Capitalism 2 and Capitalism Lab Forum

I would do more testing like this myself but still don't understand the mechanics enough.

Was struggling with the on going business because it's now 2071. Lots of people have high R&D but I'm holding my own. Thought about going into the jewellery business but the R&D was massive that someone owned and wouldn't sell. I attempted to make him go bankrupt or ruin the business by buying his silver and gold and storing it. Then tried to buy some of his jewellery and relabel it that was a stupid idea. The buying up the silver somewhat worked as he ended up buying it back off me after I took it off internal sale. I gave up the fight.

A while back bought up a lot of shares where there was a recession. Borrowed $9billion from the bank to do so. Slowly paying it back but was down to $200million. Then someone wanted to buy some shares back which gave me just over $1billion. The warehouse showrooms seem OK but thought about what was said to my post, that if I own the media firms I'm paying myself for the warehouse showrooms.

So after a bit of messing around with mines forcing premium rates and gaining a bit more money I've been going round buying up the media firms. Close to making $1billion profit a year now up from the $400million.

As a new release is out I might considering retiring soon and start all over again.

Pure jewelry business isn't that great, especially when it has competitors. Most of it's profit comes from the gold and silver ores themselves, which in term directly affected by mine setup cost. The thing with late game is that AI able to survive that long usually can afford to lose profit and maintain it's market share. Players usually can not do and will not do.

If you are thinking about businesses like fighting a war. Any confrontation with opponents always end up cost something. Direct price war cost you profit. Buy out their upstream source cos purchasing expenses, unless you can turn their resource to your own use and sell them at profit. (relabeling finished good in late game usually not easy, since troll stamp works better when there are still empty market to sell relabel products). The real issue is which tactics are most cost effective. Will you try to hit them directly, or indirectly? Or will you settle with a draw in small market share and marginal profit? Or just fight in another "battleground"? Fight in capital market is also a good strategy since sometimes you can gain more with borrowed capital.

Personally I don't bother with the absolute amount of profit my corporation makes. It varies with inflation setting, number of cities, local competent, etc. I've done countless games to dominate every single product everywhere, it's actually not that "FUN" when there's nothing else left to do. I usually come up with experimental settings and personal rules to let things more interesting and somewhat "realistic". A lot of time I even deliberately left other AIs to survive within their own "specialty market", and observe how they survive and do business. I enjoy watching them happily doing their own businesses parallel with mine. I'll even help a weaker one against a bigger one and see how they deal with AI-to-AI competition. I must say AIs are suicidal and very single minded by human standard, and usually do things the hard way. However from time to time AI can still surprise you.

One of my personal experience is, one AI had a very high tendency to buy back its own stock, and originally has a tech focus strategy, so it quickly buy back all it's stock and own 100% of it. After it researched a bunch of techs and trade all kinds of tech over decades, it suddenly changed its focus to diversity strategy, and started manufacturing products and boomed like crazy. One by one took away most market I left for other weak AIs. It became such a monster, it almost reached 1/3 of the total market (I controlled over half, and the rest is shared by all other poor weak AIs).

It bothered me so much, I spent more than a hundred years to take it down, using all the tactics and strategies I know. And it's really really hard. I used tech jump strategies, like 3 R&D centers 9-units connected 10 years project with the same product, several years finishing date apart to deal with it's tech lead product, maintaining product competitive and tech jump at the same time. I used warehouse hijack tactic to cut off it's upstream supply and cut down it's market profit (in the cost of mine). I used freebie products with $0.01 price to nuke its most profitable products. I used warehouse wholesalers tactics to trick other weak AIs to join my fight and sell my products with all our combined retail stores numbers against it. I bought up all possible media firms and spam new ones so it has to put most advertisement spending through my media. And finally I was able to turn it's profit into negative and exhaust its cash, and it had to issue new stock, so I can buy its stock and control 75% of it. It's a real tough fight, but a lot of fun.

The most funny thing in the end, is that once I was able to buy it out, I have to help it grew back up again and sustain itself, otherwise there is no point controlling a doomed corporation. I had to trace back what I have done, and slowly gave back selective area I intended for it. It's one thing to fight a war, and another to rebuild, especially when it's a former enemy. It didn't even have the backbone to maintain monopoly in empty market I left out for it anymore (it closed down a lot of firms at the end of our fight to gain some capital), and other weaker AIs quickly filled them in.

