Cake | Extra | James | Sukree

Agenda
Learning
Die Hard
Strategy
Overall
Results

Results to Cesim
Approach

Results to Cesim
Approach
Profit
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

0
(200,000)

(400,000)
(600,000)
Diehard

Red

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Results to Cesim
Approach
Profit
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

0
(200,000)

(400,000)
(600,000)
Diehard

Red

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Results to Cesim
Approach

Results

Strategy

Learning

Strategy Timeline

Initial
Strategy

Price War
Strategy

Results

Strategy

High Tech
Strategy

Learning

Diversificatio
n Strategy

Initial Strategy
(Round 1-5)
Approach
to Cesim
Tech 1: low price, low feature focus on volume
Tech 2: high price, max feature
Gradual shift from tech 1 to tech 2
Wait for lower R & D price for tech 3 & 4

Results

Strategy

Learning

Outcome to Cesim
Approach
Profit

Price War
Round 1: Loss $6,286, heavy investment in Tech 2
Tech 1: Production > Demand, lose out on price
Tech 2: Production < Demand, badly underestimated demand
for tech 2
Tech2 outsource 500 from 2000, demand 1236; lost opportunity

Round 2: Profit $237,277, rapidly increased tech 2 features

400,000
300,000
200,000
100,000
(100,000)0
(200,000)
(300,000)
(400,000)
(500,000)
(600,000)

Tech 1: Production > Demand, every group lowers price

Tech 2: Production > Demand, overestimated tech 2 growth

Diehard

Red

Invoke

Survivor

Statos

Kudeta

Realized Price War had begun

Response: slightly lower tech1 price and higher tech2 price except Asia Die Hard wont enter price war

Round 3: Loss $29,382, Die Hard finally No.1 (lowest loss)

Tech 1: Production > Demand, price war + promotion war + bad economy
Tech 2: Production > Demand, more features + higher price + didnt meet target due to promotion
attack from other groups
Die hard didnt participate in the price war, so managed to avoid heavy losses like all other groups

Results

Strategy

Learning

st Coach
1
Approach to Cesim
Stage 1: Reverse psychology
Everyone had a loss
Coaching (believed that most groups would reconsider engaging in a price war)
Expected higher price

Stage 2: Die Hards response

Capitalize on everyones decision to increase prices by lowering prices heavily

Other groups response:

Some groups increased price as expected!!! , others experimented with new
Techs

Stage 3: Die Hards future strategy

Stay in Tech 1 and 2 + capture the market with fewer competitors +
wait for new tech costs to drop
Results

Strategy

Learning

st Coach
Outcome

After
1
Approach to Cesim

Round4: Profit $156,102, Extreme price dumping

Tech 1: Production< Demand, underestimated demand again (lost
opportunity)
Tech 2: Production>Demand, price too high for feature + other
Profit
groups enter new tech
600,000
400,000
200,000
-

(200,000)
(400,000)
(600,000)
Diehard
Survivor

Results

Red
Statos

Strategy

Invoke
Kudeta

Learning

High TechtoStrategy
Approach
Cesim (Round 5-6)
Realized that profit potential of old tech was too low
Profit margin too low

Realized that market does not open up with fewer

competitors
Profit
600,000
Overtaken by Statos
400,000
200,000
-

0
(200,000)

Red
Statos

Invoke
Kudeta

(400,000)
(600,000)
Diehard
Survivor

Results

Strategy

Learning

Outcome to Cesim
Approach
Round 5: Profit $27,660, met targets + groups move to new Tech as expected +
falling behind Statos + Die Hard begins investing in new tech + start paying dividend
Tech1: Production Demand
Conservative with buffer
Huge price war in Asia

Profit
800,000

Tech2: demand > production, wanted to avoid losses from

over-outsourcing

600,000
400,000
200,000

Round 6: Profit $107,901, overtaken by many

groups

0
(200,000)

(400,000)

Tech 1: Production > Demand, consumer move to Tech(600,000)

