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Unforgettable Business Learning Unforgettable Business Learning

Harold Washington College Bral Spight, Instructor

Business Simulation Challenge

Spring 2017Unforgettable Business Learning © 2014 Capsim Management Simulations, Inc.


Why Simulate?

Risk-FreeView

Alternative Strategies

Enjoyable Compresses Time (1 Round=1Year)

Selectivity <=>

Integration

© 2014 Capsim Management Simulations, Inc.


Objectives of the Foundation SimulationDemonstrate

effectiveness of multi-discipline teams working

together.

Use strategic thinking. Test business acumen.

Understand overall interaction and impact of

various parts of a business on one another.

Grow the awareness of competition.

Take away practical skills in business management.



The Story: Background on the Companies

Started as a single corporation named Sensors, Inc.

Sold sensors as main product

Customers (OEMs) need sensors for their products to function across diverse applications

Corporation was shut down by FTC due to monopolistic operations

Two clear segments exist with varying demands

FTC required Sensors Inc. to be broken up into separate companies:

Andrews Baldwin

ChesterErie

DigbyFerris

Each team was charged to operate one of the companies and make it successful.$40 Mil in sales, 2 segments, 1 initial product, closed marketplace



The Marketplace: A Look into the Segments

Round 1 Consumer Segment Expectations

Round 8 Consumer Segment Expectations

Perceptual map used to track changing

consumer demands in size and performance

Each year, consumers will expect faster (higher performance) and smaller products (lower size)• This causes the segment

circles to drift to the lower right constantly

Market segments continue to diverge

over time

*Note the drift towards the lower

right (expectations of faster and smaller

products). Also note the divergence of the

segments.



I want to spend as

little money as possible!

I want them to have been around for a

while…no beta testing!

They have to be

moderately reliable…but not enough to drive up the price!

The technology

doesn’t have to be cutting

edge.

Low Tech Consumer CharacteristicsWhat the customers say

•Ideal Age: 3 years

•Ideal MTBF: 14000-20000

•Prefer less cutting edge

products (Bigger Size &

Low Performance)

•Price sensitive. Prefer prices at lowest possible.

Price Positioning

AgeReliability



Low Tech Consumer Decision Making



Price is not an issue. I want the

best sensors in the

market!

I want the newest

sensors you have!

We need the total package.

High performance

and small sensors for

our products.

Only the most cutting

edge products will

cut it!

High Tech Consumer Characteristics

•Ideal Age: 0 years

•Ideal MTBF: 17000-23000

•Needs Smaller and Faster

Sensors

•Not price sensitive, willing to pay higher prices.

Price Positioning

AgeReliability

What the customers say



High Tech Consumer Decision Making


Industry Segment Growth

© 2014 Capsim Management Simulations, Inc.Unforgettable Business Learning

Recession Period


Decision AreasStudents need to coordinate strategy and tactics across

the following areas of their company:

Additional Modules

- HR- TQM

R&D Marketing

Production Finance



How the Contest Was Evaluated

Balanced Scorecard

• Improving company financial picture in preparation for final debrief

• Point System

• Gauges company performance based on four perspectives• The Customer• Internal Business Process• Innovation and Learning• Financials

• In the simulation, a Proforma Balanced Scorecard is available to project results for the upcoming year.


How HWC Compared to Last Year – Year 8

2016

2015

26 Products Introduced


2017



How HWC Compared to Last Year

2017 Versus 2015/2016

• Lower interest and registration• Log-ins fell off slightly as some teams faced

attrition• Unlike last year teams focused on the same

segments this year, compounding the issues with forecasting and dealing with uneven growth

• Despite that BSC Recap scores were roughly comparable and BSC aggregate scores actually increased

• The winning team did not have a walk this year, much more competitive!

2017

2015 2016 2017 2015 2016 217 2015 2016 2017 2015 2016 2017 2015 2016 2017Total 27 32 24 920 869 578 435 419 411 2309 2348 2378 36% 25% 29%Average 5 6 4 184 174 131 87 84 82 462 470 476

Balanced Score Card Total Winner % total pointsBalanced Score Card RecapLog-InsRegistered Participants

2015

2016


How HWC Compared Nationally

2017 Versus Community Colleges Nationally

• 86 – 179 Community Colleges have attempted the simulation depending on rounds run

• Typical industry structure in real life

• Unclear how many incorporate a recession scenario into the simulation

• Inventory management and forecasting were key challenges to profitability nationally

• Despite the challenges typically 2-3 HWC teams recovered well enough to compare favorably with national norms by round 8

• Other key indicators told a similar story: Stock Price ROS/ ROE/ ROA Asset Turnover

Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

2.52.6

5.7

5.9 9.27.1

10.3 10.7

Profit (Millions)

National Mean Andrews BaldwinChester Erie Ferris


How HWC Compared Nationally


• Comparison vs. 997 – 1972 four-year colleges that have attempted the simulation depending on rounds run

• Typical industry structure in real life

• Unclear how many incorporate a recession scenario into the simulation


• Despite the challenges typically 2-3 HWC teams performed well enough to compare favorably with national standards


90

98

90

55

61

50 50

26

13

96

73

80

36

31

23

17

65 67

95

9389

66

74 74

29

54

2

24 32

15

63

51

59

34

18

12 0 2 1

Percentile Performance

Andrews Baldwin Chester Erie Ferris


How HWC Compared Nationally - 2016


• 68 – 157 Community Colleges have attempted the simulation depending on rounds run


• Despite the challenges typically 2-3 HWC teams recovered well enough to compare favorably with national norms by round 8

• HWC consistently placed 3 teams above the 50th percentile across all key indicators, not always the same 3!

• Other key indicators told a similar story: Cumulative Profit Stock Price ROS/ ROE/ ROA Asset Turnover


2.7 2.6

6.0 6.3

9.8

7.9

11.312.3

2.6

4.7

0.62.3

4.2

-4.4

-3.5

9.3

3.4

7.2

9.2

-6.1-5.1 -4.3

-0.3

13.3

0.4 1.50.2

4.9

6.8

9.4

7.4

13.0

3.6

7.5

1.3

-7.0

0.5

-4.2

-6.5

-0.4

-1.1

1.6

1.5

-3.9 -3.7-2.8

-7.0

-3.3

PROFIT/ ROUND(Millions)

National Mean Andrews BaldwinChester Digby Ferris

[ppt]slide 1 - wordpress.com · web viewthe story: background on the companies ftc required sensors...

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