Glo-Bus 2018 winning strategies from a 2018 Grand Champion.
Revised Video and Tips 2018-10-13
Contact me if you need help: w.patrick.law@gmail.com. I will never sell you anything, but I would appreciate it if you like, comment and subscribe.
Videos:
Detailed Pro Tips: https://youtu.be/VVqQ7VAaJSA
Other (Simplified) Video: https://youtu.be/omTK1GmVo0Y
2. Background
GLO-BUS is a business simulation game where teams compete
against each other. Typically done as a school activity and linked
to grades, it is popular with MBA and business students and
teachers throughout the world.
To become a Grand Champion, one must win against students at
their own school and then be chosen to compete in the Best
Strategy Invitational (BSI) against other top teams throughout the
world.
At the August 2018 GLO-BUS BSI, our team (Jenuine Cameras)
won 1st place (GrandChampion) because of our strategies.We are
willing to share this information in order to make connections with
other MBA and business school students to expand our personal
networs. Please connect with me on LinkedIn or by email at
w.patrick.law@gmail.com. If you would like to connect or if you
have questions about our GLO-BUS experience, or have questions
about what follows. I have templates, quiz tips and participation
guide notes.
4. General
Strategy:
Scoring
”Beginwiththeendinmind.”
StephenCovey
Your final grade is NOT the average of the previous year’s scores!
Final grade = IE points + BII points + Bonus points
IE points = EPS IE score + ROE IE score + CR IE score + Stock Price IE score + Image IE score
BII points = EPS BII score + ROE BII score + CR BII score + Stock Price BII score + Image BII score
Bonus points = 1 point per round for most improved + 1 point for each good forecast
EPS scores = average full game
ROE scores = average full game
CR IE scores = last year
Stock Price scores = last year
Image scores = last 3 years
ProTip: It is very easy to make-up for lower than expected starting
year scores for EPS & ROE by having a strong finish. In one or two end
game turns, you can make up for 4-5 years of starting years’ relative
weakness (i.e. in your first year, you will worry about a difference of
$0.10 in EPS, in your last year, you will worry about a difference of
$5.00). Use this fact to your advantage by storing value in the first
years and release that pent-up energy on your unsuspecting
competitors in the final years of the game.
5. General
Strategy:
Scoring
”Beginwiththeendinmind.”
StephenCovey
Best IE points:
40% more than weighted average IE expectation for EPS, Stock
Price
30% more than weighted average IE expectation for ROE
Credit rating A+ on the last round only
Image rating weighted average score of 100 on the last three years
only.
Best BII points:
20 points for the best weighted average EPS, Stock Price, ROE, CR,
Image. Everyone else will be given points out of 20 as a fraction of
the highest score of that type. Ties for first in that category still give
20 points.
6. General
Strategy:The
GLO-BUS
Equation
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐶𝑜𝑠𝑡𝑠 = 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠; maximizing earnings wins GLO-BUS
Revenue = Market share * Price
Market share = function of (PQ Spending, 1/Price, Marketing Spending)
PQ Spending = function of (component and feature upgrades, 1/models,
cumulative R&D)
Marketing Spending = function of (Retailer Support Budget, Advertising
Budget, Website Displays, Sales Promotions, Camera Warranty Period,
Discounts Offered to 3rd Party Online Retailers,Website Product Displays,
Search Engine Advertising, Retailer Recruitment/Support Budget, Drone
Warranty Period, models)
Costs = function of (COGS, Delivery, Marketing,Administrative
Expenses, interest on debt, charity, income taxes)
COGS (Cost of Goods Sold) = function of (component and feature
upgrades, labour and training, R&D, Warrantee repairs, PPE
maintenance, PPE depreciation)
***The items in bold are things that you can decide***
ProTip: Cash, R&D and PPE are the only ones of this equation that
accumulate directly over time. Free cash yield no advantage if not
invested in assets. This means that long term competitive advantages
can only be built on R&D and PPE. Short term competitive
advantages only last one additional year into the future.
