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Created by
Arthur A. Thompson, Jr.
The University of Alabama
Gregory J. Stappenbeck
GLO-BUS Software, Inc.
Mark A. Reidenbach
GLO-BUS Software, Inc.
Ira F. Thrasher
GLO-BUS Software, Inc.
Christopher C. Harms
GLO-BUS Software, Inc.
GLO-BUS is published and marketed exclusively
by McGraw-Hill Education, Inc., 1333 Burr Ridge
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Copyright © 2022 by GLO-BUS Software, Inc. All rights reserved.
No part of this document may be reproduced or distributed in any form or by any means,
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Developing Winning
Competitive Strategies
2022 Edition
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
Copyright © GLO-BUS Software, Inc. Back to Top 2
GLO-BUS
This Participant’s Guide provides you with information about GLO-BUS and suggestions for successfully
managing your camera and drone company. Here is a quick reference to the contents:
How the GLO-BUS Exercise Works...................................................................................................... 3
Your Company’s Operations................................................................................................................. 3
The Worldwide Market for Action-Capture Cameras ......................................................................... 5
The Worldwide Market for UAV Drones............................................................................................... 6
Performance/Quality (P/Q) Ratings of AC Cameras and UAV Drones............................................. 7
The Retailers and Buyers of Action-Capture Cameras and UAV Drones........................................ 8
The Competitive Factors that Determine AC Camera Sales and Market Share .............................. 9
The Competitive Factors that Determine UAV Drone Sales and Market Share ............................ 13
The Importance of the Competitive Factors that Determine Sales and Market Share ................. 16
Crafting a Strategy to Be Competitively Successful........................................................................ 17
Making Decisions................................................................................................................................. 19
Product Design Decisions............................................................................................................ 20
AC Camera Marketing Decisions................................................................................................. 21
UAV Drone Marketing Decisions.................................................................................................. 24
Compensation, Training, and Facilities Decisions....................................................................... 26
Corporate Social Responsibility and Citizenship Decisions ........................................................ 29
Finance and Cash Flow Decisions............................................................................................... 30
Decision-Making Procedures ....................................................................................................... 32
What the Board of Directors Expects: Results in Five Key Areas................................................. 32
Scoring Your Company’s Performance............................................................................................. 34
Important Advice.................................................................................................................................. 35
What You Can Expect to Learn........................................................................................................... 36
Welcome to GLO-BUS. You are taking over the operation of a company that is in a neck-and-neck
race for global market leadership in two product categories: action-capture cameras (comparable to
those designed and marketed by global industry leader GoPro) and unmanned aerial view (UAV)
drones that incorporate a company designed and assembled action-capture camera. Your company
competes against rival companies that design, assemble, and market these same two products and
that are run by other members of your class. All makers of these two products—action-capture (AC)
cameras and UAV drones—compete head-to-head in four market regions across the world—EuropeAfrica,
Asia-Pacific, Latin America, and North America, and all companies currently have the same unit
sales volumes, revenues, and global market shares in both product categories.
In the most recent year, your company had worldwide sales of 840,000 action-capture cameras and
140,000 UAV drones. Prior-year revenues were $334.1 million and net earnings were $15 million,
equal to $0.75 per share of common stock. The company is in sound financial condition, is performing
well, and its cameras and drones are well-regarded by buyers. Your company’s board of directors has
charged you with developing a winning competitive strategy—one that capitalizes on growing consumer
interest in action-capture cameras and UAV drones and improves the company’s overall performance
year-after-year.
Your first priority as a GLO-BUS participant should be to absorb the contents of this Participant’s Guide
and get a firm grip on the character of the market for action-capture cameras and UAV drones, the
operations of your company, the cause-effect relationships affecting various aspects of your company’s
operations, and the procedures for participating in the exercise.
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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GLO-BUS is a computer-based exercise, modeled to reflect the real-world character of the globally
competitive market for AC cameras and UAV drones. The operations of your company and the
companies run by other students in your class are patterned after those of actual enterprises that
design, assemble, and market AC cameras and UAV drones. Cause-effect relationships and revenuecost-profit
relationships are based on sound business and economic principles. GLO-BUS enables you
and your co-managers to apply what you have learned in business school and to practice making
reasoned, businesslike decisions aimed at improving your company’s overall performance. Everything
about your company and the competitive environment in which your company operates has been made
“as realistic as possible” in order to provide you with a close-to-real-life managerial experience.
Each decision period in GLO-BUS represents a year. The first set of decisions you will make is for
Year 6. You will make decisions each period relating to the design and performance of your company’s
two products (21 decisions), assembly operations and workforce compensation (up to 8 decisions for
each product), pricing and marketing (7 decisions for cameras and 6 for drones), corporate social
responsibility and citizenship (up to 6 decisions), and the financing of company operations (up to 8
decisions). In addition, there are 9 entries for cameras and 8 entries for drones involving assumptions
about the competitive actions of rivals; these entries help you to make useful forecasts of your
company’s unit sales (so you have a good idea of how many cameras and drones will need to be
assembled each year to fill customer orders). Plus, there is accounting and cost data to examine,
import duties and exchange rate fluctuations to consider, and shareholder expectations to satisfy.
Video Tutorials for each decision page will help you get started. And there are Help sections for
each page that provide valuable information about each decision entry, important cause-effect
relationships, and decision-making tips.
Complete results of each decision period become available online about 15 minutes after the deadline
for each decision round. Detailed information and feedback provided in the Camera & Drone Journal,
the Competitive Intelligence Report, and the Company Operating Reports provide essential information
about each company’s performance, assorted industry outcomes, updated demand forecasts, your
company’s competitive standing vis-à-vis rivals, and other statistics that enable you to determine what
actions to take to improve your company’s performance in upcoming decision rounds.
The decision round schedule developed by your instructor indicates the number of decision periods that
you will be running the company. You should use the practice round(s) to become familiar with the
software, digest all the information provided on the decision pages and in the reports, and get a glimpse
of what to expect before your management team’s decisions start to count.
The Corporate Lobby page functions as your “gateway” for all GLO-BUS activities. Plus, the Corporate
Lobby page reports the latest interest rates and exchange rate impacts. Take a couple of minutes to
familiarize yourself with the features and information on your Corporate Lobby page, all of which will
come into play during the exercise. The Recommended Decision Procedures link (Participant’s
Materials button) is especially worth a few minutes of your attention.
