Game Scenario in Detail

Industry and economic zones

The Global Business Game is available in three editions, each using a different industry and economic zones for its game scenario.

The World Edition uses the television set segment of the Household Audio and Video Equipment Industry. Student teams manufacture and sell 25-inch and 27-inch television sets in one to three economic zones: NAFTA, EU and APEC. Depending on the instructor's choice they may conduct business in the United States, Mexico, Germany, Spain, Japan, and Thailand. The game can be set to run for 8, 10, or 12 decision rounds (quarters).

The Americas Edition allows students to compete in up to three economic zones within North and South America. Mexico and Colombia are in Zone 1, Canada and the United States are in Zone 2, and Brazil and Argentina are in Zone 3. This edition features the top-loading washing machine segment of the Home Appliance Industry. The game can be set to run for 8, 10, or 12 decision rounds.

The Business Basics Edition revolves around the motor scooter industry. Student teams manufacture a single product and sell it in two target markets: North America and South America, or Europe and Africa, or Asia and Oceania. The game is set for 6 decision rounds. This edition offers beginning business students an excellent overview to the challenges and rewards of managing and expanding an international company. Financial transactions, financial instruments, human resource management, production, distribution, and logistics are all simpliefied but illustrative of important business decisions.

The Business Basics Edition is available in beta version until December 31, 2009. It will be released out of beta on January 1, 2010.

Strategic options and tactical decisions

As you increase the game's complexity The Global Business Game allows players to design and implement any one of a complete range of generic business-level strategies within a single-business corporate-level strategy.

Firms can engage in a differentiation generic strategy by investing heavily in product research and development efforts. If successful, they can apply a patented technological breakthrough to either its television sets or washing machines depending on the edition being played.

A firm could implement a generic strategy of cost-leadership by (1) using inexpensive but low quality raw materials, (2) employing high degrees of supervision, quality control programs, and assembly line robots to minimize the human errors that cause warranty charges to be required on returned defective units, (3) lowering distribution costs by creating a company-owned and operated wholesaling operation, or (4) shifting manufacturing operations to low labor cost countries.

A focused cost-leadership generic strategy can be implemented in a number of ways - by tailoring the firm's television sets or washing machines to only one market segment or by concentrating sales in only one country or one economic zone. A focused differentiation generic strategy could be implemented by making only one product model and having that model appeal to just one of the industry's user segments.

The integrated cost-leadership/differentiation strategy would be based on unique firm strengths such as efficient and well-located factories and a loyal and productive sales staff.

If all three of the world's major economic zones are available in the World Edition, players can implement strategies that are either multi-domestic, global or transnational. When they do this they are able to use a large number of market entry modes. Similar strategies can be implemented in the Americas Edition, but solely within the Western Hemisphere.

Regardless of the level of dynamism and complexity that you chose, all firms can expand their existing Home Country factory.

In the World and Americas Editions they can also increase this plant's productivity by installing automated equipment, conducting quality training programs with quality circle meetings, and use assembly line worker training programs. Quality Control inspection programs can also be implemented which ultimately reduce warranty work charges. Firms can also build new facilities in foreign countries. They can also move a domestic operation's capacity to these offshore sites. They can also sell excess or unwanted automated and assembly line equipment to other firms in the industry. As a last resort, if capacity is not needed, firms can either sell off or decommission their plant(s).

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Financial options

Each firm's external finances are tied to the financial centers associated with its home country depending on the edition chosen. In the World Edition, the financial center for NAFTA-based companies is New York City. In the EU it is Frankfurt and London. In Asia, it is Tokyo. In the America's Edition, Zone 1's financial center is Mexico City; Zone 2's is in New York City; and Zone 3's is in Sao Paulo. In the Business Basics Edition the financial centers are either New York and Sao Paulo, or Frankfurt and Johannesburg, or Tokyo and Sydney.

In order to raise capital, firms can sell common stock or issue bonds. In the World and Americas Editions, companies can obtain outside capital through short-term loans as well. They can also call their bonds and purchase Treasury stock on their own account. If you choose the "Dynamic" option, all economic factors change throughout the exercise. This entails quarterly changes in exchange rates, the stock market's activity level, long-term and short-term interest rates, raw materials costs and assembly line worker wages.

Market information

After each decision round, firms receive The Global Industry Report, which comes in the form of a trade newsletter. It summarizes the general activities engaged in by the competitors while also informing students about future events. Additionally, students can obtain market research reports with the information on the industry's major competitive elements such as comparative sales promotion budgets, near-term unit sales and estimates of competitor product quality. Finally, each firm also receives a set of confidential reports such as the operations report, income statement and balance sheet.

Strategic alliances and business negotiation

In the World and Americas Editions student teams can negotiate joint-venture arrangements and strategic alliances through patent licensing, subcontracts and the sale and transfer of production capacity. By doing this, students learn to build and maintain business relationships and balance short-term and long-term interests. At the same time, the negotiation element turns the game into an even more exciting and realistic exercise.

Human factors and ethical issues

Both World and Americas Editions feature exercises that cover human factors and ethical issues faced by those making real-world strategic decisions. Your students can be asked to respond to a number of critical incidents presenting some of the "softer" problems faced by managers. These critical incidents are presented in mini-case format and you can optionally introduce them at any point during the exercise. They include challenges in sales promotion considerations, employment practices, culture clashes, organizational change strategies, technological enhancements, and alternative structures for global competitiveness. Other human factors involve the work ethic and job satisfaction and aspirations of the workers in each of the simulated countries.

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