Mega Moments
Chapter 1 MEGA Moment
Success in the MEGA simulation will be significantly related to your ability to understand the customers you are competing for in various markets and aligning your strategy and resources to deliver the value proposition under conditions of uncertainty and with finite resources.
Many of the risks (uncertainties) noted herein are built into the simulation and will manifest in the results of operations based on the decisions you and your competing teams progressively make. The Student Guide and Customer Value Challenge "cheat sheet," if carefully read, will provide insight relating to these issues.
Outside of the MEGA platform but related to this class, you will also provide corporate mission and vision statements and a brief values definition that define your team. You will endeavor to operate your team internally and in the competition in conformance with these "public facing declarations."
Your goal in the simulation is to be a leader in as many of the winning metrics as possible. In Topic 3, you will be introduced to the simulation, but there are readings available and accessible now should you desire more insight.
Chapter 2 MEGA Moment
All successful strategy originates from deep understanding and creative insights relating to a company's competitive environment. The global environment for any business is exceptionally complex. It is simply not possible to identify, correlate, and predict all of the factors that will impact your success.
A successful simulation team will be scanning, monitoring, forecasting, and assessing your industry and global external environment before and after each decision. The Environmental Scan and Porter's Five Forces frameworks will be invaluable in helping you to identify factors which will demand your team's attention and proper assessment.
In the first several rounds of the simulation, you will have access to significant but somewhat limited data. By Decision 3 you will have had access to comprehensive market and competitor financial data. The first few rounds will be limited to avoid providing overwhelming data to teams who have limited perspective on what the information might signify.
Chapter 3 MEGA Moment
As you formalize your team for the start of the simulation, there is much to consider. You now, or very soon, will have access to the simulation platform, including market and financial information. Remember that all teams have identical financial statements at this point. Each of your competitors begins the simulation in an identical financial and strategic position. Review and apply your learning from Topics 1 and 2, including the hints provided in the noted MEGA Moments.
One of your first steps will be to analyze the information provided to you and to identify the opportunities and threats you find in the data. Given the rules of the simulation and the information provided to all participants, your goal will be to create legitimate strengths relative to your competitors in your pursuit to maximize the opportunities and minimize the identified or projected threats. The proper use of SWOT, TOWS, and PESTLE frameworks will assist you in this respect.
As your student team forms for the first decision, it is recommended that, as a team, you thoroughly and honesty assess your individual strengths and weaknesses. Some degree of specialization among team members is expected but your decisions will require team consensus.
Internally, as it relates to the simulation organization you are building, the team that can properly build and fund an organization that responds to the customer's demands in light of its competitors' market and financial positions, meets the regulatory requirements, and maintains financial viability is key.
In both cases, a realistic, honest assessment of your individual, team, and company strengths and weaknesses will improve your chances of success.
Chapter 4 MEGA Moment
As you formalize your team for the start of the simulation, there is much to consider. You now, or very soon, will have access to the simulation platform, including market and financial information. Remember that all teams have identical financial statements at this point. Each of your competitors begins the simulation in an identical financial and strategic position. Review and apply your learning from Topics 1 and 2, including the hints provided in the noted MEGA Moments.
One of your first steps will be to analyze the information provided to you and to identify the opportunities and threats you find in the data. Given the rules of the simulation and the information provided to all participants, your goal will be to create legitimate strengths relative to your competitors in your pursuit to maximize the opportunities and minimize the identified or projected threats. The proper use of SWOT, TOWS, and PESTLE frameworks will assist you in this respect.
As your student team forms for the first decision, it is recommended that, as a team, you thoroughly and honesty assess your individual strengths and weaknesses. Some degree of specialization among team members is expected but your decisions will require team consensus.
Internally, as it relates to the simulation organization you are building, the team that can properly build and fund an organization that responds to the customer's demands in light of its competitors' market and financial positions, meets the regulatory requirements, and maintains financial viability is key.
In both cases, a realistic, honest assessment of your individual, team, and company strengths and weaknesses will improve your chances of success.
Chapter 5 MEGA Moment
You will soon have access to the results of the first round of decisions. All competitors are taking the helm of identical companies. This is not realistic in the real-world but necessary in this simulation. For this and other reasons, the first round is difficult for all participants. Historical financial and market analysis had only limited validity. It is known the first decision must be made with many "unknowns" and engaged participants often feel like they are lacking needed information. Be assured that all participants were in the same position.
The good news is that this is now no longer the case. The results of the market participants' decisions are now reflected in the results of Round 1. Whether you are in first or last place in the ranking at this point is not important. What is important now is that your team thoroughly analyzes the information you have to better understand your customers, your competitors, and the market dynamics. You need to attempt to understand what is driving success and more importantly how you think your competitors will react. Apply what you have learned about competitive dynamics to help your team stay on top or move up in the rankings in the next decision.
