Case Mobiland

NIBS CongressMay 2012

Case Mobiland

NIBS CongressMay 2012

Case MobilandCase Mobiland

Business simulation In the KHLeuven business game Str@tvision

Played by students in the 2nd bachelor Business

Management – Marketing

In the international week

Business simulation In the KHLeuven business game Str@tvision

Played by students in the 2nd bachelor Business

Management – Marketing

In the international week

Case MobilandCase Mobiland

Mobiland = an island (636.000 inhabitants)

students start up their own company that manufactures and sells smartphones companies offer a similar product portfolio

Mobiland = an island (636.000 inhabitants)

students start up their own company that manufactures and sells smartphones companies offer a similar product portfolio

This case is aboutThis case is about

Production4 types of SmPh

PurchaseRM, components

RecruitingEmployees

Inventorycontrol

DistributionStore, hypermarket, …

AdvertisingRadio, TV, newspaper

Sales5 target groups

InvestingPU, building, …

FinancingEquity, IC, overdraft

BudgetingFin., prod. … plan

AccountingReports, …

Market and productsMarket and products

Population attaches great importance to 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!

Population attaches great importance to 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!

Target groupsTarget 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

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

Size target group

%

TEC 66.780 10,5%

SHO 208.608 32,8%

EAR 85.860 13,5%

PRO 106.212 16,7%

OTH 168.540 26,5%

Total: 636.000

What do students get?What do students get?

1. Capital: € 1.000.000 cash2. 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%

1. Capital: € 1.000.000 cash2. 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%

What can you buy ?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

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

DistributionDistribution

3 possibilities:

1. A store- min. one

min. one seller (specialized)- rent per period: € 150.000

2. A distribution point (in a hypermarkt)- no specialized seller- rent per period: € 50.000

3. Cost of development online sales system- a non-recurrent investment: € 26.000

3 possibilities:

1. A store- min. one

min. one seller (specialized)- rent per period: € 150.000

2. A distribution point (in a hypermarkt)- no specialized seller- rent per period: € 50.000

3. Cost of development online sales system- a non-recurrent investment: € 26.000

PersonnelPersonnel

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)

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)

AdvertisingAdvertising

3 media channels

1. TV- MoTv (Mobiland Television): young people- TV1: official government station

2. Newspapers- La Gazetta: popular newspaper- Los Intelectos: quality newspaper

3. Radio- Torro: the only radio station in Mobiland

Attention!Good harmony: advertising - production - sales

3 media channels

1. TV- MoTv (Mobiland Television): young people- TV1: official government station

2. Newspapers- La Gazetta: popular newspaper- Los Intelectos: quality newspaper

3. Radio- Torro: the only radio station in Mobiland

Attention!Good harmony: advertising - production - sales

ProductionProduction

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

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

Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6 Comp 7

Basicelectronics

Screen parts (in front, behind)

Internal & ext.connection &

earpiece

Photo & video

& MP3

Wi-fi &Bluetooth

InternetGPRS/

EDGE/3G

GPS & software

+ Windows Mobile

BAS 1 2 1 0 0 0 0

GOO 1 2 1 1 0 0 0

ADV 1 2 1 1 1 1 0

GPS 1 2 1 1 1 1 1

Cost of componentsCost of components

In EUR

Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6 Comp 7

Basicelectronics

Screen parts (in front, behind)

Internal & ext.connection &

earpiece

Photo & video

& MP3

Wi-fi &Bluetooth

InternetGPRS/

EDGE/3G

GPS & software

+ Windows Mobile

< 20000 24.7 3.3 4.8 21.6 33.7 16.6 106.3

< 23000 21.8 2.9 4.2 19.1 29.8 14.7 94.0

< 26000 19.8 2.6 3.8 17.3 27.0 13.3 85.2

< 29000 18.3 2.4 3.6 16.0 24.9 12.3 78.7

< 32000 17.3 2.3 3.4 15.1 23.6 11.6 74.4

< 35000 16.7 2.2 3.2 14.6 22.8 11.2 71.8

> = 35000 16.3 2.2 3.2 14.3 22.3 11.0 70.3

DecisionsDecisions

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'

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'

Beslissingsformulier

Periode: 1

Groepsnaam (bv. C3):Minimum-maximum

Aantal productie-eenheden 1 min. 1

Totale jaarproductie p1 BASTotale jaarproductie p2 GOOTotale jaarproductie p3 ADVTotale jaarproductie p4 GPSTotale jaarproductie p5Totale jaarproductie p6Totale jaarproductie p7Totale jaarproductie p8

Totaal: 0 max. 26.000 per PE

Personeel administratief ! min. 1 FTE & max. 2 FTE per PE

Personeel commercieel min. 1 FTE & max. 3 FTE per winkel

Personeel leidinggevend ! min. 1 FTE, max. 3 FTE

Budget opleiding personeel

P1 - TV BAS (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P2 - TV GOO (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P3 - TV ADV (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P4 - TV GPS (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P5 - TV (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P6 - TV (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P7 - TV (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

P8 - TV (200.000-600.000 EUR)

- dagbladen (7.500-200.000 EUR)

- radio (15.000-400.000 EUR)

Aantal winkelruimtes ! min. 1

Aantal distributiepunten

Budget marktonderzoek

Prijs p1Prijs p2Prijs p3Prijs p4Prijs p5Prijs p6Prijs p7Prijs p8

R&D

Analysis received results 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)

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)

0

10,000

20,000

30,000

40,000

50,000

60,000

TEC KOR VEE PRO OVE

Marktaandeel per doelgroep & product

GPS

ADV

GOO

BAS

0

5,000

10,000

15,000

20,000

25,000

30,000

B1 B2 B3 B4 B5 B6

BAS (periode 1): productie, vraag en verkoop

Productie

Vraag

Verkoop

Grafiek: Prijs, kostprijs & directe marge

BAS B1 B2 B3 B4 B5 B6Verkoopprijs 100 110 0 85 90 0Directe kost 24 24 0 29 24 0Directe marge 76 86 0 56 66 0

GOO B1 B2 B3 B4 B5 B6Verkoopprijs 0 125 119 0 110 0Directe kost 0 38 46 0 38 0Directe marge 0 87 73 0 72 0

ADV B1 B2 B3 B4 B5 B6Verkoopprijs 180 170 0 200 0 0Directe kost 71 71 0 87 0 0Directe marge 109 99 0 113 0 0

GPS B1 B2 B3 B4 B5 B6Verkoopprijs 420 400 460 0 400 0Directe kost 142 142 172 0 142 0Directe marge 278 258 288 0 258 0

Positionering: prijs en technologie

-100

-50

0

50

100

-100 -50 0 50 100

Prijs

Tech

no

log

ie

TECKORVEEPROOVEGPSBASGOOADV

WinnerWinner

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 earningsTD = total debtEQ = equitySA = salesOC = operating cash flow

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 earningsTD = total debtEQ = equitySA = salesOC = operating cash flow

Thanks ! Thanks !