Category Archives: News

Professor Darl Kolb

How Business Simulations Solve Problems with the Modern Classroom

Traditional methods of teaching via pure theory have dominated the educational landscape for generations, but technological advancements have disrupted not just how we do things, but also how we process information and learn. That is, there are now significant drawbacks of traditional teaching methods negatively affecting students’ learning.

Identifiable limitations of traditional/theory based education include:

1. Lack of theory connecting to real world application;
2. Dry nature of theory disengaging the fast-paced learner of today;
3. Lessons being viewed as an object to be passed on;
4. Little opportunity to experiment with theory;
5. Limited ability to reflect, observe and act.

Business scholars have long contended that the acquisition of theory by students is not a sufficient learning outcome. Rather, it is the application of this theory through direct experience that leads to the development of crucial management competencies such as interpersonal skills; critical thinking, workplace readiness and professional confidence. Methods in which direct experience is gained has evolved with the rise of technology and web 2.0. Today we use technology and the internet to entertain ourselves, as well as improving productivity. It is posited that as the current generation joins the workforce, the demand for e-learning will continue to increase as managers are increasingly referring to technology for solutions.

It can be argued that today’s business is very complex, requiring sophisticated skills; and that experience based learning is very productive in teaching business students. The Association to Advance Collegiate Schools of Business (AACSB International) founded in 1916, has long identified the value of experiential learning.

Why is experiential learning considered a huge leap forward in engaging the students of today? Experiential learning is described as an “outward-facing curricula and experiential education can create the critical intersection between classroom and business learning that keeps faculty and students connected to rapidly changing business models” . More than just informing students, their ability to critically and actively engage in research must be triggered through experience. This will lead to students using personal skills and tacit skills for their own knowledge creation.

While theory is necessary to create a base of knowledge, practical application is required to test a student’s understanding and experience these concepts at a deeper level while facilitating learning outcomes which they can take into the workplace.

Importantly, the Control-Value theory suggests that achievement emotions affect cognitive abilities, learning strategies, motivation, and self-regulation. Positive emotions allow students to enjoy themselves while learning, and peak their interest in developing professionally. Achieving positive emotions associated to learning can be difficult in traditional teaching methods. In stark contrast to positive emotions, the negative counterpart hinder the learning experience. Emotional responses like anxiety, frustration, shame or anger stunt desires to learn. However, it can also be argued that experiencing negative emotions can actually motivate students to perform better. Self-policing a controlled response to negative outcomes and emotions, students can accept that failure while difficult, is an opportunity to update tactics and strategies, to ultimately achieve success.

Experiential learning tools like business simulations give students the opportunity to experience the relevance of their learnt subject matter first-hand. Giving students more control and responsibility for their own learning can enhance their ability to learn from past experience. This is where simulation based learning become essential. Experiential Learning focuses on the learning process for the individual, through observation and interaction with the subject they are learning about rather than the traditional process of learning from a textbook. This also somewhat releases individuals from the burden of winning at the end of the game, to instead experience adaptive decision making as is often required in real-life situations. Simulations have flexible learning environments – different things can be learnt from the same game, and different participants can learn different things.

A good business simulation will allow students to:

1. Apply theory in a real-world setting. Allowing them to bridge the gap between learning and decision-making.
2. Engage in a challenging environment. To survive and succeed, they need to adapt and improve to changing conditions relating to their products, the competition, and the market as a whole.
3. Retain knowledge and develop skills. Absorb the lessons learnt to identify the actual consequences of decisions in the real world.

Business simulations bring practical reality and excitement to the classroom. Students obtain a vicarious exposure to the problems faced by real management teams. They gain immediate, concrete experiences, providing a base for their own observations and reflections in an environment that fosters positive attitudes toward learning.

– By Danny Master, Ian McPherson and Brook McFarlane

 


 

Ettinger, A., Holton, V., & Blass, E. (2006). E-learner experiences: what is the future for e-learning? Industrial and Commercial Training, 38(4), 208 – 212.

Finch, D., Peacock, M., Lazdowski, D., & Hwang, M., (2014). Managing emotions: A case study exploring the relationship between experiential learning, emotions, and student performance. The International Journal of Management Education, 13, 23 – 36.

