Business Simulation Archives

MikesBikes Advanced Business Simulation

MikesBikes Advanced Strategic Management Simulation

 

MikesBikes Advanced is a highly instructive and engaging means to teach business strategy, management, and decision-making. This Strategic Management Capstone Simulation bridges the gap between theory and practice, as students manage their own bicycle manufacturing company.

Competing individually or in teams, students analyze the market to formulate their own cross-functional strategic plan. The implementation of their strategy requires engaging with all key functional decision areas of their company. Students will master each business discipline, as well as understanding the relationship between each function.

The dynamic marketplace and competitive nature of the simulation ensures that students must continue to adapt their strategy to the changing market and their competitor’s decisions. The competitive element of MikesBikes encourages students to understand these principles and have fun doing it!

For an additional challenge; MikesBikes Advanced enables instructors to simulate market recessions and booms, as well as enable our unique corporate takeover module.

Recommended For:

  • Business Capstone
  • Strategic Management
  • Business Administration
  • Business Management
  • Entrepreneurship
  • Business Strategy
  • Business Policy
  • Management and Leadership Development
  • Organizational Behavior
  • Product Management

Teaching with MikesBikes Advanced

 

MikesBikes Introduction to Business Simulation

 

MikesBikes Introduction is a next generation interactive business simulation application, specifically designed for foundation-level courses.

As an introduction to business simulation, MikesBikes Intro features a unique structure which allows students to gradually build confidence. This is achieved by progressively giving students control over their own company. They will initially determine the price and marketing mix for their only product. Each subsequent decision period they are given additional decision areas to manage to provide an insight into distribution, operations and finance; as well as the task of launching new products into emerging markets.

Recommended For:

  • Foundations of Business
  • Introduction to Business
  • Business Administration
  • Business and Society
  • Business Fundamentals
  • Business Organization and Management
  • Leadership for Business
  • Small Business Management
  • Business Concepts
  • Management Principles

Teaching Foundations of Business with MikesBikes

 

How to set retail price and margin in Music2Go Marketing Simulation

Question of the Week: How do I set the Retail Price and Retailer Margin for each product? | Music2Go Marketing Simulation

Setting your Retail Price

When setting the Retail Price, you should consider things like:

  • How much competition is there in this market segment?
  • How are my competitors pricing their products in this market segment?
  • How sensitive is this market segment to price? What are the minimum and maximum price levels for this market?

Note: We recommend staying away from the top 5%-10% of the price range for every market segment, even for price insensitive segments. The maximum price is the level beyond which NO consumers will buy your products. So even for price insensitive segments, a product that is priced at the maximum looks like poor value compared to a more reasonably priced product.

Similarly do not price too close to the minimum price level for a given market. The extra market share is unlikely to make up for your smaller margins. Start off somewhere in the upper-middle of the price range and work your way up or down from there.

  • What is my overall strategy?
    • High Price, Lower Volume
    • Medium Price, Medium Volume
    • Low Price, Higher Volume
  • What are my projected sales for a given pricing level and advertising mix?

Setting your Retail Margin

Once you set your price, consider your retailer margin, unit cost, unit margin and sales projections. Look carefully at your Forecast Results reports and your Forecast Net Marketing Contribution report.

  • If your sales projections are accurate, will you make sufficient gross margin to give you a positive Net Marketing Contribution?
  • Is it worth giving your Distributors more Retail Margin early in the simulation to encourage them to stock your products and gain market share?
  • Or do you already have sufficient market share and distribution that you can afford to cut your Retail Margins?
Need extra help?
  • You can receive an immediate answer to a number of commonly asked questions through our Support Center.
  • Contact us here.
Check out other Music2Go Marketing articles here: 

Music2Go Tip: Leftover Marketing Budget

Music2Go Tip: Improving Total Marketing Contribution

 

September 2018 Product Update header

Smartsims Product Updates: September 2018

Updated Product Development/Launch Screens (MikesBikes Introduction & Music2Go Marketing)

The decision screens which enable students to modify an existing product and launching new products now feature additional information to help students make more informed decisions.

Launching a new product

Previously students would need to navigate to the Market Information and Market Summary Report for this key information, but we have now placed it directly within the screen.

MikesBikes Intro New Development Screen (New Product)

Modifying an existing product

Students will now see a short description of each option with the corresponding cost and benefit.

Modifying an existing product in Mikesbikes Introduction new screen

Missed our previous Product Update articles? You can check these out here:

 

salary-in-mikesbikes-advanced

Question of the Week: How much should we pay our staff?

