Strategy Series Motif

THE STRATEGY SERIES

These business simulations allow middle to senior leaders to explore the strategic development and leadership of business.

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The Strategy Series consist of several business simulations designed to explore strategic management issues and are especially useful for leadership development. They can be used:

Although these business simulations comprehensively cover strategic issues they do so efficiently as their durations are from as a little as one day to a maximum of two and a half days.

The series consists of eight simulations each addressing different industrial situations thus:

Finally, as part of our Extended Challenges series we have a introduction to strategy simulation - EXSTRA - EXploration of STRAtegy

KEY LEARNING: Each simulation covers:

DURATION: Depending on the simulation from one to several days.

TARGET AUDIENCE: The simulations are designed for middle to senior management.

METHOD: After a short briefing the training group is divided into several teams of four to six participants. These teams consider the problem facing them and then make decisions for a trading period. These decisions are fed, by the tutor, into a microcomputer that simulates their effect. The results are returned to the teams for their consideration before making the next decision. This decision-making cycle should be repeated for at least six periods. At the end of the simulation phase the teams reunite to discuss and compare results.

The simulations may be used with between two and eight teams.

AVAILABILITY: Because of the complexity of these simulations, they are run on a fully tutored basis.

BIONIQUE

BIONIQUE was developed from Technique to replicate the issues facing a company manufacturing pharmaceutical or chemical products. Unusually, perhaps, uniquely, the simulation incorporates the opportunity for creative advantage; in terms of actual product design.

DECISIONS: Bionique's decisions cover:

DURATION: Two and a half days

KEY LEARNING

STRATEGIC MANAGEMENT

Participants take over a subsidiary company that is currently operating and selling two products into two markets in competition with up to seven competitors. They have strategic responsibility for product development, marketing, operational capacity and financing.

Reflecting strategic needs, there is no best strategy, rather several strategies can be successful. The success of a team depends on their analysis of opportunities, the development of a strategy that offsets those of the competitors and is implemented in a controlled and proactive manner. Each product is reported as an investment centre and, so allows the business to be treated as a portfolio of Strategic Business Units.

BUSINESS OBJECTIVES & MEASURES

Provided they produce reasonable added value and remain financially viable, participants have full autonomy. However, as they are expected to keep the parent company informed, they must decide and quantify objectives and measures. So, although they are free to go for growth, maximise profitability or play it safe.

PRODUCT/MARKET PORTFOLIOS

To build their company participants must build the portfolio of products and markets. In doing so they must identify market gaps and develop products to fit these. Products that will generate adequate profits and strengthen the portfolio in terms of cash flow, capacity use, raw material use and the other products.

PRODUCT DEVELOPMENT STRATEGY

The company's products consist of an active ingredient, a filler ingredient and catalyst. Uniquely, teams create new products by specifying the amounts of the active and filler ingredients and the source of the catalyst (bought in or made in-house). This combination produces a product with a unique strength to match market needs. Designs that need to fit market gaps at lowest possible cost. Costs that are influenced by synergy with manufacturing, purchasing and the existing products.

FINANCIAL STRATEGY

Business performance is measured with a full Profit & Loss Statement, Balance Sheet and key profitability and liquidity ratios. Each product is treated as a separate profit centre and the comprehensive reporting package covers activity based costing, cash flow, cost of capital, product life-cycle information and economic value added.

MARKETING STRATEGY

Besides, deciding the price and advertising for products, participants must set target inventory levels and decide the size of the sales force. When doing this, they must take into account customers, competition and whether the product's strategic focus is on technological leadership, market creation, growth, profitability, providing cash etc..

OPERATIONAL STRATEGY

Initially, manufacturing consists of mixing the ingredients only, with teams buying in the ingredients and catalyst and, so, is a high variable cost business. However, for some products and markets it may be attractive to set-up a highly automated catalyst manufacturing facility involving major capital investment and significantly increasing fixed costs.

INFORMATION STRATEGY

Besides the standard financial and operational reports, teams must research new products, markets needs and the competition. Research that includes estimating product costs and power, test marketing and reverse engineering competitive products.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge and present and promote different viewpoints. This is especially important where the participants are from several functions.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.


