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TABLE OF CONTENTS
Teaching objectives and principles
2
Your market and activity
2
Your company
4
Finance
4
Production
4
Location
4
Strategy
4
Your mission
4
Your decision-making “rounds”
5
Performance tab
5
Watch tab
5
Decisions tab
6
Marketing decisions
6
Sales decisions
7
R&D decisions
7
Production decisions
9
HR decisions
9
Finance Decisions
10
Partnerships & coopetition
11
Mission Letters and Videos
11
References
12
Annex: registration procedure
13
1
TEACHING OBJECTIVES AND PRINCIPLES
Globstrat is a “serious game” designed to teach corporate strategy through experiential
learning. Within this framework, you will be part of a team that will take on the role of an Executive
Committee.
You will manage your company globally, in all its
dimensions (marketing, sales, finance, production, R&D,
HR, etc.), by defining a strategy and then implementing it
through a series of decisions, while adapting to changes
in the market and your competitors' strategies. Other
teams will manage the companies that will be your main
competitors, making your seminar highly interactive.
Depending on the time available, between 4 and 7 years of your company's life will be simulated
so that you can see the results of your strategy and analyse them. Your Teacher will adapt the
learning program to the situation (duration, timetable, level, etc.). This seminar will enable you to
develop a global and strategic vision (Globstrat), with concrete learning inputs rooted in the
seminar experience.
YOUR MARKET AND ACTIVITY
Your company’s activity consists in producing and selling iPad-type
tablets, starting with one single product (T) corresponding to a
standard tablet. This is a fast-moving high-tech industry, so a policy of
product innovation is essential. In particular, 3 technological
innovations are possible. They will form part of your strategic
choices and will be one of the levers for developing your
offer.
•
I (Image): touch-sensitive HD screen, offering better image quality and colors.
•
C (Communication): access to the latest generation networks and the cloud.
•
S (Storage): high-capacity memory chips capable of storing large amounts of data.
By choosing to develop one or more of these technologies (I, C, S), you can extend the product
range by integrating some improvements. In all, 7 new products can potentially be developed:
•
simple products (2nd generation) integrating 1 technology: TI, TC, TS
•
hybrid products (3rd generation) integrating 2 technologies: TIC, TCS, TIS
•
complex (4th generation product) integrating the 3 technologies: TICS
2
The "time to market" is at least 2 years as the development
process for new products goes through the development of the
technology (1 year), then the development of the product
integrating this technology (1 year). So, it's only in year 3 that
you can launch technologically new products. Each generation
of product will replace the previous one (around 50% per year,
depending on the offer that will be made), then will follow its
own life cycle.
If the market is global, you initially operate in one of the 3 major geographical markets which are:
the Americas, Asia and EMEA (Europe, Middle East, Africa). Your customer base is divided into 3
segments, each of which represents a third of your sales volumes (10,000 units per segment)
and your turnover (10,000 K per segment) :
•
private individuals
•
SMES
•
large companies,
For a better understanding of consumer expectations in the 3 geographical markets and the 3
segments, you have access (free of charge in year 0) to the "Marketing Watch" which indicates,
over a 3-year horizon, the probable changes in the market both in volume and in sensitivity to
different factors (price, quality, service, reputation, number of sales agencies, technologies I, C
and S). In year 0, the market's sensitivity to these different factors are identical (index 100 for all
sensitivities), but they will evolve differently depending on the segments. Marketing watch enables
you to analyse these trends.
Initially, your company can be described as a regional generalist: it operates in all segments of a
single geographic market. All your main competitors, represented by the other teams, are spread
across the 3 major geographical markets mentioned above.
In addition to these main competitors, many smaller competitors also account for a proportion
of sales in each segment / market and are managed automatically by the system. The
image below shows the geographical location of one of the competing companies in the Americas
market.
Your Teacher will tell you the name of your company and the initial geographic market in which
you operate.
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YOUR COMPANY
For the sake of fairness as part of the Globstrat seminar, all teams are in the same starting
position. You will be taking over the management of an existing company, with a total of 150
employees.
Once you have registered for your seminar on the Globstrat website, you will have access to all
the detailed information about your company in year 0 (performance tab). There you will find the
following main characteristics:
FINANCE
Sales figures:
30 000 K
Share capital:
15 000 K
Number of shares: 150 000
Net profit:
Long-term debt (5 years):
Initial share value:
2 250 K
10 000K
100
PRODUCTION
You already have 15 type M 2000 machines, with a production capacity of 2000 units per year,
which enabled the production of 30,000 tablets in year 0.
The total cost of production was $925, with a selling price of $1,000.
LOCATION
In addition, you have 6 sales branches in your geographical market, where you have 3 logistics
platforms (1 per segment).
