GLO-BUS: An Online Simulation
to Develop Winning Strategies
BADM 510 GLOBAL BUSINESS
www.glo-bus.com
Ben A. Kahn MCLA
Outline

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Overview: Learning objectives … What is GLO-BUS and
how does it work? … Scenarios and strategic options
Getting Started: Registration … Corporate lobby page …
Naming your company
Decisions, Decisions … :
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Product, pricing, marketing … Determinants of sales and shares
Assembly and shipping
Compensation and labor … PAT decisions
Financing
Special order option
A Battle of Strategies: Reports
Course Grade: Quizzes … Performance and scores …
Strategic plans … Peer evaluations
Procedures, Schedule, Tips, Questions?
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510 Strategic Management
MCLA / U Albany
Overview of a Simulation
NLR’s Research Flight Simulator

A business simulation puts you and your co-managers in
as realistic a company and competitive market setting as
possible and has you manage all the company’s operations
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Teams make a set of decisions for a simulated firm
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This not only allows you to test your ideas about how to run a
company but the “live case” nature of a simulation also provides
prompt feedback on the outcomes of your decisions
These are evaluated against decisions made by competitors
comprised of other class members
Decisions are entered into a PC that compares the relative
“merit” of the decisions made by all teams

“Firms” that “win” the simulation:
1.
2.
3.
4.
do an outstanding job of tracking competitors
analyze their own performance
work as a team
… and don’t shoot themselves in the foot
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Learning Objectives
NLR’s Research Flight Simulator

GLO-BUS is an online, PC-based exercise
where your team runs a digital camera
company in head-to-head competition
against companies run by other class
members

Objective: “To successfully operate a multi-
product firm in the international environment”
 Your challenge: Craft and execute a strategy
for your company which, when pitted against
the strategies of rival companies, proves capable
of consistently delivering good bottom-line
results and building shareholder value
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510 Strategic Management
MCLA / U Albany
Learning Objectives (Cont’d.)
NLR’s Research Flight Simulator

Competing against rivals will give you a chance to
apply theory to practice in crafting and executing a
strategy in a globally competitive marketplace:
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Your team must chart a long-term corporate direction, set and
achieve strategic and financial objectives, and adapt to changing
industry and competitive conditions
Your team must analyze a full array of industry statistics, examine
company operating reports and financial statements, consider
import duties and fluctuating exchange rates and interest rates, and
understand an assortment of benchmarking data and competitive
intelligence on what rivals are doing
Your team must match strategic wits with the managers of rival
companies, “think strategically” about your company’s competitive
market position, and figure out the kinds of actions it should take to
out-compete rivals in satisfying shareholder expectations
These are the heart and soul of business
strategy!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Learning Objectives (Cont’d.)
NLR’s Research Flight Simulator

In addition, GLO-BUS is designed expressly to provide
you with a hands-on, learn-by-doing experience that will:
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Integrate business functions and consolidate your knowledge
about the different aspects of running a company in creating
a cohesive strategy
Deepen your understanding of cause-effect and revenue-costprofit relationships based on sound business and economic
principles, hence build your confidence in utilizing the
information contained in company financial statements and
operating reports
Provide you with practice in sizing up a company’s strategic
situation, making sound, responsible business decisions, and
being held accountable for delivering good results
Provide a capstone experience for your business school
education that is fun and engaging!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Notable Quotable
T
“
he other teams could make
trouble for us if they win.”
 Yogi
Berra, one of the most-quoted
sports figures, famous for fracturing
the English language in provocative,
interesting, and nonsensical ways
popularly known as “yogi-isms”
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Specifically … What Is GLOBUS?

Company operations and the functioning of
the marketplace are made as realistic as
possible, allowing you and your co-managers
to proceed rationally and logically in deciding
what to do:
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Industry setting is modeled to closely approximate
the real-world characteristics of the globallycompetitive digital camera industry
Company operations are patterned after those of a
camera company that designs and produces its
digital cameras at a company-operated plant and
that also outsources some of its cameras from
contract manufacturers
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
How Does GLO-BUS Work?

