Business Simulation Exercise In The European Car Industry

Business Simulation Exercise In The atomic number 63an Car IndustryThe charm of determine, vis--vis the bud spend a pennyed pricing is being considered next. It is seen that the budgeted pricing for A-Star was 12,169.15 darn that Plush was 16,909.69. However over the next three periods, there guide been fluctuations in the cost movements as envisaged in Table 1 shown in App deceaseix.Thus over the period there has been an average of 6% increase in prices of A-Star and around 2% in that of Plush. These could be attributed to increases in material prices and labour which shall be taken up shortly. This could to a fault be due to competitors increasing prices which withdraw impacted on this argumentation also. bet and Results Production skeletal frames have been estimated at 1% of the 11.25 market sh atomic number 18. The total market sh atomic number 18 and not the market shargons as per individual age conventions have been taken into account, primarily because metropolis ca ble cars are preferred by all age groups and not restricted to any one age group.Round 1Estimated sales This has been estimated by multiplying forecasted melodic phrase with selling prices per unit The Depreciation factor has not been considered, since for the first stratum, it is not necessary to consider cost of manufacturing fixed assets from selling prices. trust Balance The Companys pecuniary strength is indicated by its bank balance. However, in this case it needs to be seen that bank balance needs to improve.Unsold stock The inquiry of any unsold stocks does not arise since all cars that were manufactured were sold out during the year.Gross borderline No account of inflation has been considered during the first year of ope symmetryns.Market Share We have under produced the cars, when compared to some other competitors, thus leading to lower market share.Round 2Estimated Sales 83% of A-Stars Production and c% Plushs production has been fully sold out.Bank Balance Exc ess of expenditure over incomes has resulted in negative bank balance. Adverse cash balance has necessitated excerpt of fresh doze of bank loan.Unsold stock There were unsold stocks of A-Star forming around 17% of production. It is hoped this would be sold during the next RoundGross Margin the result for both was 21% but we estimated gross margin 25% for city car and 23% for medium car, so we were an unsold car for city car, which affected our gross margin actual results.Market Share Market share needs to be improved by gaining harbor out inroads into markets and increasing visibleness and sale of cars. It could be through advertising campaigns.Forecast and Results 3Pricing We added two new options to care. This is to match options provided by competitors who were doing better business with these add-ons .There have been price increases in finished sounds, since, due to the impact of inflation, wage bill has increased from 425 to 430.Production Since there were aspects of uns old stocks, productions of cars were reduced this year although the numbers of workers were the same and the outturn was the same. However there was colossaler production.Gross Margins the result for city car was 25%and for medium car is 21%, but we estimated gross margin 29% for city car and 24% for medium car, so we were an unsold car for city car, which affected our gross margin actual results.Unsold stocks Since our prices were relatively gamyer(prenominal) than that of our competitors, there were unsold stocks.Market share totally cars produced could not be sold because of high pricing. This also resulted in lower market share. Thus, selling prices undeniable to be brought at par with that of competitors.Sales We increased the production, and since we produced more, we were able to sell more and gain better sales figures.Post Tax scratch term production forecasts were lower than actual, the factory producton had not changed. Thus, more production of cars led to more mat erials and labour costs. Opening stocks were however not considered while calculating impale tax profits. We sold lesser number of cars although we produced more, resulting in stocks, and also higher material costs.Results of Round 4Sales We redesigned the car options in order to live in market- and reduced the selling prices of cars. This resulted in increase in the gross margins and medium size cars had a good market.Production Factory rig was at 60%Gross Margins the result for city car was 15%and for medium car is 15%, but we estimated gross margin 24% for city car and 24% for medium car, so we were an unsold car for city car, which affected our gross margin actual results.Unsold Stocks Competitors have better brand image, better market share and improved popularityMarket Share Similar to Round 3Post Tax Profits Error in calculating please rates in current account and interest on loans.Summary of Financial Results From a examination of Table 5 8 appendixed at the end of this consider, it is evident that all is not going too serenely for this auto making company. For one thing, its margins have been decreasing and even the Post Tax Profits are showing losses at the end of Round 4. This is all the more intriguing when one considers that there has been consistent increase in production over the Rounds. Thus, the most sensible thing for the company to do at this stage is to reduce production rationally and concentrate on producing solitary(prenominal) much(prenominal) products that are money spinners and could earn handsome profits for the company in latter years. There is no use of increasing inventory and carrying costs by producing cars that do not have a ready market, or in expectations of revenues