CISCO

CISCO was developed for GEC to simulate a business bidding for and designing products on a contract basis. So, it replicates modern businesses that do not supply pre-designed products "off-the-shelf " but especially design and produce products to meet client needs. With each contract bid for differing in design, manufacture, payment terms and risk, participants face all the challenges of a contract based business. (Note: this business simulation was named after the "Cisco Kid" not the company.

DECISIONS: CISCO's decisions cover:

DURATION: Two and a half days

CISCO currently exists in two versions: One for manufacturers of electrical equipment and installations and the other for civil engineering construction companies. However, the simulation is tailorable to other contract based businesses.

KEY LEARNING

THE CONTRACTING BUSINESS

Participants are concerned with the strategic running of a business that bids for and obtains series of unique contracts. Each contract involves design and then construction. So, besides exploring how to obtain business, they must then deliver in a timely and efficient manner. As a result, participants must continuously explore how the external market-place and competition interact with and affect their internal operation and financial results.

CONTRACT BIDDING STRATEGY

Each period, teams must bid for a selection of contracts. Each contract differs in terms of size, resource needs, payment schedules, penalties, technical & commercial risk. So, the bidding strategy requires deciding how the contract fits with the business in the short and long term. Besides deciding price, teams decide the selling and design effort to use in preparing the bid. As a result, they must balance wasting this effort if the bid is unsuccessful with the increased likelihood of success and lower design risk.

BID PRICING & CONTRACT COSTS

Teams must set margins to balance bid success with profitability. So, they must measure and analyse internal costs and their competitors' pricing strategy. The analysis of internal costs involves separating controllable, influencible and uncontrollable factors. The analysis of competitive strategy requires separating long term strategy from short term actions and inconsistencies. To help this, each bid is treated on an activity based costing basis as a profit centre. As the contract progresses, provisions are accumulated for over-runs and under-runs. When delivered, a report shows expected and actual profits and highlights variances.

RESOURCE MANAGEMENT

Participants must decide their resourcing needs in terms of mix of resources, numbers, skills and outsourcing. Then, they must ensure a flow of contracts to optimise utilisation of these resources. They must balance the efficient short term use of resources with the strategic provision, in the long term, of the right mix of resources with the right skills. Besides reports showing the costs and utilisation of resources, the simulation provides qualitative comments on relative design resource skills.

FINANCIAL STRATEGY

They must decide the optimum size for the business, taking into account break-even, sub-contracting, the flow of contracts, cash flow and the need to produce consistent financial results over time and maintain an adequate level of profitability. The simulator produces a full Profit & Loss Statement and Balance Sheet. These include measures that are particular to the contracting industry (provisions, net inventory, prepayment, retentions etc..)

MANAGING BUSINESS DYNAMICS

A particular problem facing senior management of a company bidding for business is the uncertain and dynamic nature of the business where there is a varying future work load. In managing this they must determine target forward load, core business size and outsourcing policy. They must develop a bidding policy that moves them towards a steady-state where there are not periods of feast or famine.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints, and develop their people skills.

(FACE TO FACE NEGOTIATION)

Optionally, teams can negotiate contracts and subcontract resources from other teams.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can be asked for make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.

UK version Document Size 61k bytes Download size 34k bytes
US version Document Size 67k bytes Download size 34k bytes

Global Operations

GLOBAL OPERATIONS is a generic strategy simulation involving developing a world wide presence and product offering. It is the simplest and shortest of the series (duration one day) and so is usable at company conferences and where time is tight.

Participants launch a new product in direct competition with several other teams and set up a factory to produce it. Liquidity will force them to decide between new product development, expanding capacity or build their world coverage.

DECISIONS: Global Operation's decisions cover:

DURATION: One day

Originally designed in 1981, Global Operations has been in regular use since then and was completely revised recently to incorporate our latest design paradigms..

KEY LEARNING

STRATEGIC DEVELOPMENT

Participants take over a start-up company that has just obtained equity capital and has developed a new product that it must launch in competition with up to seven competitors. During the early stages they must husband cash as the expand into the world's markets, lay down production capacity and develop the range of products.

Reflecting strategic needs, there is no best strategy, rather several strategies can be successful. The success of a team depends on their analysis of opportunities, the development of a strategy that offsets those of the competitors and is implemented in a controlled and proactive manner. Each market is reported as an investment centre and, so allows the business to be treated as a portfolio of Strategic Business Units.