Your company began operations five years ago and maintains its headquarters in Taiwan. It
assembles wearable or mountable video cameras smaller than a teacup and camera-equipped drones
at recently-constructed facilities in Taiwan. The company’s action-capture camera models deliver
stunning video quality and have powerful photo capture capabilities. Once the cameras are assembled
and tested, they are shipped directly to multi-store chains and online retailers that sell electronics
products and to a wide variety of local retail shops selling cameras or sporting goods equipment or
outdoor adventure trips in Europe-Africa, Asia-Pacific, Latin America, and North America. For example,
shops selling or renting snow skis, snowboards, snowmobiles, all-terrain vehicles, go kart racers, water
skis, surf boards, bicycles, hunting and fishing equipment, sky-diving gear, and scuba diving gear often
sell or rent miniature, wearable action-capture cameras to customers wanting to video their
How the GLO-BUS Exercise Works
Your Company’s Operations
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
Copyright © GLO-BUS Software, Inc. Back to Top 4
experiences; likewise, the providers of white-water rafting trips, sky-diving and parasailing flights, deep
sea fishing trips, helicopter rides, nature trips, and other outdoor action experiences frequently sell or
rent action-capture cameras to their customers.
The unmanned aerial view (UAV) drones assembled at the Taiwan plant are sold directly to buyers at
the company’s website and to other online retailers of commercial drones. These drones are much
more sophisticated and multi-featured than inexpensive toy drones sold for recreational use. Indeed,
the company you will manage and the drone-makers you will be competing against produce copter
drones as wide as four-feet that can be used for a variety of commercial and business purposes and
retail in the $850 to $2,000+ range. UAV drones are commonly used by professional photography
enterprises movie studios and to capture often stunning shots (panoramic scenery, hovering over an
open shark’s mouth, explosive action scenes) from heights and angles not feasible with handheld or
tripod cameras. Network and local TV stations use UAV drones to take videos of fires, storm damage,
a live volcano, sporting events (golf and football), and other newsworthy events where film footage
taken from particular angles or heights or distances is more revealing. Insurance companies use UAV
drones to document damage to homes and buildings inflicted by hurricanes, tornadoes, hail, and floods,
thereby expediting the process of paying claims; drones are particularly useful in helping insurers
inspect areas that are hard to access (such as roofs and condemned buildings). Fire departments use
camera drones to monitor fires in large buildings and direct where fire hoses and other firefighting
efforts need to be aimed. Large commercial farms use camera drones to monitor crops and crop
harvesting; ranchers use drones to track the location and well-being of farm animals. Construction
companies use daily drone flights to gather data and 3-D images showing progress at project sites and
identify areas where the project might be falling behind schedule. Companies use periodic drone flights
to help protect against theft and vandalism at plant sites and remote facilities. Indeed, unmanned
drones equipped with professional quality, action-capture cameras are being used by growing types of
private and public enterprises for a growing variety of purposes, resulting in rapidly-growing market
demand for UAV drones across the world.
The two product categories your company competes in consists of as few as 4 or as many as 12
companies, as determined by your instructor. All companies begin the GLO-BUS exercise in the
same competitive position—equal sales volumes in each of the world’s four geographic regions,
equal global market shares in both cameras and drones, and equal revenues, profits, costs, product
quality and performance, brand recognition, and so on. All competing companies are thus presently on
an equal footing in all respects.
In upcoming years, the managers of all companies will undertake strategic actions to boost the
performance of their respective companies—these actions will involve altering prices, product
performance and quality, advertising, and other competitively-relevant factors that impact buyer choices
of which company’s brand to purchase. The differing actions of competing companies will almost
certainly result in substantially different cross-company unit sales volumes and market shares in all
regions of the world because the actions of some companies will prove more effective in attracting
buyers than the actions of other companies. Companies that succeed in outcompeting rivals in the
sales of either cameras or drones or both will gain sales and market share at the expense of rivals.
Some companies will suffer losses of sales and market share in cameras and/or drones in one or more
geographic regions—despite striving (or hoping) to do the opposite—because they are outcompeted by
one or more rivals offering what buyers consider to be more attractive products.
Bigger sales and market shares, of course, do not necessarily equate to better profitability and overall
performance than below-average sales volumes and market shares—firms that sell top-quality products
at premium prices often have smaller unit sales volumes and smaller revenues, yet their profits and
returns on investment may well be greater than those of firms selling less expensive, lower-performing
products to the mass market. Moreover, each competing company’s production and other operating
costs for cameras and drones are certain to change over time, as managers of the competing
companies pursue different actions to operate efficiently and build a competitive advantage linked to
lower costs or better product quality or some other factor that yields competitive advantage. It remains
to be seen which companies will end up being the most profitable and achieving the best overall
performance.
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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The company has regional facilities in Milan, Italy; Singapore; Sao Paulo, Brazil; and Dallas, Texas to
conduct the company’s marketing efforts in the four geographic regions of the world market, to support
the merchandising efforts of regional retailers who stock the company’s action cameras and UAV
drones, and to process camera/drone warranty claims (including making needed repairs).
Assembly and Shipping. The company assembles cameras and drones usually within two weeks of
receiving an order and strives to ship an order no later than 2-3 days after assembly. No camera
models or drone models are assembled in advance, warehoused in company facilities, and then used
to fill incoming orders.
The company has a staff of people engaged in product R&D; this group has the capability to develop
new and improved models of cameras and drones as directed by top management. Once company comanagers
settle on the desired specifications and performance features for the company’s line-up of
camera and drone models, the needed parts and components are obtained from suppliers having the
capabilities to make deliveries to the company’s Taiwan assembly site on a just-in-time basis, thus
eliminating the need to maintain inventories of parts or components.
The company has two buildings for assembling products at its Taiwan site—one for cameras and one
for drones (the drone assembly process also includes assembly of an action-camera model having
features and specifications suitable for use in camera-equipped drones). Both cameras and drones are
assembled by four-person product assembly teams (PATs), with each PAT performing the needed
tasks at its own assigned workstation. Shipping department personnel package orders for shipment
and stack them on the loading dock for pickup by independent freight carriers. The cameras are
delivered to buyers anywhere from 3 days to 3 weeks later, depending on a retailer’s location and the
means of transportation—shipments to distant retailers are shipped via a combination of air and ground
freight and those to customers in select parts of Asia are shipped by ground freight. The cost of boxing
cameras, packaging them for shipment, and freight charges average $5 per camera. Packaging and
shipping costs for drones average $60 per unit; most orders for drones air freighted to customers and
delivered within 5 to 10 business days.
