Addenda Appendices ABSEL 2001
Schwartz and Teach, Absel 2001
April 6, 2001
Appendix I
The Boards
1. Start-up
(Building the firm)
2. Market
Introduction (Implementation of first strategies)
3. Market
Growth (Implementation of building strategies)
4. Market
Maturity (Implementation of stabilization strategies)
5. Market
Decline (Implementation of harvest strategies)
Lay-out
The boards have 5 squares a side, 24 total with the
four corner squares. The 24 squares are
repeated randomly, with extra squares for strategies. The squares include:
|
Personnel |
|
Operations Strategies |
|
Marketing Strategies |
|
Finances |
|
Environmental Occurrences |
|
Extra Move Squares |
Appendix II
The Moves
Moves are made by the throw
of a die. Players must land on a
square, draw a card and make a decision in order to select personnel,
operations and marketing strategies, and finances. The players must accept the
environmental interventions. The
other squares can be passed on, but ultimately before a player leaves a board,
all firm needs must be met. For the
first board these include three additional venture team members; marketing and
operations strategies; a minimum amount of capital; and minimum congruence
scores for both personnel and strategies.
For the second and later boards, personnel can be replaced; strategies
can be changed; a minimum amount of capital for each stage must be raised; and
certain minimum congruence scores must be achieved. As the players move to higher levels, additional capital and higher
congruence scores must be achieved or maintained.
The cost for every complete
round around a board is $100,000 the first level; $200,000 the second board;
$400,000, $800,000 and $600,000 respectively for each round on the last
three boards. The more changes in the
decision-making, the greater the number of moves to reach an objective, the
costlier it is.
Appendix III
The Cards
Personnel
Each set of personnel cards
will have five choices for each of the functional positions in the firm. There will be one best person in each set
for the firm being played. The player
can choose to decline a person and the card goes to the bottom of the
stack. If the person is accepted, then
the cost of that person along with any funds that that person has to invest are
noted on the score sheet.
The Firm
Product: Computer chips to replace hard drives. The unit is approximately the size of a
3.5" floppy disk and there is a unit to fit PCs and a unit for Macs.
Entrepreneur Name: Larry Barnhart
Larry
thinks the best strategies should be low cost because the hardware ware
business is very competitive and a low cost strategy would allow for some
profit margin even at very low prices.
Larry thinks it is very important to tell customers how their products
are different than all the competitors.
He thinks that quality is a major factor in this market as well as
market development. He thinks finding
new markets are more important than market penetration.
Name: Mike Meyers Age: 37
Education: Bachelor in Finance (Emory)
MBA from Emory
Employment: Financial Consultant (5 years)
Financial Advisor (3 years)
Sales Manager (5 Years)
Marketing Trainee (2 years)
Personal Assets: $250,000 and is willing to invest in a firm for a 10% equity position
Beliefs: Emphasis on low price; emphasis on quality; pay employees fairly.
Ideals: Do it right the first time.
Goals: Be a "Leader" in the business community; get rich; do it on my own.
Skill sets scores: Finance - 36 Marketing - 25 Operations - 15
Name: Jennifer Bean Age: 38
Education: Bachelor in Finance (GSU)
Employment: Financial Manager (8 years)
Financial Analyst (6 years)
Beliefs: Emphasis on quality.
Ideals: To be the "Best."
Goals: To work with others.
Skill sets scores: Finance - 34 Marketing - 18 Operations - 16
Name: Rehan Sayeed Age: 39
Education: Bachelor in Business Mgt. (Northwestern)
MBA at Vanderbilt.
Employment: Financial Analyst (5 years)
Sales Person (5 years)
Marketing Trainee (2 years)
Business Mgr. (4 years)
Beliefs: Emphasis on market development and latest technology.
Ideals: To be friends will all people.
Goals: To get rich.
Skill sets scores: Finance - 36 Marketing - 24 Operations - 10
Name: Ansumana Mosley Age: 50
Education: Bachelors in Finance (Univ. of W. Virginia)
MBA (Howard University)
Employment: VP Finance (Fortune 100) 10 years
Financial Advisor (6 years)
Financial Research Analyst (13 years)
Personal Assets: 250.000 and is willing to invest in a firm for a 20% equity position
Beliefs: Emphasis on joint ventures and quality.
Ideals: Have the "Best in the Market."
Goals: Get rich, being profitable by being different.
Skill sets scores: Finance - 40 Marketing - 14 Operations - 10
Name: Michael Osborne Age: 33
Education: Bachelors in Management (UCLA)
Employment: Financial Advisor (4 years)
Marketing Manager (3 years)
Mgt. Trainee (2 years)
Beliefs: Emphasis on market development and low price.
