Business Reality 201® is a comprehensive board-based Business simulation or business game that looks at the delicate relationship between distributors and manufacturers. The ultimate goal is to allow both distributors and manufacturers to gain a better understanding of how each other’s business operates and how dependent each one is on the other
In this business simulation, there are multiple linked pairs of distributors and manufacturers. Each linked pair (company) competes against the other pairs. Each company consists of three to four players. There are two companies or three or four people each around eachbusiness simulation board, at each table.
Each company in this business game needs to put its own strategy together as well as create an integrated strategy on areas of the business such as:
• Supply-Chain Management
• Competitive pricing
• Market share
• Product mix and market leadership
• Rebates and much more
There are four managerial roles in this business simulation:
• Sales and Marketing
• Business Strategist
Each of the two companies that make up the paired team has these managerial roles. The real-world distribution and manufacturing participants are mixed so that everyone gets to walk in each other’s shoes.
Both companies, though paired, are responsible for driving their own profits first. One of the realizations that come from this program is that both sides learn just how much their success is based on the trust that is built by being strategically aligned with their business partner.
The business simulation is designed to be run in one day. The business games agenda is listed below:
A Quick Look at Year 1
- Distributor and Manufacturer run their own business independently. This is a logistic year and the goal is to help both partners understand how the other works.
- Look at cash flow separately from the distributor’s perspective as well as the manufacturer’s perspective and everything that is entailed in that discussion.
- Look at cash flow from a cooperative perspective as product moves from the distributor to the manufacturer and payment flows from the distributor to the manufacturer
- Look at the cash flow cycle as the money flows from the customer to the distributor
- Standard Income Statements and Balance Sheets are utilized to update and increase both business and financial acumen.
A Quick Look at Year 2
- ‘Pairs’ are given 2 hours to eat lunch and put together a comprehensive business plan. They are competing in an open marketplace for orders, and being successful in the marketplace has a major impact on profitability and viability. (Hard to run your company with revenue.)
- This becomes the real value of this simulation experience. Collectively both companies need to talk about everything needed to not only work together better but also to parley that relationship into driving sales, profits and value for not only each other, but also for the end user customer as well! Regardless of whether you are running this internally or with one of your key distributors, this program is going to open eyes on ‘both sides of the ledger’.
- Strategic Planning and Execution
- Understanding the business from both the Distributor and Manufacturing Point of View
- Expanding Capacity
- Managing Suppliers and Customers Effectively
The Teams also deal with Competitive Pricing at the Sales and Marketing Table
- If discounts are to be offered to win business then distributor has to get the manufacturer to agree to price concessions so that the distributor doesn’t lose too much on the sale.
- If manufacturer determines it is bad business to offer price concessions then the distributor can still make an offer to the customer but they take on all of the risk themselves.
- Impact of the product life cycle. ‘A’ and ‘B’ products have been around for a while and are beginning to decrease in value. Revenues begin to erode.
- Importance of engineering on the development of upgraded products to increase distribution and manufacturing and revenue streams (investment in Year 2 actualization in Year 3).
- What does it mean to be a Market Leader?
- In the simulation there are 3 different product groups, ‘A’, ‘B’ and ‘C’.
- Each team can determine if they wish to hold dominance in a particular product suite.
- Understand how difficult it is to catch the market leader if they are doing what they are supposed to do.
- What it means to be ‘an also-ran’ in today’s market economy
A Quick Look at Year 3
- Re-Evaluating the Strategy and Executing Through Change
- Tougher Competition
- Shrinking or Growing – Managing through both
- Running Lean
- Assisting the Distributor with Sales
- Looking for New Opportunities
- Differentiating Yourself from your Competitors
- Understanding the Value Proposition of your Channel Partner
- How do we work in this business simulation more closely together to drive sales
- What impact does the distributor have on helping their manufacturing partners add value, reduce costs
- Discussion of a distributor’s automation business initiatives and the future of the industry
- What does the future look like for you and your business partners?
- Interested in other business simulations to drive business training and business learning? See Business Reality 101 or Celemi Decision Base