Many countries have opted to impose import duties on cameras and drones sourced from Taiwan.
Going into Year 6, import duties equal 4% of the average price the company charges customers in
Europe-Africa, and 6% of the average price being charged to customers in both Latin America and the
Asia-Pacific; there are no import duties on either cameras or drones shipped to customers in North
America. Import duties in all four regions of the world market are subject to change in upcoming years.
Competitive Efforts. To capitalize on ongoing technological advances and the pipeline of product
enhancement capabilities flowing from the company’s expenditures for product R&D, each year the
company typically changes the specs for important components, adds/modifies performance features,
upgrades the internal software, makes assorted other design-related changes, and introduces new
and/or improved models. In addition, strong competition from rival companies pushes management to
make price and marketing adjustments to improve buyer appeal for the company’s camera/drone
models and to enhance the company’s ability to compete more effectively.
Stock Listings. The company’s stock is publicly traded on the NASDAQ exchange in the United
States. The closing price in Year 5 was $12 per share. The company’s financial statements are
prepared in accord with generally accepted accounting principles and are reported in U.S. dollars. The
company’s financial accounting is in accord with the rules and regulations of all authorities where its
stock is traded.
Worldwide unit sales of wearable and/or mountable, miniature action-capture cameras are reliably
projected to grow 6-8% annually for the next five years (Years 6-10) and then to grow at a slower 4-6%
annual rate during the following five years (Years 11-15). However, the projected growth rates differ by
geographic region, as shown below.
The Worldwide Market for Action-Capture Cameras
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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Projected Growth of Unit Sales of Action-Capture Cameras
Worldwide North America Europe-Africa Latin America Asia-Pacific
Years 6-10 6.0%-8.0% 4.5%-6.5% 4.5%-6.5% 8.5%-10.5% 8.5%-10.5%
Years 11-15 4.0%-6.0% 2.5%-4.5% 2.5%-4.5% 6.0%-8.0% 6.0%-8.0%
Note: Actual growth within the forecast 2% range varies from region to region. In one region the
actual growth rate may be near the high end of the forecasted range, in another region in the
same year it may be near the low end, and in still another region it may be near the midpoint of
the range. Moreover, the forecast growth rates are all based on the assumption that in future
years the competitive efforts of rival companies will, on the whole, not differ significantly from the
levels prevailing at the end of Year 5. Future growth rates may turn out to be higher than forecast
in the event more buyers are attracted to purchase action-capture cameras because of a
dramatic decline in camera prices and/or significantly higher camera quality/performance and/or
sharp and sustained increases in the marketing and competitive efforts of rival companies to grow
camera sales volumes. Conversely, factors that can drive away potential buyers and cause the
growth in buyer demand to fall below the forecast amounts include sharply higher camera prices
and/or a strong downward trend in camera quality/performance and/or complacent efforts on the
part of rival companies to please buyers and capture the available growth opportunities. In other
words, the forecast growth rates, while reliable, are not guaranteed in the event the competitive
efforts in the industry become significantly stronger or weaker than the levels prevailing in Year 5.
Because the growth rate in four geographic regions can be anywhere within the forecast 2
percent range, company managers have to deal with uncertainty about where within the projected
growth range the actual growth rate in camera demand for a particular geographic region in a
particular year will turn out to be. Bear in mind here that the managers of real-world companies
do not operate with certainty about what their industry’s growth rate in unit volume for the
upcoming year will turn out to be, correct to the first decimal place—a forecast somewhere within
a 2-percentage-point range is really a pretty good forecast!
Competition. Competition in the worldwide market for action-capture cameras revolves around price,
product quality and performance, the number of models offered, the number and types of retailers that
stock and merchandise each brand of camera, the amount of merchandising support companies
provide to these retailers, advertising, sales promotion activities (the duration of sales promotion
campaigns and the sizes of the price discounts offered to retailers during these promotional
campaigns), the length of warranties, and brand reputation.
Worldwide unit sales of unmanned aerial view (UAV) drones are reliably projected to grow 15.5%-
17.5% annually during Years 6-7, 12.0-14.0% annually during Years 8-9, 9.0%-11.0% annually in Years
10-11, 6.0% -8.0% annually in Years 12-13, and 3.75%-5.75% annually during Years 14 and 15.
However, the projected growth rates differ considerably by geographic region, as shown below.
Projected Growth of Unit Sales of Unmanned Aerial View Drones
Period Worldwide North America Europe-Africa Asia-Pacific Latin America
Years 6-7 15.5%-17.5% 15.0%-17.0% 15.0%-17.0% 17.0%-19.0% 17.0%-19.0%
Years 8-9 12.0%-14.0% 11.0%-13.0% 11.0%-13.0% 14.0%-16.0% 14.0%-16.0%
Years 10-11 9.0%-11.0% 8.0%-10.0% 8.0%-10.0% 11.0%-13.0% 11.0%-13.0%
Years 12-13 6.0%-8.0% 5.0%-7.0% 5.0%-7.0% 8.0%-10.0% 8.0%-10.0%
Years 14-15 3.75%-5.75% 3.0%-5.0% 3.0%-5.0% 5.0%-7.0% 5.0%-7.0%
The Worldwide Market for Unmanned Aerial View Drones
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
Copyright © GLO-BUS Software, Inc. Back to Top 7
Note: As noted above in regard to the growth rates of action-capture cameras, actual growth of
for UAV drone sales within the forecast ranges varies from region to region. The forecast growth
rates, while reliable, are not guaranteed in the event the competitive efforts in the industry
become significantly stronger or weaker than the levels prevailing in Year 5.
Again, while company managers have to deal with uncertainty about where within the projected 2%
growth range the actual growth rate for drones for a particular geographic region in a particular year will
turn out to be, a forecast somewhere within a 2-percentage-point range is really a pretty good forecast!
Competition. Competition in the worldwide market for UAV drones differs somewhat from that for
action-capture cameras and is centered on price, product quality and performance, the number of
models offered, the relative appeal of rival company websites as concerns providing complete
information about different models and the ease of placing orders, the comparative amounts
competitors elect to spend on search engine advertising to help draw shopper traffic to their website
(where a big percentage of drone sales are transacted), the length of warranties, the relative success
competitors have in attracting third-party online retailers to display and merchandise their brand of UAV
drones (and thereby broaden their access to potential purchasers of drones), and brand reputation.