MARKETING OBJECTIVES

In developing their business, participants must decide which markets to target and, for these the best mix of price, promotion and product. As the portfolio of products and markets develop they must decide which market to grow, which to maintain, which to milk, which to exit etc..

FINANCIAL PERFORMANCE

Business performance is measured with a full Profit & Loss Statement, Balance Sheet and key profitability and liquidity ratios. Each market sector is treated as a separate profit centre and the comprehensive reporting package covers break-even, break-up valuation, cash flow, cost of capital and economic value added.

PRODUCT & MARKET PORTFOLIOS

Throughout the simulation teams must manage the markets they serve and their portfolio of products. This simulator produces reports on competitive dominance, competitive position and world penetration.

PRICING & PROMOTION STRATEGY

Besides, deciding the right price and promotion for the customers in each market, participants must take into account competition and whether the market's strategic focus is on growth, profitability, providing cash etc..

PRODUCT DEVELOPMENT STRATEGY

The development of new products not only must take into account market needs and potentials but, also, funding needs, long term cash flow and the competition.

BUSINESS FUNDING

Development of the business involves a period of expenditure on factory capacity, market and market development. This can lead to liquidity and, possibly, solvency problems. So, teams must manage cash flow and balance sources of funds (equity, term loans and overdrafts) against this. (It is not unusual for one or more teams to over expand.)

MARKET & BUSINESS RESEARCH

Besides decisions directing the operation of the business, participants can obtain wide range of market and business research. Standard research covers competitive position, market potentials, economic trends and market tests. But, additionally, special reports for the tutor allows teams to formulate their own information needs.

FINANCIAL & MARKET RISK

Besides bankruptcy risk, teams face economic and political risk in the markets, the risk of not meeting customer needs and the risk that one, or more competitor will become dominant. To help the trainer evaluate risk, the simulator produces a list of strengths & weaknesses.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints and develop their people skills.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.

UK version Document Size 70k bytes Download size 43k bytes Click to download the simulation software.
US version Document Size 71k bytes Download size 42k bytes

INTEX

INTEX simulates an FMCG business in an industrialising nation. Its development was sponsored by BAT (UK & Export) as part of its Benson & Hedges Management Challenge initiative.

Participants take over an overseas subsidiary currently selling imported products. They have to decide whether to expand this range and set up local manufacturing for a parallel range of products. Additionally, they must decide how and when to replace expatriate management with locals. Optionally, the simulation can involve currency management.

DECISIONS: INTEX's decisions cover:

DURATION: Two days

KEY LEARNING

STRATEGIC DEVELOPMENT

Participants take over a company that is currently importing two products (a premium and standard one) into an industrialising nation. Besides the opportunity to market an economy product there is pressure to set up local manufacturing. This means that there is the opportunity to expand the product range from two (imported premium and imported standard) to six (imported premium, imported standard, imported economy, locally made premium, locally made standard and locally made economy).

Reflecting strategic needs, there is no best strategy, and rather several strategies can be successful. The success of a team depends on their analysis of opportunities, the development of a strategy that provides a good mix of products and is implemented in a controlled and proactive manner. Each product is reported as an investment centre}and, so allows the business to be treated as a portfolio of Strategic Business Units.

MARKETING OBJECTIVES

In developing their business, participants must decide which markets (premium, standard and economy) to target and, for these decide the best mix of price, promotion and imported & locally made product. As the portfolio of products and markets develop participants must decide which to grow, which to maintain, which to milk, which to exit etc.

FINANCIAL PERFORMANCE

Business performance is measured with a full Profit & Loss Statement, Balance Sheet and key profitability and liquidity ratios. Each product is treated as a separate investment centre and the comprehensive reporting package covers break-even, cash flow and cost of capital.

PRODUCT & MARKET PORTFOLIOS

Throughout the simulation, teams must manage the markets sectors and their portfolio of products. The simulator produces reports that compare team results as though they were subsidiaries of the same parent company operating in similar nations.

PRICING & PROMOTION STRATEGY

Besides deciding the right price and promotion for each product, participants must take into account their other products, customer needs and whether the product's strategic focus is on growth, profitability, providing cash etc.

PRODUCT INTRODUCTION STRATEGY

The introduction of new products not only must take into account market needs and potentials but, also, funding needs, long term cash flow and the current product offering. This is especially true if the participants decide to set up a local manufacturing facility (as this requires considerable capital investment).

