NX0441FNN01: Managing for Sustainable Competitive Advantage

Assignment B

Group 1Team 1

Tutor: Tony PurdieStudent name: Hong Nam Mai

Student ID: w11038517

Words: 3775

Date: 14/5/2012

Table of Contents3. Introduction...................................................................................................................................3

3.1. Business objectives:......................................................................................................................3

3.2. Summary of Company Performance:...........................................................................................3

4. Company performance..................................................................................................................4

4.1. Round 1.........................................................................................................................................4

4.1.1. Decisions..............................................................................................................................4

4.1.2. Forecast and Actual Results.................................................................................................4

4.1.3. Round 2 decisions................................................................................................................6

4.2. Round 2........................................................................................................................................6

4.2.1. Forecast and Actual Results.................................................................................................6

4.2.2. Round 3 Decisions:...............................................................................................................8

4.3. Round 3.........................................................................................................................................9

4.3.1. Forecast and Actual Results.................................................................................................9

4.3.2. Round 4 Decision...............................................................................................................11

4.4. Round 4.......................................................................................................................................11

4.4.1. Forecast and Actual Results...............................................................................................11

4.5.Overall trend................................................................................................................................14

5. Learning.......................................................................................................................................19

5.1. Financial Management................................................................................................................19

5.2. Human Resource.........................................................................................................................19

5.3. Operations Management............................................................................................................20

5.4. Marketing Management.............................................................................................................21

5.5. Comment on Game.....................................................................................................................21

5.6. Conclusion:..................................................................................................................................21

6. Team Performance:.....................................................................................................................22

6.1. Team Roles..................................................................................................................................22

6.2. Communication...........................................................................................................................23

6.3. Decision Making..........................................................................................................................23

6.4. Leadership...................................................................................................................................24

REFERENCES....................................................................................................................................25

APPENDIX........................................................................................................................................27

1. Appendix 1. Compare Promotion budgets between 4 companies in two Rounds.........................27

2. Appendix 2. Compare Design and options of City Car between IDEA and NAPA............................27

1

3. Appendix 3: Automation and quality.............................................................................................29

2

3. Introduction

3.1. Business objectives:At Idea Automobile Ltd, our objective is become the world- class automobile

innovator. We plan to achieve a total of 3% of market share for City and Medium and Large

car within 4 years by increase 1% in market share per year. We also expect to increase our

profit to GBP 200 million by the end of the 4th year.

3.2. Summary of Company Performance:Overall, during the 4 year period, we lunched three car models: City Car, Medium Car

and Large Car into the European car market. In order to seize the market share, we increased

our production by 90.4% from 102,925 in the 1st year to 196,000 in the 4th year. Even so, we

only obtained 1.57% of entire market at the end of the period. This figure is by far to reach

our setting goal of 3%. However, we were successful in achieving a profit target of GBP 213

mill at the end of year fourth.

Table 1: Summary of company performance

Key

IndicatorsYear 1 Year 2 Year 3 Year 4

Total Sales1440.29 2261 2861 3614

Unsold Stock0 11,478 0 0

Shareholder

Funds437 381 381 595

Closing Bank

Balance-72 -60 108 362

Outstanding

Loan120 430 430 375

* Figures show in £m, to the nearest £1 million;

3

4

4. Company performance

4.1. Round 1

4.1.1. DecisionsBased on the market research on European Car market provided, in the year 1, we

decided to target to two market segments as follow:

Model Customer segmentation

City car Under 25 years old

Medium car 24-40 years old

The rationale is that those sections have the largest numbers of customers. As a new

entrant, we agreed that we should be cautious, so that we decided to limit our productions in

the first round in order to seize less than 1% of market share in City Car and Large Car.

4.1.2. Forecast and Actual ResultsTable 4.1-1. Round 1 Forecast and Actual results

Forecast Actual

Model City Car City Car Medium Car Medium Car

Production 52,925 50,000 52,925 50,000

Unsold Stock - - - -

Gross margin (%) 20.75 19.12 16.1 15.45

Market Shares (%) 0.95 0.83 0.95 0.83

Sales (£m) 1465 1465

Gross profit (£m) 297 230.49

Post-tax profit (£m) 54.56 -62.52

Net Cash (£m) -172.53 -192.46

5

At the end of Round 1, we sold all of our cars and obtained 0.95% and 0.83% of market

share for City Car and Medium Car respectively as we expected. However, our option take-

up factors were higher than we forecasted, hence the gross-margins were also lower.