Ideals: Sell as much as possible to new customers.
Goals: Be an Industry Leader.
Skill sets scores: Finance - 30 Marketing - 24 Operations - 10
1.2.2 The Best Marketing People
Name: Carol Smith Age: 56
Education: Bachelors in MGT (Georgia Tech)
Employment: Marketing Dir. (20 years)
Marketing Mgr. (6 years)
Operations Mgr. (8 years)
Beliefs: Emphasis on low cost and low price. Considers quality to be of the greatest importance.
Ideals: Do things well and you will be rewarded.
Goals: Be able to apply mass marketing techniques to homogeneous markets.
Skill sets scores: Finance - 17 Marketing - 34 Operations - 25
Name: Teresa Campbell Age: 35
Education: Bachelors in Business Mgt. (FSU)
MBA from Univ. of Pennsylvania.
Employment: Marketing Director (3 years)
Marketing Manager (4 years)
Financial Analyst (3 years)
Beliefs: Emphasis low cost, considers quality to be of the greatest importance.
Ideals: Do it right the first time.
Goals: To make a difference.
Skill sets scores: Finance - 20 Marketing - 33 Operations - 10
Name: Michelle Saylor Age: 53
Education: Bachelor in Management Information Systems (University of Georgia in Athens)
Employment: Marketing Director (14 years)
Marketing Manager (12 years)
Database Manager (4 years)
Personal Assets: $250.000 and is willing to invest in a firm for a 30% equity position.
Beliefs: Emphasis on latest technology and market development.
Ideals: To sell as much as possible to existing customers.
Goals: To be unique.
Skill sets scores: Finance - 10 Marketing - 36 Operations - 10
Name: Shriti Sharma Age: 31
Education: Bachelor in Finance (Stanford)
MBA from Colombia University
Employment: Marketing Director (4 years)
Marketing Manager (2 years)
Operations Manager (3 years)
Beliefs: Emphasis on joint venture and market penetration.
Ideals: Technology is the "solution."
Goals: Get rich, be my own boss.
Skill sets scores: Finance - 15 Marketing - 35 Operations - 26
Name: Christina Knopp Age: 28
Education: Bachelor in Industrial Engineering (Cal. Tech)
MBA from Stanford
Employment: Marketing Director (3 years)
Operations Manager (5 years)
Beliefs: Emphasis on use of latest technology and joint ventures.
Ideals: To provide "the difference" for my customers.
Goals: To be unique.
Skill sets scores: Finance - 10 Marketing - 30 Operations - 25
1.2.3 The Best Operations People
Name: William Goldberg Age: 30
Education: Bachelor in Business Mgt. (Michigan State)
Employment: Operations Mgr. (2 years)
Operations Mgr. (3 years)
Marketing Mgr. (2 years)
Mgt. Trainee (1 year)
Beliefs: Emphasis on latest technology and joint ventures.
Ideals: Technology is the "solution."
Goals: Being profitable, but being different.
Skill sets scores: Finance - 10 Marketing - 20 Operations - 29
Name: Sherry Keating Age: 49
Education: Bachelors in Operations Mgt. (Univ. of Arizona)
Employment: Operations Director (15 years)
Operations Manager (13 years)
Line Manager (2 years)
Personal Assets: $250.000 and is willing to invest in a firm for a 10% equity position.
Beliefs: Emphasis on latest technology and market penetration.
Ideals: Sell as much as possible to existing customers.
Goals: To work with others.
Skill sets scores: Finance - 10 Marketing - 10 Operations - 34
Name: Ralph Lee Age: 33
Education: Bachelors in Business Management (UT, Austin)
Employment: Operations Manager (4 years)
Line Manager (2 years)
Management Trainee (1 year)
Beliefs: Emphasis on being unique.
Ideals: Technology is the "solution."
Goals: Being the "best" is very important.
Skill sets scores: Finance - 12 Marketing - 10 Operations - 32
Name: Frank M. H. White Age: 34
Education: Bachelors in Industrial Engineering (Georgia Tech)
Employment: Operations Mgr. (4 years)
Line Mgr. (4 years)
Sales person (4 Years)
Personal Assets: $250,000 and is willing to invest in a firm for a 20% equity position.
Beliefs: Emphasis on the importance of quality. Not concerned with price.
Ideals: Do things "well" and you will be rewarded.
Goals: Help as many people as possible.
Skill sets scores: Finance - 10 Marketing - 24 Operations - 33
Name Patricia Chung Age: 48
Education: Bachelors in MGT (NYU)
Employment: Operations Mgr (14 years)
Mgt. Trainee (1 year)
Project Leader (2 years)
Salesman (10 Years)
Beliefs: Firm believer in low price and low cost.