P/Q Ratings for Action-Capture Cameras. The World Digital Video Federation (WDVF), a wellrespected
affiliation of camera industry trade groups and camera experts, tests the performance and
quality of the action-capture camera models of all competitors and assigns a performance-quality or
P/Q rating ranging from a low of 1.0 stars to a high of 10.0 stars to each company’s line of actioncapture
cameras—each company’s star rating is reported to the nearest tenth of a star (i.e. 2.3, 4.7,
6.5). The WDCF’s P/Q ratings are based on an array of factors: (1) image sensor size, (2) size of the
LCD display screen, (3) image quality of the pictures/video, (4) number of photo modes for videos and
still photos, (4) camera housing, (5) editing/sharing capabilities, (7) included accessories (such as
capacity of flash memory card, rechargeable batteries, a plug-in battery-charger, and carrying case) (8)
number of extra performance features, (9) the number of camera models a company offers, (10) a
company’s cumulative spending on product R&D, and (11) the amount a company spends annually on
training for each of its camera-related PATs and improving its camera-related assembly methods (since
such spending can affect defects encountered and the need for repairs). Ratings are updated annually.
Currently, the action-capture camera lines of all competitors have a 4.0-star P/Q rating. Competition
among rivals is, however, likely to result in different P/Q ratings for the camera offerings of different
companies in forthcoming years. This is because all buyers both within a geographic region and across
the four geographic regions do not prefer to buy precisely the same quality camera with precisely the
same performance features and pay precisely the same price. Diverse buyer preferences thus make it
highly that some camera companies will opt to cater to buyers shopping for low-priced action cameras
having basic features (and perhaps a P/Q rating of 1-3 stars), while other camera makers may decide
to design cameras to satisfy buyer preferences for a premium-priced, full-featured action camera (with
perhaps a 7-star to 10-star rating), and still other camera-makers may choose to target “middle market”
buyers content with a medium-priced camera having a P/Q rating in the 4-6 star range.
P/Q Ratings for UAV Drones. Three years ago, the Global Alliance for Safe and Responsible Use of
Commercial Drones was formed to help lobby government authorities responsible for regulating
airspace to establish drone-use regulations that would enable commercial enterprises to benefit from
the rapidly-advancing capabilities of aerial drones to provide valuable pictures and data. Membership
quickly grew to include drone manufacturers, the suppliers of materials and components used in the
production of drones, a wide variety of commercial enterprises and trade associations with interest in
using drones for various purposes, and organizations engaged in drone technology research. Two
years ago, members of the Global Alliance voted overwhelmingly to develop a methodology for rating
the performance and quality of the hundreds of brands and varieties of drones available for sale
worldwide, but most especially UAV drones suitable for a variety of commercial uses. Eighteen months
ago, the first performance-quality or P/Q ratings of UAV drones were released for posting on the Global
Alliance’s website, along with the methodology for determining the ratings. Ratings are a function of (1)
Performance/Quality (P/Q) Ratings of AC Cameras and UAV Drones
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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the caliber of the built-in action-capture camera, (2) the caliber of the built-in GPS/Wi-Fi/Bluetooth
components, (3) battery life (maximum flight time per charge), (4) number of rotors, (5) rotor
performance and flight controller features/capabilities, (6) body frame construction, (7) the caliber of the
obstacle sensors, (8) quality of the camera stabilization device, (9) number of extra performance
features, (10) the number of drone models a company offers, (11) a company’s cumulative spending on
drone-related product R&D, and (12) the amount a company spends annually on training its dronerelated
PATs and improving idrone-related assembly methods (since such spending can affect defects
encountered and the need for repairs). Each brand of UAV drones was assigned a P/Q rating of 1.0 to
10.0 stars, with each company’s star rating being reported to the nearest tenth of a star. Ratings are
updated annually.
As of Year 5, the UAV drone offerings of all competitors in your industry group had a 4.0-star P/Q
rating. However, given the expected rapid advances in drone technology and the many new features
and improvements that are expected to be incorporated in UAV drones in upcoming years, it is likely
that the P/Q ratings of competing brands of UAV drones will quickly diverge. Drone buyers across the
world are not looking for drones with the very same features, performance, and quality because the
purposes for which they intend to use UAV drones vary greatly, thus creating a market for drones with
varying combinations of features—which, in turn, results in drones with varying costs being sold at
varying prices. Consequently, it is likely that some drone makers will opt to cater to buyers shopping
for low-priced drones having basic features (and perhaps a P/Q rating of 1-3 stars), others will elect to
target buyers willing to pay well above-average prices for a more full-featured drone (with perhaps a 7star
to 10-star rating), and still other drone-makers opting to compete for the patronage of “middle
market” buyers whose performance-quality requirements equate to P/Q ratings in the 4-6 star range.
Action-Capture Camera Retailers. Worldwide, there are some 50,000 retailers of wearable (or
mountable/attachable), teacup-size video cameras scattered across the world—each of the four major
geographic regions of the world market has 12,500 retailers of action-capture cameras, some of which
are multi-store retail chains (100 per region), online electronics retailers (400 per region), and local
retail enterprises that sell or rent these cameras (12,000 per region). Retailers with store locations that
also sell cameras on their websites are not included in the online category. Multi-store chains account
for the biggest percentage of action-capture camera sales, with online retailers second and small local
retailers third. Retail markups over the wholesale prices run 50% to 100%; thus, the models of a
company with 4-star-rated action-capture cameras wholesaling for an average of $200 could retail for
an average of $300-$400. Such markups allow retailers to put selected models or brands of cameras
on sale from time-to-time at 10% to 20% off regular price and still make a decent profit margin.
Retailers typically carry anywhere from 2-4 brands of action-capture cameras and stock only certain
models of the brands they do carry, but in all four geographic markets there are around 20 “full-line”
action camera retailers that stock most all brands and models. Most all chain-store retailers carry at
least 2 and often 3-4 of the best-selling brands. The makers of weak-selling brands of action cameras
have difficulty convincing major retail chains to devote much display space and merchandising efforts to
their models. Online retailers are, however, more amenable to merchandising low-volume brands,
especially those with relatively high P/Q ratings (favored by buyers concerned about camera
performance and quality) and/or minimal performance features but ultralow prices (which are favored
by bargain-hunting shoppers).