Virtually all GLO-BUS activities take place online
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All you need is an Internet connection and a PC installed with
both Internet Explorer and Microsoft Excel
You can either gather around the same PC for all GLOBUS sessions or you can use different PCs
GLO-BUS automatically transfers the needed software
from the GLO-BUS server to the PC you are working
on very quickly (within a couple of minutes even on a
slow connection); when you exit a session, your work
is saved and transferred back to the server
Note: The last decisions saved to the GLO-BUS
server at the time of the decision deadline are
the ones used to generate the results!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
The Scenario of Your Firm
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All companies start out on the same footing
 Equal sales volume, global market share, revenues,
profits, costs, digital camera quality, etc.
Each decision period represents one year
Operations began 5 years ago, so the first set of
decisions is for Year 6
 Your company is selling close to 800,000 entry-level
cameras and 200,000 multi-featured cameras annually
 Prior-year revenues were $206 million; net earnings
were $20 million ($2 per share of common stock); stock
price was $30 per share
 The company is in sound financial condition, performing
fine, with products well-regarded by digital camera users
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
The Scenario (Cont’d.)

Distinct product offerings:
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Worldwide marketplace:
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“Entry-level” (price) +
“multi-featured” (quality)
Headquarters and production
at Taiwan plant
Sales activities can be
pursued in North America
(Toronto regional sales
office), Latin America (Sao
Paulo), Europe-Africa
(Milan), and Asia Pacific
(Singapore)
8 potential market
segments:

2 product categories x 4
geographic areas
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
The Scenario (Cont’d.)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Strategic Options

There is wide strategic latitude in staking out a market
position and striving for good performance … There’s
no built-in bias that favors any one strategy:

Companies can pursue a competitive advantage keyed to
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low-cost/low-price
top-of-the-line camera quality and performance
more value for the money (“good products at low prices”)
Companies can have a strategy aimed at being the clear
market leader in (a) entry-level cameras or (b) multi-featured
cameras or (c) both
Companies can focus on one or two geographic regions or
strive for geographic balance or even global dominance
Companies can pursue essentially the same strategy
worldwide or craft slightly or very different strategies for the
Europe-Africa, Asia-Pacific, Latin America, and North America
markets
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Strategic Options (Cont’d.)

No One Strategy Is “Best”:

Most any well-conceived, well-executed competitive approach
can succeed, provided it is not overpowered by the strategies
of competitors or defeated by too many copycat strategies
that dilute its effectiveness
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Strategies that deliver the best performance depend on the
strength and interplay of the strategies employed by rival
companies
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Results depend on your analysis, planning, and decision making
process
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… there is no mystery “silver bullet” decision combination that players
are challenged to discover!
Decisions must be consistent and compatible
The most efficient method of organizing is to assign a particular
person or persons to one aspect of your company (function,
product, geography, etc.) … and one person may be assigned as
Chief Financial Officer and/or Chief Information Officer
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Strategic Options (Cont’d.)

Out-competing Rivals Is the Key to Market Success …
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Stay on top of changing market and competitive conditions
Try to avoid being outmaneuvered by the actions of rival companies
Make sure your digital cameras are attractively priced and
competitively built and marketed
Just as you are trying to win business away from rival
camera companies, they are actively striving to take
camera sales away from your company
It is the competitive power of your strategy vis-à-vis the
competitive power of rivals’ strategies that is the deciding
factor in determining sales and market shares in each
product-market
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Strategic Options (Cont’d.)

GLO-BUS is all about practicing and
experiencing what it takes to develop
winning strategies in a globally
competitive marketplace:
When the exercise is over, the only things
separating the best-performing company from
those with weaker performances will be the
caliber of the decisions and strategies of the
management teams of the respective companies
 It’s an exercise calculated to spur competition
and to get your competitive juices flowing

Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Getting Started

How Do You Register?
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Step 1: Have your assigned company registration
code handy (this code is used to put you into the
database for this specific course and to certify you
as a co-manager of your assigned industry and
company)
Step 2: Go to www.glo-bus.com
Step 3: Click on the “Student Registration” button
and enter your company registration code in the box
Step 4: Click that you are registering with a prepaid
code that came packaged with the text (or with a
credit card)
Step 5: Complete the personal registration
information (user name, password, etc.)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Getting Started (Cont’d.)

The Corporate Lobby Page:
 Each time you log-on to www.glo-bus.com, you are
automatically routed to your company’s “Corporate
Lobby” Web page, the hub from which you will operate
as a co-manager of your assigned company and your
gateway to all GLO-BUS activities with links to:
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Decisions and viewing/printing the results
The Participant’s Guide (manual)
The recommended decision procedures
The decision schedule (please verify!)
The two quizzes that are taken online
The 3-year strategic plans
The peer evaluations that are completed online
… and scoreboard, exchange rate adjustments, new interest
rates, upcoming deadlines, messages, co-managers log-ons
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Getting Started (Cont’d.)