This question relates to our MikesBikes Advanced Strategic Management Simulation.

Human Resources: Average Salary

This is the average annual earnings of an employee working on the factory floor. The average salary level you set will affect not only your bottom line but also attract better skills and will improve motivation.

Factory workers are paid (on average) the rate you select. Administration staff are paid (on average) twice this rate. For comparison purposes, the average industry salary is $25,000 per year.

How does Salary impact your staff’s motivation level?

Salary level is compared to an industry average of $25,000 and smoothed over several years.

Job security is reduced during downsizing, but is also smoothed over several years.

Including the training/skill level reflects the fact that employees are looking for more than salary and job security. They are looking for a job where they are learning and working with other highly-skilled people.

The graph below shows the motivation index achieved by changing the firm’s average salary from $25,000. The effect would be increased by sustaining the salary change across succeeding years.

Staff Motivation and Turnover Rate in MikesBikes Advanced

The graph below shows the effect of job cuts on morale and staff turnover.

Staff Motivation and Turnover Rate when Downsizing in MikesBikes Advanced

Check out the latest Question of the Week articles here:
preventative-maintenance-mikesbikes

Question of the Week: What is Preventative Maintenance? | MikesBikes Advanced Business Simulation

Preventative Maintenance

You should decide on the total amount to spend on Preventative Maintenance. This is an aggregate amount and so should be varied when a firm changes its plant capacity.

You should look at the Manufacturing Responsiveness Report (under the Key Reports menu) and if you are losing a significant amount of time to Breakdowns, then consider increasing your spend on Preventative Maintenance.

Effects of Spending in Preventative Maintenance

MikesBikes Advanced Breakdown Curve

Expenditure on preventative maintenance has a number of effects. Preventative maintenance reduces the likelihood of plant breakdown and losses in capacity caused by these delays. Adequate maintenance also serves to maintain the resale value of plant. Finally, ensuring the plant is producing within tolerances contributes towards the reduction of defects and improves your internal quality.

Example: Currently your firm has approximately 25,000 SCU of plant. If it were new it would be worth $4 million. However it is a few years old and its book value is only $1.6 million, so about 7% of its potential is lost due to breakdowns.

Maintenance Index vs Accumulated Maintenance in MikesBikes Advanced

Investment of about $24 per SCU or $600,000/year in preventative maintenance is sufficient to offset deterioration and will keep its operational level (and hence resale) value constant at its current level. Higher investment than this will increase the level accumulated maintenance and hence decrease machine breakdowns. Remember to adjust the amount you spend on maintenance as you increase or decrease your plant size.

 

Check out the latest Question of the Week articles here:

 

Consumer Preferences and Shopping Habits of customers

What Do My Customers Want?

If you want to create messages that resonate with your audience, you need to know what they care about.

– Nate Elliott, Marketing Technology Adviser

Consumer Preferences

It is crucial that your Product Strategy follow the preferences of your consumers. Valuable Market Research has been conducted to investigate what your customers are looking for in the products they buy. This information is available to you under the Market Information Report (under the Key Reports menu).

Market Information Report with information on Product Dimension Sensitivities and Preferences in MikesBikes Intro

The table above (taken from the Market Information Report) will tell you important areas that you should be focusing on.

For example, the Mountain Segment has High sensitivity to Advertising. What this means is you should be focusing your Marketing Budget on Advertising and not PR (as the Mountain segment has low sensitivity in this area). If a market segment is highly sensitive to one area this means: “if you increase this figure, then proportionately more people are going to buy your bike.” This would then result in a higher return on your investment than if you invest in areas where your target market segment has a low sensitivity in.

Each market segment is sensitive to different dimensions. View the Market Segment Scenario Information report.

Marketing Dimension Sensitivities

If we take the Racers segment we see it has a low sensitivity to Advertising and a high sensitivity to PR. This means that an increase to our Racers bikes’ PR index (see Market Summary report) is going to have a larger increase to our sales volume than a change to our Awareness rating.

Questions?

We strongly recommend all MikesBikes Advanced users view our Business Simulation Tutorial Videos.

If you have any questions just send us an email through our Contact Us page.

Accessing Reports from Previous Years in MikesBikes

There are various historical information available for you under the Historical Reports menu.

This can be found under the “All Reports” menu, then use the drop-down box within this screen to navigate through these reports.