BUSINESS FUNDING

Development of the business involves expenditure on factory capacity, inventory and market development. This can lead to liquidity and, possibly, solvency problems. (It is not unusual for teams to over expand.) So, teams must manage cash flow and balance sources of funds (equity, term loans and overdrafts) against this. Funding needs that may require an injection of equity and the guaranteeing of bank loans - both of which must be negotiated.

FINANCIAL & MARKET RISK

Besides bankruptcy risk, teams face economic and political risk in the market, the risk of overestimating sales, the risk of not meeting customer needs and the risk that one, or more products will interact. To help the trainer evaluate risk, the simulator produces a list of strengths and weaknesses.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints, and develop their people skills.

FACE TO FACE NEGOTIATION

To obtain additional funding participants must negotiate with the tutors role-playing parent company management.


LOGISTIQUE

LOGISTIQUE was developed for Henley Management College to provide a general purpose simulation address the strategic development of a service company. Participants take over a neglected logistics and transport company. And are faced with the challenge of increasing penetration of existing markets and entering new markets while ensuring optimum resource levels and financial viability.

DECISIONS: LOGISTIQUE's decisions cover:

DURATION: One and a half days

KEY LEARNING

MARKET SEGMENTATION

The transport company currently serves five market sectors - express van, overnight van, long distance truck full and part load and combined van and truck. Additionally, teams must decide whether they should concentrate on these markets or expand into three further, contract markets (contract van, contact truck and contract both truck and van). Based on potential, resources, financial consequences, product offering and competitors, teams must decide which segment(s) they should serve.

PRICING AND PROMOTION

Teams must decide price on a market sector basis to ensure demand and profitability. To make the right clients aware of the company and get them to use it, teams must where to focus promotion.

BUSINESS PROCESS RE-ENGINEERING

Besides stimulating demand in the marketplace and responding to changes in these, participants have the opportunity to change the efficiency and cost of business operation.

FINANCIAL PERFORMANCE

Besides a full Profit & Loss Account, Balance Sheet and, optionally, Cash Flow Statement, each market sector is treated as an investment centre on an activity based costing basis. So, for each sector the demand, sales income, profit contribution and debtors are reported. The sector reports allow teams to assess profitability, growth and cash use or generation on a market segment basis.

FORECASTING & CONTROL

The markets make use of four core resources - delivery vans, trucks, trailers and depot space. Each market sector makes different use of these resources and, since, to maximise profits they all must be fully utilised, teams must forecast requirements. (Under utilisation will cause unrecovered fixed overheads and under capacity will cause lost sales.)

BUSINESS RESEARCH

To enable the right decisions to be made, teams have the opportunity to research markets and the business. Besides standard research covering guests, attitude towards price, customer awareness and product needs, the simulator supports a wide range of ad-hoc research. (A special tutor's audit provides the trainer with the information needed to provide this research.)

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints and develop their people skills.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.


SMART

SMART was sponsored by Ashridge Management College following their experience using Global Operations on their premium market strategy programme. The simulation is based on the strategic development of a service business (a Hotel).

DECISIONS: SMART's decisions cover:

DURATION: One and a half days

KEY LEARNING

MARKET SEGMENTATION

The hotel serves three major market sectors - business users, holiday makers and local residents. Each are segmented further - business users into large & small conferences and business travelers - holiday makers into holiday tours, short breaks and individuals - local residents into weddings/parties and diners. Based on potential, resources, financial consequences, product offering and competitors, teams must decide which segment(s) they should serve.

PRODUCT OFFERING & CUSTOMER NEEDS

A feature of the simulation is the way in which teams can change their offering. So, for instance, among other things, they can add a fitness centre, or a squash court. Each of these address different customer needs and, provide competitive advantage. However, since they are not, direct, revenue earners, teams must assess whether the extra demand will pay for the costs and capital investment incurred by the offering. So, teams must research customer needs and competitor offering to ensure the new facilities meet the needs of the markets served and generate adequate profits.

PRICING AND PROMOTION

Teams must decide price on a market sector basis to ensure demand and profitability. To make the right clients aware of the hotel and get them to use it, teams must decide the right mix of promotion. Promotion that ranges from several forms of press advertising, through several types of exhibitions to direct selling and market brochures.