Haro, S., & Turgut, G., (2012). Expanded strategy simulations: Developing better managers.  Journal of Management Development, 31(3), 209 – 220.

Kolb, A., Kolb, D., (2005). Learning Styles and Learning Spaces: Enhancing Experiential Learning in Higher Education. Academy of Management Learning and Education, 4(2), 193 – 212.

Image displaying the question "How do i maximize my total marketing contribution?"

Music2Go Tip: Improving Total Marketing Contribution

Image displaying the question "How do i maximize my total marketing contribution?"Landing on this page means you have come searching for answers to the question: “How do I maximize my total marketing contribution?” 

To answer this we first need to establish an understanding of what Total Marketing Contribution is and why it is important.

What is Total Marketing Contribution? Why is it important? 

Total Marketing Contribution is typically how you are graded or compared to your peers within your course (there are other indicators but instructors typically opt to grade you on this). While your marketing contribution is calculated as…

Marketing Contribution = Sales Revenue – Cost of Goods Sold (CoGS) – Marketing Expenses.

To get your Total Marketing Contribution you just sum up all the marketing contribution your firm has generated for the duration of your simulation (so far).

How do I maximize my Total Marketing Contribution? 

There are essentially four methods you can use here:

  1. Increase Sales Revenue while CoGS and Marketing Expenses remain constant
  2. Reduce your CoGS while Sales Revenue and Marketing Expenses remain constant
  3. Reduce your Marketing Expenses while Sales Revenue and CoGS remain constant
  4. Increase Sales Revenue while reducing your CoGS and Marketing Expenses.

Typically, you will want to aim for the fourth method used above.

To increase your Sales Revenue while reducing (or at the very least maintaining) your marketing expenses you need to ensure your Marketing Budget is spent as efficiently as it possibly can be.

How do I spend my Marketing Budget efficiently? 

Make sure you are reaching your customers through the most effective methods and appealing to their desires/wants/needs. Check the market information report, check to see what the market segment you are marketing to has the highest sensitivity to (higher sensitivity means higher change in sales volume). Check the Media Viewing Habits of the market segments, and take into account the media reach of the different media types.

When you have sales promotion available to you (after the first rollover), check the how old your product is within the Distribution Cover and Sales promotion report and see how to target your sales promotion based on your product’s lifecycle within the Market Information report.

When evaluating your decisions from the previous period you can look to reports like:

  • Some Product Details (or All Product Details)
  • Product Awareness Increase By Media
  • Distribution Cover and Sales Promotion (once Sales Promotion comes available to you)

(Note that market research reports will come out of your marketing budget so purchase these reports wisely). 

How do I reduce my Cost of Goods Sold? 

The best method for reducing your Cost of Goods Sold is conducting product development to reduce the cost of your product you’re selling. Consider the following critical points:

  • “Is the Research and Development cost worth the reduction in the production costs?”
  • “This will reduce my production costs but I need to reduce my price to remain competitive, thus reducing my gross margin per unit. Is it worth it? If I reduce my price and the production costs to maintain my gross margin per unit, will this increase my Sales Revenue anyway?  Is this market segment sensitive to changes in price?”

When evaluating your firm to see if you need to further reduce your firm’s production cost through product development, you can review the following reports:

  • Product Contribution
  • Pricing Overview

 

While there is no ‘one-way’ to win any of our simulations; be sure to check out our tutorial videos and the player’s manual for advice on how to best implement a strategy your team has chosen.

If you have any questions about the simulation feel free to get in touch with us at help@smartsims.com or fill out a contact us form.

Image of question on piece of paper: "Does the leftover marketing budget rollover to the next period?"

Music2Go Tip: Leftover Marketing Budget

Besides the view of the Auckland skyline and the iconic Skytower, it is likely you have come to this page searching for the answer to the question: “Does the leftover marketing budget rollover to the next period?”

The short answer? No. It is therefore in your best interest to spend the entirety of your marketing budget (see Budget Spending report under Forecast Results to see how much of your budget you have spent).

Be sure not to overspend on your budget as well. If you do spend more than has been allocated to you then the simulation will cut back on your spending for you which may not be in the manner you would like!

 

How do you get a larger budget?