4
Tech 2: Production < Demand, other groups moved out
+ Die hard allocated more outsource to tech 4
Tech 4: Production >> Demand, promotion + first
mover advantage of other groups resulted in lower
demand for Die Hard
Strategy
Massive loss due Results
to outsourcing 1600
while actual

Learning

Diehard
Survivor

Red
Statos

Invoke
Kudeta

Diversification
Strategy (Round 7-10)
Approach
to Cesim
Realized massive potential of Tech 3 (due to Scenario
Analysis) + Decided to do low price Tech 3
Die Hard decides to go for every tech to maximize
utilization + profit
Capacity constraint set higher price by having all 4
products

Results

Strategy

Learning

Diversification
Strategy (Round 7-10)
Approach
to Cesim
Scenari
o
Analysi
s

Results

Strategy

Learning

Diversification
Strategy (Round 7-10)
Approach
to Cesim
Utilizatio
n

Results

Strategy

Learning

Outcome to Cesim
Approach
Round 7: Profit $140,651, + Begin investment in Tech 3 + stop invest in Tech 4 + Intense Data Analysis +
Scenario Analysis
Tech 1: Production > Demand, demand continues to fall except in Asia
Tech 2: Production Demand, growing in Asia (but smaller profit potential compared to Tech 3), falling in Europe
Die Hard moved to Tech 4 in US

Tech 4: Production Demand, set premium price in US and dump the rest in EU; Premium Price Dumping
Strategy Created

Round 8: Profit $341,774, Die Hard returns with a

vengeance, Tech 3 drives profit

Profit

Tech 1: Production > Demand (constrained due to

production capacity)
Opportunity to increase price
Tech 2: Production > Demand, penetrated the US market
at low price but the market was too small
Tech 3: Penetration Pricing, Production < Demand in Asia;
Production> Demand in EU due to lack of features
compared to competitors
Tech 4: Production Demand, Premium Price Dumping
Strategy
Results

Strategy

1,000,000
800,000
600,000
400,000
200,000
0
(200,000)
(400,000)
(600,000)

Learning

Diehard
Survivor

Red
Statos

Invoke
Kudeta

Outcome to Cesim
Approach
Round 9: (we thought this was the final round**Plant decision): Profit 519,630,
found the way to maximize potential of all techs.

Tech 1: Production<Demand, Asia demand was very strong even at higher price
Tech 2: Production<Demand, market continues to grow in the US, better than expected
Tech 3: Production<Demand; continuous growth in all market
Profit
Tech 4: Production<Demand; continue premium price dumping strategy
1,200,000
Reached 100% capacity everywhere
1,000,000
800,000
promotion attack drives sales, used instead of R & D
600,000

Round 10: Profit 794,050

400,000

200,000
Tech 1:Production<Demand, Asia demand was very strong even at higher
price
0 1 2
Tech 2:Production<Demand, promotion keeps demand high
(200,000)
Tech 3:Production<Demand, demand marginally affected by higher(400,000)
price
(600,000)
Tech 4:Production<Demand, continue premium price dumping strategy
Diehard
Die Hards strategy pays off
Survivor
Slightly higher price would have taken Die Hard to No.2 or even No.1
High and continuing growth in profit

Results

Strategy

Learning

Red
Statos

Invoke
Kudeta

9 10

ApproachtotoCesim
Cesim
Approach

Analyze the
Market
Determine
Tech for each
Market
Create an
optimal
Production
plan
Determine R
&D