Figure 4.1-1. Forecast and Actual Gross margin (%) Round 1

Forecast Actual1

6

11

16

21 20.75

16.1

19.12

15.45

City CarMedium Car

Consequently, our cost of sales was much higher than forecasted. Thus, although we

sold all the cars but we did not achieved the same gross profit, post- tax profit and net cash.

Figure 4.1-2. Forecast and Actual Gross profit, Post-tax profit and Net cash (£)

Gross profit Post-tax profit Net cash-300000000

-200000000

-100000000

0

100000000

200000000

300000000

400000000

297000000

54000000

-172000000

230000000

-62000000

-192000000

ForecastActual

6

Regarding to the net cash, at first we discussed in a team that we would take out a loan

of £200 m in the first year as we calculated that amount would enough to cover our expenses

and to ensure that we would have the positive closing bank balance at the end of the year.

However, our team leader, Peter Khanzan personally changed the amount of loan to £120m

when he entered the decision without exchanging views with other team members.

4.1.3. Round 2 decisionsBased on the good sales result in the first Round as well as the information on market

research, we decided to increase our production to 52.5% (from 102,925 to 157,000) in order

to seize more market share while the whole market is predicted to rise by 1.96% which

mainly caused by growth of City Car and Medium Car’s sectors.

We agreed that we should increase the prices by 8.3% for each models on purpose of

obtaining more profit. Realizing the effect of automations to productivity, we invested 75

more units of automation and hired 600 workers more for second round. A new model (Large

Car) would be lunched in the third round.

4.2. Round 2

4.2.1. Forecast and Actual ResultsTable 4.2-1. Round 2 Forecast and Actual result

Forecast Actual

Model City Car City Car Medium Car Medium Car

Production 83,000 74,000 71,522 74,000

Unsold Stock - - 11,478 -

Gross margin (%) 25.57 21.29 22.57 23.29

Market Shares (%) 1.42 1.22 1.23 1.22

Sales (£m) 2410 1,465

Gross profit (£m) 711 230.49

Post-tax profit (£m) 263.3 -62.52

Net Cash (£m) -353.07 -490.60

7

To compare with Round 1, our gross margins had increased significantly, although

there were still slightly different between our forecast and results. But it is not easy for us to

pick up the correct figures for take-up factors.

Figure 4.2-1. Forecast and Actual Gross margin (%) Round 2

Forcast Actual0

5

10

15

20

25

30

25.57

22.5721.29

23.29

City CarMedium Car

The most noticeable event here was that we had 11,478 City Cars in stock at the end of

the year; that is why we could not take 1.42% of this sector as we expected. As a result, our

sales, gross profit, post-tax profit and net cash were considerably lower than our aimed

figures.

Figure 4.2-2. Forecast and Actual Sales, Gross profit, Post-tax profit, Net cash (£) Round 2

Sales Gross profit Post-tax profit Net cash-600000000

-400000000

-200000000

0

200000000

400000000

600000000

800000000

241000000

711000000

263000000

-353000000

146000000230000000

-62000000

-490000000

ForecastActual

8

Regarding to gross-tax profit, we made a mistake when did not take in the account the

expense on research and development for the new model lunching. This amount was

£187.48mill while we forecasted it was only £24mill. So that our actual cost of sales was

much higher, therefore there was a gap between our forecast and actual results on gross profit

and post-tax profit.

In this round we also invested to the new model to lunch in Round 3. Hence, our net

cash was decreased by £298mill to compare with the previous round.

4.2.2. Round 3 Decisions:Obviously, our main problem came from a huge number of unsold cars. The reason was

likely because we increased prices and productions by 52.5% but at the same time we cut

down 20% of promotion budget (from £30m to £25m) while other competitors maintained

the high promotion budget (see Appendix 1)

Moreover, after analysing the data on competition, especially to compare with NAPA-

our main competitor who targeted in same group of customer, we found out that the problems

in our City Car model was possibly because of our designs and options. Although our cars

had 2 options more than NAPA’s, but our total popularity factors were lower than theirs

(455/475) (see Appendix 2).This suggested us that the designs and options did not match that

which customers want and need.

To resolve the problems, it was necessary to change the designs and options of our City

Car model to increase our popular factors. However, we agreed that we should maintain the

perception of “safe, comfortable and good value for money cars” as our completive

advantage. That is important for us to distinguish our products from other competitors.

