The document discusses the strategies and decision-making process of a company playing a business simulation game over 9 periods, focusing on being the first mover in the emerging Vodie market, setting objectives to dominate specific segments, and balancing budgets to fund R&D, production, and marketing while maintaining stock performance and market share leadership. Key lessons highlighted include benefits of early market entry, importance of long-term strategies and goals, need for flexibility, and budget management challenges of running a large diversified business.

1. BUSINESS
GAME
-Using Markstrat Program-
1

2. Performance Analysis
Game Strategy
Decision-making Process
Lessons Earned
2

3. 1 PERFORMANCE ANALYSIS
3

4. Stock ~20000
in P9
We always lead the market
throughout 9 periods
Right strategy at the
beginning helped us
move forward
2 special periods, we will discuss in next part
4

5. Market Share
Leading both markets, in a total of 54.8% market share
5

6. 2 Game Strategy
. .
6

7. General Strategy
o Focus differentiation:
 Each brand focuses 100% on one segment
 Eliminate the Buffs, just focus on Singles, Hiearners, Pros, Others
and Vodie market
 Conduct R&D at the right time to improve the products
o Have to be the first mover to Vodie market
o Ready to change
o Spend all the money in beginning to advertising  get brand
awareness
The more specific Objective and Strategy will be discussed in next part
– Decision Making –
7

8. 3 Decision-making process
8

9. Period 1
1. Analysis
o Cash is very important
o Use all of the budget to gain competitive advantages
o SYGU & SYCA already met the needs of Singles & High
earners – Focus on them
 One Brand focuses 100% on one Segment
o Prepare to the R&D project in P2 in order to be the first team
enters the Vodite market
9

10. Period 1
2. Decision Making
o No R&D in P1
o Marketing mix
– Production: based on market forecast, purchase intention &
market share
– Pricing: Based on conjoint analysis
– Advertising: One brand for one segment
– Advertising research: 10% of ads
10

11. 11

12. o Market research: Purchased all studies.
o Sales forces: Based on shopping habits study
12

13. Period 1
3. Results
13

14. 14

15. Over
1400
15

16. Period 2
1. Analysis
No team dominated
Pros and Others 16

17. 1 : 6 : 1 : 1 : 1
17

18. o Have enough cash to R&D vodite
o R&D for Vodite costly reduce budget for R&D for
Sonite
o Decide to go to Pros & Others in future
o Gain more market share
o Gain more cash
o Increase stock
18

19. Period 2
2. Decision Making
o R&D projects
 PSYG1 to improve SYGU and reduce cost
 PSYOT to introduce new product for others
 PVY11: new Vodite products
o Continously increase
 Production
 Ads budget & ads research
 Sales forces
o Perceptual objective: Power and Price (numbers based on
Semantic Analysis)
o Price: based on Semantic Analysis 19

20. Period 2 decisions
20

21. Period 2
3. Results
o More market share!
o PVY11 completed!
o R&D projects for Sonite hadn’t been completed (not
enough needed budget)
o Stock increased!
o More cash than others
21

22. ~2300
22

23. Competitive
advantage
23

24. Period 3
1. Analysis
24

25. oStrategy
– Release product for Pros to restrain budget of other teams
– Use money to boost sales and market shares.
25

26. Period 3
2. Decision Making
o R&D
– PSYG1: for singles, improve and reduce cost
– PSYTO: new products for others
– PSYPO: new product for Pros
26

27. Period 3
2. Decision Making
o Brand Portfolio
– SYGU: Singles
– SYCA: High-earner
– SYPO: new products for Pros ( based on same project
with SYCA )
– VYTO: first mover in Vodite market
27

28. Period 3
2. Decision Making
o Realize that we don’t need all the research studies
 Buy just what we need
o Continuously increase
– Production
– Advertising and advertising research
– Sales forces
28

29. 29

30. Period 3
3. Results
o Gain more market share: SYGU,SYCA
o Dominate Vodie market: VYTO
o Cannibalization: SYPO and SYCA (based on the same
project)
o But SYPO gain brand awareness
o Completed all R&D projects
o Stock increased! 3825
30

31. Period 4
1. Analysis
Team E dominated Pros
31

32. R&D for Vodite
32

33. o War against team E in segment Pros to keep them busy
o VYTO targeted to Early Adapters and Followers (high
potential growth)
o Need money to maintain growth  take loan
o More market share
o Keep competitors busy in Pros and Others
o Dominate Singles, Hieaners, Vodite
33

34. Period 4
2. Decision Making
o R&D
– PSYC1 to improve SYCA for High-earners
– PVY22 to reduce base-cost
34

35. Period 4
2. Decision Making
Brand portfolio
SYGU: Singles SYCA: High Earners
SYPO: Pros SYOO: Others
VYTO: Followers
VYAD: Adapters
35

36. Period 4
2. Decision Making
o Increase
– Production
– Ads & Ads research
– Sales
36

37. Period 4
3. Results
37

38. 38

39. o Good products 4873
o Strategy go well
o More market share
o Stock increased (well it always increased!!)
o Technical problems-we couldn’t take loan
– 1 vodite R&D project incompledted
– Lower brand awareness
39