Ideals: Treat the customer fairly.
Goals: Be on top of a large firm; be my own boss; do it on my own.
Skill sets scores: Finance - 10 Marketing - 22 Operations - 30
Appendix IV
Strategies,
Marketing and Operations
The strategies are written
on individual cards and the player selects the desired strategies. The player can choose to accept and pay the
price for adopting a particular strategy and receive the benefits, or can decline
a strategy. Adopting and/or changing
strategies on later boards is more costly than on earlier boards (no cost to
adopt on the start-up board).
Congruence scores are associated with each strategy selected. Before they can proceed to the next board,
each player must select three operations strategies (one each for cost, quality
and technology); and one each for price, promotion, distribution and
differentiation strategies.
Finances
Cards will have an equity or
debt opportunity and an associated cost.
The player can choose to accept and pay the price for adopting a
particular financing opportunity and receive the benefit, or can decline
it. Because the firm has a greater
value as it moves through the life cycle, changing on later boards is less costly
than on earlier boards. All debt must
be repaid at the end of the start-up board, one-half at the end of the
introduction board, and none for the remainder of the boards.
Environmental
Occurrences
Each card will have an
opportunity or threat and the cost for each that the firm must be paid or
received. Some do not apply for the
start-up board. For example:
The firm has its bank loan
called. The firm loses its debt
capital.
The angel investor dies and
his/her estate takes the funds back.
A UN action has begun and
the economy has slowed. The firm's
maximum sales potential is reduced by 15% for the present board.
A technical breakthrough has
created an opportunity for quality costs to be reduced by 50% and sales to
increase by 25%.
Interest rates were lowered by the Fed and loan costs are reduced $20,000.
A major weather problem has occurred and the firm is charged an additional round fee of 50% due to delays.
Due to changing consumer needs, lower quality is acceptable and the firm gains a quality bonus of $150,000.
A venture capitalist wants to buy 10% of the firm for $1,000,000.
The long-term economic prognosis for the industry is bad and the sales potential is reduced 25%.
The long-term sales potential is enhanced due to marketplace conditions and market size will expand 30%.
Your major distributor in South America has collapsed due to a coup. Your firm loses $300,000.
A lawsuit finds for defendants and your firm benefits $200,000.
A lawsuit is settled and your firm receives a royalty for the next two rounds of play, equal to 10% of your total sales.
A war in Israel eliminates a joint venture and costs the firm $250,000.
Interest rates go down 0.5%, the company has an additional $10,000 profit due to lower interest rates
Appendix V
Financial
As the game begins the
players receives $5,000,000 as the initial start-up capital. In order to move to the second board the
player must have accumulated $2,500,000.
The player may do so by acquiring employees that have their own sources
of funds or equity accumulation. On the second board the player may do the
same, but also has sales revenue. Sales
revenue is calculated using congruence scores, of both personnel and
strategies, serving to reduce maximum revene for the board by the overall % congruence. The player may give up control of the firm
in the second round, but only 50% equity is allowed in the first round.
Sales revenue is calculated
for board two and for subsequent boards by utilizing congruence scores and
multiplying those scores by the maximum sales value for each board. For board two the maximum is $10,000,000;
for the next board, the growth stage, $64,000,000; the maturity stage value is
$100,000,000; the declining stage, $50,000,000.
To leave the
first board, the player must have congruence scores of 80 and 125 respectively
for personnel and strategy congruence and a total of $2,500,000. For the second board, the scores must be 90
and 175 with cash in excess of $6,000,000.
There are no minimums, but the 90 and 175 values must be maintained for
the remainder of the boards as the player then knows what congruence is
(scoring paradigms are given to the player after the second round). Maximum congruence for personnel is 110 and
for stratggies, 250.
Completing a Game
If a player bankrupts, for
the first two boards the player must go back and start over again. "Winners" can be defined by
meeting personal goals or if playing competitively, by overall dollars
accumulated or by cash and congruence scores, equally weighted.
Finance Cards
Start-up Equity $5,000,000
$500,000
$1,000,000
$2,000,000
Each card has one of the three amounts on it with a
10, 20 or 30% ownership cost of equity.
Equity may not exceed 50% of ownership
Start-up Debt
Debt may not exceed 100% of equity.
Cost of debt is 4% a round.
Each card has 25, 50, 75 or 100% debt allowed.
Introduction
Board
Equity increases to:
5,000,000
7,500,000
10,000,000
Cost of equity is 10, 20, or 30% randomized per
card.