According to market research, the market was predicted to fall sharply by 1 mill cars

sold, our company should reduce the productions considerably by 27%. A long with this, we

increased 60% of promotion budget and simultaneously announced a price reduction of 3%

and 1% for City Car model and Medium Car model respectively in order to boost customers’

demand.

Regarding to new model Large Car, we cautiously aimed to obtain 1% of the market

share and decided to sell at a reasonable price to penetrate the market.

9

4.3. Round 3

4.3.1. Forecast and Actual ResultsTable 4.3-1. Round 3 Forecast and Actual Results

Forecast Actual

Model City CarMedium

Car

Large

CarCity Car

Medium

Car

Large

Car

Production 60,000 70,000 27,000 71,478 74,000 27,000

Unsold Stock - - - -

Gross margin

(%)20.71 17.64 22.74 15.56 17.27 17.94

Market Shares

(%)1.31 1.22 1.00 1.31 1.22 1.00

Sales (£m) 2861.48 2861.48

Gross profit

(£m)640.63 489.37

Post-tax profit

(£m)198 0.49

Net Cash -272 -321.53

Ending Round 3, we were the only company in the group who successfully sold out all

of the new products as well as the number of unsold cars from previous round. That is why

although we decreased our productions but our market share of City Car did increase by

0.8%.

However, we still had problem with the gross margin as all of our forecast figures were

higher than those in results because of failing in forecasting take-up factors.

10

Figure 4.3-1. Compare Forecast and Actual Gross margin (%) for 3 model Round 3

City Car Medium Car Large Car0

5

10

15

20

25

20.71

17.64

22.74

15.5617.27 17.94

ForecastActual

Besides, we had made a mistake when calculate the research and development budget

when only calculated the amount of money that we would spend on research and

development budget for one model (approximately £17.5mill). But in actual, we had to spend

more than three times higher that (£57.1mill). Moreover, we did not take into account some

expenses which included Professional Charge (£10.46mill), Warranty Claims (£38.4mill) and

Interest on Loans (£39.5mill). Those was the reason why we still had a gap between forecast

and actual on gross profit, post-tax profit and net cash as showed in following figure.

Figure 4.3-2. Forecast and Actual Gross profit, Post-tax profit and Net cash

Gross profit Post-tax profit Net cash-400000000

-200000000

0

200000000

400000000

600000000

800000000

640000000

198000000

-272000000

489000000

490000

-321000000

ForecastActual

11

4.3.2. Round 4 DecisionDespite the marker predicted to shrink by around 11%, we resolved to raise our

productions from 157,000 to 196,000 cars (24.8%) as well as considerably increasing the

prices (proximately 8.6% in average) in aiming to get more profit.

The reason for this was because we strongly believe that we are now able to maintain

our competitive advantage and successfully compete with our rivals in the market.

To ensure our success, we invested £10mill (25%) more into promotion budget in order

to encourage customers to buy.

We also decided to increase our popularity factors by replacing a preferred safety

option (Sun reflect glass) by a more popular one (Xenon Headlight) in our City Car.

4.4. Round 4

4.4.1. Forecast and Actual ResultsTable 4.4-1. Round 4 Forecast and Actual Results

Forecast Actual

ModelCity Car

Medium

Car

Large

CarCity Car

Medium

Car

Large

Car

Production 82,000 84,000 30,000 82,000 84,000 30,000

Unsold Stock - - - -

Gross margin (%) 14.59 19.42 23.04 17.15 20.27 22.57

Market Shares (%) 1.72 1.61 1.22 1.72 1.61 1.22

Sales (million) 3614.40 3614.40

Gross profit

(million)766.55 718.78

Post-tax profit

(million)214.67 213.66

Net Cash (million) -6.31 -12.83

At the end of the year, we sold all of our products and achieved £3614mill of sales as we

expected. Our forecasts on Gross margin were just slightly different from actual

12

Figure 4.4-1. Forecast and Actual Gross margin Round 4

City Car Medium Car Large Car0

5

10

15

20

25

14.59

19.42

23.04

17.15

20.27

22.57

ForecastActual

Therefore, it our forecast on gross profit, post-tax profit and net cash were quite closed

to the actual results.

