions taken

by teams in different rounds in different areas of simulation from
the word go. These decisions impact their businesses during
following years. They are usually/sometimes unaware of it.
Each Team would do a presentation on as to how they ran their
business. What was right with and wrong with it. The team also
fields questions from other teams. Debrief would capture, for
example, wrong and right decisions taken by them in a particular
market segment/functional area during a particular round that
turned out to be their best/worst decision. And they were
penalized/rewarded over the ensuing years.
Post-simulation de-briefing session shall include comprehensive
analysis of entire simulation where following, inter-alia, is
highlighted:

10. Advance Modules

what went wrong/right with teams at different stages of

the simulation

why a team, in-spite of making seemingly all right

decisions, did not do as well as it should have and viceversa

which decisions under what circumstances resulted into

great benefit/loss

Finally, participants present a report to stockholders on

the way they have been running their business

The Capstone simulation has advance modules in Marketing, HR,

TQM and Labor Negotiations. The advance modules are introduced
by the Prof. at different milestones of the Simulation depending
upon participant profile. These are designed to make the simulation
more challenging and they impart greater understanding of the
business to the participants.

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

11. Post-round Reports

After each round there are several reports generated on the

performance of each team and the way the entire market performed.
Some of the reports are as follows:
Industry Journal (Capstone courier) a detailed report on all
aspects of business during the last round for all the teams.
Analyst Report- The Analyst Report evaluates a company in ten
categories of management performance viz. forecasting, profit,
productivity, financial structure, wealth creation, customer
satisfaction etc.
Balanced Scorecard report- The report captures each Teams
performance on four parameters viz. Finance, Customer, Learning
& Innovation and Internal Business Process.
Round Analysis this report, as name suggests, is a detailed
analysis of a teams performance during the preceding round.
Top 10 Rankings this report ranks a team vis--vis other live
teams (there are more than 3,000 teams world wide that are playing
Capstone simulation at any given point of time) on various
parameters i.e. Net Profit, Equity Price, ROE, ROS, ROA etc. The
teams can also see the Top 10 teams for that round on each of the
parameters. They now know how far they are from the pinnacle
(even in a simulated business environment). They may even be
listed among the Top 10 teams worldwide, i.e. Capstone Hall of
Fame.
Star Report this report gives one star to each team on five
management criteria i.e. Contribution margin, Profit, Stock price,
Inventory Management and Cash flow management. It is possible
that a team may receive all the stars but it may be nowhere in terms
of financial performance.
Annual Report - a separate report on each team for each round.
And several other reports.
These reports are very exhaustive. Participants need to go through
these reports carefully to understand market dynamics so that they
make smarter business decisions for the following rounds.

12. Assignments

While participants would run their simulated business and compete

for market share, profit etc., they would also have several
assignments to complete. The Prof. introduces these assignments at
different stages of the simulation depending upon the way the
simulation is being played out and participant profile. Some of
these assignments are individual and some are team assignments.

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

13. Peer Evaluation

14. Success in the

Simulation

These assignments come in only on-line delivered programs that are

spread over a period of time. These can be customized to meet a
particular requirement for a particular group.
At the end of the simulation. Team members evaluate other team
members contribution/attitude towards the simulation. These inputs
are fresh and spontaneous. This definitely is a block buster. Peer
Evaluation Results/reports have proven to be an HR Head/CEOs
dream tool to assess their managers. Interestingly, managers
behavior/contribution during the simulation is largely reflective of
their real world conduct.
Just as in the real business situation, success in the simulation is
determined by:
- Participants ability to understand competitors strategies/game
plan, and then come up with a winning strategy and execute it well.
- Participants ability to get that 30,000ft view and marry it with
operational excellence (devil is in the detail!)
- Level of Group dynamism. We see teams comprising of very
smart managers but at total loggerheads with each otherperforming disastrously. We also see teams that are slow to pick up,
but have great intra-group co-ordination, and doing extremely well.
- Courage to follow up on the strategy in-spite of setbacks
- Agility and nimbleness to change the strategy mid course

15. Benefits

Following are some of the ways through which participants shall

benefit:

Cross-functional alignment

Risk analysis

Experience in setting and executing tactics and strategy,

Helps mine the intelligence from financial information,

Importance of aligning all business functions towards a

clear goal.

Demonstrates the financial impact of non- financial

decisions.

Allows managers to live the financials in their own

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

business.

16. Discover

Better communication of strategy to co-workers and team

members

Closer attention to, and understanding of, competitors

behavior

Increased focus and skill in team dynamics

Participants, during the course of simulation, discover:

1. How different industry conditions support different types of
strategies;
2. How industry conditions change and the implication of
those changes for strategic management;
3. How organizations develop and maintain capabilities that
lead to sustained competitive advantage.
4. How Strategic Inflection Point (SIP) hits a business and
how businesses overcome it or become its victims.
5. How to align your business strategy with your stated
financial objectives
6. Finally, you do not want a scenario where your managers
continue to receive great performance appraisal reports
and companys bottom line keeps sinking.

