Guide for Teachers - In A Spin

Method:

This is a game that requires minimal preparation beforehand but will benefit from a bit of thinking about the process involved and the timing. The game is designed to be played with small groups each playing the part of the managing directors of a firm producing domestic washing powders for washing machines. If the group you have is small, the game can be played with each individual being the company.
The suggested timing is nine rounds but this can be flexible; the reason for choosing nine rounds is so that students have to factor in changes to the size of the market. The game will require students to use some basic numeracy skills to calculate profit levels, sales, market share and so on.
Below is a suggested outline of the structure for the initial information to be given to each group based on 6 groups of 3 students but this can be amended according to individual needs. The structure, however, is designed to reflect a market structure where there are different sized firms with different aims and objectives and different competitive advantages. It is up to the students to try to work out what these might be. For example, one of the firms has a relatively small market share but a high profit margin reflecting that they are producing for the top end of the market - a very high quality product. Other firms have much higher market shares but lower margins reflecting the fact that they cater for the volume end of the market.
At the end of each round of decision-making, students will have to make a decision on what happens to the business as a result of their decisions. How students make these decisions is entirely up to them and will hopefully be based on some prior work on market structures and competitive behaviour in markets. Students will be expected to justify their decisions. Look to reward those who are clearly thinking through their reasoning for their decision and who are clearly using their knowledge of business and economics in arriving at their decision.
You will need to record what happens at the end of each round and a template (available as HTML or in Word) for doing this is provided - this can be projected onto a white board or interactive white board so that students can follow the progress of the market.
Suggested opening information is provided as follows:
- Company 1: Price per 1.1kg packet = £2.90, AC = £1.90, Market share = 18%
- Company 2: Price per 1.1kg packet = £2.85, AC = £2.10, Market share = 19%
- Company 3: Price per 1.1kg packet = £3.60, AC = £1.75, Market share = 8%
- Company 4: Price per 1.1kg packet = £3.10, AC = £2.25, Market share = 13%
- Company 5: Price per 1.1kg packet = £2.20, AC = £1.80, Market share = 20%
- Company 6: Price per 1.1kg packet = £2.95, AC = £1.80, Market share = 12%
When you give your feedback try to introduce new ideas and issues that students may not have considered to try to make them think about consequences and also to introduce them to new issues that they will benefit from.
For example, many students will take an easy option to cut prices, sack staff and advertise. Most will be unlikely to consider the consequences so your feedback will help to enrich their knowledge and understanding. If the firm at the top end of the market cut their prices, for example, you can cut their market share down considerably to try to make them aware that their price is high for a reason. If students cut costs by getting rid of staff they might face the consequence of having to cope with trade unions which might lead to a disruption in production as the union calls a strike in protest. If the students suggest that they are going to enter into negotiations to reduce the workforce by voluntary redundancy and natural wastage this group might be rewarded more appropriately.
Students can enter into discussions to merge but will obviously be subject to the constraints faced by businesses with regard to competition regulations!
If you are feeling mischievous you can introduce the external shock cards. These can be given to groups at various times during the game to introduce an element of uncertainty. The shock regarding the damage to clothes from the chemicals in the washing powder is based on an actual event which occurred some years ago between Lever Brothers and Proctor and Gamble (see: 'Soap majors cross swords over tablets' and 'Five year facelift for Unilever'). Be prepared for the accusations of favouritism when you do this though!
Some groups may catch on to the fact that the European market is available to move into. There is, however, only a 10% gap in the European market and you will have to make the students aware that they then face the issue of exchange rates and other problems - you will have to use your discretion in such circumstances but get the students to work the European market section out separately from the UK market, translate the figures into £ from € before adding them onto the final figures - this will help build their confidence in numeracy skills as well as make them aware of the importance of exchange rates in trading abroad.

Points Total

Award points for students at the following levels:

Profit made - award 1 point for every thousand pounds worth of profit
Sales - award 1 point for every 10,000 units sold
Market share - award 1 point for every percentage point of market share

In A Spin - Guide for Teachers

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