that may not occur.Coming to market share, it may be seen that some aspects of this ratio are market driven and may not be controllable by the company. However, it is necessary that Sound Marketing Strategies need to be made that could utter aspects of a sagging bottom line and reducing market share in belligerent auto making markets.Non-financial resultsComing to the non-financial aspects, it is evidenced that the number of work force has increased from the initial 391 for A-Star and 475 for Plush, total of 866 employees according to the budgeted estimates. However the strength of the work force in the subsequent rounds is as shown in Table 2 in AppendixFrom the above, it is quite evident that there has been an excess use of work force as compared to the budgetary figures. Coming to capacity utilization while in the First and Second Round, there has been 100% capacity utilization, during the third round, it is just 65% of total.Regarding promotional activity expenses, it is evidenced that while the budgetary figure of 60M have been maintained in the First and Second round, in the Third round this has increased to 80M, an increase of 20M.Present scenario in the car manufacturing scenario in EuropeIt is also seen that, economic re cession has severely affected the European car industry and therefore a clearer picture could only emerge if and when the recession fades away(p) and the business economies are realised perhaps after 2010 or so. Over the past five years, there has been a slowdown in economic output across the EU. Weak growth has led to reduced consumer and business confidence. Industrial production, including the production of durable consumer goods, has declined. This has impacted severely on the car industry, given the cars billet as the ultimate consumer and fashion item, as well as the importance of engineering and design in the manufacturing process. Average profit margins have declined from around 10% in the 1960s to less than 5% today, and some volume car processrs are actually losing money. (EMCC Dossier on the European Automotive Industry, 2004).A business tuition of this kind needs to also consider economic and non-economic factors like rate of inflation, GDP, industry growth, taxation , availability of spares, etc. in order to be viable and competitive in global car markets. Segmentation and business opportunities in developing countries also needs to be seen as also the need for exploring exports in high growth areas. The non-economic factors like client trends and preferences, road conditions and liking for the product are also major(ip) issues, especially when automakers are vying severally other not only in technical competence but also in market sharing and aspire realization. Under such circumstances, costs, pricing, attitudes and selling stratagems all play authoritative roles in determining the business opportunities and its future impact on business, especially in changing and volatile markets. The need for business projections and target setting in areas of production, sales, finance and human relations are crucial in the highly competitive auto making industry.Critical reflection on teachingsThe teaching and the analyzing are interrelated they both find the guidance as the useful tool in the psychoanalysis and in the final conclusion. The learning buttocks be fortunate only when the antithetic traits and the complexities are understood properly by the guide and the knowledge can be proven beyond the boundaries. The critical reflection has the major role on the education and it is its major objective. The model of the critical reflection is shown which was put forward by meziro, for the explaining of the critical conduct exhibited in Table 3 in AppendixThe reflection is the analyzing or the forecasting of the future period by the decision making approach with the complicated and the interrelated schema.Learning as an important toolThe learning can be considered as an important tool for the analysis of the different departments in the business plump for and the various functions of the same. To learn the proper functioning of the different departments are vital to know whether the business game is a success in the different trait and whether the departments suits the requirement.HR departmentThe HR department is the one which deals with the people as the asset of the governance, the people related activities and the contribution by the people to the organization. It is the strategic approach to the goal settings and the functions of the management. In the study of the department is considered the strength of the employees were considered to be less than 1000, during the start up but by the growth of the company and by the innovation the strength of the employees has reached upto 4000.The study of the departments are considered by the employees turnover and the capacity of the production output by the employees in the organization. The loan facility that are acquired for the different operations and for the benefit of the employee. Professionalism of the human Resource (HR) department is implied to be twofold implications. A professional HR practitioner has a collective professional role to play to enhance the HR occupation. (HR Department Professionalism A Comparison Between the UK and Other European Countries, 2005).Operations DepartmentThe operations department consists of the operations performed in the car industry, the operation starts from the leveraging of the raw materials to the process and to the finished goods to the dispatching of the product is the duty of the operations department that has to be monitored. The different operation technique like the JIT and the six sigma process are done in for the