Your budget is given to you based on either 50% of your last year’s gross margin (see the Industry Benchmark report under key reports for this figure) or $25 million, whichever is higher (up to a maximum of $50 million).

Alternatively, you can launch a new product which provides your firm with an extra $10 million to fund the launch campaign (but this comes with its own expenses). This funding only lasts for one year.

 

While there is no ‘one-way’ to win MikesBikes or Music2Go; be sure to check out our tutorial videos and the player’s manual for advice on how to best implement a strategy your team has chosen.

If you have any questions about the simulation feel free to get in touch with us at help@smartsims.com or fill out a contact us form.

Picture with text overlaying saying how to forecast sales within MikesBikes Advanced

How to Forecast Sales in MikesBikes Advanced

The video above will demonstrate how to make a Sales Forecast for an existing product and a new product, as well as the complementary production decisions for both.

Just a note that for our example in calculating the Planned Production units for our existing product, you will see that we have Closing Inventory. However, if you have no units of Closing Inventory, you do no need to subtract any units from your Sales Forecast to calculate your Planned Production.

We have provided you with the script for the video below to read through:

“In MikesBikes Advanced you will be required to enter a Planned Production decision for each of your products. Your Planned Production will be your Sales Forecast minus any existing stock.

Planned Production = Sales Forecast – Existing Stock

How do I conduct a Sales Forecast?
A Sales Forecast is a prediction of the number of units we believe we can sell in the year ahead. This is calculated by predicting our market share for the year ahead; being the percentage of the total market we believe we can secure.
Estimated Market Size Next Year x Percentage Market Share

What is our market share?
So what we need to do first is to identify our current market share through the Market Summary report. We can see that for our RC Rockhopper product, we had a market share of 49.8% of the total unit sales last year.

What is the estimated market size next year?
We then need to find out what the total market size will be for the year ahead. If we look at the Market Information report, we can see the forecast demand for the year ahead is 45,000 units.

Calculating our Sales Forecast
Therefore, in this example our Sales Forecast would be 49.8% of 45,000 units. Being 22,410 units.

Note that if you believe that based on your decisions for the year ahead you can increase your market share from last year, you would adjust this figure.

For this example, we believe our market share will remain constant therefore Sales Forecast will be 22,410 units.

Calculating our Planned Production
Now that we have a Sales Forecast we can calculate our Planned Production.

We can see on the Product Summary report that we have 1,698 units of Closing Inventory.

Therefore, our Planned Production is 22,410 minus 1,698 units. Being 20,712 units.

This is entered this into the Products screen under “Pricing”.

How do I conduct a Sales Forecast for a New Product?
For a new product, the challenge is we do not have any existing sales to calculate a Sales Forecast from.

Therefore, a Sales Forecast for a new product can only be based on the Forecast Total Market Size.

In this example, we are wanting to launch into the Leisure market.

The Market Information report tells us that for the year ahead, the Forecast Demand for the year ahead is 26,000 units.

If we then look at the Market Summary report we can see that there were no competitor products in this market last year. However, given the opportunity an empty market creates, we should assume that at least one other competitor will also launch into this market.

Considering this Single-Player scenario only has one other competitor we can aim to produce 50% of the Leisure market’s total size which is 13,000 units. Click Apply”

 

If you have any questions, please feel free to click here and fill out a form or email us at help@smartsims.com.

Smartsims’ New Website

Smartsims Logo

It has been a big year for the Smartsims team! We have updated our logo and are now ecstatic to announce the launch of our new website!

There are many new exciting features that are a part of this! You may have already noticed:

 

Resources Section

Under the resources menu you will find: Case Studies, Articles, Simulation Resources and Hall of Fame. You will likely be familiar with the Hall of Fame and Articles. However, we are most excited about our new Case Studies page. Here you will find interviews with instructors sharing their experiences using our software; journal articles; and interviews with students.
 
 

Featured Case Study:

Preview for Case Study "Why students love SmartsimsS"


 

New Product Imagery and Product Logos

We have great new logos and product imagery for our products. If you’d like to take a look, you can find these new logos on the following pages:

Product Logo and Image for MikesBikes Intro       Product Logo and Imagery for MikesBikes Advanced

Product imagery and logo for music2go marketing       Product Logo and Imagery for AdSim

Launch of MikesBikes Accounting

Product Logo and Imagery for MikesBikes Accounting
Our most recent addition to our product line, MikesBikes Accounting, is a business simulation designed to support learning objectives of management accounting courses. We have more information on this product here. Feel free to get in touch with our team by filling out a form if you’d like to learn more.

