MikesBikes Lessons Learned
During a MikesBikes wrap-up session, students offered these “lessons learned” to future players.
The number of “votes” recorded for each suggestion is used to rank order of the items.
General Strategy
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During the simulation, use the off-line rollover in the multi-player version (88)
Research your markets, sensitivities and thresholds, then get off to a quick start: dominate
new markets early (29). Late entry into crowded markets is a poor move (11)
Plan all of your decisions ahead of time (29)
Stick to your chosen markets (15)
Do continual calculations (14) such as unit costs, how much can you sell, plant
efficiency.
Don’t get too big, too fast (10)
Use the player’s manual (7)
Good team communication is very important (4)
Don’t go into every market (3)
Porter’s 5 forces is very important (2)
Marketing
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Reduce retail margins (53)
Don’t overprice (1)
Finance
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Sell shares at the beginning to raise capital (23)
Tracking cash flow is very important (18)
Investor relations is an important expenditure (14)
Re-purchase your shares (9)
Pay off your debt (4)
Operations
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Improve your quality (17)
Strive for a high efficiency plant and increase batch size, lower visual inspections, and
increase prevention type expenditures (4)
New Product Development
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Continually consult the perceptual map and modify your bikes accordingly (14)
Selected Quotes from MikesBikes Final Reports – Lessons Learned
Section
Permissions were obtained to use the following quotations from the Lessons Learned
sections of MikesBikes Final Reports. They are organized by category.
On the MikesBikes Business Simulation
“MikesBikes was a very meaningful and practical experience.”
“MikesBikes is an interesting, fun, and effective way of simulating some of the real-life
management decisions required to run a business. The software is easy-to-use- and
allows the user to analyze individually the decisions that were implemented. The
competitive nature of the program also encourages students to independently gain a better
understanding of their decisions as well as the concepts and strategies involved in
business.”
“We learned the most from the mistakes that we made.”
“The MikesBikes simulation was a fun and interesting way to gain knowledge about the
development of a business. It allowed us to expand on the ideas taught in class such as
creating a business strategy and using tools like SWOT.”
“On the whole, we found this exercise both stimulating and challenging.”
“Operating a simulated bicycle manufacturing corporation over a period of seven years
was an opportunity to gain insights on a real entrepreneurial experience. Our team
entered the simulation under many assumptions regarding the nature of business
operations but was quick to learn our shortcomings through inherent challenges, and
many trials and tribulations. These skills cannot be learned by the usual form of
lecturing.”
“Probably the most engaging aspect of the simulation for our group was the
competitiveness. We practiced the Single Player Version thoroughly, and mastered every
aspect of it. We were excited to begin playing against other teams.”
“We learned that in order to be number one in the world you have to: predict what your
competitors are going to do, use all of the data and information provided in the program,
play offline to test decisions, develop a strategy, and have excellent team dynamics.”
“The MikesBikes’ learning experience was enjoyable for all because we were
enthusiastic and out team was very successful. For each of us, this was our first
comprehensive introduction to many business management concepts. Each time we
faced a difficult decision, we would discuss it among ourselves with each person having a
different perspective, creating a very educational environment. This environment
certainly contributed to a personal, long term understanding of the business principles
and our team’s business success.”
“…a unique opportunity to learn many essential business skills.”
“Our group developed a new vocabulary that incorporated common business terms that
most of us had not used previous to this experience. We learned how to read and
understand financial reports allowing us to determine what areas interact and how to
balance the effects of decisions. We were able to learn hot to pick out the important
variables in business reports to examine our results in comparison to other teams.”
General Advice
“It is now very clear to us that you cannot run a business half-heartedly. Clear, good
decisions cannot be made at the last minute; time and energy must be put into every
decision in order to do well in the business world.”
“One of the most important lessons learned was never to assume you’ve won before the
simulation is over. We possessed the highest shareholder value for all rollovers except
the final round. Our placement dropped to fourth in the final round as a result of poor
allocation of funds due to the assumption that we couldn’t be beat.”
