MANAGEMENT BUSINESS SIMULATION COMPETITION
INTERNATIONAL COLLEGIATE BUSINESS STRATEGY
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
The course ends on Sat., April 16
Office: BT 650 H
Office Hours : Call or E-mail for appointment
Alternative E-mail: firstname.lastname@example.org
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
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.
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
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?
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,
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
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,
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
You must read the players manual carefully before embarking on making
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
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
Think of a consumer product ($10 wholesale), think of 6 or 7 upgrades or
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.
A successful team must be organized to meet the challenges of running a
multi-national manufacturing company competing in a dynamic environment.
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
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.
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
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
(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.