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Department of Agricultural, Environmental, and Development Economics


Students Gain Business Experience Through Simulation

April 3, 2017

On a recent spring afternoon, five AEDE 4106 Business Strategy students sat in a conference room hashing out how to reduce the amount of time it would take to get their products to market. They consulted an industry conditions report, checked their balance sheets, production schedules and  marketing budget. These students aren’t running a real business but are CEOs, COOs and CFOs of a virtual company through the Capsim Capstone Business Strategy Simulation. 

“There are 12 teams divided into  two competitive industries. All student teams start out with the same amount of money and the same products,” shared Dr. Parkman. “They have the ability to change these products and apply business strategy to outperform their peers.”  

She added that there are eight rounds of competition for students to test their assumptions and learn from their mistakes.

Team member Landon Lindemer fessed-up that his team didn’t fare well in the previous round. “Some of our products weren’t going to be ready to sell for a whole year,” he shared.

Zack Mcconnell piped in, “we have a lot of work to do.”

So, together the team worked their way through the online platform making decision after decision on how to reduce time spent in research and development to get their products to market sooner. At one point, they realized that reducing material costs through quality initiatives would drastically reduce the amount of a new loan. Once that change was entered in real-time, Grace Dannemiller, the official team number-cruncher, shared the good news: the changes also resulted in a 33.9% reduction in R & D time.

Week by week as students put theory to practice, a newsletter tracks each team’s progress.

“We get to see how we stack up against the other teams,” said Megan Phyillaier. ““It’s fun but stressful when you think about the amount of money you’re borrowing. It’s a good thing it’s not real money!”

The team is currently in 4th place in their industry with almost 23 million in profits and working hard to catch that first place team.

"We're going to pull it together this round, “ added Zachary Corcoran.

There still could be many steps left for these students to take between the classroom and the board room but with the simulation experience, they may feel a bit closer.