1. April Training The Executive Business Simulation
presents
The Executive
Business Simulation

2. 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

3. 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?

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

5. Strategic Space – Where will you be ?

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

7. 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

8. 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 ?

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

10. Introduction
The Simulation

11. Marketplace
Europe

12. The Product
Cars
(Images removed – copyright)

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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

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

21. 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 !

22. 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

23. Good luck with your venture