Raw Preview of Attachment:(refer to the detailed question and attachment below)
My Biz Café Simulation Learning ExperienceAlicia MeyerDevryAbstractThis paper will cover a reflection of my experience with the Biz Café simulation. After reading this paper, one should have an idea of what I learned from the simulation and how it works. I will be talking about the challenges my team and I dealt with and how we overcame these challenges. Most importantly, I will be talking about how we made Four Friends Coffeehouse a run as a successful coffee shop. In this paper, I will also discuss my thoughts on teamwork and the significant factors of running a small business. My Biz Café Simulation Learning ExperienceTaking part in the Biz Café simulation has been one of the most motivating, enjoyable and enriching learning tools that I have ever been given the opportunity to utilize. It actually gives you the surreal feeling that you are really running your own coffee shop business. I appreciate the creativeness of the simulation and the fact that it provided a fun, delightful educational experience for me. Biz Café has allowed me to become familiar with the significant factors of successfully starting and running a small business. Some of the significant factors include management, marketing, operational and accounting decisions. The Biz Café simulation provided hands-on experience that allowed my three teammates and I to make the imperative business decisions that contribute to the making or breaking of a business. Overall, I have certainly developed a better understanding of the management of a small business and what it possibly feels like to become an owner. Having the opportunity to start and run a simulated coffee shop from a practical standpoint, I have been able to broaden and strengthen my knowledge of the day-to-day operational functions of a small business. With the help of my team, we were able to make the careful decisions needed in order to run as a successful coffee shop business.Four Friends CoffeehouseIn the start-up decisions, the name we chose for our café was Four Friends Coffeehouse. We agreed upon the name Four Friends Coffeehouse for the fact that our team consisted of four individuals. The furniture we chose for our coffee shop was the Green Theme which proved to be a great choice that worked for our coffee shop. We also decided that purchasing the high capacity espresso machine would be very convenient for the business. The machine turned out to be a great investment that served Four Friends Coffeehouse well. Challenges We OvercameA challenge that we faced with our coffee shop was making the staffing decisions. We struggled with trying to figure out a sufficient number of staff to hire and an appropriate pay rate. At the beginning of the simulation, we only hired a few servers which caused us to become understaffed. As a result, this had an effect on the overall service of the workers. They were not as happy or productive as we had hoped. Our managers were becoming stressed out and our servers were being overworked. To address the issue, we later made the necessary adjustments and hired a few more servers in order to increase productivity. We also thought that by giving the managers a pay raise, it would make them feel appreciated and motivate them to work. Later on in the simulation, we decided that a pay raise for the servers was necessary as well. Recognition is what is needed to inspire employees to do their best. According to Shah (2009), “People are willing to work—and work hard—if they think their work makes a difference” (p.284). Early on in the beginning of the simulation, we underestimated the impacts of the brand awareness. We did not take advantage of the radio or newspaper advertisements. Before long, we realized how much more business we would have been getting by simply marketing our café and product. By investing in the advertisements, our sales were definitely increased. Good marketing is undeniably one of the keys to the success of a business. What Made Us SuccessfulAs a team, it is most important to always work together if you plan to succeed. Throughout the Biz Café simulation, my teammates and I each put forth an awesome team effort by working together. We all brought different ideas and thoughts to the table. Communication is vital in teamwork. We made it our business to meet twice a week to discuss our weekly decisions and goals for our coffee shop. Each of us had a competitive spirit which means we had fun with the simulation. Constantly keeping track of the other cafés helped us to stay ahead. During each round of the Biz Café simulation, we exercised a realistic way of thinking when making important decisions that would have an impact on our business. For the most part, our purchasing and sales forecasting proved to be pretty accurate. As a result, we did a great job purchasing an adequate amount of coffee for each round. Our ultimate goal was to win! By bringing in the greater amount of income out of all the other cafés, I feel like we truly succeeded. ReferencesShah, A. J. (2009). Business Now (p. 284). New York, NY: McGraw-Hill. Go Venture Simulation ReportIce Cream ShopDecisions and OutcomesWhen choosing my simulation I picked the first one that peaked my interest, ice cream! I have always been very interested in the food industry so I thought