In the second trimester of 2020, more than 50 students of MA-ITTM-03 and MA-IM-17 had a chance to participate in the Cesim Global Challenge simulation, putting theory into practice. In this simulation, students developed an understanding of global business operations in a dynamic, yet friendly, competitive environment. 12 student teams were set up and decision making included economical, political, financial aspects, as well as accounting, procurement, production, logistics, research & innovation, and marketing.
Teams managed a global mobile telecommunication company through technical evolution in a fast-paced 21st century operating environment. Students developed and executed strategies for their simulated company operations in the USA, Asia, and Europe. The best performing teams were awarded certificates by Professor Torsten Fischer, head of FHM’s International Department in Berlin.
“Generally, we would invest about half an hour analyzing our results. How much money did we earn this round? How much share did we occupy in the global market? Why did other teams sell more than we did? How could we increase the market capitalization of our company? Which market should we enter in the next round? All the answers should be found”, explained YunHui Ren (MA-IM-17), leader of the Winning Team with the highest market capitalization of all twelve teams.
Mahendra Gadhavi (MA-ITTM-03), leader of the Winning Team with the highest cumulative shareholder return, commented: “Coming from a mechanical engineering background my team and I had limited knowledge of global business functions like finance and marketing, but the simulation provided the perfect exposure to these functions and made our learning creative and very effective. Teamwork has been one of our best experiences. I personally consider the teamwork and the guidance from our instructor two major reasons behind our success in the simulation.”
Chengjie Tang (MA-IM-17), leader of another Winning Team, provided the following feedback: “we had the chance to ‘operate’ a company by ourselves at such a young age and had lots of fun. Even after the practice round, we were so confused and messed it all up. No one had a loss except our team. Then, after an analysis with our instructor, we invested a lot in R&D. Yes, and we made it! In round 2, we earned the biggest profit among all teams. We decided to use a skimming price strategy and offered smartphones with more functions in Europe than in Asia or the USA. However, the competition was much fiercer than we thought it could be. In order to win back and even expand market share we had to find a way to cut down our cost to offer a lower price, too, but also earn money.”
Srikrishna Edara and Divya Pinninti (MA-ITTM-03), leader of the team with the most impressive turnaround explained their unconventional, but ultimately highly successful strategy: “For being a price aggressive competitor, we invested into a high number of plants/factories and it turned out to be very well in the final phases of the simulation. The initial big mistakes in round 3 pushed the team to a confused state and led to a downfall in the next two rounds. We spent approximately 3-4 hours per found analyzing results of previous rounds, mistakes we made, performance of competing teams and fabricating a plan to help us improve our performance.“
Instructor Klaus B. Zensen, Ph.D. concluded “simulations are a great way for students to use the tools they have learned in the class and to make decisions under uncertainty. And in the end, we instructors at FHM are teaching students to make decisions, trying to minimize risk and perform well. Students really must learn how to read balance sheets and profit and loss statements to find out what went wrong or what can be improved. In the debrief sessions, I highlighted the sales and profits of each team in each of the three markets USA, Asia and Europe, the stock price and market capitalization, market share, whether they got a short-term loan (which indicates poor cash management), capacity utilization, and how these variables affect team performance. If there was a key mistake made by several teams, I would point it out.
I was happy to see that many teams really pursued a clear overall strategy like low-cost or differentiation and actively identified opportunity gaps in the market. Students learned that there are no right and wrong answers, but the goal is to minimize the risk within a wide range of choices. Of course, students also must figure out how to optimize the team to perform better, just like in real life. This is a form of experiential learning and as an instructor I do not have all the answers, either. I am operating with a lot of unknowns, too.“