Figure 4.4-2. Forecast and Actual Gross profit, Post-tax profit and Net cash Round 4

Forecast Actual-100000000

0

100000000

200000000

300000000

400000000

500000000

600000000

700000000

800000000

900000000

766550000718780000

214670000 213660000

-6310000 -12830000

Gross profitPost-tax profitNet cash

We also confused about predicting the warranty claims and professional charges, so

that we had picked up the lower figures than those in reality. As a result, our overheads were

higher than we expected, so that we had a gap between forecast and result of gross profit.

13

Regarding to the difference between our forecast and actual post-tax profit, we were

wrong when calculated the amount of tax that we had to pay.

In our forecast, we calculated the tax that we would pay as following formula:

Tax Payment= Post-tax Profit*Tax Rates

But according to the User Manual Operation Module, we have to calculate the tax

payment by using the below formula:

Tax Payment = Accumulated Profit*Tax Rates

That explains why even though our forecasting gross profit was much higher than it in

actual, but there was slightly different between our forecast for post-tax profit with this figure

in the result.

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4.5.Overall trend

ProductionIn four years, our production increased by 90% from 102,925 units to 196,000 units and

sales increased by 145% from £1,465mill to £3,614mill. We only had problem with car sales

in round 2 in which 11,478 units of City Car Model were in stock.

Figure 4.5-1: Productions and car sold in four years

Round 1 Round 2 Round 3 Round 4-50,000

0

50,000

100,000

150,000

200,000

102,925

157,000 157,000

196,000

102,925

145,522

168,478

196,000

0

-11,478

0 0

ProductionSoldUnsold

Market Share:Market share steadily increased from 0.89% in the 1st year to 1.52% in the 4th year.

However, we did not meet the target of 3% of the entire market share as we expected at

beginning. The reason was that we were too cautious to increase our productions while our

competitors often raise their productions much higher than ours

.Figure 4.5-2. Market share trend

15

Year 1 Year 2 Year 3 Year 40.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

0.89%

1.23% 1.18%

1.52%

IDEA

IDEA

Shareholder Funds:During the four years, our Shareholder Funds increased from £437.45m to £595.23m. It

shows that our company had been able to earn profit over the time (see Figure 11).

Figure 11. IDEA’s Shareholder Funds in four Years

Year 1 Year 2 Year 3 Year 40

100000000

200000000

300000000

400000000

500000000

600000000

700000000

437450000

381080000 381570000

595230000

Shareholder Funds

Shareholder Funds

16

Cash PositionOur Net cash dropped a lowest point in the second round then steadily increased in third

and fourth round and the trend is set to be continued. It indicated the sign of better

financial strength and liquidity which also proved by increasing in other financial

indicators (see Figure 12).

Figure 12: Cash Position trend

Year 1 Year 2 Year 3 Year 4 (600,000,000.00)

(500,000,000.00)

(400,000,000.00)

(300,000,000.00)

(200,000,000.00)

(100,000,000.00)

-

(192,460,000.00)

(490,600,000.0

0)

(321,530,000.0

0)

(12,830,000.00)

Cash Position

Cash Position

17

Gross margin:From Round 1 to Round 2, the gross margin for City Car and Medium Car rose by 6.4% and

5.84% respectively. However in Round 3 these figures dropped to 15.56% and 17.27%. This

was because we cut down the prices and lunched new model in the Round 3. From Round 3

to Round 4, we can see an upward trend when all figures had increased.

Figure 13: Gross Margin for each model in for years

Round 1 Round 2 Round 3 Round 40

5

10

15

20

25

16.1

22.57

15.56 17.15

15.45

21.29

17.27

20.27

0 0

17.94

22.57

City CarMedium CarLarge Car

18

Strike daysThe number of strike days gradually decline from 8 days in Round 1to 3 days in

Round 4. This reflected our effort in improving the human resource during the game as we

tried to invest more into training budget as well as annually increased wages (see Appendix

3).

Figure 14: Number of Strike days

Year 1 Year 2 Year 3 Year 40

1

2

3

4

5

6

7

8

9

8

4

5

3

Number of Strike days

Number of Strike days

19

5. Learning

5.1. Financial Management

Financial StatementThorough analyses company performance; I learnt the important of understanding

financial statement in order to assess a business. With the knowledge equipped in class I can

understand the financial statements which provided in each round of Business game. It

contained needed information to helps me identify the key issue in order to make appropriate

decisions.

