Business Simulation Game Strategy
Strategy Development

One common strategy used in the business world is to emulate the market leader. Quite often, competitors will just match the strategies used by the market leader. Such an approach will tend to neutralize the competitive advantage of the market leader in the areas considered (e.g., price, product quality), but it will always leave you one step behind the leader, unless you make a much more effective decision. However, if your team is doing very poorly, relative to the market leader, resorting to this strategy will give you time to work on a better strategy, while still improving your overall performance. This approach also might slow down the performance of the leader, because of the neutralization of the decision variables that have been matched or improved upon. Matching the leader also might be unsettling to the leader, causing them to abruptly change strategy, for better or worse. Such is the world of business!

What you need to do during the game, by reading the manual and analyzing the decision and results of the various firms, is to determine the nature of the response functions for each decision area. For example, does a lower or higher price lead to greater profits and/or sales? Does more advertising lead to greater profits and/or sales? Does a larger sales force size lead to greater profits and or sales? Plot the decisions made by the various firms against sales and profit to see if there is any relationship. You can also do a simple regression analysis (one independent variable at a time - e.g., price) or a multiple regression analysis (a number of independent variables at a time - e.g., price, sales force size, product quality expenditure). The Tools - Data Analysis - Regression option in Excel can be used for this purpose.

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