7. General
Strategy:
Moat
”Inbusiness, Ilookforeconomic
castlesprotectedbyunbreachable
moats.”
WarrenBuffett
Long term competitive advantages (moats) (work hard to develop in
first ¾ of the game, exploit in last ¼ of the game):
Economies of Scale Moat: Assuming always operating at 100% capacity,
your factory should be the largest, but less than 2x industry average.
High # units sold = high image and low cost per unit (for any given
product design).
Secrets Moat: without ever going negative EPS, cumulative R&D
investment should be 2.5x the industry average for first ¾ of the game.
Stop investing in R&D in the last ¼ of the game. Cumulative R&D +
current R&D = low cost per unit and high PQ (for any given product
design).
Short term competitive advantages (moats) (use in last ¼ of the
game):
High image: current year market share is a function of last years image
among several other things
High # of 3rd Parties carrying your products: current year market share is
a function of the number of 3rd parties carrying your products among
several other things.
ProTip:You must develop a long term competitive advantage over
time! Playing the game only thinking of the current year is playing
very dangerously.
8. General
Strategy:
Management
"Integritywithoutknowledgeis
weakanduseless,and
knowledgewithoutintegrityis
dangerousanddreadful.“
SamuelJohnson
Overall Recommended Strategy:
Game first ½: keep all scoring metrics as close to the investor
expectations as possible without going over – invest for the long term.
Game second ½: maximize EPS, ROE.
Game last 3 rounds: maximize image.
Game last round: maximize stock price as long as credit rating is A.
Increase PQ by changing product design over time, but sticking to low
competition areas.
Honesty: Having someone else log into your account and do the
inputs for you. This is called cheating. Would your group members
ever want to go in with you into a real business after cheating at
something so unimportant as a business simulation game? Talk to
people about the game, ask their advice, get hot tips off the internet,
but don’t cheat. If you are still on the fence about this one, keep in
mind that GLO-BUS tends to track all login location information. Are
they tracking anything else? Maybe. At any rate, cheaters are
horrible and you are not one of them. We all know better. You can do
this on your own, learn lots and have fun in the process! Avoid the
trap.
9. GLO-BUS Decision
Entries
The competition, the market, the FX will all change each year;
therefore, you must adjust every decision entry every year. The
following are steps to guide your year on year decision entries.
10. Step 1:Check
yourC&J
Journal:
Benchmark
Pages
“Riskcomesfromnotknowing
whatyou’redoing.”
WarrenBuffett
Goal: Review your long term competitive advantages on the
“Benchmarks” pages of the Camera and Drone Journal. Looking at
these first will help you keep your head while you are making decision
entries:
(Page 6 & 7) Benchmarks, Cumulative R&D Expenditures: target highest
(Page 6 & 7) Benchmarks, Assembly Facility: target largest size as long
as you can fill the factory without negative margins. Margins are
expressed on the marketing decision pages as percentages at the
bottom of the dark grey boxes.
(Page 6 & 7)Total Camera/Drone Production/Assembly Cost: lowest (low
PQ strategy); average (high PQ strategy)
(Page 6& 7)Workforce Statistics:
Compensation: target average
Productivity: target highest
Labor Cost: target lowest
(Page 6& 7) Delivery Costs, Marketing Costs,Warranty Claim Rate,
Warranty Repair Cost: we should largely ignore these benchmarks.
(Page 5) Financial Statistics
Shares of stock outstanding benchmark: target lowest
Equity: target less than the highest, preferably low
11. Step 2:
Forecast
“Theonlyfunctionofeconomic
forecastingistomakeastrology
lookrespectable.”
