MARKET
CONDITIONS
REPORT

Unforgettable Business Learning

®

Perceptual Map
Each market segment has different
positioning preferences. This is illustrated
by the sets of dashed and solid circles
in the graphic below. Over time, these
preferences will shift (see Page 11 of the
Manager’s Guide for more information).

Your company manufactures genetic testing devices.
Your customers fall into two groups, which are called
market segments. A market segment is a group of
customers who have similar needs. The segments
are named for the customer’s primary requirements:
Budget and Performance.

In addition to operating in the Americas, your
company will now have the opportunity to
compete in two additional global markets:
Europe and Asia Pacific.

Customers within each market segment employ
different standards as they evaluate sensors.
They consider four buying criteria:

+ Price

+ Age

+ Positioning

+ Service Life

To the right is an illustration of the
perceptual map from the end of Round 0.
You’ll notice the fine cut, rough cut and
ideal spots for your product to be located.

1. POSITIONING

1

MARKET
CONDITIONS
REPORT

Jan 1st 2017 Jan 1st 2018 Jan 1st 2019

Drift Rates
Each year, the segments drift up and
to the right, resembling the customers’
preference for faster and more accurate
products. In each year of the simulation,
customers will demand that products
move by the following:

Segment Centers
The information in the table below reflects
the segment centers at the end of the round.
Therefore, the Round 0 positions can be seen
as the Round 1 starting positions, and so on.
Each month during the simulation year, the
segment drifts 1/12th of the distance from the
starting position to the ending position.

SPEED ACCURACY

SPEED ACCURACY SPEED ACCURACY

BUDGET

BUDGET

ROUND

PERFORMANCE

PERFORMANCE

+0.5

4.8

5.3

5.8

6.3

6.8

7.3

7.8

8.3

8.8

4.8

5.3

5.8

6.3

6.8

7.3

7.8

8.3

8.8

6.0

6.7

7.4

8.1

8.8

9.5

10.2

10.9

11.6

6.0

6.7

7.4

8.1

8.8

9.5

10.2

10.9

11.6

+0.7

+0.5

+0.7

0

1

2

3

4

5

6

7

8

2

POSITIONING

Segment Sizes by Region
At the beginning of the simulation, more units in
the Budget segment are sold than the Performance
segment. With the industry moving to a more global
market, projected demand across the three regions
at the end of Round 0 is growing. Below is the total
number of units demanded during Round 0.

IDEAL SPOTS
ACCURACYSPEED

BUDGET

PERFORMANCE

+0.0

+1.4

+0.0

+1.4

2. SEGMENT SIZES & GROWTH RATES

EUROPE ASIA PACIFICAMERICAS

BUDGET

PERFORMANCE

5,838 1,994 553

3,195 697 216

Growth Rates
Over the course of the simulation, each
segment in each region will grow at a different
rate. However, each segment’s growth will stay
constant across the simulation.

EUROPE ASIA PACIFICAMERICAS

BUDGET

PERFORMANCE

6% 18% 43%

13% 31% 49%

The information in the table above shows the
Ideal Spot “offsets,” or how far away the ideal
spot is from the segment center. Remember the
ideal spot is different from the segment center
in the Performance market because customers
constantly demand faster, more accurate devices.

POSITIONING

3

SEGMENT SIZES & GROWTH RATES

ROUND

ROUND

5838

6188

6560

6953

7370

7813

8281

8778

9305

3195

3610

4080

4610

5209

5887

6652

7517

8494

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

1994

2353

2776

3276

3866

4562

5383

6352

7495

697

913

1196

1567

2053

2689

3523

4615

6045

553

791

1131

1617

2312

3307

4729

6762

9670

216

322

480

715

1065

1586

2364

3522

5247

SEGMENT SIZES OVER TIME

EUROPE ASIA PACIFICAMERICAS

GROWTH RATE

GROWTH RATE

6%

13%

18%

31%

43%

49%

4

BUDGET SEGMENT

EUROPE ASIA PACIFICAMERICAS

PERFORMANCE SEGMENT

3. PRICING ANALYSIS

Pricing has a large impact on margins, demand and overall
company performance. Each year, customers demand
cheaper products – at a rate of 0.50 per year. Reducing
price comes at a cost – margins. Over time you will need
to formulate a strategy of how you will reduce your cost
structure, or combat the price pressure from your customers
and competitors. Below are tables of the local price ranges
your customers will have for all eight rounds.

ROUND

ROUND

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

¤45.00

¤44.50

¤44.00

¤43.50

¤43.00

¤42.50

¤42.00

¤41.50

¤41.00

¤25.00

¤24.50

¤24.00

¤23.50

¤23.00

¤22.50

¤22.00

¤21.50

¤21.00

LOW HIGH

EUROPE (¤)

¤35.00

¤34.50

¤34.00

¤33.50

¤33.00

¤32.50

¤32.00

¤31.50

¤31.00

¤15.00

¤14.50

¤14.00

¤13.50

¤13.00

¤12.50

¤12.00

¤11.50

¤11.00

LOW HIGH

EUROPE (¤)

S$45.00

S$44.50

S$44.00

S$43.50

S$43.00

S$42.50

S$42.00

S$41.50

S$41.00

S$25.00

S$24.50

S$24.00

S$23.50

S$23.00

S$22.50

S$22.00

S$21.50

S$21.00

LOW HIGH

ASIA PACIFIC (S$)

