individual reflection report
Final Individual Report Page | 2 Contents Introduction2 1st rollover2 2nd Rollover4 3rd Rollover5 4th Rollover7 5th Rollover8 6th Rollover11 7th and 8th Rollover13 Conclusion15 References16 Introduction The tutor in our class introduced us with the Smartsims Mikesbikes intro, a business simulation project and gave an essential concept to understand how we should approach every year in the simulation. Business simulation helps us to understand an abstraction of reality, builds a community and network, prepare to make analytics decisions (Advantexe, 2019). In the beginning, we got the opportunities to play the single-player to remove most of the difficulties in the multi-player, which was very helpful to make proper decisions in the multi-player. We struggled a lot but maintained our group discussion and came up with significant decisions. 1st rollover At first, we had few decisions to make, including price, production, advertising and public-relation. We checked the market research-market information to find out the information regarding the product sensitivities which shown below: We checked the market information thoroughly and studied all the information that represents mountain product that we call Premium Fly, which we estimated 24,300 in the year 2019. The recommendation of the product in the market summary was straight forward, but we tried to increase the price as we have spent almost $4,600,000 on advertising and public-relation because of that we priced it $730. After the first rollover we got the result as follows: The shareholder value did not increase quite significantly. We got $12.47 SHV, which was 11.0% increase compared to the last year. Positive Carry Finan got the highest SHV among us in the year 2019 of $12.64 SHV, whereas, Firm3 was struggling in the first rollover with $10.86 Shareholder value. Although our shareholder value was not precise, we sold 24,042 units Premium Fly product, which was ranked to after Mako Pty Ltd. We managed to get 97% Demand Forecast Accuracy in the year 2019. 2nd Rollover We started reviewing the issues that happened in the first rollover and discussed with my group members. We realized that there were some new decisions in the 2nd year of the simulation, for example, distribution margin and Branding of the product. We started to check the market summary and decided to spend more amount on Branding rather than paying a considerable portion of the margin. We spent $1,250,000 along with our previous expenditure on advertising and public-relation and provided 25% margin to all the three shops in our business. Because of that huge expenditure on the media channels and Branding, we acquired a vast majority of market awareness, and we increased the product price to $773, and the production was 25,929 in the year 2020. In 2020, our shareholder value increased to $15.09 with the changes of 21.0% compared to the last year. Our retail sales were $20,317,532 and derived $1,926,733 profit after tax in the second rollover. Our brand awareness increased to 41%, and the demand forecast accuracy was 99%. We have very few products left from the previous year. 3rd Rollover The third year became more complicated due to more new decisions. I discussed with me each of the group members regarding the decision on capacity. We had the extra capacity in the year 2021. Some of my group mates suggested selling a few of them to reduce the wastage. But later on, we realized that we need to launch a new product in year four. We did not change anything to our capacity. We spent $1,200,000 on efficiency to increase productivity and reduce the wastage and $1,400,000 on quality to ensure better product to attract potential customers in the future. Another decision we made regarding the debt. We found out that we were paying $80,000 in interest expenses because of the loan we take from the financial institution. We instantly paid off the debt and reduce the expenditure in the future. Suddenly our shareholder value dropped to $14.64 and almost (3.0%) decreased compared to the last year SHV. It happened because of the extra expenditure on our new decisions. Although we got lower shareholder value, our sales were stunning, and we sold 28,588 units which were second on the position after Mako Pty Ltd. The profit after tax was $1,322,634, and the water reduces to 8% in the factory. Our sales forecast accuracy was 100% in 2021. 4th Rollover The most challenging year was year 4 of the simulation. We all get together on several occasions as different opinion raised by our group members. There was an intense moment we felt in that week. We looked through all the way possible to get better decisions with our limited resource in the year 2022. There were lots of decisions to make, for example, development of the old product, introducing a new product, capacity, efficiency, quality, equity repurchase and deciding dividend to pay or not. We concluded with the product launch. We decided to launch Road product and named it Platinum Fly with the price $2390 and 10200 units production in the factory. We increased the capacity, efficiency and quality of the product to make a sure adequate supply in the market. We repurchased the equity of $1,460,000 but didn't pay any dividend to the shareholders. The year 2022 was the year of expenses. We spent a lot to make a position secure in the market. We managed to increase our shareholder value to $27.95, which was 127.1% changes compared to the last year. The retail sales were outstanding. We sold $30,216,640 and had a profit of $3,798,039, and our demand forecast accuracy was 97%. We were so worried and never thought that we could succeed in the pitfall of year four. 5th Rollover We continued the strategy that we followed in the year 2022. We decided to launch another product. The new segment was Youth product, and we called it Diamond Fly. We priced it at $399 with 36000 units of production. We targeted the economy customer through the product. We increased our capacity and improved the efficiency and quality to back up all the production. We continued to repurchase the equity from the market and wait for the next year to pay the dividend to the customers. All the group members were so happy to see the results of year 6 of the game. It was beyond our expectation to get to this position. Our shareholder value rocketed to $59.45, and the changes were 56.8% compared to the last year. All increased including retail sales, profit after tax, earning per share, cash, net assets etc. The awareness of product was in the pick. We succeeded to grab more customers, and sales units increased dramatically. 6th Rollover We moved on the 6th year and decided to keep all the things stable. We didn't stop developing the products and continued the sufficient amount of marketing of our product. We made sure that the quality of the product so that we could grab more potential customers. That we repurchased all the shares that we can buy and paid $10.50 dividend to our shareholders. Our shareholder value continued to, and it became $99.47. We had the retail sales of $59,074,882 and $10,599,848 of profit after tax in the year 2024. The competitors were not doing well except Mako Pty Ltd. They had the highest shareholder value of Mako Pty Ltd. That is why we got the second position in our world. Flash Bikes had the lowest shareholder value of $5.14, and they were struggling making their decisions. 7th and 8th Rollover After overcoming all the difficulties in the previous year, we stood to the year 2025 & 2026, which were similar as there were no new decisions to make in those years. We met all together as usual and decided not to improve the product and kept the price and marketing expenditure the same for the products. We gave the maximum amount of dividend to our shareholders. We continued to produce a quality product and minimized the wastage in the factory. In the last year, our shareholder value stood to $194.93, and the profit after tax was $14,653,380. We got a massive amount of cash and net assets. We defeated all the competitors in our world and captured the 9th position in the whole class. Our global position was 98.9%, which was an excellent achievement for our Group. We were so glad to have one another and satisfied with our group members effort as a whole. Conclusion We believe that our Group is one of the best Group in the whole class. We worked together and decided together and felt deeply the moment of the game. We enjoyed a lot by participating in this business simulation. This was our utmost opportunity to learn how to work as a team in the professional field. We thank our respected tutors and the institution to give us such creative opportunities to be fit for the future career. References Advantexe. 2019. Advantexecom. [Online]. [29 May 2019]. Available from: https://www.advantexe.com/why-business-simulations Smartsimscom. 2019. Smartsimscom. [Online]. [29 May 2019]. Available from: https://course.smartsims.com/student/course-page/mikesbikes-intro