JohnKennethGalbraith
Goal: Enter a Forecast into the bottom of the marketing pages.
i. In a spreadsheet, record the Ind.Avg. (industry averages) shown
on the Competitive Intelligence Report.
ii. Calculate the year to year % change for each industry average (for
example: ind. avg. price year 7 $240, ind. avg. price year 8 $230, %
change = (230-240)/230 = -4%).
iii. Average all of the % changes. (for example: first year to year price
change was -4%, second year to year price change was -6%, third
year to year price change -2%; average = (-4% + -6% + -2%) / 3 = -
4%)
iv. Calculate and enter the “Anticipated Industry Average Marketing
Efforts” values on the marketing decision entry pages (they are
red) by multiplying one plus the average % change by the current
Ind.Avg. shown on the Competitive Intelligence Report (for
example: Price to Retailers = $230 times (1 + -0.04) = $221). You are
anticipating where the market will go. This is a very powerful tool.
Note: First and Second Round Forecasts, we use -8% price, +5%
PQ/Models, +20% all others and ignored the year to year % change
12. Step 3:
Product
Design
“Ifyouwanttohaveabetter
performance thanthecrowd,you
mustdothingsdifferently fromthe
crowd.”
SirJohnTempleton
Goal: MinimizeTotal Production/Assembly Cost for chosen strategic design PQ
(time intensive)
Step 1: Temporarily crank R&D to $0. This allows you to feel comfortable
while you make your entries. EPS and ROE will be good, the sun will shine and
your group members will be proud. You are in control. We will increase R&D
later, once you can demonstrate that you have money to spend on it.
Step 2: Choose # models higher than industry average. Preferred # models
should be higher than competition unless there are severe disadvantages.
Low PQ strategies often have high models to compensate.
Step 3: Choose a target PQ different than any of your competitors. Higher
PQ increases image (and therefore market share) for one following year, but
hurts net profit/cash in current year. Low PQ increases net profit in the
current year and hurts image in the current year. Image / market share is less
important at the start of the game than at the end. Generally, it is advisable
to start with a lower PQ than what you want to end up with if you are
investing in cumulative R&D.
Step 4: Change the components and features until you have a design with
the lowestTotal Production/AssemblyCost for the target PQ. Try different
combinations of components. For example, some component combinations
that yield a PQ of 2.4 will have aTotal Production/Assembly Cost that is higher
than others.
13. Step 4:
Marketing
“Stoppingadvertisingtosave
moneyislikestoppingyour
watchtosavetime.”
HenryFord
Goal: Maximize EPS for chosen image rating (time intensive)
Step 1: Choose an image rating target. First ½ of game its okay to be
a little below investor expectation (especially if your forecasts are
conservative). Last three rounds maximize image without going into
further debt.
Step 2: Temporarily increase your factory size/install on the
compensation and facilities screen and temporarily take out whatever
loans you need to stay cash flow positive. Problems arise on the
marketing page if you can’t produce enough units to satisfy demand.
You will come back to these pages to correct them later.
Step 3: Temporarily optimize Price for the maximum EPS then back
it off by about 5% to give you a margin of safety.
Step 4: Optimize the easy marketing decisions. The items to
change are Sales Promotions, % discount and Discounts Offered to
3rd party Online Retailers for the maximum EPS without going less
than the competitive assumptions.
Step 5: Choose aWarranty Period higher than the competitive
assumption.
14. Step 4:
Marketing
(continued)
“Withoutpromotion,
somethingterrible
happens…nothing!”
P.T.Barnum
Goal: Maximize EPS for chosen image rating (time intensive)
Step 6: Change your % advantage over the competition until you reach
your target image rating. (first ½ of game it is okay to go with a lower image
rating than investor expectations, but ensure your image rating is the
maximum in the final three years for the most points). To do this, repeat the
following steps until you reach the chosen image rating:
Step 6a: Choose a % amount that you want to test. For example, start with 20%.
Input a Price, Advertising Budget, Website Displays/Info, Retailer Recruitment /
Support Budget that is the chosen % more advantageous than the competitive
assumption listed at the bottom of the page. For example, if I chose 20%, then all
of my prices will be 20% less than the competitive assumption, my Advertising
Budget will be 20% more than the competitive assumption, etc. If you are
confused as to what “the competitive assumption” is, just look at the bottom of
the marketing pages.