The most regrettable thing is that another weak AI also owned 100% of its stock, but wasn't "lucky" enough to be a threat (since it only manufactured one class of products in the competition area), became collateral damage caught in our crossfire, and went bankrupt. I was sad not able to save it. I think we need reverse strategies not to defeat AIs, but help them without direct capital inject through issuing stock to parent company. It's a lot harder than you think. Even buying AI's products to sell sometimes doesn't help, when it lowers the price at suicidal level. I would like an flag or a signal to AI that it would understand I come in peace, and baring good will (for now )

I tried a new idea out, well mentioned this before, to see how it worked. It failed but made somewhat sense.

Built 14 farms in the cheapest wage area and just sold frozen meat and eggs. 2 farms for each city all in the one city. Works really at the beginning to get some cash, with max training and the sales going through meaning your quality is growing (didn't realise until last game that if products aren't shifted from a shop, farm etc, then the training for that department is pointless as each department will stay at 1, until products are being moved from it. So on last game was wasting space in a warehouse, moving stuff to them just to get the departments level up and quality to go up)

Anyway. I then thought, I'll make several warehouses in the central most city. Then all the farms will supply those warehouses. Then everyone can buy from those warehouses instead of the farms that might be too far away. That's where it fails. I was hoping this might bring down freight costs for some of the firms buying from me. Because of course, the warehouses maybe closer to them than the farm. Doesn't appear to work like that. Everything ended up costing a lot more so hardly anyone would buy from the warehouses.

I still think it's a semi sound idea but I guess the mechanics in game don't allow this to work as it should. Or maybe I'm just not understanding it well.

But what about the idea? Lets remove farms but if they were factory products. I'm half way across the world in the US, the goods are made in Russia. Would it not help if there was a warehouse in the UK that could then ship to the US?

We have the likes of Amazon etc doing this. Having warehouses based in main countries they sell to. Or do they also make a lose on these warehouses?

jondonnis wrote:But what about the idea? Lets remove farms but if they were factory products. I'm half way across the world in the US, the goods are made in Russia. Would it not help if there was a warehouse in the UK that could then ship to the US?

We have the likes of Amazon etc doing this. Having warehouses based in main countries they sell to. Or do they also make a lose on these warehouses?

As I mentioned before, warehouse doesn't lower freight cost, most of the time you'll pay extra freight cost. Since instead of directly from source to destination, it's from source to warehouse and then warehouse to destination. And instead of just downstream clients paying the freight, the source to warehouse freight cost is part of the warehouse expenses. But by reducing fluctuation, or increase utilization, or reduce the number of factories needed, your overall overhead marginal cost can be lower, in term a higher profit margin. Whether implementing warehouse complex is beneficial or not, depends heavily on the cost of freight of that product and the gain you get selling to downstream. The location of the warehouse is just as important as the location of retail store.

For a product like egg, since the ratio between freight cost to usual end-customer price is quite high, normally even if you don't use warehouses, the egg farms still need to be quite close to retail store to get a decent profit. Hence almost always it's better to use a close by local farms. The livestock meat products are a little better, but you still need to weight on the benefit and cost. Sometimes it's worth it, sometime don't. Normally you don't need a warehouse in every city, but just warehouse near your farms in the same city for the benefit of smoothing product flow.

For factory products that have low material cost and negligible freight to retail price ratio. Warehouse can help in your scenario of local central warehouse system. Not just from management perspective, like Camio pointed out, but also the benefit of wholesaler price differences (if you don't have the money to spam so many retail stores in the beginning). Every city has different base local price and rating, if you only have factories as wholesalers source, you need to put your price quite low for AIs in all cities to buy from you, and your own retail stores have to compete with AI retail's demand. If you put local buffer warehouses and only allow AIs to buy from them, you can control the price and supply of goods much easier, at the same time create wholesale price differences between cities (remember always weight on the benefit and cost, the gain may not always be greater than the cost of maintaining warehouses and extra freight cost). Generally speaking, you can run a corporation without warehouses quite all right (as it should be as in Cap2), but with warehouses you get more flexibility and options.