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Strategy used in GameSimulationService challenge an exploration of business
Group 2 Members:
Apurba Mukherjee (14P189)Bharat C.V. (14P193)
Raghuveer Santosh (14P217)
Samiran Mathur (14P222)
Supreet S (14P232)
Sushma Talla (14P234)
Simulation Team: Alpha D02
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Service Segmentation Positioning
Service offered Hotel services
Segmentation
Five Star hotel rooms (High end )
Three Star hotel rooms (Medium end) Economic/Budget hotel rooms (Lower end)
Positioning
High quality hotel service provider (High quality acting asPoint of Differentiation)
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Decision making algorithm
Analyseresults of theprevious year
No. of existingclients
No. of new clients Capacity utilization Demand/client
and Sales/client Sales income and
Net Profit
Key decisionsfor next year
Quality spends Promotional
spends Pricing decision
keeping ourobjectives in mind
SupportingDecisions fornext year
EstimateSales/client
Estimateadditionalresources required
Financial analysis
to estimate cashavailable Estimate loan
requirements, ifany
Pern
Reassess in caseof mismatch
The above decision making algorithm was followed with the help of a financial mod
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Snapshot of performance Marketing Perspec
-1.6%
28.1%
31.9%
27.8%
24.8%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0
200000
400000
600000
800000
1000000
1200000
1400000
Year 1 Year 2 Year 3 Year 4 Year 5
%
Accoun
tingUnits
Sales income and Sales growth
Total Sales Income Sales Growth
212 202 268331
48 116177
235
0
200
400
600
800
Year 1 Year 2 Year 3 Year 4
Client Base - Level 1
173 206329
521110 167
284
452
0
200
400
600800
1000
1200
Year 1 Year 2 Year 3 Year 4
Client Base - Level 2
259 225 202 180
00 0 0
0
100
200
300
Year 1 Year 2 Year 3 Year 4
Client Base - Level 3
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Snapshot of performance Operations Perspec
2535
4969
813032
35
41
51
0
20
40
60
80
100
120
140
Year 1 Year 2 Year 3 Year 4 Year 5
Building Resources
Resource A Resource B
120
103 10610
94 91105
12
0
20
40
60
80
100
120
140
Year 1 Year 2 Year 3 Yea
%
Capacity Utilization
Resource A Resourc
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Year 1 decisions and rationale
Year 1
Criteria Decision Reason
Price
Level 1 60 Kept the same decisions as the previous
years to see how the market behavesLevel 2 45
Level 3 30
Promotion
Level 1 20000 We wanted to test how the market respondsto increase in promotional spends. Hence,we increased promotional spends on level 2by 1000 AU.
Level 2 16000
Level 3 15000
NewResources
A 0 Being uncertain of the market we did not
acquire new resourcesB 0
QualityImprovement
A 25000 We kept the quality spends same as
previous years.B 15000
Loans Taken 0 We did not take loans as we did not acquire
new resources.
Underst
Despite spon promonew clientThis indica declini
No. of exi1 and 2 de
spending improvemthat our qcomparicompetit
Capacity uwas 120%shortage
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Year 2 decisions and rationale
Year 2
Criteria Decision Reason
Price
Level 1 60 By observing prices of competitor and theirmarket shares, we understood level 1 andlevel 3 were not majorly price sensitive
However, level 2 seemed to be pricesensitive. To test this we decreased price by1 AU
Level 2 44
Level 3 30
Promotion
Level 1 25000 Increased promotional spends in level 1 and
2 to attract new clientsLevel 2 18000
Level 3 0
NewResources
A 10 Acquired resources to meet estimatedmarket demandB 2
QualityImprovement
A 30000 Improved quality spend to increase the levelof quality of our service and retain existingclients
B12500
Loans Taken 80000
Since, new resources are being acquired we
decided to borrow 80000 AU as per our
calculations
Underst
Sales gr28% dueof level 1
Declininglevel 3 comarket in
Market in level is price s
Decline ilevel 1 anour qualthe bestcompeti
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Year 4 decisions and rationale
Year 4
Criteria Decision Reason
Price
Level 1 63 We increased price in level 1 by 1 AU as we felt higher price
was justified due to higher quality Price in level 2 was reduced further by 1 AU to attract new
clients
Level 2 41
Level 3 28
Promotion
Level 1 35000 We made significant increase in level 1 and 2 promotionalspends to attract new clients
We assumed that in level 1 and 2 clients would be attracteddue to higher quality and reasonable price
Since level 2 is highly price sensitive we wanted toincrease client base by decreasing prices slightly and thenretain them by providing quality of service
Level 2 40000
Level 3 0
NewResources
A 20 Acquired new resources to meet the expected increase indemand from clientsB 6
QualityImprovem
ent
A 60000 Improved quality spends further to increase the level of
quality of our service and retain existing clientsB 30000
Loans
Taken
50000 Based on our financial model we estimated that we need a
further loan of 50000 to acquire new resources
Understand
Sales growdue to incrand level 2
Market shlevel 2 to attracted bincreased phigh qualit
Retained existing c
Capacity utestimates a%. We werehigh demcapacity uresource
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Year 5 decisions and rationale
Year 5
Criteria Decision Reason
Price
Level 1 63 Level 2 and 3 prices were increased by 1 unit. Since client base was large in level 2 and quality spends
were high we felt we could retain clients even if we raisedprices slightly
Since level 3 was a declining market with no new clients inlevel 3 also we estimated that we can raise price by 1 AUwithout losing many clients
Level 2 42
Level 3 29
Promotion
Level 1 30000 Promotional spends in level 1 were slightly reduced and
level 2 kept as it is as we wanted to keep demand in checkso that clients do not complain of shortages
Level 2 30000
Level 3 0
NewResources
A 12 Acquired new resources to meet the expected increase indemand from clientsB 10
QualityImprovem
ent
A 75000 Improved quality spends further to increase the level of
quality of our service and retain existing clientsB 60000
Loans
Taken
50000 Based on our financial model we estimated that we need a
further loan of 75000 to acquire new resources
Underst
Sales gro25% due of level 1 asales incr
by 34.7% Market s
level 2 to
were attraspends anservice
Capacity uestimatesand B weutilized
Demandto sales/
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Key learnings from simulation game
Taking decisions in a declining market
Taking decisions in a price sensitive market
Attracting and retaining customers in a service industry
Importance of trust and quality in a premium segment
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Thank you