“When the simulation began, we felt confident in our team’s vision, goals, and strategic
plan. After the first rollover, we quickly became aware that the success of a company
relies heavily on the dynamics of the market. The strategic decisions of competitors
weigh heavily on the overall direction of a company. Our original plan quickly became
obsolete in the tumultuous bike industry, and we were forced to re-evaluate our
competitive positioning. To this end, we learned that continuous adjustment and
adaptation are required elements for a successful business.”
“Deviations from the initial strategic plan were necessary as a result of changing market
dynamics…”
“We learned that it is very important to understand all the components of a company and
the effects of every individual decision. Whether the decision concerns batch size or
investor public relations, every component is critical and should not be left unexplored.”
Playing Offline
“Playing offline in the MikesBikes program was very important to test decisions. We
were able to try out decisions to see how well it worked and make the necessary changes
to get the best outcome.”
“[We] strongly emphasize the use of both offline simulations and the player’s manual in
order to [be] more competitive.”
“When starting to familiarize oneself with the MikesBikes program, it is easy to assume
that expertise with the software would be more important than actual business savvy.
The offline rollback option allows a player to gain valuable insight into the intricacies of
the simulation through multiple iterations. We noticed as we progressed with these trials
that distinct business principles and strategies began emerging. The decisions we made
in accounting, sales, operations, management, and marketing were all intricately
connected. This connection followed definite trends which responded to sets of unified
decisions that constituted a particular strategy or plan of attack. As such, it is hard to
identify single decisions as being the catalyst for success over a given rollover year.”
“Overall, the most important lessons we learned were to keep focused in terms of
production and marketing, to take note of the moves of the competition, and to do offline
rollovers!!”
Perceptual Maps
“We discovered that one of the keys to market domination was to continually modify the
bikes to remain in the center of the perceptual maps for each market segment. We were
successful at doing this for our kids’ bike; however we attempted to do this with our
adventure bike too late in the game, and therefore did not have a chance to get the desired
results.”
“We discovered the perceptual map was essential. We learned to continuously modify
the specifications on our products in order to stay in the centre of the perceptual map.
During the beginning of the game, many of our competitors bikes were out of range and
thus, a lot their resources were wasted because of it.”
Advertising
“In the early rollovers, our team had difficulty with advertising and quality. We were
well below the competition in both of these aspects, which hurt our sales. After analysis
of what the competition was doing in these aspects of the game, and looking at the
sections of the Help Files, we were able to determine the amount that should be put into
these decisions. This allowed us to remain competitive for second place.”
“Through out the entire simulation we spent a lot on advertising and brand recognition.
This did not help us though as our quality was so low that advertising could not make up
for our poor reputation.”
Competitive Analysis
“A critical insight gained from our experience with MikesBikes is the importance of
detailed competitive analysis. We were very focused on our own goals, and consequently
did not consider previous or potential actions of our competitors. We now realize that as
a successful entrepreneur, one must be able to accurately predict the actions of
competitors, and apply strategy accordingly.”
“Learning how to analyze and understand the competitors is essential.”
Retail Margins
“The importance of proper retail sales margins was a huge factor in profit potential.
There was an optimum value for retail sales margins that greatly affected our profits once
implemented.”
New Product Development
“The severe consequences resulting from a failed development project were experienced
first hand by our group. This was a very important lesson in the sense that, even the
slightest oversight – if it occurs at a crucial stage – can cost a company an opportunity to
develop to their full potential.”
“Continually innovating with respect to product development is a must. We modified our
bikes on each rollover and this allowed the product specifications of the bikes to be
maximized and it drove down the prime unit cost over time. It is important to decrease
inventories when using this strategy so that old product write-offs can be minimized.”
Operational Decision-Making
“We felt confident about our marketing and product development skill sets. However, it
became apparent that we had a weakness in operational and financial decision-making.
Without these fundamental skills, we were unable to achieve our original goals.”
“The operational decisions were important to ensure that our production procedures
performed as efficiently as possible and accurately met the specific demands of each
market. Increased production efficiency resulted in greater capacity and profits. Also,
accurately meeting demand without over producing meant that the optimum numbers of
bikes were sold while avoiding costly idle time and inventory storage.”