Step 6b: Change the price by the amount of the FX effect. If the FX effect is
negative then add that much to the regional price. If the FX effect is positive then
subtract that much from the regional price.
Step 7: Again Optimize the easy marketing decisions: Optimize Sales
Promotions, % discount and Discount Offered to 3rd party Online Retailer for
the maximum EPS without going less than the competitive assumptions.
Step 8: Add R&D: If you are in the first ½ to ¾ of the game go back to the
Product Design page and crank up R&D until you have the EPS less than the
investor expectations. If you are in the last ½ to ¼ of the game, consider low
or no R&D spending so you can maximize EPS, ROE. Recommended no R&D
the last round.
15. Step 5:
Compensation
& Facilities
“Capitalisdeadlabor,which,
vampire-like,livesonlyby
suckinglivinglabor,andlives
themore,themorelaborit
sucks.”
KarlMarx
Goal: Maximize EPS without inflating wages for later years
AC Camera Workforce Compensation
BaseWage: +1% works well
Assembly Quality Incentive: optimize for EPS (usually low)
Attendance Bonus: optimize for EPS (usually low)
Fringe Benefit Package: optimize for EPS (usually low)
Best Practices / Productivity ImprovementTraining: maximum.
UAV Drone Workforce Compensation. The drone workforce needs to be your
premier workforce – pay them better than the camera workforce.
BaseWage: +1% works well
Assembly Quality Incentive: optimize for EPS (usually high)
Attendance Bonus: optimize for EPS (usually high)
Fringe Benefit Package: optimize for EPS (usually high)
Best Practices / Productivity ImprovementTraining: maximum.
Number of workstations/expansion: add workstations and expand equally
until expected overtime is in the single digits. Add factory space if the
Sensitivity Analysis (see step 2 of these slides) for the 2nd deviation of less (+2)
competition shows an Expected Unit Shortfall. This allows
Robotics:Only do this upgrade if the “Net AnnualCost of Robotics Upgrade”
is more than $-1,000 (expressed in $000s). A negative cost is a savings. Use
100% debt because selling shares will increase Equity and kill ROE. Note that
the Robotics Upgrade will increase EPS and ROE marginally in the current
year.
16. Step 6:
SpecialContract
Offers &
Corporate
Citizenship
“It’snotjustaboutcheckingthe
boxoncorporatesocial
responsibility. It’sabouthitting
ourbottomline.”
PeggyJohnson
Goal:Get a little edge for almost nothing.
Special Contracts has little impact on overall scores, but can be a
little bit helpful to those with a competitive advantage. To win
these you will need to increase your “Value Index” greater than
the competition. You can see how the competition did on the
“Comparative Competitive Efforts” page for the last couple of
years. Increase your Special Discount Offer until your value
index is a healthy % above the competition or at the maximum
without your cash flow going to zero.
CSRC Initiatives:Corporate Social Responsibility gains no scoring
points. Use Renewable Energy Program, Improved Working
Conditions and Institution of a SupplierCode if it increases
image and doesn’t impact EPS considerably. Use Green
Initiatives and Charitable Contributions with caution.
17. Step 7:
Finance &Cash
Flow
“Donotdelayarootcanal.
Don’tdopiecemealsolutionsto
aproblemthatisfundamental.”
NassimTaleb
Goal: Use debt, share repurchases and dividends to maximum long term
effect.
Debt
First 1/3 of game: take out enough debt so that your “Projected Cash
Balance” at the End of theYear is >5% of Net Revenues.
Second 1/3 of game: payback debt.
Last 1/3 of game: Never allow current ratio <2.0 and Debt to Equity
>60:40 because it destroys your credit rating. On the third to last round,
take out enough debt in 10 year loans to reduce shareholder’s equity to
near the mandated minimum without letting the current ratio go less
than 2.0. Note that you never have to payback the full amount of these
loans because the game will end before you need to pay out. This will
boost ROE considerably to counteract some of the crazy ROEs that
some of the loser teams can get by accident. Keep credit rating at A or
better.