S$35.00

S$34.50

S$34.00

S$33.50

S$33.00

S$32.50

S$32.00

S$31.50

S$31.00

S$15.00

S$14.50

S$14.00

S$13.50

S$13.00

S$12.50

S$12.00

S$11.50

S$11.00

LOW HIGH

ASIA PACIFIC (S$)

$45.00

$44.50

$44.00

$43.50

$43.00

$42.50

$42.00

$41.50

$41.00

$25.00

$24.50

$24.00

$23.50

$23.00

$22.50

$22.00

$21.50

$21.00

LOW HIGH

AMERICAS ($)

$35.00

$34.50

$34.00

$33.50

$33.00

$32.50

$32.00

$31.50

$31.00

$15.00

$14.50

$14.00

$13.50

$13.00

$12.50

$12.00

$11.50

$11.00

LOW HIGH

AMERICAS ($)

PERFORMANCE PRICE BY REGION

BUDGET PRICE BY REGION

5

4. BUYING CRITERIA

Americas – Budget Segment
+ Price, $15-$35 — importance: 55%

+ Age, 3 years — importance: 19%

+ Ideal Position — importance: 17%

+ Service Life, 14,000-20,000 — importance: 9%

Europe – Budget Segment
+ Price, ¤15-¤35 — importance: 50%

+ Ideal Position — importance: 21%

+ Age, 3 years — importance: 15%

+ Service Life, 14,000-20,000 — importance: 14%

Europe – Performance Segment
+ Ideal Position — importance: 43%

+ Age, 0 years — importance: 33%

+ Service Life, 17,000-23,000 — importance 16%

+ Price, ¤25-¤45 — importance: 8%

Asia Pacific – Budget Segment
+ Price, S$15-S$35 — importance: 60%

+ Ideal Position — importance: 14%

+ Service Life 14,000-20,000 — importance: 14%

+ Age, 3 years — importance: 12%

Asia Pacific – Performance Segment
+ Ideal Position — importance: 41%

+ Age, 0 years — importance: 28%

+ Service Life, 17,000-23,000 — importance 20%

+ Price, S$25-S$45 — importance: 11%

Each of the geographical regions has varying
operating costs. Users must take into account
currency exchange rates, shipping costs and tariffs
of each region before making final decisions.
Below is information from the end of last year.

5. REGIONAL OPERATING COSTS

Americas to Europe: $1 = ¤.90
Americas to Asia Pacific: $1 = S$1.25

Shipping Costs
To Europe: $3.00 per unit
To Asia Pacific: $2.50 per unit

6

Americas – Performance Segment
+ Ideal Position — importance: 39%

+ Age, 0 years — importance: 32%

+ Service Life, 17,000-23,000 — importance: 19%

+ Price, $25-$45 — importance: 10%

BUDGET SEGMENT PERFORMANCE SEGMENT

Tariffs
Europe – 4.5% per unit
Asia Pacific – None

Tax Rates
Americas – 35%
Europe – 32%
Asia Pacific – 25%

Prime Interest Rate – 7.0%

$3.00 per unit

AMERICAS EUROPE ASIA PACIFIC

$2.50 per unit

6. CURRENCY EXCHANGE RATES

Over the years, currency exchange rates adjust in
relation to your home currency, which is the American
dollar ($). These rates vary, and will move from year
to year.

Below, you’ll see the projected rates over the next
three years. Projections beyond that are unavailable,
but be sure to check each region of the Marketing
Department in the simulation or the Marketing
Segment pages (pgs. 8-13) of the Globe for the
current year’s exchange rate.

YEAR 0 – 2017

YEAR 1 – 2018

YEAR 2 – 2019

YEAR 3 – 2020

Currency Exchange Rates

7

¤0.90

¤0.95

¤0.95

¤1.05

EUROPE (¤)

S$1.20

S$1.25

S$1.20

S$1.10

ASIA PACIFIC (S$)

$1.00

$1.00

$1.00

$1.00

AMERICAS ($)

G131833 Page 1
Dec. 31 2021 Annual Report Round 0

Cash Flow Statement

Cash Flows From Operating
Activities 2015 2021

Net Income (Loss) $2,864
Adjustment For Non Cash Items
Depreciation $2,400
Extraordinary Gains/Losses/Writeoff $0
Changes in current assets and liabilities
Accounts Payable $777
Inventory ($1,681)
Accounts Receivable $3,164
Net Cash From Operations $7,525

Cash Flows From Investing Activities
Plant Improvements (Net) $0

Cash Flows From Financing Activities
Dividends Paid $0
Sales of Common Stock $0
Purchase of Common Stock $0
Cash from Long Term Debt Issued $0
Early Retirement of Long Term Debt $0
Retirement of Current Debt $0
Cash From Current Debt Borrowing $0
Cash From Emergency Loan $0
Net Cash From Financing Activities $0
Effect of Exchange Rate $0
Net Change In Cash Position $7,525

Starting Cash Position $0
Closing Cash Position $8,525

Net Income (Loss)

A company’s total earnings (or profit).

Adjustment For Non Cash Items
Any items that had a change in value but
no cash transaction associated.