New Responsive Design

This will allow you to easily view our website on any device while maintaining the same experience.

If you have any questions or comments feel free to get in touch with us by filling out the form below.
 

 

Why is calculating total capacity so important

Calculating Total Capacity

Why is calculating your Total Capacity important?

While the simulation shows you your firm’s current total capacity, you can use this calculations to predict the amount of bikes your firm can produce in upcoming years; work out if you need to reduce or increase your capacity or; question whether there is an imbalance between your factory and workers.

In MikesBikes your factory is most effective when the capacity of your workers is well matched to the capacity of your plant. If your Factory Workforce and your Plant Capacity get out of balance then it is likely they will not be working to their full potential (possibly costing your firm more than is necessary).

Total Capacity SCU = Squareroot (Factory Workforce Capacity SCU * Plant
Capacity SCU)

This equation allows you to emphasize one form of capacity over another depending on how each approach fits with your strategic plan. For instance, you can employ more workers immediately whereas you have to wait 12 months for new Plant to become available.

Just be aware that if your Factory Workforce Capacity and Plant Capacity favor one over the other too much then you might find this is inefficient. So check your Manufacturing Responsiveness report when deciding whether to employ more workers or to purchase more Plant.

How do I calculate my Total Capacity?

Example 1
Factory Workforce Capacity = 25,000 SCU and Plant Capacity = 25,000 SCU
Total Capacity = sqrt (25,000 * 25,000) = 25,000 SCU

Example 2
Factory Workforce Capacity = 35,000 SCU and Plant Capacity = 15,000 SCU
Total Capacity = sqrt (35,000 * 15,000) = 22,912 SCU

Example 3
Factory Workforce Capacity = 40,000 SCU and Plant Capacity = 10,000 SCU
Total Capacity = sqrt (40,000 * 10,000) = 20,000 SCU
 
Be sure to note that this total capacity won’t be completely what is available to you. Your factory faces inefficiencies (if you’re using MikesBikes-Advanced then this will be things like breakdowns, reworking, setup, raw materials stockout and training) which will mean you don’t get to use the full 100%. Check out the manufacturing guide for more information on how this will affect your decisions.

 

How to Design a Business Course around MikesBikes Advanced

https://youtu.be/PkfjJVteMxI

Designing a course requires professionals, topic experts, and a deep understanding of students’ needs. The long and short of it – course design takes time. Therefore, we are creating a series of articles on how select Smartsims clients employ business simulations to engage their students.

This article follows Professor Darl Kolb of the University of Auckland. Having utilized MikesBikes Advanced in both his undergraduate and post-graduate courses, Professor Kolb’s students often exclaim this is the highlight of their degree.

Professor Kolb truly embraces the concept of experiential learning by utilizing course activities which reflect real-world situations managers of a company may experience. Through role-play students adopt roles within a ‘management team’. Instructors will take up the role of ‘shareholders’ or ‘board of directors’ who the students are responsible to. Deeply ingrained within the course content, the simulation is entirely relevant to the student’s and their futures. This relevance inherent within the simulation is key to keeping the students engaged. Professor Kolb finds this metaphore also provides students a sense of purpose and develops their skills for real-life business situations.

How is the simulation structured in the course?

“We have put it right at the centre of the design so it begins early on and runs on throughout the course so there is no seperation, it is intertwined … Students are getting used to the simulation just as they are getting used to the course.”

– Professor Darl Kolb

Generally MikesBikes Advanced features two key phases; Single-Player and Multi-Player. The Single-Player practice round has students competing against a computer opponent where they can control moving back and forth between decision periods (which we term “rollovers”). This usually occurs over a two to three week period. Students then move onto the Multi-Player competition where student teams will be competing against each other for highest Shareholder Value.

Professor Kolb’s course is structured according to the following key events:

  1. Single-Player practice phase
  2. Resume Activity
  3. Multi-Player competition phase
  4. Reflections
  5. Board Meetings
  6. Group presentations
  7.  Final Shareholder Value

 

Single-Player Phase

“Students play the Single-Player to get orientated [with the simulation] just as if they were getting work experience to get this executive role we are going to give them.”

