This slide is the result of CESIM simulation done by students of Business School at Chulalongkorn University (CU), Team DIEHARD [scored 29/30 1st place for applying strategies creatively, low volatility stock price with sustainable growth]. By reading this, you will gain insights on how Cesim operates and how to win it. This slide is displayed for illustration purposes. CESIM Global Business Challenge is a simulation based on real life scenario. It is used to aid the users to understand more about the economic variables and how they affect the business operation. Users can get to decide on how the virtual company should operate to win the market. CESIM website: http://sim.cesim.com/ Feel free to share your thoughts and experience about CESIM below.

1. Cake | Extra | James | Sukree

2. Overall
Results
Die Hard
Strategy
Learning
Agenda

3. Approach to CesimResults

4. Approach to CesimResults
Results Strategy Learning
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5. Approach to CesimResults
Results Strategy Learning
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6. Approach to CesimResults
Results Strategy Learning

7. Strategy Timeline
Initial Strategy
Price War
Strategy
High Tech
Strategy
Diversification
Strategy
Results Strategy Learning

8. • Tech 1: low price, low feature – focus on volume
• Tech 2: high price, max feature
• Gradual shift from tech 1 to tech 2
• Wait for lower R & D price for tech 3 & 4
Approach to CesimInitial Strategy (Round 1-5)
Results Strategy Learning

9. • Price War
• Round 1: Loss $6,286, heavy investment in Tech 2
Tech 1: Production > Demand, lose out on price
Tech 2: Production < Demand, badly underestimated demand
for tech 2
 Tech2 outsource 500 from 2000, demand 1236; lost opportunity
• Round 2: Profit $237,277, rapidly increased tech 2 features
Tech 1: Production > Demand, every group lowers price
Tech 2: Production > Demand, overestimated tech 2 growth
 Realized Price War had begun
 Response: slightly lower tech1 price and higher tech2 price except Asia – Die Hard won’t enter price war
• Round 3: Loss $29,382, Die Hard finally No.1 (lowest loss)
Tech 1: Production > Demand, price war + promotion war + bad economy
Tech 2: Production > Demand, more features + higher price + didn’t meet target due to promotion
attack from other groups
 Die hard didn’t participate in the price war, so managed to avoid heavy losses like all other groups
Approach to CesimOutcome
Results Strategy Learning
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10. • Stage 1: Reverse psychology
Everyone had a loss
Coaching (believed that most groups would reconsider engaging in a price war)
Expected higher price
• Stage 2: Die Hard’s response
Capitalize on everyone’s decision to increase prices by lowering prices heavily
• Other groups’ response:
Some groups increased price as expected!!! , others experimented with new Techs
• Stage 3: Die Hard’s future strategy
Stay in Tech 1 and 2 + capture the market with fewer competitors +
wait for new tech costs to drop
Approach to Cesim1st Coach
Results Strategy Learning

11. • Round4: Profit $156,102, Extreme price dumping
• Tech 1: Production< Demand, underestimated demand again (lost opportunity)
• Tech 2: Production>Demand, price too high for feature + other groups enter new tech
Approach to CesimOutcome – After 1st Coach
Results Strategy Learning
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12. • Realized that profit potential of old tech was too low
• Profit margin too low
• Realized that market does not open up with fewer competitors
• Overtaken by “Statos”
Approach to CesimHigh Tech Strategy (Round 5-6)
Results Strategy Learning
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13. • Round 5: Profit $27,660, met targets + groups move to new Tech as expected + falling
behind Statos + Die Hard begins investing in new tech + start paying dividend
• Tech1: Production ≈ Demand
• Conservative with buffer
• Huge price war in Asia
• Tech2: demand > production, wanted to avoid losses from
over-outsourcing
Approach to CesimOutcome
Results Strategy Learning
• Round 6: Profit $107,901, overtaken by many groups
• Tech 1: Production > Demand, consumer move to Tech 4
• Tech 2: Production < Demand, other groups moved out + Die hard
allocated more outsource to tech 4
• Tech 4: Production >> Demand, promotion + first mover advantage of
other groups resulted in lower demand for Die Hard
• Massive loss due to outsourcing 1600 while actual demand was 1100
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14. • Realized massive potential of Tech 3 (due to Scenario Analysis) +
Decided to do low price Tech 3
• Die Hard decides to go for every tech to maximize utilization + profit
• Capacity constraint set higher price by having all 4 products
Approach to CesimDiversification Strategy (Round 7-10)
Results Strategy Learning

