China Focused Strategy
A comprehensive, dynamic strategy simulation designed for MBA, Executive Development courses with a focus on emerging economies--specifically China.
StratSimChina is a strategy simulation game based on the automobile industry that provides participants an opportunity to experience strategy in the high-growth/high-competition market of China. Managing a business in this environment requires careful attention to investment, cash flow, and rapidly changing market conditions. Students will start by conducting environmental analysis before articulating the vision and mission of the organization. They must manage short- and long-term objectives, making integrated decisions that impact all areas of the business. Teams compete directly against each other with the results being dependent upon how the competitors interact, what new products are introduced, and how these products are supported. StratSimChina is built on the StratSim methodology used by thousands of students since the mid-1990s.
In addition to the simulation, StratSimChina also includes an article by Juan Antonio Fernandez, author of China CEO, as well as five supplemental cases all focusing on various issues related to doing business in China. Thus, in one package, students receive a wealth of information about China ranging from background information to specific business school cases, plus the opportunity to experience managing a company competing in a high-growth market such as China through the StratSim simulation.
This unique version of StratSim is an excellent complement to traditional teaching methods, allowing students to apply marketing concepts in a dynamic, integrative environment.
Much of the complexity of the automobile industry has been simplified to allow participants to focus their time and energy on strategic issues. However, we've retained as much realism as possible to make it easier to quickly understand the overall environment. At its core, StratSimChina is a simulation about strategy formulation for a company doing business in China. Along those lines, students will be challenged to:
- Develop a business definition and implement a profitable long-term business strategy in a rapidly developing and highly competitive industry environment
- Identify market opportunities and create product/service offerings to satisfy them through new product offerings or upgrades to existing product lines
- Develop the corporate infrastructure necessary to sustain growth
- Allocate scarce resources among products, functions, and other investment alternatives
Student teams play the role of a management team competing in the Chinese automobile industry. They are one of six firms per industry, each company having a unique position and product offering. Some companies are positioned as high-end producers, while others are more value and volume driven. Each company begins the simulation with two vehicles and then must decide how best to improve their performance and potentially enter new market segments that offer opportunities for growth. Revenues are generated through the sales of cars and trucks to automobile dealers in the StratSim world. Additional revenues are possible through direct sales to fleet buyers. To read the full copy of the case for the simulation, request a Faculty ID here!
As an added resource, StratSimChina comes with five supplemental cases and articles in the Student manual that address the following topics:
- Tips for doing business in China, specifically the role of “guanxi” in business and government relationships
- Learning about the personal and leadership dimensions within a multinational enterprise, the role of a country manager, the role of partnerships in global strategy, and the multi-dimensional challenges facing the executive who is charged with making global strategy happen.
- Considering the issue of product localization and when a product should be global vs. local.
- Matching internal capabilities against results from an environmental scan
- Making operational decisions relating to city selection in an international context
- Contrasting the pros and cons of product and geographic market diversification and consideration of the factors that may constrain a firm’s strategic options and pace of diversification.
- Illustrate the numerous difficulties of doing business in emerging markets with a focus on China, despite the enormous potential.
- Emphasize the nuances of maintaining relationships with powerful global partners while exploring strategic partnerships with smaller players to expand specific markets.
- Stress the importance of creating a channel strategy in an international context based on financial analysis as well as qualitative concerns.
With StratSimChina, instructors have a comprehensive set of metrics (45 in total) to judge team performance. For full access to all performance measures, request a Faculty ID. In general, team performance can be judged by the following:
- Net Income and Cumulative Net Income
- Stock Price
- Total Shareholder Return
- Return on Equity, Return on Assets, Return on Marketing
- Earnings Per Share
- Cumulative Net Income
- Debt to Equity
- Average Return on Invested Capital
- Market Share
- Market Value
- . . . and more!
Any of the 45 measures areas can be weighted and combined by the instructor to form an overall score to evaluate team performance.
If you are an instructor and would like to review StratSimChina for your class, please fill out our Faculty ID Request!
At a Glance
Two or more teams of students go head-to-head in direct competition, competing in the same industry as separate companies.
- International Business
- Emerging Markets
- Courses with China Specific Content
- Strategy Formulation: Students start by conducting environmental analysis before articulating the vision and mission of the organization. Students must determine their firms' core competencies, and formulate corporate-level, business-level and functional-level strategies.
- Product Development: Students create new product concepts and choose whether to develop them and ultimately launch them into the market. Each team also has the ability to improve its development capabilities through investment in vehicle technologies, as well as by expanding the number of product development centers.
- Marketing: Students develop an understanding of the marketing function and strategic management by analyzing consumer/product relationships, choosing target market segments, and designing and implementing a marketing mix strategy.
- Operations: Teams make operations decisions that consist of building or selling off capacity, entering a sales forecast and production level for each product, and optionally, deciding to source from overseas. Retooling costs and estimated inventory are recalculated when the forecast or production is changed.
- Human Resources: Students must decide how team responsibilities are divided. Will they be product managers? Functional managers? How will information be analyzed? Who will negotiate with potential partners? All students on a team make one set of decisions for their firm, so coordination among team members is an essential ingredient for success.
- Finance and Accounting: Financing and management accounting decisions in StratSimChina involve analyzing projected cash flows and ensuring there are sufficient funds to cover investments and operations. In addition to choosing among many alternative uses for their limited funds, students also make decisions involving dividends, short vs. long-term debt, and raising capital by issuing stocks and bonds. Students are expected to perform financial ratio, breakeven, and net present value analysis.
- Optional B2B Module: This optional module allows students to explore alternative purchase processes and sourcing options with Chinese fleet customers. The B2B module may be turned on at any point during the simulation to provide new challenges and options as the game progresses.
- Purchase of Market Research: Students use sophisticated market research to learn about buyer behavior, and improve their strategic choices. Research techniques included in StratSimChina include test markets, conjoint analysis, perceptual mapping, focus groups, concept tests, and purchase surveys.