Decision making based on data - Simulation for MSBA300
Our students thank you for choosing the simulation as part of MSBA 300 and I will spend a few minutes to walk you through the presentation and give you a couple of couple of tips how to do best in this simulation over the next several weeks. So let's start. You will find this presentation and some background material in the course section and I recommend that you read the background information about this case and you also can do some research broad marketing and marketing strategies. What you should look at is what are different marketing strategies. And you will find that there are different strategies that you can choose one is called the low cost leader where you try to get the lowest price highest volume lowest price economy of scale and you try to be profitable by doing that and gain market share but there are other strategies than this because this strategy the low cost leader strategy has the disadvantage that it's not necessarily the one that yields the highest profit the other strategy is one where you differentiate the product and there are ways how you can do this in this simulation by product differentiation with product features. You can also choose different geographic locations you can choose different channel strategies so there's different ways how you can strategize and I I would like you to do some research on that your effective is to achieve the highest profit you can achieve the highest profit in different ways as I said based on a marketing strategy. You can do that by high market share high volume at a low price or you can do a lower volume at a higher price if that is more profitable and if you get enough customers for each year you will make a decision and we will go over what decisions you've got to make and then. I want you to post a decision guide a decision rationale. We'll go over that as well for each year. You will find a Dropbox for each year of the simulation simulations for years and you post your decision rationale for each year in the respective Dropbox in year.
One your decision rationale should include a lot of analysis of the market and the historical data. There's some historical data of the previous years. Obviously is your first year so you have not made any decisions you cannot look back on how your decisions fared so look back and see what decisions your competitors made in the last several years what blue what decisions blue made and how that impacted their market share. The dashboard is useful in in years. Two three and four to see how you are doing each one of you will have their own market. So you're not playing against each other. You play for yourself but your decisions impact the market and in the dashboard. You can see how you are doing. How your decisions impact that. Your market share profit revenue and demand and you will also see how your competitors are doing and you will see what decisions they made and you can learn from that you can learn from your own decisions and you can learn from the decisions that your competitors make and by the way your decisions impact the decisions of the competitor so if you go for a low-cost strategy don't be surprised if your competitors also lower their prices etc so and that depends on each one of you what you're doing in your decision guide income statement is important because as I said before you will be the simulation will be graded on cumulative profit and market share. Your grade for the class is based on the quality of your decisions not on the quality of your outcome but what you're looking at and what you want to achieve and I will publish. For each year a scoreboard is a cumulative profit and I will also share cumulative market share and cumulative revenue and you will see that those three parameters are not necessarily linear so if you have the highest revenue that doesn't mean you have the highest profit and if you have the highest market share doesn't mean you have the highest revenue and the highest profit consult the income statements in year.
Two three and four and see how much money you can spend for marketing the more revenue you make obviously and the more profit you make the more you can invest just like in the real life production versus demand you will see in decisions that there's a tool for that and I highly recommend that you use it because the common made most make mistake is that people under produce they underestimated a man the under produced and then in the year. The consequence is that you sell less than you could have sold and your competitors sell more so be really sure that you do a good job in the demand prediction and production planning the pricing chart as I said your decisions will impact also your competitors decisions so be sure to study that and again everything. You studied documented and see how that impacts your decision social media that self-explanatory. I don't have to say anything about that. The data stores they are useful and when you use the data. Explorer to make decisions take some screenshots and put that in your decision rationale that you put together. You put a document together for each year and in each document for each year. You explain why you're making the decisions that you're making and so the data. Explorer is an important tool you can use screenshots of that same thing is true with a geographical demand so now we come to how you make decisions you make decisions on the number of units for produce as I told you that's important. The channel price also very important because the price is important factor in your marketing strategy the formulation that's product differentiation product features and positioning trade channels. Spend you know where. Where do your customers get your product media spend and market segment for your decisions target market segments for your decisions and you will see what the target markets are so these are decisions that you make in the system and before you make the decisions think about it do your strategy.