Set the Prices

Determine the
Demand
Tweak
Logistics
Decide on
Financial
Issue

Reviewing

Results

Strategy

Learning

1. Analyze
Market
Approach
tothe
Cesim
?

Actual = Budget
See Competitors

Results

Strategy

Learning

2. Determine
Tech for Each Market
Approach
to Cesim

Coverage diagram
Intense Data Analysis
Scenario Analysis

Results

Strategy

Learning

3. Createto
anCesim
Optimal Production Plan
Approach

No

Yes
Results

Strategy

Learning

4. Determine
R & D to be Invested
Approach
to Cesim
See competitors R&D Expense
See tech growth potential
ROI > Cost

Results

Strategy

Learning

5. Set thetoPrices
+ 6. Determine Demand
Approach
Cesim

Results

Strategy

Learning

7. Tweak to
Logistics
Approach
Cesim
Tax 38% Tax 31%
Tax 22%

Results

Strategy

Learning

8. Decideto
onCesim
Financial Issue
Approach
Constant Dividend payment over the period
Constant Share buyback
Payback debt if cash is still in excess

Results

Strategy

Learning

Learning

Learning to Cesim
Approach
Teamwork and Synergy
To anticipate and manipulate competitors move
First-move incentives
Understand how market works
Customer demand (Price promotion sensitivity)
Intense Data Analysis (IDA)
Beat-the-Competitor Analysis (BCA)
Learning Curve and Economies of Scale
Premium Price Dumping Strategy (PPD)
Multiple Scenario Utilization
Transfer Pricing and Logistics Optimization
Demand estimation process
Face with reality
Results

Strategy

Learning

Learning to
Teamwork
Approach
Cesimand Synergy
Time arrangement
Meeting scheduling
Internet
Face to face
During coaching

Teamwork and collaboration skills

Everyone attends coaching session
Delegate responsibility
Learn to trust
Utilization of diverse backgrounds
Learn to improve overtime (TQM)
Results

Strategy

Learning

Learning - Anticipate
& Manipulate Competitors Move
Approach
to Cesim

Results

Strategy

Learning

Learning to
Firsts
Mover Incentives
Approach
Cesim

Results

Strategy

Learning

Learning to
Understand
Approach
Cesim How Market Works
Customers Perception
Global Economy
Uncertainties
Tax
Tariff and Import Duties
Currency
Competitors

Results

Strategy

Learning

Learning to
Customers
Approach
Cesim Demand
Demand (Q) is function of:
(-) Price
(+) Features
(-) Substitute products (competitors,
other techs)
(+) Promotion
(+) Length of time in the market
(+) Market growth
Supply = Production Capacity
In-house
Outsource
Capacity Constraints
Results

Strategy

Learning

Learning to
Intense
Data Analysis (IDA)
Approach
Cesim
Determine the tech with the
highest revenue
P*Q

Analyze why they change

market over the round
Maybe tech1 performed
better in here than tech2,
or they lack capability to
produce tech2 efficiently
Results

Strategy

Learning

Learning to
Scenario
Analysis
Approach
Cesim
Peaked! And continue
declining

Declining stage!

Market Growth from

the Market
Condition

Product Lifecycle
Growing
Peak
Declining
Results

Strategy

Learning

Learning to
Beat-the-Competitor
Analysis
Approach
Cesim

Results

Strategy

Learning

Learning to
Beat-the-Competitor
Analysis
Approach
Cesim
Cracking
R&D

Results

Strategy

Learning

Learning to
Beat-the-Competitor
Analysis
Approach
Cesim
Cracking
Production
Constraints

Results

Strategy

Learning

Learning to
Beat-the-Competitor
Analysis
Approach
Cesim
Consequence
s

Results

Strategy

Learning

Learning to
Learning
Curve & Economies of Scale
Approach
Cesim
Learning Curve

Production Cost Function

Allow workers to learn

Keep the plant utilize
Achieve economies of scale Avoid idle or over-utilize
Results

