Corporate Strategy. We started off using a product life cycle strategy with differentiation in all segments except for low end. However we found that it took too long for segments to move so the specifications of the products were in the right position, and it also cost money to promote the repositioned products into a new market (eg. from high end to traditional segments). From our problems, we decided to drastically change to a broad differentiation strategy. We learnt quickly and put in a lot of effort, ending up with good profits by the end.
Financing. We experienced finance problems, needing emergency loans during the
first two rounds and suffered from the follow-on effects of high interest. To fix this, we took out a large long-term loan because another discovery was the assumption that we would not have to pay it back, as loans were for 10 years and the simulation only lasted for seven. From cost-benefit analysis, the interest we paid was well worth it.
We followed the market leader by investing in automation rather than increasing capacity. We sold capacity to finance automation when we were short on cash.
Business Strategy. We did not have a set of individual strategies for each product, but our overall goal was to fulfil customer segment criteria as much as possible. We looked for opportunities, such as launching a new product in the high end. From capacity and automation decisions we also learnt the importance of forward planning.
Marketing Strategy. One reason for our early failures was our low contribution margins. Profits rose quickly as we set prices more carefully. Low accessibility and awareness was a big reason why we performed poorly initially, and we quickly deciphered that this was a critical factor predicting sales. Building on existing awareness and accessibility was an important driver of sales for our competitors.Monitoring. The forecasting method we found most effective was looking at sales of competitors with similar promotion and sales budgets and product specifications. Forecasting could have been more carefully analysed, and monitoring and recording could have been more extensive, especially in determining automation and capacity.
Group Work and Time Management
Our group met up before each decision in the computer labs and all five of us made decisions. This gave everyone a say, but was inefficient: during some meetings we only finished the R & D section. If we didn’t finish, with five people in the group it was hard to manage our schedules to find another meeting time. During the later stages of the simulation when there were two decisions a week, we had two people collaborating their ideas on the phone, and the rest of the group checked the decisions and brought up any issues they had. This was more efficient, but the same people tended to make the decisions. I found the optimal schedule for decision deadlines was one a week, because two in a week took up a lot of time, and once per fortnight was a too long a period. I did not find the mid-session break decision a problem. The formal CEO structure was not used and we did not have defined roles, although we did have an informal group co-ordinator based on her organisation and personality.
What We Did Well: As soon as we identified that we were in trouble, we tried our best to not become demotivated, acted quickly and worked hard to improve.
Two Other Things That Could be Improved:
- I think another reason we had problems was because not everyone in the group understood the material initially. Each group member could specialise in a product. Before the meeting each group member could make the decisions for the product they are responsible for, then during the meeting everyone would check them and make the rest of the decisions collaboratively.
- View training tutorials and do the practice simulation together so that we know that everyone has done it. Those who understand can explain the concepts to other group members.