efficiency of the operation department for the competitive advantage. Focused research studies that advance the theory and practice of operations management. OMR is a rigorous, double-blind peer-reviewed journal that is lie toward fast reviews and publication of high-quality research that makes a clear contribution to the science and practice of operations management in todays global institutions. (Meredith and McMullen, n.d).Marketing departmentThe marketing depart ment consists of the marketing of the manufactured cars to the customers with good promotion techniques and tactics like the offers to find the increased sales and the revenue. The main idea is to promote the product to the customer but the proper market analysis and the research has to be conducted to make the product a success.The qualitative and the quantitative research are to be conducted to have a thorough analysis for the same for finding out the motive for the product and the forecast about the market. Statistics provide traders with the detailed information needed to make focused decisions only a complete market analysis can provide the story behind the numbers. (Market Analysis, 2010).Financial departmentThe financial department consists of the analysis of the financial data and the analysis of the cash flow and the fund flow of the company as the whole, the accounts personnel are to be hired as the financial controller where they have the ultimate control for the finance and the different kind of the financial aspects.The different pricing mechanism to be treated as the retribution period to be made short and analysing of the different pricing ratios to be done,The fixed assets should be increased and the company turn over should be increased. The different tools are used for the analysis of the finance aspects. The commonly used ratios are the instant financial analysis, history ratios, and financial statement analysis tools, with industry ratios tools and accounting ratios. (My Business Analyst (MBA), 2010).If the game was played once more the performance can be improvised to much extend because the first game can lack the experience and the usage of the certain tools can be used more.The safety aspects can be considered more and the competitor analysis are to be done,The car industry can also go for the hybrid variety of cars in the industry as they are the common variety in demand ,the company also go for the variety of the alternative propul sion vehicle and electric vehicle which can add on the variety to the category of the brand. The completeness in the collection and the analysis may also have some of the inadequacy as a result of the lack of experience in the field.Business game is the practical tool to practice and understand business and its challenges, threats and opportunities. Business games help to identify oneself as the core part of the business and managing the situations.Regardless of the size of business you are in whether a large corporation, a small company, or even a home-based business effective communication skills are essential for success. (Improve your chat Skills, 2010).The communication is very important in a business It is the effectiveness in the company which contribute for the overall growth and the prospectus of the company and the smooth functioning of the different departments in the organization irrespective of the functions in the departments, The World of Business Communication Eve ry businesss aim is to gain profits. Whatever be the example of business you are in the bottom line is that you must earn something from it. (The world of Business Communication, 2010).It is through the communication that the operations are handled effectively and efficiently. The business game is usually to improve the performance and to boost up the skills of selling, marketing and the operations.Theres a lot of confusion about squad building event days. much it is seen as an exercise to boost morale, to help workers bond better, and as a fun day out at the companys expense. (Rose, 2010).The additions for the improvement in the company are the guidance at the each of the steps for the avoiding of the mistakes and the error correction at the each level. The reference to the previous business game which are a success, The each step of the activities should be conducted in a group. The open discussion should be conducted in order to have various opinions regarding the business an d the management and the brainstorming ideas from the team mates. It involves the activities to be conducted and the Free team building activities, exercises and ideas are for building teams and teamwork, corporate employee motivation, personal development, ice-breakers, energizers, and more serious learning and personal development. (Chapman, 2010).(ReferencesThe all round 1 and 3 and the graphs for the understanding of the companys performance).Team Performance A critical evaluation of the performance of the teamFor every organization there will be a set of team obligated for particular activities within the organization. Team represents a set of people working together towards accomplishing a set of predetermined goals and objectives. Effective, profitable teams of all types have a positive impact on bottom line results and organizational success. (Cornelius, 2006, p.1) The important works were allocated to these four members. These team members were Yi Jiang, Adnan Hasan, Shan u Jain and Fawaz Khalid Ansari. All these members have performed in such a way that this enabled the organization to achieve it goals. They altogether took the decisions related to the various operational areas. The functions allocated to each member and their roles being in a team are explained as