I also aware the integrated link between Balance Sheet, Income Statement and Cash

Flow in analysing the financial statements. Any alteration in each statement will lead to

change in the others. Costales and Szurovy (1994) proved this when suggest that it is

necessary to consider all the financial statements as a whole while evaluate company

performance.

Price strategyDuring the whole 4 rounds, we did not apply a price strategy for our company. We

were too concerned about sales and productions and managed to sell all the cars. In fact, we

did not have a clear pricing strategy over the game. We used to maintain lower selling prices

and produced less than our competitor (NAPA). As a result, we could not maximize our

profit and were always behind them in the race.

If the game operated again, I would employ an appropriate pricing strategy in order to

increase our profit as much as possible. For example, in the first round, I would apply price

skimming strategy to quickly get back money spent on research and development. In the next

rounds, along with boosting productions, I would use Average pricing Strategy to avoid

competition and keep the perception of good quality products as they have a strong link to

each other (Smith, 2011).

5.2. Human Resource

Training employeesIn the game, I learnt the important role of training employees in company

performance. From round 1 to 4, we gradually increase training budget; hence it had good

effect to our product quality and productivity as well as reduced the number of strike days.

Through training process, employees will be equipped new skills, knowledge, and principle

20

to help them perform better in task, hence, increase productivity, quality and employees’

satisfaction (Urbaniak, 2004). This means that continuous investing into employees will

make them more allegiant to the organization (DeFelice, 2007).

Human Resource PlanningIn the game, we did not consider Human Resource Planning as a part of the business plan in

order to meet the company’s objective. Smith et al (2006) suggest that the most difficulty of

Human Resource Planning is to bring it together with the company business’s plan in order to

achieve the goal.

Due to lack of advanced preparation, during the game, we just simply changed the number of

workers to fit with target productions. As a result, it was challenged for us to manage the

workforce and labour cost needed for each round. If I could play the game again, I would

initially take Human Resource Planning as a part of our business plan.

5.3. Operations Management

Productivity and QualityAutomation had significantly influenced to our productivity and product quality. It

showed in all four Rounds that every time we decided to change the allocation of automations

for each car model, it directly affect to warranty costs per car. (see Appendix 3) This means

that, quality increase helped to reduce costs, therefore increase profit. Moreover, I understood

the crucial role of quality control in achieving our competitive advantage. Raturi and Evans

(2005) claim that improving product quality can bring more profit to organizations through

seizing market share and increase in sales.

Measuring and Improving performanceDuring the game, we did not apply performance measurement to assess how well our

company in order to improve our performance. As Barnes (2008), measuring performance is

crucial in operation management in order to successfully manage an organization. Measuring

the company performance in each round would help me to identify the strengths and

weaknesses, therefore, to assess the efficiency and compatible of decision-making. Besides,

measuring competitors’ performance, especially, the one who got high achievement would

help us set a good standard.

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5.4. Marketing Management

Marketing Research As my team role was a Marketing Manager, I was responsible for market analysis to

support our team in marketing decision-making. Based on the information in Market research

on European car market provided, we decided to target to the segments in which the

customers was the largest and in order to seize less than 1% of market share in the first

round. In the second round, we was failed when estimate the target productions for City Car

sector, although the market was predicted to rise. As a result, we had a number of cars in

stock. Inversely, in the third and fourth round, we determined to increase our productions

even though the market forecasted to fall. From the fact, I understand that the market is

uncertain and decision making should not be entirely based on the research; a right decision

should consider the personal experience and knowledge (Peter and Donnelly, 2911).

Marketing mixIn the Business game, we did not employ marketing mix (price, product, and place,

promotion) to improve our marketing strategy. As we had a huge number of unsold cars in

round 2, I found out that our product had not matched that which our customers need or want.

It suggested me that a marketing mix strategy in which the 4P are suitable with our customers

will help our company create its competitive advantage in order to ensure success (Stone,

2001).

5.5. Comment on GameIt would be more realistic if we could pay discriminate wages for employees who

worked in the different Car Model, as well as give incentives and rewards to workers in order

to increase productivity and product quality. We also were unable to use the Psychological

pricing policy in the game to gain the impression of cheaper product. The Data on

competition should include the information on productions, sold and unsold cars of all

companies, so that, it would easier for us to compare and learn from others.

