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Information to the event ”Managerial Financial Decisions course” Prof. Cesim Global Challenge simulation overview. Prove your strategic knowledge! Plan and execute the strategy together with your team members, and lead your company through the simulation. Learn to handle complexity!

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Information to the event ”Managerial Financial Decisions course” Prof. ....

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    1. Information to the event”Managerial Financial Decisions course”Prof. ....

    2. Cesim Global Challenge simulation overview Prove your strategic knowledge! • Plan and execute the strategy together with your team members, • and lead your company through the simulation Learn to handle complexity! • Real decisions and market reactions • Gain insight to:.... Experience, the joy what strategic improvement gives you! • ”Noone is perfect, but a team can be!” • Compete in teams • Celebrate your success Some general info about the course if needed-TO DO: Prof. ......+ you could add the header and write sg like ”.... GC4 course” and insert the school logo

    3. Concrete experience Applying new ideas Observations & reflections Analysis & planning Decision making Results & team-work Generalising from the experience Lectures & discussion Learning goals: familiarize with complex decision making Increase participants’ awareness of the complexity of operating an international company To develop capabilities in analyzing key environmental & organizational variables Enhance fact-based analytical decision-making and crystallize the financial implications of business Gain practical experiences in team-work and problem solving

    4. Students’ opinions • ”Our strategy proved to be successful by reaching €38.91 share price by the end. We truly enjoyed the whole simulation game. Sadly, these few weeks have been short to get deeply to know the game and form the proper strategy; however we believe that have provided excellent opportunities to get insight the business life and its decision making processes.” Stratégiánkat végeredményben sikeresnek mondhatjuk, hiszen 38,91-es részvényárral megnyertük a szimulációt. Összességében elmondhatjuk, hogy nagyon élveztük a játékot. Sajnos kevésnek bizonyult ez a pár hét a játék megismeréséhez és a stratégia kialakításához; ugyanakkor úgy gondoljuk, hogy kiváló lehetőséget adott belepillantani a játék az üzleti életbe és a döntések meghozatalába. (Fehér Anna - Oláh Zsuzsa - OstoróczkyBoglárka) • ”I would like to say thanks for the chance to participate and try CESIM. I liked it! It was a hard work to make decisions; however I hope I could demonstrate the aspects I considered through the simulation”Szeretném megköszönni a lehetőséget, hogy részt vehettem az órákon és kipróbálhattam a CESIM-et. Nagyon tetszett! A döntések meghozatala komoly munkát igényelt, és remélem be tudtam mutatni a döntéshozatali aspektusokat melyeket használtam a szimuláció során. (Engelhardt Márk József)

    5. Students’ opinions – cont. • ”In this game we have learnt quite a lot of useful and important issues that we may utilise in our future work. It is important to note that we have been part of a truly complex, thorough simulation game that required concentration from us. We got to know that in business life every small decision has its consequence for success or failure. We are satisfied about our results, because all of our goals that we had set in the first round have been fulfilled; we have been market leaders in our European and Asian markets, whilst our share prices have risen sharply and our operating profit has increased significantly. However, we are a bit disappointed that we do not have more rounds to see what could have happened in this interesting and challenging game.” A játék során nagyon sok hasznos és fontos dolgot tanultunk meg, amelyeket a későbbiek folyamán sikeresen alkalmazhatunk majd saját munkáinkban. Fontos megemlíteni, hogy egy hihetetlenül összetett, nagyon sok gondolkodást és odafigyelést igénylő szimulációnak lehettünk a részesei, amelyben megtanultuk azt, hogy az üzleti életben minden apró döntés hatással van a sikerre és éppúgy a kudarcra egyaránt. A játékban elért eredményeinkkel elégedettek vagyunk, hiszen az első kör után megfogalmazott céljainkat kivétel nélkül teljesítettük: piacvezető termékekkel voltunk jelen az európai és az ázsiai piacon is, mindeközben a részvényáraink magasra szöktek és jelentősen pozitív üzleti eredményt sikerült produkálnunk. Némi csalódottsággal tölt el minket viszont az, hogy a félév legérdekesebb és legizgalmasabb vetélkedésében mi lett volna akkor, ha még rendelkezésre áll néhány kör a csapatok számára. (Kalló Imre – Kapitány Gábor - LanczAlexandra)

    6. Cesim Global Challenge, a web-based simulation General introduction The Home screen • The simulation is completely web-based. There is no need to install any separate applications and the simulation can be accessed from any computer that has an internet connection. • The simulation platform allows team-members to work virtually if they wish. Each team-member has her/his own account that enables them to make decisions and scenarios on their own and later combine the outcomes with the other team-members on the [decision checklist] -page. • The platform also includes a communications forum that can be used to communicate within teams and between all teams in one market. • Menu bar • Communication with team & instructor • Quick details overall market situation • "Closest deadline“ • Message forum • Team decision log

    7. The simulation consists of 2 practice and 10 decision rounds Decisions making flow during the simulation course The learning process during the rounds Detailed information: Readings/Decision Making Guide • You can modify the decisions for the current round until the deadline for the given round • If teams have not saved decisions for a round, previous round’s inputs are used

    8. Simulation case and simulation goal • Simulation case: The team will take over as the new management team of Mobilé Inc, a global mobile handset manufacturer. The team will be responsible for the company’s strategy, R&D, marketing, production, logistics, and finance. The essence of Mobilé Inc is a fast-developing mobile handset market with product life cycles driven by technological evolution. • Simulation goal: The main objective is to deliver sustainable, profitable growth. Typically this is measured by a ratio called “cumulative total return to the shareholders”, which combines share price development and dividends paid to show the total return to the shareholders. The teams may try to manipulate their profits, revenues, and market share in the short run, but share price will punish any short-sighted decisions sooner rather than later.

