Business Simulation Seminar
Introduction to the Simulation
Business Simulation
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The worst day you will ever have in
business is when you have to fire
someone due to your fault.
In simulations, only electrons, not
people. Learn.
In class, I will use your mistakes as
examples in front of your
competition. Everyone learns.
The Industry
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Electronic sensor industry
Sell the sensors to OEMs (original
equipment manufacturers)
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Put your sensors in their products
Sensor Industry Market Segments
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Traditional
Low End
High End
Performance
Size
Customer Needs
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Customers evaluate the product on
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Positioning (size and performance)
Reliability
Age
Price
These needs differ for each segment
Perceptual Map
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Graphically shows market needs
Can be used to position products
Capstone perceptual map
NOTE: it is absolutely critical to
your success to understand the
perceptual map. If you do not,
you will fail. If you have
questions, ASK!
Your Business
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Formed when a monopoly was
broken up
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All companies start the same
Four main functional areas
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R&D
Marketing
Production
Finance
Simulation – Six Basic Strategies
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Broad cost leader
Broad differentiator
Niche Cost Leader (low tech)
Niche differentiator (high tech)
Cost leader with product life cycle
focus
Differentiator with product life cycle
focus
R&D
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Controls the product line
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Customers concerned with
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Currently 5 models, can grow to 8
Size – weight and size
Performance – how fast it is
Reliability – how long it lasts before failure
Age – how long it has been available
The bigger the change in the product the
longer it takes to develop it
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New sensors take more than a year
Marketing
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Manages
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Price
Promotion budget
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Sales budget
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100% awareness means that all
customers know about your product
100% accessibility means that every
customer can locate your product
Bigger budgets mean more sales
Production
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Each product has own manufacturing
line
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Two shift capacity for each line
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Need to schedule production run for year
Can buy new capacity year in advance
Second shift has 50% higher labor costs
Each line has automation rating
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Automation is expensive but replaces
workers
The higher the automation, the longer
the R&D
Finance
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Ensures all activities are funded
Sources of funds
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Stock
Bonds
Current debt – bank loans
Declares dividends
Retires stock
Retires bonds
Getting Started
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Team building activity
Assign people to corporations
Group Assignment
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Assign groups
Groups should
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Determine operating logistics
Read strategies in the Guide
Create a mission and strategy
Write a press release
Upload press release to website
The Website
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Steps to register
Navigate the site
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Intro/Getting Started
Homework
Guide
Capstone simulation