this would be a great way to experience some of the business decisions that go into running a restaurant. Although it took me awhile to get the hang of all of the variables that went into making each decision I quickly go the hang of it and ended up doing pretty good. As I worked through the simulation it taught me a lot about different strategies to become successful when trying to market a product with little differentiation. In the following paragraphs I will discuss the highs and lows and my personal experience running the simulation.The goal of the simulation was to Goal is to generate as much profit as possible by winning market share from competitors. On average, a store in your location generates $10,000 in sales each week. I don’t have a lot of experience with online simulations except for the SG simulation we have done so it took me awhile to get the hang of everything. Each year you make a variety of decisions that affect the yearly outcome. The first decision made each year was pricing. At first I chose to price my product high. I was unaware on how much the competition was charging so I pick $3.00, which ended up being almost twice my completions price. This resulted in very low profits and about a 2% market share. As the game progressed pricing was probably the biggest thing I focused on. I wanted to get it just right, not too high and not too low. I wanted to have price be competitive advantage and I accomplished this almost every corner. As I reduced the price to a dollar I have extremely high sales but my overall revenue took a hit. I then increased it to around $1.50, which seemed to be the sweet spot. I had an edge over my competitor because my product was much less and I was gaining market share with every run of the simulation. My Strategy at first was to invest a lot into market research to create a something that customers can differentiate from competitors. I then reduced the price of my Ice cream so people would get a low price and great product, something that the others could not offer. This was successful in selling a ton of product but it resulted in very little profit because when I took into account cost and price of innovation it leaves very little to be made. I also offered price discounts to generate more sales, but I am not sure that was the best decision as it didn’t generate too many additional sales but did cut into my profitability even more. I also found myself never having left over inventory. Each month I always ended up at zero which I am not sure is normal or if it was just because it is impossible to have leftover inventory because each cone is made to order. I read each report at the end of every year and I adjusted my prices until they where “below average” and once they got there I increase the price by 5cent until it was the highest “below average” price point and I had the greatest competitive advantage in price.The second factor you are to determine was product research and development. There where three option for this: “none”, “average”, and “high”. I invested 35,000 dollars into this and chose “high” the majority of the time. My goal was to create different product that was different. I found the best results when focusing on high R&D and ended up with a total score of 100% in this category. The advice my marketing director gave me was to invest a lot in this category at the beginning just to get the word out and get ahead of the competition early. I tried to reduce R&D half way through but never found as positive of results as when I invested a lot into it. The next decision to be made was marketing which involved three factors: Price discount advertising, sales promotion, and brand equity advertising. After viewing my result I didn’t know that I could have expanded into other territories. I guess I overlooked this fact or was unaware on how to do it. I put all of my money into downtown, which ended up doing pretty well by itself. I gained a 30% market share in downtown and turned a profit 60% of the time. Since you could only offer a percentage discount ever other year my strategy was to promote the discount heavily when I implemented this strategy. Each month I was given 3000 dollar to spend on various things but mainly I invested those funds into marketing. I invested pretty much all of that money into promotion of the discount when I implemented it and when I couldn’t do that I invested evenly into the other two factors. I generally implemented a 20% price discount when possible which paid off greatly. I often had top grossing revenue when I did this and gained a couple percent in market share every time. If I would have realized I could have expanded into other territories I would have been much more successful because with the strategy I implemented in one city I had the highest profits the last 7 years.The next category was human resources which was automatically determined every year by the computer. This was something I was a bit confused about because I wish I could have controlled more factors that went into my business. I wasn’t sure what the computer was deciding for me every year, which was a bit frustrating. The last variable that was to be decided was the purchase of variable financial reports. These included product competitiveness, consumer profiles, company investments, brand equity, and finally market share and