TABLE OF CONTENTS

Business Enterprise Simulation

WRITING A GOOD
BUSINESS PLAN
A. Learning points

What is business plan?

Important Steps

How to write business plan?

B. Narrative

What is Business Plan?

A business plan is an essential tool for any business, serving as a formal written document that
outlines the goals of the enterprise, the strategy for achieving those goals, and the time frame
within which these objectives should be accomplished. It provides a roadmap for the business,
guiding its growth and development while also serving as a critical document for securing
funding from investors or lenders.

Important Steps

1. Write an executive summary

A brief overview of the business, its mission, and its objectives.

2. Business Description

Detailed information about the business, its products or services, the market it serves, and its
competitive advantages.

3. Operations Plan

An operations plan is a crucial element of a comprehensive business plan. It details the day-to-
day activities required for running the business and achieving its strategic objectives. This
section outlines the processes, systems, and resources necessary to produce and deliver the
company’s products or services. An effective operations plan ensures that the business
operates efficiently and meets customer expectations consistently.
4. Organization and Management

Information on the business structure, ownership, and the management team.

5. Legal Structure of Business

The legal structure of a business is a critical decision that impacts various aspects of its
operations, including liability, taxation, and management. Choosing the right legal structure is
essential for aligning with the business's goals and ensuring compliance with legal and
regulatory requirements.

6. Products or Services

A description of the products or services offered, including details on their benefits and
lifecycle.

7. Marketing & Sales Strategy

Plans for marketing, sales tactics, pricing strategy, and customer acquisition.

8. Competitive Analysis

A competitive analysis is an essential component of a business plan, providing insights into the
competitive landscape in which a business operates. It involves identifying key competitors,
evaluating their strengths and weaknesses, and understanding the market dynamics that
influence competition. Conducting a thorough competitive analysis helps businesses to develop
effective strategies, capitalize on opportunities, and mitigate potential threats.

9. Unique Selling Proposition

A Unique Selling Proposition (USP) is a critical concept in marketing and business strategy. It
defines what sets a product or service apart from its competitors and why customers should
choose it over others.

10. Financial Plan

A financial plan is a crucial component of any business strategy, providing a roadmap for
managing finances, achieving goals, and ensuring long-term sustainability.
How to write business plan?

A good business plan guides you through each stage of starting and managing your business.
You’ll use your business plan as a roadmap for how to structure, run, and grow your new
business. It’s a way to think through the key elements of your business

INTRODUCTION TO
BUSINESS ENTERPRISE
SIMULATION
A. Learning Points

What is Business Simulation?

Why practice a Business Simulation?

Benefits of Business Enterprise Simulation

B. Narrative

What is Business Simulation?

Business simulation is a type of experiential learning activity where participants engage in a

simulated business environment. It replicates real-world business scenarios, allowing
individuals or teams to make decisions, analyze outcomes, and learn from the consequences in
a risk-free setting. These simulations can cover various aspects of business, such as finance,
marketing, operations, and strategic management. They are commonly used in education,
training, and corporate settings to enhance decision-making skills and foster a deeper
understanding of business concepts.

Why practice a Business Simulation?

1. Real-world experience - Participants can apply theoretical knowledge to practical situations,

gaining valuable hands-on experience in managing a business.

2. Risk-free environment - Since simulations aren't real businesses, participants can experiment
with different strategies and decisions without facing real financial consequences.

3. Decision-making skills - Participants learn to analyze data, assess risks, and make informed
decisions, improving their critical thinking and problem-solving abilities.

4. Teamwork and collaboration - Simulations often involve teamwork, fostering collaboration

and communication skills as participants work together to achieve common goals.
5. Feedback and reflection - Participants receive feedback on their decisions and performance,
allowing them to reflect on their actions and improve their strategies for future simulations or
real-world situations.

6. Understanding complex concepts - Simulations provide a practical way to grasp complex

business concepts by seeing how they play out in a dynamic environment.

Benefits of Business Enterprise Simulation

1. Real-Life Experiences - Business enterprise simulation provides participants with a taste of

real-life business experience in a controlled environment.

