Introduction to Mikebikes Business Simulation Game
In order to understand the real business world, the role of a business stimulator is important. This can be done by studying the theories and accounting calculations. In the real world, it provides us with an opportunity to apply different strategy and make decisions. Mikebikes is one of the virtual worlds of business. This simulation is made up of segments such as advertising allocation, capacity, and distribution debt equity control and so on.
Mikebikes simulation consists of two versions: 1. Single play and 2. Multiplay. The intro used by Mikebikes using Smartsims is useful for business simulation in order to be accustomed to real world business. One advantage of the Multi play is the fact that it provides the similar environment as the real world. This helps to understand business in a simple manner.
The Intro of Mikebikes Multi play consists of three segments. These include price, development, and production. Apart from this advertising, PR, capacity, debt and equity also form the intro. In order to manage these components, one has to be wise while playing and taking decisions. The game targets to raise the Shareholder Value (SHV). At the early stage, eligibility remains by playing with advertising. Other areas can be controlled one at a time. We analysed the market research report and found the strategies required for advertising and setting the price of the products. In the first year, based on the strategy we undertook pocket friendly price and advertising campaign. This was applied in the magazine and in PR. In order to get rid of the loss of sales, we produced mountain bikes. During the second year, we added the payment of least distribution margin along with the previous strategy. We also developed our branding to add more awareness. All the debts were cleared during the third year in order to reduce the expense of interest. This was done as it provided to be a drawback of profit and decreased the SHV. It also controlled capacity. We managed to increase our efficiency and reduced wastage. Along with it, we managed to improve quality up to 90%. However, the fourth year was challenging due to the improvement in mountain bike that cost $2million. We managed to look through the reports and discovered that youth bike was fit to be launched during that particular year. This cost us $1 million. We even spent some amount on television as it was appealing for youth bikes. Likewise, we increased our capacity and spent a lot trying to increase the efficiency, quality and brand of our products in order to create awareness. In order to increase shareholder value, we started to buy back the equity. We even paid a dividend of 50 cents. The fifth-year proved to be the second biggest challenge for us. Apart from improving the mountain and youth bikes, we developed road bikes that cost almost $4 million. Hence, we also increased the price of the product in order to improve it. The road bike is considered as an expensive product. However, based from evidences from the reports, it was found that the quality was considered as a king. A certain amount was also spent in the magazines for PR. Control was gained in the sixth year when we got an opportunity to launch another product. However, we rejected the offer as we had launched all our products. We managed to increase the capacity, efficiency and quality due to the increase in sales and increased the product price. We managed to buy all equity and increased the dividends. In the seventh year, we followed the strategy we had in the previous year. However, we stopped improving the product to lower the price of the product in order to maintain stability in sales. We managed to increase shareholder value by paying more dividends. A similar strategy was also followed in the last year.
The Components of Mikebikes Multiplay
Initially, the change was required in naming the company. I had given the name Bikes for single player simulation. In order to understand the condition that affects the market I read through the reports and analysed the steps required for making decisions in business.
At the beginning, we operated the company with a mountain bike. We tried to enter the amount that was higher than the marked price at $700. We provided minor changes in the PR and advertising budget. The results saw a drop in SHV from $11 to $9. This indicated the ineffective result after the first roll was over. The focus on advertisement occurred to me after consulting with other students during my first year. I made decisions that I used to make previously only to find that the SHV increased by a considerable amount. However, the following year was vital for the game as it focused on branding and distribution. In this regard, I decided to decrease the price from $710 to $705, so that the sales can be increased.
During the second gaming week, I had started out with the idea of understanding the basic necessities of simulation. My decisions during the initial years were better than the decisions I took last week. Some of the recordings that were made during the game play have been provided.
In the early years, the generic price of the mountain bikes was set at $700. The forecast was made that 18000 units of the product can be sold with 16500 units of product available for sales. I made a decision that increased the price keeping in mind the required increase for the advertisement and PR. I even managed to increase the capacity of production before I rolled over.
