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Strategy Simulation (Value Champion) 4 points
This is the final simulation for this class and sums up most of what has been learned throughout the past few weeks. The key to this simulation is understanding how to analyze a value chain which helps to improve the coordination of the processes that produce and deliver the offering. The value chain is a sequence of activities that firms complete to deliver a value proposition to their customers. The activity that managers make determine the firm’s cost position and its differentiation advantage.
The learning objectives for this simulation are to: demonstrate the purpose of value chain analysis; recognize key activities within firms and understand appropriate tactics to increase firm revenue or decrease firm cost; learn how to use the activity and driver analysis to determine appropriate tactics to increase firm revenue or decrease firm cost; finally, make consistent activity choices that will support a firm’s customer value proposition.
Start by opening the simulation and click on Begin Tutorial. This will give you a brief introduction to what will be required in each step or part of the process and about the factory decisions. Read about SmartShoe and scroll to the bottom to begin. Round 1 is a practice round that will hep you earn as you slowly run and make choices for Round 2. Pay close attention to the information on the sidebar. Note that “Potential Revenue” and “Potential Profit” are only estimates.
The objective is to earn the highest profit possible. The simulation imitates a typical manufacturing firm, with students making decisions related to the warehouse, factory, and showroom. The simulation rewards those that select a high quality/low volume strategy or low quality/high volume strategy and then make a set of decisions to support their strategy.
Assignment: Run the simulation as previously described in the introductory section. The choices made in Round 2, for the settings in the warehouse, factory, and showroom should be based on what was learned in round 1. Respond to the questions below in the discussion board in Blackboard as part of your post.
Describe in detail what decisions made in Round1 prevented you from being more profitable after reviewing the simulation results and the income statement. Was there a profit earned? If not, why and what expense prevented that from occurring?
What choices did you make to support your actual strategy choice of either being high quality/low volume or low quality/high volume?
Which activity choices in the simulation had the greatest impact on SmartShoe’s operating expenses shown on the results page? On its sales?
See attached for the generated statistics