40. Period 5
o Game will be play until Period 9
o Period 7 has the special event
o Growth too fast ???
40

41. Period 5
1. Analysis
o We controlled Sonite, but did not control Vodite
o Team I was rising in Vodite
o Not enough money for WAR
o Decide to take loan - 10mil
41

42. Period 5
2. Decision Making
o R&D
– PSYG2 for Singles
– PVY12 : reduce cost of Vodie products
42

43. Brand portfolio
SYGU: Singles SYCA: HiEarners
SYPO: Pros SYOO: Others
VYTO: Followers
VYAD: Adapters
43

44. o Marketing mix
44

45. Period 5
3. Results
• Capture more market share in Singles and Others, Vodite
• Market share decreased in Pros and Others
• Have a big loan to payback
• However, stock increased
• Total expenditure was too high 6474
45

46. 46

47. o Net contribution 119,640 --> Budget 35,450
o Net contribution 581,770 --> Budget 35,450
Whatttttt !?!?
47

48. Period 6
o We have to pay the loan of 10mil
o Manage many Brands  expense too much
o Period 7 is very important – Bonus based on % stock raise
o Our Brands for Pros and Others did not work well
o Our sale forces expenditure seemed to be too high
o Vodie market grow too fast and very potential  we have to
control it
48

49. Period 6
1. Analysis
E entered Vodie
market Risk 49

50. Followers segment could be bigger than Sonite in period 7 50

51. OK
51

52. HIGH
I’s product (Followers) is better than us, the only problem is their pricing strategy 52

53. The lost sales of our Brands  opportunity for other teams 53

54. Brand Awareness of I and U in Followers
segment were not high
54

55. Period 6
2. Decision-making
 Open 3 new brands in Vodie
o Focus on Vodie  Focus all Vodie Brands on Followers
 Withdraw the Others
o Give up the Sonite market  Reduce the volume of Singles,
Hiearners, Pros
o Win the Bonus in Period 7  Not purchase any Sonite research
Keep the Stock rise slightly in P.6
&
Have needed things to win the Bonus in P.7
55

56. Our decisions
Sonite market Reduce the production
 keep the Stock low
56

57. Our decisions Gain the Brand
Vodie market Awareness
57

58. Period 6
3. Results
Higher than what we want 58

59. Over
9500
We got the o Each Brand can produce maximum 2000K products
ADVANTAGE o The Followers size rises significantly
59

60. Period 7
1. Analysis
o The Vodie Analysis Tools have not worked well yet
 Other teams would have the problems like us in R&D
o We get the advantages in Vodie market
 dominate other teams
o Vodie market size would be over 12000 in Period 8 & we can run
maximum 5 brands
 come back to the Sonite market
60

61. Period 7
2. Decision-making
o Come back to Sonite market
o Limited budget we could
not spend more
Buy 4 studies for the Sonite market: Consumer survey, Consumer panel, Semantic Scale
and Market forecast 61

62. For Vodie
In good situation, we 5 Brands with the total of 7500
can get90%  6000<our sales<9000
market share
62

63. Period 7
3. Results Dominated the Vodie market
Come back and gain ~1/4 Sonite
Team O earn the benefit of our scarification in Sonite market 63

64. Period 7
3. Results
o Rank second in the events, got extra money
o A lot of lost sales in Sonite, if we produced
more, maybe we will win since almost
money team O gained from Singles
o Stock rise to over 13000
64

65. Period 8
1. Analysis
O entered Vodie market, they have lots of money and the strong base in Sonite 65

66. As what we forecasted, Followers in this period would be
over 12000  we have to share the Vodie market with
other teams…
66

67. Period 8
1. Analysis
o The estimate tools for Vodie is now OK
o Other teams spent a lot in R&D
o Our Sonite products is now worse than others
 We have to improve our Product
67

68. Period 8
2. Decision Making
o Take the loan of 4mil
o R&D
 PVYYY: with all the ideal characteristics for Followers, but
very high base cost
 PSYG3: Improve for Singles segment
 PSYHH: Improve for Hiearners
o Reduce the Sale forces
o Increase production in Sonite
68

69. Increase Production and Ads to take back the market share
69

70. Produce a total of 8000 products
6400<sales<9600 Restraint the market
70

71. Period 8
• Our Sonite grow from 23 to 34%
3. Results • O grow 0.7%
• Our intentional low production in Vodie gave
other teams some gifts
71

72. 72

73. Period 9
The Followers size of P8 is
1. Analysis 11674, not over 14303
Good for us
We could earn 12000/~17000, which is 70%
73

74. All of them get scared of setting a low price as ideal price
BUT WE DO NOT 74

75. Our base cost is 611, the forecasted Ideal price for Follower is ~ 420,
and the price accounts to over 49% of importance
Is this a big Problem ??
75

76. o Base cost: 384  transfer cost: 96 Could earn
 Base cost: 611  transfer cost ~ 150-200
o Sell at price 423  the selling price is 286 ~$100/product
However, the contribution would be reduced 76

77. • Sonite market also grows up a lot
• Completed the R&D, we got strong products
for Singles and HiEarners
77

