Business Simulation Report Of Abacus Ltd

Company Overview

Business simulation is a kind of simulation which is mainly used for the Business education, business training and analysis. The simulation could be scenario-based or numeric-based simulation. Most often, the business related simulations are mainly used for the business education training and business development.

The objective of this report is to provide a Project Simulation Report, where the SWOT analysis of the firm will be evaluated. The implementation and simulation for improving the stakeholder’s value will be determined. The SHV results will be obtained. The simulated screenshots will be provided for a clear picture (Barnet, 2017).

Abacus Ltd is a bicycle manufactures, bikes have unique style and ethos that are created with passion. The aim of the company is to produce a quality base bikes for an enthusiastic ride. Apart from this, its goal is to attain the position of a finest bike manufacturers, in the market.

Mission

Abacus Ltd confers to produce products that solely are devised for the requirement of the customers. Lot of choices are to be done for the customer requirement, it can be irresistible to conclude the desire fixtures that prevails the best.

Vision

Our vision is to produce quality service to the customers to attain the customer satisfaction. It also has the vison for stimulating the cycling culture and life style.

Company Structure

 Abacus Ltd bike are marketed in almost all countries.

General Director: Luca

Manager: Joao

Secretary: Melissa

Strengths

1. The bicycles are developed or designed by athletic coach and by specialized bicyclists. Thus, the bicycles are much efficient and follows the kinesiology.
2. They use more effective technological tools for testing the products.
3. It offers high quality bicycles.
4. It maintains the public relations.
5. It has good advertising strategy.

Weakness

1. New entrants in the market, can increase difficulties for the firm.
2. In the initial two years, only limited bicycles are available.
3. The products are highly professional, for normal people.

Opportunity

1. It has a chance to be a leading producer of Bicycle and takeover the market.
2. Use of innovative technology, to improve the production of bicycles.         

Threat

1. Direct movements of opponents are a threat for the company.
2. The product’s price is costly, for the firm to produce (Bakouros and Kelessidis, 2000).

Abacus Ltd represents the bicycle industry in the capitalist economy. Consumers in this market are able to buy the bicycles as per their need. Abacus Ltd include three types of section in this market they are Low cost Youth bikes (YY), mid-ranged mountain bikes (Adv5) and the high cos road bikes (RR). Owing to the competitive nature of the market economy, the local manufactures are able to produce only one segment that is mountain bike section.

Implementation includes the Industry benchmark report, market summary of the products and minutes for the company Abacus Ltd from the year 2016 to 2021. The following screen shots gives the implementation process (Kwak and Ingall, 2017).

The management process consists of formulating the implementation plan, strategic plan and evaluating the performance. Evaluation is nothing but to measure how long the process have progressed, to meet the objectives of the company. Evaluating our current position is essential and evaluation is a cyclic process (Verbeke, 2013).

Strategic Planning of the Firm

First year decision

In the first year decision, the market share and the estimated controlling for the next year is decided. The market share is estimated as 18.3%.

Shareholders value (SHV)

The SHV for the year 2016 is $11.26 with 0% in cumulative change.

Second year decision

During the second year, the decision are on the product information and review is conducted. For the year 2017’s profit after tax is calculated as $953,771, market share is analyzed as 18.3%, awareness is .35% and the PR is 0.09%. The product information is also given as the planned units is 22,000 and the forecasted units is 23,000. The retail price is decided to set as $720.

Shareholders value (SHV)

 The shareholder’s value is the highest among all of its competitors that is, $13.9

Third year Decision

The third year decision holds review and the product inventory. It covers the new decision and manufacturing the control factor capacity. Here, the long term debt is controlled. It holds the market share of 19.6% (highest share) with the retail price $720.The awareness percentage is 0.47%, the PR is 0.10%. Gross Margin is $8,755,392 and the profit after tax is $1,868,007.

Shareholders value (SHV)

Abacus Ltd holds the highest shareholders value of $16.94 with the cumulative change of 50%.

Fourth year Decision

The third year decision holds the review, efficiency, quality and the product inventory. It covers the new decision and manufacturing the control factor capacity. Here, the long term debt is controlled. It holds the market share of 18.9% (highest share) with the retail price $720.The awareness percentage is 0.48%, the PR is 0.11%. Gross Margin is $8,786,266 and the profit after tax is $1,885,846

Shareholders value (SHV)

Shareholders value is $19.20 with the cumulative change in 71%.

