This document provides an overview and introduction to a business simulation. Students will manage various areas of a sensor company including R&D, marketing, production, and finance. The simulation compresses one year into each round and allows students to test strategies. Students will be graded based on metrics like profitability, stock price, and market share. The document explains the industry context and competitive environment that students will operate their companies within.

1. Welcome to the Foundation®
Business Simulation

2. School: Bloomsburg University
Professor: Dr. Lam Nguyen
Class: MGMT 481-Business Policy

3. Objectives
Demonstrate effectiveness of multi-discipline teams working together.
Use strategic thinking.
Test your business acumen.
Understand overall interaction and impact of various parts of a
business on one another.
Grow the awareness of competition.
Take away practical know-how to improve the effectiveness of your
business.

4. Why Simulate?
Risk Free
View Alternative Strategies
Enjoyable
Compresses Time (1 Round=1Year)
Selectivity <=> Integration

5. SENSOR
INDUSTRY
OVERVIEW

6. The Marketplace
 Customers (OEMs) need sensors
for their products
 Initially one segment, now
breaking into two
Low Tech
 Very different customer demands
developing between the segments
High Tech  Diversification in the use and
utility of the sensors

7. The Marketplace
 In our industry we track the
Low
changing customer demand on a
Tech
perceptual map
High
Tech
 Over 8 years customers will
demand much faster and smaller
sensors
 Market Segments will
continue to diverge

8. Low Tech Customers
 “I want these sensors to be cheap” You’re
not giving me
what I want
 “I want them to have been around
for a while – no Beta Testing!”
 “They have to be moderately
reliable.”
 “The technology doesn’t have to be
cutting edge.”

9. High Tech Customers
 “These sensors have to be small, like
micro, and fast” And I’m not
getting what I
want!
 “I need them to be right out of R&D,
I’m talking ZERO years on the market”
 “I’m willing to pay more to get what I
want.”
 “I like a pretty high reliability.”

10. SENSOR INDUSTRY ANALYST PROJECT ONGOING GROWTH
Sees the next 8 years as consistent growth. All market
segments increase at a nice “clip,” according to market analyst.
“I see the entire market growing Sensor Industry
at around 14% or 15% per year. 12000
The High Tech market alone will
10000
be growing at a whopping
20%.” 8000
6000
I hope those companies out
4000
there are ready for that kind of
expansion!” 2000
0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Low Tech High Tech

11. COMPANY
OVERVIEW

12. SEC ANNOUNCES BREAKUP OF MONOPOLY
FOR IMMEDIATE RELEASE
The SEC, took dramatic action today by breaking up
the monolithic corporation Sensors, Inc.
In a statement to the press, the SEC outlined the
reason and the outcome of this move.
“We cannot allow monopolies of this sort to impact an
entire industry! The customers that utilize these
sensors are being held hostage.”
“Effective immediately Sensors, Inc will be dissolved
into the Andrews, Baldwin, Chester, Digby, Erie and
Ferris companies.”

13. The Competition
$40 Million in Sales
1 Product Line
2 Segments
Closed Marketplace
6 Companies
Andrews Digby
Baldwin Erie
Chester Ferris

14. SHAKE UP IN SENSOR INDUSTRY: Company Fires Management Team!!!!
After poor results, lackluster sales and angry
customer reports, the Chairman of the Board of
Directors has announced the immediate
termination of the Management Team.
“This is a black day for our company,” said
Chairman Dr. Lam Nguyen, “We need to hire a
dynamic leadership group that will be able to
take this company into the future!”
“Due to this immediate need I have hired the
Dream Team to start on January 1st. I expect to
see great things from this Executive Team!

15. Welcome To
Your New
Company

16. Students need to coordinate strategy and tactics across the following areas of
their company:

17. Establish the specification of the
products to meet customer demand R&D
Build the quality and reliability
(MTBF) into the products
“Our products
are not well
Ensure the perceived age of the positioned in
product meets customer demands the marketplace.”
Create new products to meet the
changing marketplace

18. Marketing Set the price of our products in the
marketplace
Build customer awareness through
“Our products
are not priced
promotion
optimally.
Establish a sales force and
And many of our
customers don’t
distribution channels
even know our
product exists.” Set the sales forecast for our
products
Set Credit Policies AR/AP

19. Purchase machinery to automate
our facilities Production
Buy or sell capacity of product
lines “We are paying
too much for
labor costs.
Schedule production for each line
Very soon we
Manage the majority of the will run out
of capacity to
companies fixed assets meet demand.”
Establish your workforce
complement

20. Finance Acquire capital to fund capital
expansions
•Issue Stock
“We have poor
cash flow and
•Short Term Debt
substandard •Issue Long Term Bonds
financial ratios.
We have no
Issue dividend to our shareholders
financial policy
statement.” Balance our debt portfolio
Manage our Proformas

21. Proformas
A great management tool driven by forecasts and
projections. Allows “What if” Scenarios by the company.
Balance Sheet
Profit & Loss
Cash Flow
Financial Ratios

22. Scoring Methods

23. Success Measures:
oBalanced Scorecard
oROE
oROS
oROA
oCumulative Profit
oStock Price
oMarket Capitalization
oAsset Turnover
oMarket Share
oWeight each selection

25. Analyst Report

27. Running your Company

28. Things to do on an Annual Basis
Establish business strategy for your company
Analyze Foundation FastTrack to see industry results
Make tactical decisions across each functional area (aligned to
strategy!)
Upload official results and confirm on the website
Await results when Professor processes
Rejoice in your superior capitalistic acumen
Begin the process again by confirming alignment of your results
with your company’s strategic goal.

29. Good Luck and Enjoy!