After completing the study on marketing research, I identified that due to less production and an increased awareness I had an amount of the sales. Hence, I made a decision to raise production and forecast the sales. I even raised the budget for brand awareness from 250000 to 700000. I even provided support for the launch of mountain bikes in three television channels. My focus was more on sports stores and I managed to provide the products in 60 stores and provide them with a margin over sales up to 25%.
The results displayed showed promising progress after the analysis of my experience in this simulation. The rise in PR and advertisement paid off well. The company did not suffer any loss in sales and the right decision was made regarding the increase in share market. In order to achieve these results, it was imperative to spend the amount on branding. The drawback of my abilities was the fact that I did not have any distributors for my product. However, due to less closing stock, the capacity level was under control. This reduced the cost incurred for storing the bikes in the warehouse.
Strategies and Decisions in Mikebikes Business Simulation Game
In order to ensure proper decision planning for 2020, I followed the instruction given in the year ahead report. I ensured that I stuck to the principles that were underlined in the report. I even managed to raise the retail price with more on spending for advisement and PR. The budget for the project proved to be adequate and as a result, I did not make any altercation in the budget. However, I did change the budget after the drop in quality. The following year, I kept the same figures by improving the quality. In this regard, I raised the budget for maintaining quality up to 80%. In order to maintain the sales, I even increased the production. As shown in the previous reports, I increased the production to raise the level of market share. The sports stores were provided support along with a discount. However, the main focus was on the sports stores because of the category of the bikes that were produced. The commission was also increased as it helped to increase the sales of the stores. The results of this roll over are recorded below:
During the fourth year, a new player was introduced in the market. Cautious instructions were provided in the year-ahead report. This was a significant information and provided aids to make effective strategies and decisions. Some of the decisions include:
- The launch of the product will cost $1 million
- Improving the specifications will cost $1 million
- Reduction of cost of current product will cost $1 million
- $2 million will be required to improve the specifications as well as reduce cost
After analysing the income level, I made a decision regarding the launch of a youth bike. In this regard, I decided to increase the support to the discount shops regarding the distribution channels. Based on the research report, I even managed to set the advertisement and PR level. The buyers could be reached by television; hence, I made the decision to spend equally on PR and advertisement.
The increase in SHV in a year provided encouraging results in 2021. The success was possible due to proper decision-making strategy. However, the drawback was the loss of youth bike due to low production. Hence, the focus for next year is to maintain a balance in the production level and maintain customers.
In order to improve the conditions next year, I decided to buy back the shares and distribute dividends. I even managed to launch road bikes with a view to increasing production capacity of 50000 at a price of $21000. Other production capacity included 25000 units of youth bikes and mountain bikes. The price of these products was also increased. The decisions regarding making $0 dividends were aligned with the $200,000 shares of buy back equity. These were made after comparing with competitors.
After comparing 6 years with the machine, I found that I had performed well in the first 4 years. However, in the last 2 years, I realised that I had crucial insight into the financial factor. However, as shown above, the results improved with the increase in SHV. Despite this, I could not meet the target set by the competitors. Thus, I was lacking in value shareholders even though I was a leading provider of 3 categories of a bike.
In order to understand the options provided in smart Sims, I needed to make vague marketing decisions. I learned five important points that can help me in the multiplayer group activity. The points are described below:
- Build a strong awareness of mountain bikes by advertising about it. It is also necessary to identify the media channels that identify particular products for achieving results.
- In order to cover the target market, it is necessary to formulate powerful distribution plan that aligns with research reports.
- In order to maintain a quality of bikes, it is necessary to maintain production capacity.
- It is necessary to maintain production efficiency level by improving the market research and reducing other expenses
- Due to our prior brand image, we decided to raise the price after the market share increases more than 50%.
In my experience, I had enjoyed the game and learned various things from Multi play. I even got the real world experience that helped me to understand the strategies required to satisfy shareholder and customers. I even learned to make profits by increasing sales. The Multi play also helped me to undertake significant decisions, particularly in crucial years. In my opinion, Mikesbikes business simulation game is the ultimate way of knowing different situations in business. It is also beneficial as it helps to learn from the mistakes that have occurred.
Mikesbikes.com. (2017). Mike's Bikes. [online] Mikesbikes.com. Available at: https://mikesbikes.com/ [Accessed 17 Nov. 2017].
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