Overview of the game Q1

Have a Strategy – Be Consistent Seek a Competitive Advantage – Be Better than other groups in what areas? Know the differences in size of Workhorse/Traveler/Mercedes markets in each City & the Web Be Aggressive – It is rewarded by the game, don’t simply follow everyone else, be unique Cumulative Balanced Scorecard of the Game – Measures 8 Areas – Not all are Equal in Weight (Financial Performance Most important)

Know the types of financing: Investment from investors (me) – Q1 (2 million); Q2 (1 million); Q3 (1 million); Q4 (4 million) Short Terms loans – you can borrow if you don’t want to wait – debt financing Emergency Loans – Don’t confuse – these are to be avoided (Loan shark terms, high interest rates, he takes shares of your stock, diluting stock value) Follow advise of having enough cash on hand to avoid emergency loans (money in a CD is not cash on hand) to avoid Guido/Loan shark Don’t leave a lot of money laying around in CD’s – use the money to invest in your company

There are three major market segments (work horse/traveler/Mercedes) but there are sub-segments as well. You can offer products for high/low of each for example. Brand Names = Brand Loyalty Salespeople are important (and Service Workers) – do you have enough to sell what you make? Brand Judgment & Ad Judgment (acceptable scores are 70 and up); higher these scores are, the less you have to spend on Advertising, Salespeople, etc. as these become more effective Designing Ads – How many things to say (1-9)?

Law of Diminishing returns – spending more for everything is not the answer – what is the right amount is different for everything (advertising, what your computer has in it, salespeople etc…) Research & Development (R&D) available to be ordered in Q4 for Q5 &Q6 – Expensive and Important regarding differentiation [Explain this better – what it is..how to use it] Licensing of Research and Development – an option that allows you to sell/share technologies with other groups. Capacity – know the difference between Fixed Capacity (how many units you CAN make per day) and Operating Capacity (how many units you tell the factory to make per day)

Factory Worker productivity – affected by salary, vacation, retirement, etc… which calculates how productive they will be (expressed as a percentage). The higher the percentage, the more they will produce of what you order each quarter. Remember, if you order 100 computers per day but your productivity is 65%, the factory will only make 65 units per day. Sales Force Productivity – same idea as Factory Worker Productivity – the higher their productivity, the more units they are going to be able to sell per person.

Always buy the Marketing Research available each quarter (15,000) What does it show/allow you to do? Brand and Ad judgments of all other Companies Can compare Brands and Ads side by side Demand for all brands Learn where all companies are (who is in what city/web) Compare compensation/productivity of all Sales Force and Factory Workers Overall competitor profile table

Three Things you need to order 1 Quarter in Advance: Opening a new city or a web center Increasing production at your factory (manufacturing) Ordering R&D takes either 1 or 2 quarters (depending on how much you pay for it) – so for example, if you order R&D in Q4 it will be ready in Q5 or Q6…