Online Retailers of UAV Drones. There are 100 online retailers of UAV drones in each of the four
geographic regions. Because your company sells its UAV drone models at the company’s own website
in direct competition with other online retailers of UAV drones, these online retailers are inclined to
stock and display your company’s brand of drones only if they can purchase your drone models at an
attractive percentage discount to the price being charged on your website. In other words, if you offer
to sell online retailers your models of UAV drones at say 20% off the price being charged on your
website, then a greater number of online retailers will be inclined to stock and merchandise your drone
models than if you only offer them a 10% price discount. Moreover, the bigger the percentage discount
The Retailers and Buyers of Action-Capture Cameras and UAV Drones
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
Copyright © GLO-BUS Software, Inc. Back to Top 9
you offer to these online retailers, the bigger the sales they will generate—discounts of 15% to 20%
may result in 3rd
-party online retailers accounting for 25% to 35% of your company’s total sales volume.
Generally, if your company’s price discounts are under 10%, very few online retailers will purchase your
drone models for resale on their websites because their profit opportunities are minimal (even if they
charge prices higher than your company’s website prices in hopes of attracting buyers who have never
visited your company’s website).
The Buyers of Action-Capture Cameras. People interested in purchasing a wearable video camera
in order to record their action adventures for personal viewing and also to share their experiences with
others (perhaps on Facebook or other sites) are generally quite aware that there can be big differences
in the prices and performance of the various brands of action-capture cameras. Many do extensive
internet research to educate themselves about the features, performance, and prices of different actioncapture
camera brands and models. The World Video Camera Federation’s much publicized P/Q
ratings are trusted by people who are shopping for action cameras or already own one, and the
Federation’s frequently-visited website has detailed information concerning the results of its
performance tests and the basis for its P/Q ratings of each action-capture camera brand. Moreover,
both the makers of these cameras and online electronics retailers have extensive information on their
websites about currently available models. There are also assorted websites and publications that
publish/post information about and reviews of new and improved camera models. Consequently, it is
easy for most potential buyers of action cameras to do considerable comparison shopping before
deciding which camera brand to buy—they tend to be quite aware of the prices and P/Q ratings of
different brands, the various retail locations and websites where action cameras can be purchased, the
warranties of competing brands, and the fact that retailers have periodic weekly sales promotions that
feature sizable discounts off the regular retail price. Potential buyers also pay at least some attention to
the media ads they see for various action cameras brands and their purchasing decisions are to some
degree influenced by these ads. Many price-sensitive consumers shopping for their first action-capture
camera are inclined to wait to make a purchase until the retailers of these cameras in their geographic
area have weekly sales promotions featuring discounted prices.
The Buyers of UAV Drones. Individuals and enterprises interested in purchasing a UAV drone for
commercial use are generally quite aware that there can be big differences in the prices and
performance of the various brands of UAV drones. many do extensive Internet research to educate
themselves about the features, performance, and prices of different brands and models of UAV drones.
The readily available P/Q ratings for various brands of drones compiled by the Global Alliance for Safe
and Responsible Use of Commercial Drones are considered trustworthy, and the Global Alliance’s
frequently-visited website has detailed information concerning the results of its performance tests and
the basis for its P/Q ratings of each drone brand. Moreover, both drone-makers and third-party online
electronics retailers of drones have extensive information on their websites about the currently available
models they offer for sale. Because of mushrooming interest in the features and capabilities of UAV
drones, a growing number of websites and media publications have begun posting/publishing articles
about the features and capabilities of newly-available drones and newsworthy developments in the
drone industry. Consequently, it is common for likely drone purchasers to do considerable comparison
shopping before deciding which drone brand to buy—they are familiar with the P/Q ratings of rival
brands, the retail prices and information posted at company websites and the websites of other online
retailers of drones, and the warranties of rival brands. Potential buyers also pay at least some attention
to the search engine advertising they encounter when browsing for information about UAV drones, and
their decisions to ultimately purchase this or that brand are affected by these ads.
Competition among rival makers of action-capture cameras centers around 11 factors:
1. Average Wholesale Price to Retailers— The most important price-related consideration affecting
a company’s camera sales/market share is the extent to which its average wholesale price for the
camera models it sells to retailers in each region is above/below the regional all-company average.
A company whose average wholesale price is above the industry (or “all-company”) average in a
region is burdened by a price-based competitive disadvantage. The bigger the percentage by which
The Competitive Factors that Determine AC Camera Sales and Market Share
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a company’s average wholesale price is above the regional average, the bigger is the company’s
price-based competitive disadvantage and the bigger is the resulting negative impact on its
cameras sales and market share in the region. Conversely, the bigger the percentage by which a
company’s average wholesale price is below the regional average, the bigger is the company’s
price-based competitive advantage and thus the bigger is the positive impact on its cameras sold
and market share in the region. In other words, the further a company's average wholesale price is
above the regional average, the bigger the number of action-camera shoppers who will opt to buy
lower-priced rival brands whereas the further a company's average wholesale price is below the
regional-average, the bigger the fraction of action-camera shoppers in the region a company can
attract to buy its lower-priced brand.
However, the size of any company’s pricing disadvantage/advantage versus rivals (and the
resulting loss/gain in camera sales and market share) can be decreased/increased by its
competitive standing versus rivals on the other 10 competitive factors. Any company whose
wholesale price exceeds the regional average can partially offset or even overcome its price
disadvantage when it has competitive edges over rivals on some/many other relevant buyer
considerations—such as an above-average P/Q rating, more models for buyers to select from, or
longer-than-average warranties. But the further a company's average wholesale price to retailers is
above the regional average prices, the harder it is for a company to use non-price enticements to
overcome rising buyer resistance to the company’s higher priced camera models.
Similarly, any company whose price to retailers is below the average prices of its regional rivals can
widen its price-based advantage over rivals when it also has a competitive edge over these rivals
on some or many of the other 10 competitive factors that influence camera sales and market share
in a region. In addition, the further a company’s price is below the average being charged by
regional rivals, the easier it becomes to offset any competitive disadvantages relating to a belowaverage
P/Q rating, shorter-than-average warranties, a below-average number of models, and
other competitively relevant factors.
One other price-related factor is also relevant. The buyers of action cameras in Latin America
and the Asia-Pacific region are more sensitive to cross-brand price differences than are
camera buyers in North America and Europe-Africa. Thus when camera-makers raise their
wholesale prices to retailers in a region this quickly translates into higher retail prices in the region
because retailers mark up the wholesale price they pay camera-makers by 50% to 100%.
Consequently, when the product offerings of competing companies entail only minor differences in
P/Q ratings (and other factors that shape buyers’ brand preferences), then cross-brand differences
in wholesale price will have a bigger impact on unit sales and market shares in Latin America and
the Asia-Pacific than in North America and Europe-Africa.