– Professor Darl Kolb

Professor Kolb introduces the course and the simulation together, ingraining into students that theory goes hand-in-hand with real-life business situations. Providing students with access to the Single-Player allows students to experience the simulation before they begin their simulation associated assignments.

Professor Kolb introduces the simulation to students in the first class and covers how the course will run. Outside of class time students will use the Single-Player for the first week aiming to gain the highest Shareholder Value they possibly can within a set number of rollovers (six to eight). Student’s best result in the Single-Player is included with their resume.

Resume Activity

Each student must submit a brief resume which includes past qualifications and/or experience which may be relevant to a position in the Management Team of their MikesBikes company, as well as their best Single-Player result. Professor Kolb then uses this information to assign students into teams of five, with an objective of splitting up those who performed well in the simulation and/or who bring previous business experience/qualifications. As part of this, Professor Kolb also assigns each student the role of either: CEO, Marketing Manager, Operations Manager, Finance Manager or Innovation Manager for their team (or ‘firm’). This application process helps students to develop the skills required to construct a resume and apply for a specific role they desire, often students will apply to particular roles they envisage for themselves after having completed their course.

 

Multi-Player Phase

“When their company begins performing we give them three practice rounds so they get to see the full MikeBikes-Advanced experience but they also get to restart and have another go in a different market. We have this stage to help students to come to grips with the complexity and the depth of the simulation.”

– Professor Darl Kolb

For the duration of the course, Professor Darl Kolb will continue with tying the simulation into the content he teaches. As a live case study, MikesBikes-Advanced provides him with a lot of opportunities to address specific events in the simulation by applying theory he chooses to present in class. With the simulation being applicable to each and every student, students find this content engaging and relevant.

Multi-Player Practice Round

The Multi-Player begins with four practice rollovers which occur weekly. This gives students an opportunity to familiarize themselves with their role and the team’s dynamics. It also enables students to, this course design starts students with a few practice rounds of the simulation. Letting students test strategies, make mistakes and learn from these. Students are bound to make mistakes and that is the nature of learning. This lets students make mistakes without affecting their grades later on. After the practice rollovers have been completed, the simulation then resets ready for students to begin with the real competition.

Multi-Player Competitive Round

The simulation is then reset ready for students to begin the real competition. Further rollovers are processed weekly. Over this phase Professor Kolb uses the activities below to facilitate real-world learning outcomes.
Reflections

At certain points throughout the course Professor Kolb assigns reflective exercises for students to complete. The most intense exercise for the individual students are the reflective essays; they require a combination of theory, personal experiences, introspection, and self-evaluation. Students are then graded upon their ability to describe their situations, their insight, and their ability to combine this with theory.

Board Meetings

Mid-simulation students engage in mock board meetings, where the Management Team (students in each group) must present to their board of directors (two or three faculty members). Students summarize their strategy, goals, and performance. Board members challenge students on the reasoning behind their decisions and remind them of their responsibilities to shareholders in future decision periods. This is potentially an activity which students can be graded on.

Group Presentations

After the final rollover each Management Team presents their simulation journey to the class. This is an opportunity to reflect on what went well, what mistakes were made, what they would they have done differently and what their learning outcomes have been.

Final Shareholder Value

Teams are ranked at the end of the simulation based on their Shareholder value. This is Smartsims’ recommended key performance indicator.

 

How does Professor Kolb grade the simulation?

Professor Kolb’s course content focuses on managing people and organizations. As such, although students are graded on final shareholder value, the majority of their course grade is assigned to reflections, board meetings and group presentations as mentioned above.

 

Is this the only way to design a course with MikesBikes Advanced?

Far from it! This is only one article in a series which explains various different ways other instructors are including the simulation within their business courses. There are multiple ways on how to incorporate a simulation beyond this too! The options are limitless.

Want to get started incorporating the simulation into your course design? Want to learn more? The Smartsims Team have years of experience and are here to help. Click here to talk to them about your course and how you would like to implement MikesBikes.

