Snapdeal presents Stratethon

Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances. ~ Sun Tzu. (Chinese military strategist)

Stratethon will bring the best of you by making you think on your feet and navigate real life scenarios. The competition will provide you a flavour of ideation as well as execution.

Schedule

Thereare10roundsinthegame;eachroundwillbeopenfor11hoursand30minutes.Youcansubmit/changeyourdecisionstilltheroundislive.

StartTime EndTimeRound1 14thOctober2015at9:00PM 15thOctober2015at8:30AMRound2 15thOctober2015at9:00AM 15thOctober2015at8:30PMRound3 15thOctober2015at9:00PM 16thOctober2015at8:30AMRound4 16thOctober2015at9:00AM 16thOctober2015at8:30PMRound5 16thOctober2015at9:00PM 17thOctober2015at8:30AMRound6 17thOctober2015at9:00AM 17thOctober2015at8:30PMRound7 17thOctober2015at9:00PM 18thOctober2015at8:30AMRound8 18thOctober2015at9:00AM 18thOctober2015at8:30PMRound9 18thOctober2015at9:00PM 19thOctober2015at8:30AMRound10 19thOctober2015at9:00AM 19thOctober2015at8:30PM

Pleasenotethattoaidyourdecision-makingaseparatesection'Analysis' will be provided only for the first two rounds.

Onlytheteamleader,personwhoregisteredtheteam,willbeabletoplaythegame.Otherteammemberswontbeallowedtoplay.Simultaneousloginsarenotpermitted.

Background

Thisgamesimulatescorporatecompetitionwhereinteamscomprisingofvariousbusinessheadsco-ordinate tocomeouton top!The teamwithgoodbusinessacumenandpractical senseof formaleducationshouldprevailintheend.Thepromotersofyourcompanywokeupafterasoberingdreamanddecidedtoreplaceoldheadswith greenhorns. On one side, promoters got tired of bureaucracy and fighting between variousdepartments,on theother, theyhave takenagreat leapof faithbypromotinggreenhorns to theboardroom.Letusseeifyoucanprovethepromotersrightorleavethemwithlifeofnightmares.Inparticular,yourteammemberswillhaveto:

Targetappropriatesegmentsbypositioningyourproductsinahighlycompetitivemarket; Decideuponadvertisementbudgetsandappropriatemediachannels; RunR&Ddepartmenttodesignanddevelopnewproducts; Doamplemodificationstoexistingproductstoensureobsolescenceisprevented; RunProductiondepartmenttoplancapacityandproduction; Investinincreasingefficiencyofproductionsystems; DecideontheSalesForceandtheirassignments; DecideonopeningofNewStoresanddiscountstovariousstoreformats; TakeFinancedecisionstoensureampleliquidityisavailabletothecompany; Ensurethatshareholdersarekeptinhighspirits; Ordermarketresearchstudiesfortakinginformeddecisionmaking; DosufficientCSRactivitiestoprop-upCompanysimage; Decision-makinginfaceofethicaldilemmas.

Macro-Economic situation in theworld is stable.Thegame representsageneralproduct sector inany country where free competition prevails. You are in an automobile industry and the firmproducesbikes.Theproduct isdifferentiableonbasisof5parametersBulk,Features,Performance,ConvenienceandPrice.ApartfromPrice,otherparametershaveavaluerangefrom0to100.Forexample,BulkValue of 80 (much lighter) is better than 10 (quite bulky) and similarly Convenience Value of 20(quiteapuzzletooperate)isworsethan70(veryintuitiveuserinterface).Thefirms inthegamestartwith2products;eachtargetedataspecificconsumersegment.Atthestartofthegame,all teamsstartatthesamelevelwithproductstargetedat4outof5consumersegments.Thevariousconsumersegmentsareasfollows-LowEarnersPeople in this segmenthavepractically zero knowledgeabout theproduct andareonlyconcernedabouttheprice.

High Earners People in this segment are highly qualified, demand value and alsowilling to paymoney for it. Theydemand Lighter,Great Features,MaximumPerformanceandMostConvenientproduct!Andifsomeonecanprovideitcheaper,thenitwillbeicingonthecake.Geeks People in this segment are extremely knowledgeable about the products in themarket.Theyprefermorefeatureswithhighperformancealbeitatlowerprice.Elite People in this segment are elitist. Theywill demand the best thing butwill have the leastknowledgeoftheproduct,comparabletoLowEarners.IfyoucandishoutaproductthatisLight,hasGreat FeatureswithMaximumPerformance, then you can end up charging high premiumon theprice front! Such naivety stems from the fact that the segment believesmore in brandishing theproductthanactuallyusingit.OthersPeopleinthissegmentcannotbeconsideredtobelongtoanyothersegment.Theywouldbehappywithaproductthatisslightlybulky,nottoomanyfeatures,deliversaverageperformanceatso-soconvenience.Thepricethattheywouldpaywouldalsobegreaterthantoolowandlesserthantoohigh.At the beginning of each decision round, you will have a set of Financial Statements of yourcompany.YourteamshouldintrospectthisinformationalongwithvariousMarketResearchStudiesorderedby your company. Keep an eyeon the competition.After discussion and analysis of yourstrategyfortheround,yourteamcantakedecisions forvariousdepartments.CheckthedecisionswiththePro-Formastatementsandmakealterationsifrequired.Thedecisionscanbealteredtilltheroundislive.Eachroundisequivalentfor1yearandyoullgettoplay10roundsi.e.10years.For the team to excel, it is essential that a good working relationship is developed within yourcompany.Involvementofeveryteammemberinthediscussionhelpsinaddingperspective.

