Transcript Information to the event ”Cotrugli Business School Simulation Days
http://gc4.cesim.com
Information to the event ”..... course”
Prof. ....
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Cesim Global Challenge simulation overview
Prove your strategic
•
knowledge!
Plan and execute the strategy together with your team members, •and lead your company through the simulation
Learn to handle complexity!
• Real decisions and market reactions • Gain insight to:....
Experience, the joy what strategic improvement gives you!
•”Noone is perfect, but a team can be!” •Compete in teams •Celebrate your success Some general info about the course if needed-TO DO: Prof. ......+ you could add the header and write sg like ”.... GC4 course” and insert the school logo http://gc4.cesim.com
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Learning goals: familiarize with complex decision making
• Increase participants’
awareness of the complexity
of operating an international company • To develop
capabilities in analyzing key
environmental & organizational
variables
• Enhance
fact-based analytical decision-making
and crystallize the financial implications of business • Gain practical
experiences in team-work
and problem solving
Applying new ideas
Analysis & planning
Concrete experience
Decision making
Observations & reflections
Results & team-work
Generalising from the experience
Lectures & discussion http://gc4.cesim.com
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Cesim Global Challenge, a web-based simulation The Home screen
•
General introduction
The simulation is
completely web based
. There is no need to install any separate applications and the simulation
computer
connection.
can be accessed from any
that has an internet • The simulation platform allows
team members to work virtually
[decision checklist] -page.
if they wish. Each team-member has her/his own account that enables them to make decisions and scenarios on their own and later combine the outcomes with the other team-members on the • The platform also
includes a communications forum
that can be used to communicate within teams and between all teams in one market.
http://gc4.cesim.com
1. Menu bar 2. Communication with team & instructor 3. Quick details overall market 4.
situation "Closest deadline“ 5. Message forum 6. Team decision log 4
The simulation consists of 2 practice and 10 decision rounds
Decisions making flow during the simulation course The learning process during the rounds Detailed information: Readings/Decision Making Guide •You can modify the decisions for the current round until the deadline for the given round •If teams have not saved decisions for a round, previous round’s inputs are used http://gc4.cesim.com
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•
Simulation case and simulation goal
Simulation case: The team will take over as the new management team of
Mobilé Inc
, a global mobile handset manufacturer. The team will be responsible for the company’s strategy, R&D, marketing, production, logistics, and finance.
The essence of Mobilé Inc is a fast-developing mobile handset market with product life cycles driven by technological evolution.
• Simulation goal:
The main objective is to deliver sustainable, profitable growth.
Typically this is measured by a ratio called
“cumulative total return to the shareholders”
, which combines share price development and dividends paid to show the total return to the shareholders.
The teams may try to manipulate their profits, revenues, and market share in the short run, but
share price will punish any short-sighted decisions
sooner rather than later.
http://gc4.cesim.com
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8. Finances and Budgets
- Treasury management - Dividend policy - Capital structure - Short and long term debt - Financial indicators - Budgets
7. Logistics
- Delivery priorities - Transfer prices
Decision making: 8 fields to be covered 1. Market conditions
- Read the market outlook
2. Demand
-Total market demand -Predicted market growth -Product selection -Market shares
6. Marketing
- For each product and market - Product feature decisions - Pricing decisions - Promotion investments
5. R&D
- Development of technology - Development of new features - Purchasing of licenses for technology and features http://gc4.cesim.com
3. Production
- Production capacity - Capacity allocation - Outsourcing
4. Investments
- Estimations of future demand - Investment in new production plants 7
Market Outlook gives rough idea of market developments in each round
1.
It is very useful to read the
market outlook
before you start to make decisions. Outlooks contain important information on
possible future developments
and will help you in anticipating market movements.
2.
At the bottom of the page you'll find a
dedicated tab for parameters
. These parameters (costs, exchange rates, tax rates, etc.) are presented for the current and the previous round. Together with the ones that are not shown here, these
parameters define your business case
and you can take advantage of this information for example when planning for taxes, logistics or investments.
http://gc4.cesim.com
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Teams estimate demands for each round
1.
Steps for demand forecasting
Estimating
total market growth
for each market area.
Market Conditions -page is useful for making these estimates.
2.
Choose which
technology
products you sell in each area. 3.
Estimate
market shares
for each of these products in all of the markets. Total market shares for this and last round can be seen on the far right side for all three regions.
4.