Naming Your Company:
 At your initial meeting, you and your co-managers
should decide on a name for your company
 Your company’s name must begin with the letter
of the alphabet that you have been assigned
 Names
can be up to 20 characters
 To name the company, click on the link at the top of
the Corporate Lobby and enter your company’s full
name in the space provided

All company names are “public” and appear in the
GLO-BUS Statistical Review
 Select
a name that you are proud of and reflects the
image you want to project to your customers,
shareholders, and other company stakeholders (Bad
example: “Hoocares”)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Notable Quotable
I
“
mage is everything!”
 Andre
Agassi (in 1990 Canon ad
campaign)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Getting Started (Cont’d.)
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All company co-managers can access the latest decisions
and results from any PC connected to the Internet
The Corporate Lobby screen indicates the last date at
which a co-manager saved decisions to the server and
whether other co-managers are currently logged on
All co-managers can be logged on simultaneously
If another logged-on co-manager clicks on the Save icon
and uploads new decisions to the server, you will be
notified the next time you press the Save icon – you then
have the choice of:
1.
2.

overriding the co-manager’s saved decision entries by saving your
decisions to the server; or
importing the co-manager’s decisions onto your decision screens
and overriding your own entries
Remember: The last set of decisions saved to the
server are used to process the results!!!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Decisions, Decisions …

You and your co-managers are responsible for the
following decisions each period (entered in the decision
boxes):
Total
Items Entries
Product design and performance (for each camera model)
Pricing and marketing (for each geographic area)
+ special order discount bids (begin decision #6, year 11)
Entry-level assembly and shipping (for each quarter)
Multi-function assembly and shipping (for each quarter)
Annual compensation and quarterly labor force
Financing company operations (annual equity; quarterly debt
and dividends)
Total = potential max
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
10
20
15
+7
4
4
7
60
+7
16
16
13
4
10
44/51 135/142
MCLA / U Albany
Decisions, Decisions (Cont’d.)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Let’s Go To The Demo …
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Product Design
Note!
Component costs
decrease 5%/year
Determine
productivity
“Dashboard”:
•Same for all screens
•Re-calculated instantaneously
•See “What-if” changes
• 5-10% as long as gauge rival efforts
Trade-off quality and costs
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Pricing and Marketing
Note!
•Carries over for both E-L
and M-F
•Enter zeros to withdraw
Gauge rival efforts
Based on prior year
competitive efforts
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Determinants of Sales and
Shares
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Market growth 8-10% years 6-10; 4-6% thereafter
Your strategic challenge is to craft a competitive strategy
that you believe will produce the desired results when
pitted against the competitive strategies of rival
companies, region by region:
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Price (enter zero to withdraw from market)
Performance/quality (P/Q) rating (currently 2½ stars)
Promotions (number, length, amount) provide price discounts
Advertising (enter zero to withdraw from market)
Number of camera models (but can reduce P/Q and productivity)
Size of dealer network (enter zero to withdraw from market)
Warranty period (claims = $50/E-L and $100/M-F)
Technical support (should be constant per camera; enter zero to
withdraw from market)
Image and reputation
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P/Q and market share penetration
Tough to change momentum (loyalty results in market share stability)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
"We're pleased to report that competitor envy is running at an
all-time high as well."
Cartoon by Dave Carpenter
Copyright 2005, Harvard Business Review
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Sales and Shares (Cont’d.)
Size of Dealer Network:
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12,500 retailers per region
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50,000 available retailers worldwide
Sales offices for 8,000+ dealers = $3.3 million in year 5
{
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100 chains/region @ $10,000 each (price-sensitive, preferring
entry-level cameras)
400 online/region @ $4,000 each
12,000 camera shops/region @ $200 each (quality-sensitive,
preferring multi-feature cameras)
20 “full-line” shops per region carry everything
Markups = 50-100%
Decision to carry = Prior-year shares + P/Q ratings +
Cumulative ad spending + Prior-year promotions

