Monday, December 03, 2007

Parakram

The buzz had begun a month earlier. A team involving people from all functions – Finance, Marketing, HR, Operations had to be formed for a 3 stage Inter B school event. We called ourselves NMIMS Bulls. The Bulls were Ankit, Abhishek (Finance),Rahul a.k.a Raka ( Operations), Sreejith (HR) and me (Marketing). The first stage online quiz narrowed the teams to 20. There were IIMs and ISBs to intimidate us in the 2nd round Case Study competition. But the Bull was on a run and it came surging to the final round confidently beating the competition and being among the top 5 teams . Then came the real thing which made all the previous stages look minuscule.

It was a Business Simulation game which was to last 12 Straight hours. They say that it is the learning you should focus, not the result. And it was indeed a tremendous learning experience. There was plenty of material to be read and understood before the game started. So a lot of time was spent on the analysis of the information. And before we launched into the 12 hour marathon, we had a rough plan ready. The basic aim was to build a manufacturing company (with 3 million dollars given to us) and run it for 4 years with various constraints like Market demand, other teams’ strategies, attrition in the company etc.

Our strategy focused on being aggressive. We started with 2 plants, demand being not there in the market. The process started with us giving our strategy like number of plants to be constructed, salesmen to be hired etc for the first year in numbers to the administrator. The admin fed it in the simulator and gave us data like Balance Sheets, Profit Loss Statement, Cash Flows, Sales, Industry reports, future trends, views of industry people on the trends in the industry, R&D developments, attrition of Salesmen etc etc..

Within 15 minutes, we had to analyze those reports, plan for the next quarter and fill out the details like Selling Price, R&D expenditures, Expenditure on Sales Promotion, Salesmen hiring, No. of units to produce etc. This was then given to the admin who fed it again and gave us the same reports for the next quarters. The situation and company performance changed on basis of market conditions and other teams' strategies. The same process moved on for 16 quarters. The start was not well for us in terms of numbers. Due to the huge capacity we had built there were loads of inventories we accumulated each quarter. The second year went on with profits in the red for us. We were producing more than we could sell. Considering the aggressive strategy, we hired the max salesmen and at one point our cost on salesmen Salaries were eating into the profits like hell (32%). Our debt was at all time high and the bank was charging a hefty interest every quarter. But we persisted. Then came the lucky break for us. In the third year, due to the high R&D expenditure, we got a breakthrough in technology which made our product more salable for next 2 -3 quarters. But the problem was that it was a recession period in the economy and demand was quite low. But again our planning for future helped us. There came a huge export order and we were easily able to bid for it at relatively lower price (all teams had to bid for the order). That helped us see the profits in the positive for the first time in 3 years !!!! (They again went in red the next quarter is a different matter ;))

But we had recovered quite a bit by now. At least we were making good sales. At one point after 13 quarters we were quite confident that we were well ahead of others. The future plan for the last 3 quarters was well in place. The Market demand was at all time high. We had increased the price by around $1500 and were still selling. We had sufficient inventory and from the market reports we were buying we were sure that others were not producing even close to us. Victory was in sight. But then came the shocker. Along came an import order, where teams could buy products. We lost the bid. So now there was a good chance that all teams had plenty of finished goods. The market was good. So the line of reasoning suggested that prices would go high. We rubbed salt to the wound with this strategy. By quoting an exorbitant Selling Price, we could sell merely 36 units as against market average of around 250 – 300. The inventory had risen to 500 (huge number) and with 2 quarters left, we were almost in a soup. Suddenly we were thankful that we didn’t get the import bid because that would have added more finished goods. There was a light at the end of tunnel when a team approached us with offer to buy units (trading between teams had been going on in the past too). We sold most of the unsold items of previous quarter to this team who went by the forecast of huge surge in demand for next 2 quarters and bought the goods from us. The next problem for us was the huge production we were having in our factories. They had to be sold in the next 2 quarters. So we pulled back and lowered the price. The Sales team or “Pathe” as we jokingly called them were in place (we had not let the sales force decrease for all 4 years).

With these details we filled out the final data for the final 2 quarters (they had to be together this time) and waited. Waited to see if the light we had seen was the end if tunnel or the oncoming train. It was like the last ball if a thriller. We could be out or hit a six – anything could happen on that last ball. The problem was we didn’t know about what the other team(s) had scored. We waited for results for a long half hour. The results for last 2 quarters were being printed. It was a time when we discussed aimlessly. What does the expression of the admin is telling. That strategy was wrong. That was right. Was it really right? Fruitless discussions but discussions nonetheless. Nerves were on an all time high. Then the quarterly results were given. The first page opened was the Profit-Loss statement. It was positive – 17 lakhs profit. Then we saw inventory – zero. Bank debt – zero. Things were looking good. But we still didn’t know we had won or some other team had!!

