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The 21 st Century Car Challenge - DarkBlue 2

An analysis of one of the best teams in the Mega Learning Car Challenge Simulation
by

Devendra Bhandari

on 9 December 2013

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Transcript of The 21 st Century Car Challenge - DarkBlue 2

The 21st Century Car Challenge
Strategy
DarkBlue Team Game 2
Aim: market leader in the eco-friendly car.
High market growth, learning curve and economies of scale.
High investments into HR & Quality.
Success based on a consistent strategy combined with minor adjustments in each period.
Sales (units)
Plant Capacity
Marketing Expense
Engineering
Price
109
97
1123
71
500
Our Learning Curve
Teamwork
Devendra Bhandari
Strategy Analyst
Saskia Freund
Competitors' Analyst
David Huckschlag
Strategy Analyst
Sonia Vibhakar
Competitors' Analyst
Emma Jaglowski
Marketing Expert
Joseph Richardson
Engineering Expert
"Strategy is about making choices, trade-offs; it's about deliberately choosing to be different."

Michael Porter
Proactive Long-Term Strategy
Reactive short-term Strategies
Changes in the external environment.
Finite Game.
Need to gain profits quickly to reinvest.
Team discussion: All ideas welcome.
Reactive Decision
Eco-friendly market new -> unexpectedly slow growth.
Still stuck to long-term strategy.
Potential for fast revenue in low-cost market.
High investments into low-cost car.
Reinvested profits into eco-friendly cars.
Contradiction
Our success: Eco-friendly
Mean price: 69.5
Cost per unit period 11:
28.10
2nd lowest:
31.09
- Green Team
Bounded rationality
Limited information regarding market and possible alternatives to raising revenue.
Limited amount of time available.
Lack of ability and resources to arrive at the optimal solution.
Good decision lead to bad decision!
Too much investment.
Too many unnecessary new parts.

high unit costs
lower profits
Learning
Experience
Our performance

3rd Place

Sales Revenue:
€26,369m
EBIT:
€2736m
ARE:
€ -14901m
ROCE:
9%
Share Price:
€19
Employee Morale:
68%
Focus on all four cars.
Invest more in quality.
Focus on gaining positive ROCE & ARE to be able to issue dividends.
Focus on matching orders and capacity.
Thank you for your attention!
Expert Advise
Illustration
References

Selten, R. (1990) Bounded Rationality.
Journal for Institutional and Theoretical Economics
. 146 (4). 649-658.

Kahneman, D. (2003) Maps of Bounded Rationality: Psychology for Behavioral Economics.
The American Economic Review
, 93 (5). 1449-1475.

Simon, H. A. (`965). Administrative Decision Making.
Public Adminivestration Review
. 25 (1). 31-37.
Full transcript