“For several rollovers, our plant capacity was too small. This meant that we had
produced and sold all the bikes that we made. Had we had a higher plant capacity and
number of workers, we would have been able to produce more and sell more, increasing
our profits.”
“In manufacturing alone, there are a huge number of variables that need to be adjusted to
achieve optimum levels of production and quality. The number of workers and plant size
is simple enough to calculate; however, manufacturing processes become much more
complicated. Determining what batch size was needed, how much setup time needed to
be reduced, or how much raw material inventory was needed were new concepts to learn
about and consider.”
“Minimize idle time because it decreases production efficiency and increases
manufacturing costs. Idle time can be extremely difficult to get rid of because this is one
area where the offline rollover does a poor job of helping.”
“Large investments in quality systems technology coupled with a moderate inspection
rate allowed us to attain a high quality index.”
Strategy
“We learned that there is a big difference between setting out plans and trying to actually
carry them out. Although our group had a good strategy of operating in high quality,
high price markets, we had to adapt to compete.”
A lesson to take from this simulation is that it is important to get into undeveloped
markets early and capitalize on the lack of competitors because it is very difficult to gain
a share of an already established market.”
“Our team learned that if you do not have a solid strategy mapped out at the beginning of
the simulation, then there is no way that you can do well.”
“The simulation showed us that being the first to enter a particular market does not
necessarily guarantee that you can keep the edge and stay ahead of your competitors.”
Using Available Data
“We found it was extremely important to use the available data to research the market
and the various indices to figure out where the saturation points were. This allowed our
team to plan ahead and effectively invest money to increase quality and promote our
products and company.”
Finance
“Understanding the basic financial statements was important, especially in the initial
rollovers. Looking at the cash flow and profit and loss statements enabled us to watch
our spending very carefully.”
“One of our most difficult issues was that we acquired two emergency loans early on in
the game and were in debt. This meant that we were paying a lot of interest in each
round. It was a struggle to succeed when we were already so far behind.”
“A major step that we learned in running a successful venture was the interpretation of
financial statements. Fully understand all these documents. It helps to improve your
business, to improve against the competition and even get an understanding of what your
competition is trying to achieve.”
“[Our] main weakness…involved financing procedures. We had no clearly defined
strategy for investment decisions. This likely inhibited our final shareholder value.
Generating more cash flow during the early stages of development may have helped us
take over the market segment before other companies had a chance. As well, paying off
debt and issuing dividends may have increased shareholder value during the final periods
of the simulations.”
“A major downfall of our team was a lack of knowledge regarding the finance decisions.
None of our team members had a solid understanding of the principles behind the equity
section, and how changes to this section would affect our business. In retrospect, what
should have been done was to sell shares early on in the game to raise money to start up
and expand our company.”
“The early rollovers taught us the importance of selling shares of one’s company to
increase available capital. Our main competitor did this in their first rollover and we saw
their company’s share price skyrocket. They had more money initially to invest in
advertising, production and development and this provided them a competitive advantage
that kept them ahead of the rest of the world for the remainder of the simulation.”
Team Meetings
“The interdependence of each category (i.e. Operations, Finance, Marketing, etc.)
required decisions that took many factors into account. Thus, it is wise for the group as a
whole to make decisions for the company rather than leaving a single person responsible
for one category.”
“Our team meetings were used to review and analyze the results from the previous
rollover, discuss the next steps and subsequently input them into the program. They
generally lased up to two hours and tool place the day of the rollover. In order to develop
a degree of consistency and primarily to limit confusion and/or error, we had a designated
computer person who was responsible for inputting and changing program values as well
as a scribe who kept a log of what decisions and changes were made at each meeting.”
“Our group found communication between members and working as a team is essential.
By brainstorming together and debating possible courses of action, all perspectives were
considered and everyone had an input on the decisions being made. This can be applied
in the real world where companies have to possess both elements of risk takers and
grounded people who think things through to achieve a productive and successful
balance.”