15. Approach to CesimDiversification Strategy (Round 7-10)
Results Strategy Learning
Scenario
Analysis

16. Approach to CesimDiversification Strategy (Round 7-10)
Results Strategy Learning
Utilization

17. • Round 7: Profit $140,651, + Begin investment in Tech 3 + stop invest in Tech 4 + Intense Data Analysis +
Scenario Analysis
• Tech 1: Production > Demand, demand continues to fall except in Asia
• Tech 2: Production ≈ Demand, growing in Asia (but smaller profit potential compared to Tech 3), falling in Europe
• Die Hard moved to Tech 4 in US
• Tech 4: Production ≈ Demand, set premium price in US and dump the rest in EU; Premium Price Dumping Strategy
Created
Approach to CesimOutcome
Results Strategy Learning
• Round 8: Profit $341,774, Die Hard returns with a vengeance, Tech 3
drives profit
• Tech 1: Production > Demand (constrained due to production capacity)
• Opportunity to increase price
• Tech 2: Production > Demand, penetrated the US market at low price
but the market was too small
• Tech 3: Penetration Pricing, Production < Demand in Asia; Production>
Demand in EU due to lack of features compared to competitors
• Tech 4: Production ≈ Demand, Premium Price Dumping Strategy (600,000)
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18. • Round 9: (we thought this was the final round**Plant decision): Profit 519,630, found the
way to maximize potential of all techs.
• Tech 1: Production<Demand, Asia demand was very strong even at higher price
• Tech 2: Production<Demand, market continues to grow in the US, better than expected
• Tech 3: Production<Demand; continuous growth in all market
• Tech 4: Production<Demand; continue premium price dumping strategy
• Reached 100% capacity everywhere
• promotion attack drives sales, used instead of R & D
• Round 10: Profit 794,050
• Tech 1:Production<Demand, Asia demand was very strong even at higher price
• Tech 2:Production<Demand, promotion keeps demand high
• Tech 3:Production<Demand, demand marginally affected by higher price
• Tech 4:Production<Demand, continue premium price dumping strategy
• Die Hard’s strategy pays off
• Slightly higher price would have taken Die Hard to No.2 or even No.1
• High and continuing growth in profit
Approach to CesimOutcome
Results Strategy Learning
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19. Approach to CesimApproach to CesimAnalyze the
Market
Determine Tech
for each Market
Create an optimal
Production plan
Determine R & D
Set the Prices
Determine the
Demand
Tweak Logistics
Decide on
Financial Issue Reviewing
Results Strategy Learning

20. Approach to Cesim1. Analyze the Market
Results Strategy Learning
• Actual = Budget
• See Competitors
?

21. Approach to Cesim2. Determine Tech for Each Market
• Coverage diagram
• Intense Data Analysis
• Scenario Analysis
Results Strategy Learning

22. Approach to Cesim3. Create an Optimal Production Plan
Yes No
Results Strategy Learning

23. Approach to Cesim4. Determine R & D to be Invested
• See competitors’ R&D Expense
• See tech growth potential
• ROI > Cost
Results Strategy Learning

24. Approach to Cesim5. Set the Prices + 6. Determine Demand
Results Strategy Learning

25. Approach to Cesim7. Tweak Logistics
Results Strategy Learning

26. Approach to Cesim8. Decide on Financial Issue
• Constant Dividend payment over the period
• Constant Share buyback
• Payback debt if cash is still in excess
Results Strategy Learning

27. Learning

28. Approach to CesimLearning
• Teamwork and Synergy
• To anticipate and manipulate competitors’ move
• First-move incentives
• Understand how market works
• Customer demand (Price promotion sensitivity)
• Intense Data Analysis (IDA)
• Beat-the-Competitor Analysis (BCA)
• Learning Curve and Economies of Scale
• Premium Price Dumping Strategy (PPD)
• Multiple Scenario Utilization
• Transfer Pricing and Logistics Optimization
• Demand estimation process
• Face with reality
Results Strategy Learning

29. Approach to CesimLearning – Teamwork and Synergy
Results Strategy Learning
• Time arrangement
• Meeting scheduling
• Internet
• Face to face
• During coaching
• Teamwork and collaboration skills
• Everyone attends coaching session
• Delegate responsibility
• Learn to trust
• Utilization of diverse backgrounds
• Learn to improve overtime (TQM)

