An Introduction to Mikes Bikes Advanced Presented by: Peter Janciw

What is a Business Simulation? A representation of a real world company Governed by real life business conditions trying to achieve goals and strategies You are placed the role of Management and must make strategic decisions It is NOT just a game, it is a learning experience

Why simulations are used Application of theoretical business concepts (everything you learned in IB1!) Used in both the academic and business realm Simulations build teamwork skills and provide an enjoyable way to learn. Manitoba International Marketing Competition

We will now look at… What is Mikes Bikes? Simulation interface elements The importance of strategy The main functional areas of the business Things to watch for

What is Mikes Bikes? You are the new manager of a manufacturer in the bicycle industry 5 market segments and 3 distribution methods exist 2 versions: Single-Player and Multi-Player We will be using the Multi-Player version Rollovers are automated!

Multi-Player Structure Course World Firm User

Simulation Interface Elements Decision Screens – Enter the values for all functional areas for the next period Reports – View company results and analyze for next decision The Advisor - The Mikes Bikes “helper.” Provides tips and assistance

The Importance of Strategy Strategy – How you will achieve your organizational goals Each Marketing, Production and Financial decision you make ties into your overall strategy! Monitor strategy by constant analysis (via reports) then make the right decisions

Applying The Strategy Big Picture > Main Objectives > Low Level Meeting Main Organizational Objectives Making Profit Having enough Product Keeping Customers Happy

The Main Functional Areas Marketing – Advertising, Public Relations, Branding, Price, etc Production and Operations – Our capacity to produce Finance – Costs, Cash Flows, Profit R and D – Developing products the consumer wants HR – Size of our workforce, training, etc

1. Marketing Promotion – Advertising, Public Relations Distribution (Place) – Departments Stores, Bikes shops, and Sport Shops Price – How much will we/can we charge our customer? Product – Creating what the consumer wants

2. Production and Operations Plant capacity measured in SCU’s (Standard Capacity Units) Control batch size, set up time reduction, preventative maintenance Forecast sales to determine production values Factory efficiency of 70% - 80% is very good

3. Finance We want to cover our costs and make a profit! We can increase or pay back long term debt Shares can be sold to raise capital, or be bought back. Provide shareholders with dividends from cash surplus

4. Research and Development Modify existing products or create a new one Choose product attributes: Design/Style and Technical Specs Use the product placement and the perceptual map to determine which attributes our target market wants

5. Human Resources We can increase or decrease the size of our workforce We need to decide how much to pay our employees We need to decide how much we are going to spend on training our employees

Things to watch for… Plant capacity – Too much will be a waste of resources. Under capacity will result in not being able to meet our customer demands (opportunity costs). Marketing decisions - Be sure to spend the right amount of resources in the proper areas.

Things to watch for… Financing decisions - Watch your debt to equity ratio. Too much debt and not enough equity will hurt share price! Is the price right? – Having a price that is too low results in lower revenues. Having a price that is too high results in lower sales. Don’t stock out!

Simulation Schedule 2 practice moves 6 actual moves Fri May 20th, Tues May 24th 6 actual moves Move 1: Fri May 27th Presentations to the board Show how your company has performed over the past 5 periods

The Group Experience Do key tasks AS A TEAM Listen to everyone’s ideas and opinions Deal with situations as the occur

Downloading and Playing Download all software and player manuals from http://www.smartsims.com Smartsims e-mail: help@smartsims.com 2 team members can register at a cost of $50 each. This amount is spread over the team to lower costs Smartsims will e-mail your registration information to you

Downloading and Playing Firewall configuration Access Multi-player software in 3C13 UserID: student-01 Password: NetMike Smartsims access: Login: stuwinnipeg Password: canada pjanciw@hotmail.com

Walkthrough How to make a round of decisions…

Questions