Changes in current assets and liabilities
Cash basis for any unpaid supplier or
customer accounts, plus inventory value.

Net Cash From Operations
The activities involved in selling the
products to customers.

Cash Flows From Investing Activities
Net investment in long term company
investments such as plant improvements.

Cash Flows From Financing Activities
Issuance and repurchase of company
stocks and bonds, dividends paid and
current debt/emergency loans.

Net Cash From Financing Activities
Impact of exchange rate fluctuations on
cash from overseas operations.

Starting Cash Position
The company closing cash position
January 1st the previous year.

Closing Cash Position
The company closing cash position
December 31st the previous year.

Cash Flow Summary Closing Cash Position

G131833 Page 2
Dec. 31 2021 Annual Report Round 0

Balance Sheet

Assets Liabilities

2020 2021
Cash $0 $8,525
Accounts Receivable $0 $3,836
Inventory $0 $1,681
Total Current Assets $0 $14,042
Plant and Equipment $0 $36,000
Acc. Depreciation $0 ($12,000)
Total Fixed Assets $0 $24,000
Total Assets $0 $38,042

2020 2021
Account Payable $0 $2,777
Current Debt $0 $0
Long Term Debt $0 $13,200
Total Liabilities $0 $15,977
Common Stock $0 $5,808
Retained Earnings $0 $16,256
Total Equity $0 $22,064
Total Liabilities
Owners Equity $0 $38,042

Assets Definitions Liabilities Definitions

Cash Your end-of-year cash position.

Accounts Receivable
Reflects the lag between delivery and
payment of your products.

Inventory
The current value of your inventory across
all products. A zero indicates your company
stocked out

Total Current Assets
Cash and other resources that are expected
to turn to cash or to be used up within one
year of the balance sheet date

Plant and Equipment The current value of your plant.

Accumulated
Depreciation

The total accumulated depreciation from
your plant

Total Fixed Assets
Plant and Equipment value minus the
amount it has depreciated.

Total Assets Total value of ownership that can be
converted to a cash basis

Account Payable
What the company currently owes
suppliers for materials and services.

Current Debt

The debt the company is obligated to
pay during the next year of operations. It
includes emergency loans used to keep
your company solvent.

Long Term Debt
The company’s long term debt is in the
form of bonds, and this represents the
total value of your bonds.

Total Liabilities Total obligations of the company

Common Stock
The amount of capital invested by
shareholders in the company.

Retained Earnings
The profits that the company chose to
keep instead of paying to shareholders
as dividends.

Total Equity
The company’s total assets minus total
liabilities

Total Liabilities
Owners Equity

The aggregate of all debts the company
is liable for.

G131833 Page 3
Dec. 31 2021 Annual Report Round 0

Income Statement:Americas

Eat NA NA NA Total Industry Avg. Common
Sales $46,669 $0 $0 $0 $46,669 $46,669 100%
Variable Costs
Direct Labor $12,894 $0 $0 $0 $12,894 $12,894 28%
Direct Material $19,216 $0 $0 $0 $19,216 $19,216 41%
Shipping Cost $0 $0 $0 $0 $0 $0 0%
Inventory Carry $202 $0 $0 $0 $202 $202 0%
Total Variable Costs $32,312 $0 $0 $0 $32,312 $32,312 69%
Contribution Margin $14,357 $0 $0 $0 $14,357 $14,357 31%

Period Costs
Depreciation $2,400 $0 $0 $0 $2,400 $2,400 5%
SG&A
R&D $0 $0 $0 $0 $0 $0 0%
Promotions $2,000 $0 $0 $0 $2,000 $2,000 4%
Sales $3,000 $0 $0 $0 $3,000 $3,000 6%
Admin $744 $0 $0 $0 $744 $744 2%
Total Period $8,144 $0 $0 $0 $8,144 $8,144 17%
Net Margin $6,213 $0 $0 $0 $6,213 $6,213 13%

Other $0 $0 0%
EBIT $6,213 $6,213 13%
Interest (Short
& Long) $1,716 $1,716 4%

Taxes & Tariffs $1,574 $1,574 3%
Profit Sharing $58 $58 0%
Net Profit $2,864 $2,864 6%

Sales Unit sales times list price.

Variable Costs
Variable costs are those costs that vary depending
on a company’s production volume.

Contribution Margin
Unit price minus variable cost per unit. How much
each unit ‘contributes’ to the fixed costs of
running the company.

Period Costs
Selling and administrative expenses associated
with the accounting period (in this case one year).

Net Margin The portion of revenue that remains after fixed and
variable costs are accounted for.

Other
Charges not included in other categories such as Fees,
Write Offs, and TQM.

EBIT Earnings Before Interest and Taxes.

Interest (Short &
Long) EBIT minus interest, taxes, and profit sharing.

Taxes & Tariffs Income tax based upon a 35% tx rate.

Profit Sharing Profits shared with employees under the labor contract.

Net Profit EBIT minus interest, taxes, and profit sharing.