2. P/Q Ratings—The vast majority of action-capture camera shoppers consider the widely-available
and much-publicized annual P/Q ratings compiled by the World Digital Video Federation to be a
trusted measure of the performance and quality of competing brands of AC cameras. Market
research indicates buyers worldwide consider the P/Q ratings of competing brands of AC cameras
to be one of the two most important factors (along with price) in shaping their choice of which
action-camera brand to purchase. A company whose P/Q rating is above the regional average P/Q
ratings of rivals in a region enjoys an important competitive advantage on the performance-quality
aspect of its camera models. Likewise, a below average P/Q rating constitutes an important
performance-quality-based competitive disadvantage. The more a company's P/Q rating is above
the industry average, the more that camera shoppers in the region are attracted to purchase the
company’s camera brand—unless the company’s higher P/Q rating is undermined by (1)
unfavorable comparisons against rivals on such other buyer-relevant features as comparatively few
models for buyers to choose among, a significantly weaker brand reputation, or a much shorterthan-average
warranty or (2) charging a price premium for the added performance-quality that
buyers consider “too high” or “not worth the extra cost.”
Market research further reveals that the buyers of action cameras in North America and
Europe-Africa are more sensitive to cross-brand differences in P/Q ratings than are camera
buyers in the Asia-Pacific and Latin America regions. Thus, when two brands of action
cameras have slightly different prices and P/Q ratings (and all other buyer considerations are, on
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balance, virtually identical between the two brands), then a bigger percentage of buyers in North
America and Europe-Africa will purchase the brand with the higher P/Q rating while a bigger
percentage of buyers in Latin America and the Asia-Pacific will purchase the cheaper-priced
brand—resulting in bigger sales for the camera brand with the higher P/Q rating in the North
America and Europe-Africa regions and bigger sales for the lower-priced camera brand in the Latin
America and Asia-Pacific regions.
However, beware of assuming the differing cross-region sensitivities to price and P/Q ratings mean
buyers in North America and Europe-Africa care little about price or that buyers in Latin America
and the Asia-Pacific care little about P/Q ratings. Camera prices and P/Q ratings matter greatly
in all geographic regions.
3. Number of Models—Companies offering buyers a bigger selection of models than rivals enhance
their company’s competitiveness by giving camera buyers more opportunity to find a model well
suited to their preferences. Companies offering comparatively fewer models than rivals risk losing
sales and market share to competitors offering greater selection, unless they offset their narrower
selection with other appealing competitive attributes (such as a lower price, higher P/Q rating,
longer warranties, and so on).
4. Advertising Budget—Media advertising is used to inform the public of the prices and features of
newly introduced models, to tout the merits of buying the company’s brand, and to inform shoppers
of special sales promotion campaigns and discounted sales prices. Even though retail dealers act
as an important information source for customers and actively push the brands they carry,
advertising on the part of camera-makers (often done in conjunction with the advertising efforts of
retailers stocking its brand) strengthens brand awareness, helps pull buyers into retail stores
carrying the brand, and informs the public about the features and prices of a company’s latest
action camera models. The competitive impact of advertising depends on the size of your
company’s current-year advertising budget in each region. Companies whose advertising is above
the all-company regional-average gain an advertising-based competitive edge that positively
impacts their company’s regional sales volume and market share; the bigger the percentage
competitive advantage, the bigger the positive impact. Companies whose spending is below the
regional average suffer from an advertising-based competitive disadvantage that negatively impacts
their regional sales and market share; again, the bigger the percentage competitive disadvantage,
the bigger the negative impact.
5. Sales Promotions (number of weeks)—Rival companies can run from 0 to 20 week-long sales
promotion campaigns annually to tout their action-capture cameras—all such campaigns involves
offering retailers a discount of some size off the regular price. Periodic sales promotion campaigns
are of interest to retailers stocking the company’s models because they call attention to the brand,
spur consumer interest and store traffic, and help increase unit sales. Market research indicates
that the competitive impact of sales promotions depends on whether the number of sales promotion
events a company has annually is above/below the industry average in each region. Companies
having above-average number of sales campaigns gain a promotion-based competitive edge that
positively impacts their regional sales volume and market share. Conversely, a below-average
number of weekly promotions results in a competitive disadvantage that negatively impacts a
company’s regional sales volume and market share. The bigger the percentage competitive
advantage/disadvantage, the bigger the positive/negative impact.
6. Sales Promotions (% discount)—Retailers that are offered, say, a 15% discount off regular
wholesale price on units sold during a sales promotion event can be counted on to pass the savings
along to consumers in the form of corresponding sale prices of 15% off the regular retail price. In
the camera business, just as in most other businesses, bigger sales price discounts attract more
buyers than smaller price discounts. Thus, promotional campaigns involving sale prices of 15% to
20% off the regular price have substantially greater sales-enhancing impact than promotions
offering only 5 or 10% discounts, even if a company holds more sales with such small discounts. In
other words, the size of the discounts off regular price a company offers during sales promotion
events is a very crucial factor in determining the sales-enhancing impact of its promotional
campaigns, more so than the number of promotional events. Companies offering discounts above
the regional average gain a competitive advantage that positively impacts the company’s regional
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sales volume and market share, with the size of the positive impact depending on the size of the
competitive advantage. Companies offering discounts below the regional average have a
competitive disadvantage that negatively impacts the company’s regional sales volume and market
share, with the size of the negative impact depending on the size of the competitive disadvantage.
7. Retailer Support Budget—Support for regional retailers involves providing retailers with in-store
signs, up-to-date product-information brochures, and engaging video-enabled point-of-purchase
(POP) displays that showcase uses of the company’s camera models and accessories. A portion of
the retailer support budget is also used to support the trips of company marketing personnel to visit
the stores of high-volume retailers and work with store managers/clerks in expanding/improving the
footprint of the company’s POP displays. Companies whose retailer support expenditures are
above the regional average gain a competitive edge in attracting retailers to stock their brand
compared to companies providing below-average amounts of retailer support—the bigger a
company’s retailer network in a region, the stronger is its brand exposure to camera shoppers and
the stronger the resulting positive impact on its regional sales and market share.
