Start Up Presentation Single-player Version

Learning Outcomes To gain an understanding of core business functions, including Marketing, Operations, Accounting, Finance and Strategy To visualize a business as an interactive system of these components To learn how to analyze company data in a live case study To make management decisions and experience the results of those decisions.

The Scenario You will be working with the Single player version of MikesBikes-Intro on CD. You play against a computer opponent (Mike). You start as a Brand Manager (part of the Marketing Department) and gradually work your way towards being promoted to President where you will make a full set of business decisions. Designed specifically for Intro to Business classes - but also suitable for Intro to Marketing, Management and Accounting Business students gradually work their way towards a full set of business decisions. Free single-player version with a MGH Irwin TextBook (Mikes Bikes Intro - SOLO) Multi Player online version where student can connect from anywhere and compete in teams (Mikes Bikes Intro - Net)

Single-player Version Environment 3 DISTRIBUTION CHANNELS 3 MARKET SEGMENTS 2 MANUFACTURERS Real Cool Cycles (student) The SoloMike environment has two manufacturing firms, two distribution channels, and two market segments. Students compete against Mike who runs “Mountain Top Cycles”. Bike manufacturers: Real Cool Cycles - you, MountainTop Cycles - Mike (ie your computer). Distribution channels: Bike Stores Department Stores Market segments: Adventurers Leisure MountainTop Cycles (computer) Compete through For control of

You (and Mike) begin the simulation with a single identical product in the Mountain Bike segment. Initially you have control over its price, advertising mix and sales forecast. Then it gets INTERESTING…….. Period Description New Decisions Available Segments Available 1 Year 2002 Brought into the family business as a Brand Manager. Pricing and Promotion Production Planner Control of the Product Promotion budget Mountain 2 Year 2003 Promoted to Marketing Manager. Distribution Branding Control of the Firm Promotion Budget 3 Year 2004 Promoted to General Manager. Capacity Planner Bonds (no investor relations) Control of the Production Budget Control of Capital Expenditure 4,5,6 Years 2005, 2006, & 2007 Promoted to President. Expanding the product mix is now possible. Product Slot (new product) Redevelop (existing product) Abandon (existing product) Equity 2nd Product slot made available Control of the Product Development Budget and Financial Activities Budget Road Kids

Getting Started Install MikesBikes-Intro. If you have any problems installing the software then email SmartSims at help@smartsims.com Read and print these five key reports (AT A MINIMUM): The Year Ahead report provides great strategy advice. The Scenario Information report is a market analysis prepared by consultants. Industry Benchmark Report shows your performance against the competition. The Income Statement shows your profit and it was prepared by the Accounting department in your firm. The All Product Details Report shows individual product performance and it is prepared by the Product Marketing department in your firm.

Developing a Product Strategy Decide on a product strategy, which is a long term, multi-year plan. The company President has given you complete freedom to manage your firm’s single product. However he/she has recommended that you choose to implement one of three product strategies:  High Price, Lower Volume Strategy To follow this strategy, your decisions this year might increase your price by up to 10% and increase your Product Promotion budget by 50-100% of last year’s profit (e.g. if your profit was $1m, then this year you would increase your promotion budget in the range of $500K to $1m).  Medium Price, Medium Volume Strategy To follow this strategy, your decisions this year might change your price by less than 1%, and increase your Product Promotion budget by 25-50% of last year’s profit.  Low Price, Higher Volume To follow this strategy, your decisions this year might decrease your price by up to 5% and increase your Product Promotion budget by 25% of last year’s profit.

Enter your decisions Mandatory: Change your firm’s name to include your own name. (This is the only time in the game you may do so.) For example: Michele Fritz’s Winner Co. Set your Expenditure Budget. Make your Pricing and Promotion decisions. Make your Production Planner decision. Press the Go button to roll over your decisions and see the results in the following year. You can “rollback” your decisions until you turn them in to your instructor with the assignments. After turning the assignment in, you must live with the decisions you made up to that point in time.

Hints for Success What is a decent shareholder value in this industry? By 2005, A score of $15 is OK A score of $20 is Good A score of $25 is Great Start off with small changes and use the rollback button to go back and improve your decisions after you have seen the results At certain points you have written assignments to submit to your instructor. Once these assignments have been turned in, you may no longer roll back to a period prior to the year of the assignment. You may still use the rollback button for the years between assignments, until the next written assignment is due. Your instructor will keep the printed reports with your decisions in order to monitor this policy. Read the MikesBikes Intro Player’s Manual as it contains lots of useful information and and tips. It can be found at http://www.smartsims.com/simulations/downloads/index.asp You’re now ready to take over as a Brand Manager

Written Assignment 1: Product Strategy Prepare a one page (maximum) summary report (typed, double spaced in a font of 10 or 11) describing how your product strategy will help your firm succeed over the next 5 years. What do you want your firm to be known for? What is the one thing that makes your firm stand out from the competition? Why did you select this strategy? Refer to any data, analysis, or indicators that justify your decision. After you have rolled over to 2003, print out a copy of the “Industry Benchmark Report” and the “Decisions Made Last Period Report”. Make certain that you have already changed the name of your firm, or your will not get credit for submitting these reports! Click on the Industry Reports item on the Decision Tree, then print out the Industry Benchmark Report. Click on the Firm item on the Decision Tree, then print out the Decisions report which is available as you scroll through the report choices in the box at the top right hand section of the screen. (The reports will show they are for period 2002.) Staple them to the rear of your assignment.