Simulation game group report.docx

Simulation game group report.docx

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Simulationgamegroupreport

DeliveryPerformanceGroupReport

Content

1.Introduction

1.1CaseInformation

OurgrouparehiredbytheboardofdirectorsofMobiléInctogainthesuitableshareholderreturnaswellastocompetewithotherreorganizedcompanies.（Besides,）删掉了因为下面还有个besidesBlackboxoperationshavemadeourcompanyandotherreorganizedcompaniesatthesamefinancialandoperationalconditions.Andallofthesecompanieswerecompetinginthreemainmarkets:

America,EuropeandAsia.BesidesthesecompaniesincludingtheMobiléIncallhaveenoughcashflowtosupporttheirfuturedevelopment.

1.2Thesisstatement

Thissimulationgamewentthrough5trialroundsand8officialroundstoanalyseimpactofthedevelopmentoftechnologyandthecostofoperationontheprofitandcashflowofthecompany.Atmeantime,thereasonsoftheimplementofdifferentstrategiesduringthedifferentstagethroughoutthegamewillalsobestudiedinthisreport.Inthegame,werepresentedthePinkteamintheUniverse5.Bothinthetrialgameandofficialgame,ourteamgainedthehighestshareholderreturn.Forexample,bytheendoftheofficialgame,wegainedthehighestshareholderreturn（12.33%）whiletheteamwhorankedsecondgainedonly9.66%.

1.3Structureofthereport

Inthenextpart,therewillbeabriefillustrationofthebackgroundwhichwillfollowbyanexpositionoftheoriginalplannedstrategyandthestrategyweactuallyachieved.Thesectionfollowingwillbeanexplanationofwhyachangehappenedinfouraspects:

competitors’aspect;financialaspect;marketaspectandourkeydecisions.Furthermore,thethirdpartisabouttheanalysisofpositioningoftheMobiléIncusing4Psframework（Brassingtonetal,2013）.Lastbutnotleast,afutureplanandacriticalreviewwillbeillustratedinthelasttwoparts.

2.StrategyAnalysis

2.1Background

Inthissimulationgame,therewere8teamscompetinginoneuniverse.Accordingtoourobservationofthetrialandtheofficialrounds,threemaintypesofcompetitorcanbeseen:

universal-developmentorientation（representedbyTeamGreen）;high-technologyorientation（representedbyTeamOchre）andlow-profitorientationwithlargenumberoffactories（representedbyTeamRed为了跟后面统一都改成了TeamXXX）.

2.2MainTechniquesusedforDecisionMaking.

Weappliedthefishbonediagram,alsocalledIshikawaDiagram,（showsinFigure1）toourdecisionmakingprocesswhichisaratherdirectandintuitivewaytomaketheprocedureeasyandcleartobeunderstood（QuentinandSkrabec,2007）.

Figure1:

FishboneDiagram（IshikawaDiagram）.居中

Whatismore,ourdecisionmakingwastotallybasedonouraccuratecalculationanddetailedanalysis.Table2isanexampleofourcalculation.

Table2:

CalculationExample.

Besides,theBCGGrowth-ShareMatrixwhichwascreatedbyBruceHenderson（Wikipedia,n.d.）wasalsousedbyustoanalysethemarketperformanceofafirmoraproductbasedonthemarketshareandmarketgrowthrate（SeeFigure3）.

Figure3.额。

。

缺了这个图的名字

Lastbutnotleast,wealsofollowedthe“Ruleofthreeorfour”whichindicatedthatinanormalandhealthymarket,thereshouldbenomorethanthreemajorcompetitorsandthebiggestoneholdsnomorethanfourtimesofthetotalmarketsharethanthesmallestone（FinancialTimes,2013）.

2.3OverallStrategyandStrategyAdjustment

Beforetheofficialrunstarted,wehadmadeourdecisionforthelong-termstrategyaccordingtotheexperienceofthetrialrun.Wedecidednottofocusonthemaximizationoftheprofit,butonthereturnedearningasthemaximizationoftheTotalShareholderReturnwasthedeterminantofwhethertheteam’sperformancewasgoodorbad.

Atbeginning,wedecidedtodevelopTech2,Tech3andTech4inthelaterperiodofthewhole8rounds.AstherewasnomarketforTech3andTech4intheearlierperiod,wedecidedtostartwithTech1andTech2toopenthemarket.Inthemediumperiod,wewoulddevelopTech1,Tech2andTech3asatransition.AstimepassbywewouldgiveupdevelopingTech1andfocusonTech2,Tech3andTech4orjustTech3orTech4.Howeverduetothestrategychosenbyothercompetitorsandthemistakeswemade（ourselves可以删掉）inthefirstfewrounds,wechangedourstrategytimely.WegaveupTech4andonlyfocusedonTech2and3.Thespecificreasonsbehindthiscanbeillustratedinthefollowingaspects:

2.3.1Competitors

InthisreportwewillonlyanalysetheperformanceofTeamOchreandTeamGreen,sincetheyappliedarathermoderatamentestrategywhichwasnotabletoinfluenceourdecisionsandotherteamsareconsideredtobenotcapableenoughtobeourcompetitor.