The admin (who also designed the game) again made us wait for some 15 minutes and then gave his analysis. Under each analysis heading, Team 1 was coming on top. Team 1 did best in this and Team 1 in that. The strategy if Team 1 was best in this aspect and in that aspect. And we sat there holding the arm of the chair, the chair hurting under our forces. Then at the end of 12 long hours, we had 5 ROI’s (return on Investment) on the projector screen (along with results of 2 other separate modules – more about that later).

Team 1 had a big ROI of 179. The admin announced, “Team 3 were playing very well but they lost at one place in the middle due to XYZ reasons. Team 2 came close but for them it was more of a fluke than a real strategy(they had ROI of 139). But the team which had long term vision and strategy and blah blah blah in place was Team 1 and they are clear winners.”

All hell broke loose for Team 1 as they cheered, celebrated, shouted.

Team 1 was NMIMS Bulls.

Our Team had won the coveted Parakram with a prize money of cool Rs 50,000.




19 comments:

Tarun said...

sabash mere cheeteh.. oh I mean Bull...:):)..

I am proud of you

Sumit said...

Congrats man n waiting eagerly for treat. n i need the 45 pages aur zaldi deliver time 0 honi chaye

Cuckoo said...

Hearty Congrats !!

What an achievement and what a description, felt like I was part of the team. :)

Cuckoo said...

I am emailing this to some of my friends. :)

Amrut said...

Mind blowing blog man... The Sales team or “Pathe” as we jokingly called them were in place hahahahahah...
Mast hai..
But,lekin.. where is the part in which you mentioned about selling something? 200 Rs cig, etc etc...
Agar is blog main nahe daal sakta to kise aur main to daal...
haan I almost forgot...
Congraaaaaaaaaaaaaaaaaaaaaaaaaaats....
:):):):):):)....

Anonymous said...

Kudos Marketeer!
very intriguing post indeed
Me too need the that hefty report

Anonymous said...

Congo man!!..
Dont know ya but i guess ur team deserves it..:)

The Island Girl: said...

maujan...its so funnny to see u talk about BS,P$L, cash flows and inventory...
ne how all the best for future projects..and was that health biscuit CS part of this????

The Island Girl: said...

BULLS rule everywhere:)

Taurus-The Bull is no different!!

Alesea said...

Wow man...dat was some post...congratulations for winning the tough cookie...best of luck for the future

Amey said...

Congrats!!! Now that was a "parakram" (is that also a hindi word ?)

Now that the praising part is done, where's the treat? And "Olive Gardens" is not an option.

SiD said...

@Tarun: Thanks dude!!!

@sumit: abey tu to khud hi le sakta hai lappie mein se..

@cuckoo: thanks a lot... :)


@amrut: that 200 thing was also one separate outdoor module... more about it later.. the post was already very long... and thnks!!

@anon1: Thanks..kindly tell me who r u.. then only i can give you the report..

@anon2: definitely - i dont deserve it .. the whole team does!!

SiD said...

@island girl: Ya.. the health biscuit was part of the second phase of this competition only..
aur cash flow vash flow mujhe zada samajh nahi aate.. bas pata chal jaata hai ki acha hai ki bura hai!! :)

@alesea - Thanks a lot!!

@amey: hahaha.. olive garden!!! LOL..
aap mumbai aao.. treat mil jayegi (vaise abhi tak paise nahi mile :( )
and yes, that is a word in Hindi..

Ankit said...

Too Good man !!

I cant stop my self laughing and it was really one of the moments in life which is simply unforgetable !! Specially when he finally said " And Hence the NMIMS BULLS WINS " .. Kudos !!

50scent said...

I AM ANO No.1

NehaPandey said...

Hi,
What a welcoming blog for anyone who would be roving around your blog. Amazing.. Congratulations. Well explained with just right punches.
After knowing you thru your blogs and so impressed I just have one question - khate kya ho yaar?

SiD said...

@neha: wah re.. kisi ko to impress karne mein kamyab hua main life mein!!! ;)

khata kya hun?? tan ki shakti.. mann ki shakti.. bournvitaaaa :)

ARNAB said...

hey man....congrats on that achievement!!! i wanted 2 knw wat was the name of the simulation game u played??? im a student of the Schulich School of Business, Toronto nd would like to introduce this in my school!!!

SiD said...

@arnab: There was no name as such. A person has actually developed the simulation game over 10 - 12 years... The college had hired him. He came, organised everything and conducted the game. I am not sure it can be done in toronto as the guy was mumbai based..
but guess there are plenty of simulation games available online.. just have to shell out the moolah!!