Nx448 Business Game Report

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Contents
Part 1 Introduction3
1.1 Business Objective3
Part 2 Company Performance4
2.1 Round 14
2.1.1 Discrepancy analysis4
2.2 Round 26
2.2.1 Business Strategy6
2.2.2 Round 2 Forecast7
2.2.3 Discrepancy Analysis7
2.3 Round 38
2.3.1 Business Strategy8
2.3.2 Round 3 Forecast9
2.3.3 Discrepancy Analysis9
2.4 Round 49
2.4.1 Business Strategy9
2.4.2 Round 4 Forecast10
2.4.3 Discrepancy Analysis10
2.5 Key Performance Indicators11
2.6 Performance Evaluation Comments12
Part 3 Learning14
3.1 Financial Management14
3.2 Human Resource Management15
3.3 Operation Management16
3.4 Marketing Management17
Part 4 Team Performance18
4.1 Team18
4.1.1 Management Team18
4.1.2 Decision-making Process19
4.1.3 Leadership19
4.1.4 Team Role19
4.2 Individual20
4.2.1 My Contribution20
4.2.2 My learning about effective teamwork and decision making20
4.2.3 Suggestions for Improving My Performance21
Part 5 Conclusion21
Part 6 Reference22
Part 7 Appendices23
7.1 Design and Options23
7.2 Warranty Cost24
7.3 Other Key Performance Indicators25

Part 1 Introduction
This report will give a clear analysis and explanation of the company performance during the business game. Learning about four main business functional areas (Finance, Marketing, Operation and Human Resource) will be discussed in part 3. Team performance and individual assessment will be critically evaluated in part 4. 1.1 Business Objective

Moon Star Motors aims to provide customers with the ability to own a car and lead the customers to experience comfort and quality at an affordable price.We intend to create a distinctive place in the market for our products and build up brand value of quality and reliability in the mind of customers. The initial business objectives set up by management team is: * Increase sales annually

* Maximise our profit
* Sell out 98% of our cars for every round
* Obtain 16% return on investment by the end of round 4

| City Car - TIKI| Large Car - CRUISER| Total|
Forecast Production (Units)| 85,000| 35,000| 120,000 | Sales Income (£m)| 850| 833| 1,683|
Post Tax Profit (£m)| -| -| 20|
Bank Balance before Loan (£m)| -| -| -74|
Closing Bank Balance (£m)| -| -| 26|
Table 1.0 Forecast for year 1

Part 2 Company Performance
2.1 Round 1
2.1.1 Discrepancy analysis
Unsold stock

In round 1, we forecast to sell out both TIKI and CRUISER. However, only 80% of TIKI is sold, with 17,393 units left. We concluded three main reasons as following: * Supply over demand. We are over confident to sell big volumes with low price, but the market actually reached saturation. * Unattractive and inflexible options. In order to maintain low material cost, we only offer two options for customers to select. It might affect the popularity of our TIKI and make it less competitive compared with other car manufacturers. * Not enough promotion. We invested 23 million on market promotion via television and internet, which is about £200for every single car. We didn’t invest too much for this round because we want to firstly evaluate the effect of advertisement. Net profit

We forecast 20 million net profits and actual figure is minus 116 million. This is mainly due to the large amount of unsold stock and ineffective pricing strategy. The total contribution is unable to recover our fixed cost. In other words, the break-even point is set up too high and our sales volume did not reach BEP. Meanwhile, some overheads such as professional charges and warranty claims are not properly calculated. Gross margin

The difference between forecast and result for gross margin of TIKI and CRUISER is 3.21% and 7.08% respectively. It is mainly caused by the unexpected extra direct cost. For example, the worker strike increase our labor cost of both models and the option take-up is more than our estimate. Market...
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