Check the
expected demand
in each area.
5.
Crosscheck with
projections on planned infrastructure
(Network coverage) improvements of all four technologies. http://gc4.cesim.com
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Unit costs and available capacity determine production plan
Steps for production planning
1. Choose
which technologies
to produce in each production line and how much of the production line. capacity you allocate to each product. 2. Check the
unit cost
. The scrap% depends on the maturity of each technology in production.
3. Decide how much production is allocated to
contract manufacturers
.
• • • Two concepts to keep in mind:
Capacity utilization 1,1 1,05 1 1,15 1,2 Learning curve 70 65 60 55 50 45 40 35 30 25 20 5000 0,95 0 % 20 % 40 % 60 % Capacity utilisation 80 % 100 % 120 % 10000 15000 20000 25000 Global cumulative production per technology USA 30000 ASIA
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Investment in new plants
Steps for investment planning
1. Estimate global demand for the next two rounds. This year’s demand is based on the estimates made on the Demand page. 2. Decide investments into new production facilities in USA and/or Asia. They will be available for production two periods from now and you have to pay for them one period from now.
3. Check alignment of projected demand and capacity.
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The marketing mix
• • •
Steps for marketing planning
1. First decision you make is to decide the number of handset features to be offered. More features cover more of the various customer preferences, but also cause more costs.
2. Decide Price and promotion decisions here. 3. Check your budgeted financial outcome.
4. Crosscheck origin of your products Features can only be implemented if the company has invested to its own R&D or license purchases.
Price elasticity differs between the markets. Promotion influences the demand at three levels: product, market, and global http://gc4.cesim.com
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Logistics:The team decides delivery priorities and transfer pricing
Steps for logistics planning
1. Choose in which
order to satisfy your demand in the markets
. This decision is only relevant if your global supply is not enough to fully satisfy your global demand. 2. Set
transfer prices
. They make other business units participate in R&D and other fixed costs and can also be used to benefit from different tax rates between countries. 3. Check resulting
production flow and cost implications.
http://gc4.cesim.com
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R&D: own development and technology licenses
Steps for R&D planning
1. Decide your own R&D investments into each technology. You need to keep in mind that all results from your own R&D investments are available with a delay of one period.
2. Decide where to complement own R&D by buying technology and design licenses. License purchases make the technologies and features available immediately. 3. Check the number of handset features available in each Technology.
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The financial decision heavily impact company success
Steps for financial planning
1. Here you can make the finance decisions. i.e., increase (+)/decrease (-) long term loans, issue/buy back shares, and pay dividends.
2. Check the capital structure of the company. It is reasonable to try to keep approximately equal amounts of debt and equity on the balance sheet.
3. Transfer funds between different countries, if needed. Blue bars indicate cash reserves and green bars indicate local debt. Cash at the end of the year cannot fall below 2 million USD. If the planned financing is not sufficient to maintain this requirement, the system will fill the gap automatically by taking short-term debt.
http://gc4.cesim.com
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Submitting Team`s Decisions: work efficient as a team
The steps of the succesful Team`s Decision saving process are:
1. Agree on your team`s strategy and the team`s decision saving process.
2. Make decisions on your own according to your team`s strategy.
3. Leave time for submitting the team`s decisions. In the simulation you work together as a management team of a company. You have to react on given market conditions in each round. First you make a draft on your own, then you have a look at the individual proposals of all the team members and agree on a common decision set, which you submit to Team`s Decisions.
4.
You can choose rather one of the team member`s decision sets and click on ”Copy”, or click on ”Go” under Team`s Decisions and add the team decisions to that profile.
5. After the round deadline the simulation calculates the results based on the Team`s Decisions. The reports are available under ”Results”.
http://gc4.cesim.com
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The simulation calculates the results once the deadline has passed Results calculation process and content
After each round the system generates reports that depict the results of each team in a particular market. Results consist of:
a.
b.
c.
d.
e.
f.
Summary report with a set of charts Financial statements; including consolidated P&L and balance sheet, and parent company (USA) cash flow statement Financial ratios; including share price info and key financial indicators Area reports for all areas; including market reports and P&L and balance sheet for each business area Production report; including information about the production volumes, contract manufacturing, production facilities Cost report; including information about scrap rates and production and logistics costs Results provide useful information about a team’s own sales, operations, and finances. In addition, results can be used to benchmark performance with the competing teams in the same market. http://gc4.cesim.com
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