STRATEGY
If your company is in a healthy financial situation and is one of the main players in the market, its
strategy is ill-defined. As a regional generalist with a standard product, your company is very
similar to those of your competitors.
It is precisely the essence of a good strategy to find a way of being different that resonates
within a market. It's up to you now !
YOUR MISSION
To kick-start your Globstrat experience, at the beginning of the seminar, we provide you with a
framework for initial reflection to develop your strategy and structure your team's initial thoughts.
The aim is to create value through a series of coherent decisions that reflect your own strategy.
The value will be measured by the share price, initially at $100.
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Your mission is to finish the simulation with the highest share value to win the Globstrat "serious
game" against your main competitors.
The value of your company is assessed using a complex
model that considers 4 major factors: customer
value (market share, sales revenue), economic value
(ROCE, debt), financial value (earnings per share,
dividends), and societal value (CSR index and
environmental aspects). Globstrat has adopted the 3 Ps
approach (Profit, People, Planet). Achieving financial,
human and environmental success at the same time will
translate into a higher share price.
YOUR DECISION-MAKING “ROUNDS”
Once you have logged into your Globstrat account, you can analyse your performance and that of
your competitors, and make your own decisions, using the following 3 main tabs:
PERFORMANCE TAB
This tab gives you access in year N to your company's results at the end of year N-1. The
information will be increased each year and concerns your sales (global and by market), the R&D,
production, the HR function, balance sheets and income statements, cost analyses and the 3P
dashboard.
Deciphering your past performance will be the starting point for each round of decision-making, so
that you can see and understand the initial results of your strategy.
WATCH TAB
As well as analysing your past performance, you need to constantly analyse the market, and the
strategies implemented by your competitors. A range of watch (monitors) services are available to
you, free in year 0 and chargeable thereafter (20KE per watch service). Despite their cost, they
are extremely useful for clarifying your path and gaining a better understanding of your
competitors' strategies. Only the environment watch will be free every year, as it concerns general
public information.
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•
•
•
•
•
•
•
•
Environmental watch: this shows you the cost of components, the cost of energy, interest
rates and the rate of inflation
Marketing watch: this concerns the evolution in market trends in terms of volume and
sensitivity to various factors, showing thus the evolution in consumer expectations. It gives you
3-year trends and must therefore be kept up to date
Sales watch: prices and quantities sold on all markets and segments
R&D watch: technologies and new products developed
Production watch: machinery, productivity and stocks of semi-finished products
HR watch: workforce, payroll, CSR index
Finance watch: simplified balance sheets and income statements
Customer value: the latter enables you to position your offer in relation to that of the leader in
the segments in which you operate, in terms of the 6 key characteristics of your offer that build
the customer value (price, quality, services, branches & e-commerce, innovation and
reputation).
DECISIONS TAB
The decisions tab is where you indicate, enter and save all your decisions.
Here are some of the key points. Note that at the bottom of each decision page you will find a link
entitled "Generate forecasts", which allows you to view your expected results. Of course, these
forecasts depend to a large extent on your estimated sales and may therefore prove inaccurate
depending on the gap between your actual sales and your forecast sales. The purpose of these
forecasts is to save you time; by focusing your attention more on the strategy and not on the
calculations: make sure they are realistic!
Once you have consulted the forecasts, click on “Continue with decisions” in order to continue
and adjust your decision-making. To make it easier to understand, you will find the symbol
for
all the decisions, which will take you to a summary in the following form; Decision / Budget /
Impact.
MARKETING DECISIONS
On this page you can view the geographical position of your company, with its 6 initial branches
(indicated by the blue dots) and its 3 distribution platforms (individuals, SMES, companies). Here
you can decide whether to expand into other geographical markets, your number of sales
branches per market, your advertising policy, and your new distribution platforms (1 for each
segment). In addition to these platforms, you can develop an e- commerce solution that will
enable you to sell your products to all 3 market segments, even if e-commerce sales are aimed
more specifically at the “individuals” segment.
6
Points to watch :
•
In your initial geographic market, it is crucial to maintain (at least for the first few years) your 3
distribution networks, as each segment will represent at the start, a third of your sale.
•
International development takes 1 year: you must first choose to set up a representative office
in the market(s) of your choice, and the following year choose one or more distribution
networks in your new market. You need at least one branch for each market
SALES DECISIONS
Here you will set your sales forecasts and prices for each product in each segment and market, as
well as customer payment terms (1 to 3 months). Supplier payment terms are set at 2 months.
In the “individuals” segment, your direct customers are major retailers (excluding any e- commerce
sales), who are particularly sensitive to payment terms. Allowing them longer payment terms will
facilitate your sales but will have a negative impact on your cash flow.
Finally, you will define your services policy. You can only offer services that you have previously
developed (R&D Decisions). The services offer can be integrated into your value proposition and
be included in the selling price. The unit cost per service is $30.
