MBA INTEGRATION SIMULATION

1. MBA INTEGRATION SIMULATION INTOPIA

2. WHY SIMULATION? • ARTIFICIAL REALITY INVOLVING LIFE-LIKE DYNAMICS OF THE COMPETITION AND MARKETPLACE • A VEHICLE FOR UNDERSTANDING MANAGEMENT PRINCIPLES • AN EXERCISE IN ENTREPRENEURSHIP, TEAM WORK, TOP MANAGEMENT, STRATEGIC ALLIANCES, AND INTERNATIONALIZATION • A CHANCE TO RUN A BUSINESS

3. KEY OBJECTIVES • OBJECTIVES-STRATEGY-IMPLEMENTATION • ENVIRONMENT SCANNING • DECISION-MAKING UNDER UNCERTAINTY. • INTERFUNCTIONAL COORDINATION • NEGOTIATION SKILLS • SURPRISE & CRISIS MANAGEMENT • HQ-SUBSIDIARY RELATIONSHIPS • UPPER-MANAGEMENT TEAM DYNAMICS

4. WHAT IS IT? • IN AN ARTIFICIAL WORLD OF INTOPIA THERE ARE THREE MARKETS: THE US, EU, AND BRAZIL. • THE ONLY INDUSTRY THAT EXISTS IS THE PERSONAL COMPUTER/CHIPS INDUSTRY. • EACH MBA TEAM RUNS AN INDEPENDENT COMPANY IN THAT INDUSTRY. • EACH COMPANY IS REGISTERED IN LIECHTENSTEIN, A TAX HAVEN COUNTRY. • EACH SUBSIDIARY IS AN INDEPENDENT LEGAL ENTITY IN THE MARKET.

5. FINANCE • EACH COMPANY STARTS FROM SCRATCH WITH INITIAL CAPITALIZATION OF 20M SF. • COMPANIES CAN CHOOSE TO INVEST IN PLANTS TO MANUFACTURE CHIPS OR PCS OR BOTH IN EACH MARKET. • CAPITAL NEEDS COULD DICTATE A NEED FOR LONG-TERM LOANS. • BEING A GLOBAL COMPANY, OPERATIONS ARE IN FOUR DIFFERENT CURRENCIES. • SHORT-TERM LOANS ARE ALSO AVAILABLE.

6. ORGANIZATIONAL BEHAVIOR • THE GAME DOES NOT DIRECTLY INVOLVE BEHAVIORAL ASPECTS OF MANAGING STAFF AND LABOR. • HOWEVER, THE TOP-MANAGEMENT TEAM IS COMPRISED OF 3-5 MEMBERS. • TEAM MEMBERS CAN TAKE DIFFERENT FUNCTIONAL RESPONSIBILTIES AND CREATE AN ORGANIZATIONAL STRUCTURE. • WATCH FOR THE INTRA-TEAM AND INTER-TEAM DYNAMICS.

7. PRODUCTION • CHIPS ARE AN INPUT FOR PCS. THERE IS A KNOWN RATIO OF INPUT TO OUTPUT. • CHIPS CAN BE PRODUCED IN-HOUSE OR PURCHASED FROM OTHER COMPANIES. • CAN HAVE UPTO 3 PLANTS FOR EACH PRODUCT IN EACH MARKET--THERE ARE ECONOMIES OF SCALE. • PLANT CAPACITY IS FIXED. • PLANTS BECOME OLD; NEED MAINTENANCE.

8. LOGISTICS • PLANTS TAKE ONE PERIOD TO BUILD. • PRODUCTION OF EACH PLANT FOR EACH PERIOD MUST GO INTO INVENTORY FOR SALE IN THE SUBSEQUENT PERIOD. • INTER-COMPANY SALES OR INTRA-COMPANY SALES ACROSS MARKETS TAKE A PERIOD IF SURFACE SHIPPED. • AIR SHIPMENTS MATERIALIZE IN THE SAME PERIOD.

9. ACCOUNTING • WHEN YOU SELL, YOU DON’T RECEIVE TOTAL PROCEEDS IN THE PERIOD OF SALE. • LIKEWISE, WHEN YOU INCUR EXPENSES, YOU DON’T PAY FULLY IN THE PERIOD OF PURCHASE. • THERE ARE SOME EXCEPTIONS, ESP. IN INTER-COMPANY SALES/PURCHASE. • EACH SUBSIDIARY REPORTS IN ITS LOCAL CURRENCY, WITH CONSOLIDATED STATEMENTS PRESENTED AT HQ IN SF.

10. MARKETING • BOTH CHIPS AND PCS CAN BE SOLD IN ANY MARKET. • EXPORTS AND IMPORTS ARE POSSIBLE. • OBVIOUSLY, THERE IS A LARGER CONSUMER MARKET FOR PCS THAN CHIPS. • MARKET SHARE MAY BE A FUNCTION OF PRICE, PRODUCT, DISTRIBUTION, AND PROMOTION.

11. R&D • EACH COMPANY STARTS WITH GRADE ZERO FOR CHIPS AND PCS. • THEY CAN UPGRADE TO A HIGHER-GRADE PRODUCT THROUGH R&D. • COMPANIES CAN UPGRADE TO GRADE 9 AT THE MOST.

12. MARKET INTELLIGENCE • SUBSTANTIAL AMOUNT OF MARKET INTELLIGENCE IS AVAILABLE FOR PURCHASE. • IT TAKES A PERIOD TO ORDER CONSULTING SERVICES OR REPORTS. • YOU CAN ONLY PURCHASE UPTO 6 PIECES OF INFORMATION IN ANY PERIOD, SO PLAN AHEAD.

13. WHAT IS MY ROLE? • HUMBLE GAME ADMINISTRATOR • GOVERNMENT OF EACH MARKET • TAX AUTHORITY OF EACH MARKET • BANKER & INSURER • LABOR & TRADE REPRESENTATIVE • JUDICIAL AUTHORITY & ARBITRATOR • CONSULTANT

14. LOGISTICS OF THE GAME! • READ THE INTOPIA EXECUTIVE GUIDE. • BECOME FAMILIAR WITH THE INTOPIA WORLD. • PREPARE A PLAN FOR YOUR COMPANY: DUE BY THE FOURTH WEEK. • BE READY TO PLAY IN FIVE WEEKS. • WILL PLAY SIX PERIODS IN FALL. • AND SIX PERIODS IN SPRING. • WILL WRAP-UP WITH A FINAL REPORT IN THE CAPSTONE STRATEGY CLASS.

15. QUESTIONS? SANJEEV AGARWAL ASSOCIATE PROFESSOR DEPARTMENT OF MARKETING 368C CARVER HALL TEL: 515-294-9822 EMAIL: SAGARWAL@IASTATE.EDU