Business Creation and Growth due to SimVenture Addressing All Business Areas - Case Study Example

Business Creation and Growth s Submitted by s: Contents Executive summary 3 Introduction 4 Management theory and SimVenture 5 SimVenture’s measurement of assessment 8 Conclusion 10 Bibliography 11 Executive summary A business simulation game is a programme that enables individual to run their virtual companies and get more knowledge concerning business and entrepreneurship in a sustainable and engaging manner. In this context, SimVenture is among the best business simulation games and is an exceptional way of learning about the numerous aspects of starting a business for the first time entrepreneur as well as the competing and complicated demands likely to be faced by business owners. All decisions made in an area of business have ramifications some of which are not clear or obvious. This creates a challenge, which is evident in the generation of enquiries, orders as well as sales that are essential to building successful companies. Introduction The best learning comes from experience and business simulation seeks to enable students to apply the theoretical knowledge they acquire through making decisions, and analyzing the results of the actions they take (Cruz-Cunha, 2012, p. 607). Simulations are usually cross sectional and incorporate all the main elements of decision making in business where the students deal with analysis of markets, formulation of strategies as well as strategy management, while getting instantaneous results of their actions (Louis, Jabine and Gerstein, 2003, p. 87). Through this approach, they are able to retain relatively more information compared to when they use the conventional methods of learning. Business simulations are comprised of competing teams that run theoretical companies. Every team gets a chance to develop corporate strategies and apply strategic models and ideas in an applied decision-making context. This assists them to appreciate the entire business procedure and its distinctions in a simplified and unforgettable way. SimVenture enables people to develop and run their own theoretical company while learning about the business the way an entrepreneur is supposed to (Jones, Macpherson and Jayawarna, 2013, p. 45). Individuals who wish to learn about business as well as entrepreneurship prefer to use this simulation, as this allows them to benefit from use of SimVenture. This business game can also be considered as a great training resource for the firms that seek to foster teamwork, increase skill-sets of its employees and help them think faster in different situations (Jones, 2013, p. 101). The simulation tool can be used in a variety of business areas including in market and competitor research, customer feedback, setting prices, identifying sales channels, customer support, distribution, target markets as well as promotions. It may also be used for business planning, advertisements, public relations, website, design of product and banking. The simulation further creates unexpected events like burglary and problems in the area of supply, monthly reports, and more than one currency options, notepads where the players can have an opportunity to record their note as well as custom content and a template for a business plan. The notepad integrated into SimVenture as well as the mechanism for monthly evaluation provides information to students so that they can review the performance of the business or make presentations in a tutorial, with the presentations may focusing on the performance of the business and the group dynamic. The presentations should put emphasis on the manner in which groups run their businesses and they achievements they have made. It is important to print monthly performance data so that it may be shared as part of the presentation. Notably, the users of SimVenture cannot be able to make changes to performance data after they have run through the entire run and this makes the printed monthly information that is availed for any presentation as a truthful representation of the activities that took place (Cole, 2004, p. 250). This differs from other business presentations where comments along with decisions are lost in theory and half-truths (Zeigler, Praehofer and Kim, 2000, p. 17). The presentations associated with SimVenture are supposed emphasize on the performance of a group as a team and the knowledge individuals gained about themselves through the simulation. The group can be directed to provide feedback in various ways, but if performance can be connected to any team working theory, then this aspect of the leaning experience may be equated to any other part in regards to strength. Management theory and SimVenture Numerous organizations are continually depending on simulations to assist them make strategic decisions (Wong and Ma, 2013, p. 665). Simulation is the utilization of advanced mathematical models in the analysis of various strategic decisions that are available to various parties including competitors, regulators and suppliers, so that the possible outcomes can be predicted (Kropp and Scheffran, 2007, p. 234). However, simulations are not a new phenomenon since political scientists and economists as well as the military have employed its principles since the fifties. In the eighties, businesses started employing simulations to assist them in making decisions that affect pricing, production, labor negotiations and marketing and adverting. Even though the mathematics may seem obscure and divorced from corporate reality, it is evident that when the simulation principles are stripped down to their essence, are powerful instruments that support decision making. Marketing and adverting transactions that involve numerous participants as well as bidding strategies are the best applications for simulations since the decisions associated with them blend strategic and financial inputs along with considerations (Pride and Ferrell, 2010, p. 313). Possible marketing and adverting deals usually utilize sequential simulations that would be developed through a prolonged period (Lamb, Hair and McDaniel, 2011, p. 173). In such as case, the numbers of possible players together with the actions they make take are able to generate numerous possible outcomes that can be considered by managers. In order to deal with this complicated nature, a refined but easily understandable software algorithm that has the capacity to model the decisions a company should make while keeping in mind the expected conduct of others is used to attain its goals. The first step entails assembling all the important information that is relevant to the deal under scrutiny (Robinson, 2011, p. 280). Simulation s methodologies focus on the collection of a variety of inputs such as the potential players, the objectives of every player and the likely actions of the players. The main aim of using the simulation is to understand the lines of thought of every player in order to get a better understanding of their strategic goals, possible behavior and economic incentives (Ferdig and Freitas, 2012, p. 296). This information can be collected through an all-encompassing intelligence process that includes the development of what if scenarios as well as client role playing. Ultimately, after the information collection phase is finished, all the information is input into the algorithm so that mathematical modeling can be done with this phase providing possible outcomes for each player for every move them made. Results of analysis of simulations are illuminating as far as management is concerned when considered from a transactional, competitive-intelligence and shareholder-alignment point of view (Harry, 2010, p. 689). The models from simulations assist in suggesting optimal courses of action along with its payoffs while