followsYi Jiangwas responsible for look after the marketing department. His duty was to design the marketing research programs and to give instructions and take into account guidance to his team members. He used to prepare slides for presentation in the team. After conducting marketing research he decides the promotion strategy that has to be apply for their product to become successful in the market. He was having a clear idea about the European market conditions and based on those ideas he gave grant suggestions related to the production quantity and the percentage of market share that has to be captured by the company. He was the person who gave the idea to produce city and medium s ize cars. He helped me in the operations department by deciding the quantity of products that has to be produced by the company. The company was having huge stock that was not sold in both the spot and the third round. This was a great problem for the company. For solving this problem he provided an excellent idea to redesign the car. This was decided in the fourthly round and the result was outstanding.Adnan Hasan was responsible to manage the finance department. He was responsible to handle all the financial operations of the company in all departments specifically the accounts department. Deciding the finance required for each activity is not an easy task and he was much capable person to give all financial instructions to the company. He has helped the operations department by stating the quantity to be produced by the firm and also provided the accurate number of human resources required for the operations department.Shanu Jain was responsible to look after the human resource department within the organization. She is a person who is very talented and highly committed towards the work. She was responsible to conduct the meetings within the organization. She prepared the agenda and the minutes of the meeting conducted between the team members from all the departments. Inorder to smoothen the team work a team choose was created by Shanu JainDateAttendanceDiscussion17-11-2009100%Decision related to market segment and selected the design and options.18-11-2009100%Decision related to pricing of cars.20-11-2009100%Estimating the production units and sales value.22-11-2009100%Forecasting the profit and the cash flow and designing decision form.NX0441 Managing for Sustainable Competitive AdvantageIn the second round she found that the productivity of the employees has been reduced and for solving that problem she suggested to increase the wages of the worker. This resulted in an increase in the productivity among the employees and it was found in the followe rs rounds..The last key member is Fawaz Khalid Ansari and that is me. I was the team leader for the operation department and i was responsible to handle the operations department within the organization since I am a mechanical engineering graduate. I took the decisions related to the quantity of output to be produced by the company. I gave my complete effort to give my best to the team and thereby to the organization. With my available knowledge about the cars and the latest trends in the European market I helped the marketing department to understand the consumer behaviour with respect to the car market. I also helped my team, members to create excellent designs for the cars. I suggested an idea to purchase a single factory and give the maximum from it. As a key team member in the organization I took the decision to produce less at the first stage and this was a great help for the firm, because till round 2 the company was having many stocks that were not sold.All the activities th at have to be performed by each team members are prepared in a chart and it is termed as team charter. Every team will have a particular charter and it will be in a written format. The charter typically includes a statement of mission, objectives or statement of work background authority, boundary conditions (scope, constraints, resources, and schedule) membership high-level requirements or specifications, and larboard responsibilities. (Project Management Training and Resources Team Charter, 2009).I realised that the team work increases the level of motivation. This encourages members to work hard for the benefit of the team and the team is motivated because its members get their emotional and intellectual needs met by the team. (Working in Teams, 2010).The most important benefit for all the team members is that they will realise the value of a group work. In a teamwork environment, people understand and believe that thinking, planning, decisions and actions are better when done cooperatively. People recognize, and even assimilate, the belief that none of us is as good as all of us.(Heathfield, 2010). All the decisions that are taken with respect to each department within the organization have its own significance in achieving the target of the organization.ConclusionThis is a business management game where the team members are asked to select and start a business and they have to sell the product. Various discussions have been held at different levels. It was able to learn a lot of things from this work. The participation of the team members towards a common goal was the major attraction of this game.From this game it was also able to understand how a team is working towards the predetermined goal for achieving the organizational goal. The important objective of theteam members was to increase the value of the shareholder. For accomplishing this objective the team has listed out various steps that have to be followed. There is a team leader who is responsi ble to guide all the performance that is performed by the other teammembers.