Case Mobiland NIBS Congress May 2012
Case Mobiland w Business simulation w In the KHLeuven business game Str@tvision w Played by students in the 2 nd bachelor Business Management – Marketing w In the international week
Case Mobiland w Mobiland = an island (636. 000 inhabitants) w students start up their own company w that manufactures and sells smartphones w companies offer a similar product portfolio
This case is about Budgeting Fin. , prod. … plan Purchase RM, components Financing Equity, IC, overdraft Recruiting Employees Investing PU, building, … Production Advertising 4 types of Sm. Ph Radio, TV, newspaper Inventory control Distribution Store, hypermarket, … Sales 5 target groups Accounting Reports, …
Market and products Population attaches great importance to mobile communication 4 types of smartphones w w BAS: telephony & games GOO: idem BAS, + photo, video & MP 3 ADV: idem GOO, + Wi-fi, Bluetooth, internet (GPRS/EDGE/3 G) GPS: idem ADV, + GPS, GPS-software & Windows Mobile Not necessarily all models on the market!
Target groups w The techies (TEC) w looking for technologically advanced device w between 18 & 36 yr, price not too high (personal use) w The short-callers (SHO) w important: the device should be cheap w new technology is less important 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 w De professionals (PRO) w price is not so important (company buys) w technology is important w The earners (EAR) w price is not really relevant w customer expects (almost) all features w The others (OTH) w technology is not important: only call - texting w Other features not so important, not too expensive
What do students get? 1. 2. Capital: € 1. 000 cash You can borrow from the Eurobank - Investment credit (building, machinery): limited! - Overdraft: temporary liquidity shortages: unlimited interest (changes from the 2 nd round) ) - IC: 5% OD: 10% bank account (neg): 15% bank (pos): + 2, 5%
What can you buy ? A production unit (PU): includes: - one building - 4 machines € 1. 250. 000 Every company: at least one PU ! Company has costs: w insurance w overhead costs w maintenance & repairs Maximum capacity of 1 PU: 26. 000 devices
Distribution 3 possibilities: 1. A store - 2. A distribution point (in a hypermarkt) - 3. min. one seller (specialized) rent period: € 150. 000 no specialized seller rent period: € 50. 000 Cost of development online sales system - a non-recurrent investment: € 26. 000
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 (min. 1) € 60. 000
Advertising 3 media channels 1. TV - 2. Newspapers - 3. Mo. Tv (Mobiland Television): young people TV 1: official government station La Gazetta: popular newspaper Los Intelectos: quality newspaper Radio - Torro: the only radio station in Mobiland w Attention! Good harmony: advertising - production - sales
Production 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 Basic electronics Screen parts (in front, behind) Internal & ext. connection & earpiece Photo & video & MP 3 Wi-fi & Bluetooth Internet GPRS/EDGE/ 3 G GPS & software + Windows Mobile BAS 1 2 1 0 0 GOO 1 2 1 1 0 0 0 ADV 1 2 1 1 0 GPS 1 2 1 1 1
Cost of components In EUR Comp 1 Comp 2 Basic electronics Screen parts (in front, behind) Comp 3 Comp 4 Comp 5 Internal & ext. Photo & connection & video earpiece & MP 3 Wi-fi & Bluetooth Comp 6 Comp 7 Internet GPRS/EDG E/3 G 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
Decisions w During each round the team takes concrete decisions about: w Final pricing for each product model w determine the deployment of staff w determine the number of production units + production volume w Determine the promotional efforts w determine the number stores, distribution points, online sales w determine additional financing needs w Enter the decisions in the 'decision form'
Analysis received results The participants receive: w the actual demand of customers, w actual amount of sales, w comparative data: pricing & margin w price and image positioning, w market share by target group and product model w data on production and inventory, w Results (balance sheet, income statement, cash flow)
Winner w Per market: winning company w 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
Thanks !
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