at the same time highlighting opportunities that allow the organization to work in cooperation with foreign competitors, including those with varying business goals. They can also make it possible for businesses to collaborate with third parties through strategic alliances that will be mutually beneficial. Additionally, it provides management insights concerning the manner in which the negotiating process would transpire and the possible bids that may originate from actors that had not been anticipated (Biech, 2012, p. 464 ). Generally, the use of simulations, especially SimVenture, ensures executives buy in and documentation of the prevailing state while enhancing alignment concerning new marketing and advertising strategies (Calkins, 2008, p. 236). Even though some of managers are unwilling to admit that they use SimVenture, numerous firms acknowledged its value publicly as far as making complex and high-risk decisions is concerned (Vanzant-Stern, 2005, p. 146). Regardless of its numerous benefits, SimVenture has its share of critics who consider it as being too complicated and disconnected from the familiar decision-making practices (Sarjoughian and Cellier, 2001, p. 30). However, these negatives are over-stated as complicated mathematical or software packages are not needed to perform detailed modeling in cases where Microsoft Excel will suffice. Additionally, even though SimVenture assumes the players will remain rational, this is not supposed to be the default supposition in the model. Methodologies should therefore factor on the inherent irrationality of the actions of most of the people, particularly in situations such as negotiations where the bias of the management may skew the resulting decisions. Moreover, the expectations of the executive have to be calibrated early as SimVenture is not a strategy remedy by simply an instrument, which should be used with other methods of making decisions such as strategic planning as well as discounted cash flow analysis (Lenhard, Küppers and Shinn, 2006, p. 103). This tool should not at any time be used as a replacement for good judgment or financial analysis. SimVenture’s measurement of assessment Software used for simulation such as SimVenture are intentionally created so that the progress of the user as well as the decisions he or she makes are recorded automatically (Becker and Parker, 2011, p. 19). Furthermore, features are usually written into the simulation to allow notes and plans to be made and then accessed later in electronic format of in a printed version. SimVenture allows evidence to be collected in different management simulations through the history function that displays all the completed activities for each month, the notepad function that enables the users to record their personal memos, save and load that stored and retrieves files electronically as well as the print version that generates reports and plans. Because simulation software gathers data in various formats, trainers have varied options in regards to assessment performance. In terms of what is measured, trainers usually want the users to show what has been learnt using the resource, nonetheless, some of the courses mainly emphasize on the financial performance of the user. Numerous software have data analysis tools incorporated in them which assist in measuring assessments. As far as SimVenture is concerned, all the employees require training prior to them using the software or starting a new job. Through business simulation, employees can be trained based on the skills they already possess. In SimVenture for instance, the training option allows the management to track the skills of the employees and come up with the appropriate skill training. Presently, there are numerous all over the globe that employ business simulation in training and motivation of their staff and through various forms of simulation, the management is able to get more information concerning the understanding of the their staff and other aspects of the business. This can be demonstrated through knowledge in a number of aspects including successful marketing and selling, and whether employee have a full appreciation for the manner in which activities in this area affect organizational and operational issues and the bottom line. With assistance from pre-set settings and recorded briefings, simulation tools such as SimVenture can be used to test the decision-making abilities of employees in the organization, their analytical skills as well as their thinking and overall business insight. Since the tool captures all the decisions made by the users, managers can use different simulation software as a foundation for expressive and collaborative presentations what will be the source of priceless comprehension of the thinking of the employees. SimVenture addresses all the aspects of business areas such as Sales and Marketing, Operation, HR and Finance (Jones, Macpherson and Jayawarna, 2013, p. 410). As far as sales and marketing is concerned, SimVenture addresses all the desired areas of this aspect in a businesslike manner including customer research, selling points, tools used for promotions as well as marketing research among others, making it an effective marketing instrument. Further, simulations are able to generate results that cannot be measured through experiments with the present level of technology. Surface interactions and rate of flow at the exit of a micro-electric thruster are aspects that cannot be measured by any device that exists currently. Simulations have a capacity to give results in issues that may be considered too small, or when the probe is too big and is thus skewing the results or when the conditions for the probe are too harsh for any tool. Simulations can be set to run for countless time steps with varying degrees of detail with the only restrictions being programming skills or the CPU being used. SimVenture also allows for time compression as in real life it may take a very long time to gain a certain level of skill in a specific field, since it be years before an individual meets all the business situations that may be encountered in the field (Chung, 2004, p. 1-4). It may also take a long time before the outcome of strategic business decisions to become evident and it may also be challenging to see the manner in which particular outcomes are linked to the initial decision. Through SimVenture, time-to-competency can be compressed through exposure to a wide range of scenarios in a short time and providing the results of decisions in a few seconds making it easier to relate to the results. Conclusion When using SimVenture, any inappropriate strokes are likely to lead to the wrong results and furthermore, human beings are programmed using theories of the manner in which things work and not laws, however, theories are not often a hundred percent correct. As long as the simulations can give precise results, a baseline should be run to ensure that it works in order to ensure that there is some credibility associated with the simulation. Nonetheless, numerous people do not consider what they do as business unless they can be able to see, taste and hear the project. The virtual world is challenging to get used to during the initial times, but once a person becomes comfortable, only the sky will be the limit. Bibliography Becker, K. and Parker, J. 2011, The guide to computer simulations and games, Wiley Pub, Indianapolis, Ind. Biech, E. 2012, Developing talent for organizational results, Pfeiffer, An Imprint of Wiley, San Francisco, CA. Calkins, T. 2008, Breakthrough marketing plans, Palgrave Macmillan, New York, NY. Chung, C. 2004, Simulation modeling handbook, CRC Press, Boca Raton. Cole, G. 2004, Management theory and practice, Thomson Learning, London. 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