presents

The Executive

Business Simulation

April Training

Aims & Objectives

To provide experience in running a company & an opportunity to build on and use business skills

Main Aim:

Objectives:

Strategic Analysis

make key decisions & manage outcomes pitfalls successes

teambuilding & communication

leadership skills

planned & unplanned events

Vision

Business

What is a business?

What is the purpose of a business?

How does a business make a profit?

What is profit and what is it for?

difference between profit and cash?

Vision

Vision

What is a ‘vision’?

Where you want to be

What sort of company you want to be

Core values

Strategic Space – Where will you be ?

PERCEIVED VALUE PROPOSITIONS

LOW

HIGH

WHOLECOST

OFOWNER-

SHIP

LOW HIGHPERCEIVED VALUE

•Hyundai

•Kia

•Honda

•Toyota

•VW•Subaru

•Nissan•Chevrolet

MASS MARKET

•Mazda

•Ford•Mitsubishi

•Pontiac

•Oldsmobile

•Mercury•Chrysler

•Buick

•Volvo•Acura

•Audi•Saab

•Cadillac

•Lincoln•BMW

•Lexus•Mercedes

PREMIUM MARKET

ENTRY LEVEL

LUXURY

2002 AMERICAN CONSUMER SURVEY

•Saturn

•Dodge

•Infinit

Strategy

What is a strategy?

direction & steps to achieve your vision

Strategy – How to get there……

InboundLogistics

Operations OutboundLogistics

Marketing& Sales

Service

ProcurementTechnology Development

Human Resource Management

Organisation Infrastructure

Margin

Mar

gin

Primary Activities

SupportActivities

Value Chain Analysis

Strategy – How to get there……

Value Chain Analysis

Technology

What actions do we take to achieve this ?

1. Decision 1

2. Decision 2

3. Decision 3

How much focus

should be in each area relative to

each other ?

Operating Levels

Strategic decisions

Tactical decisions

Operational decisions

Strategic Analysis - Business

Plan

The Simulation

Introduction

Marketplace

Europe

The Product

Cars

(Images removed – copyright)

The Starting Position

Must produce two models in year 1

May increase to a maximum of five models

Marketing Considerations 1

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

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

Increase perceived value of product by:

Choosing design features Making options available Invest in Research & Development

Marketing Considerations 2

Research time : once for the company Development time : once for each model

Television Radio Periodicals/Reviews Internet

R&D Projects

Promotion

Dealer Incentives Promotional Offers Sponsorship

How Much

to spend

??

New Model Investment

Made a year in advance Average cost is £290m

Marketing Considerations 3

Computer-Generated Data on Competition

Computer-Generated Market Research

Available for £10m

Available for £5m

Productivity depends on car size (cars per worker per year)

City : 36 Medium : 34 Large : 32 Luxury : 6

Production

One unit costs £500,000 One unit is as productive as 10 workers

4,000 workers per factory Bought and sold automatically based on total workforce size Cost £600 million each

Automation

Factories

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

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

Finance 2

Interest rates

Overdraft : 8 + inflation (min 15%)

Balance in credit : 1.5 + inflation

Negotiated loan : 5 + inflation

Remember !

If you want to succeed

Don’t over produce ! and

Don’t over price !

and of course….

Don’t under-produce and

Don’t underprice !

Simulation Programme

Decision Points

Mon Wed Friday

Week 1w/c 20 March

Trial Run 1 2

Week 2w/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

Good luck with your venture