Points to watch :
•
•
•
•
•
Your sales forecasts must be as realistic as possible, because all your financial forecasts are
based on your sales target.
Be careful to maintain your margins per product or, conversely, not to increase your prices
too quickly without having created sufficient customer value.
The optimum number of services is generally 2 per segment, and up to 6 for the SMES
segment, which is most sensitive to services. Don’t forget to select the ones you want to offer
once you’ve developed them (R1D), which takes 1 year.
R&D DECISIONS
Your innovation management guidelines are defined here. Firstly, product innovations aimed at
extending your product range beyond the standard tablet (T) offered by all your competitors in
year 0. As mentioned in the presentation of your business activity and market, up to 7 new
products (TI, TC, TS, TIC, TIS, TCS, TICS) can potentially be developed by progressively
integrating all or part of the new I, C and S technologies. The product innovation process takes
time (2 years). For example, to launch the TI product you will need to develop the technology I
(year N), develop the TI product (year N+1), and then launch the TI product on the market in year
N+2.
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Another R&D area is the services policy. As mentioned above, you can develop up to 6 new
services: extended warranty (+ 2 years), ecological recycling of products, customer support
(hotline), cloud storage, data security, and rapid troubleshooting. These different services can be
more or less adapted to each of your 3 segments and take up to 1 year to develop.
Finally, your R&D policy also concerns the issue of your company's certifications involving
quality (ISO 9000) and the environment (ISO 14000) (decisions taken in Production tab).
For each standard, several levels of requirement are defined (9001 to 9004 and 14001 to 14004).
ISO certification obtention is based on the following criteria:
ISO 9000 Criteria
9001
9002
9003
9004
Number of R&D quality labs
1
2
3
4
Level of supplier certification
9001
9002
9003
9004
Minimum quality index
125
150
175
200
14001
14002
14003
14004
Number of ecological R&D labs
1
2
3
4
Components certification level
14001
14002
14003
14004
% supplied by renewable energy
25 %
50 %
75 %
100 %
ISO 14000 Criteria
Obtaining a quality certification is based on achieving an overall quality index for your products.
This index evolves progressively, generally by one level per year. To achieve this, you must also
promote the development of your quality index at the same time, using M 2000 type machines like
the ones you have at the start (Production Decisions), by appropriate laboratories (R&D) and
through efforts to promote training and quality culture (HR Decisions).
Points to watch :
•
Closely monitor the product innovation process each year (choice of technologies to be
developed + choice of new products to be developed with this technology the following year).
•
New services take 1 year to develop: so, you can start offering them in the year following their
development phase.
•
To find out whether your efforts will enable you to achieve the desired levels of certification
(9000 or 14000), don't hesitate to consult the Forecasts (R&D tab). You'll be able to see which
criteria have been validated and which may be missing.
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PRODUCTION DECISIONS
Finished products are produced in 2 main stages: 1/ production of semi-finished products (costing
$450 in year 0) and 2/ assembly. The cost of producing semi-finished products depends mainly on
the productivity of the machines. Initially, you have 15 M2000 type machines (i.e. with a nominal
production capacity of 2000 units per year), but it is possible to buy and sell other machines: the
M2000, M4000 (production capacity of 4000 units per year) and M8000 (production capacity of
8000 units per year). The choice of machines has a major impact on productivity, but these more
productive machines slow you down in significantly improving your quality index.
If you buy or sell these machines, make sure you have the same number of production teams as
the machines, by hiring or firing teams. For all other decisions, hiring or firing is handled
automatically by the software. If your assembly capacity is totally flexible, the semi-finished
production phase is subject to a working time agreement with a flexibility of plus or minus
10%. In other words, if your production capacity exceeds your actual sales by more than 10%,
you will create stocks of semi-finished products. Conversely, if your production capacity is more
than 10% below the actual demand, you will lose sales due to a lack of production capacity. Lost
sales can be redistributed on the market to your competitors!
Points to watch :
•
Make sure that the numbers of teams and machines are the same every year.
•
In your forecasts, make sure that the planned production capacity matches your sales
forecasts (in terms of overall volume), in order to avoid stock-outs or overproduction (stocks of
semi-finished products).
HR DECISIONS
In year 0, your company is composed of 150 employees and with a total payroll of 9,900 K. HR
policy: (headcount, salaries, training, remuneration and social benefits) influences staff satisfaction
and commitment, which in turn has a positive impact on productivity, product quality and, more
generally, on all of your actions.
Your CSR policy is based both on your HR policy and on specific actions that you can develop.
This will help to create a culture of social and societal responsibility, measured by a CSR index.