Cost of debt for the second board rounds is 3%.
Debt is set at a maximum of 2:1 to equity.
All debt is paid off before proceeding to the next
board.
Cards have 50, 100, 150 or 200% debt allowed.
For the
administrator, increase sales in the second and later rounds up to 50% equity,
if over 50% reduce sales by 150 -% Equity.
In other words, if 25% eqwuity given, then sales increase fto 125%; if 60% given, then sales decrease to 90%.
Appendix VI
Scoring
At any time,
each team may complete a scorecard that includes the name of the person for
each position and their respective position scores. In addition, the player reports excess cash the firm has retained
(and obtained) from hiring, financing, etc.
The player reports the selected strategies and presents the firm score
card to the game administrator.
The game
administrator sums the position values for the team member and divides by
100. This value may range between a low
of 0.70 and a high of 1.10. This is the
personnel congruence score. The
strategy value matrix is then used to calculate the value of the strategies and
their relationship to firm performance.
This value is calculated by adding up the scores for each of the
selected strategies. This number is
then divided by 100. This result will
range between a low of 0.70 and a high of 2.50. This is the strategy congruence score.
For board two (market introduction) scoring, the player
may make any changes to increase their congruence score and may change the
strategy selections based upon the possible new congruence resulting from
employee changes. Scoring for the
second board is the same as for the first board, but with the higher costs
associated with changes as noted on the scorecards. Congruence scores are then multiplied by the $10,000,000 maximum
possible sales. This figure is added to
the other accumulated capital.
Strategy Congruence Values
All Possible Strategies and
Their Scoring Values for Product 1
|
Key Strategy |
Start-up |
Intro. |
Growth |
Maturity |
Decline |
Quality |
|
|
|
|
|
|
High Quality |
25 |
25 |
25 |
25 |
25 |
|
|
20 |
20 |
25 |
25 |
25 |
|
|
15 |
15 |
15 |
10 |
15 |
|
|
10 |
10 |
15 |
10 |
10 |
|
Low quality |
5 |
5 |
10 |
15 |
10 |
Price |
|
|
|
|
|
|
Low price |
25 |
25 |
20 |
15 |
10 |
|
|
20 |
20 |
20 |
15 |
10 |
|
|
15 |
15 |
15 |
15 |
10 |
|
|
10 |
10 |
10 |
15 |
15 |
|
High Price |
5 |
5 |
10 |
15 |
20 |
Cost |
|
|
|
|
|
|
Low Cost |
50 |
50 |
50 |
50 |
50 |
|
|
40 |
40 |
40 |
40 |
40 |
|
|
30 |
30 |
30 |
30 |
30 |
|
|
20 |
20 |
20 |
20 |
20 |
|
High cost |
10 |
10 |
10 |
10 |
10 |
Technology |
|
|
|
|
|
|
Latest Technology |
50 |
50 |
40 |
30 |
10 |
|
Current Technology |
30 |
20 |
10 |
20 |
30 |
|
Old Technology |
10 |
10 |
20 |
30 |
40 |
Promotion |
|
|
|
|
|
|
Inform |
25 |
25 |
10 |
|
|
|
Persuade |
10 |
10 |
25 |
50 |
10 |
|
Remind |
|
|
10 |
25 |
50 |
|
Distribution
(Place) |
|
|
|
|
|
|
Selective |
25 |
25 |
10 |
|
25 |
|
Intensive |
10 |
10 |
25 |
25 |
|
|
Extensive |
|
|
10 |
50 |
|
Differentiation |
|
|
|
|
|
|
Low |
10 |
10 |
10 |
10 |
10 |
|
|
20 |
20 |
20 |
20 |
20 |
|
|
30 |
30 |
30 |
30 |
30 |
|
|
40 |
40 |
40 |
40 |
40 |
|
High |
50 |
50 |
50 |
50 |
50 |
Appendix
VII
Administrator Instructions
for Playing the Game
For a two hour session of
playing, 15 minutes should be allocated for pre-game briefing; 45 minutes
maximum for two boards; and 15 - 30 minutes for final debriefing.
Additional Financial
Information for a Player's Strategic Choices
Each strategy
used in the game has its unique sets of choices and changes in fees that
increase as the player advances to higher boards and the product matures.