Fifth year Decision

This year includes the review, improvement and the new ideas to be implemented, this makes to improve the performance. Product contribution is derived from the gross margin. Ide4as are developed to create new products. Gross Margin is $26,454,816 and the profit after tax is $9,888,055.

Shareholders value (SHV)

Shareholders value is $53.46 with the cumulative change SHV as 375%.

The research information include the price, quality, quantity distribution channels and advertising. From the market summary for the period 2016 it is analyzed that the 18,000 units of mountain segment are sold in the previous year with no lost in sales with the retail price $700, market share is 14.3%. At this summary it shows that there is no sale in the road segment and the youth segment. For the next year it is shown that the Abacus Ltd has increased its units of sales to 24,350 units with 497 lost in sales its market share raises to 18.35 than its customers. The retail price is set as $720. For the year of 2018 it is noted that the Abacus Ltd further increased its sales to 28566 units with the highest market share of 19.6% with $750 as its retail price, the lost sales is zero. For the year 2019 bit has the same market shares with increase in sales in units. In the year 2020 it has sales in road and the youth segment. For road segment 11,000 unit of sales with 496 lost sales, mountain segments 39,392 units and youth segment holds 37,764 units of sales. In the year 2021 it has its mountain segment sales for 39,292 units, road segment 11,000 units are sold with lost sales of 4026 and youth segment holds 37,764 units.

SWOT Analysis

The minutes of meeting is as follows (13+ Meeting Minutes Template – Free Samples, 2017) (minutes, 2017):

Meeting Title:  Year 1- 2017 Marketing and development decisions

Meeting Date:  29/08/17                      Meeting Time:  11am                Meeting location: At KOI

Meeting called by	Luca
Type of meeting	Annual
Facilitator/ Chairperson	Joao Jornada
Note taker/ secretary	Melissa Beck
Attendees	Luca, Joao and Melissa

Agenda Items

Agenda Topic: to develop a best Performance

Discussion	For higher product development product segmentation strategy planning must be focus should be made to increase the profit for Abacus ltd, actions to remove or pay for the elements in favor for customers.
Conclusions	In the first year of manufacturing of product Adv5 the retail price is being set as $750, cost for advertising is concluded for $3,500,000.The retail margin for distribution
Action Items		Person Responsible	Deadline
Product price setting		XYZ	30/08/17

Meeting Title: Year 1- 2017 Marketing and development decisions

Meeting Date:  05/09/17                      Meeting Time:  11am                Meeting location: At KOI

Agenda Topic: Strategy

Discussion	A key element of marketing effort is awareness in branding for attracting the customers attention. The branding strategy can be promoted by advertising. Advertising can make impression towards the brand. The brand advertising cost is being set as $250,000. Discussion is made to make advertising over media such as · TV · Internet · Magazines
Conclusions	The decision making capacity by the customer is affected by the brand awareness from this we can attain customer loyalty. The decision is made as to set the first phase of advertising in media for $1,166,700.
Action Items		Person Responsible	Deadline
Product development decision	XYZ	06/09/2017

Meeting Minutes

Meeting Title:  Year 2- 2018 Brand Development and Distribution channels

Meeting Date:  17/08/18                     Meeting Time:  11am                Meeting location: At KOI

Meeting called by	Luca
Type of meeting	Annual
Facilitator/ Chairperson	Joao Jornada
Note taker/ secretary	Melissa Beck
Attendees	Luca, Joao and Melissa

Agenda Item

Agenda Topic: Distribution strategies, volume and pricing of products

Discussion	The product distribution channels can be attained by implementing “4 Ps” · Product · Promotion · Place · Price A right product must be promoted correctly at in proper place in right price. Revenue can be increased with the help of this strategy. Our distributing channels are the sports shop, bike shops and discount stores. The needs of the stores must be analyzed and strong marketing is recommended.
Conclusions	The decision for the channel marketing is made as                      Bike Shops       Sports Stores            Discount Stores Extra Support         $0                $300,000                      $0 Retail Margin         35%                 25%                         35%
Action Items		Person Responsible	Deadline
Product distribution channels	XYZ	24/08/18

Meeting Title: Year 2- 2018 Brand Development and distribution channels

Meeting Date:  19/09/18                      Meeting Time:  11am                Meeting location: At KOI