    9. Decision making: 8 fields to be covered 8. Finances and Budgets • Treasury management • Dividend policy • Capital structure • Short and long term debt • Financial indicators - Budgets 1. Market conditions - Read the market outlook 2. Demand • Total market demand • Predicted market growth • Product selection • Market shares 7. Logistics - Delivery priorities • Transfer prices • 6. Marketing • For each product and market • Product feature decisions • Pricing decisions • - Promotion investments 3. Production • Production capacity • Capacity allocation • Outsourcing • 5. R&D • Development of technology • Development of new features • - Purchasing of licenses for technology and features 4. Investments • Estimations of future demand • Investment in new production plants

    10. Market Outlook gives rough idea of market developments in each round It is very useful to read the market outlook before you start to make decisions. Outlooks contain important information on possible future developments and will help you in anticipating market movements. At the bottom of the page you'll find a dedicated tab for parameters. These parameters (costs, exchange rates, tax rates, etc.) are presented for the current and the previous round. Together with the ones that are not shown here, these parameters define your business case and you can take advantage of this information for example when planning for taxes, logistics or investments.

    11. Teams estimate demands for each round Steps for demand forecasting • Estimating total market growth for each market area. Market Conditions -page is useful for making these estimates. • Choose which technology products you sell in each area. • Estimate market shares for each of these products in all of the markets. Total market shares for this and last round can be seen on the far right side for all three regions. • Check the expected demand in each area. • Crosscheck with projections on planned infrastructure (Network coverage) improvements of all four technologies.

    12. Unit costs and available capacity determine production plan Steps for production planning • Choose which technologies to produce in each production line and how much of the production line. capacity you allocate to each product. • Check the unit cost. The scrap% depends on the maturity of each technology in production. • Decide how much production is allocated to contract manufacturers. • Two concepts to keep in mind: • Capacity utilization • Learning curve

    13. Investment in new plants Steps for investment planning • Estimate global demand for the next two rounds. This year’s demand is based on the estimates made on the Demand page. • Decide investments into new production facilities in USA and/or Asia. They will be available for production two periods from now and you have to pay for them one period from now. • Check alignment of projected demand and capacity.

    14. The marketing mix Steps for marketing planning • First decision you make is to decide the number of handset features to be offered. More features cover more of the various customer preferences, but also cause more costs. • Decide Price and promotion decisions here. • Check your budgeted financial outcome. • Crosscheck origin of your products • Features can only be implemented if the company has invested to its own R&D or license purchases. • Price elasticity differs between the markets. • Promotion influences the demand at three levels: product, market, and global

    15. Logistics:The team decides delivery priorities and transfer pricing Steps for logistics planning • Choose in which order to satisfy your demand in the markets. This decision is only relevant if your global supply is not enough to fully satisfy your global demand. • Set transfer prices. They make other business units participate in R&D and other fixed costs and can also be used to benefit from different tax rates between countries. • Check resulting production flow and cost implications.

    16. R&D: own development and technology licenses Steps for R&D planning • Decide your own R&D investments into each technology. You need to keep in mind that all results from your own R&D investments are available with a delay of one period. • Decide where to complement own R&D by buying technology and design licenses. License purchases make the technologies and features available immediately. • Check the number of handset features available in each Technology.

    17. The financial decision heavily impact company success Steps for financial planning • Here you can make the finance decisions. i.e., increase (+)/decrease (-) long term loans, issue/buy back shares, and pay dividends. • Check the capital structure of the company. It is reasonable to try to keep approximately equal amounts of debt and equity on the balance sheet. • Transfer funds between different countries, if needed. Blue bars indicate cash reserves and green bars indicate local debt. Cash at the end of the year cannot fall below 2 million USD. If the planned financing is not sufficient to maintain this requirement, the system will fill the gap automatically by taking short-term debt.

    18. Submitting Team`s Decisions: work efficient as a team The steps of the succesful Team`s Decision saving process are: • Agree on your team`s strategy and the team`s decision saving process. • Make decisions on your own according to your team`s strategy. • Leave time for submitting the team`s decisions. In the simulation you work together as a management team of a company. You have to react on given market conditions in each round. First you make a draft on your own, then you have a look at the individual proposals of all the team members and agree on a common decision set, which you submit to Team`s Decisions. • You can choose rather one of the team member`s decision sets and click on ”Copy”, or click on ”Go” under Team`s Decisions and add the team decisions to that profile. • After the round deadline the simulation calculates the results based on the Team`s Decisions. The reports are available under ”Results”.

    19. The simulation calculates the results once the deadline has passed Results calculation process and content After each round the system generates reports that depict the results of each team in a particular market. Results consist of: • Summary report with a set of charts • Financial statements; including consolidated P&L and balance sheet, and parent company (USA) cash flow statement • Financial ratios; including share price info and key financial indicators • Area reports for all areas; including market reports and P&L and balance sheet for each business area • Production report; including information about the production volumes, contract manufacturing, production facilities • Cost report; including information about scrap rates and production and logistics costs Results provide useful information about a team’s own sales, operations, and finances. In addition, results can be used to benchmark performance with the competing teams in the same market.

    20. The website to know more about CESIM