Start-up |
Introduction board |
|
|
|
|
Personnel (3) |
Personnel (3) |
|
Hire (100,000) |
Hire (150,000) |
|
Fire (25,000) |
Fire (100,000) |
|
$50,000 to change any strategy |
|
|
Operations |
Operations |
|
Quality (5 choices) |
Quality (5 choices) |
|
|
Change in Strategy Fee
(100,000) |
|
|
Per round quality cost |
|
|
(1) low 50,000 |
|
|
(2)
100,000 |
|
|
(3)
200,000 |
|
|
(4)
400,000 |
|
|
(5) high 500,000 |
|
|
|
|
Latest technology |
1,000,000 |
|
Current technology |
500,000 |
|
Older technology |
100,000 |
|
|
|
|
Marketing |
|
|
Place |
Selective 500,000 |
|
|
Intensive 2,000,000 |
|
|
Extensive 5,000,000 |
|
Promotion |
Inform 500,000 |
|
|
Selective 2,000,000 |
|
|
Remind 5,000,000 |
|
|
|
|
No costs for start-ups |
Change in strategy fee
$100,000 |
|
Differentiation |
(1) low 100,000 |
|
|
(2)
200,000 |
|
|
(3)
300,000 |
|
|
(4)
400,000 |
|
|
(5) high 500,000 |
|
|
|
|
No costs for start-up |
Five choices ($100,000 to change) |
|
Cost |
(1) low 500,000 |
|
|
(2)
400,000 |
|
|
(3)
300,000 |
|
|
(4)
200,000 |
|
|
(5) high 100,000 |
|
|
|
|
Price |
(1) low 100,000 |
|
|
(2)
200,000 |
|
|
(3)
300,000 |
|
|
(4)
400,000 |
|
|
(5) high 500,000 |
Appendix IX
|
Personnel |
Persons |
Scores |
|
Congr. |
Start Cash |
5000000 |
Times of |
|
|
|
|
|
|
|
|
Each |
|
Finance |
|
|
|
|
Rounds 100000 |
|
|
|
Marketing |
|
|
|
|
|
|
|
|
Operations |
|
|
|
|
Equity % (50% max) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (1:1) Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounds |
|
|
|
Total |
PGS |
|
/100 |
= |
Hiring ea |
100000 |
|
|
|
|
|
|
|
Firing ea |
25000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
Changes |
|
|
|
|
|
|
|
|
50000 ea |
|
|
|
3. Opps (3) |
|
|
|
|
|
|
|
|
Quality |
|
|
|
|
|
|
|
|
Technol. |
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
4. Mkt. |
|
|
|
|
|
|
|
|
Price (1) |
|
|
|
|
|
|
|
|
Differ. (1) |
|
|
|
|
|
|
|
|
Place (1) |
|
|
|
|
|
|
|
|
Promo. (1) |
|
|
|
|
|
|
|
|
Total |
SGS |
|
|
|
Environ Occurrences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
/100 |
= |
Total Cash |
|
|
Start-up
Board
To leave this round, a PGS score of 80 is needed; a SGS of 175 is needed; and 2,500,000 cash.
The cash at the bottom right hand corner of the score sheet is what is available to begin year 2. The first board has zero sales. The second board sales factor is $10,000,000. Each firm begins with $5,000,000 start-up dollars. Depending on whether or not new employees buy equity or not and depending on what their negotiated salaries are, the amount of initial cash results. This number is added to the congruence cash available to determine the second year start-up cash. A similar calculation is done for the second and subsequent boards.
Second Board--Introduction
|
Personnel |
Persons |
Scores |
|
Congr. |
Start Cash |
5000000 |
Times of |
|
|
|
|
|
|
|
|
Each |
|
Finance |
|
|
|
|
Rounds 200000 |
|
|
|
Marketing |
|
|
|
|
|
|
|
|
Operations |
|
|
|
|
Equity % (50% max) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (2:1) Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounds |
|
|
|
Total |
PGS |
|
/100 |
= |
Hiring ea |
100000 |
|
|
|
|
|
|
|
Firing ea |
25000 |
|
|
|
|
|
|
|
|
|
|
|
Strategies |
|
|
|
|
Changes |
|
|
|
|
|
|
|
|
100000 ea |
|
|
|
3. Opps (3) |
|
|
|
|
|
|
|
|
Quality |
|
|
|
|
|
|
|
|
Technol. |
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
4. Mkt. |
|
|
|
|
|
|
|
|
Price (1) |
|
|
|
|
|
|
|
|
Differ. (1) |
|
|
|
|
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Place (1) |
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Promo. (1) |
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Total |
SGS |
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Environ Occurrences |
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Total |
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/100 |
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Total Cash |
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+ |
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PGS X |
SGS |
X |
$10 M |
= |
Sales |
= |
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PGS of 90; SGS of 210; and $10,000,000 to leave this Board.
The cash at the bottom right hand corner of the score sheet is what is available to begin the third Board.