Introduction
SimVenture Evolution is an online program offering a functional, interactive business practice. It provides participants with the ability to use and learn fundamental economic theories. SimVenture allows them to manage a bicycle manufacturing company in a simulated market. The organization structure contains four departments with related resources, such as Organization, Operations, Research and Development, Sales, and Marketing. The organization department is responsible for resources, borrowing, credit control, equity, and location. The functions of the operation division are resources, production, logistics, quality control, and purchasing. The research and development group is in charge of resources, pricing, promotion, branding, market research, and sales channels. Sales and Marketing are accountable for resources, product technology, and product design.
The simulation aims to build a comprehensive view of the company’s activities by learning the correlation between several functions and their influence. The report reveals the performance of running a bicycle company within six quarters. It also analyzes a number of complex, interrelated problems and tasks, reaching the target indicators. They might be the company’s practical organization activities, solving internal and external issues, and getting the target indicators of profit, production volume, and market share.
Initial Stage
The activities and development of the manufacturing enterprise are carried out following specific goals. In general, the company is characterized by a primary or global purpose, which is implemented to establish the range, output level, and product quality. The profit maximization is determined by the method of the company’s production and its effectiveness (Barrow et al., 2018). There are different ways to improve enterprise performance; to begin with, is implementing new technologies that allow the business to reduce costs and increase the amount of profit (Barrow et al., 2018). Moreover, the modernization of equipment and resource-saving has a considerable impact on production profit (Barrow et al., 2018). It is required for a continuous workflow to attract investments and their rational use (Barrow et al., 2018). Besides, the company should continue advancing product quality and conducting its research, development, and policy.
Concerning the simulation process, firstly, it is necessary to define the organization’s mission and goals and analyze the environment. It includes collecting information and analyzing the company’s strengths and weaknesses, and its potential opportunities based on the available external and internal data (Barrow et al., 2018). It is essential to conduct detailed research on the niche to entice investors. It is needed to understand how big the market is and what financial prospects exist. It was also necessary to determine the target audience’s capacity and the extent that which potential competing companies can meet the consumer’s needs (Barrow et al., 2018). A fundamental research factor is defining the prospects and existing trends in a specific economy segment, where the company leads its activities.
These actions involve all departments’ joint efforts; the team could draw up a more coherent and thoughtful business plan and development strategy based on market analytics. It also describes the scheme of work and methods of making a profit in detail. For example, planning a startup’s business plan should include creating a clear strategy for conducting a marketing campaign (Barro et al., 2018). It is necessary to create a product promotion system that should be significantly different from competitors’ campaigns. There must be interaction on an equal basis for successfully fulfilling the assigned tasks. This is by reason that the team has various needs that require a variety of personal qualities from the leader. Management teams should be considered, and command roles are allocated based on these functions.
Growth Stage
At the start, the comprehensive report of the profit and loss could not be precisely prepared because of the lack of available data. It should be noted that the first expenditure was spent on research and development. Consequently, the company made its first profit due to spending money on a preliminary examination of the market. Meanwhile, the company might not survive in the market in a long-term perspective relying on potential financial prospects. There was a downward trend in the profit scale; it indicated that it had been no longer enough for an enterprise to have information only about the firm’s internal state.
Knowledge about its production, economic activities, and involving the sales and marketing department, for a long time was responsible for communication with consumers, advertising, and product distribution, which do not meet the current requirements. It needs constant, strategic, and operational planning of all production, marketing, and commercial activities of the company, based on reliable, representative marketing information (Barrow et al., 2018). The practice has shown the need to separate each department’s functions and services from allocating a specialized service for organizing marketing activities, which is primarily responsible for conducting marketing research and developing marketing programs.
Therefore, a part of the expenses was used to fund an aggressive marketing campaign afterward, organized towards familiarizing the customers with the company’s products. With increased demand, the firm faced the necessity to implement additional capital. The reasons for adding extra money were sustaining debt creditors at a controllable level and growing demand for the company’s production. As an outcome, it was crucial to raise working capital. For ensuring higher output in perspective, the decision about acquiring bigger space was made.