5.6. Conclusion:The Business Game helps me reinforce the knowledge that I had learnt in the four areas

Financial, Marketing, Operations and Human Resource Management. Over the game process,

I had practiced my management skills which are necessary for me as a manager in the future.

22

Especially, it helps me to perceive the important role of working in a team in order to achieve

the collective goals.

6. Team Performance:

6.1. Team RolesIn the first round we decided to divide the task into three functional areas and

allocated to each team member’s based on individual’s background and qualifications.

Because a person is assigned a suitable role, he would perform better (Adair, 2009). So that,

in the first round I was mainly responsible for marketing management as I had experiences in

this field from my previous job. Other team members took the roles as illustrated in following

chart:

Chart 1: IDEA manager team roles

However, in order to assist team members in their individual learning, we agreed that

in each round individual should mainly take responsibility for a different task from the

previous round. Moreover, for each round, we appoint a different team member to record the

meeting minute and present our decisions in seminar.

Consequently, in Round 3 and 4, I have the turn to take the role of Financial Manager

to share task with Devavrat. I had been supported by Peter and Devavrat in Financial

Management which was not my strong aspect. As my preferred learning style (Honey and

Mumford, 2009) was Pragmatist, I felt that by practising finance, I had strengthened my

knowledge in this field and effectively contribute to teamwork. However, at the same time, I

and other team members also occupied another role. We had to manage multiple tasks

simultaneously; therefore we met some difficulty in completing our task on time. Adair

23

CEO Peter Khazan

Marketing ManagerHong Nam Mai

HR ManagerJing Dong

Operation Manager

Sharina Qi

Financial ManagerDevavrat Kakade

(2009) suggest that if a member takes so many roles in a team he or she suffers for tense

which affect to individual’s performance. Thus, if I could participate in the game again, I

would take only one role from the beginning to the end rather than taking different tasks at a

time.

6.2. CommunicationIn IDEA Automobile Ltd, we aware of the important role of communication in our

team work. We had 8 meetings from the 1st to the 4th Round. However, I found that

communication was insufficient in our team. The ideas and opinions mostly came from Peter,

me and Devavrat. Jing and Sharina hardly spoke out. Belbin (2000) suggests that our problem

might because we had a Shaper who had a strong characteristic and tend to offend their team

members. Adair (2009) also agreed that personality can affect to communication in teams. It

was showed in our meetings as Peter appeared to be dominant other team members.

As my preferred working roles are Plant, Specialist and Implementer, I was actively in

contributing my ideas in teamwork. To enhance communication between team members, I

created a Facebook group and encourage my colleagues to use it as a channel to communicate

with each other as well as discussing ideas and helping other to understand the tasks.

However, the issue still remained as most of the discussions on Facebook were between me,

Peter and Devavrat.

Our problem might cause by the fact that we was lack of understanding individual’s

differences. As play the game again, I would suggest my team members to have some outside

activities together. This would be a good way to improve communication and strengthen the

relationship between team members in order to increase team performance (Syer and

Connolly, 1996).

6.3. Decision MakingIn IDEA Company, we believed that every idea and opinion should be agreed by all

the team members before going to final decisions. However, our approach did not go well in

the 1st and 2nd round. This was because Peter had changed the final decisions personally

without exchanging view with us. For example, he altered the amount of loan we would take

for round 2 from £200mill to £120mill as well as assertively lunched Large Car model in

Round 3 despite the fact that we all agreed to produce Luxury Car in the meeting. Peter’s

behaviour had made the rest of team feel a sense of resentment.

24

During the first two rounds, I also felt that my ideas and opinions had not been

listened by the team. Especially, I used to have different views with Peter in some areas

related to productions and options but when we put the issues in the group discussion, other

team members tended to avoid conflict with Peter as he appeared to be over-dominant.

From the round 3, as taking chaired role, I tried to make our decision making process

more democratic by considering all the different opinions and aspect before going to final

decisions. I also encouraged our colleagues to speak and be more transparent in decision

making process in order to regain the trust which is necessary for us to achieve our common

goals (Meyers, 2007). The better results of round 3 and 4 did prove that our team

performance had improved significantly by employing an effective decision making process.

So that, maintaining democratic environment from the beginning would be my first priority if

I had chance to play the game again.