Bank loans should be dominated by 10-year loans for stability. Note that
interest rates will fluctuate and you don’t want to get caught paying too
much for your debt because you are forced to refinance that year.
Always do Early Repayment if the interest rate on the loan you have
is more than the current market interest rate (i.e. swap loans for the
lower interest rate one).
ProTip: Don’t let your credit rating fall below B- because high interest
rate loans will destroy your competitive advantage in the long run.
18. Step 7:
Finance &Cash
Flow
”Peopleshouldtakewayless
thanthey'reworthwhenthey
arefavoredbylife...Iwould
arguethatwhenyourisehigh
enoughinAmericanbusiness,
you’vegotamoraldutytobe
underpaid—nottogetallthat
youcan,buttoactuallybe
underpaid.”
CharlieMunger
Goal: Use debt, share repurchases and dividends to maximum long term
effect.
Repurchase stock (attempt to drive the number of shares down to
the minimum (minimum is usually 15,000 share outstanding)
First 1/3 of game: maximize Stock Repurchases even if you need to take
out debt to do so. The reason is because your stock is inexpensive
because the overall market for action cameras and drones is immature.
Second 1/3 of game: maximize repurchases when the intrinsic value of
the stock (Use a price to earnings ratio of about 15) is greater than the
market price (the price you pay).
Last 1/3 of game: repurchases a small portion only when the intrinsic
value is greater than the market price and you need the extra EPS or if it
is the last round and you have already maximized dividends.
Dividends
Use dividends when you have bought all of your stock back that the
game allows and you have paid back your debt. Do not use dividends
ProTip: If possible, on the last round, go with an unusually high
dividend payment to maximize stock price, but never exceed your
EPS. Recommend maximum of 80% EPS.
Warning! Never allow Shareholder’s Equity to go to zero, crazy things
happen for scoring (it is a bug in the software that returns zero points
for ROE and EPS for that round)
19. Step 8:
Check your
Margin of
Safety
“Goodleadershipconsistsof
showingaveragepeoplehow
todotheworkofsuperior
people.”
JohnD.Rockefeller
Goal:Check to make sure your inputs are not sitting at a cliff
Sensitivity AnalysisActivity (margin of safety on your decision
entries); sometimes in GLO:
Step 1:Write down the expected EPS, ROE, CR, image, net income,
cash
Step 2: Change the forecasted competitive assumptions by one
selection worse. Write down the expected EPS, ROE, CR, image, net
income, cash. Repeat for four selections worse (more competitive)
and four selections better.
Step 3: modify your strategy/inputs if the EPS, ROE, net income or
cash go negative at the 2nd deviation worse competition. Modify
your strategy/inputs if the trend in overall scoring stays the same or
decreases as competition gets easier.
20. Step 9:
FinalClean-up
“Doveryai,noproveryai.”
RonaldRegan
Goal: Find the Easter eggs and save them in your basket
Step 1: Return to the Product Design Page and crank up R&D.
Again, in the first half to ¾ of the game cumulative R&D spending
goes far in giving you a competitive advantage. It is typically the
case that those who have the largest or nearly largest cumulative
R&D at the end will win. At least the last ¼ of the game, it is wise to
R&D becomes
Step 2: Review. Go back to the Product Design Page inputs to check
that you got the lowestTotal Production/Assembly Cost. It is often
the case that the inputs from the Marketing and Compensation &
Facilities screens require changes to the Product Design Page.
Step 3: Look for Easter eggs. Check all of the inputs on all of the
pages up and down by a couple of selections. GLO-BUS has hidden
a couple Easter eggs where you can get unusual benefits for next to
no additional cost. Look especially for places where you can get
additional market share at no additional or very little additional cost.
There are even times where EPS will go up at the same time as
market share!
Step 4: Save the inputs. Logout and go back in to check the inputs.
There is no forgiveness by the GLO-BUS administrator for forgetting
to save.
