PRESENTATIONPRESENTATION

VISUAL-STRAT BUSINESS GAME

CAPTURING THE GLOBAL MARKET

• A unique product manufactured in Europe . . .

The Motorcycle!!

Three MarketsThree Markets

1. the European market, where your company is already a leader

2. the North American market, where a dealer network has just been set up

3. the rest of the world, which will be accessible after three periods of prospecting

Winning Market SharesWinning Market Shares

• by being the most aggressive in terms of prices and advertising

• by exploring new markets in the Rest of the World

• by developing one’s brand image due to sponsoring

Finding New CustomersFinding New Customers

◦ Prices (short-term): action at N

◦ Advertising budget (mid-term): action at N, N+1,N+2

◦ Sponsoring (long-term): action at N+4 . . . N+10

One decision = One year

Finding New CustomersFinding New Customers

• by entering in the global zone after a minimum of three years of exploring new market or prospecting (at least 6% of the sales budget allocated )

• In period 4, the prospecting budget must be more than the competitors’ average.

• The prospecting effort must be continued even after achieving the opening of this market.

Finding New CustomersFinding New Customers

by making bids if your company is already known

This is an order to satisfy the next period if your offer has been selected.It is valid only for one period.Conditions to partaking: be able to prospect in the global market and have allocated a budget equal to at least 5% of the sales.

The Police

Finding New CustomersFinding New Customers

Sign agreements with local partners.

= COMMERCIAL INVESTMENT•using the local know-how•creating local jobs•decreasing the customs fees

Only the most efficient and the fastest companies can do it; the purchasing cost is not proportional to the obtained result.

Life Cycle of a ProductLife Cycle of a Product

Life cycle of a product

Phase 1 Phase 2 Phase 3

All the plants are located in the European Union.

• Invest in new plants to satisfy the demand.

Adapting Your Offer to the Demand

• Do not produce useless stocks, and close plants if necessary.

additional information about market trend, competitors’ strategies, cost prices of the

products, etc.

Get information about environment trend due to:

Adapting Your Offer to the Demand

From period 4, do not hesitate to resort to subcontractors.

Adapting Your Offer to the Demand

You have stocks:

On the contrary; your production and stocks are not sufficient:

Be a SELLER.

Be a BUYER.

Subcontracting requires an agreement between two partners about volumes and pricing.

Control Your CostsControl Your Costs

◦ by producing at full capacity

◦ by improving the design with research and development

◦ by maintaining the production tool

Adapting Your Production Adapting Your Production CapacityCapacity

by proposing flexible working contracts (overtime hours, limited period contracts)

by developing investment or closing existing production lines

by subcontracting to other companies (from period 4)

Managing Financial ResourcesManaging Financial Resources

loan

overdraft

Placements

capital increase

Preparing your decisionsPreparing your decisions

1) Update the data of the scenario (in orange on the sheet).

Download the Excel file.

These values must be checked onthe main page of www.visual-strat.com.

www.visual-srat.com or

Acces decsions.

Europe North America WorldVolume 19 0 0Unit cost 6584 0 0

Stock position

18000

-921708

A Theoretical production capacity of the periodDisinvestment

B Accumulated productivity:

Europe North America World Volume 19

Unit cost € 6584 Value k€ 125

Preparing Your DecisionsPreparing Your Decisions

Resources allocation (in manufactured unit) Production allocation to Europe zone 500 Production allocation to North America zone 534 Production allocation to Rest of the World zone 300 Production allocation to other markets 200 Total needs ( in motorcycles) 1534 Production tools (fixed part) 1600 Production tools (flexible part) 25 Products purchased from subcontractors 0 Accumulated productivity -78 Total available ( in motorcycles) 1547

Production tools and productivity gains Production investment in period N operational in N+1 200 Disinvestment or production line stop in the period 0 Accumulated productivity N+1 (in motorcycles to be produced) -92 Coefficient Maintenance efficiency period N+1 1.058

2) Update the Excel sheet with your results (in green).

Motorcycle stock inventory

Results :

production

Accumulated productivity = number of motor lost or won.

Production capacity = production tool+ Investment of the period.

Or directly

Preparing Your DecisionsPreparing Your Decisions

Loan more than one-year term and less than one year.

Valid only before making decision.

Cash Initial (k€):-16623

Remaining loan to reimburse (k€)2910

Total invested (k€)0

No profit to shareFiancial fees (k€): 4301

Europe N. America Rest of the W OthersDistribution in % 33 33 34 0

0

-16623Loan reimbursement by advance (k€)

0Financial investment (k€)

FINANCIAL DECISIONSAvailable (k€):

STOCKHOLDERS EQUITY -9462

 Capital 5600 

 Share premium 0 

 Retained earnings 138

 Balance carried forward -15853

Operating income 654

 Loan more than one year term 2328

 Loan less than one year term 582

 Account payable 686

 Outstanding in bank 16623 Total Liabilities 10757

 LONG TERM LIABILITIES

 CURRENT LIABILITIES

LIABILITIES

2328+582=2910

2) Update the Excel sheet with your results (in green).

Loaning rate 10%Overdraft rate 15%

166232910

0

2784

Loan Period 6

Overdraft in bankLoan Period 5

Financial costs in k€

OR directly

Results :Balance sheet

Preparing Your DecisionsPreparing Your Decisions

The financial costs must be the same.

Cash Initial (k€):-16623

Remaining loan to reimburse (k€)2910

Total invested (k€)0

No profit to shareFiancial fees (k€): 4301

Europe N. America Rest of the W OthersDistribution in % 33 33 34 0

0

-16623Loan reimbursement by advance (k€)

0Financial investment (k€)

FINANCIAL DECISIONSAvailable (k€):

15170

3) Update the Excel sheet with your decisions (in red).

Loaning rate 10%Overdraft rate 15%

166232910

15170

4301

Loan Period 6

Overdraft in bankLoan Period 5

Financial costs in k€

Determine your cost price and selling price.

Preparing Your DecisionsPreparing Your Decisions

TotalProd. Cost of the FP

AdvertisingProspecting 0,33 0,33 0,34 0 900Market study 0,33 0,33 0,34 0Sponsoring 0,33 0,33 0,34 0 900

Financial costs 0,33 0,33 0,34 0 4301Cost price

Unit cost priceSale price

Forecasted profit 4301After tax 2494

1040 1412 1849 0

13000 12999 13000 011515 10981 10642 08060 7687 8342 0

1419,33 1419,33 1462,34 0297 297 306 00 0 0 0

297 297 306 0600 650 800

World Others5447 5024 5468 0

Europe North Ammerica

And now . . .

Let the competition begin!