6.4. LeadershipInitially, we collectively elect Peter Khanzan whose preferred team role was Shapers

according to his Belbin Team Role report. But we decided to have revolving leaders. It means

that in every round, each team member would have chance to take the leading role to conduct

the meetings and present decisions. This would enable individual to develop his/her skills and

leadership through practicing as suggested by Adair (1998). However, in the first and second

round, other members were reluctant to take the leading role, therefore all the meetings were

still be conducted by Peter.

But as mentioned in Decision Making part above, I felt overwhelmed and resented

with the way Peter personally changed the collective decision. I also sensed the same feelings

of other team members while received feedback from them.

From the Round 3, I actively took the leading role to co-chair the meetings with Peter

Khanzan. I tried to put all ideas and options into discussions and maintain the democratic

environment to ensure that everyone really engage in the teamwork. As a result, in round 3

and 4, I received support from the rest of the team for most of my idea which had affected to

our company performance.

25

REFERENCES

Adair, J. (1998), Leadership Skills. London: The Institute of Personnel Development.

Adair, J. (2009), Effective Teambuilding How to make a winning team. 2nd ed. London: Pan

Books.

Barnes, D. (2008), Operations Management: An international perspective, London: Thomson.

Belbin, R. M. (2000), Beyond the Team. Great Britain: Butterworth-Heinemann.

Belbin, R.M. (2010), Management Teams Why they succeed or fail. 3rd ed. Great Britain:

Butterworth-Heinemann.

Costales, S.B. & Szurovy, G (1994), The guide to Understanding Financial Statements, 2nd

Ed, USA: McGraw-Hill.

DeFelice, A. (2007), Training Employees, Accounting Today, (21), 10, pp. 10.

Honey, P. & Mumford, A. (2009), The Learning Styles Helper’s Guide. Maidenhead Berks:

Peter Honey Publications Limited.

Meyers, S. (2007), 'Growing Leaders in Your Own Backyard', Trustee, (60), 6, pp. 8-11

Peter, J. P. & Donnelly, J.J. H. (2011) Marketing Management Knowledge and Skills, 10 Ed,

New York: McGraw-Hill.

Raturi, A.S. & Evans, J.R. (2005), Principles of Operations Management, USA: South-

Western.

Smith, B.J., Boroski, J.W. & Davis, G.D. (2006). Human resource planning, Human

Resource Management, (31), 1-2, pp 81-93.

Syer, J. & Connolly, C. (1996), How Teamwork Works The dynamics of effective team

development. London: McGraw-Hill.

26

Spencer, J. & Pruss, A. (1992), Managing your team How to Organise People for Maximum

Results. London: Judy Piatkus.

Stone, P. (2001), Make Marketing Work for You, UK: How to Books.

Tim J.Smith (2011), Pricing Strategy: Setting Price Levels, Managing Price Discounts, &

Establishing Price Structures, USA: South-Western Cengage Learning.

Urbaniak, A 2004, Training employees, Supervision, (65), 2, pp. 6-7.

27

APPENDIX

1. Appendix 1. Compare Promotion budgets between 4 companies in two RoundsFigure 1

Round 1 Round 20

10000000

20000000

30000000

40000000

50000000

60000000

70000000

30000000

25000000

60000000

40000000

23000000

30000000

25000000

31000000

IDEANAPAF5POISE

2. Appendix 2. Compare Design and options of City Car between IDEA and NAPA

Table 1.

Age group: Under 25

Options & Designs IDEA NAPA Popularity factors

1. Multi-location airbag Yes Yes 60

5. Alloy wheel Yes Yes 80

17. Run-Flat Tyres Yes No 20

20. Sun Reflective

Screen/GlassYes No 15

21. Air Conditioning Yes Yes 60

22. Superior Sound Yes Yes 95

28

System/ipod

25. Metallic Paint No Yes 55

29. Safety Package Yes No 40

2/4 Door Saloon/Estates Yes No 20

3/5 Door Hatch No Yes 60

Small Engine Yes Yes 65

29

3. Appendix 3: Automation and qualityFigure 3-1 : Automation allocated

Round 1 Round 2 Round 3 Round 40

10

20

30

40

50

60

70

80

25

75

5550

25

5055

50

0 0

15

25

City Car

Medium Car

Large Car

Figure3-2: Warranty cost per car

Round 1 Round 2 Round 3 Round 40

100

200

300

400

500

600

193.38154.64 142.06 149.61

272.31

218.46198.07 205.34

0 0

532.49

418.7

City CarMedium CarLarge Car

30