Simulation Paper

David Hanna
Management
December 13, 2016
The first time that I had completed the simulation was when a classmate of mine
told me we had to do it for class moments before class had even begun. I rushed to
the website and started it up and noticed soon that employees were unsatisfied
with their pay and I went and changed their pay and my employees rose as did the
company as well. I also got funding in the beginning and I changed the price as I
was watching the graphs spike up and down and finally found a niche for a spot of
steady increase around year 8 and continued with it throughout the rest of my first
try and did not go bankrupt. I got the highest net worth in the class for that round
as I did not get an IPO during this attempt. I do not have the results for this
attempt, although I do think it was the best attempt I had.
The only saved simulation is the last one I completed and this is the one wear the
economy fluctuated and the income had spiked up and down throughout making
changes due to companys filing vacancies. The picture bellow shows the overview
of my results of my last saved attempt. I had to make many changes during this
attempt to keep my margins going up. I kept my employees happy throughout with
keeping the salary high and ended up switching around the percent of engineers
and sales because of the spikes in sales per quarter. When I saw, them going down
I would add more sales employees and then when they went back up I added
engineers thinking it would make the product better as I raised the price slowly and
added sales at the same time.
One of the main goals after doing the simulation a few times was to get my IPO
launched because I had failed to do that a few times. The times I succeeded in
doing this I saw that my profits would increase due to making my company public.
As you can see in the picture below I started off with little to no market share
because my stock price was so high because of the value of my company. I slowly
would rise to the top and beat out my competitors throughout the simulation as you
can see I ended at 53.3% and my competitors fell to 23.9%. I did this by switching
my employees around and adding more salesmen to get out on the road and
promote this product.

As you can see in the above image my quarterly sales were somewhat low as I had
to work with it during trial and error in editing different measures. I finally figured it
out where it is shown the steady increase towards the end of the simulation. I found
that adding sales employees raised the quarterly sales but adding too many would
make it decrease due to the product being not as good since of the low number of
engineers. Towards the end though I finally found the perfect middle ground as it
slowly spiked up and rose above the competitors. I think due to the change over 15
years engineers were needed due to some sort of change in technology.
One thing I noticed almost every time during the simulation was my price for the
product would be higher than the competitors. I would increase the price when the
engineers were most of the employees because in my head it went with how the
product would be. I thought that the more engineers the better the product the
higher the price. Therefore, after the engineers are steadily increasing I would need
to increase employees in sales to get out and market this product and sell it. This
eventually worked towards the end of my simulation. Another measure that I saw
was my customer service had slowed down to make a belly midway through the
simulation. I believe this was due to my increase in engineers to make my product
better than the competitors. It came back up though towards the end when I added
more sales employees. This information can be seen in the following graphs on the
below.

The following graphs show my adjustments to the compensation part in the

overview. I realized when Juan presented his ideas in class that the only thing that
matter was the salary in that section and midway through this simulation you can
see that I only kept the salary and dropped all others as they did not affect my sales
or income.

As I began the simulation I figured out the market quickly as sales went up very
quick and I went for my IPO early on as you can see in the graph below my potential
market size increased rapidly and plateaued. I believe that midway through the
spike I launched my IPO and then it slowly hit its peak and stayed there the rest of
the way. My sales as I have already said earlier had gone down midway through the
simulation due to me making the product better with the engineers. This decision
though ended up paying off because of that spike near the end which made it hit
record high sales. My prospects dipped down as my sales went down which can be
obviously due to people being worried if the company was going go under.

My cash flow and profit went up and down during this simulation but as I have said
repeatedly I ended up beating out my competitors. In the image below the
quarterly revenue and operating expenses went up and down as did my competitors
but when we both went back up again I sky rocketed over them. Mas my revenue
went up my expenses went up as well but the good thing about mine was that my
price was so high on against my competitors the revenue in the end far outweighed
the expenses. In the end my revenue was 34.7 million dollars per quarter and my
expenses were only 18.4 million which left me 14.3 million in profit. I ended up
asking 190.4 million dollars during this simulation which I could say would be a
dream. I remember though one of my simulations made a billion and was shocked
and proud to say that I loved seeing those numbers. My net income did not go
down a whole lot but when I saw it was going down I would switch a few things
around and eventually see it start going up again where I wanted it to be. Towards
the end, I was hitting peaks of over 10 million dollars of net income coming in per
quarter and ended up at the end of the simulation have 11.4 million per quarter.
In my mind the most important part of the company is the net worth because this is
where they are measured and what a company strives to have. In the beginning of
the simulation when I started up I had low net worth as I was not making much
money, but as I started to make money the more net worth I was gaining and this is
around the time I had my IPO launch during that first mountain that is shown in the
graph below. It quickly went down due to the economy and me adding many new
engineer employees. Towards the end, it finally climbed back up almost at a ninety-
degree angle and hit company records with it having 579.3 million in net worth for
the founders, 634.9 million for the VC funding people, 660.6 million for the
employees of the company, and 49.9 million to the public. As my net worth

increased during the end up my simulation so did the stock price and firm valuation
as it shown in the graph below.
In the end I had a lot of fun doing this as I know I will be doing this sort of thing as I
get into the business world. It was very enjoyable to see money being increased. It
was almost addicting to try and get as high as you can and earn as much money.
Seeing the net worth increase as you make changes to the company was very
satisfying for me to see. Overall I would recommend this be a staple in this class
because it was a very fun and learning experience.