8. Website Product Displays / Info—The level of expenditures for website displays and information
is a proxy for the time, effort, and creativity that a company puts into (1) posting periodically
refreshed and visually appealing displays of its various camera models, along with ample and
useful information about each model’s features, capabilities, and specifications, (2) providing site
visitors with the capability to create side-by-side model comparisons, (3) enabling site visitors to
post their reviews of particular models, and (4) providing good after-the-sale product support to
customers. Many potential buyers make a point of visiting the company’s website to gather
information about the company’s models and research how the features, capabilities, and
specifications of its models compare against those of rival brands. The product displays,
informational content, and customer reviews at each company’s website, along with the website’s
visual appeal and functionality, is thus an important element in prompting buyers to visit a nearby
retailer of the company’s brand, personally inspect the company’s various models, and perhaps
make a purchase. Visits to a company’s website also enable customers to obtain needed after-thesale
technical support, download apps and software updates for previously-purchased camera
models, browse product manuals, discover how to file a warranty claim, and use the chat function to
pose questions to online personnel.
9. Retail Outlets—A company’s sales and market share in a geographic region are strongly
influenced by the number and type of retailers (multi-store chains, online electronics retailers, and
local retail shops) it can convince to stock its brand and display its models. In general, having more
of each type of retailer selling the company’s brand is better than having fewer retailers because of
the added display exposure and the added convenience to camera buyers of being able to buy a
given brand at more locations. Companies with an above-average number of retailers in a region
enjoy a competitive edge that positively impacts their regional sales volume and market share.
Companies with a below-average number of retailers in a region suffer from a competitive
disadvantage that negatively impacts their regional sales volume and market share. In the last two
months of each year, camera retailers decide whether to stick with the camera brands they are
currently stocking or whether to make some adjustments based on five considerations: (1) which
camera brands in their region are growing in popularity and declining in popularity among buyers
(as measured by changes in each company’s market share in the region), (2) each camera maker’s
P/Q ratings for its line of action cameras as compared to the regional average, (3) the number of
week-long sales promotion campaigns each company undertook as compared to the regional
average, (4) the size of the promotional discount each company offered during these weekly sales
promotions relative to the regional average, and (5) each company’s expenditures to support the
merchandising efforts of camera retailers in the region relative to the regional average.
10. Warranty Period—Camera buyers, of course, find longer warranties more appealing than shorter
warranties. A company whose warranty period exceeds the regional average gains a competitive
edge that positively impacts its regional sales/market share, whereas a company whose warranty
period is below the regional average suffer a competitive disadvantage that negatively impacts its
regional sales volume and market share. The further a company’s warranty period is above/below
the regional average, the bigger the positive/negative impact.
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11. Company Image (brand reputation)—The “image rating” for each company in the industry is
based on its P/Q rating for action-capture cameras, its P/Q rating for UAV drones, its global market
share of action camera sales, its global market share of UAV drone sales, and its actions to display
corporate citizenship and conduct operations in a socially responsible manner over the past 4-5
years—a total of 5 factors. All companies had an overall worldwide image rating of 70 at the end of
Year 5. Image ratings/brand reputations are updated at the end of each year, using the latest P/Q
ratings, year-end global market shares, and information relating to the social responsibility efforts of
rival companies. Newly-released brand image ratings are widely-publicized and become quickly
known to buyers considering the purchase of action cameras and UAV drones.
Market research confirms that the latest company image ratings (brand reputations) of rival
companies have a moderately strong influence on the brand choices of camera buyers in the
upcoming twelve months. Thus, companies with current image ratings above the industry average
have a meaningful competitive edge over rivals with below-average image ratings in attracting
camera buyers to purchase their brand and in recruiting additional retailers to stock and
merchandise their camera models for a period of 1 year (at which time new end-of-year company
image ratings/brand reputations are released). The importance of a strong brand reputation in
attracting camera buyers is big enough that companies with comparatively weak reputations must
exert enough extra effort on the other 10 competitively relevant factors to boost overall buyer
appeal for their brand and overcome their image/reputation disadvantage. When weak image
companies significantly improve the overall buyer appeal and competitiveness of their camera
models from one year to the next, they can definitely win market share from strong image rivals
despite having an image rating disadvantage. Should companies with once-weak brand reputations
continue to improve their overall image ratings over a period of several years, they can definitely
turn the liability of a weak brand reputation into a strong brand reputation and competitive asset.
Competition among rival makers of UAV drones centers around 9 factors:
1. Average Direct-Sale Price to Online Customers—Companies charging a price that is below the
regional average gain a price-based competitive advantage that positively impacts their regional
sales and market share, whereas companies charging a price that is above the regional average
results in a price-based competitive disadvantage. The bigger the percentage by which a
company’s average retail price is below/above the regional average, the bigger the resulting
positive/negative impact on its regional sales volume and market share.
However, any company whose direct sale price is above the industry average in a region can
partially offset or even totally overcome its price disadvantage when it has a competitive edge over
rivals on some or many other important sales-determining factors—such as a P/Q rating that is
above the industry average P/Q rating, an above-average number of models, longer-than-average
warranties, an above-average number of third-party online retailers, above-average expenditures
for search engine advertising, and an above-average brand reputation. Price disadvantages
become progressively easier to overcome as a company’s P/Q rating rises further above the
industry average. P/Q ratings that are 1-2 stars (or more) above the industry average can
command prices hundreds of dollars above the industry average because a sizable fraction of the
commercial enterprises that purchase UAV drones place a high value on the added performance of
drones with P/Q ratings of 7 stars and higher—perhaps as many as 5% of the world’s drone buyers
can be enticed to pay prices perhaps as high as $2,000-$2,500 for UAV drones with 9-star or 10star
P/Q ratings. But the further a company's price to retailers is above the industry average in a
region, the harder it is for a company to use enticements other than higher P/Q ratings to overcome
rising buyer resistance to higher retail prices for its drone models. Likewise, the further a
company’s price is below the industry average in a geographic region, the easier it becomes to
offset any competitive disadvantages relating to lower P/Q ratings, shorter warranties, fewer
models, and so on.
One other price-related factor is also relevant. The purchasers of drones in Latin America and
the Asia-Pacific regions are more sensitive to price differences than are drone purchasers in
The Competitive Factors that Determine UAV Drone Sales and Market Share
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North America and Europe-Africa. In other words, when the drone offerings of competing
companies entail only minor differences in P/Q ratings (and other factors that shape buyers’ brand
preferences), then price differences will have a bigger impact on unit sales and market share in
Latin America and the Asia-Pacific than in North America and Europe-Africa.
