MikesBikes Simulation | Finance Simulation Game
Table of Contents
Many at times, students are not equipped properly to face real-world experiences. It is for this reason that MikesBikes Simulation empowers students to enable them to become responsible in the outside competitive market. Through Smartsims, MikesBikes Intro allows learners to run a bicycle manufacturing company while making critical marketing and financial decisions.
Read this article to have a better understanding of simulation and what is required of you during the four years. Better still, if you need help completing your MikesBikes simulation, we have experienced experts, who can be of great help to you.
Start Here
To start, one needs to log in to Smartsims website. Smartsims is a simple website that is easy to access and maneuver around. After logging to the platform, learners will find PDF guide materials, manuals and videos, as well as the MikesBikes Intro itself. In the MikesBikes simulation Intro, learners meet to two phases. That is, the Single-player and Multiplayer. The decisions to enter in each phase are different. Here is what to expect in each phase.
finance simulation game
Single-Player
The single-player is the basic phase in MikesBikes simulation that allows a learner to practice and compete against a controlled computer competitor. Unlike in the Multi-Player, ones decisions are not final. Here you can roll over and back into the next or previous years respectively to test your decisions. If the decisions are not fine you can rollover and if the decisions are inappropriate, you rolls back to improve the decisions in order to beat your competitor. Unlike in the Multi-player, you compete with a single competitor. However, importantly, you get to familiarize yourself with the simulation in order to maximize your shareholder Value (SHV). Precisely, it equips you with significant ideas on how to make decisions in the actual phase, multi-player in the MikesBikes simulation.
Multi-player
Unlike in the Single-player, the multi-player introduces you to the real competition. Here, you compete against your colleagues or student groups. It is only the Shareholder Value that can identify a winning team in the finance simulation game. Therefore, the core objective in this phase is to make best decisions in order to stand out amongst your competitors. However, in this phase, rolling over to the next decision period is done automatically depending on the dates scheduled by your instructor.
The results became available in the finance simulation game when all your competitors have finished making their decisions too. Importantly, is to make sure you enter your decisions before the deadline raptures. However, most learners fail the MikesBikes simulation test because they take it lightly as the single player. Undeniably, the multi-player in the finance simulation game is the most demanding phase in the whole simulation exercise. This calls for the need of you to set high goals in terms of making viable and proficient decisions because you compete with many competitors whom at many times will make decisions much better than you do in the MikesBikes simulation.
Offline Multi-player
Better still, you can launch the offline multi-player in the finance simulation game to explore favorable ideas for the online multi-player. The offline multiplayer is exactly as the online one only that the decisions entered cannot reflect in final decisions. If you find the decisions desirable in the offline mode, you can always transfer the decisions to the online mode when you finally launch it. Through the offline mode, you can be able to gauge your decisions as compared to those of your competitors. In reality, if you find the decisions profitable to your shareholders, then it is wise go for the option when launching the online player.
finance simulation game
Online Multi-player
Unlike in the offline mode of finance simulation game, you should always be keen and careful to the kind of decisions you enter here as they reflect your final decision. Therefore, it is advisable to double check your decisions before rolling over to the next decision period. Now that you have a solid understanding of all the components of the simulation, here is what you can expect in each decision period.
Why Shareholder Value (SHV) is Important in the Simulation
MikesBikes Simulation takes students through a four-year period of critical business decisions. Importantly, the goal of learners is to enrich its shareholders by providing a return on their investment in your company. That is, the success of one’s company is measured in terms of the amount of Shareholder Value (SHV) in comparison to its competitors in the finance simulation game. But what exactly can you do to increase your shareholder value? Well, here are the most basic tips that you must keep in mind when playing the finance simulation game.
- Improve your profitability by selling more by avoiding wastages and losses,
- Always minimize shareholder investment,
- Ensure you keep your debts as low as possible, and
- Remember to pay your dividends.
As a competitor, keep in mind that profitability is the only way to enable win over your competitors. First, you can maximize your profits by working on increasing your revenues through sales and minimizing overall costs. For instance, you can increase your revenues through:
- Optimizing your retail prices but in a competitive manner.
- Increasing production of your company
- Introducing new products into the market
- Attracting new customers through competitive marketing strategies that aligns with the market information provided for each product in the finance simulation game.
Effective Strategies
On the other hand, you can come up with effective strategies of reducing your production and operational costs. Many students attain a poor Shareholder Value (SHV) in the MikesBikes simulation because of misappropriation of resources. Thus, to win over your competitors requires you to strategize properly on how to reduce your costs through decreasing inventory, minimizing wastages, lowering the prime cost of your products as well as concentrating on a more profitable product. That is, avoid spending much on less desirable products. Instead, venture into a desirable product that can profit your company using fewer resources.
Strategies for Improving your Shareholder Value
In case you are struggling to improve your company’s SHV, you can opt for new strategies to push the value higher. Instead of despairing, consider the below five tricks and your company’s SHV will surprise you.
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Perform a situational analysis
finance simulation game
Through the situational analysis, you can learn why your Shareholder Value has been dropping. Assess the degree at which your competitors’ decisions are affecting your results and why the consumer preference is not favoring your decisions in MikesBikes simulation. Go back to the market information report, market summary, and the industry Benchmark Report to have a better idea of what to do in the finance simulation game.
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Focus on efficiency
Your returns should speak for itself. Therefore, ensure each functional decision yields a profit to your company. Strictly, your overall costs should NOT exceed 30% of your wholesale revenues. That is, ensure your spending is sensible when conducting product development, distribution, and production.