G131833 Page 4
Dec. 31 2021 Annual Report Round 0

Income Statement:Europe

Eat NA NA NA Total Industry Avg. Common
Sales $0 $0 $0 $0 $0 $0 100%
Variable Costs
Direct Labor $0 $0 $0 $0 $0 $0 –
Direct Material $0 $0 $0 $0 $0 $0 –
Shipping Cost $0 $0 $0 $0 $0 $0 –
Inventory Carry $0 $0 $0 $0 $0 $0 –
Total Variable Costs $0 $0 $0 $0 $0 $0 –
Contribution Margin $0 $0 $0 $0 $0 $0 –

Period Costs
Depreciation $0 $0 $0 $0 $0 $0 –
SG&A –
R&D $0 $0 $0 $0 $0 $0 –
Promotions $0 $0 $0 $0 $0 $0 –
Sales $0 $0 $0 $0 $0 $0 –
Admin $0 $0 $0 $0 $0 $0 –
Total Period $0 $0 $0 $0 $0 $0 –
Net Margin $0 $0 $0 $0 $0 $0 –

Other $0 $0 –
EBIT $0 $0 –
Interest (Short
& Long) $0 $0 –

Taxes & Tariffs $0 $0 –
Profit Sharing $0 $0 –
Net Profit $0 $0 –

G131833 Page 5
Dec. 31 2021 Annual Report Round 0

Income Statement:Asia Pacific

Eat NA NA NA Total Industry Avg. Common
Sales $0 $0 $0 $0 $0 $0 100%
Variable Costs
Direct Labor $0 $0 $0 $0 $0 $0 –
Direct Material $0 $0 $0 $0 $0 $0 –
Shipping Cost $0 $0 $0 $0 $0 $0 –
Inventory Carry $0 $0 $0 $0 $0 $0 –
Total Variable Costs $0 $0 $0 $0 $0 $0 –
Contribution Margin $0 $0 $0 $0 $0 $0 –

Period Costs
Depreciation $0 $0 $0 $0 $0 $0 –
SG&A –
R&D $0 $0 $0 $0 $0 $0 –
Promotions $0 $0 $0 $0 $0 $0 –
Sales $0 $0 $0 $0 $0 $0 –
Admin $0 $0 $0 $0 $0 $0 –
Total Period $0 $0 $0 $0 $0 $0 –
Net Margin $0 $0 $0 $0 $0 $0 –

Other $0 $0 –
EBIT $0 $0 –
Interest (Short
& Long) $0 $0 –

Taxes & Tariffs $0 $0 –
Profit Sharing $0 $0 –
Net Profit $0 $0 –

1

MANAGER’S GUIDE

®

2

This booklet has been designed as both a quick start guide and

a reference manual. As we introduce you to each element in the

simulation, we’ll provide a short introduction to the interface,

followed by a deeper explanation of the tools you’ll use to run

your company.

This guide does not have to be read like a novel. It is important

to start with the Introduction to get an overview of the simulation,

but after that feel free to jump in and out of the material to find

the information you need, as you need it.

HOW TO USE THIS GUIDE

3

ORIENTATION ………………………… 4

BUSINESS ENVIRONMENT ……. 8

USER INTERFACE ………………….. 13

DEPARTMENTS ……………………… 20

+ R&D…………………………………… 21

+ MARKETING …………………….. 29

+ PRODUCTION ………………….. 37

+ FINANCE ………………………….. 43

MAKING DECISIONS ……………… 49

STRATEGY ……………………………… 63

GLOSSARY …………………………….. 71

TABLE OF CONTENTS

4

ORIENTATION

4

5

A business simulation creates an environment in which

you can apply business concepts, strategy, and tactics,

as you make a series of decisions that will directly

impact the financial well being of your simulated

company. It is your chance to run a whole company and

build your business acumen.

Capsim’s GlobalDNA is a multifaceted simulation that

will challenge you to think outside the ‘silos’ of individual

disciplines such as marketing, accounting, operations

and so on, and appreciate how each element of the

company’s operations interacts with one another.

The success of your company is dependent on your

ability to think strategically, learn from mistakes and

missteps (and if you don’t make any, you’re not trying

hard enough!), and enjoy the learning experience

knowing that nobody’s retirement portfolio will be

destroyed if your company fails!

The simulation offers two different modes: Practice

Rounds and Competition Rounds. Practice Rounds allow

you to become acquainted with the simulation interface,

saving and reports, and organize workflow with your

teammates. Once the Practice Rounds are completed,

the simulation is reset, and the real competition begins.

Companies compete for up to eight rounds, with each

round simulating one year in the life of your company.

WHAT IS A BUSINESS SIMULATION?

6

Your organization designs, develops, and sells genetic

testing devices to the medical industry. The company was

originally part of a much larger organization (MediCorp,

Inc.) with a virtual monopoly in the market. However, the

97% market share MediCorp enjoyed eventually drew the

attention of the Monopolies Commission.

The American Times summed up the Commission’s

findings and actions:

New Markets

MediCorp had adhered to a strict ‘no export’ strategy

based on the fragility of genetic testing devices and the

cost of replacing inaccurate or broken units. However,

today’s more robust technology means this is no longer

the case, and industry reports suggest that demand is

growing overseas. These markets have been touted,

by some commentators, as the future of the genetic

testing market.

COMPANY BACKGROUND

“Increasing pressure from hospitals, clinics and non-
profit organizations slowly began to turn the focus
of the Monopolies Commission towards MediCorp,
Inc. Although there was no suggestion of foul
play, the American Medical Board was concerned
that genetic research was being inadvertently
stifled. The Commission moved quickly to split
the conglomerate into six equal entities, who have
gone on to hire from a pool of talented young
executives and form a new Board of Directors for
each company.”

