Business Report for SimVenture - Case Study Example

THE SIMVENTURE BUSINESS REPORT Introduction SimVenture is very accomplished tool which is of common use in most learning institutions. It encourages self learning in that learners have time to create, run and manage their business without the existence of doubts that the firm may collapse financially. It is used in schools, colleges, universities as well as commercial and public sector environment. It involves making key financial decisions ranging from the organization of the business, financial management, sales and marketing strategies and daily business operations. SimVenture focuses on global business and is designed for people who love numbers on the screen. In the process of using the process of using this application the user will have the chance of viewing business from a wider perspective and in the process acquire strategic mindset which is a prerequisite to modern day business. Sustainability It provides an engaging and immediate learning environment where users continuously solve problems by analyzing information, making decisions and dealing with consequences. i) Flexibility It can easily be used since it is software which can be installed on the central server and accessed on any connected computer ii) Employability Under SimVenture simulation, people who think innovatively and laterally beyond their area of specialization are greatly valued. Life long learners who are adaptive are able to fast thinking through the learning process. Increasingly, organizations seek critical thinkers with insight and the ability to reflect. In today’s business team players with the ability to discern social cues and respond accordingly to those cues are in great demand, this simulation helps in inculcating this skills. This learning experience encourages proper financial management and efficient time utilization; this eventually leads to robust financial gains. 1. Research Market research There should be an organized effort to gather information about customers and the prevailing markets. Marketing activities within the simulation have different levels of effectiveness, depending upon which target segment is selected. Information on how effective the activity will be in reaching the different segments is available in some cases, such as Advertising, giving percentages to guide the user in selecting an appropriate method to reach their chosen market segment. Generally a broad approach will help to reach a greater percentage of the chosen market segment and will result in a high number of enquiries being generated. (Thatcher 1990) Competition research This is a crucial business activity for any business entrepreneur. Analysis of the competitors is an ongoing process which will give a clear understanding of the weakness and the strengths of the competitor. Some of the benefits of conducting a competitive research include better targeting of customers, better understanding of the markets, proper forecasting of the potentials of the market and understanding what the competitors are offering. The product competitors are studied extensively; this will guide the designing of the product. Customer feedback To deliver a great customer experience, you must engage with your customers, listen to their feedback, and make improvements based on what you learn. The information obtained is used to fine tune the product design and determining the pricing of the product 2. Marketing promotion Advertising The advertising should be planned and should be consistent with the name of the business and the benefits of the product. The main reasons for advertising include; educating and informing the public, offering specific products and services, making the business and the product familiar to the public and attracting customers to find out more about the product Direct marketing This involves making direct communications to the customer via any means possible. This mode of communication puts the customer at the center-stage and primarily focuses on accountability. The following characteristics make it stand out; (Thatcher 1990) i) The communication is made directly to customer not through intermediaries ii) This mode of communication aims at driving a specific action iii) Major emphasis is placed on measurable responses from the customer Public relations This involves coming up with a press release. The choice of the story may not necessarily have any impact on the simulation but it will have an impact on the customers. For the case of a new computer business, the press release may include the reasons for coming up that business and the determination to succeed Networking This brings together individuals or groups who are like- minded. Ideally meeting people who have an interest in your area of specialization will help you learn about problems faced by others and be better prepared when it happens to you Pricing The price has to be determined considering various price factors like competition, market condition and the quality of the product. Specified discounts and short term sales promotions have to be spelled out. The base price has to compete with other competitors in the market. Break even analysis has to be undertaken to determine the possibility of a profit Selling points The selling points have to be determined, an effective selling point has t match the target of the segment preferences and probably the specifications of the product. Determining a unique selling point has to follow some steps, this includes; listing the features that are unique about the product, deciding on the needs that are going to be specifically met by the product, identifying the aspects in the product that cannot be imitated by the competitors, creating phrases about the unique product which are short and concise and lastly answering the customers primary question ‘What’s in the product for me?’ (Wolfe & Bruton 1994) Sales channels Within the sales channels element of the simulation encourage the students to explore Personal Selling and distributor sales as part of their campaign. They can designate how many hours of personal selling they will undertake each month, though they will find that this approach takes a couple of months to generate any sales. Distributor sales take time to research and negotiate within the simulation but provide a good opportunity to generate a regular number of orders. Marketing channels will determine the kind of business strategies to be employed. Either to sell the products directly or indirectly to the customers. Having your own online business store will greatly impact the business turn around and the level of revenue collected by the company. The online market has exclusively transformed commerce with business now shifting to ecommerce and other online channels. (Wolfe & Bruton 1994). Distributors Distributors have to be identified taking into account the potential sales. The distributors will ensure that the product has a wider market. They may be inform of intermediaries that buy and resell the product 3. Finance Since it may not be possible to run business without a bank account, there must be a bank account which will help in managing money effectively. The bank account virtually pays and accepts payments from other business accounts, earns interests to your money, and enables you to get an overdraft. The profit and loss forecast will help in predicting income and expenditure of the coming months. In the real sense income should exceed costs so as to enable the firm make profit. Key decisions Some of the key decisions in a firm include getting value for the business; a regular check on the market value is a good way of keeping the sales expectations realistic. The other key decision is making acquisitions, in market place mergers and acquisitions are seen to be offering a favorable condition to buyers. Key financial management decisions made includes financing and investments. The investments must be financed in some ways; however the financing alternatives need to be considered. Alternative sources of finance like borrowing from banks and taking credit from suppliers was considered. The other decision involves financial control. This will ensure the business is meeting its objectives. To ensure this is done effectively, efficiency and security of the firm’s assets needs to be taken into consideration. (Summers 2004) From the simulation it has been learnt that, to maximize sales the following needs to be put into practice; choosing the selling points of the product, deciding on the marketing promotions to be used in the product and choosing the sales channels to boost the order. Some of the decisions that have to be considered include choosing on the time dedicated for the running of the business, this is because working for longer hours leads to inefficiency. (Wolfe & Bruton 1994) Conclusion As a consequence of simulation it is quite easy to gain success in terms of enquiries, orders & sales by simply developing a broad sales & marketing strategy. However, when working as a group, it is seen that some strategies are more successful than others. Furthermore well thought through strategies generate more profit and hence more money becomes available to spend on sales & marketing in subsequent months. As the use of the simulation continues it becomes easy to appreciate that some strategies are more cost effective than others. (Thatcher 1990) Whilst it is not probable to cover every possibility, there are some issues & problems most commonly encountered in the process of simulation. This includes the inability to select the selling point and as a result the potential customers do not know about the product or may consider the product inappropriate for their needs. The other thing is choosing wrong sales and marketing activity and hence no inquiry is being made leading to loss of income Bibliography Adelman, P. J., & Marks, A.M. (2009). Entrepreneurial finance. Upper Saddle River, N.J., Prentice Hall. April Training Executive. (1994). Executive: a business simulation based on the motor industry. Frodsham, April. Barnes, A. 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On the Use of Computerized Simulations for Entrepreneurship Education. Simulation & Gaming, . Read More