Transcript Management Challenge an exploration of business

Retail Challenge
an exploration of business
This computer simulation gives you and the
others:
• an opportunity to manage a “real” business
for several simulated quarters
• making decisions as part of a small team
covering:
– Marketing
– Operations
– Finance
• your objective, while competing against the
other teams, is to make your business a
success
The Simulation
The simulation consists of three stages:
• Preparation
• Decision-making
• Review
Preparation
–
–
–
–
Familiarization
Organization
Consider objectives
Consider strategies
Decision-making
–
–
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–
Submit Decisions
Simulate
Analyse Results
Replan
Review
– Discuss & Compare Results
The Situation
• a subsidiary
• currently operating
• sells three product ranges
– Staples
– Fashion
– Big Ticket
• has staff who sell all ranges
• all costs & prices are a universal currency
You will run this business for several periods, each of
which represents one trading quarter
Marketing
Sales are influenced by
– price (mark-up)
– advertising
– staffing
– stock availability
– the actions of the other teams
You decide mark-up for each product range
separately. Advertising and sales staff sell all
product ranges.
Cost Data
• Sales staff – 500 AUs per quarter
• Other Expenses – 7000 AUs per quarter
• Advertising – decided by you
Discounts
Range
Staples
Fashion
Big Ticket
Discount Level
40,000
15,000
20,000
Discount
5%
20%
10%
Other Data
•
•
•
•
Prompt Payment Discount - up to 5%
Interest on Overdrafts – 20%/year
Interest earned on Cash – 12%/year
Mandatory Payment to Parent
– 75% of Operational Income
– plus 4% of Total Equity
Decisions
For each range separately
• Percent Mark-up
• Gross Purchases
And in general
• Advertising
• Sales Force Size
• Creditor Days
Use the decision form supplied and complete it
carefully and legibly and hand to the
simulation controller at the specified times.
Results
Results are returned to you in three stages:
Preliminary Results
– demand at cost & ending stock
– Sales, operating profit, cash and overdraft
Full Results
–
–
–
–
Purchases & sales
Profit & Loss
Balance Sheet
Key Measures
Business Research
– Market News (prices & market shares)
– Company Reports
– Company News
Observations
•
•
•
•
it takes time to understand
but the business still has to be run
therefore your decisions will not be perfect
time will be a constraint
• by the end you should (just) be in charge of your
business
• your business skills will be challenged
• remember the purpose is to learn!
(rather than just to win!)
• so, take time to reflect & review
• and have fun!