TeamOchrehadputalotofmoneyintoTech4,thenthroughdevelopingandbuying,theyalreadyreached7featuresatRound4.Furthermoretheydidwellincost-controlthroughproducingTech4bythemselves.NeverthelesswewerestillthinkingwhethertodevelopTech3atRound4.Asaresult,wedecidedtogiveupTech4asTeamOchrewassuchastrongcompetitorinthefieldofTech4.IntermsofTech3,astherewasnoteamdecidedtoputalargeamountofmoneyinTech3,westillconsideredtohaveachanceinthedevelopmentofTech3.Otherwise,wewouldnothaveacashcow（seeFigure3）inthenextfewroundsasthemarketshareofTech1andTech2wasbecomingsmallerandtheirprofitspacewouldbelimitedinthelaterperiod.AsforTech2,wehadadvantagesintermsoftheproductioncost,fortherewasnocompetitorsproducelargescaleofTech2themselvesexceptforTeamGreenwhoonlyproducedasmallnumberofTech2.

2.3.2Finance

Intermsoffinance,ifwedidnothaveenoughcashtodealwiththelossesandconstructionfeesofnewplants,itwouldautomaticallyaskaloanfromshort-termdebtwithhighinterestrate.Inordertoavoidthissituation,itisimportantforourteamtopredictthefuturecashflowtocontrolthenumberofcash.

2.3.2.1Theprincipleofforecast 

Theusingofcashhasfourpurposes.Thefirstpurposeistomakeuplosses.Nextpurposeittodealwithconstructionfeesofnewplants.Thethirdpurposeistosharebuybacksandthelastpurposeittopaythedividendpayment.Inordertomaximizetheretainedearnings,wetriedtoavoidlossesineveryround.Besides,atthebeginningrounds,becauseweneededalargebudgettobuildnewplantsanditwasnotasuitableperiodtosharebuybacksandusethedividendpayment.Thus,themainspendingofourteamwastheconstructionfees.

Accordingtothegamerules,newplantswouldbeavailablewitha2rounddelay.In other words,weneededtoforecastthenumberofnewplantsintheroundafternext,thenwecouldgettheaccuracybudgetofnetplantsandtocontrolthecash.Inthisway,wecouldsavemoneybecauseofthedepreciationandhighefficientcapacityusage.Weusedasystemdesignedbyustoforecastthenumberofnewplantsbasedonourmarketshare（SeeTable2）.Thistablecouldhelpustoexecutethenewplantplansmorescientificallyandreasonably.

2.3.2.2Methodsoffinancialmanagement

Inthisgame,thecashconsistofprofitsandfinancing.Theprofitsbelongtouncontrollable factor,whilefinancingbelongstocontrollable factor.Asaresult,wefocusedonthefinancing.Andtherearetwowaystofinancing:

oneisshareissue,anotheristoaskaloanfromlong-termdebt.

Atthebeginningrounds,wethoughtitwouldbebettertousethelong-termdebttofinancing.Because,wethoughtwecouldmakeprofitsatthebeginningrounds.Anditcouldincreaseourissueprice.Inouropinion,theissuepricewasimportant,forhigherpriceofissuepricecouldhelpustoraisemorecashwiththesamenumberofshares.Comparedwithshareissue,long-termdebtwouldbesuitableforthebeginningrounds.However,duetothelossesatthebeginningrounds,ourissuepricewasdecreasing.Thus,atthefourthrounds,weissued10,000sharestofinancing.Thereasonwasthattheratioofequityandliabilitieswashighduetothelargenumberoflong-termdebt,anditwouldincreasetheinterestrateoflong-termdebt.Asaresult,althoughtheissuepricewasnotunsatisfactory,weneededtorecovertheratioofequityandliabilitiesandneededalargecashtobuildnewplants.Atthelastrounds,becausewehadnoplanstobuildnewplantsandwehadlotsofcashduetotheprofits,webegantorepaythelong-termdebt,tosharebuybacksandtousethedividendpaymentinordertoincreasetheratioofcumulativetotalshareholderreturn. 

2.3.3Marketing

AccordingtoTeamOchre’sstrategy,itcanbefoundthattheyinvestedTech4inthefirstround,thusthemarketdemandofTech4hasalreadyappearedinround2.However,wefoundthatthemarketgrowthrateofTech4islowerthanthatofTech3whichturnedupinround3.Inotherwords,althoughthemarketdemandofTech4hasbegunincreasing,wethoughtitstillcannottaketheplaceofTech3whichwouldbe“thecashcow”untilround6orround7.BecausethemarketgrowthrateofTech3washigherandthecostwasmuchlowercomparedwiththatofTech4.And,thisgameonlyhas8rounds,eventhoughwecouldnotgetthehighestprofitinthelastround,butwecouldstillachieveadesiredcumulativetotalshareholderreturn.Therefore,wechangedourlaterstrategyaccordingtotheprofitspaceofdifferentTech.

2.3.4Keydecisions

2.3.4.1Tech1

TheTech1wasthecashcowatthebeginning.However,themarketshareofTech1wasdecreasingandmostofcompetitorscreatedthepricewarofTech1.Therefore,theprofitspaceofTech1waslimitedafterround3,thuswegaveitupinround4.

2.3.4.2Tech2

WefoundthatmostoftheteamswereusingoutsourcingtoproduceTech