Bus 294


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Bus 294

  1. 1. Bus 294 MANAGEMENT BUSINESS SIMULATION COMPETITION INTERNATIONAL COLLEGIATE BUSINESS STRATEGY COMPETITION JOIN THE WINNING TEAMS San Diego, April 14-16, 2005 Instructor: Dr. El-Shaieb Spring 2005 On-Campus MBA The college pays for team registration, travel and accommodations in San Diego, etc. The course ends on Sat., April 16 Office: BT 650 H Office Hours : Call or E-mail for appointment Tel. 408-924-3551 Fax. 408-924-3555 E-mail: elshaieb_a@cob.sjsu.edu Alternative E-mail: abdel39@verizon.net This is what our teams achieved in the competition in 2004 The College of Business team scored two major wins in the 40th Annual ICBSC. The ICBSC was held this year in San Diego from April 15-17, 2004. The competition started with the remote phase in January. Then the competition moved to San Diego for the intensive phase. Our on-campus MBA team, LokateMe, Inc., consisting of Monika Erande, Ruchi Kasliwal, Artie Kaushik, Chong Pin Lim, Gautam Mulchandani, and Hemanth Puttaswamy, won the first runner-up prize in their world and the best Business Plan and Annual Report prize in its world. A sample student reaction to the competition On behalf of everyone on my team, SparTek, I wanted to let you know that we are really excited that we were able to participate in, let alone win first place, in the ICBPC. In all honesty, we could not have done it with out Abdel's continued support and help. We also really appreciate your time early on in helping us get organized and develop our strategy. All of us on the team are going to take the gigantic marble statue, I mean trophy, to our classes over the next two weeks and talk about this experience, the class and how rewarding it was. Also, I spoke to Lee Jerrel and I specifically mentioned that this was one of the best experiences we all had so far in the program and that SJSU should continue to support this competition. The learning experience as
  2. 2. well as the recognition have brought about and will continue to establish a lot of positive awareness to the SJSU Business Program and the ICBSC. Ramin Sayar The Trophies Almost all the trophies in the "Trophy Case" for the College are from our teams that won in this competition. The Trophy case is located at the west entrance of the first floor of the Business Classroom Building. THE BENEFITS FOR THE PARTICIPATING STUDENT The benefits include: The "single most rewarding experience in my entire college career;" Hands-on, actually "running" a corporation; Feeling the synergy of the team experience; Bringing together functional academic concepts resulting in integrated, applied management; The taste of battle with, at times, stirring success, or, at times, stunning failure-at least in the perspective of the moment. The team manages a manufacturing company competing directly against 5 other teams (companies) in its industry. The team members assume roles as the firm's top executives, responsible for key strategic and operational decisions in marketing, financing, and production. Eight quarters of historical data are provided as the starting position wherein all teams are identical; then, 20 sets of quarterly decisions are submitted for operations over a simulated period of five years. Each team is responsible for a Strategic Business Plan an Annual Report, a Management Report to Directors, and one formal oral presentation to judges (who are senior business executives) sitting as the company's Board of Directors. Team members typically learn firsthand how a group effort can result in synergy and enthusiasm. Participants say the experience is the most rewarding of their educational career. The purpose of this course Most of the courses in MBA programs serve a specific business function such as accounting, finance, international business, marketing, management, etc. Few courses attempt to integrate all of these functional areas. This course attempts to integrate most of these functional areas in the following ways: I. Product Development: Each team should think of a product to make and sell. This will allow you to translate some of your ideas for new products that may have thought of into reality. The team must also think of new models (modifications of that product) that may be introduced in the future. II. Research and Development: How much to spend on R&D in order to develop new models? When do you introduce new models and their impact on sales, prices, etc?
