MBA INTEGRATION
SIMULATION
INTOPIA
WHY SIMULATION?
• ARTIFICIAL REALITY INVOLVING LIFELIKE DYNAMICS OF THE COMPETITION
AND MARKETPLACE
• A VEHICLE FOR UNDERSTANDING
MANAGEMENT PRINCIPLES
• AN EXERCISE IN ENTREPRENEURSHIP,
TEAM WORK, TOP MANAGEMENT,
STRATEGIC ALLIANCES, AND
INTERNATIONALIZATION
• A CHANCE TO RUN A BUSINESS
KEY OBJECTIVES
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OBJECTIVES-STRATEGY-IMPLEMENTATION
ENVIRONMENT SCANNING
DECISION-MAKING UNDER UNCERTAINTY.
INTERFUNCTIONAL COORDINATION
NEGOTIATION SKILLS
SURPRISE & CRISIS MANAGEMENT
HQ-SUBSIDIARY RELATIONSHIPS
UPPER-MANAGEMENT TEAM DYNAMICS
WHAT IS IT?
• IN AN ARTIFICIAL WORLD OF INTOPIA
THERE ARE THREE MARKETS: THE US, EU,
AND BRAZIL.
• THE ONLY INDUSTRY THAT EXISTS IS THE
PERSONAL COMPUTER/CHIPS INDUSTRY.
• EACH MBA TEAM RUNS AN INDEPENDENT
COMPANY IN THAT INDUSTRY.
• EACH COMPANY IS REGISTERED IN
LIECHTENSTEIN, A TAX HAVEN COUNTRY.
• EACH SUBSIDIARY IS AN INDEPENDENT
LEGAL ENTITY IN THE MARKET.
FINANCE
• EACH COMPANY STARTS FROM SCRATCH
WITH INITIAL CAPITALIZATION OF 20M SF.
• COMPANIES CAN CHOOSE TO INVEST IN
PLANTS TO MANUFACTURE CHIPS OR PCS OR
BOTH IN EACH MARKET.
• CAPITAL NEEDS COULD DICTATE A NEED FOR
LONG-TERM LOANS.
• BEING A GLOBAL COMPANY, OPERATIONS ARE
IN FOUR DIFFERENT CURRENCIES.
• SHORT-TERM LOANS ARE ALSO AVAILABLE.
ORGANIZATIONAL
BEHAVIOR
• THE GAME DOES NOT DIRECTLY INVOLVE
BEHAVIORAL ASPECTS OF MANAGING STAFF
AND LABOR.
• HOWEVER, THE TOP-MANAGEMENT TEAM IS
COMPRISED OF 3-5 MEMBERS.
• TEAM MEMBERS CAN TAKE DIFFERENT
FUNCTIONAL RESPONSIBILTIES AND CREATE
AN ORGANIZATIONAL STRUCTURE.
• WATCH FOR THE INTRA-TEAM AND INTERTEAM DYNAMICS.
PRODUCTION
• CHIPS ARE AN INPUT FOR PCS. THERE IS A
KNOWN RATIO OF INPUT TO OUTPUT.
• CHIPS CAN BE PRODUCED IN-HOUSE OR
PURCHASED FROM OTHER COMPANIES.
• CAN HAVE UPTO 3 PLANTS FOR EACH
PRODUCT IN EACH MARKET--THERE ARE
ECONOMIES OF SCALE.
• PLANT CAPACITY IS FIXED.
• PLANTS BECOME OLD; NEED MAINTENANCE.
LOGISTICS
• PLANTS TAKE ONE PERIOD TO BUILD.
• PRODUCTION OF EACH PLANT FOR EACH
PERIOD MUST GO INTO INVENTORY FOR
SALE IN THE SUBSEQUENT PERIOD.
• INTER-COMPANY SALES OR INTRACOMPANY SALES ACROSS MARKETS TAKE
A PERIOD IF SURFACE SHIPPED.
• AIR SHIPMENTS MATERIALIZE IN THE
SAME PERIOD.
ACCOUNTING
• WHEN YOU SELL, YOU DON’T RECEIVE
TOTAL PROCEEDS IN THE PERIOD OF
SALE.
• LIKEWISE, WHEN YOU INCUR EXPENSES,
YOU DON’T PAY FULLY IN THE PERIOD OF
PURCHASE.
• THERE ARE SOME EXCEPTIONS, ESP. IN
INTER-COMPANY SALES/PURCHASE.
• EACH SUBSIDIARY REPORTS IN ITS LOCAL
CURRENCY, WITH CONSOLIDATED
STATEMENTS PRESENTED AT HQ IN SF.
MARKETING
• BOTH CHIPS AND PCS CAN BE SOLD IN
ANY MARKET.
• EXPORTS AND IMPORTS ARE POSSIBLE.
• OBVIOUSLY, THERE IS A LARGER
CONSUMER MARKET FOR PCS THAN
CHIPS.
• MARKET SHARE MAY BE A FUNCTION OF
PRICE, PRODUCT, DISTRIBUTION, AND
PROMOTION.
R&D
• EACH COMPANY STARTS WITH GRADE
ZERO FOR CHIPS AND PCS.
• THEY CAN UPGRADE TO A HIGHER-GRADE
PRODUCT THROUGH R&D.
• COMPANIES CAN UPGRADE TO GRADE 9
AT THE MOST.
MARKET INTELLIGENCE
• SUBSTANTIAL AMOUNT OF MARKET
INTELLIGENCE IS AVAILABLE FOR
PURCHASE.
• IT TAKES A PERIOD TO ORDER
CONSULTING SERVICES OR REPORTS.
• YOU CAN ONLY PURCHASE UPTO 6 PIECES
OF INFORMATION IN ANY PERIOD, SO
PLAN AHEAD.
WHAT IS MY ROLE?
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HUMBLE GAME ADMINISTRATOR
GOVERNMENT OF EACH MARKET
TAX AUTHORITY OF EACH MARKET
BANKER & INSURER
LABOR & TRADE REPRESENTATIVE
JUDICIAL AUTHORITY & ARBITRATOR
CONSULTANT
LOGISTICS OF THE GAME!
• READ THE INTOPIA EXECUTIVE GUIDE.
• BECOME FAMILIAR WITH THE INTOPIA
WORLD.
• PREPARE A PLAN FOR YOUR COMPANY:
DUE BY THE FOURTH WEEK.
• BE READY TO PLAY IN FIVE WEEKS.
• WILL PLAY SIX PERIODS IN FALL.
• AND SIX PERIODS IN SPRING.
• WILL WRAP-UP WITH A FINAL REPORT IN
THE CAPSTONE STRATEGY CLASS.
QUESTIONS?
SANJEEV AGARWAL
ASSOCIATE PROFESSOR
DEPARTMENT OF MARKETING
368C CARVER HALL
TEL: 515-294-9822
EMAIL: SAGARWAL@IASTATE.EDU