2. Improvement knowledge retention over time - One of the significant advantages of business
enterprise simulation is its ability to improve knowledge retention over time.

3. Obtain Fast and Insightful Feedback - When studying business enterprise simulations,
learners can obtain direct and insightful feedback about the effectiveness and application of
specific processes.

4. Reduce Risk and Fear as future employees or entrepreneurs- In normal employment,

employees are often given a task with generic instructions.

5. Access to Quantifiable and Measurable Exercise - The issues of managers or entrepreneurs

with traditional training and methods are the impossibility to express or measure its quality and
output.
ANALYZE THE MARKET
A. Learning Points

Environmental Scanning: An Introduction

The Swot Analysis

Five Forces of Competitive Analysis

B. Narrative
Environmental Scanning: An Introduction

It is essential to conduct environmental scanning to identify the needs and wants of people, the
niche for your business mission, and to give attention to the trends and issues.

The Swot Analysis

The SWOT analysis was created in the 1960s by business guri, Edmund P. Learned,

1.C. Roland Christensen, Kenneth Andrews, and Willio D. Book

in their book titled, "Business Policy, Text and Cases."

SWOT, which stands for rengths,

We knesses, Opportunities, and Threats,

It is an analytical framework that can help a company meet its challenges and identify new
markets.

Five Forces of Competitive Analysis

The Five Forces of Competitive Analysis was developed in 1979 by Michael E. Porter of Harvard
Business School as a framework or a guide for assessing and evaluating the competitive
strength and position of business a organization.

Supplier Power, Buyer Power, Number of Competitors, Competitive Rivalry, Possibility of

Substitution, Possibility of New Entrants
 MARKETING
PLANNING PROCESS:
COMPREHENSIVE
OVERVIEW

A. Learning Points

What is Marketing?

What is the strategic planning process?

B. Narrative

What is Marketing
Marketing involves creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large. It encompasses various strategies
and techniques aimed at promoting products or services to target audiences, with the goal of
generating sales and building brand awareness.

What is the strategic planning process?

Setting Objectives- Defining the organization's mission, vision, and goals.

Environmental Analysis- Assessing internal strengths and weaknesses, as well as external

opportunities and threats (SWOT analysis).

Market Analysis- Understanding the target market, customer needs, and competitive
landscape.

Strategy Formulation- Developing strategies to achieve the objectives, such as market

segmentation, targeting, and positioning.

Strategy Implementation- Allocating resources, designing action plans, and executing the
chosen strategies.
 MARKET
SEGMENTATION

A. Learning Points

What is Market Segmentation?

Type of Market Segmentation

How to Implement Market Segmentation?

B. Narrative

What is Market Segmentation

Market segmentation is a marketing term that refers to aggregating prospective buyers into
groups or segments with common needs and who respond similarly to a marketing action.
Type of Market Segmentation

Demographic Segmentation - It refers to splitting up audiences based on observable, people-

based differences.

Geographic Segmentation - A customer's location can help you better understand their needs
and enable you to send out location-specific ads.

Behavioral Segmentation - It studies the behavioral traits of consumers, which include their
knowledge of, attitude towards, use of, or response to a product, service, promotion, or brand.

Psychographic Segmentation - Has been used in marketing research as a form of market

segmentation which divides consumers into sub-groups based on shared psychological
characteristics, including subconscious or conscious beliefs, motivations, and priorities to
explain and predict consumer behavior.

How to Implement Market Segmentation

Market segmentation is a pivotal strategy in modern marketing, enabling businesses to

effectively target diverse customer groups with tailored products, services, and marketing
initiatives. This essay elucidates the systematic process of implementing market segmentation,
highlighting its significance in enhancing customer engagement and maximizing marketing ROI.
 PRICING STRATEGIES

A. Learning Points

10 Most Practical Pricing Strategies

B. Narrative

Competition-Based Pricing Strategy

It uses the competitors' prices as a benchmark and doesn't take into account the cost of its
product or consumer demand.

Cost-Plus Pricing Strategy

It focuses solely on the cost of producing the product or service, or your COGS.