FINANCIAL PERFORMANCE

Besides a full Profit & Loss Account, Balance Sheet and, optionally, Cash Flow Statement, each market sector is treated as an investment centre on an activity based costing basis. So, for each sector the demand, sales income, profit contribution and debtors are reported. The sector reports allow teams to assess profitability, growth and cash use or generation on a market segment basis.

FORECASTING & CONTROL

The markets make use of four core resources - bedroom accommodation, ball room, dining rooms and bars. Each market sector makes different use of these resources and, since, to maximise profits they all must be fully utilised, teams must forecast requirements. (Under utilisation will cause unrecovered fixed overheads and under capacity will cause lost sales.)

BUSINESS RESEARCH

To enable the right decisions to be made, teams have the opportunity to research markets and the business. Besides standard research covering guests, attitude towards price, customer awareness and product needs, the simulator supports a wide range of ad-hoc research. (A special tutor's audit provides the trainer with the information needed to provide this research.)

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge, present and promote different viewpoints and develop their people skills.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.

UK version Document Size 105k bytes Download size 33k bytes    
US version Document Size 106k bytes Download size 31k bytes    

Technique

TECHNIQUE was developed for Philips BV to replicate the issues facing a company manufacturing high-technology products. Unusually, perhaps, uniquely, the simulation incorporates the opportunity for creative advantage; in terms of actual product design.

DECISIONS: Technique's decisions cover:

DURATION: Two and a half days

KEY LEARNING

STRATEGIC MANAGEMENT

Participants take over a subsidiary company that is currently operating and selling two products into two markets in competition with up to seven competitors. They have strategic responsibility for product development, marketing, operational capacity and financing.

Reflecting strategic needs, there is no best strategy, rather several strategies can be successful. The success of a team depends on their analysis of opportunities, the development of a strategy that offsets those of the competitors and is implemented in a controlled and proactive manner. Each product is reported as an investment centre and, so allows the business to be treated as a portfolio of Strategic Business Units.

BUSINESS OBJECTIVES & MEASURES

Provided they produce reasonable added value and remain financially viable, participants have full autonomy. However, as they are expected to keep the parent company informed, they must decide and quantify objectives and measures. So, although they are free to go for growth, maximise profitability or play it safe.

PRODUCT/MARKET PORTFOLIOS

To build their company participants must build the portfolio of products and markets. In doing so they must identify market gaps and develop products to fit these. Products that will generate adequate profits and strengthen the portfolio in terms of cash flow, capacity use, raw material use and the other products.

PRODUCT DEVELOPMENT STRATEGY

The company's products consist of electronic and mechanical hardware controlled by software. Uniquely, teams create new products by specifying microprocessor, the amount of memory and the type of mechanism. This combination produces a product with a unique power (processed instructions per second or PIPS) to match market needs. Designs that need to fit market gaps at lowest possible cost. Costs that are influenced by synergy with manufacturing, purchasing and the existing products.

FINANCIAL STRATEGY

Business performance is measured with a full Profit & Loss Statement, Balance Sheet and key profitability and liquidity ratios. Each product is treated as a separate profit centre and the comprehensive reporting package covers activity based costing, cash flow, cost of capital, product life-cycle information and economic value added.

MARKETING STRATEGY

Besides, deciding the price and advertising for products, participants must set target inventory levels and decide the size of the sales force. When doing this, they must take into account customers, competition and whether the product's strategic focus is on technological leadership, market creation, growth, profitability, providing cash etc..

OPERATIONAL STRATEGY

Initially, manufacturing consists of assembly only, with teams buying in microprocessors, memory and mechanisms and, so, is a high variable cost business. However, for some products and markets it may be attractive to set-up a highly automated mechanism manufacturing facility involving major capital investment and significantly increasing fixed costs.

INFORMATION STRATEGY

Besides the standard financial and operational reports, teams must research new products, markets needs and the competition. Research that includes estimating product costs and power, test marketing and reverse engineering competitive products.

TEAM WORKING

With participants working in small teams, they have the opportunity to share experience and knowledge and present and promote different viewpoints. This is especially important where the participants are from several functions.

(BUSINESS PRESENTATION)

Optionally, at the end of the simulation, teams can make a formal board presentation covering objectives, strategies, process, the future (of the simulated business) and learning.

UK version Document Size 97k bytes Download size 30k bytes    
US version Document Size 96k bytes Download size 30k bytes    

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Most recent update: 23/07/12
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