17. Balanced Scorecard The Comp-XM is an independent software that comes along
(Post program assessment)

with Capstone. Similar to Capstone but much simpler. Here, a

participant undertakes an exam towards the end of Capstone
Business Simulation workshop. Runs a business as CEO. At the
end of the exam an individual report is generated on each
participant capturing her areas of Competency and Deficiency
across Balanced Scorecard viz. Finance, Internal Business
Processes, Innovation and Learning, and Customer Satisfaction
etc. The Comp-XM answers the question "What did they
learn? The exam changes to reflect decisions and results for
each individual participant who uses the Capstone or
Foundation Business Simulations. Each student's exam is
unique, yet all exams are comparable.

18. Ethics module

The Capsim Ethics Plug-in presents students with ethical

dilemmas to be solved in the context of their simulated

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

company, considering the long and short-term impacts on all

relevant stakeholders.
19. EQ and IQ
20. Logistics

While the Peer Evaluation tool captures the EQ profile of a

participant, the Comp-XM brings out the business acumen
competencies.

1. One table big enough to accommodate participants, for

each team
2. One pc connected to Internet, for each team
3. One white board, LCD Projector/screen, for each team
4. Teams can be located in one large hall with a little distance
from each other, (calling distance YES, listening distance
NO) or in adjacent rooms on the SAME FLOOR.
5. A robust printing and photostat facility near the venue
6. Besides, some of the course material shall be forwarded in
advance in softcopy/hardcopy version that will require to
be photo stated at your end and distributed among the
participants, as indicated by the facilitator, before the
program begins.

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Capstone- Interactive Business Simulation Seminar

Decision List
Participants make following decisions in different function areas:
Strategy
Strategy is the central theme of the Simulation; the participants shall have comprehensive
exposure to Financial and Business strategy. Under Financial strategy, they shall have the option
to select anyone or a combination of more than one from the following as their primary,
secondary goal:
high stock price
high market cap
high return of sales
high return on equity
high return on assets
high net profit
high asset turnover
high market share
The participants shall determine, at the beginning of the simulation, how much weight to
be given to each of the above goals while evaluating their performance at the end of the Seminar
simulation.
Under Business Strategy, the participants shall have the option to pursue anyone or a
combination of more than one from the following as their business strategy:
cost leader with a product life cycle focus
differentiation strategy with a product life cycle focus
broad cost leader
broad differentiation
niche cost leader
niche differentiation
Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Participants shall learn to dovetail their financial goals with their business strategy and
vice-versa.
Research & Development
The Seminar allows students to revise and invent industrial sensors products. Products are
assigned a:

Size

Performance

Reliability Rating

R&D efforts vary in length and cost, depending on the parameters of the project. The participants
make, inter-alia, following decisions:
-

R&D effort vs. timing of the product to the market

R&D effort vs. automation level of the plant

TQM practices vs. R&D effort

Cost benefit analysis of R&D effort

Marketing
The Seminar addresses:

Segmentation and Positioning

Product Development

Perceptual Mapping

Customer Purchase Decision Making

The 4 P's (Price, Product, Promotion and Place)

The participants make, inter-alia, following decisions:

-

impact/no impact of credit period upon sales

impact on sales of promotion and sales budget

Production
The Seminar examines:
Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Capital (automation) vs. Labor (overtime) Tradeoffs

Capacity utilization

Margin Analysis

Asset Turnover

Product Introduction

The participants make, inter-alia, following decisions:

-

impact of suppliers credit period on production schedule

TQM practices vs. automation

Labor contract vs. automation

HR practices vs. production/productivity

Finance
The Seminar produces:

Balance Sheets

Cash Flow Statements

Income Statements

Students examine capitalization using both stock and bond markets, and explore ratio
analysis in detail.

Experience

Group process is as important as a team's strategy. The Seminar offers methods for groups
to organize by function, by product, by segment, or as a board of directors. Much thought has
gone into shaping the conversations within a team. For example, tactical questions are resolved
through what-if analysis, while the spreadsheets graphs and charts foster discussion of the
strategic implications.
The Web site includes several additional resources:

Peer Evaluation System

Bonus Questions

Team and Class Conferences

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Site Email System

Simulation Purpose
Learning

technology

has

changed.

The

way

adults

learn

hasn't.

Studies show we retain less than 20% of what we see or hear alone, around 50% of
what we both see and hear - but up to 80% of what we interact with.
Malcolm Knowles, a leading theorist in adult education, said there were four key elements to
successful adult education programs. Each of those elements is integral to the Capstone
Seminar simulation:

Adults learn best from hands-on, problem-solving activities.

Adults must believe the learning will have a personal benefit.

Adults have lifetime experiences that should be tapped and built upon.

