MikesBikes-Intro (MB-I) is an Online Business Simulation that will give you the opportunity to run your own company, managing all the key functional areas of a Firm. It is used as an interactive tool to enhance the integration and learning of the basic concepts of business in a real life context:. You will get hands on experience at making critical price, marketing, operations, product development, and financial decisions.
Your team will take over an existing Bike Company starting as Brand Managers, but the Company President has announced their intention to retire in 3 years time. Your team has been selected as their successor so over the next few years will be gradually given more control over the company, eventually becoming the Executive Officers.
As the Managers of your MikesBikes Firm, the primary goal for your company is to enrich its shareholders (owners) by providing a return on their investment in your company. The measurement of this total return to shareholders is known as Shareholder Value (SHV), so the success of your company is measured by the amount of Shareholder Value you can create in comparison to your competitors.
There are two versions for students: Single-Player and Multi-Player. Both versions simulate the management decisions of a company in the bicycle industry and require you to make key marketing, operations, product development and finance decisions. In both cases the goal is the same: to maximize Shareholder Value.
There are two version of MikesBikes that will be used in your course, a Single- Player and a Multi-Player version. The MikesBikes Single-Player is a practice version where your challenge is to achieve the highest shareholder value that you can within 10 years (decision periods). You will then move onto the MikesBikes Multi- Player to compete against other teams within your course. Again the main performance measure is to maximize shareholder value. The combined actions of all of the firms in the market affect the performance of the whole industry.
In the Multi-Player version, you will compete against other student teams within a 4 to 7 Firm Industry competing for the highest Shareholder Value
Shareholder Value (SHV): Performance Measure of MikesBikes
As the Managers of your MikesBikes Firm, the primary goal for your company is to enrich its shareholders (owners) by providing a return on their investment in your company. The measurement of this total return to shareholders is known as Shareholder Value (SHV), so the success of your company is measured by the amount of SHV you can create in comparison to your competitors.
Your Share Price is driven by: Profitability and Earnings Per Share (EPS) E.g. Firm A has 2 million shares issued and made $1 million profit, EPS = $0.50 E.g. Firm B has 20 million shares issued and made $10 million profit, EPS = $0.50 E.g. Firm C has 2 million shares issued and made $2 million profit, EPS = $1.00
Debt to Equity (D/E) Ratio
A higher D/E ratio means higher risk which results in a lower share price Earnings Per Share (EPS) is calculated using your Net Earnings (Profit) divided by total Outstanding Shares; so to increase your Share Price (and SHV) you must focus on increasing Profit. SHV is a long-term performance measure so continued increases in profits will result in larger increases in SHV.
In MikesBikes-Intro, you will begin with basic Pricing, advertising and production decisions. As the simulation progresses, you will be given access to additional decision areas, which reflects on your rising in rank within the company. Take careful note of the year ahead report at the beginning of each decision period, as this will inform you of new decision areas that have become available. The table below clarifies exactly when those decisions become available to you, we recommend that you check back on this over the course of the simulation.