Agenda Topic: Product Planning Decision

Discussion	Discussion is made for the development of product and further decisions are made for the improvement is brand advertising. Planning is also made to increase the sales of “Adv5”from 22,000 units to 28,000. Cost of brand advertising is also planned to increase.
Conclusions	The cost of brand advertising is increase to $500,000. Plans made to increase the sales of units.      Product                               Adv5   Design Project Name             Adv5Proj Forecast Sales (Units)             28,000 Planned Production (Units)      28,000
Action Items		Person Responsible	Deadline
Sales of units	XYZ	20/10/18

Meeting Minutes

Meeting Title:  Year 3- 2019 Strategic Planning and Product development

Meeting Date:  29/08/19                     Meeting Time:  11am                Meeting location: At KOI

Meeting called by	Luca
Type of meeting	Annual
Facilitator/ Chairperson	Joao Jornada
Note taker/ secretary	Melissa Beck
Attendees	Luca, Joao and Melissa

Agenda Items

Agenda Topic: Capacity planning decisions

Discussion	This year discussion are made for the setting the capacity planner decision.
Conclusions	Capacity planning decision is made as Capacity Increase              2000 SCU Capacity Decrease             0 SCU Efficiency Improvement    $205,850 Quality Improvement         $969,000
Action Items		Person Responsible	Deadline
Budget is prepared for making capacity plans.	XYZ	3/09/19

Meeting Title: Year 3- 2019 Strategic Planning and Product development

Meeting Date:  12/09/19                    Meeting Time:  11am                Meeting location: At KOI

Agenda Topic: Product Marketing Decisions

Discussion	Plans are made to increase the sales of “Adv5”with the same cost of advertising of 2018. Expenditure for brand advertising is decided to increase. Since loss in sales occurs for 497 units.
Conclusions	Product                                                            Adv5 State                                                                Normal Design Project Name                                      Adv5Proj Retail Price                                                      $720 Advertising Expenditure                                  $4,000,000 PR Expenditure                                               $750,000 Forecast Sales (Units)                                     30,700 Planned Production (Units)                              30,000 The cost for brand advertising is increased to $600,000.
Action Items		Person Responsible	Deadline
Increasing the sales	XYZ	17/09/19

Meeting Title: Year 3- 2019 Strategic Planning and Product development

Meeting Date:  19/09/19                      Meeting Time:  11am                Meeting location: At KOI

Agenda Topic: Decision for distribution

Discussion	Resources program was devoted last time, decision taken for building the alternative method for distribution. This help us to grow aggressively.
Conclusions	Bike Shops   Sports Stores   Discount Stores Extra Support               $0          $300,000               $0 Retail Margin                25%           25%                 25%
Action Items		Person Responsible	Deadline
Distributors support allocation	XYZ	25/09/19

Meeting Minutes

Meeting Title: Year 4 – 2020 Decreasing Debt Raised

Meeting Date:  01/01/2020                      Meeting Time:  10am             Meeting location: At KOI

Meeting called by	Luca
Type of meeting	Annual Meet
Facilitator/ Chairperson	Joao Jornada
Note taker/ secretary	Melissa Beck
Attendees	Luca, Joao and Melissa

Agenda Items

Agenda Topic: To decrease the debt raised

Discussion	Any company cannot survive with the existing and outdated product. Thus, it requires advanced and improved product and this is the reason to launch a new product, which requires extra capital. It will be highly expensive, if a completely new product is developed from the scratch. Thus, an existing product is advanced and the capital is increased by taking debt.
Conclusions	In 2020, a huge amount of debt i.e., $10,000,000 was raised to support the redevelopment of Adv5, which was launched as a new product named “RR”. The launch of the new product was possible by the redevelopment of the already existing product “Adv5”, which led to the development of RR. Product                                                         Adv5                  RR State                                                       Redeveloped                New Design Project Name      Adv5Proj_Spec_Cost_2020     Swift_2020 Retail Price                                                          $735             $2,350 Advertising Expenditure                            $2,500,000           400,000 PR Expenditure                                            $600,000       $3,545,455 Forecast Sales (Units)                                       30,000             16,000 Planned Production (Units)                                30,000            16,500
Action Items		Person Responsible	Deadline
Long-term debt		XYZ		10/01/2020

Meeting Title: Year 4 – 2020 Production and marketing

Meeting Date:  11/01/17                      Meeting Time:  10am                Meeting location: At KOI