“Increasing pressure from hospitals, clinics

and non-profit organizations slowly began to

turn the focus of the Monopolies Commission

towards MediCorp, Inc. Although there was no

suggestion of foul play, the American Medical

Board was concerned that genetic research

findings were being inadvertently stifled.

The Commission moved quickly to split the

conglomerate into six equal entities, who have

gone on to hire from a pool of talented young

executives and form a new Board of Directors for

each company.”

The
Commission
moved quickly

MediCorp Inc. Splits into 6

7

Portable genetic diagnostic tests (genetic tests) are

used to quickly test for a range of medical conditions.

Diagnostic testing devices have a long history, going

back to the first medical thermometers. They evolved

to include devices that mechanically checked for vital

statistics, like blood pressure, or biochemical tests of

blood type or sugars. As time passed the “lab on a chip”

concept combined several diagnostic devices into one.

Your industry is on the cutting edge. You specialize

in portable genetic diagnostic tests. Your devices can

determine whether a particular gene, or combination

of genes, is present in the patient, and can even tell a

physician whether the gene is switched on or off.

They are useful in diagnosing diseases like cystic fibrosis,

Crohn’s disease, and certain types of cancer, as well

as determining risk profiles that help people avoid the

development of a disease towards which they might

be predisposed.

Your company manufactures these portable health test

kits. The devices are largely sold to hospitals, school

districts, and private paramedic service companies.

Your company competes directly with the other

companies in a zero sum market, which means

every sale you make is one your competitors lose.

Conversely, every sale your competitors make means

one less customer for you.

Your goal in the simulation is to outperform the

competition. A successful company will use the tools

available to analyze the market and implement a

dominant strategy. Additionally, your instructor may

set specific success measures such as: Share Price,

Return on Sales (ROS), and/or Net Profit.

WHAT IS A GENETIC
DIAGNOSTIC TEST?

WHAT ARE YOUR
COMPANY OBJECTIVES?

GENETIC DIAGNOSTIC TEST

ANDREWS

BALDWIN

CHESTER

DIGBY

ERIE

FERRIS

You will lead one of the following companies. You may
compete against up to 5 other companies led by your
peers, computers or both.

8

BUSINESS ENVIRONMENT

8

9

Within the simulation, there are three geographical zones:

Americas, Europe, and Asia Pacific. For the period of the

simulation, the following assumptions about the cultural

and economic landscape in each zone apply:

REGIONAL OUTLINES

Asia Pacific

This region includes emerging economies, constituting relatively

low income communities, increasing economic growth, and

significant demand for improved health care. The region

has a zero-tariff policy that makes it an attractive market

moving forward.

Europe

In GlobalDNA, Europe represents a highly developed,

technologically advanced and relatively high-income economic

region. It is experiencing steady economic growth that your

company hopes to capitalize on.

Americas

This is where your company is headquartered and managed.

In GlobalDNA, this region represents a mature economy with a

stable political environment. As the genetic diagnostic testing

industry is well established, the Americas are considered a

saturated market moving forward.

Currency – S$

Currency – €

Currency – $

10

WHAT IS A MARKET SEGMENT?

Do you know someone who must have the latest

gadget? Maybe someone who always buys a specific

brand, regardless of the price? Are you, on the other

hand, always looking for a bargain and don’t really

mind if it doesn’t have all the features of a more

expensive model?

Whatever your preferences, there are many other

buyers who share them. Buyers sharing similar

buying preferences are placed into clusters called

market segments, which you can see drawn below.

Companies will strategically place their products in

particular segments so they can better meet their

customers’ buying criteria.

MARKET SEGMENTS IN GlobalDNA

The genetic diagnostic test market has two clear

segments: Budget and Performance.

Budget Segment – Buyers are looking for a product that

is inexpensive but still fulfills their primary needs.

Performance Segment – Buyers in this segment are

looking for the most up-to-date, technologically

advanced products and don’t mind paying a premium

to get what they need.

There are, however, other criteria on which customers

also base their purchase decision. To see detailed buying

criteria for each segment, you will need to look at the

Industry Report, called The Globe, published at the end

of each simulation round.

MARKET SEGMENTS

MARKET SEGMENTS ARE

REPRESENTED AS CIRCLES

PERFORMANCE

BUDGET

11

Product positioning is such an important concept that

marketers developed a tool called a Perceptual Map to

track the position of their products. To the right, you can

see the Perceptual Map used at the start of GlobalDNA.

The GlobalDNA Perceptual Map measures Accuracy on

the vertical axis and Speed on the horizontal axis.

Each axis extends from 0 to 20 units.

Each market segment—Budget and Performance

discussed on the last page—is represented on the map

as a circle. The Budget segment in the lower left focuses

on price, first and foremost, and thus is satisfied with

products that are slower and less accurate.

Comparatively, the Performance segment to the upper

right demands faster, more accurate products, and

Performance customers are willing to pay a higher price

for them.

PERCEPTUAL MAP

For a more detailed explanation of perceptual maps, see the

R&D section starting on page 21.

1212

The market for genetic diagnostic test equipment is

expanding, but in each geographical region there are

different growth rates for each market segment.

