Thousands of students playing business simulations have been asking a seemingly simple question from you, their teacher, and peers alike: how do I win the business strategy game? What are some surefire ways to beat the simulation? What are the best strategies?
And here is the much awaited answer: there are none. While this may be a bit disappointing for participants looking for an easy way to cheat the system, most students and you will delight in the fact that their success will be based on merit and experimentation instead of the exploitation of a glitch.
The reason behind this is simple: most business simulations (Cesim's included) are designed to be played by real players against real players and not against computers or artificial intelligence. This creates a very powerful element of chance, as there is no way for students to predict how their fellow competitors will behave. They may follow a bold investment heavy strategy or try to undercut others by setting their prices lower than the market average. Against this, just like in the real business world, the only strategy teams can have is being prepared for the unexpected and being ready to pivot if necessary.
But since business management games aim to teach participants how to successfully run a company, it is important to point out that albeit there are no definite strategies to guarantee winning the business game, there are a number of basic tenets any good managers should follow when doing business:
1. Think holistically
Whether your students are running a real venture or a simulated one, they need to understand how different functional areas of the company work together in order to make sound decisions about the business as a whole. So when looking for advice on how to win business simulation games, the first one you should give them is to take the time to learn the effects of marketing, R&D, logistics and finance on one another and leave thinking in silos behind.
2. Be in it for the long haul
Your students may also be thinking to themselves, "We should just focus on using tactics that make us the market leader in the coming rounds since the game is finite". While the latter may be true, the main objective in Cesim business simulations is achieving a sustainable profitable growth. Growth that is built on a strategy that does not undermine the future of the company for short term gains, the best indicator of which is cumulative total shareholder return. So the second advice you might want to give your students is to think of their simulated business as a real entity, and make decisions with the future prospects in mind.
3. Be ahead of the curve
Speaking of the future, another thing your students should pay attention to is the market outlook and the development of trends. Staying competitive is a very real struggle businesses have to deal with on a daily basis, and it is no different in a simulated business environment. By spending time on analyzing future scenarios and predicting what consumers will want as well as how competitors will behave, teams can emulate what many great CEOs have done to create the innovations we use today.
4. Be ready to pivot
Finally, even the perfectly crafted strategy can crack if the whim of the market changes unpredictably, the forces of nature cut off the company's supplies, or the competitor launches a new product exactly like another team's with more features and slightly cheaper. If your students can't adapt to these unpredictable events, they will soon be out of business. Which is why the last but not the least thing you should prepare them for is the need for flexibility and risk assessment when it comes to devising any long term business strategy, because they can never know when something will happen that turns their entire venture upside down.
Did this article help you tackle the questions from students about strategies needed to win a business game? What have you been telling your students when they asked you? Let us know!
Extended reading: 7 Business Simulation Hacks You (Probably) Didn't Know
Bonus winning tips: reflection from a Cesim graduate
We invited a MBA student to share with us his management experience of being a CEO in a simulated business environment and his thoughts on the essential factors needed for one to become a successful business leader:
- Having highly capable people all on the same team could bring negative effects and thus result in low work productivity and efficiency.
- Instead of focusing on details, a good leader should work on the division of labor and empowering employees.
- When the company revenue increases, think about employees' hard work and contribution. When the company revenue decreases, think about your mistakes.
- Broadening sources of income should not be the main financial concern but cutting cost.
Feel free to drop us a message if you would like to share your thought-provoking reflections with us.
Good luck to all student teams participating in Cesim's simulations. May the best team wins!