Business Simulation Game Essay
The purpose of the Competition and Strategy program is to provide students with deep knowledge on proper decision-making in a business environment and the tactical principles to it. Within this program my team members Kristijan, Yaniv, George and me (Team KUGY) experienced the opportunity to apply our academic and theoretical understanding and knowledge within an online business ruse game, in which we created our own car business and competed around the European car market fictionally. This daily news aims to elucidate the improve of our strategic decision-making, observes the reasoning behind it and examines the next implementation of our approach. Based on the definition of strategy staying вЂњA plan of action designed to achieve a long-term or perhaps overall aimвЂќ, we inhibited ourselves inside the commencement from the game what our technique would be (Andrews, 2010). Consequently, after considering the theories examined in class we all decided that people needed to share our own and coherent technique in less than forty five words, installing to the restrictions objective, advantage and opportunity (Tregoe, Zimmerman, Schuster, 2008). вЂњAttaining maximised profitability by simply carefully hoping to get to know our customersвЂ™ demands, consequently adapting our goods to suit all their expectations for an extent where we would prevent serving and start appreciating, to be able to charge reduced priceвЂќ (Yaniv, George, Kristijan and Ugo). The theoretical model all of us chose to establish our approach was PorterвЂ™s generic strategy, that led us into a differentiation-focused strategy. Given to Assurer, a competitive strategy is approximately differentiation (Andrews, 2010). Therefore we thought that we should separate our organization best simply by concentrating on a narrow target, hence, handful of market sectors and determined that difference would be each of our competitive benefits. Furthermore Porter claims that decent strategic decision-making requires compromises which is slightly by what not to do instead of what to do (Porter, 1997). Depending on this assertion and each of our differentiation-concentrated technique we chose to serve only 4 out of sixteen offered market segments, moderate cars intended for 25 to 40В year older customers, channel cars pertaining to 41 to 55 yr old customers, significant cars for customers over 55 year old and then luxurious cars for forty one to 55 year old consumers. So as opposed extending our products within the whole marketplace to realise maximised revenue KUGY decided to concentrate on three diverse segments with customers showing similar demands, form 3 strategic sections whose target it is to become familiar with the customerвЂ™s wants and needs to offer higher customer benefit and allow all of us to demand premium rates. Regarding financing, KUGYвЂ™s began position was up to ВЈ500 million in the bank. In the first three rounds, KUGY took away two financial loans in the initial 3 models so as to have sufficient capitals to finance our very expense concentrated technique. Our bills for r and d, competition market research, product, and marketing were considerable over-all five years, which is duplicated in significant fixed cost figures over all five years. However the info acquired on market notion and competition allowed all of us to get more familiar to our clients but also to design each of our products and set marketing attempts in balance with their demands, by possibly adding and dropping item features, upgrading research investments and specific our products from the competition. Furthermore, KUGY increased the amount paid of all several models every year, which allowed us to increase revenue slowly over the five years of the game. KUGY has preferred to limit it is production to small volumes because a limited target market is among the most primary parameters of your focus strategy (Andrews, 2010). In the sectors KUGY offered, quantities demanded tend to become small in comparison with segments whose customers require is based on much less price demanding cars. Consequently, if income is defined as R = Queen * L, price was definitely the key factor in creating revenue rather than selling important quantities. KUGY tried to modify production to such a level where our team would not have any car in inventory at the end of every business 12 months and normally succeeded from this concern with slight exceptions. In addition KUGY tried to decrease their labour cost and spend money on automation rather. Our team determined it will suit our company approach and photo and to include three extremely technologized development plants, with small yet very skilled labour makes. We obtained further trade-offs concerning each of our marketing work. In regards to the several Ps, which includes price, product, place and promotion, KUGY took the decision to focus on all four would have compared our approach implemented in theВ beginning. Consequently, we centered our online strategy on product and promotion. As earlier mentioned, we have spent significant sums in the advancement our products, by investing in r and d over the models of the video game, but likewise by adding and dropping features into groups that looked like there was of significance to our buyers and hence went up perceived advantages of our products from year to year. In addition to this marketing expenses were similarly large too, due to the fact that KUGY recognized conversing the benefits of both equally our work and our products to build superior buyer value like a first goal. George regularly highlighted that even the best product in a vehicle market may not sell in the event its ascendancy or predominance were not disseminated effectively. Provided to Porter when a corporation makes a decision upon a generic strategy, the corporation is most beneficial informed by simply thoroughly sticking to this strategy so as to remain differentiated (Andrews, 2010). According reality we chose to focus on a narrow target audience, KUGY made the decision that looking to study even more segments may jeopardize the current business. When offering a new model KUGY stuck to segments whose customersвЂ™ requires are comparable so as to prevent вЂњbeing caught up in the middleвЂќ as Tenir cites this (Andrews, 2010). We all decided that changing our technique could business lead our team to get corrupted. Regarding the organization decisions and overall performance we decided to