Business Simulation

Team Innovate:
Aditya Shekhar Alok Tripathi
Archit Pateria Arpit Gupta
Bhanu Pratap Khari Kishan Khakhar
Himanshu Agarwal Siddhant Patel
 Our Strategy
 We wanted to be cost differentiator in the initial stages. Our aim was to make the products marketable
and easily available to the public.
 So, with the same aim we expanded our production in the Asian market speculating high demands, but
the setback of oil war hampered our profits. We stalled our expansion plan at that time and decided to
focus on manufacturing products at cheaper cost.
 Based on market outlook and future demand, we rolled out Tech 4 in Europe and Asia as soon as
possible but due to high demand we didn’t meet the market estimates.
 We decided to outsource the manufacturing of Tech 2 and Tech 4 products owing to the lower cost &
high competition.
 We kept our debts low to borrow money from banks in case of any emergency situations
 Few strategies such as limiting the number of factories in Asia to 6, not spending enough on R&D,
outsourcing production of products backfired in the middle of the competition (Round 6-8)
 Decision Checklist
 Production and Demand:
 Our strategy was focused on keeping up with the demand and capturing market share in
different regions. We decided the market demand after analysing the market outlook of different
regions.
 Sometimes in Asia there was a slump in the demand, whereas mostly Asian market saw rapid
increase in demand. The markets in USA and Europe are mostly mature but there were certain
period when the demand in these two markets also saw sudden rise.
 Our production strategy was initially dependent on in-house facilities but with the increasing cost
of production of new products, we decided to shift the production to 3 rd party (outsourced
facility).
 We focused on building factories in Asia to meet the local demand but limited our expansion to 6
factories in Asia and 13 in USA

 Learnings:
 Initially we invested in infrastructure in Asia but after the oilistan incident we stopped our
expansion in the Asian market. This decision had a significant impact on out sales in the later
period as we had to export Tech 1 products from USA and sometimes the sales was lower than
expected.
 Due to the high initial cost of production of Tech 3 products, we relied on outsourcing but over
the time, the demand for the product increased and we were not able to meet the demand
through outsourcing. We should have developed the products in-house and since the production
cost decreases due to learning curve, it would have been cheaper for us.
 • We relied mostly on in-house R&D services due to the
lower cost. We planned the investment in R&D after
predicting the future trends
• Also, we bought the new features depending on the
R&D features being offered by our competitors in the same
product line
• Due to rapid expansion plan, we bought the tech 4 from
third party which incurred higher cost than expected.

• After investing heavily in promotions in the first two rounds, we

realised that in Asian market it is important to be cost-efficient
and marketing didn’t affect much.
• The case in USA was opposite, products of similar cost and
Marketin similar features differed in sales due to the amount spent on
g promotion. We increased our expenses on promotion in USA
and Europe
• We changed our marketing expenditure based on the market
demand, we tried to keep our expenses low when the demand
slowed down (conservative approach)
 • Our logistics and transportation cost was one of the lowest
among all the teams. We tried to sell the product being
manufactured in that market only and kept the demand
accordingly.
Logistic • We kept Europe as the second priority in most of the cases but
s changed it when the market of Tech 4 exploded in European
market in the initial rounds.
• For a long time, due to the rift between China and USA, we tried
to limit our export and leverage our production facilities in both
the countries.

• Given the opportunity to transfer the profits to other location to

get tax benefits, we used it to lower our taxes on profit by
transferring it to Asia and Europe.
• Lower tax rates in both the regions helped us to save some cost
and was reflected in our PAT.
Tax • Due to lack of information, we used this leverage later and had
to pay higher income taxes in the first two rounds.
 • Our strategy was to reduce the debts and liabilities to have a better credit
rating and lower debt rate, so we can borrow money when needed.
• We incurred some short term debt in Asian market due to our expansion
Financ plans which were repaid from our profits the region.
• We repaid our long term debts by round 9 and then for shareholders benefit
e we decided to pay dividend on the shares.
• Also, we tried to transfer standing cash to Asian market, as the interest on
cash deposit was 4.5% which was higher than other two regions
• We could have paid the debts earlier and borrowed some money from the
bank for our expansion plans in Asia.
Thank You