These growth rates are specific to the industry, however,

and may not reflect the regional economy as a whole.

GROWTH RATES

For specific growth rates, see the Industry Tables
section on page 60.

Budget:Performance Ratios

3:12:1
Americas

Approximately 2:1

Budget:Performance,

for the foreseeable future.

Europe

Approximately 3:1

Budget:Performance

but trending toward Performance

in the next five to ten years.

Asia Pacific

Approximately 3:1

Budget:Performance

with further expansion of the

Budget market anticipated.

3:1

13

USER INTERFACE

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14

The company homepage is the starting point for your

GlobalDNA experience each time you log in.

COMPANY HOMEPAGE

ARTICLE SLIDER

NEWSSTAND

DEPARTMENT QUICK LINKS

KEY PERFORMANCE INDICATORS

TOOLS

EXECUTIVE DEVELOPMENT PROGRAM6

MANAGER’S GUIDE7

15

ARTICLE SLIDER

Front and center, the photo slider of relevant

articles offers you additional resources to learn more

about business and the simulation. The rotating

stories offer insight into the simulation’s key points,

and will help you apply your business knowledge

to GlobalDNA. As you progress through the

rounds, these articles will change to reflect your

company’s development.

DEPARTMENT QUICK LINKS

To the right of the slider you will see the department

quick links, where you enter the simulation and

make decisions. Clicking a department will give

you the option of using your personal draft or

loading the saved file that contains the latest official

decisions from your team.

TOOLS

Below the department links are vital tools you’ll

need to make informed decisions. The financial

paper ‘The Globe’ provides a detailed look inside

the entire industry. Your company’s Annual Reports

give you a look into the key financial reports from

the previous year. Finally, the Market Conditions

Report outlines the shape of the industry for the

years to come.

COMPANY HOMEPAGE

NEWSSTAND

Below the news article slider is the Newsstand,

where you can access and search for articles to

help with your decisions.

KEY PERFORMANCE INDICATORS

Next to the Newsstand is the Key Performance

Indicators (KPIs) summary. Think of this as a

quick snapshot into the performance of each

company in the industry.

EXECUTIVE DEVELOPMENT PROGRAM

On the bottom left of the Company Homepage is

the link to the Executive Development Program –

your onboarding center.

MANAGER’S GUIDE

This manual! You’ll be able to access this

document via the bottom right of the Company

Homepage at any time.

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7

16

Each rotation is divided into the following sections:

Introduction

A video overview of the module’s goals

Case Study

Background on Decadon’s departmental issues

What would you do?

A summary of the issues and tasks to focus on

Decisions

The department interface, identical to the simulation

20/20

Review and grading of your decisions

Quiz

Five questions to test your knowledge

Wrap up

Key takeaways from each department

Your progress can be monitored from the EDP

dashboard, and at any time you can quickly jump

to your last saved section by clicking the link in the

relevant module.

Good luck!

The Executive Development Program (EDP) is a rotational

training program designed to help prepare you for the

GlobalDNA simulation experience. The EDP takes you

through each of the four functional departments (R&D,

Marketing, Production, Finance) and gives you a series of

tasks to complete in an interactive environment replicated

in the simulation.

The workflow of the EDP is based around saving a

fictional company, Decadon Electronics. Various errors

in each department are highlighted, and you are given

the chance to solve the issues while navigating the

department interfaces. Support is offered in the form of

help videos, task hints and walk-through tips.

EXECUTIVE DEVELOPMENT PROGRAM

EDP
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6

5

4

3

2

1

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Save

Click to save your decisions. You can choose to save by

department or your entire decision file. The last saved

decision file will be used when your instructor processes

the round.

If you’re working with a team, any time a team member

saves a file, you have the opportunity to download their

decisions. The pullout box on the right side of your screen

will alert you if there are updated decisions to download.

Please note, loading these decisions will overwrite your

current saved file in the selected department(s).

Exit

Click here to return to your course page or log out of
Capsim entirely.

SIMULATION INFORMATION

Company name

Located in the top left of the interface, your company

name serves as a link to the company homepage.

Simulation Info

Key information regarding the simulation, round and

industry. This information is useful when contacting your

instructor or Capsim for support.

DEPARTMENT LINKS

The department links are quick links to each department

page. All departments are easily accessible from all pages.

SIMULATION TOOLS

Reports

Click to see the The Globe financial paper. This will help

guide your decision making process for the coming year.

The GlobalDNA navigation bar includes icons that

represent departments, resources and actions on each

page of the simulation.

NAVIGATION

SIMULATION TOOLSSIMULATION INFO DEPARTMENT LINKS

R&D

For more information about saving or collaborating as a
team, see page 79-80 – or visit capsim.com/v/GDNAsave
for a video demonstration.

18

ANDREWS

BALDWIN

CHESTER

DIGBY

ERIE

FERRIS

RECALCULATE

Each department page has a ‘Recalculate’

button that will update decisions with

any changes you have made. Each time

you change or update a decision, click

‘Recalculate’ to see the changes take effect.

REGIONAL DECISIONS

You will need to make decisions for each

region, even if that decision is to do nothing.

To be successful, each department must

consider the international environment when

balancing resources between markets.