  3. 3. III. Marketing: In this course you are asked to call on the information in your marketing and economics courses to develop a marketing strategy. This strategy will include analysis of price changes, salespeople hiring, retention, firing, commissions and salaries, changes in the GDP, CPI and other economic indices. You could also buy market surveys, which may help you determine customer preferences, etc. IV. International Business: The company you are managing is operating in a foreign country with all the problems of importing and exporting products such as tariffs, currency fluctuations, GDP fluctuations, inflation, recession, etc. V. Operations Management: When do you build a new plant or expand an existing one? When to open a manufacturing plant in a foreign country? How productive are the employees (the learning curve!!)? How much to ship from the plants to the various markets? VI. Accounting: A detailed income statement allows you to examine each cost element and its contribution to the bottom line. It allows you to examine the cost of goods sold (CGS) to determine the gross profit. It also allows you to analyze the effects of the selling and administrative expenses in order to determine their effect on the bottom line. VII. Finance: A consolidated cash flow worksheet and balance sheet allows you to analyze the various capital expenditures in order to determine the final cash balance. This leads to the determination of the forms of acquiring cash; issuing stock, bonds, loans, etc. All of this may be complicated by fluctuations in the foreign exchange rates and any regulations the foreign country may impose on the flow of cash to the corporate HQ. VIII. All of these components are integrated allowing you to see the impact of any changes of the decisions you make on the operation of the company. IX. Teamwork: (you will be working mainly in teams in this course). The only way to run a complex enterprise such as this one effectively is to work in teams. An effective team organization requires that the team members work effectively together. Team coordination is essential to the success of the team. Improving team dynamics with the objective of attaining cohesiveness leading to successful analysis of information, making good decisions and implementing them within a very short time period. X. Business Plan: In this course you are provided with a set of historical data (three years) in order to develop a business plan. Then you will be able to compare the actual performance of your company with the plan. This includes formulation of mission, objectives and strategy with the opportunity for implementation leading to the realization of the objectives. XI. Managing a manufacturing company with domestic and international subsidiaries in a dynamic interactive environment. XII. Successful integration of the functional areas (marketing,
  4. 4. operations sales and finance). This simulation has been used effectively in International Competitions with excellent results for almost forty years. Our teams in these competitions have performed exceptionally well for the past few years. Our Off-Campus Spring 2003 MBA team won the grand prize in its world running away from the competition. Our On-Campus Spring 2003 MBA team won the first runner-up prize in its world. Our On-Campus Spring 2004 MBA team won the first runner-up prize in its world. The unfortunate problem with computerized business simulations is the emotional attachment to the decisions and the results. If you are running a simulation, you invest so much time in making your decisions, and the results are instantaneous. If the results are not favorable, you are immediately disappointed. You must read the players manual carefully before embarking on making decisions. The emphasis in these types of courses is on learning first and actual performance second. I have seen teams that did everything correctly (correct strategy and execution), but did not do well in the simulation. REQUIRED TEXT: Cotter, R. and Fritzsche, D., The Business Policy Game: An International Simulation, Player's Manual; 2002, 5th ed. The Players Program and the Players manual must be downloaded from www.eskimo.com/~bpg (case is important). Click on the player's area. The user Name is player and the password is swb30oss Deliverables (Team): Think of a consumer product ($10 wholesale), think of 6 or 7 upgrades or models. Company name (as soon as you decide on the product, it will easy to decide on the company name). Strategic Business Plan (SBP) after year three run of the real simulation, Years 1, 2 &3. The SBP will be based on the historical data for years 1, 2 & 3. Must be mailed to San Diego before March 7, 2005. Annual report (covers year4 of the simulation to be delivered as soon as we arrive in San Diego on April 14). This should follow an annual report of a multi-national manufacturing company. Team Organization: A successful team must be organized to meet the challenges of running a multi-national manufacturing company competing in a dynamic environment.
  5. 5. Here are recommendations for position titles and responsibilities: VP Marketing and VP Sales; (sales, forecasting), pricing, Advertising, salesmen (hire, transfer, salary, commissions), introducing new models, Quality (along with VP Production). VP Production: Plant capacity, units made, costs, training and the effects of the learning curve, Quality (along with VP Marketing). VP Finance: how much does all of that cost, $ to invest in new plant, international currency transactions, etc. VP, MIS; Help with the spreadsheets and monitor the Competition. Could provide support for other VPs. President: responsible for communications, etc. Provides help where needed. The team first action is to learn how to use the spreadsheets. They are available in the Templates sub-directory in the Players directory. Team members should complete the sales forecast, production and finance templates in that order to take advantage of the linkage. Macros are included which will move the entries down one quarter upon executing the macro. Thus the entries for the second quarter become entries for the current quarter after running the macro. After shifting the three quarters down, teams may tweak their figures and enter new data for the fourth quarter to complete their planning year. By including macros, users will encounter a warning message that the file contains macros. The macros are safe and should be loaded. The files are archived in a zip file, which may be unpacked using any one of the popular zip programs. GENERAL NOTES: Bankruptcy is possible. This usually occurs simply because of "dumb mistakes" by a firm’s management, or, rarely, by extremely good play of one firm coupled with extremely poor play on the part of the bankrupt firm. Thus, it is appropriate to note that "management’s first concern is with consistency among decisions, and with avoiding outright mistakes. When these concerns are satisfied, it is soon enough to focus on performance." The Game Administrator will always keep your firm solvent by infusing sufficient cash as an "emergency bank loan" at high interest rates. If an "emergency bank loan" occurs, the Company MUST raise that amount of money by selling stock, bonds, or assets in the very next quarter! R&D and advertising: Large step increases in R&D or advertising expenditures take several periods to become fully effective. Large step decreases are effective (with adverse effect) immediately. Concerning elasticity of marketing mix factors: the marketing mix factors that you are able to control are advertising dollars, size of sales force, sales commissions, sales salaries, product model & quality level, price, and
  6. 6. distribution. You need to determine the elasticity of each of these mix factors in order to tell which is most effective for your firm. There is no limit on how many dollars your firm can spend on marketing; however, know that additional spending does have a point of diminishing return of (or even negative) effectiveness (the S curve). LAPTOP COMPUTER and PRINTER: The team will need, at least one (or more if possible) laptop computer(s) for running the players Program and a printer for printing the reports. Top