As noted earlier, your ranking at this point should not lead to overconfidence or despair. It is early in the competition, and Round 1 results tend to be less predictive of ultimate success than the next several decisions, where you will attempt to build an organization that outcompetes its competition. There is no correct business-level strategy or secret formula for victory. A team that understands their customers, formulates a strategy given the market and competitive dynamics, considers and reacts to external economic trends, executes well under conditions of time pressure and resource constraints, and learns from and reacts to their errors, will be the ultimate winner.
Chapter 6 MEGA Moment
Depending on your instructor and class modality, you may soon have access to very detailed financial information regarding each of your competitors. This information can be overwhelming and is typically less significant to participants early in the simulation. When and if these data are available, you will have as much financial information about your competitors as you have about your own company.
A clever team will dissect their competitors' financial statements in an attempt to determine their strategies. To be clear, you will never "know" your competition's strategy, but one must attempt to gain directional insight in order to deploy your resources for maximum impact.
Access to and analysis of complete financial statements for your competitors will provide you with many clues regarding their business-level and corporate-level strategies. Are your competitors focusing more on some of their business units than others? Are some of your competitors investing heavily in business units where costs are low and economies of scale are high? How about high margin cost? Is it apparent that some of your competition intends to specialize? What does this mean for your team? If there is a competitor you would like to surpass in the next decision, does your corporate strategy leverage the elements that give you the advantage you need to make that move?
You now have information relating to the fundamentals of business strategy, including:
- What is strategy?
- External and industry scan
- Internal analysis
- Business-level strategy
- Competitive dynamics
- Corporate-level strategy
Apply your understanding of these concepts iteratively for each of the remaining MEGA decisions, leveraging the complete financial and market data given to all participants.
Depending on your instructor and class modality, you may have the opportunity to participate in an international merger. This happens in the decision in Round 4. This merger will offer new upside and risks to participants. It also further complicates the decision process and your competitive and financial analysis. Now is the time to review your understanding of the fundamentals of business strategy. If these are well understood, you are ready for the next challenge. You will soon be moving into M&A, International, Organizational, and Governance themes. Again, your understanding of each of these topics will be challenged through application in the simulation exercise.
Chapter 7 MEGA Moment
You will likely have the opportunity to expand your operations internationally during this decision period. If your course is not running the version of the simulation that includes a merger, you have only one or two more decision periods to earn market share and improve your competitive position. Be sure to engage with your Instructor, who is able to help your team identify areas for improvement relative to your competitors. NOTE: Your instructor, like you, does not know the decisions required to win. Every simulation universe is unique, and the results derive from the cumulative decisions of each of the teams in that universe.
If you are playing the simulation version that includes the merger, please be sure to read the additional materials associated with the rules, standards, assumptions, and accommodations built into the simulation model. There are some new rules you must know.
The MEGA simulation essentially creates a hybrid "merger" that admittedly may not represent something you would typically see in the real world. In order to offer this feature, many real-word complexities have either been simplified or automated so the creators could capture some of the important learning opportunities.
The merger creates a new market opportunity in a new region. Region 2 has somewhat different dynamics than Region 1. Be sure to read and understand all of the MEGA documentation as this MEGA Moment is not intended to be in any way comprehensive. The purpose here is to briefly describe how the learning content might relate to the simulation you are playing.
M&A activity and international strategic concepts presented in this class provide a basic outline and some of the reasons companies chose to merge or expand internationally. M&A activity is a very common strategic move in business. Large corporations are involved in M&A activities virtually all the time. Midsize and small companies often operationalize their strategies through M&A activities. As it relates to the MEGA simulation, you should carefully consider how the merger opportunities offered could improve your financial performance relative to your peers and make informed decisions.
It is quite true that properly aligned teams may find significant opportunities, and success, in Region 2. It is also true that this merger may not result in favorable outcomes. As common as M&A activity is, in the real world the odds that any merger achieves its prospective impact are slim. M&A activity is complicated and risky.
Chapter 8 MEGA Moment
If you have decided to pursue any of the opportunities open to you via the merger, you should be seeing some initial results. Be sure to identify where and how your competition is approaching their engagement with Region 2. This will vary by team and by universe and the results will likewise vary widely.
This international section should help you understand some of the organizational demands resulting from international operations. Are you organized to exploit a global international strategy? If so, are you making decisions in the simulation to leverage the intended benefit of this strategy? Perhaps you believe the competition, market, and economy require a transnational structure. Have your decisions supported the characteristics of a strategy and transnational structure? The same could be considered for multidomestic.