Cannot change in upcoming year
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Assembly and Shipping
Note!
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Compensation and Labor
Note!
Determine
productivity
Cost vs. productivity trade-offs to
minimize labor cost per camera (vs.
$25 for outsourcing)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
PAT Decisions
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Assembly:
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Max = 10% more than projected orders
Requires 1Q lead time, with peak in Q3
4-Member Product Assembly Teams:
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Each requires 1 workstation
100 workstations/PATs can = 10,000 units/year
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Can add up to 50 workstations/PATs per quarter @ $75K each
Productivity cut 4% per model added; 2% boost per model dropped
Labor Utilization:
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Overtime @ time-and-a-half up to 30% max.
Severance for laying off full-timers = 50% base pay per worker
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Utilized 80 workstations/PATs in year 5, Q4
Productivity increasing to 12,000 units/year
Full-timer = more than 2Q
Additional Costs:
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Outsourcing = $25/camera (for labor)
Handling & shipping = $3/camera
Import duties = $5/E-L; $10/M-F
Depreciation = 4%/year
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financing
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financing (Cont’d.)
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Collection of receivables = Last Q’s sales + 2Qs for unsold inventories
Emergency Loan: Automatic draw on (and repay of) $100 million credit
line if necessary to cover cash outflows
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Pay for components, interest, taxes, and dividends in following Q
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Dividends should = 2-5% stock price and < 75% EPS
Beginning equity = Common stock + Additional capital + Retained
earnings = $99.9 mill.:
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Outstanding loans = $25 million
10 mill. shares outstanding; can issue 5 mill. share max per year; can
repurchase 50% per year but cannot drop below 7.5 mill.
Total equity cannot drop below $50 mill.
Stock repurchase if price ≥ $10
Credit Rating (based on 4Qs):
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D/E Ratio ≈ .10 to .33
Times-interest-earned (annual operating profit/annual interest) ≈ 2 to 10
Debt payback (≈ 3 years)
Credit used (≈ 5-15%)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Decisions Printout
Compare
to results
Note: Print and check carefully!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
The Special Order Option

As the simulation progresses, your company will be given
an opportunity to bid against rivals and obtain a special
order of entry-level cameras to be assembled Q3 and
shipped to chain store retailers in time for the peak retail
demand in Q4
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All interested camera-makers can bid for these orders
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When the special order bid option is activated, a screen for entering
bids will appear on the decision menu
Bids are taken in each of the four geographic regions and there are
two winning bids in each region (both for 100,000 entry-level
cameras)
The winning bids are based solely on low price (with brand image
and P/Q rating as tie-breakers)
Normally, winning bidders outsource the assembly of the cameras
needed to fill these special orders
Winning bidders are shown on the Statistical Review’s
“Benchmarks” page
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Special Order (Cont’d.)
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
A Battle of Strategies

Following each year’s decisions, you’ll be provided with
“Competitive Intelligence” reports containing
information of the actions rivals took to capture the
sales and market shares they got
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Note: All industry members get identical reports
Armed with this information, you will be in pretty good
position to figure out some of the strategic moves they
are likely to make in the upcoming decision period
Analyze your opponents thoroughly and develop a
game plan to defeat them …
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scout their strategies
judge what they will do next
and come up with a competitive strategy of your own aimed
at “defeating” their strategies and boosting your company’s
performance
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Global Retail Sales
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Benchmarking Data
Note!
Note: Compare to decisions, costs, operations, etc.!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financials
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financials (Cont’d.)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Quarterly Snapshot
Note!
Compare competitive
efforts for any rival
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Strategic Groups
Key rivals
Niche players
Obtain for any rival
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Company Analysis
Note!
Counter potential
moves of key rivals
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Company Analysis (Cont’d.)
Note!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Production Costs
Note!
Totals and
per/camera
Monitor
costs
Note: Compare to projections!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Regional Operations
Note!
Note: Compare to projections!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financials
Note!
Note: Compare to projections!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Financials (Cont’d.)
Note: Compare to projections!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Virtuous/Vicious Cycle
Marketing
Mix
Image
P/Q
Volume
Retailers
R&D
Components
Share
Price
Productive
Equity
+ Debt
Revenues
Profits
Costs
PATs
Gears must mesh or it will be a grind!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade

50% of final grade:
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10 points for 2 Quizzes
10 points for Team Reflections (cumulative) that apply
the course materials to the simulation and are the bases
for your decisions
10 points for Company Performance (2 measures)
10 points for 3-Year Strategic Plans (Decisions #46/Years 9-11 and #7-9/Years 12-14)
10 points for Group Presentation and Final Report
Adjusted by Self Evaluation and Peer Evaluations
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade (Cont’d.)