Clicking on the region names (Americas,

Europe, Asia Pacific) will allow you to make

decisions for each region.

HOW TO ENTER YOUR DECISIONS

Your management decisions are executed by entering them

into the relevant cells of each department’s web page.

DECISION BOXES

If the box is outlined in gray, data can be

entered. If no data is entered, the previous

round’s value will remain.

REGIONAL DECISIONSDECISION BOXES RECALCULATE

19

The R&D, Marketing and Production pages contain a

number of tools below the top decision area to help you

make informed decisions within the departments and

across the company as a whole.

COMPANY CHARTS

The Company Charts contain information about your

company that updates throughout the simulation.

MARKET CHARTS

The Market Charts contain information regarding the

business environment, divided into three separate drop

downs – Customers, Competitors and Forecasting Tools.

TOOLS

COMPANY CHARTS MARKET CHARTS

20

DEPARTMENTS
This section covers the basics of each of the four
department pages – Research and Development,
Marketing, Production and Finance.

Each department section is structured as follows:

1. An introduction to the department’s purpose
and functions

2. A visual overview of the interface highlighting
the decisions to be made on each page

3. Detailed information on the key components,
rules and potential tactics

4. References to additional glossary tables
and/or definitions

Each department section provides the information
you will need to make tactical decisions for the
department.

RESEARCH & DEVELOPMENT MARKETING

PRODUCTION FINANCE

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21

The role of R&D is to design and modify the products
in your company’s portfolio. R&D must work closely
with the Marketing department. Marketing provides
information on what your customers really want so
that R&D can identify the best product specifications
to meet those needs, while coordinating project
timelines and managing development costs.

The department page is where the following
decisions are made:

• Creating new products to meet customer demands

• Managing existing products to keep them relevant
in the marketplace

• Retiring products from the market that no longer
fit your strategic direction

RESEARCH
& DEVELOPMENT

1
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PRODUCT DECISIONS PERCEPTUAL MAPCREATE NEW PRODUCT

R&D CHARTSR&D EXPENDITURES RETIRE PRODUCT 6

23

R&D DEPARTMENT

CREATE NEW PRODUCT

Click the ‘+ New Product’ tab to open the new

product development decisions. You can select

the name, design, specifications and Region Kits

to best position your product. A Region Kit is an

upgrade that customizes the product to meet

local requirements.

PRODUCT DECISIONS

You can make up to two updates to your existing

products. As you make decisions, you will see an

updated release date. Upon completion of the

project, you will produce and sell all units of the

product at the new specifications. Update 2 begins

immediately after Update 1 ends. Aligning your

decisions with the customer buying criteria while

balancing development time and costs is essential

to your success in R&D.

PERCEPTUAL MAP

The Perceptual Map displays your products’

Accuracy and Speed coordinates and where your

product falls compared to where customers are

located. On the Perceptual Map, there are two

circles. Each circle is a market segment, which

represents a group of customers with similar

preferences for Speed and Accuracy.

R&D EXPENDITURES

View how much you are investing in creating new

products and modifying existing offerings.

RETIRE PRODUCT

Sometimes a product becomes obsolete and needs

to be retired. Click the ‘Retire Product’ button to

eliminate the product from your portfolio and sell off

the remaining units.

R&D CHARTS

Additional information regarding the company and

business environment,including your investments,

material costs and perceived age of products in

the market.

6

24

R&D DECISIONS

PRODUCTS

Under ‘Specs’ in the Products panel you see the

specifications of the current product. Designing a new

product or modifying an existing product creates a

project. For each project, you need to determine the

product’s specifications for:

Speed – the time it takes the device to analyze a sample

and display results

Accuracy – the likelihood of the testing device to

provide a correct result. Devices with a higher Accuracy

rating are less likely to give a false positive or false

negative result.

Service Life – expressed in hours, as the average time

before the device is likely to fail. Increasing Service Life

increases material cost per unit. Decreasing Service Life

decreases material cost per unit.

Region Kits – a feature that tailors products to the

specific region they will be sold in. Region Kits boost

demand in an area by 10% compared to the competition,

but add 3 months of development time to add/remove

and 15% in material cost per unit.

Age – a new product starts with an age of zero.

However, modified products are considered to be new

and improved, which cuts the perceived age of the

product in half. Only decisions changed for Speed or

Accuracy cut the age in half. Changes to Service Life

and Region Kits have no impact on the perceived age.

See projects on page 27 for more details
about changing specifications.

25

SEGMENT MOVEMENT

Customers in each market segment — Budget &
Performance — continuously expect faster and more
accurate products. We map those increasing demands

on the Perceptual Map. The circles defining the product

segments will move a little each month, drifting towards

the top right-hand corner of the map as customers look

for faster and more accurate devices.

Each company must innovate and update products to

keep up with segment movement and remain competitive.

Within each segment there is an ‘ideal spot’. These are

the coordinates for the customers’ desired Speed and

Accuracy of the product at that point in time. The ideal

spot drifts an equal distance each month, but is different

for each segment. The Budget segment moves slower,

and customers do not expect frequent changes to their

products. The Performance segment, however, moves at

a faster pace, and customers expect frequent changes to

their products.

R&D DETAIL

DRIFT RATES

In the simulation, the rate that the segments move is

called ‘drift rate’, and it is different for each market

segment. Drift rates reflect what we experience in

real life — the next version should be faster and more
accurate. See the Industry Statistics section on page 59

for the actual drift rate in each segment.