Strategy

Learning

Learning to
Transfer
Pricing & Logistics
Approach
Cesim

Tax 38% Tax 31%

Tax 22%

Results

Strategy

Learning

Learning to
Transfer
Pricing & Logistics
Approach
Cesim

Global

Results

Strategy

Learning

Learning to
Premium
Price Dumping Strategy
Approach
Cesim

Results

Strategy

Learning

Learning to
Premium
Price Dumping Strategy
Approach
Cesim

Results

Strategy

Learning

Learning to
Premium
Price Dumping Strategy
Approach
Cesim

Results

Strategy

Learning

Learning to
Multiple
Scenario Utilization
Approach
Cesim

Results

Strategy

Learning

Learning to
Demand
Estimation Process
Approach
Cesim

Results

Strategy

Learning

Learning to
Demand
Estimation Process
Approach
Cesim

Results

Strategy

Learning

Learning to
Demand
Estimation Process
Approach
Cesim

Results

Strategy

Learning

Learning to
Reality
Approach
Cesim
Share Price

Die Hard Inc.

450
400
350
300
250
200
150
100
50
0
0

Diehard

Red

Results

Invoke

Survivor

Strategy

7
Statos
Learning

8
Kudeta

10

Learning to
Reality
Approach
Cesim
Share Price
450
400
350
300
250
200
150
100
50
0
0

Diehard

Red

Results

Invoke

Survivor

Strategy

7
Statos
Learning

8
Kudeta

10

Learning to
Reality
Approach
Cesim

Results

Strategy

Learning

Learning to
Reality
Approach
Cesim

Results

Strategy

Learning

Conclusion
Approach
to Cesim
Profit
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

0
(200,000)

(400,000)
(600,000)
Diehard

Red

Invoke

Survivor

Statos

Kudeta

10

Conclusion
Approach
to Cesim
Cumulative Total Shareholders Returns Growth
40.00
30.00
20.00
10.00
(10.00)

(20.00)
(30.00)
(40.00)
Diehard

Red

Invoke

Survivor

Statos

Kudeta

10

Sun Tsu Quote

Approach
to Cesim

Thank You

Feedback to Cesim
Approach
Does not take into account of overall stability over rounds.
Limited components
Promotion effect over time not clearly defined + first mover
advantage
Overall (Can learn more than learnt in textbook +
application)
We all enjoy it
Should continue for the future
Note: We claimed an extra point
for being the first group to come
up with the group name and
slogan

Appendix 1
Excel Analysis
Approach
toCesim

Appendix 1
Excel Analysis
Approach
toCesim

Appendix 1
Excel Analysis
Approach
toCesim

Appendix 2
Results
Approach
to- Cesim

Appendixto
2 Cesim
- Results
Approach
Cumulative Total Shareholders Return (%)
30.00
20.00
10.00
-

0
(10.00)

(20.00)
(30.00)
(40.00)
(50.00)
Diehard

Red

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendixto
2 Cesim
- Results
Approach
Cumulative Total Shareholders Return (%)
30.00
20.00
10.00
-

0
(10.00)

(20.00)
(30.00)
(40.00)
(50.00)
Diehard

Red

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendixto
2 Cesim
- Results
Approach
Cumulative Total Shareholders Returns Growth
40.00
30.00
20.00
10.00
(10.00)

(20.00)
(30.00)
(40.00)
Diehard

Red

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendixto
2 Cesim
- Results
Approach
Cumulative Total Shareholders Return (%)

Results

Strategy

Learning

Appendixto
2 Cesim
- Results
Approach

Results

Strategy

Learning

Appendix 2to
- Results
Approach
Cesim

Results

Strategy

Learning

Appendixto
2 Cesim
- Results
Approach
Return on Sales (ROS)
40
30
20
10
-

0
(10)

Diehard

Red

(20)
(30)
(40)

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendixto
2 Cesim
- Results
Approach
Return on Equity Ratio (ROE)
150
100
50
-

0
(50)

(100)
(150)
Diehard

Red
Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendixto
2 Cesim
- Results
Approach
Return on Capital Employed (ROCE)
100
80
60
40
20
-

0
(20)

Diehard

Red

(40)

Results

Invoke

Survivor

Strategy

Statos
Learning

Kudeta

10

Appendix 3
Sun Tsu Quotes
Approach
toCesim