stick to this strategy. Nevertheless, according to the fact that we described every version to be 1 separate marketplace based ideal business product, the production and marketing actions achieved within the business units varied to an magnitude. The strategy used to every SBU was also a emphasis strategy. Even so the methods utilized to attain difference varied. For example, we decided to reveal each of our luxurious car model by utilizing newspapers and dealer bonuses instead of TELEVISION advertising that people used for the medium and enormous car versions. Additionally , all of us decided after less revolutionary price rises for each of our medium and large cars when compared with our high-class model. KUGYвЂ™s achievement may be measured due to its income. Furthermore, inside the second year, our corporationвЂ™s profits have already been rising yearly, which implies a good trend in achievements. When looking at each of our overall earnings calculation, because Pr sama dengan (P*Q вЂ“ Q*VC вЂ“ FC), with P (Price), Pr (Profit), Q (Quantities demanded), FC (fixed cost) and VC (variable cost), the most significant factor on earnings was the constant annual price rises because contrasting toВ quantities demanded that raised regularly. Concerning the price, overall expense was typically defined simply by elevated fixed costs for marketing/advertising, item research and development, and competition and market research. KUGYвЂ™s competitive benefits was depending on these considerable investments that allowed us to raise prices. According to the reality we were producing profit, the strategy appeared to work very well, but it was unexpected as to the extent value was receptive when comparing for all the work we placed in our marketing and products. We were amazed just how little we could raise the cost keeping in mind the amount of money and effort we put into identified customer value/benefits and the top quality of our products. It would not have been reasonable to contest the elasticity used for earnings calculations by creators with the game, in line with the fact that we lack the mathematical understanding to do so. Nevertheless it was quite disappointing the moment realising how little big difference measures such as increased research and development, optimised promoting efforts and improved features manufactured in comparison to changes in price. After contrasting this business game with the real life, businesses that obey to the differentiation focus approach such as Porsche or LVMH are making a whole lot of earnings. Nevertheless, these kinds of firms had been into their organization for decades and also have invested significant resources and efforts to achieve their income and their position within the market. I assume that if we might have played this kind of business video game for a for a longer time period of time, applying a differentiation-focused strategy would have possibly resulted to a higher revenue margin general. However , theory and practice are very several. Particularly in very competitive industries such as the car industry and especially much more considerable monetary fluctuations, value seems to be the key factor when itвЂ™s about making purchasing decisions. Moreover, in my opinion, aiming to attain maximised profitability by a cost leadership method from this business game is perhaps less difficult and less time consuming in comparison to KUGYвЂ™s strategy based on the fact that "" do not have to change the same amount of parameters and pay as much attention to few variables besides quantities demanded and cost differences. Although observing your data from the two competition and market information, trying to attract conclusions and in addition conducting limitless amounts of check was at times very exhausting but simultaneously very addicting. I have to acknowledge I have very benefited coming from contributing in this business gameВ experience. My group work with George Yaniv and Kristijan was on of the rare 1st good teamwork experience I had fashioned in the last 3 years at Richmond University and in many cases if we went into some problems over the simulation game, we always took time to discuss it and try to find strategies to those problems. The fact that individuals were getting together with on a regular basis has truly facilitated the cohesion into our group. Moreover, people have contributed evenly to the total outcome, concerning creative advices, estimating data, drawing findings and essentially trying to put it into decisions. I really appreciated working with my group members along with every circular of the video game we occasionally had extra discussions about this topic. We all agreed that the key problem with implementing a technique was that there is absolutely no right solution and hence no fundamental real truth in this matter area. There are a great number of different methods to attain earnings and uncountable factors in the ever-changing market environment which could affect a companyвЂ™s profitably. When putting into action a strategy all those factors must be taken into consideration so as to allow the company to react properly to modifications in the environment. The theoretical component to implementing a strategy remained hard, while the useful achievement had been even harder. When KUGY understood we could not manage to raise rates to the level we hunted so as to to get estimated income, we started to question our approach and wondered in the event the decisions we took in the beginning had been still ideal. We finally decided to stay with our strategy and achieved a reasonable use it regardless if it could had been better, nevertheless especially after we concluded round 3 with a crucial loss, I seriously felt like we were not applying the good strategy and after idea with our staff and while everyone was trying to encourage each other what to do we finally decided to follow our initial plan. I really believe that managers in actual firms who need to communicate and protect their tactical decision for their superiors, plank of directors or employees cope with true difficulties. However , contributing in this business simulation game was a fun and very addictive knowledge and I really think I taken advantage of a lot by it. My spouse and i also wish that the experience I attained from it can at some point always be useful in the near future me once i will have to have my 1st strategic decisions.
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