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Case Mobiland NIBS Congress May 2012

Case Mobiland NIBS Congress May 2012. Case Mobiland. Business simulation In the KHLeuven business game Str@tvision Played by students in the 2nd bachelor Business Management – Marketing In the international week. Case Mobiland. Mobiland = an island (636.000 inhabitants )

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Case Mobiland NIBS Congress May 2012

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  1. Case MobilandNIBS CongressMay 2012

  2. Case Mobiland • Business simulation • In the KHLeuven business game Str@tvision • Played by students in the 2nd bachelor Business Management – Marketing • In the international week

  3. Case Mobiland • Mobiland= anisland (636.000 inhabitants) • students start up theirown company • thatmanufacturesandsellssmartphones • companies offer a similar product portfolio

  4. This case is about Budgeting Fin., prod. … plan Financing Equity, IC, overdraft Purchase RM, components Recruiting Employees Investing PU, building, … Production4 types of SmPh Advertising Radio, TV, newspaper Inventory control Distribution Store, hypermarket, … Accounting Reports, … Sales 5 target groups

  5. Market and products Population attaches greatimportanceto mobile communication 4 types of smartphones • BAS: telephony & games • GOO: idem BAS, + photo, video & MP3 • ADV: idem GOO, + Wi-fi, Bluetooth, internet (GPRS/EDGE/3G) • GPS: idem ADV, + GPS, GPS-software & Windows Mobile Not necessarily all models on the market!

  6. Target groups • The techies (TEC) • looking for technologically advanced device • between 18 & 36 yr, price not too high (personal use) • The short-callers (SHO) • important: the device should be cheap • new technology is less important • De professionals (PRO) • price is not so important (company buys) • technology is important • The earners (EAR) • price is not really relevant • customer expects (almost) all features • The others (OTH) • technology is not important: only call - texting • Other features not so important, not too expensive

  7. What do students get? • Capital: € 1.000.000 cash • You can borrow from the Eurobank • Investment credit (building, machinery): limited! • Overdraft: temporary liquidity shortages: unlimited interest(changes from the 2nd round) ) - IC: 5% - OD: 10% - bank account (neg): 15% - bank (pos): + 2,5%

  8. What can you buy ? A production unit (PU): € 1.250.000 includes: - one building - 4 machines Every company: at least one PU ! Company has costs: • insurance • overhead costs • maintenance & repairs Maximum capacity of 1 PU: 26.000 devices

  9. Distribution 3 possibilities: • A store • min. onemin. one seller (specialized) • rent per period: € 150.000 • A distribution point (in a hypermarkt) • no specialized seller • rent per period: € 50.000 • Cost of development online sales system • a non-recurrent investment: € 26.000

  10. Personnel Commercial € 40.000 (min. 1, max. 3 per store) Administrative € 35.000 (min. 1, and min. 1 per group of 3 commercial) Production € 35.000 (min. 1 per PU) Executive € 60.000 (min. 1)

  11. Advertising 3 media channels • TV • MoTv (MobilandTelevision): youngpeople • TV1: official government station • Newspapers • La Gazetta: popularnewspaper • Los Intelectos: qualitynewspaper • Radio • Torro: the only radio station in Mobiland • Attention!Good harmony: advertising - production - sales

  12. Production For the production of the four models:-> required product components-> Vary by model

  13. Cost of components

  14. Decisions • During each round the team takes concrete decisions about: • Final pricing for each product model • determine the deployment of staff • determine the number of production units + production volume • Determine the promotional efforts • determine the number stores, distribution points, online sales • determine additional financing needs • Enter the decisions in the 'decision form'

  15. Analysis received results The participants receive: • the actual demand of customers, • actual amount of sales, • comparative data: pricing & margin • price and image positioning, • market share by target group and product model • data on production and inventory, • Results (balance sheet, income statement, cash flow)

  16. Winner • Per market: winning company • Criteria for selection: 'Company health index’ (CHI)CHI = 2.0 RE - 0.8 TD + 1.3 EQ + 1.2 SA + 2.9 OC RE = retained earnings TD = total debt EQ = equity SA = sales OC = operating cash flow

  17. Thanks !

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