size. I did buy these reports at the beginning middle and end of each year just to see how I was progressing. They where quite expensive so I didn’t utilize them all that much. These reports where helpful but I didn’t think that they where worth the money. Once uncovering all of the different variables I began to formulate a direct strategy. At first I was focusing on high prices and a high end product but I soon found out this was not very effective. I was consistently in last place for the first five years and was not gaining ay market share in the downtown market. I then began to paly with the price going down from three dollars until my financial CFO told me that I was “below average” in price. At first it was to low and even though I was selling a large volume of ice-cream the cost margins where to narrow and I wasn’t turning much of a profit. I finally found a sweet spot of around $.1.55 which was still considered “below average” but I was able to sell a lot of product and began to gain more and more market share within the downtown market. I consistently invested heavily in marketing and anytime I could do a discount on the product I took that opportunity because it my market share was almost 3% more every time I applied that variable. AS time went on I began to surpass every other company in the downtown market and the last 12 years I was profitable. I ended up with a 28% market share, which placed me 2nd overall in the downtown market, and even though I didn’t expand to other territories Is till ended up doing pretty well.Given I achieved a second place result, I am happy with my decisions. I would change the way I started the simulation, but as with any business you learn from your mistakes and improve upon them. My strategy was designed around achieving the highest profit possible, and I feel I did just that.TakeawaysThrough this simulation I had a ton of fun and learned a lot. It was very interesting to see how I progressed and how even the smallest change can affect performance greatly. I have always been interested in the food industry and this was a great way to see what it might be like to start a chain in a competitive market. I made a lot of mistakes especially at the beginning but it was great to learn from them and adjust the different variables until you had an effective strategy. There honestly were not a ton of factors that went into each years decisions so it was fairly easy to see what I was doing wrong and make quick changes. As stated earlier the biggest problem for me was pricing. It was necessary to really play around with the price of each ice cream at first because the simulation gave you no indication as to what the other firms where charging. I got the price down about halfway through the simulation and then it was just a matter of focusing on marketing. The three marketing factors where also hard to determine at first but that is to be expected with any new company. I closely followed my financial reports and every year looked at what each one of my employees was suggesting. The marketing director and CFO where definitely the most helpful and had a lot of input in what the best price of my product would be and what the best diversification of dollars would be throughout marketing and simulation reports.I ended up being able to offer a high end product at a reasonable price. My prices where low but not the lowest and I invested heavily into R&D, which was by far, my biggest expense. Since my product was probably the best out there I also invested heavily into marketing my product and less in the other marketing variables. This proved to be a very effective strategy because people where willing to pay a little extra for a differentiated product. I gained considerable market share once I implemented this type of strategy and if the simulation was just a little longer I believe I would have had the highest market share. I found this to be effective a little to late in the simulation and there just wasn’t enough time lef.t Along with this late discovery I was also unaware that I could move outside of the downtown are which would have helped greatly in my overall profits. It was great to see on a small scale the numerous decisions that a CEO must make in running a company. Anything from manufacturing, to marketing, to human resource decisions. I was able to clearly see how one decision affected the next. Some decisions were a snowball effect as was the case with my HR decisions early on in the simulation.Overall this simulation was a great experience and I learned a lot through it. I think the best experience was leaning from some of the mistakes I was making and how I thought something work great and it ended up not doing very well or the opposite with something I wasn’t expecting to do well proving to be a great strategy. There are of course some things I would change looking back but this simulation was realistic in the fact that once a decision was made but couldn’t go back to adjust it, instead you had to keep adjusting as the simulation went on until you had an effective strategy. I think this simulation was a great way to learn about some of the factors that go into starting a new business and I believe a great use of time and would recommend to keep including it in the course.
Solution: The Best Part of Waking Up
Solution: The Best Part of Waking Up