This is not a try and error approach here. I really want you to think about it. And since this is a class about data data analytics. I want you to analyze the data and let the data analysis. Guide your decisions so finally you will get a table with decision history and in year four when you submit your decisions for year four you can submit your decisions and you will see immediately the results then. I want you to reflect on years. One two three and four and see how your decisions went and what you would do differently what you learned from the decisions etc so you can do a little back so as I said you will not be graded on the result. But you will be graded on is. How did you interpret the dashboard. What data elements that you used to make your decisions that you create any side tables and notes to make your decisions if so include them include them in your decision rationale. How did results form from the previous years. Inform you and guide your decisions. So that's what I'm interested in and that's what I'm grading the paper on and and don't forget submit. The decision guide for each decision round for each year in the Dropbox that I will post. And then afterwards we will do a debrief and he will get your grade and hopefully you'll learn something practical about how we use data to make business decisions thank you and. I hope you have fun with this simulation I find it really that a lot of students you know after a semester of learning all the details about data analytics really enjoyed that. Now you can actually utilize dashboards and analytics to make this decision. So it's a it's a great way to put this into practice so have fun and I'm looking forward to see your decisions.
One your decision rationale should include a lot of analysis of the market and the historical data. There's some historical data of the previous years. Obviously is your first year so you have not made any decisions you cannot look back on how your decisions fared so look back and see what decisions your competitors made in the last several years what blue what decisions blue made and how that impacted their market share. The dashboard is useful in in years. Two three and four to see how you are doing each one of you will have their own market. So you're not playing against each other. You play for yourself but your decisions impact the market and in the dashboard. You can see how you are doing. How your decisions impact that. Your market share profit revenue and demand and you will also see how your competitors are doing and you will see what decisions they made and you can learn from that you can learn from your own decisions and you can learn from the decisions that your competitors make and by the way your decisions impact the decisions of the competitor so if you go for a low-cost strategy don't be surprised if your competitors also lower their prices etc so and that depends on each one of you what you're doing in your decision guide income statement is important because as I said before you will be the simulation will be graded on cumulative profit and market share. Your grade for the class is based on the quality of your decisions not on the quality of your outcome but what you're looking at and what you want to achieve and I will publish. For each year a scoreboard is a cumulative profit and I will also share cumulative market share and cumulative revenue and you will see that those three parameters are not necessarily linear so if you have the highest revenue that doesn't mean you have the highest profit and if you have the highest market share doesn't mean you have the highest revenue and the highest profit consult the income statements in year.
Two three and four and see how much money you can spend for marketing the more revenue you make obviously and the more profit you make the more you can invest just like in the real life production versus demand you will see in decisions that there's a tool for that and I highly recommend that you use it because the common made most make mistake is that people under produce they underestimated a man the under produced and then in the year. The consequence is that you sell less than you could have sold and your competitors sell more so be really sure that you do a good job in the demand prediction and production planning the pricing chart as I said your decisions will impact also your competitors decisions so be sure to study that and again everything. You studied documented and see how that impacts your decision social media that self-explanatory. I don't have to say anything about that. The data stores they are useful and when you use the data. Explorer to make decisions take some screenshots and put that in your decision rationale that you put together. You put a document together for each year and in each document for each year. You explain why you're making the decisions that you're making and so the data. Explorer is an important tool you can use screenshots of that same thing is true with a geographical demand so now we come to how you make decisions you make decisions on the number of units for produce as I told you that's important. The channel price also very important because the price is important factor in your marketing strategy the formulation that's product differentiation product features and positioning trade channels. Spend you know where. Where do your customers get your product media spend and market segment for your decisions target market segments for your decisions and you will see what the target markets are so these are decisions that you make in the system and before you make the decisions think about it do your strategy.
This is not a try and error approach here. I really want you to think about it. And since this is a class about data data analytics. I want you to analyze the data and let the data analysis. Guide your decisions so finally you will get a table with decision history and in year four when you submit your decisions for year four you can submit your decisions and you will see immediately the results then. I want you to reflect on years. One two three and four and see how your decisions went and what you would do differently what you learned from the decisions etc so you can do a little back so as I said you will not be graded on the result. But you will be graded on is. How did you interpret the dashboard. What data elements that you used to make your decisions that you create any side tables and notes to make your decisions if so include them include them in your decision rationale. How did results form from the previous years. Inform you and guide your decisions. So that's what I'm interested in and that's what I'm grading the paper on and and don't forget submit. The decision guide for each decision round for each year in the Dropbox that I will post. And then afterwards we will do a debrief and he will get your grade and hopefully you'll learn something practical about how we use data to make business decisions thank you and. I hope you have fun with this simulation I find it really that a lot of students you know after a semester of learning all the details about data analytics really enjoyed that. Now you can actually utilize dashboards and analytics to make this decision. So it's a it's a great way to put this into practice so have fun and I'm looking forward to see your decisions.