The RMG simulation
In this web-based simulation, students will be taking over an existing retail business, the Adler Company, that has not been performing up to the expectations of the Board of Directors. The executive team must begin by identifying their target markets and developing an overall strategy that will allow them to gain a competitive advantage over rival firms. Participants make quarterly Merchandise Planning & Allocation, Pricing, Promotion, Store Operations, Human Resource and e.Commerce decisions.
The Adler company initially operates two stores in each of two markets and offers four major merchandise categories. Teams can adjust their merchandise assortments, media mix, pricing and employee recruiting & compensation plans as they work on turning around their firm. After the first year teams are able to add new stores, remodel existing stores, and / or add a new e.Commerce channel. Students purchase quarterly market analysis reports to assess their competitive position in the market and adjust their strategic plan to more tightly focus business tactics.
The executive team has 2 years (8 business quarters or decision periods) to turn around the company. Within this time frame, they should become a self-sufficient firm, earning substantial profits from their operations.
A Balanced scorecard is used to measure each firm's performance and to compare the results among the competitors. Each firm's performance is based on merchandizing effectiveness, financial performance, marketing performance, investments in the firm's future, financial risk, creation of wealth, asset management. The use of the Balanced Scorecard encourages students to manage a host of performance criteria at the same time.
The Retail Management Simulation provides an excellent opportunity for enhancing leadership and teamwork skills and promotes better decision making by closely tying strategic planning and execution decisions to company performance. Further, the simulation facilitates a greater understanding of the financial impact of merchandising, pricing, promotion, store operations and human resource decisions and how they flow to bottom-line performance. While maintaining a bottom line focus, the teams must also understand the importance of consistently delivering customer value in light of the competitive marketplace.
During the simulation exercise, each team member assumes an area of responsibility:
- Merchandise Planning & Allocation
- Pricing & Promotion
- Store Operations
- Market/Consumer Research
- Overall Company Leadership
Quarterly Reports are Provided on:
- Merchandising Plan v. Actual by Store and Category
- Income Statement
- Balance Sheet
- Market Analysis – Market Share by Consumer Segment, Competitive Promotions & Pricing, Economic Trends & Seasonality
The unique benefits of the Retail Management Simulation:
- Brings Management Education Alive – linking key concepts and real time decisions
- Presents Realistic Scenarios – participants deal with business decisions and situations that are commonly encountered in real life
- Increases Knowledge Retention – enables the main learning points to be supported by actual decisions made by team members
- Enables Real-Time Team Collaboration – participants work together in a team building format to formulate their business strategies and tactics and receive timely feedback on their decision effectiveness