Adults need to apply new knowledge and skills immediately to aid retention.

At the end of the Simulation, participants come to acquire a strategic business mind-set and have
a holistic perspective of the business. They cease to look at issues from merely their function
perspective.

CAPSTONE users in India come from

Corporates:
Acalmar

L&T Infotech

Adani Exports

Lupin

AgroTech Foods (Conagra)

Mahindra & Mahindra

Alcatel-Lucent

MASTEK

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Allergan

Microsoft

Ambuja Cement

MphasiS

Asian Paints

Murugappa Group

Bajaj Allianz

Neelam Group

Bharati Telesoft

Nestle

BMC

NIIT

BOSE Corporation

OIL India

BreakThrough

Oracle

Center for Monitoring Indian Economy (CMIE)

PepsiCo

Central Bank of India

Polaris

Citibank

P & O Nedlloyd

Cochin Stock Exchange

Portal Player

Computer Science Corporation (CSC)

Power Trading Corporation (PTC)

Cordys R&D

Praj Industries

Coromandel Fertilizers

PRINCIPAL Global Services

Dell

Pulsar Knowledge

Dr. Reddy's Lab

Reliance ADA

DSM

Religare Securities

Gammon India

Satyam Computers

Genpact

Sukaso Ceracolors

Global Trust Bank

TATA Bluescope

HCL

TATA AIG

Hindustan Lever (HLL)

TATA Consultancy Services (TCS)

Hindustan Motors

TATA Interactive Services

HTMT

TATA Projects

Infosys

TATA Tele

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

Indian Grameen Services (Basix)

Tecumseh Products

Infotech Enterprises

Thermal Systems

INTUIT

Thinksoft

JCB

Wanbury

JSW Steel

WIPRO

Jubilant Organosys

WNS Global

Kotak Mahindra Bank

YAHOO!

Larsen & Toubro (L&T)

Business Schools and others:

Aditya Gwalior

IMT - Nagpur

Amrita - Coimbatore

Indian Army

Bharathidasan - Tiruchirapalli

Indu School of Mgmt - Vadodara

BIMTECH Noida

IPE Hyderabad

BITS - Pilani

I-Point - Bangalore

CIIS - Chandigarh

ISB Hyderabad

D J Academy - Coimbatore

ISBR Bangalore

FORE School of Mgmt New Delhi

Jaipuria

GIM - Goa

LIBA - Chennai

GITAM Vizag

MDI - Gurgaon

Exceed and Enhance Pune

MICA - Ahmedabad

IBA - Bangalore

Nirma Ahmedabad

ICFAI (IBS)

Nittie Mumbai

IIFT - Kolkata

NMIMS - Bangalore

IIM - Ahmedabad

NuVeda - Chennai

IIM - Bangalore

OHIO Christ Bangalore

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550

IIM Indore

PSG - Coimbatore

IIM Kozhikode

Rajagiri Cochin

IIM, Ranchi

Sanghvi Indore

IIM - Shillong

SCMS - Cochin

IIT- Chennai

SP JAIN - Mumbai

IMI - New Delhi

Symbiosys - Pune

IMIS Bhubneshwar

TAPMI Manipal

IMS New Delhi

TSM - Madurai

IMT - Ghaziabad

XIMB Bhubneshwar
XLRI - Jamshedpur
XVJIM - Hyderabad

Professor ProfileDharam is a corporate banker by training and a strategic management trainer by accident!
Dharam pioneered simulation based Business and Management teaching among top-end of
corporates and b-schools in India by introducing CAPSIM Simulations (CAPSTONE Business
Simulation) in '2003. He honed his business, financial and credit analysis skills as a corporate
banker in India (SBI) and Singapore (DBS).
Dharam teaches Strategic Business Management through CAPSIM Simulations (CAPSTONE
Business Simulation). He works extensively with several clients in India and overseas viz TCS,
Microsoft, PepsiCo, Infosys, L&T, Asian Paints, Alcatel-Lucent, Wipro, Nestle, Mahindra &
Mahindra, Oracle, JCB, DELL, Intuit, Allergan, Kotak Mahindra, Genpact, Murugappa, YAHOO!,
ALSTOM, Siemens, IIMA, IIMB and IIMC etc.
Dharam was awarded 'RECOGNITION FOR EXCELLENCE IN TEACHING' by CAPSIM
Management Simulations Inc. USA.
He enjoys balancing out a very busy professional life with strong community links through
involvement in not-for-profit organizations that can use his skills and enthusiasm. His interests
include literature, movies, music, theatre, intricacies and intrigues of business/financial world
and a bit of golf.
"TELL ME AND I'LL FORGET.

SHOW ME AND I MAY REMEMBER.

INVOLVE ME AND I WILL UNDERSTAND."

Trendset Winz, G-804, Nanakramguda, Hyderabad 500 008, India, Phone - +91-98850-13550