Similarity and Differences between Management Theories and SimVenture - Case Study Example

Business Creation and Growth affiliation Business Creation and Growth Businesses are coming up day-in-day-out and it is good to have a guide that directs a new entrepreneur on ways to venture into a certain business and how to effectively and efficiently run his or her company. SimVenture is a business simulation that permits entrepreneurs to run and set-up their own businesses. It provides information on how to market your products, how to manage your resources, how to operate, and how to organize and locate your business. Additionally, apart from SimVenture there are different management theories that have been in existence from ancient times. The paper will compare and contrast these management theories with SimVenture. Table of Contents Business Creation and Growth 2 Abstract 2 Management theories 4 SimVenture 4 Market research 5 Consumer feedback 6 Competition research 6 SimVenture in sales and marketing 6 Selling point 7 SimVenture in finance 7 Product design 8 Production 9 Organization 9 Similarity and differences between management theories and SimVenture 10 Management theories Management theories are implemented to assist to increase the company’s service quality and productivity. A majority of leaders do not apply a single concept or theory when executing strategies in the place of work. They apply a combination of theories that are: contingency theory, theory X and Y, systems theory and chaos theory. Contingency helps leaders to come up with decisions centered on the issue at hand instead of one size fits all technique. Systems theory are applied by leaders who recognize how dissimilar systems have effects on the worker and how the worker affect the systems around them. Chaos theory is constant. Though some circumstances and events in a company can be altered, others cannot. Chaos understands that change is unavoidable and is infrequently controlled. Lastly, theory X and theory Y is where those leaders who believe that employees lack ambitions and require incentives use theory X while those who believe employee are driven naturally and take accountabilities use theory Y (Hill, Jones, & Schilling, 2014). SimVenture SimVenture is a business simulation that permits individuals to set up and run their companies (Clarke and Matthews, 2011). An individual is responsible for running his or her company and must be able to come up with strategies and make good decisions that will make a positive impact on the company. Each and every decision you come up with has a financial and time consequence. And every month the significances of all your decisions play out and interact. The market role is played by the simulation; this includes sales, orders, and inquiries and an individual can run his or her business for up to a period of three years. SimVenture was designed by business experts and entrepreneurs and backed up by e-learning specialists. This tool carefully reflects actuality and also slots in an affluence of related business information. The data within SimVenture is also offered to assist one to run a much more efficacious virtual business. This tool is used each time to help one understand the best business practices that will enable an individual to run and set up a business without having to fear about the risks (Cole and Kelly, 2004). Nearly all related business concerns are covered in the simulation. The authenticity of SimVenture is attained through the collaboration of multiple variables with a variety of algorithms that execute calculations as every month progresses. This model can be used even if one does not have a great deal of technological awareness. As soon as a new game is formed, SimVenture comes up with a distinctive set of information which describes the virtual environment for the period of that simulation. Moreover, a number of settings can be changed to alter the amount of challenges present in each and every game (Corina Edwards, Harte and Stewart, 2010). Market research The virtual market comprises of a large number of potential consumers who are categorized in six market segments: ICT Businesses; Solo Businesses; Corporations; Professional services; Service companies and Engineering companies. Therefore, one should be aware that each and every consumer has their distinctive set of features and must average out this features to come up with a market report that can be specially made in the simulation. The information included in each category is broadly similar every single time there is loading of a new game but will vary in detail. For instance, one may notice that corporations all the time order in hefty quantities while the real order size will differ from game to game. The market report comprises the following information for each of the six segments. Firstly, the market size, is the sum of individual consumers in this section. Secondly, the order frequency is how frequently consumers within this section purchase. Thirdly, the average price should arise from a range of reflections on the consumer’s tolerance to dissimilar prices. Additionally, the order size, is the regular amount of units ordered in a particular purchase. Lastly, product preferences, is the significance consumers attach to particular product features (Ezz, Koechlin, & Stergioulas, 2012). Consumer feedback Furthermore, in each section of the market every virtual consumer who is present has a distinctive identity. So the preferences and characteristics noticed in each report on the market will differ for each one. There should be frequent consumer research so as to be able to analyze the reactions of a sample of existing and potential consumers. This will allow one to construct a more comprehensive illustration of the nature of their selected target section’s preferences. The communication with independently defined consumers means a range of plans can be fruitful in similar markets, in effect forming niches in the marker sections. The business turnover might not be big but can be still enough to withstand a sensible amount of profit. Competition research Moreover, in each segment of the market there is a main competitor that is also formed, therefore a competition research must be carried out so as to find out the selling price and product design of the market leaders. Through this one can adjust his or her prices if their market share is endangered (Gamlath, 2009). SimVenture in sales and marketing In sales and marketing, SimVenture helps individuals starting or wishing to develop their business by helping them to define the selling they will use in their sales and marketing campaign. Additionally, selecting market promotions that will enable a company to convey their information to potential consumers. And lastly, the sales channels that they will implement to back up their marketing campaigns. Every decision they come up with has cost and time implications since they are functioning with a fixed budget; therefore, they will be required to take a well-thought-out approach. They might require to abandon and resume the simulation in multiple times so as to become acquainted with the way SimVenture functions. There is no good lesson than learning from your mistake, therefore, through this mistakes one is likely to develop the skill rapidly to plan more cleverly and manage the development of the business fruitfully (Harte and Stewart, 