The Two Quizzes:

There are 2 “open book” 20 multiple-choice question quizzes
built into the simulation, taken online and scored immediately
upon completion
 5 pts – Quiz 1 (45-minute time limit) covers the Participant’s
Guide – its purpose is to spur you to read and absorb how
things work in preparation for managing your company


Average Score = 84
5 pts – Quiz 2 (75-minute time limit) covers the Company
Operating Reports and certain information in the GLO-BUS
Statistical Review – its purpose is to check to see if you
understand the numbers and how they are calculated


Quiz 2 Average Score = 64
Click on the links for the quizzes on your “Corporate Lobby”
Web page for more information

The three sample questions for each quiz give you an idea of
what to expect
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade (Cont’d.)
Company Performance:
Board members and investors have annual performance
targets for the company, each weighted equally
1. Grow EPS at least 8% annually
through Year 10 and at least 4%
annually thereafter
2. Grow stock price about 8%
annually through Year 10 and
about 4% annually thereafter
3. Maintain ROE of 15% or more
annually
4. Maintain a B+ or higher credit
rating
5. Maintain an “image rating” of 70
or higher
Yr 5
Yr 11
Yr 14
}
}
EPS= $2.00 ≥$3.16 ≥$3.56
Stock=
$30 ≥$45.85≥$51.57
ROE= 17.5% ≥15% ≥15%
Credit=
B+
≥B+
≥B+
Image=
70
≥70
≥70
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Grow

Maintain

Notable Quotable
“
T
he digital camera industry has
reached maturity early, and the
heady growth rates will slow ...”
 “Digital camera market peaked too
soon” CNET News.com (April 28,
2005) http://news.zdnet.com/21009595_22-5688981.html
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade (Cont’d.)
 Company
 Scoring
Performance (cont’d.):
standards used to calculate
“performance scores” for each company
 Absolute:
Investors’ confidence (Did you
meet or beat the annual performance
expectations for each of the 5 performance
measures?)
 Relative: Best-in-industry (How well does
your company’s performance stack up against
the company with the best 5 performance
measures?) … as long as no losses and better
than investors’ expectations!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Company Performance (Cont’d.)
Investors’
Confidence
(5 pts.)
EPS
ROE
Credit Rating
Stock Price
Image Rating
= 20%
= 20%
= 20%
= 20%
= 20%
Best-In
Industry
(5 pts.)
… or, about 1 point for
each possible cell
towards final grade
•High Score (average overall score of all first place teams at simulation end)=102
•Average Score (average overall score of all teams at simulation end)=78
•Low Score (average overall score of all last place teams at simulation end)=51
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Performance Scoreboard
Expectations:
≥100 = excellent
90-99 = very good
80-89 = good
70-79 = fair
<70 = sub-par
Best-in-industry:
Scaled on 100
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Scoreboard (Cont’d.)
Function of EPS, ROE, credit rating, dividends per
share, and achieving performance targets
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Scoreboard (Cont’d.)

The winner is not
who is ahead the
longest, only who is
in front at the end
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Notable Quotable
A
“
s you set out for Ithaka [I]
hope your road is a long one, full of
adventure, full of discovery. ... Wise
as you will have become, so full of
experience, you'll have understood
by then what these Ithakas mean.”
 Konstantinos Kavafis, Ithaka (1911)
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade (Cont’d.)

The Two Strategic Plans:

Commitment to Deliver Specified Results But Permits Full Strategic
Flexibility


Modify your strategy as often and as radically as necessary in response
to unanticipated conditions as long as you meet or beat the
performance targets set forth in the plan
3-year strategic plan includes


A strategic vision for the company
Objectives for EPS, ROE, credit rating, image rating, and stock price
appreciation





To get a “good” performance score requires that a company achieve
performance levels at least commensurate with investor expectations each
year
“Bonus scores” for setting “stretch objectives” that are higher than the
investor minimum performance targets and then meet or beat these stretch
targets
Proportional points are awarded for under-achieving the target
Declare a strategy for entry-level and multi-featured cameras
Prepare a “pro forma” income statement that projects unit camera
sales, revenues, prices, and costs per camera for each of the four
geographic regions
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Course Grade (Cont’d.)