DESCRIPTIONOFGAMEDECISIONSGame has 6 decision screens, one each for Chief Production Officer, Chief Finance Officer, ChiefMarketingOfficer,ChiefSalesOfficer,ChiefResearchOfficerandChiefExecutiveOfficer.Thebroadoutlineofdecisionstobetakenbyeachdepartmentchiefisgivenbelow.

CPODecisionsChiefProductionOfficerhastotakedecisionsregardingtheplantcapacity,maintenanceinvestmentandproductionvolumeofeachoftheproduct.Building1UnitofCapacitygives100,000productionunitsatcostof150,000.Thecapacitydoesnothaveanysalvagecost,i.e.downsizingdoesnotmakesense.Also,capacityinvestmentisdepreciatedattherateof10%usingstraight-linemethod.Inventorycostisequalto20%ofValueofInventoryHolding.

CFODecisionsChiefFinanceOfficerhastodecideuponreceivablepolicy,payablepolicy,sourceoffinancingforthecompany,alongwithdividendandsharebuyback.The company has to maintain a minimum cash balance of 500,000. Anything above it would beinvestedinmoney-marketfundstoyieldareturnof2%.Anyshortfallwillbemadeupbyemergencyloanthatisavailableatapenalrateof25%!ThemaximumallowableDebt-Equityratioforthecompaniesattimeoftakingloanis2:1.AccordingtoD-Eratio,theloanrateswillvaryfrom10%to20%.Sharescanbeboughtbackat10%premiumandsoldat10%discounttoprevailingshareprice.

CSODecisionsChief Sales Officer has to take decisions regarding opening or closure of Company-OwnedShowrooms, aswell as recruitmentandappointmentof Salespeople formarketing the companysproducttootherStoreformatssuchasSpecialtyStoresandMassMerchandisers.ChiefSalesOfficeralsohastodecideuponthemarginstobemadeavailabletooperatorsofvariousstores.Kindlynote,providing a greater margin at Company-Owned Store will make Specialty Stores and MassMerchandisersrevoltandtheywouldnotstoreyourproducts.Company-OwnedStoresTheseareexclusivestoresfortheproductsofyourcompany.While it isfrequentedbyGeeksandHighEarners,itisquiteimportantforElitesastheybuyproductonlyfromCompany-OwnedStores.Specialty StoresThese storesprovideahigh levelof serviceand technical support. Theyusuallycarrymostexpensiveandhigh-performanceproducts.Becauseof theirhigh levelof technologicalexpertise,specialtystoresarefrequentedbyGeeks,HighEarnersandOthers.MassMerchandisersThesestoresoperateona low-price,high-volumebasis.Asaconsequence,thelevelofserviceisquitelow.Theyoftendistributethecheaper,low-performanceproducts.TheyarefrequentedbyLowEarnersandotherssegments.

CMODecisionsChiefMarketingOfficerhastotakedecisionsregardingadvertisementsbudgetsandmediachannelsto utilize for each of the product. Also, the onus of conducting advertising research for specificconsumersegmentisalsoonthemarketingdepartment.Demandforaproductiscreatedbecauseofawarenessaboutproduct,willingnessoftheconsumerand availability of the product. Awareness increaseswhen the product is advertised using properMediaChannels.Willingnessincreaseswhenconsumersperceivecharacteristicsoftheproducttobeclosetotheirdesiredlevels.Availabilitydependsuponstockingofstoreswherethetargetconsumervisits.

CRODecisionsChiefResearchOfficerhastotakedecisionsondevelopmentofproducts,afterallyourcompanyisaproductcompany.ManydifferenttypeofR&DprojectscanbelaunchedFrommodifyingexistingproducts(tolowerproductioncostsorimproveproductcharacteristicsorboth)tolaunchingnewproductsaltogether.TheR&D investment is amortizedover3 years.Newly launchedR&Dproject canbe finishedovermultipleyears,dependinguponthemoneymadeavailabletosuchaproject.Havingmore than 2 products in same consumer categorymay help in increasing your companysmarketshare,butbeawareofthecannibalizationofcustomersamongstproducts.Also,keepinmindthatmodifyingaproductscharacteristicswillforceliquidationofoldstockattheendoftheperiod.Ina round,morethanoneexistingproductcannotbemodified. Investment inanewR&Dprojectcannottop200,000,000.Lastly but importantly, if you end up taking an emergency loan in excess of 10,000,000 in theprecedingyear,thenyouwillnotbeabletocarryoutanyR&Dactivityinthecurrentyear.