21. FAQs, ProTips and
Reminders
The competition and foreign exchange both change from year to year; therefore, you must
adjust every decision entry every year. The following are steps to guide your decision
entries. Many of them won’t make a big difference, but many of them are Champion level
tips if you can manage to make them work well for you.
22. Tips /
Reminders
“Thestockmarketisfilledwith
individualswhoknowtheprice
ofeverything,butthevalueof
nothing.”
PhillipFisher
Common Pitfalls of GLO-BUS players
Early Rankings Chaser:The rankings at the start of the game don’t matter. It
is only the ending ranking that matters. CR, image and stock price success is
meaningless at the beginning of the game. Therefore, if you need to sacrifice
something at the beginning of the game, let it be these. Your rank should be
less than half for the first part of the game as you develop your durable
competitive advantage (moat). The last half of the game, your rank should be
in the top three if you have done things right. TheGLO-BUS creators want to
teach you about business, not monkey button pushing – they have done a
good job of punishing those who are monkey button pushers.
Expensive Stock Buyer: reducing the amount of stock outstanding will
increase ROE and EPS for all future rounds. Keep stock prices low during the
first half of the game by artificially not meeting investor expectations and you
can buy your own stock back at a discount to its intrinsic value! Buy low and
hold. This is another virtue of maximizing R&D early. Current year R&D
spending reduces current year EPS and ROE. When theGLO-BUS investors in
your stock see the lower earnings they don’t account for the fact that you are
adding to your competitive advantage for the future. Stock price is largely
driven by EPS, ROE and CR.
Hacker: By hacking, I mean trying to develop a foolproof system or
developing software to play the game for you. If you are into the illegal kind, I
hope you get caught, expelled and charged. The reason that the legal kind
doesn’t work is because your competition are irrational humans and the
number of rounds is statistically insufficient to use reversion to the mean
techniques (as the engineer in the group, I did the math, it doesn’t work).
23. Tips /
Reminders
”Toreachaportwemustsail,
sometimeswiththewind,and
sometimesagainstit.Butwe
mustnotdriftorlieatanchor.”
OliverWendellHolmes,Sr.
Exploit the Competition’s Natural Human Biases:
Recency Bias: The competition will tend to make decisions closer to what they
think the ranking leader did in the very last round. Competitive assumptions
should err on the side towards whatever the ranking leader did last round.
Anchoring I:The competition will hold onto or stay close to an input just because it
worked last time for high current year rankings. Ignore the current year rankings
and focus instead on your durable competitive advantage metrics for the best end
game scoring.
Anchoring II: The competition will tailor inputs to achieve the Investor
Expectations regardless of head or tailwinds in the industry. Prices will rise when
FX is unfavorable and prices will decrease if FX is unfavorable.
Anchoring III: The competition will believe that they need to stay close to the
beginning year inputs in the first round. Every time we have played, we get an
enormous advantage on the competition by playing a game of maximum
differentiation – especially in the first round. This turns out for be far safer than
trying to guess what everyone will do without any prior market data to rely upon.
Our typical first year: PQ 0.5, models 7, price = 5% less than the competitive
assumption, Marketing each around $5-7MM, maximum weeks promotions,
maximum warranties, discounts to online retailers 10-20%. We hide the advantage
through maximum R&D and a maximum factory size increase otherwise our stock
price goes through the roof and we hit the top of the rankings. We have been
known to use this technique again in the second and third year if we believe that
we can get away with it but without the factory size increases to the same extent.
Now that this secret is out there in the public space, it might not be so helpful, so it
might be best to try something similarly differentiated.
24. Tips /
Reminders
“Ifyoucontrolyourreactionto
suffering,thensuffering
becomesirrelevant.”
MohnishPabrai
Exploit the Competition’s Natural Human Biases (continued):
Answering an Easier Question: The competition will prefer to win in the
short term (their only focus will be high EPS and ROE for the current round).
You should store as much value for the long term as possible at the beginning
of the game and let it all out at the end of the game. Cumulative R&D and
lowest production cost for a given quality are your goals for most of the game
(at least ¾); these are not just nice to haves if it can be afforded.