2010). Selling point The selling points in SimVenture make available the communication that is taken through the entire sales and marketing activity in the game. So as a business to be effective, the selling point should match with the target segment preferences and the product specification. Marketing activities in the simulation have dissimilar levels of efficacy, reliant on the target segment that is nominated. Data on how operational the action will be in getting the different sections is presented in particular cases like advertising, providing percentages to direct the user in choosing a suitable technique to reach their selected market segment. In the sales channels, distributor sales and personal selling should be explored as part of the sales and marketing campaign. Personal selling tends to take a long time to generate assets, and one should go for the distributor sales that although they take a long time to negotiate and research, they offer the best chance to make a consistent amount of orders (Jensen and Yip, 2014). SimVenture in finance In the finance scenario, the business is established well after a period of one year in the market. The product is backed up and well designed by a sales and marketing campaign that will put up with a realistic number of orders for a period of approximately nine months. The business is robust, but it still requires watchful financial management in the short-range. Suppliers may threaten to withdraw credits as early as the first month of a financial crisis, and if the trend endures in the subsequent months without taking any actions, then the condition will carry on to worsen. Additionally, you as the owner of the business, you might employ an employee who has an over-ambitious strategic plan to take the company to another phase of growth and if his or her idea is applied then it would cause a financial collapse for the business (King, Newman and Thring, 2008). Therefore, before implementing a plan you should work on the economic component of the simulation to view the economic consequences of the proposed plan before making a conclusion on how it could be put into use so as to make it more practical. In developing an efficient and effective financial plan, one should identify the price for every activity on the strategy in the stimulation. Additionally, costs should be entered into the comprehensive profit and loss forecast spreadsheet to enable the owner to come up with financial forecasts, and they can use the three months actual figures to forecast expected expenditure and income for up to one year. Also, one should find the price of raising cash and supplement these into their forecasts. And lastly, the forecasting spreadsheet should be used in SimVenture to model alternate proposals (King and Newman, 2009). Product design In designing the products, one should be able to design products in a way that meets the needs of the consumers. Additionally, being able to select the correct mix of product characteristics while keeping the prices down. Market research should be conducted so as to be able to identify the needs of their consumers and redesign their products. Furthermore, the impact of the redesigning your products should be evaluated and the impacts they will bring to the business. However, if the redesigning production processes will make a loss to the company, then you should consider in implementing the transformations. Moreover, the impact the redesign will do on packaging, support, marketing, and sales should also be evaluated. Finding the correct supplier is also important, and the amount you have to pay for their services should be weighed. Additionally, the payment terms should be considered, and one should evade paying before the customers pay you (Mayer et al., 2014). You should also ensure the affiliation you have with the suppliers is good, and they should be reliable, providing correct goods that are of high quality, and also they should do it on time. Discounts should be done when buying bulk goods. Production In production, the procedure of how you produce should be cost-effective, and the stock should be enough to minimize to delays in availability. Also, you should not overproduce as the products may go bad, and this may bring about a loss. Lastly, outsourcing must not be considered as producing for yourself will make it easier for you to satisfy orders promptly. Moreover, you should monitor the reliability of your products frequently so as to achieve a greater level of quality. Checking your services and products before supplying to the consumer should be done so as to find the defects and rectify them so that you can prevent bad reputation. Problems in the process of manufacturing that bring about those failures should be highlighted, and correct actions should be taken to rectify them (King and Newman, 2009). Organization Furthermore, the organization should develop, train and recruit talented individuals. Whether you need to improve the employment process, hasten skills improvement or supplement that all significant sparks to away-day-events or teambuilding. To achieve all this, it is good to use SimVenture. Additionally, the location of your organization should be able to reflect a picture that is reliable with the services and products you offer. There should be sufficient space for all your services and where to store your products. A good location exposes the company to numerous potential consumers and before relocating you should consider the effects. The resources needed for the smooth running of the business, ranging from equipment’s, tools, transport, and furniture should be evaluated on the effects they have on your business. Some equipment’s that cannot be acquired should be hired and also vehicles can be paid for a duration of time (Smith, 2011). However, this processing of hiring should not be done in the long-term as they cost more. Workers in your company should not be overworked are the workers may become demotivated, less effective, stressed, become sick, and also their social life may be affected. In addition, you should be able to attain the targets that you set and should be conservative. Lastly, there should be legal aspects that run your company (Williams, 2011). These legal aspects comprise of contract laws, employment laws, and health and safety. Similarity and differences between management theories and SimVenture The majority of aspects of SimVenture are similar to the management theories, for instance, the motivation factor and how the workers are affected. Also, the aspect of change, as directed by the chaos theory, is similar to SimVenture, which advocates in redesigning products to meet customer needs. However some dissimilarity arises where the theory Y says that workers are self-motivated, this is contrary to SimVenture where it says the needs of the workers should be met so as to enable them provide good services and product to their consumers. Limitations that occur with using both the management theories and SimVenture are increasing prices in supply, fatigue, lack of funding, competition, and poor publication of the manufacturers (Neemuchwala, 2012). References Clarke, R., & Matthews, R. (2011). The Monograph: Creative Thought/Creative Practice–A Case Study. 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An evaluation of Simventure. Williams, D. (2011). Impact of business simulation games in enterprise education. Read More