Agenda Topic: Production and Marketing

Discussion	The marketing and production of a new product requires capital, which cannot be compensated with the generated revenue of the firm. The product’s production and marketing must be effective to gather more sales. This is the main reason for opting for external debt.
Conclusions	The production  is RR is accomplished with Magazines, Internet and TV, which costed $400,000 for magazine and $0 for both TV and internet. The promotion of the new product is accomplished with $1,418,183 and $2,127,272, where the medium is internet and magazine. Marketing Product                         Adv5         Adv5            Adv5      RR              RR                   RR Media                                TV       Internet    Magazines     TV          Internet      Magazines Product Advertising  $833,333    $625,000   $1,041,667    $0                  $0         $400,000 Product PR                   $0                      $0     $600,000     $0     $1,418,183     $2,127,272   The production requires to meet the technical specification and necessary expenses, where the variable production cost is set as $133.73 and $600.00. Production Project Name                          Style   Technical Specifications   Variable Production Cost     Expenditure Adv5Proj_Spec_Cost_2020    46.25                                  50.00                                  $133.73        $2,000,000 Swift_2020                              24.67                                  67.25                                   $600.00        $1,000,000
Action Items		Person Responsible	Deadline
Production and marketing of the product	XYZ		14/01/2020

 Meeting Minutes

Meeting Title:  Year 5- 2021 Strategic Planning and Product development

Meeting Date:  29/08/21                    Meeting Time:  11am                Meeting location: At KOI

Meeting called by	Luca
Type of meeting	Annual
Facilitator/ Chairperson	Joao Jornada
Note taker/ secretary	Melissa Beck
Attendees	Luca, Joao and Melissa

Agenda Items

Agenda Topic: Introduction of new product

Discussion	The demand for the product RR is lost for 4026. Following this product introduction of new product is done for the product named “YY” with the design product name “Tiny_2021_C”
Conclusions	Product        Adv5                    RR                                    YY State          Redeveloped           Redeveloped                      New Design      Adv5Proj_Spec      Swift_Spec               Tiny_2021_C                    _Cost_2021        _Cost_2021              Retail Price      $739               $2,200                              $345 Advertising       $4,500,000      $0                                 $2,400,000 Expenditure                                                                             PR Expenditure      $800,000         $4,000,000                       $0 Forecast Sales     38,000             10,000                             40,000 Planned Production 38,500         10,000                             39,000
Action Items		Person Responsible	Deadline
Product planning	XYZ	05/09/2021

Meeting Title: Year 5- 2021 Strategic Planning and Product development

Meeting Date:  05/09/21                      Meeting Time:  11am                Meeting location: At KOI

Agenda Topic: Debt and equity decisions

Discussion	Debt and equity decisions are framed in this year. Plans are made to repay the long term debts and decision on the equity shares.
Conclusions	DEBT DECISIONS Debt Long Term Debt Raised             $0 Long Term Debt Repaid             $9,000,000 EQUITY DECISIONS Equity Equity Raised                             $0 Equity Repurchased                   $5,350,000 Dividend Per Share                    $0.50
Action Items		Person Responsible	Deadline
Debt repaying and equity	XYZ	12/09/21

Conclusion

The Project Simulation Report for a bicycle firm is completed successfully. The meeting minutes are provided on a weekly basis, for all the five years. MultiPlayer Simulation is utilized for simulation. The SWOT analysis of the firm is determined. The implementation and simulation for improving the stakeholder’s value is determined. Marketing strategy is analyzed for Abacus ltd. The SHV results are analyzed and obtained, where the simulated screenshots are provided.

References 

Anon, 2017. 13+ Meeting Minutes Template – Free Samples. [online] Template.net. Available at: <https://www.template.net/business/word-templates/meeting-minutes-templates/> [Accessed 20 Sep. 2017].

Anon, 2017. Meeting minutes. [online] Templates.office.com. Available at: <https://templates.office.com/en-US/Meeting-minutes-TM00002073> [Accessed 20 Sep. 2017].

Bakouros, D. and Kelessidis, D., 2000. PROJECT MANAGEMENT.

Barnet, M., 2017. MODELING & SIMULATION IN BUSINESS PROCESS MANAGEMENT.

Kwak, Y. and Ingall, L., 2017. Exploring Monte Carlo Simulation Applications for Project Management. [online] SpringerLink. Available at: <https://link.springer.com/article/10.1057/palgrave.rm.8250017> [Accessed 18 Sep. 2017].

Verbeke, A., 2013. International Business Strategy. Cambridge: Cambridge University Press.