The Retail Management Game is an online simulation allowing students to manage the executive decisions involved in the retail industry. The author of the simulation, Dr. Dale Achabal, says that the game allows students to focus on their areas of responsibilities while seeing the impact of their decisions on the company as a whole. Dr. Achabel says that team collaboration and building, as well as decision building, are important components to the simulation.
“The problem with graduates is they want their hands held while making decisions. They want to know how long it will take to become a Vice President,” says Achabal. The simulation allows students to build their confidence and ability in order to make independent decisions in a low-risk environment.
Students will be immersed into the Adler Company, a struggling business. The corporation has not satisfied its Board of Directors. It is up to the students to turn the company around. Each student takes on one of the management roles and needs to know his or her responsibilities. The executive team is responsible for identifying their target markets and developing the overall strategy to move forward. This exercise teaches students about accountability and integrated retail management.
The students form teams and then take over the management of the Adler Company. Teams’ decisions affect one another. Although they are both trying to rebuild the Adler Company, if one company prices too low, then all teams will feel the impact of this within the market. Essentially, their decisions are being weighed against each other and against a computer-set algorithm to determine which is best practice.
Over the course of six to eight business quarters, they try to gain a competitive edge over their rivals. Each team makes decisions in the main areas of the retail business. “The functions of the business work together. Sales and support are triggered by planned merchandising; some expenses are controlled and some are fixed; but, you gain more control of the company as you progress through the business quarters,” says Achabal.
As the retail management experience unfolds, the simulation gets more complex. “Students are constantly being challenged as the simulation builds upon itself,” says Achabal. “Decisions get better because students become more informed and challenged with new areas to keep them engaged.” The areas on which the game focuses includes:
- Merchandise Planning & Allocation
- Pricing & Promotion
- Store Operations
- Human Resource
- Market & Consumer Research
The Adler Company initially operates two stores in each of two markets. It offers four major merchandise categories. Teams can adjust their merchandise assortments, media mix, pricing, and employee recruitment and compensation. After the first year, teams are able to add new stores, remodel existing stores, and add a new E-Commerce channel. Students purchase quarterly market analysis reports to assess their competitive position in the market. From these reports, students can adjust their strategic plan to focus more tightly on business tactics.
The executive team has one-and-a-half to two years to turn around the company. Within this time frame, they should become a self-sufficient firm, earning substantial profits from their operations. There are usually four to eight members per team. The game is constructed to be flexible with titles and areas of responsibility.
A Balanced scorecard is used to measure each firm’s performance and to compare the results among the competition. Each team’s performance is based on merchandizing effectiveness, financial performance, marketing performance, investments in the firm’s future, financial risk, creation of wealth, and asset management. The use of the Balanced Scorecard encourages students to simultaneously manage a host of performance criteria.
The Retail Management Game provides an excellent opportunity for enhancing leadership and teamwork skills. It promotes better decision-making by closely tying strategic planning and execution decisions to company performance. Further, the simulation facilitates a greater understanding of the financial impact of quarterly tactical decisions and how they flow to bottom-line performance. The teams must understand the importance of consistently delivering customer value in light of the competitive marketplace.
Students gain confidence as they go through each quarter’s decisions. “As they progress through the exercise, their comfort level increases,” says Achabal, “and their mindset changes from being overwhelmed by numbers to seeing the overall strategy.”
There is no one right answer. “The effect of a teams’ decisions has a lot to do with how they compare to the competition,” says Achabal. Sometimes teams will make bad decisions that not only impact their own company, but also other teams and companies. Teams must weigh not only their decision options, but also those of their competitors.
Simulations allow users to experience the cause-effect relationship of their decisions. They are able to experiment with different business practices in a safe and controlled environment. If you are interested in learning more about the Retail Management Game, please visit the link below or email [email protected]