Points to watch :
•
As far as training policy is concerned, its impact is largely linked to the budget you allocate. It
is therefore necessary to both "earmark" expenses and indicate the budget as a percentage of
the total payroll
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FINANCE DECISIONS
The financial management of your company will lead you to define your investment financing
policy by making reasonable use of the leverage effect of long-term debt, while at the same time
ensuring the profitability and solvency of your company. If it generates profits and has the
necessary cash flow, it can use these resources, for example, to: distribute dividends to its
shareholders, repay debts early or buy back previously issued shares.
For your first round of decisions (year 1), you have a cash flow capacity (net profit + depreciation)
of 4,550 K, which may be reduced by dividends that you can distribute given this positive net profit
for year 0. You can also take out a long-term loan of up to 2,000 K (the amount for year 1), and
carry out a capital increase of up to 1,500 K. However, in year 1 you will have to repay the annual
instalments on the long-term loan already taken out (10,000 K over 5 years = 2,000 K of capital to
be repaid in year 1).
Overall, your maximum financing capacity in year 1 if you do not distribute dividends is 4550
(operating cash flow) – 2000 (capital to be repaid) + 2000 (new long-term loan) + 1500 (capital
increase) = 6050 K.
You will also need to finance the investments linked to your strategy. Limited financing capacity
will certainly lead you to define investment priorities. Here are the main investment possibilities
and the associated amounts (all this information will be available online under the symbol
This is not the total cost, but only the investment requirement excluding operating costs:
•
New geographic market: 1,000 K per new market and 500 K per new segment (distribution
platform) the following year.
New products: 2000 K per new technology, then 1000 K the following year for each product
development.
Quality, productivity and ecology of laboratories: 500 K per laboratory
Machines: 1000 K, 2000 K and 3000 K per new machine (respectively for M2000, M4000 and
M8000).
•
•
•
Points to watch :
•
Decisions can only be closed at the end of each round if the following financial rules are
respected. To help you do this, use the forecasting tool, and especially the financing, income
statement and projected balance sheet tabs.
•
Financing investments with permanent capital
•
No provisional overdraft authorized (but you can take out a short-term loan of up to 1,500 K in
year 1 to cover it)
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PARTNERSHIPS & COOPETITION
The strategies put in place are part of a competitive universe, but you can cooperate on specific
subjects. It is up to your teacher to decide whether or not to include these partnerships in your
Globstrat seminar. Four types of partnership have been modelled in Globstrat:
SUBCONTRACTING: you can negotiate a subcontracting agreement directly with your
competitors which covers semi-finished products (excluding assembly).
JOINT-VENTURE (JV): in order to share certain R&D costs, you can jointly develop a product in 1
year, using each other's technologies, which each competitor can then manufacture and market.
LICENSES: unlike JV agreements, licenses relate to finished products. They involve the transfer
of a patent, allowing the buyer to manufacture and market the product concerned (in defined
markets and segments) in return for a % of the turnover generated.
EQUITY ACQUISITION: lastly, competitors can negotiate simple or cross-shareholdings between
themselves or with the bank.
MISSION LETTERS and VIDEOS
To deepen your preparation, you can consult the mission letters by function: Marketing / Sales,
Production, R&D, HR, Finance, CEO, and read the Alliances and Partnerships guide.
The following videos are also available:
General view of the simulation
: https://www.youtube.com/watch?v=23sLBqY6gjA
The process of defining your strategy
: https://www.youtube.com/watch?v=xGNsDt7bBh0
Interface tutorials: View 3 tutorials (12')
•
•
•
General view of the interface: https://www.youtube.com/watch?v=Tit0N1L0rnU
Decision-making process: https://www.youtube.com/watch?v=SA1qjpbeE-E
Annual diagnostic process: https://www.youtube.com/watch?v=cvt4jNjiifQ
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REFERENCES
Globstrat is a benchmark tool in strategy training, already used by many customers (universities
Companies
/ schools / companies) for their students, executives and managers.
Schools &
Universities
(France)
Schools &
Universities
(International)
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ANNEX: REGISTRATION PROCEDURE
You are invited to create your GlobStrat account in order to take part in the Strategic Management
Simulation associated with your training.
1/ LOG ON TO THE GLOBSTRAT-ACADEMY WEBSITE
https://www.globstrat-business-games.com
Select the menu Access (tab) : “GlobStrat Registration”.
Or directly on the home page Select :
"Create your Account".
2/ ENTER THE REGISTRATION CODE
Your teacher will give you this code before or at the beginning of your seminar.
3/ ENTER YOUR DETAILS
In the identification form, please enter :
o
o
Your surname, first name and an exact email address (you will need to reply to the
confirmation email to validate your account), which you will then use as your login.
A password of 6 alphanumeric characters (aA..zZ 0..9), with no special characters. Your
password must be exactly 6 characters long. Make a note of this password, which you will
use to log in again (via the "Access your simulation" tab on the home page).
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