Capitalism 2 and Capitalism Lab Forum

Question about low cost industry

Is it possible to execute a low cost manufacturing company?

Like no R&D center and selling low quality products at tiny margins?


I suppose this works better with semi products...

I just ran a game where I opted to engage in no R&D or marketing, having my products compete on Price alone (mostly).

I opted to go into the food industry, and was initially planning on seeing what would happen if I sold all my goods at rock-bottom prices. I carefully set the internal prices on my farms and factories to ensure they would operate at a small profit, allowing me full flexibility with retail pricing. I deviated from this slightly because the cost of training my farms was so low, I couldn't see any reason not to do it at 100%. This gradual influx of quality ended up saving my butt.

Initially I was able to dominate every market I set foot in, able to lower my prices to a level where I could match and beat the Ratings of my competitors and still make a profit. Running at minimal costs was fun! I made a boatload of money this way, but eventually my revenue started shrinking after real competitors entered the market and I was fighting just to stay above 50%.

I had a panic moment when a competitor started selling 80 quality Cereal Bars backed up by a 100-strength brand rating. I lowered and lowered my prices and only just barely managed to get a comparable rating to his. It was in that moment that I realized the fundamental weakness of this strategy: If your product doesn't have a high enough rating, you can drop your price all the way to Zero and still be unable to compete.

Fortunately my farms had matured by this point to produce high-quality crops, and so I had enough quality-points from the ingredients to be able to compete while making a tiny fraction of a profit. If I hadn't had a source of Quality within my own production chain, I would have lost that market.

You can make a lot of headway early on selling goods with a high "price" rating in price-conscious cities, but you will eventually realize that dropping your price from 10% default to 0% only earns you ~10 rating points. You will eventually need a second source of ratings, and that can only come from Farm-training, R&D, or Marketing.

It sadly seems that some links are broken

especially those

Integrated strategies and special reports :

* Tips and Tricks by mwyeoh, although it's for earlier version, but the general GOLDEN RULES for business always apply to both in game and in real world. P.S. chrishaas61's stock manipulation trick no long worked in current version.

* williet4038 on the warehouse utlitization

* Hans_Lemurson on Cost Analysis for Firms of Different Sizes

* Hans_Lemurson and counting on Store Placement, Production Efficiency and Capacity

* Esoteric Rogue on R&D effectiveness of semi-product

* The middleman report by counting

and some in the " Tactics " part , Farmer heaven , and some of the "newbie" videos at the very beginning ;(

I was interested a lot in the stock manipulation trick , and it feels sad missing THE GOLDEN RULES

Pietro wrote:It sadly seems that some links are broken

especially those

Integrated strategies and special reports :

* Tips and Tricks by mwyeoh, although it's for earlier version, but the general GOLDEN RULES for business always apply to both in game and in real world. P.S. chrishaas61's stock manipulation trick no long worked in current version.

* williet4038 on the warehouse utlitization

* Hans_Lemurson on Cost Analysis for Firms of Different Sizes

* Hans_Lemurson and counting on Store Placement, Production Efficiency and Capacity

* Esoteric Rogue on R&D effectiveness of semi-product

* The middleman report by counting

and some in the " Tactics " part , Farmer heaven , and some of the "newbie" videos at the very beginning ;(

I was interested a lot in the stock manipulation trick , and it feels sad missing THE GOLDEN RULES

What kind of golden rules?

I think the wiki is being re-organized and breaking those links. Just Google for "Capitalism Lab wiki" - I believe the beginner tips are those "Golden Rules".

marty wrote:I think the wiki is being re-organized and breaking those links. Just Google for "Capitalism Lab wiki" - I believe the beginner tips are those "Golden Rules".

This one?

http://capitalismlab.wikia.com/wiki/Beginners_Tips

And a lot of broken links, just need to add www. in front of the old links.
like this one
* williet4038 on the warehouse utlitization
to this
http://www.capitalismlab.com/forum/view ... 1293#p8073

Micro supply chain

It is possible to complete multiple steps of manufacturing in a single factory. The philosophy of this strategy is that even moving materials between adjacent factories can be quite costly. Each semi-product that has to be transferred from one factory to another requires using up sales slots in the producing factory, and a purchase slot in the consuming factory. Those slots add up pretty quickly.

By cutting down on the number of purchase and sales slots in your factories, you leave more room for production per factory. This strategy works well, as long as you can ensure production is balanced between your units without much idleness. For example, 1 unit manufacturing textiles can feed exactly 2 units manufacturing stuffed toys. Since you need cotton for stuffed toys anyways, you might as well turn that Cotten into textiles.

Say, you wanted to turn cotton into textiles, and then take those textiles to make stuffed toys. If you decide to have 2 factories and limit each factory to 1 step of the proses, you could cram 3 manufacturing slots in the factory making the stuffed toys. But using a micro supply chain, both of your factories can have 2 manufacturing slots for stuffed toys apiece. Granted, that's less then 3, but a dedicated factory for textiles has no manufacturing units for stuffed toys. this also works for motorcycles, bread, and a bunch of appliances.

Micro supply chain

It is possible to complete multiple steps of manufacturing in a single factory. The philosophy of this strategy is that even moving materials between adjacent factories can be quite costly. Each semi-product that has to be transferred from one factory to another requires using up sales slots in the producing factory, and a purchase slot in the consuming factory. Those slots add up pretty quickly.

By cutting down on the number of purchase and sales slots in your factories, you leave more room for production per factory. This strategy works well, as long as you can ensure production is balanced between your units without much idleness. For example, 1 unit manufacturing textiles can feed exactly 2 units manufacturing stuffed toys. Since you need cotton for stuffed toys anyways, you might as well turn that Cotten into textiles.

Say, you wanted to turn cotton into textiles, and then take those textiles to make stuffed toys. If you decide to have 2 factories and limit each factory to 1 step of the proses, you could cram 3 manufacturing slots in the factory making the stuffed toys. But using a micro supply chain, both of your factories can have 2 manufacturing slots for stuffed toys apiece. Granted, that's less then 3, but a dedicated factory for textiles has no manufacturing units for stuffed toys. this also works for motorcycles, bread, and a bunch of appliances.