CEODecisionsChief Executive Officer is responsible for co-ordination amongst various departments and alsocompanysimage.Research has shown that CSR activities have an important effect on companys image that has acascadingeffectonbrandloyaltytowardsproductsofthecompany!Thegamerevolvesaroundco-ordinationbetweenthecompanyheadsandinformationassessmentfromthevariousresearchreports.Buytheonesthatseemimportant,researchafteralliscostly.

DESCRIPTIONOFGAMESCREENSThescreendescriptionisintendedtogiveyouapreviewofwhatsinstoreforyouinthegame.Itiscriticaltoclearlyunderstandthescreensherealthoughthereisnoreplacementofin-gamepractice.

Pro-FormaP&LStatementThedecisionsofthecurrentroundareprojectedoneyearintothefuturetogenerateProf-FormaP& L Statement. The statement is important and can be used to make appropriate changes indecisions.OneshouldalsobecautiousonrelianceofPro-FormaP&LStatementbecausetheRetailSales(i.e.theTopline)isessentiallyguidedbyyourcompanyswishfulguidance!

Pro-FormaCashFlowStatementThedecisionsof thecurrent roundareprojectedoneyear into the future togenerateProf-FormaCashFlowStatement.Thestatementisimportantandcanbeusedtomakeappropriatechangesindecisions,especiallyFinancedecisions.OneshouldalsobecautiousonrelianceofPro-FormaCashFlow Statement because the Inflow from Sales is essentially guided by your companys wishfulguidance!

P&LStatementTheP&LStatementhelpsyou inanalyzingoutputofyourdecisionstaken inthepreviousperiod.Youcanalsocompareitwithpreviousyearandpro-formaP&Lstatement,aswellasagainstyourcompetitors.

BalanceSheetThe Balance Sheet helps you in keeping track of your companys solvency and consequently theabilitytotake-uploanandinvest intocapacitybuildingand/ordevelopmentprojects.Youcanalsocomparewithyourcompetitors.

CashFlowStatementThe Cash Flow Statement helps you in analyzing actual cash flows. It is extremely important tomaintainminimumcash levelwith the company. You can also compare itwith previous year andpro-formaP&Lstatement,aswellasagainstyourcompetitors.

Product-WiseProduct-WiseisaveryimportantstatementthatprovidesNetContributionofeachproductinyourcompanysportfolio.NetContributionisequaltoexcessofsellingpriceovervariablecosts.Ithelpsyouingaugingwhichproductismakingmoneyandwhichdoesnt.

ProductResearchThereportavailableatacostof500,000givesaninsightonvariousproductsavailableinthemarketCharacteristics,Price,AdvertisingBudgetandAdvertisingResearch.

SegmentSalesResearchThe report available at a cost of 500,000 gives an insight on the product purchases by variouscustomersegmentsLowEarners,HighEarners,Geeks,ElitesandOthers.

ChannelSalesResearchThe report available at a cost of 500,000 gives an insight on the product sales through variousshoppingchannelsCompanyOwnedShowrooms,SpecialtyStoresandMassMerchandisers.

ProductPerceptionsThereportavailableatacostof500,000givesaninsightonperceptionofproductcharacteristicsbyvariouscustomersegmentsLowEarners,HighEarners,Geeks,ElitesandOthers.

SegmentAwarenessResearchThe report available at a cost of 500,000 gives an insight on the level of awareness of variousproductsamongcustomersegmentsLowEarners,HighEarners,Geeks,ElitesandOthers.

SegmentWillingnessResearchThe reportavailableatacostof500,000givesan insighton the levelofwillingnessofpurchasingvariousproductsamongcustomersegmentsLowEarners,HighEarners,Geeks,ElitesandOthers.

SegmentAvailabilityResearchThe report available at a cost of 500,000 gives an insight on the level of availability of variousproductsamongcustomersegmentsLowEarners,HighEarners,Geeks,ElitesandOthers.

CompanyOutreachResearchThe report available at a cost of 500,000 gives an insight on outreach of various companies Showrooms,Stores,Salespeople,CSRActivityandBrandLoyalty.

ConsumerSurveyResearchThe report available at a cost of 500,000 gives an insight on the media channel and shoppingchannel used by the various customer segments Low Earners, High Earners, Geeks, Elites andOthers.

MarketSizeResearchThereportavailableatacostof500,000givesaninsightonsizeofvariouscustomersegmentsandlevelofpenetrationLowEarners,HighEarners,Geeks,ElitesandOthers.

LeaderboardThepagewilldisplayallthecompaniesindescendingorderofshareprice.