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Seek guidance from manuals and videos
Every time you make a bad decision, seek help from learning materials provided in the website. Take your time to watch MikesBikes tutorial and read to understand all the player manuals too. Better still, we have an experienced and ready to help team that will prove helpful when you encounter difficulties in improving your SHV in the MikesBikes simulation.
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Seek a cash injection
Business is all about making risks. Do not be afraid to borrow cash when dealing with tough situations in your company in the finance simulation game. Make sure you do not reach the insolvent stage. However, your instructor should guide your borrowing.
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Go for other goals
No situation is impossible. That is, if you find yourself not in a position of improving your SHV, you can develop new and easy to achieve objectives. Importantly, is to raise your profitability, which in turn reflects in your company Shareholder Value.
Decision Periods
In the first two years, the simulation tests learners’ abilities to make significant marketing decisions. On the other hand, the other two years introduces learners to operational and financial decisions. Below is a comprehensive analysis of what to expect in each period.
Rollover: This is a simple term used to explain moving from one decision year to another. A rollover processes the entered decisions to give you results for the next year.
Rollback: This is a term used to describe the action of moving back to the previous decision year. Many at times, rolling back is done when you realize the decisions are not impressive as compared to those of your competitors’.
Year 1: Sales and Marketing
The first step you are required to take is to market your bicycles in MikesBikes. After setting reasonable prices for your products, you need to proceed to creating product awareness through advertising and public relations (PR). You need to refer back to market summary, product summary, and market information before making any marketing decisions. Study all the reports to understand how different products react to different marketing decisions. For example, Mountain and Youth bikes have high sensitivity to advertising as compared to Road bikes. Similarly, Mountain and Youth bikes tend to have a low sensitivity to product public relation. Therefore, you will need to plan properly to avoid overspending which may hurt your business financially when you finally reach the third and fourth years. The trick is to understand how your product reacts to marketing and you will be good to rollover to the next decision period year.
MikesBikes Simulation
Year 2: Distribution and Branding
Just like when in the real business world, you are allowed a platform to distribute and brand your products to reach more customers. First, the distribution will depend on the type of bike you are selling. For example, if you are selling Mountain bikes then you will need to distribute your bikes to nearby sports and discount shops. On the other hand, if you choose to invest your money in the production of Road bikes then in distribution remember to include bikes shops in your distribution budget. Precisely, study shopping habits of the customers you are to sell your products to. For instance, the chart below is helpful when studying shopping habits of your customer.
MikesBikes Simulation
Second, through branding you get to increase the awareness of your company, which will greatly help you when launching a new product into the market. Read and understand chapter 2 and 3 of the second PDF material provided in the website; an additional advantage in the second year because it exhausts on market analysis and implementation needed in the MikesBikes simulation.
Year 3: Operations and Finance (DEBT)
In year 3, you make manufacturing decisions based on control factory capacity, efficiency, and quality. However, importantly, in year three you are tested on the abilities of making financial decisions that entails controlling of long-term debt. The trick here is to refer back to industry benchmark and market summary reports. Stay guided in this decision period because many learners make simple mistakes that hurt their companies in the long run. Another important thing to do in year three is to improve your products.
Improving your sales helps your company to record more sales hence more profits that is reflected in SHV. Increase capacity when you expect demand to go high or when launching a new product in the MikesBikes simulation. Otherwise, sell capacity to boost your revenues even though it may lower the value of your Shareholder Value. Avoid wastages and increase efficiency. Therefore, have your facts right before navigating to the capacity planner.
MikesBikes Simulation
Financial management is all about paying back or raising more funds to facilitate your company’s production and operational activities. Many at times, borrowing in the finance simulation game facilitates large expenditures like increasing factory capacity or product development. You can only borrow when you expect returns to be impressive. Otherwise, repay your debts in order to raise the value of your Shareholder Value (SHV). Remember, every business starts with a $1,000,000 debt so do not ignore this step. Before paying your debts, assess how your company is performing financially by checking your financial health on the Pro Forma reports. After which, you can rollover to the fourth decision year in the MikesBikes simulation. In case you may get confused, navigate to this area to pay or raise more funds for your company.
MikesBikes Simulation
Year 4: Product Development and Finance (EQUITY)
This is the final decision year. Like the third year, year four requires you to make financial decisions. However, in the fourth year you are introduced to product development, equity, and dividends. First, in product development, you are required to perform product modification. You need to choose among the four options provided to you in the finance simulation game. The options include no change, improve product spec (1m), reduce cost (1m), and reduce cost & improve spec (2m). Improve a product if only you expect to get high returns otherwise skip the process. Here is how to determine if you need to perform product development for your products in the finance simulation game.
MikesBikes Simulation
Finally, navigate to the equity area where you get to issue or repurchase shares. Note that issuing shares to the public helps to raise more cash for your company in the in the finance simulation game. However, it has a negative impact to your shareholder Value. On the other hand, repurchasing shares from the public tends to be expensive but it has a positive impact to the Shareholder Value of your company because earning per (EP) share increase.
Similarly, in the dividend decision screen, you are required to issue dividends to your shareholders. However, you are only to issue dividends when you are sure you have enough profit and cash to cover for all your day-to-day and capital expenses. Just like when repurchasing shares, issuing dividends is a good idea in that it have a positive impact to your company’s Shareholder Value in the finance simulation game.
