Introduction

This is a game designed to help you develop your understanding about how businesses compete with each other. The rules of the game are there to enable the game to progress smoothly but in terms of how you approach the game there are no rules providing you adhere to the laws of the land!

There are a number of concepts that you should know to partake successfully in the game. The key ones are listed below:

• You should know how to calculate profit:
  • Profit = Total Revenue (TR) - Total Cost (TC)
  • TR = Price (P) x Quantity sold (Q)
  • TC = Fixed Costs (FC) + Variable Costs (VC)
• You should know and understand the elements of the marketing mix and how they can be used (You can think of 7Ps not just 4!)
• You should be aware of the external influences that affect business decision-making
• You should understand the difference between the aims of a business and the objectives of a business
• You should have a basic understanding of market structure and how this can influence the behaviour of a firm

Aim

The aim of the game is simple. You must make decisions to try to achieve the following:

• Increase sales
• Increase your market share
• Make a profit

The Scenario

Your team are the managing directors of a company producing washing powders for domestic washing machines. At present you are operating in the UK only. The size of the market in the UK is currently 200 million units a year - a unit being one pack of washing powder/tablets. Assume that each unit is currently 1.1kg. The market is currently growing at 2% each year and a year is represented as the end of the third round.

The European market is worth an estimated €2.75 billion but is currently dominated by 3 very large firms who account for 90% of total sales. The European market is around 550 million units.

Image copyright: Ginger Garvey, stock.xchng

The Game

You will be given some initial information regarding your current market position. The first thing you will have to do is to calculate your total sales and your profit levels.

You will then be given 7 minutes to consider your next move. You will have to explain your decision to the remainder of the groups at the end of these seven minutes. Your teacher/lecturer will note down the details for each firm. You will have to give a short explanation of the reasoning for your decision and what you hope to achieve from the decision.

Your teacher/lecturer is the referee and the sole arbiter of what happens in the game. He/she will assess your decision and those of the rest of the groups and will explain what has happened to your market position as a result of your decision.

You will then have to assess your situation and develop your next strategy. There will be a total of 9 rounds and the business with the highest points total will be deemed the winner. The points total will be calculated in relation to the amount of profit made, your market share and the level of your sales.

When making your decisions, remember that some of them may take time before you see the benefits, you can if you wish make the decision to do nothing but you will need to be wary of what your rivals are doing!