MikesBikes Introduction

MikesBikes Intro historical report

The available historical reports are:

  • Income Statement History
  • Balance Sheet History
  • Cashflow Statement History
  • Factory Report History
  • Emergency Equity Decision
  • Industry Benchmark
  • Product Summary
  • Market Summary
  • Decisions

MikesBikes Advanced

MBA historical reports

The available historical reports are:

  • Income Statement History
  • Balance Sheet History
  • Cashflow Statement History
  • Manufacturing Responsiveness
  • Quality History
  • Industry Benchmark Report
  • Product Summary
  • Market Summary
  • Decisions
Smartsims Product Updates for June 2018

Smartsims Product Updates: June 2018

We’re now halfway through the year and exciting developments are coming your way!

Improved Tablet and Mobile Experience

We understand that students have busy lives and are not always near their computer. So we have made it easier for them to check their results and update their decisions from their tablets and mobiles.

They can access all the same decisions and reports as they can on their desktop browser. However, we have adjusted the tablet/mobile screens to show the most relevant content, the reports and scrolling are better suited to smaller devices, and a ‘Hamburger’ style menu makes it easy to navigate.

Mobile Friendly Business Simulations

Key Reports within Decision Screens

When students are making decisions, they often need to review one or more reports which means they often have to leave the decision screen. So we have added a commonly-used reports tab to each of the decision screens.

Selecting a report from the “Reports” tab will display the report as a pop-up over the top of the decision screen. This way students can quickly review key information and make an informed decision without having to leave the decision screen.

MikesBikes Intro Reports Screen

New Historical Reports Menu (MikesBikes Only)

We often receive emails from students requesting access to previous years’ reports. To make this accessible for students, we have now made  historical reports available for them to access. This is available to them under the All Reports menu.

MBI Historical Report

Accessibility and Improved Compatibility with Screen Readers

A key requirement for many institutions is accessibility for students with disabilities. Our simulations work with JAWS and NVDA, two of the most common screen readers, to help vision impaired students navigate their way around. We also provide additional context information for the screen readers in the input fields.

For instance, when you enter the Retail Price input field, the screen reader would announce: “Retail Price. Decision last year was $1600. Minimum Price is $1000. Maximum price is $3000.”

Similarly when you enter the Production input field you would hear: “Production Units. Decision last year was 15,000 units. Maximum production is 18,700 units”

This is of great benefit to vision impaired students as they do not have to hunt around for the information they need to make their decisions.

Updated Report Names

Updated report names for the following reports in MikesBikes Introduction, MikesBikes Advanced and Music2Go Marketing:

  • The Product Summary – Sales, Margin, Production has been shortened to Product Summary.
  • The Market Summary (All Product Details) has been shortened to Market Summary.
  • MikesBikes Advanced only: Financial Results for All Firms is now called the Industry Benchmark Report.

MikesBikes Advanced Updates

There have been three important updates to the MikesBikes Advanced scenario which will apply to all new courses starting from July 2018. These changes are detailed here: https://www.smartsims.com/news/2018-product-update-for-mikesbikes-advanced/

The MikesBikes Dog Retires

Our MikesBikes users will know the little dog which has featured in the simulation over the years. It is with sadness we have retired “Cliks” and “Einstein” the dog. This older style feature simply does not gel with our current updated simulation interface, nor the upcoming new interface under development.

To bid farewell we published an article looking back at the history of “Cliks” and “Einstein” the dogs: https://www.smartsims.com/news/the-mikesbikes-dog-has-retired/

The MikesBikes Dogs have been replaced with a new Performance Star Rating.

Simulation Starting Year Update

Just a reminder that earlier in the year all simulation were updated to have a starting year / year ahead 2019 (reporting year 2018).

 

Our August product updates are now available here: https://www.smartsims.com/product-updates/august-2018/

 

If you have any comments or questions feel free to contact us.

What is a double rollover in MikesBikes Advanced and how does it work?

If you are using MikesBikes Advanced your course will most likely feature a Final Double Rollover.

What is a Double Rollover?

A double rollover means that the simulation will rollover twice simultaneously. A Final Double Rollover ensures your final decisions leave their company in a healthy position for long-term success.

How should I plan for the Double Rollover?

You only need to enter your decisions once before the Final Double Rollover. All decisions will then be processed for the first rollover. For the second rollover most of your decisions will simply repeat, except for the following decisions which will not carry over:

  • Hire/Fire Workers
  • Buy/Sell Plant
  • Raise/Repurchase Equity
  • Raise/Repay Long-Term Debt
  • Product Development Decisions
  • Takeover and Owned Company Decisions (if applicable)

If you have any questions please contact us.