LosingTrack of the Ultimate Goal: The competition will tend to stay the
course in the final year. For us, unfortunately, like all mercenary CEOs in real
businesses, do not have these same biases (you are a temporary consultant
trying to fix the company remember?). GLO-BUS ends in the final year and
the business ceases to exist. There is no reason for long term thinking after
that date. Give it everything you’ve got in the final year. There is no store of
long term value beyond that. Best to have extremely high dividends, high
stock price buybacks, don’t help 3rd parties for the sake of gaining more of
them the next year).
Cognitive Ease: The competition will intuitively stay away from regions of the
world in the current year where profit margins are poor due to delivery or FX.
You can subsidize that region to gain large amounts of market share in those
regions and when the FX changes back to favorable, you will win big. This
may also make the competition go into a negative margin situation where
they are losing profit for each unit they produce. Watch out that you don’t go
into negative margin yourself though! Leave a margin of safety in case the
competition is smarter than you thought.
25. FAQs
“Ineverycompany,
differentiationisnevermore
importantthanitisintimesof
trouble,andthat’sthetime
wheneveryonetendstogoto
thewellandequalizerather
thandifferentiate.”
JackWelch
Question: All of the other teams have PQs of around 4 to 5.
Shouldn’t we do the same? Answer:The reason that most beginner
GLO-BUS players use a PQ of around 4 to 5 is because 4.0 is the
default value at the beginning of the game. Lacking confidence in a
new environment, but having a general idea that “PQ is good” players
will increase PQ a little at the expense of EPS. Little do they know
that everyone else is doing a similar thing. The result is that all of
those teams that hang out around the original default end up sharing
a smaller and smaller piece of the market by all crowding into the
same PQ. Any PQ can be successful in this game as long as it is
different from the competition.
Question: The benchmarks show that I have the highest costs for
[insert variable here], isn’t that bad? Answer: Not necessarily, in
fact, it could be very good in some cases. For example, if you have the
highest warrantee costs of the game, but by doing so, your market
share and profits are higher because of an unusually high warrantee
that your customers love and are willing to pay for, then you should be
okay with having the highest warrantee costs of the game. An
unusually high variable compared to the benchmark should trigger
you to look into whether you are getting a greater benefit from that
cost. Only using benchmarks in GLO-BUS, without an absolute
measure of value, would be just as silly as doing it in real life to invest!
26. FAQs
“Thedeepestsinagainstthe
humanmindistobelievethings
withoutevidence.”
AldousHuxley
Question: How much time to budget for GLO-BUS including quizzes, 3-year
strategic plan, presentations? Answer: If you already understand how to
read a balance sheet, income statement and cash flow statement and want to
pass, budget at least 1-2 hours per turn. If you are interested in 1st Place/top
marks budget 3-4 hours per turn; GLO-BUS requires some time developing
inputs and a lot of time tweaking the inputs a little bit for a slightly better
performance. This time spent tweaking each value up or down to review that
you have the best inputs each year will greatly help you withQuiz #2, the 3-
year strategic plan and any presentations you need to make.
Question: How do I convince my group members to do the right thing and
store value in the first half of the game instead of panicking about the
rankings? Answer: Follow all of the steps outlined in these slides very
carefully. Crank R&D spending to zero and show them the expected result in
EPS, ROE,CR, image. If they still won’t believe you, have them give me a call
and I can show them my rankings pages from past GLO-BUS games. Being at
the bottom is bad only if that is not where you intend to be!
Question: What is a good group dynamic? Equal votes for a CEO for the
current round (you could also rotate through theCEO role). The CEO comes
up with the inputs for that year and saves it. Everyone can then log in and
come up with better numbers. If they have better numbers, they send the
CEO a note. If there are disputes, the CEO wins. If you feel like you have a
rougeCEO, politely vote them out of the role for that year. It is good business
to expect a good group dynamic, be trusting, but always have a plan in place
in the unlikely scenario that the wheels fall off.
27. Contact
Information
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