Table 1. Sequence of Simulation Activities
Quarter 1: Organize team to do the job
Focus on process of working as a team to achieve goals
- assess team members' skills, personalities, and work
styles
- set organizational and personal goals
- organize the work
- determine how to manage the organization
- establish leadership
Quarter 2: Evaluate market opportunities, setup operations and prepare
for test market
- Analyze market opportunities -- evaluate segments,
geographic markets and potential competition
- Select target segments
- Create customer value -- design initial brands for
test market
- match components to benefits desired (quality function
deployment (QFD))
- evaluate impact of different components on changeover
costs and scale economies
- Setup manufacturing operations -- evaluate financial
tradeoffs
- compare regional cost differences of labor and distribution
on plant location
- evaluate economy and liquidity of different capacity
investments
- Select test markets -- set up sales offices
Quarter 3: Go to market to test strategy and market assumptions
- Marketing strategy -- evaluate tactical options and
choose marketing mix
- pricing and price promotions
- sales force management - number employed, training,
incentives
- advertising -- ad copy design, media selection,
ad frequency
- Manufacturing -- plan production and inventory levels
- forecast demand by brand
- set 65-day production schedule
- Market research -- budget collection of information
Quarter 4: Evaluate test market performance and revise strategy, become
a learning organization
- Evaluate performance
- financial performance -- financial statements,
ratios, industry norms
- market performance -- customer opinion of brand
designs, prices, advertising, sales force
- competitor tactics -- segments targeted, selection
of marketing tactics
- Revise marketing and manufacturing tactics as needed
and continue test marketing
Quarter 5: Seek external funding -- prepare business plan, negotiate
equity investment
- Evaluate performance -- financial, marketing, and competitive
- Develop two year business plan
- goals -- marketing, financial and ownership marketing
strategy
- manufacturing strategy financial strategy
- tactical pert chart (show tactics over time)
- pro forma cash flows and financial statements
- size of equity request, number of shares offered
and share price
- Present business plan to venture capitalists and negotiate
equity investment. Begin roll out of business plan
Quarter 6: Monitor, improve and execute
- Evaluate team -- self assessment of roles played, contributions
made, and adjustments needed
- Evaluate performance -- financial, marketing, and competitive
- Skillfully adjust strategy
- marketing -- make incremental changes in tactics
- use activity based costing (ABC) to evaluate
profitability of brands, sales offices
- conduct demand analysis to estimate brand,
price, advertising, sales force elasticities
- invest in R&D for new technology
- manufacturing -- work on
- quality improvements with statistical process
control (SPC)
- demand-- driven production scheduling
- capacity utilization by reducing changeover
time and costs
- reducing pipeline whiplash by managing market
stimulation activities
- project cash flows and adjust strategy within financial
capability
Quarters 7 - 10: Monitor, improve, and execute (continue)
- Manage strategy
- skillfully adjust strategy to unanticipated competitive
moves
- continuously improve brand features (R&D), pricing,
promotions, sales force, product quality, production
efficiency, and asset management
- project cash flows and adjust strategy within financial
capability
Final Quarter: Report back to investors
- Report on operations since presentation of business
plan
- market performance
- financial performance
- valuation of the firm
- departures from plan, justification
- plan for the future
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