Peer Evaluations:

At the end of the exercise, you will be asked to
complete a 12-question evaluation of each of
your co-managers and a self- evaluation of your
own performance
 Used
to make final individual adjustments
These are completed online and can be
reviewed by clicking on the Peer Evaluation Link
on your Corporate Lobby Web page
 Are for your instructor only and are completely
confidential … Please complete them in an
honest and professional manner

Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Some Procedures

Follow the “Suggested Decision Procedures”


Decision Schedule link on your Corporate Lobby Web
page has dates and deadlines for the decisions



See the link on your Corporate Lobby Web page
The decision deadlines are strictly enforced since the
results are processed automatically on the GLO-BUS servers
immediately following the deadline
The results of each decision will be available online
one hour following the decision deadline (and usually
15 minutes)
You will be notified via e-mail as soon as the results
are ready

At that point you can log-on, see what happened, and
proceed with the next decision
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Schedule
Decision
Deadline For Saving Entries
Practice Decision 1 - Practice Year 6
30-Jan-08
7:00 pm
Practice Decision 2 - Practice Year 7
6-Feb-08
7:00 pm
Quiz 1
6-Feb-08
9:00 pm
End of Practice Period (Data reset to Year 6
and practice results are no longer available)
7-Feb-08
11:59 pm
Decision 1 - Year 6
13-Feb-08
7:00 pm
Decision 2 - Year 7
20-Feb-08
7:00 pm
Decision 3 - Year 8
27-Feb-08
7:00 pm
Quiz 2
27-Feb-08
9:00 pm
3-Year Strategic Plan
5-Mar-08
7:00 pm
Decision 4 - Year 9
5-Mar-08
7:00 pm
Decision 5 - Year 10
12-Mar-08
7:00 pm
Decision 6 - Year 11
19-Mar-08
7:00 pm
3-Year Strategic Plan
2-Apr-08
7:00 pm
Decision 7 - Year 12
2-Apr-08
7:00 pm
Decision 8 - Year 13
9-Apr-08
7:00 pm
Decision 9 - Year 14
16-Apr-08
7:00 pm
End-of-Game Peer Evaluations Available
23-Apr-08
6:00 pm
Decision 10 - Year 15
23-Apr-08
7:00 pm
Company Presentations
30-Apr-08
6:00 pm
Note: See GLO-BUS
schedule for precise
deadlines for all simulation
activities; please notify
instructor of any
discrepancies
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Tips for Success



Use the practice decision to become fully
acquainted with the menus and functionality built
into the screens
Make full use of all the “Help/More Info” sections
Be professional!

Run the company in a serious manner:


Practice making business decisions, learn to craft winning
strategies in a competitive market, and take responsibility for
the results of your actions
Don’t be imprudent, highly risky, or un-businesslike (that
would get you fired in a real company):


Who shoots from the hip almost always shoots themselves in
the foot
Don’t be a daring adventurer out to win some variant of a
videogame by making wild decisions and testing the limits of the
simulation
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Tips for Success (Cont’d.)
Lessons Learned from the Past

Do know the business


strategy and stick to it
… build the needed
infrastructure and develop the
business model to support your
strategy
Do invest early and often


... be internally consistent
… initial decisions are critical but
watch out for dead ends


… organization and complete
member involvement
or you will be “stuck in the
middle”

promises
… use to examine small changes
Don’t try to “game (or blame)
the system”


… watch the competition to
make rapid adjustments
Don’t treat projections as


… being average is mediocre
Don’t follow others

Do create effective decision
making process
Don’t be “all things to all people”

Do craft “customer value”


… benchmark rivals and self
Do agree on a long-term



… evaluate the feasibility and
risks of sustaining your strategy
Don’t panic or make radical
moves

… be patient but persistent
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Notable Quotable
C
“
ontrol your own destiny …
Or someone else will!”
 Jack
Welch, former GE CEO
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Questions?
 Please
eliminate the “middle man”!
 Use
the “help/more info.” screens
 Contact GLO-BUS Technical Support
Team:
 Send
a message, submit a request, or ask a
question at http://www.globus.com/feedback.html
 Phone (205) 348-8923
…
but also notify instructor of issue and
response!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Good Luck!!!
Ben A. Kahn / Paul Miesing “GLO-BUS” BADM 510-70 Strategic Management
MCLA / U Albany
Dedicated to the Memory of My Son, Solomon Sharone Cyrus Jochnowitz-Kahn
University of Rochester, Class of 2010
“I Want to Live, Go to College, and Help People
to Make This World A Better Place.”
My Name Is Rocky Balboa
My Name is Rocky Balbao
I am Soly’s Dog