This required the united work of Organisation and Operations departments. Manufacturing is a significant component of any business process. The product or service must be of adequate quality and meet the needs of the consumer. With increased popularity due to the marketing company, the main task is to implement new developments in production effectively. Besides, logistics plays one of the central roles at this point. It is vital to develop an efficient delivery system for the goods to end consumers.
Prognoses
Next quarters it becomes clear that the company outgrows the local level, and the ideas to expand the business to the regions arise. This intention requires adjusting the company’s business plan for long-term goals; horizontal growth is better to start from neighboring areas. When organizing a branch’s work, company representatives should frequently travel to a new region (Barrow et al., 2018). It is unavoidable to find premises, hire personnel, and ensure the delivery of goods. Additionally, as the business expansion requires high financial costs; at a particular stage, the production needs additional investments or credit money; any company’s investment is economically justified. The business expansion will require an initial and additional investment for advances, including upgrading equipment, and opening a store in a new location.
Entering the regional market is always associated with more or less risk. From this perspective, the Research and Development, Sales, and Marketing department service’s primary functions are to decrease this risk by evaluating the regional market and suggestions for establishing a sales system. It is also essential to organize a new advertising campaign, which can only be achieved by raising money from investors, income from clients, or obtaining loans. These actions are more comfortable and affordable when the branch is located not far from the parent company. Thus, financial planning is related to the expansion plan, and all activities must also be viewed from an economic point of view.
Benefits
There are several tasks that business simulation solves. Firstly, it implements new business processes with minimal resistance and searches for faults and ways to optimize current business processes. Participants can form a strategic vision of the company and business and adapt to changes in the organization (Yasin & Hafeez, 2018). It also includes developing skills for any required competencies, improving the quality of cross-functional interaction, and team building in a business environment (Yasin & Hafeez, 2018). For instance, during the simulation, various tasks can be solved, such as managing financial information, pricing, employing production capacity, choosing a company strategy, and evolving the team’s skills of influence. Business simulation is realistic, so it is useful to access enterprise processes and each department’s effect on various mechanisms and outcomes.
A holistic vision and business management mainly contribute to managers’ understanding of related functions and other departments’ roles in achieving the company’s results. This game gives knowledge of management’s essential aspects by providing financial information methods to make decisions (Yasin & Hafeez, 2018). With regards to losses and wrong actions, participants get the opportunity to look at their team’s work from the outside and see which critical elements of teamwork are not used or transformed in their practice.
Business simulation resembles a market environment as close as possible to a particular company’s realities. Since any company’s process can be modeled in a business simulation, they are used to develop managers’ ability to make competent administration decisions and teach them how to implement a specific business process. While designing strategic skills in new conditions, at the same time, the game introduces the ability to strike a compromise and negotiate in situations when everyone has their interests, and plans; otherwise, the company takes losses.
Conclusion
Simulation is an excellent opportunity to demonstrate how each function is vital to the organization. Besides, ignoring colleagues’ interests can lead to challenging consequences. SimVenture helps to form a common understanding of the business among managers, which is necessary for middle management to the highest leadership level. The market simulation format enables participants to learn the theory and review particular strategies directly, applying them to the business processes. It becomes possible to evaluate in practice the long-term effects of decisions made without actual damage to the business and test entrepreneurial and managerial competencies these days. The advantages of business simulations include participating in large groups of employees with active involvement in the learning process, which ultimately contributes to team cohesion.
Overall, the business strategy was successful because, during the game, the participants correctly prioritized and built high-quality interaction. The team members started by developing a long-term strategy, setting goals, and assigning responsibilities. Participants also always carried out an interim analysis to adjust the development path. The team’s relevant summing-up is a comprehensive vision of the enterprises, much broader than the image within only one particular department.
References
Yasin, N., & Hafeez, K. (2018). Enterprise simulation gaming: Effective practices for assessing student learning with SimVenture Classic and VentureBlocks. In Experiential learning for entrepreneurship (pp. 51-69). Palgrave Macmillan.
Barrow, C., Barrow, P., & Brown, R. (2018). The business plan workbook: A step-by-step guide to creating and developing a successful business. Kogan Page Publishers.