April Training The Executive Business Simulation presents The Executive Business Simulation

Aims & Objectives Main Aim: Objectives: To provide experience in running a company & an opportunity to build on and use business skills Objectives: Strategic Analysis make key decisions & manage outcomes pitfalls successes teambuilding & communication leadership skills planned & unplanned events

Business Vision What is a business? What is the purpose of a business? What is profit and what is it for? difference between profit and cash? How does a business make a profit?

Vision What is a ‘vision’? Vision Where you want to be What sort of company you want to be Core values

Strategic Space – Where will you be ?

Strategy What is a strategy? direction & steps to achieve your vision

Strategy – How to get there…… Value Chain Analysis Support Activities Organisation Infrastructure Human Resource Management Margin Technology Development Procurement Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Primary Activities

Strategy – How to get there…… Value Chain Analysis Technology What actions do we take to achieve this ? Decision 1 Decision 2 Decision 3 How much focus should be in each area relative to each other ?

Strategic Analysis - Business Plan Operational decisions Operating Levels Strategic Analysis - Business Plan Strategic decisions Tactical decisions Operational decisions

Introduction The Simulation

Marketplace Europe

The Product Cars (Images removed – copyright)

The Starting Position £500 million in the bank raised from 5 million £100 shares No production facilities No workforce Current economic climate prevails

Marketing Considerations 1 Must produce two models in year 1 May increase to a maximum of five models City (Mini) Medium (Scenic) Large (Audi A6) Luxury (Jaguar XK8) Under 25 1 2 3 4 25 to 40 5 6 7 8 41 to 55 9 10 11 12 Over 55 13 14 15 16 Once a sector has been chosen you : may only move vertically within the grid; may aim at a different age group; cannot change the car size

Marketing Considerations 2 Increase perceived value of product by: Choosing design features Making options available Invest in Research & Development How Much to spend ?? R&D Projects Research time : once for the company Development time : once for each model Promotion Television Radio Periodicals/Reviews Internet Dealer Incentives Promotional Offers Sponsorship

Marketing Considerations 3 New Model Investment Made a year in advance Average cost is £290m Computer-Generated Market Research Available for £5m Computer-Generated Data on Competition Available for £10m

Production Productivity depends on car size (cars per worker per year) City : 36 Medium : 34 Large : 32 Luxury : 6 Automation One unit costs £500,000 One unit is as productive as 10 workers Factories 4,000 workers per factory Bought and sold automatically based on total workforce size Cost £600 million each

Human Resources Issues WAGES Minimum wage is £338 per week Average wage is £398 per week TERMS A working year is 50 weeks Average absenteeism is 5 days per annum Redundancy payments : 12 weeks salary

Finance 1 Start with £500 million shareholders’ funds Half of closing bank balance used to repay loans Fixed assets i.e factories and automation and 50% of new model investment depreciate at 10% of book value per annum Stock Valued at materials + labour on Balance Sheet Costs 20% of value to maintain condition

Finance 2 Interest rates Overdraft : 8 + inflation (min 15%) Balance in credit : 1.5 + inflation Negotiated loan : 5 + inflation

Remember ! If you want to succeed Don’t over produce ! and Don’t over price ! and of course…. Don’t under-produce Don’t underprice !

Simulation Programme Decision Points Mon Wed Friday Week 1 w/c 20 March Trial Run 1 2 Week 2 w/c 27 March 3 4 5 All decision sheets must be handed in by 12:00 noon LATEST to BRONTE Reception Results available next working day by 9:00 am

Good luck with your venture