There are limitations to MEGA relating to fully controlling these organizational structures. For example, the marketing effort is independent in each region. This would be more multidomestic. Whereas the engineering decisions are limited to a more global perspective. There are, however, some decisions within your control that would be directing funding and focus to one or the other. You also have the opportunity, as a simulation team, to organize yourselves in principal areas of responsibility that would also give directional influence to one of the three discussed structures.
Modes of entry, also discussed in this topic are, in fact, something you will have to decide as a MEGA team competing in the merger version. Are you exporting production or will you be investing in production in Region 2? These are fundamentally modes of entry decisions. It is anticipated that the simulation will be a dynamic learning experience that provides each student with the opportunity to understand how some basic textbook information gets applied in a realistic way and how access to data and a dynamic environment complicates something that on the surface seems quite simple.
Regardless of the specific format of the simulation you are playing, international business adds a layer of complexity to all business operations and an appreciation for the basic strategic aspects of those operations.
Chapter 9 MEGA Moment
As the impacts of the merger begin to stabilize and are represented in the competitive positioning and financial results of each team, this would be a good time to review how your team is operating together. Governance is about the proper and ethical leadership, processes, and mechanisms by which corporations are controlled and operated. In this simulation, your team is tasked with making decisions that consider your manifold stakeholders, including your stockholders, employees, customers, and competitors. On each decision, has your team discussed the implications of your choices as you believe they will impact your key stakeholders? Do your decisions reflect a consistency with your stated and publicly facing mission, vision, and values declarations?
Some teams may be in a position to pay dividends. Should you pay a dividend? What are the financial and accounting impacts? What alternative uses do you have for these funds? Keep in mind that every decision you make impacts your performance and your financial statements in ways known and unknown. By definition, every decision, and every dollar, means you are unable to do another thing with that dollar. These decisions impact each of your stakeholders differently. If you pay off debt, you will have less money to pay a dividend to your stockholders or invest in your employees, right?
Finally, competent governance includes a degree of transparency and effective internal communication. Is your team a model of exceptional corporate governance? If not, why not, and how can you improve?
Chapter 10 MEGA Moment
A corporation's organizational structure is an ever-evolving living thing attempting to leverage "hopefully" unique functional capabilities in a massively dynamic competitive environment. Corporations are relentlessly challenged from every possible attack vector. All levels of strategy—functional, business, and corporate—the planning, the tactics and initiatives, and the capacity and budgetary constraints all must necessarily adjust to respond to change.
Corporations are organized to respond to their market and are most impactful if the intended structure is responsive to the intended strategy. That is to say, strategy and structure have a reciprocal relationship. Additionally, both strategy and structure need to be built with an appreciation for rapidly evolving externalities. Global conflicts, economic shocks, technological innovations, and more punish the unprepared and inflexible market participants.
Built into the MEGA simulation are a variety of these external shocks. Depending on your class modality and on your instructor, one might expect some challenging situations.
Given your team’s strategy and how your team has organized, assess how are these related? Do they have the reciprocal relationship discussed in this chapter? Finally, are you designed to accommodate and respond properly to a significant shock? By the way, if your team understood the concepts in the governance section and has great governance, your stakeholders will expect you to answer "yes" and you will be prepared to demonstrate both competence and grace in the face of difficulty.
Chapter 12 Recap of MEGA Moments: Key Takeaways
- Starting on Equal Footing: Remember, every team began the simulation with identical financial statements. This level playing field meant that strategic decisions, not starting conditions, determined success.
- Deep Dive into Data: You have had access to comprehensive market and financial data throughout the simulation. The importance of analyzing this data, especially competitors' financial statements, cannot be overstated. It offered clues about their strategies and helped shape your own.
- Strategic Choices Matter: Your team had to grapple with the complexities and execution of one or more business strategies, from cost leadership to differentiation. Reflect on how aligning these strategies with customer needs and your finite resources influenced your outcomes.
- The Power of Frameworks: Throughout the simulation, tools like SWOT, TOWS, PESTLE, Environmental Scan, and Porter's Five Forces were invaluable. They provided structure to your analyses and helped identify opportunities and threats in the competitive landscape.
- Collaboration and Assessment: Internal team assessments played a crucial role. Recognizing individual strengths and weaknesses within the team was key to making informed decisions.
- Embracing New Challenges: The possibility of an international merger introduced both opportunities and complexities. It was a testament to the evolving nature of business and the need for adaptability.
- Continuous Learning and Application: The simulation was not just about understanding business concepts but applying them iteratively. Each decision round built upon the last, challenging your team to leverage knowledge in new contexts.
As you reflect on these MEGA Moments, consider how each point influenced your team's journey and the lessons you can carry forward into future endeavors.