By Brook McFarlane

Image displaying text "what is offline mode"

Tutorial Video: How To Use Offline Mode (All Simulations)

The video above will run you through the offline mode; what it is and how to launch it within all of our simulations. Please do note that some courses have the offline mode disabled, in which case you won’t have the option of launching an offline mode to test your Multi-Player decisions.

We have provided you with the text of the video for you below:

“Our simulations feature an offline mode which allows you to test your Multi-Player decisions through it. This video will first run through how you can launch an offline mode and following this I will discuss the limitations of the offline mode.

Now we will show you how to launch your offline firm. Please do note that some instructors have chosen to have the offline mode disabled for your course.

When you login to the Smartsims website and navigate to the simulation page, you will see a blue launch button and also an Offline button under the Multi-Player heading. Clicking on the blue button launches your live firm and clicking on the offline button launches an offline version of your firm where you can test the quality of your decisions. You are able to rollover to try out different options and strategies before you finalise your decision for that period.

The offline mode has several limitations to it, so bear these in mind.

In offline mode, your competitors use only their default decisions so it is important you don’t read too much into the results. For instance in Offline Mode you might launch new products into empty markets and do very well due to the lack of competition. But if you use those same decisions in the live Multi-Player, you could do poorly if the other firms choose to launch new products at the same time. Always think about what might happen if your competitors were to do something differently.

Decisions in Offline Mode are not saved back to your Multi-Player firm, so if you like the decisions you made, you should copy/paste the Current Decisions report into an Excel file, and re-enter the decisions by launching your live firm.

Now try using Offline Mode yourself, and feel free to email help@smartsims.com if you have any questions.”

By Dany Master and Brook McFarlane

Jaya, Maria And Rezyl Share Their Journey To First Place

Rezyl, Jaya and Maria (pictured above) form the team “Aether Bikes” from King’s Own Institute, Australia. While competing with other teams within their course (taught by Rex Walsh), Aether Bikes managed to achieve First Place within our MikesBikes-Intro Top 20 Hall of Fame!

Why is this significant? What does it mean?

Our Hall of Fame historically compiles the top 20 Shareholder Value results from firms played by students in courses worldwide. This means Aether Bikes beat every other team within our database. Considering our database includes hundreds of other firms and thousands of other students, for them to beat every single one of them is quite a feat in itself! It is fair to say this team had quite a good grip and understanding of business as a whole.

For those not in the know, Shareholder Value is the main Key Performance Indicator used within MikesBikes. Further, a rollover is the simulation’s way of showing a progression in time.

How did Aether Bikes achieve this?

“We found MikesBikes-Intro very competitive and engaging.

We adapted our strategy based on the current situation of the market and our competitor’s actions. In doing so, we made sure to keep track of all the Key Reports in the simulation, such as the Industry Benchmark Report and Market Summary (All Product Details) report. In addition to that, we have also made sure to read the Player’s Manual and watch all the videos available in the website.

The competition started out steady, but as time progressed, it got more competitive than we had anticipated. It became more difficult to come up with a plan that will differentiate our firm from others, as our decisions and strategy were quite similar to our competitors. What helped us on this were the resources available in the website, such as the manuals, videos and the key reports in the simulation.”

What advice did Aether Bikes have for other students?

“We would like to advice future students to read the manuals and watch the videos available in the website. These are very helpful in understanding the game. It’s also important to look at what your competitors are doing by utilizing the reports available. We strongly advice students to take advantage of the Single-Player, as this will better prepare them for the Multi-Player part of the simulation.”

Aether Bikes’ final comments:

“We believe that Smartsims has developed a great program in providing a real-world business experience. We have learnt and gained extensive knowledge about business, and how to run a company, just like in the real world. We would like to thank Smartsims for their efforts and our lecturer, Rex Walsh for being supportive and for providing us with helpful advice.”

By Brook McFarlane

Click Turning Back in Time

Flashback to MikesBikes Way Back When

There’s a social media trend that’s been going on for quite a while now, where you post old photos or memories from the past to share among your friends. Along with the photo is your caption, for which you will add either #FlashbackFriday, #TBT, #ThrowbackThursday or both if you wish. These hashtags denote that your photo is a “blast from the past.” This trend is the theme of our article and today’s piece is certainly a major #TBT. Continue reading Flashback to MikesBikes Way Back When