Freemium Pricing Strategy

Companies offer a free version of their product with basic functions and hope their users will
eventually pay to upgrade or access more features.

Dynamic Pricing Strategy

"It's a flexible pricing strategy where prices fluctuate based on market and customer demand.

Skimming Pricing Strategy

Companies charge the highest possible price for a new product and then lower the price over
time as the product becomes less and less popular.

Penetration Pricing Strategy

Companies to attract customers to a new product or service by offering a lower price during its
initial offering.

Economy Pricing Strategy

The company keeps its product's selling price very low with a minimum margin.

Premium Pricing Strategy

Companies price their products high to present the image that their products are high-value,
luxury, or premium.

Bundle Pricing Strategy

Companies group several products into a bundle and sell them at a single price, rather than
attribute individual prices to each item.

Psychological Pricing Strategy

"A strategy that uses pricing to influence customers' spending or shopping habits to make more
or higher value sales.
 SETTING PRODUCT
STRATEGY PART 1

A. Learning Points

Components Of The Market Offering

Product Levels: The Customer-Value Hierarchy

Product Classifications

Durability and Tangibility

Consumer-Goods Classification

B. Narrative

Components Of The Market Offering

Market offerings include three main categories: products, services, and experiences. We list a
few examples of each below. Market offerings include both convenience product and service
offerings. Convenience products include bread, detergents, paper, snacks, and so on.

Product Levels: The Customer-Value Hierarchy

The customer-value hierarchy, also known as the product levels, outlines the different levels of
value that a product offers to customers. It typically includes core benefits, basic product
features, augmented product features, and potential additional services or benefits. This
framework helps businesses understand and deliver value to their customers effectively.

Product Classifications

Product classification or product taxonomy is a type of economic taxonomy which organizes

products for a variety of purposes. However, not only products can be referred to in a
standardized way but also sales practices in form of the “Incoterms” and industries can be
classified into categories.

Durability and Tangibility

Durability and Tangibility Products can be classified into three groups, according to durability
and tangibility: Nondurable goods: tangible consumed in one or a few uses. Durable goods:
tangible that normally survives many uses.

Consumer-Goods Classification

Consumer goods are divided into three categories: durable goods, nondurable goods, and
services.
 SETTING PRODUCT
STRATEGY PART 2

A. Learning Points

Design

Luxury Brands
B. Narrative

Design

The totality of features that affect the way a product looks, feels, and functions to a consumer
Luxury brands

Quality

Uniqueness

Craftsmanship

Heritage

Authenticity

History

Product line length

Line stretching

-Down-market stretch

-Up-market stretch

-Two-way stretch

Line filling

Line modernization

Line featuring Line pruning

Co-Branding

Two or more well-known brands are combined into a joint product or marketed together in
some fashion

Ingredient branding
Co-branding that creates brand equity for parts that are necessarily contained within other
branded products

Packaging

Used as a marketing tool

Packaging objectives

Self-service

Consumer affluence

Identify the brand

Company and brand

 How to Write a
Financial Plan for your
Business Plan in 2024

A. Learning Points

WRITING YOUR FINANCIAL PLAN BUSINESS PLAN

DIVERSIFICATION OF ASSETS
REVVING UP THE TOTAL CASH RESERVES

QUALITY OF PRODUCTS

EMPLOYMENT OF PART-TIME WORKERS.

B. Narrative

WRITING YOUR FINANCIAL PLAN BUSINESS PLAN

Hire the services of professional planners, who would be well placed to ensure the survival of
your company under all circumstances.

DIVERSIFICATION OF ASSETS

As the old saying goes; it is never wise to put 'all your eggs in one basket.'
REVVING UP THE TOTAL CASH RESERVES

If your company is actually facing liquidity problems, it is likely that your planners would advise
you to sell off excess inventory equipment's.

QUALITY OF PRODUCTS

When the economic conditions are not favorable, company financial planners deem it
necessary that your business produces a superior-quality product, compared to rival
businesses.

EMPLOYMENT OF PART-TIME WORKERS

Corporate financial planning strategies state that, it is not advisable to hire a large number of
full-time, permanent employees, if your company is facing.