78. Period 9
2. Decision Making
o Produce maximum for 5 Brands of Vodie, want to gain 12000 in sales
o Modify 5 Vodie Brands, using new R&D project
o Produce maximum for Hiearner and Singles, using new products
o Open the new Brand for Single and produce 1000 to take shares from
other teams (this is risky, we can get many inventories, however, it would
be 5-7 mil in bad case, in good situation, we could gain a lot)
78

79. Semantic
Scale
Based on Semantic Scale &
Conjoint Analysis
79

80. Set the Price higher than ideal price and use
Perceptual Objectives to improve it
80

81. Period 9
We WIN Team Y did
3. Results not perform
well?
Team O is
amazing??
81

82. LET’s SEE
82

83. 83

84. • They produced a lot and want to replace us
• However, they stuck in big problem
84

85. <
o Dominate the Sonite again
o Reach the limit of game by selling all 12000 Vodie product
85

86. 4 LESSONS EARNED
86

87. 1. First mover into Vodie market experience
o Lower cost for R&D
o Dominate the market with large shares  gain more budget
o Know the market better than others (not sure since we didn’t know whether other teams
can see the Vodie studies or not)
o Vodie market is very potential, the market size would be larger than Sonite in few
periods
o In Vodie, focus 100% on Followers, this segment will account to over 95% of the
market. So, don’t waste money on other segments
o The forecast of Vodie is not accurate at some first few periods. In our course, from P3
to P6, the actual market size always > forecast one  plan your production wisely
o The estimate tool could not be used in first 2 periods and even when it began working,
the accuracy is not good  if your product is worse than others: can use the Brand
map and competitor product’s characteristic to conduct R&D project.
87

88. 2. Set up objective and strategy experience
o Always try to satisfy the customers, but, do it wisely
o The objective and strategy should cover at least 2 following periods – think about
long term, not short term
o Be proactive and flexible – Foresee the trend and dare to change
o Think about the milestones of the game ( P1,2,6 and 8) to get the right strategy
o Sacrifice is needed if you want to earn more (P6)
88

89. 3. Budget experience
o The key factor of success
o It has the upper limit  if you run a big business like us, your job is not easy
o In this game, we:
 Spend all the money in first, second periods  gain more market share, contribution and
lessen the budget of others  we have enough money to R&D Vodie, etc while others can not
 Spend all the money in other periods caused we have to run a very big business…
o Tips:
 Ads is needed, spend more and earn more, but when you control the segment, 2500-3000 is
enough
 The longer the game is, the more expensive the R&D would be  R&D for 2 or 3 period in the
future. If we in P3, we would R&D for P5 or P6
 Allocate sale force effectively, at the beginning, for 100K products we used 10 people, at the
end, for 100k products we used 3 people, and they still did the job well
 Use the loan at right time could give you a big advantage
89

90. 4. Number setting technique experience
o For production plan, you have +/- 20% automatic adjustment  use it
o Price & Perceptual Objective : use the semantic scale or MDS, but use the next period
forecasted number
o You can set the price lower than base cost as long as it larger than the transfer cost
o For the sales force, use shopping habit as a tool to allocate, but, adjust the percentage
to next period by yourself since the number you got is the current one
o R&D: use the analysis tools to get the characteristics of project, however, should take a
look at the numbers and self adjust them, don’t believe the program 100%
P7
P8 P9: 56-21-23
90

91. 6. Other experiences
o For each market, your firm can only manage 5 brands, each brand produce a maximum of
2000k products (can auto-adjust to 2400)
o For each market, the maximum you can produce is 12000
o Good product is the key factor to increase market share, not the ads
o Your can take advantage of ads in special way: open a brand based on old R&D project
with a low production (50-100K) and a high ads  gain brand awareness. Then when the
project complete, you modify that brand with new characteristics
o Buy the studies effectively, at the beginning, you should buy all of them to get a broad view,
but in next periods, you can eliminate some of them.
o For us: Benchmarking, Consumer survey, Consumer panel, Market forecast and one
analysis tools (Semantic scale or MDS) are required. The conjoint analysis you just need it
one time. The others do not add much values
91

92. And more important…
o The leader has advantages, but those could not ensure a victory  always try
your best and be careful
o Other teams can catch up the leader, in 2-3 last periods, many teams have the
maximum-same budget, event the leader  Spend money in smart way and
make the different
92

93. WHY “Y” WIN
?

94. Team Y
took it
more
serious

95. 1

96. Read the book
Practice File
Learning curve

97. 2 Focus
“I fear not the man who has practiced
10,000 kicks once, but I fear the man
who has practiced one kick 10,000
times.”

98. 2 Focus
Well, One brand is for just One
segment

101. 3 Be Innovative

102. Be Innovative
I mean
R&D
“Innovation distinguishes between a leader and a follower.”

103. Leader – heavy R&D, just a bit
marketing & ads

104. Follower – Heavy advertising,
somewhat R&D

105. Few R&D
are falling behind?

106. 4 Dare to Risk
Dare to Risk

107. 5 Be Flexible

108. THANK YOU
for your listening
108