1 / 17

GLO-BUS Simulation Introduction

GLO-BUS Simulation Introduction. Mr Jeff Stambaugh Dillard College of Business/Rm 257A jeff.stambaugh@mwsu.edu. The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill. Built by Stambaugh/2009. Introduction to Glo-Bus Simulation.

reese-lynch
Download Presentation

GLO-BUS Simulation Introduction

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. GLO-BUS Simulation Introduction Mr Jeff Stambaugh Dillard College of Business/Rm 257A jeff.stambaugh@mwsu.edu The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  2. Introduction to Glo-Bus Simulation • You have been selected to take over management of a digital camera manufacturer with its factory in Taiwan and worldwide sales • Major part of your effort / grade in this course • This will be fun! The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  3. Objectives • Employ strategic concepts of course (theory into practice) • Practice technical skills acquired in previous courses • Hands-on implementation • Attention to detail (or details) • Performance improvement / measurement The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  4. Big Picture • Profitable business with sales in North America, Latin America, Asia-Pacific, and Europe-Africa • Two major camera lines (entry level and multi-featured) and your company has 3 models of each • Your company has 7 major competitors (the other people in this room) • Simulation is real play—actions of your competitors DO make a huge difference in your performance The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  5. Starting Position • Profitable, well-regarded company with sales in all 4 regions • Sold 800,000 entry-level and 200,000 multi-featured cameras last year • Prior year revenues: $202M • Net earnings: $20M • EPS: $2.00 • Credit Rating: B+ • P/Q: 2.5 • $100M line of credit ($25M currently in use) The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  6. Your Objective • Manage / grow your firm to maximize several measures over 7 rounds • First, build a product customers will buy at a price that makes money for you • Then, refine the market offering to maximize profits • While always being smart about corporate management (dividends, loans, stock purchase / buyback plans) • Grades will mirror actual performance The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  7. Investor Expectations / Scoring Standards • Grow EPS 8% annually first 4 years, then 4% • ROE of 15% or better (17% last year) • B+ or higher credit rating (B+ last year) (Not included in scoring) • Stock price gains of 8% annually first 4 years, then 4% (Opening stock price is 30) (40% of score) • Image rating of 70 or higher (70 last year) • Two equally-weighted standards: how well did you meet investor expectations and how do you compare to your competitors? The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  8. Strategy • There is no “correct” strategy to succeed • Your performance depends on: • A well-crafted strategy • The expertise of you execution • Actions of your competitors (region by region) • Cost-leadership, differentiation, combo, and focus strategies ALL viable The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  9. Basic Simulation Principles • Everything is done via the web (www.glo-bus.com) • You submit decisions for each round • Each round represents 1 year (starts in Year 6) • Computer “competes” your decisions against other corporations • You receive detailed results for each round • Seven total rounds in this class (plus one scheduled practice round) The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  10. Mechanics • Your team inputs decisions from your corporate lobby page • EXCEL-based … doesn’t run on Mac version • Last set of saved decisions is what computer will run • Run occurs automatically at deadline • Results are available within an hour of deadline • Getting started … register at www.glo-bus.com • Have your company registration code and credit card handy ($35) The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  11. What Kinds of Decisions Are Involved? • Product design / features (10 decisions) • Pricing and marketing (15 decisions) • Manufacturing ops and HR practices (15 decisions) • Corporate finance (4 decisions) • CSR (6 decisions—influences image rating) • Special order bids (100,000 EL cameras—price only) • Lots of on-screen help to help with the decisions • NO quarterly adjustments • Key Notes: • Your factory is all JIT • You build camera’s one quarter before they’re sold • Production percentage by quarter: 20-20-40-20 The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  12. Where To Begin? • Learn the simulation • Read the student guide • Practice run 19 Feb (computer lab 335) • On-line quiz must be taken before class on Feb 26th • Form a vision and strategy for your company • Your BHAG and goals • What will be your basic strategy (Chap 5 stuff) The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  13. Where To Begin (2) ? • Recognize Key Tasks • Admin: keep copies of everything • Competitor Intel / Strategy: quarterly snapshots, study for trends, strategic adjustments • Product design: features, R&D, # of models • Marketing: retailer mgt, tech support, advertising, warranties, pricing, promotions • Production: how many to produce, worker compensation, training, hiring / firing (# of PATs), # of workstations, overtime, outsourcing • Financial: performance targets, loans, dividends, stock sales / buybacks The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  14. Big Picture Words of Wisdom • Many successful paths (if done right) • Have a coherent strategy and competitive approach • You can’t be the premium AND lowest cost product • Know what you are changing (this is not an exercise in EXCEL … it’s strategy)—you may just strive for industry average (+ / -) in some areas • This is a competition … know what your competitors are doing and react accordingly! • Keep trying … turn-arounds happen frequently The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  15. Biggest Words of Wisdom • If you make money, the stats will take care of themselves • Build cheapest camera possible for your target P/Q • Strive for low labor costs / camera • Be careful of intentionally cutting number of retailers • Know how to measure your strategy’s effectiveness and be ready to adapt • Ignorance of competitors = defeat (probably)! The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  16. Biggest Words of Wisdom • Learn from your performance • Stop what isn’t working … do more of what is! • Don’t change too many things at once • Making money is the main course (sales / costs) -- corporate decisions are the dessert! • You will feel uncomfortable and unprepared … just like real life! The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

  17. How I Will Help You Learn • You can ask me questions at any time … more than anything I will try to focus your thinking • Practice round and out-brief (19 & 24 Feb) • You can ask me questions at any time … more than anything I will try to focus your thinking • Interim Board of Directors meeting • Informal • You can ask me questions at any time • Board of Directors presentation at end of semester • Demonstrate that you learned … hard to do if you don’t know how you “learned” The optimist sees opportunity in every danger; the pessimist sees danger in every opportunity... Churchill Built by Stambaugh/2009

More Related