The document describes the Marketplace Live simulation, which allows participants to manage a simulated business. It discusses how participants are placed on business teams with different functional roles and must make strategic and tactical decisions each quarter. These decisions are input into the simulation along with competitors' decisions, and results are fed back. The goal is for participants to learn about all aspects of business management through running their simulated company. Key details provided include the initial capitalization, sources of funding, consequences of financial decisions, and performance evaluation using a balanced scorecard.

1. The Learning Strategy andThe Learning Strategy and
Mental Discipline ofMental Discipline of
Marketplace LiveMarketplace Live®®
January 23, 2017Copyrighted in its entirety, Innovative Learning Solutions,

2. I listen, I forget.
I see, I remember.
I do, I understand.
Old Chinese Proverb

3. Business simulations are a form of
combative training where
participants pit their business skills
against those of formidable
opponents under the watchful eye
of a training coach.

4. Please tell me
what it is?
It’s a snake.
It’s a
tree trunk.
It’s a sheet
of rawhide.
It’s a steel
tube.
When we study one discipline at a time, we are like a bunch
of blind people trying to understand what an elephant is.

5. It is an
Enterprise!
Accounting
Production
Marketing
Distribution
Finance
With marketing simulations, you can crawl all over and under the new
venture to help you to see and understand the whole thing.
Human
Resources

6. Joyce Russell
team work, human resources
Harry Bruce
leadership, governance
Jim Reeve
accounting, profit analysis
Sarah Gardial & Bob Woodruff
customer value
Jim Wansley
finance
Ernie Cadotte
marketing
Ken Gilbert
production processes
Ivan Slimak
brand design, quality processes
Tom Mentzer
supply chain
Dominique Garval
business strategy

7. Participants learn about all aspects of business by managing a
simulated business.
The Marketplace Live scenario follows the lifecycle of a new
product and new business.
Business decisions are introduced as they become relevant in the
evolution of the company.

8. Live and breathe strategic planning and
management in a rapidly changing
environment.
Develop leadership, teamwork and
interpersonal skills.
Promote better decision making by
learning to manage a totally
integrated company, including the
management of sales outlets,
marketing, production, and human
and financial resources.

9. Crystallize the financial
implications of business
decisions and how they flow
to bottom-line performance.
Facilitate learning of important
business concepts, principles
and ways of thinking.

10. Discover how important it is to
use market data and
competitive signals to adjust
the strategic
plan and more tightly focus
business tactics.

11. Learn what it takes to
start up and manage a
new venture.

12. Teams are placed in a
entrepreneurial scenario -
starting up and running a new
business venture.
The opposition is played out
by competing teams.

13. opponent
MarketBusiness Team opponent
opponent

14. Each team member assumes a tactical area
of responsibility:
Marketing // Finance // Distribution
Production // Overall Leadership

15. Business team receives information on current situation.
Current situation is evaluated, strategy formulated and tactics
set in place.
Tactical decisions are fed into the Marketplace Live simulator,
along with decisions of opponents.
Results of decisions are fed back to business team.

16. The business team can acquire
information on what is happening
in the marketplace:
– customer reaction to market
decisions
– competitor actions
Current situation is evaluated,
strategy formulated, and tactics set
in place.
Tactical decisions are again fed into
the Marketplace Live simulator.

17. You and your business
partners have decided to
enter the international
microcomputer industry.
The microcomputer
industry is in its
introductory stage of the
product life cycle.
Several other international new venture firms are
entering the market at the same time.

20. Q1: Organize the team, name the company, analyze market
information, establish strategic direction and set up shop
(design brands open a sales office and/or international web
center, and build a factory).
Q2: Test-market brands, prices, ad copies, media campaigns,
sales staffing, and internet tactics. Determine compensation
package for employees and production schedule for each
brand.

21. Q3: Study end user feedback,
competitive tactics, employee
productivity, factory operations,
and financial performance and
adjust strategy.

22. Q4: Perform a comprehensive strategic analysis and prepare
a business plan. Present strategic analysis, business plan, and
financial request to venture capitalists.
Q4 – Q6: Initiate international roll-out campaign.

23. End of Game - Prepare report
to the Board regarding:
• performance since presentation
of Business Plan
• deviations from plan
• justification for departures
• strategic analysis of
current situation
• plan for future

24. The initial capitalization is $4M which is being invested by the
executive team over the first 3 quarters; $2M in Q1 and $1M in Q2
and Q3.
The executive team owns 100% of the company.
Forty thousand shares of stock will be issued to the executive team
in exchange for their $4M. The initial stock value is
$100/share.

25. At the start of Q4, the executive team will have
the opportunity to request up to $4M from
venture capitalists.
The venture capitalists will expect a strategic
plan for the second year in business, including:
strategic analysis of the current situation
strategy: goals // priorities // strategic thrusts
tactical plan: geographic expansion // R&D
plant expansion // etc.
pro forma financial statements through Q6

26. The bank will extend a line of credit
to the executive team equal to one
and a half times the firm's equity
position in the previous quarter.
The bank is highly risk adverse and
will call in your loan in part or whole
if your debt capacity declines due to
unusual or extended losses.

27. The bank is intolerant of poor financial management.
If a firm ends a quarter
with a negative cash
position, the bank will
contact a loan shark to
obtain an emergency
loan to cover the firm's
checking account.

28. The Loan Shark requires repayment
in the next quarter.
The emergency loan interest rate is
a sliding scale which begins at
10% per quarter and may go as
high as 25% per quarter.
For each $100 which the loan shark places in your
checking account, he will take one share of stock in
your firm.
The issuing of stock to the loan shark causes a dilution of
your stock value and your share of the company.

29. A firm is technically bankrupt if its cumulative losses exceed its
equity investment.
Bankruptcy occurs when the
sum of retained earnings and
the common and preferred
stock is a negative number.
Stated differently, the
management has used up all
of the equity of the firm
when the negative value of
the retained earnings
exceeds the value of the
common stock.

30. Strategic thinking and tactical execution
Balanced Scorecard for quarters 3 through 6
Executive Briefings // Business Plan // Report to Board
How well the company is prepared for the future