30. Approach to CesimLearning - Anticipate & Manipulate Competitors’ Move
Results Strategy Learning

31. Approach to CesimLearning – First’s Mover Incentives
Results Strategy Learning

32. Approach to CesimLearning – Understand How Market Works
Results Strategy Learning
• Customer’s Perception
• Global Economy
• Uncertainties
• Tax
• Tariff and Import Duties
• Currency
• Competitors

33. Approach to CesimLearning – Customer’s Demand
Results Strategy Learning
Demand (Q) is function of:
• (-) Price
• (+) Features
• (-) Substitute products (competitors, other techs)
• (+) Promotion
• (+) Length of time in the market
• (+) Market growth
Supply = Production Capacity
• In-house
• Outsource
• Capacity Constraints

34. P*Q
Analyze why they change market
over the round
• Maybe tech1 performed better
in here than tech2, or they lack
capability to produce tech2
efficiently
Determine the tech with the
highest revenue
Approach to CesimLearning – Intense Data Analysis (IDA)
Results Strategy Learning

35. Market Growth from the
Market Condition
Product Lifecycle
• Growing
• Peak
• Declining
Peaked! And continue declining Declining stage!
Approach to CesimLearning – Scenario Analysis
Results Strategy Learning

36. Results Strategy Learning
Approach to CesimLearning – Beat-the-Competitor Analysis

37. Results Strategy Learning
Approach to CesimLearning – Beat-the-Competitor Analysis
Cracking
R & D

38. Approach to CesimLearning – Beat-the-Competitor Analysis
Cracking
Production
Constraints
Results Strategy Learning

39. Results Strategy Learning
Approach to CesimLearning – Beat-the-Competitor Analysis
Consequences

40. Learning Curve Production Cost Function
Results Strategy Learning
Approach to CesimLearning – Learning Curve & Economies of Scale
• Allow workers to learn
• Achieve economies of scale
• Keep the plant utilize
• Avoid idle or over-utilize

41. Approach to CesimLearning – Transfer Pricing & Logistics
Results Strategy Learning

42. Approach to CesimLearning – Transfer Pricing & Logistics
Results Strategy Learning
Global

43. Approach to CesimLearning – Premium Price Dumping Strategy
Results Strategy Learning

44. Approach to CesimLearning – Premium Price Dumping Strategy
Results Strategy Learning

45. Approach to CesimLearning – Premium Price Dumping Strategy
Results Strategy Learning

46. Approach to CesimLearning – Multiple Scenario Utilization
Results Strategy Learning

47. Approach to CesimLearning – Demand Estimation Process
Results Strategy Learning

48. Approach to CesimLearning – Demand Estimation Process
Results Strategy Learning

49. Approach to CesimLearning – Demand Estimation Process
Results Strategy Learning

50. Approach to CesimLearning – Reality
Results Strategy Learning
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Die Hard Inc.

51. Approach to CesimLearning – Reality
Results Strategy Learning
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52. Approach to CesimLearning – Reality
Results Strategy Learning

53. Approach to CesimLearning – Reality
Results Strategy Learning

54. Approach to CesimConclusion
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55. Approach to CesimConclusion
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56. Approach to CesimSun Tsu Quote

57. Thank You

58. Approach to CesimFeedback
• Does not take into account of overall stability over rounds.
• Limited components
• Promotion effect over time not clearly defined + first mover advantage
• Overall (Can learn more than learnt in textbook + application)
• We all enjoy it
• Should continue for the future
Note: We claimed an extra point for being
the first group to come up with the group
name and slogan

59. Approach to CesimAppendix 1 – Excel Analysis

60. Approach to CesimAppendix 1 – Excel Analysis

61. Approach to CesimAppendix 1 – Excel Analysis

62. Approach to CesimAppendix 2 - Results

63. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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64. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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65. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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66. Approach to CesimAppendix 2 - Results
Results Strategy Learning
Cumulative Total Shareholders Return (%)

67. Approach to CesimAppendix 2 - Results
Results Strategy Learning

68. Results Strategy Learning
Approach to CesimAppendix 2 - Results

69. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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70. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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Diehard Red Invoke Survivor Statos Kudeta

71. Approach to CesimAppendix 2 - Results
Results Strategy Learning
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72. Approach to CesimAppendix 3 – Sun Tsu Quotes