USING EMPLOYEE OPINIONS AND CHEAPER MATERIALS.

The suggestions of the planners should be suitably complemented with all useful ideas that the
existing employees of the company can come up with.
 How to Write a
Financial Plan for your
Business Plan in (With
Templates)

A. Learning Points

How to Write a Financial Plan?

Three Financial Statement

B. Narrative

How to Write a Financial Plan

In the journey towards financial stability and prosperity, a well-crafted financial plan serves as
the compass guiding individuals through various life stages and economic landscapes. Much like
a blueprint for building a house, a financial plan lays the foundation for achieving short-term
goals, securing long-term aspirations, and weathering unexpected financial storms. This essay
elucidates the key components and steps involved in crafting a comprehensive financial plan,
empowering individuals to take control of their financial futures.

Three Financial Statement

Income Statement (Profit and Loss Statement):

The income statement provides a summary of a company's revenues, expenses, and net income
over a specific period, typically quarterly or annually. It illustrates whether the company has
generated profits or incurred losses during the period. Key components of the income
statement include.

Balance Sheet

The balance sheet presents a snapshot of a company's financial position at a specific point in
time, typically at the end of a quarter or fiscal year. It consists of three main sections.

Cash Flow Statement

The cash flow statement provides insights into how cash flows in and out of a company during a
specific period, categorizing cash inflows and outflows into three main sections.
 How To Create a Cash
Flow Forecast

A. Learning Points

What a cash flow projection?

B. Narrative

What a cash flow projection ?

A cash flow projection is a forecast of the expected cash inflows and outflows over a specific
period of time.
When you will have surplus cash and when you will need to borrow or use other sources of
funding.

Financial data of your business

This includes information about your revenue, expenses, and any expected changes in those
amounts.
How to Calculate Break
Even Points

A. Learning Points

Break Even Formula

Break Even Analysis

B. Narrative

Break Even Formula

COMPANY PRODUCE WIDGETS - FIXED COSTS = $50,000

VARIABLE COST FOR 1 WIDGET = $10

SELLING PRICE FOR 1 WIDGET = $20

Break-even point = $50,000/($20-$10) $50,000/$10 = 5,000 widgets

Company needs to sell 5,000 widgets in order to break even and begin generating a profit.

Break Even Analysis

Break-even analysis is a financial tool used to determine the point at which revenue equals total
costs, resulting in neither profit nor loss. It's helpful for businesses to assess their profitability
and make informed decisions about pricing, costs, and potential profits.
 How to Write Profit
and Loss Statement

A. Learning Points

Profit and Loss Statement

NET PROFIT = gross profit-operating expenses

B. Narrative

Profit and Loss Statement

1. Revenue: This is the total amount of money a business has earned from its sales or services.

2. Cost of goods sole: This is the cost of the products or materials used to the goods or services
that were sold.

3. Gross profit: This is the difference between revenue and the cost of goods sold. It is
calculated by subtracting the of goods sold from the revenue.
4. Operating expenses: These expenses a business incurs in the course of its day-to-day
operations, such as rent, utilities, salaries, and marketing costs.

5. Net profit: This is the final profit or loss of a business after all revenues and expenses.

NET PROFIT = gross profit-operating expenses

Step 1: Gather financial data

Step 2: Calculate gross profit

Step 3: Calculate operating expenses

Step 4: Calculate net profit

Step 5: Create the P&L statement

How To Create Balance
Sheet in Business Plan

A. Learning Points

Company's assets, liabilities, and equity

COMPANYS ASSETS
COMPANY LIABILITIES & EQUITY

B. Narrative

Company's assets, liabilities, and equity

Assets are resources that a company owns and expects to provide future economic benefit.

Liabilities are obligations that a company owes to others, such as loans and debts.

Equity represents the residual interest in the assets of a company after liabilities are paid.
COMPANYS ASSETS

Current assets Cash, accounts receivable, and inventory Non-current assets Property, plant, and
equipment.

Expected to provide economic benefit for longer than one year.

COMPANY LIABILITIES & EQUITY

Current liabilities Accounts payable and short-term debt.

Non-current liabilities Long-term debt.