Overview

 You are now MBA’s  You are the experts.  You have had the training.  Top 5% of Educated People in the World  You make the rules.  If you don’t like the rules, change them.  You write the books.  If you don’t like what a book says, change it.  You teach the classes.

 Simulation  Used to Learn Real Life  Airline Pilots  Astronauts  Businesses  Games  Fun  Entertainment

 Not a Class To Teach Skills  Class to Apply What You Already Know  BUSN 6120 Economics  MRKT 5000 Marketing  BUSN 6110 Production and Operations  FINC 5000 & 5880 Finance  HRMG 5000 Human Resources  Others

 Sensors  Identical Competitors  Monopoly Breakup  Everyone Begins the Same  Oligopoly Market Structure

 The Team Member Guide is your definitive resource for what happens in the simulation.  Know it well.  Everything in it is important  It is overwhelming at first.  It will get better as we go.

 Everyone must do the rehearsal tutorial before we start the simulation.  Where you get familiar with how the simultion works.  It is a tutorial on how to use the simulation.  It is not a practice round.  It is not a competition round.  It is not the COMP-XM exam.

 Important step  Don’t leave it out.  Tells about  Current Market Conditions  How the Industry Will Evolve  Operational Planning

 The Industry Conditions Report (One Time)  The Capstone Courier (The Newspaper)  Rubric Debrief Report (Understanding Mistakes)  Many Others  Like a Real World Business  Information is Everywhere.  You must find what is useful.  No one is going to tell you where to look.

 Use the Online Spreadsheet  Let One Student do all the Updating

 Research and Development  Marketing  Production  Finance  Other  Human Resources (later in simulation)  Information Technology (Spreadsheets)

 Designs Product Lines  Invents New Products  Revises Current Products  Pay attention to Lead Times

 Sets Prices  Promotes Your Product  Very Important  Spend a Lot of Money on Promotion  Creates Customer AWARENESS  One of the things beginners get wrong.  Sales Forecast

 How Many Units You Will Produce  Determines Production Capacity  Discontinues Lines  Sells all inventory at half price  Sets Automation Levels  Labor Costs go down as automation increases  Takes Time  Possible to Over-automate  Buys and Sells Production Lines

 Raises Money to Run the Business  Bank Notes  Bond  Issues  Retirements  Stock Issues  Dividends  Buy Back Stock

 The HR Module Begins in Round 2  Allows you to manage the people you have.  The TQM Module Begins in Round 3  TQM is your Friend  Use it to Lower Your Costs

 Rehearsal Tutorial  Individual  Practice Rounds  8 Rounds, Team Play  Competition Rounds  8 Rounds, Team Play  Comp-XM (Exam Rounds)  5 Rounds, Individual

 Each Round  Represents One Year  Takes 1-2 Hours to Complete  Each Team Uploads their Round Info  Spin the Round  Happens for all teams at the same time  Analyze The Results  Upload the Next Round

 Published Once at the Beginning

 Price  Age  MTBF  Positioning  Size  Performance

 Deals with Positioning  See Page 4 of Team Member Guide  Drift (Industry Conditions Report)

 Fine Cut  Rough Cut  Outside

 Extremely Important  See Section 3.2 of the Team Member Guide  Understand Your Customer Survey Score  Product Demand is Based on the CSS.  Build a Spreadsheet!!

 Broad Cost Leader  Broad Differentiator  Niche Cost Leader (Low Tech)  Niche Differentiator (High Tech)  Cost Leader with Product Life Cycle Focus  High end, traditional, and low end focus  Differentiator with Product Life Cycle Focus  High end, traditional, and low end focus

 Borrowing money at high interest rates because you didn’t have enough cash to run the business.  Remember: Retained Earnings is not a cash account.

 Stock outs are bad  Understand them and avoid them when possible

 Marketing – Conservative  In case sales don’t materialize  Production – Aggressive  Because Finished Goods Inventory is a Liquid Asset

 Awareness – Customers are Aware of Your Product  Promotion Budget  Accessibility – Customers Can Find Your Product  Sales Budget  Spend Lots of Money on Both of These

 Your competitors are Good  The Computer Teams are Good

 Don’t Make Mistakes Early  You can easily get behind and go bankrupt.  There is NO RESET BUTTON.  You live with the consequences of your decisions.

 See the Six Basic Strategies  Pick One  Stick with it.  If it doesn’t Work, Change it.  There are Other Strategies  See the Strategic Planning Process Presentation

 Companies pay employees lots of money to spend full time dealing with these issues  If you run out of things to do in this 1-2 hour exercise, you are doing something wrong.  There is always more you can do.