26

IDEAL SPOT

As you know, the ideal spot is that point in the segment

where, all other things being equal, demand is highest.

In the image below, it’s represented as the black dot

within the circle. The perceptual map helps you to

calculate the Ideal Spot for each round of the simulation,

using the drift rate information you will find in the

Industry Statistics section on pages 59-60.

The circles above reflect positioning within
each segment. The darker the color, the better
positioned the product is within its circle. The inner
fine cut (green) has a radius of 2.5 units on the
scale, while the outer rough cut (blue) has a radius
of 4.0 units.

SERVICE LIFE COSTS

The Service Life rating for existing products can be

adjusted up or down. Each 1,000 hours of Service Life

adds $0.30 to the material cost. Customers prefer

products towards the top of the range. For more

detailed information on Service Life and the Rough and

Fine Cuts, please see page 81 in the Glossary.

CUSTOMER BUYING CRITERIA

In the Customers tab, the Buying Criteria for each

of the market segments is displayed. The Customer

Buying Criteria are the different product features that

customers consider when buying a product.

Criteria include the product price, positioning (including

Speed and Accuracy), its perceived Age and Service

Life of the product.

Just as in real life, different segments place different

levels of importance on each factor. For example, an

American customer seeking a performance product

places positioning above all other things, however an

American customer seeking a budget product considers

the price and age of the product above positioning.

For a detailed look into the Customer Buying Criteria,

see the Customer data tabs on the R&D and Marketing

pages, or the segment pages in The Globe.

R&D DETAIL

BETTER

BUDGET

POORER

PERFORMANCE

27

There are three types of R&D projects:

1. Inventing a new product

Enter the Accuracy, Speed and Service Life figures that

are appropriate to the segment you wish to enter.

2. Modify an existing product and reduce the

perceived age

You can reduce the perceived age of a product by

changing a product’s Accuracy or Speed coordinates.

Any additional changes to the product’s Service Life or

Region Kits will factor into the development time.

3. Modify an existing product and don’t reduce the

perceived age

Not all modifications reduce the perceived age.

When only changing the Service Life figure and/or

adding or removing Region Kits, the perceived age

of your product will not be cut in half.

PROJECTS

Use the Customer Buying Criteria boxes in the Market

Segment Analyses in The Globe to help determine the

best position and service life level for your products.

When a repositioning project completes, the product’s

age is cut in half. Thus, R&D drives three of the four

buying criteria — positioning, service life, and age —

leaving only price, which is determined by Marketing.

Considerations before starting a project:

+ Where do I want my product positioned on the

Perceptual Map when the project ends?

+ What length of Service Life should my product have?

Is it within the required range of the segment?

+ Do I want to add any region kits to tailor my product

to a specific area?

+ Do I want to make multiple product updates within

this calendar year?

Your product will continue to sell with the old
specifications up until the completion of the
repositioning project, at which point it will begin
to sell with the new specifications.

28

Region Kits are region-specific product additions

that increase a product’s attractiveness to customers.

Conceptually, our genetic diagnostic test performs

several genetic tests at once. For example, given a

biopsy, it can test for several varieties of cancer.

Since cancer incidence varies by region, the genetic test

can vary by region. However, it is possible to tailor your

product to test for additional region specific diseases.

For example, a cholera test may be considered for

Asian customers, but would not be relevant to

European customers.

In GlobalDNA, adding a Region Kit boosts demand by

10% over your competitors (i.e. adding an Americas

region kit will add 10% demand in the Americas). If your

competitors choose to add a Region Kit, as well, then

your demand boost will reduce. In the case that all six

companies are offering Region Kits to a specific region,

there will be no advantage in customer demand for

any team.

Adding a Region Kit to a product adds three months

to the R&D project timeline, plus a 15% material cost

increase in the region where the product is sold. If you

REGION KITS

are managing the Andrews Company, for example, and

you decide to put a European Region Kit on your Able

product, you will see a 15% increase in material cost for

all products that are shipped to Europe. However, no

products in the Americas or sent to Asia will incur any

additional material costs. You can have up to three

Region Kits on each product.

In the simulation, you don’t have to
determine how to specifically tailor
your product. You are only required to
determine if you will offer a region-specific
product to certain areas.

This product has a Region Kit for Europe
and Asia Pacific, but not the Americas.

29

The Marketing department is responsible for
forecasting sales, promoting both the products and
brand, as well as pricing and selling your products.

We know that customers have preferences for
Accuracy, Speed, Age and Service Life specifications,
all of which are determined in the R&D department,
but marketing has control over the other key factor in
the customer buying criteria: pricing.

Marketing is also responsible for forecasting sales
of each product for the coming year. This is critical
because your Production Department uses these
forecasts to determine how much of each product
line to manufacture, and your Finance Department
uses these forecasts to generate your proforma
financial statements.

MARKETING

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MARKETING CHARTS

PRODUCT DECISIONSREGIONAL OPTIONS

REGION TABS

REGION MAP

ANDREWS

BALDWIN

CHESTER

DIGBY

ERIE

FERRIS

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MARKETING DEPARTMENT

REGIONAL OPTIONS

The left side of …