2. P/Q Rating—The vast majority of drone shoppers consider the widely-available and muchpublicized
annual P/Q ratings compiled by the Global Alliance for Safe and Responsible Use of
Commercial Drones to be a trusted measure of the performance and quality of competing brands of
drones. Market research indicates buyers worldwide consider the P/Q ratings of competing drone
brands to be one of the two most important factors (along with price) in shaping their choice of
which brand to purchase. A company whose drones have a P/Q rating above the industry average
thus has an important competitive advantage over rivals, whereas a below-average P/Q rating
constitutes an important competitive disadvantage. P/Q ratings that are more than 1 star above or
below the industry average result in particularly strong competitive advantages or disadvantages
and thus have strong positive or negative impacts on sales volumes and market shares in each
region. The competitive advantage that attaches to an above-average P/Q rating can make a
company’s drone brand even more appealing to buyers (and thus translate into even bigger sales
volume and market share) if it is supplemented by charging an attractively small price premium for
the added performance-quality, by also offering a longer-than-average warranty and/or an aboveaverage
number of models to choose from, and so on. Likewise, a company selling drones with an
above-average P/Q rating can erode its performance-quality advantage by charging a price that
buyers consider “unreasonably high” for the added performance and quality or by weakening the
competitiveness of its product offering with other subpar characteristics (a short warranty or a weak
brand reputation or an unappealing website) that undercut the P/Q rating advantage.
Market research further reveals that when two brands of drones have slightly different prices and
P/Q ratings (and all other buyer considerations are, on balance, an even tradeoff between the two
brands), then a slightly bigger percentage of buyers in North America and Europe-Africa will
purchase the brand with the higher P/Q rating while a slightly bigger percentage of buyers in
Latin America and the Asia-Pacific will purchase the cheaper-priced brand.
3. Number of Models—An above-average number of models enhances a company’s competitiveness
in the marketplace by giving drone buyers wider product selection and thus more opportunity to find
a model with the features and specifications that best matches how they plan to use the drone.
Companies with a below-average number of models risk losing sales and market share to
competitors offering greater selection, unless they offset their narrower selection with other
appealing competitive attributes (a lower price, a higher P/Q rating, a longer warranty, etc.).
4. Retailer Recruitment / Support Budget—This expenditure covers the costs of calling on
prospective online retailers to (1) personally communicate the expected rapid growth of the UAV
drone market, the advantages of a company’s drone models, and the R&D effort the company is
making to improve future models of its drones, (2) build a relationship with these prospects via a
face-to-face visit, and (3) explain the kinds and amount of merchandising support the company
provides. Retailer support includes providing periodically-refreshed pictures of the company’s
various drone models for online retailers to display in their webstores, supplying comprehensive
and up-to-date information about each model, and engaging in collaborative efforts to service buyer
requests for various kinds of after-the-sale product support (filing warranty claims, downloading
product manuals, obtaining software updates and useful apps, and so on).
Companies whose expenditures for website displays are above the regional average have website
display-based competitive edge that positively impacts their regional sales volume and market
share. Conversely, below-average expenditures for website displays results in a competitive
disadvantage that negatively impacts a company’s regional sales volume and market share. The
bigger the percentage competitive advantage/disadvantage, the bigger the positive/negative impact.
5. Discount Offered to 3rd
-Party Online Retailers—While exerting efforts to recruit third-party
retailers and support their efforts to merchandise the company’s drone models is important, the
crucial inducement to securing the commitment of 3rd
-party online retailers to market a
company’s drones is the size of the percentage discount off the price that a drone-maker is
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selling drone models at its website. Understandably, third-party online retailers have zero
interest in buying a drone-maker’s models at the same price the drone-maker is charging at its
website, then marking the purchase price up by some percentage (10% or more to cover their own
costs and allow for an attractive profit) and trying to secure orders at prices above a drone maker’s
website prices. Hence, a drone-maker wanting to gain wider buyer access and additional sales
volume through 3rd
-party online retailers can do so only by offering to sell its drones to these online
retailers at an attractively large percentage discount off its own website price. The bigger the
percentage discount offered, the greater the number of 3rd
-party retailers that will agree to stock and
merchandise a drone-maker’s brand. But, as should be expected, the bigger the amount by which a
drone-maker’s percentage discount offer exceeds the industry regional average, the bigger the
number of 3rd
-party online retailers it will attract to sell its brand of drones in that region and the
greater will be the resulting regional sales volume and market share it achieves.
6. Search Engine Advertising—Search engine ads are a means of attracting more drone shopper
traffic to a company’s website and thereby helping achieve a bigger unit sales volume and market
share in a region. A company whose expenditures for search engine advertising is above the allcompany
regional-average gains a search engine advertising-based competitive edge that
positively impacts its regional sales volume and market share; the bigger the percentage
competitive advantage, the bigger the positive impact. A company whose expenditures are below
the regional average suffers from a search engine advertising-based competitive disadvantage that
negatively impacts its regional sales and market share; again, the bigger the percentage
competitive disadvantage, the bigger the negative impact.
7. Website Product Displays / Info—The level of expenditures for website enhancement is a proxy
for the time, effort, and creativity that a company puts into (1) posting periodically refreshed and
visually appealing displays of its various drone models, along with ample and useful information
about each model’s features, capabilities, and specifications, (2) providing site visitors with
capability to create side-by-side model comparisons, (3) enabling site visitors to post their reviews
of particular models, (4) making it easy and quick for buyers to place orders and pay for their
purchase via credit card or wire transfer, and (5) providing good after-the-sale product support to
customers. Bigger than average expenditures for website expenditures attract more website
visitors because of the resulting enhanced visual appeal, functionality, features and information.
Many potential buyers make a point of visiting the company’s website to gather information about
the company’s models and research how the features, capabilities, and specifications of its models
compare against those of rival brands. Visits to a company’s website also enable customers to
obtain needed technical support, download apps and software updates for previously-purchased
drone models, browse product manuals, and discover how to file a warranty claim.
Companies whose expenditures for website displays are above the regional average have website
display-based competitive edge that positively impacts their regional sales volume and market
share. Conversely, below-average expenditures for website displays results in a competitive
disadvantage that negatively impacts a company’s regional sales volume and market share. The
bigger the percentage competitive advantage/disadvantage, the bigger the positive/negative impact.
8. Warranty Period—Shoppers for UAV drones find longer warranties more appealing than shorter
warranties. A company whose warranty period exceeds the regional average gains a competitive
edge that positively impacts its regional sales/market share, whereas a company whose warranty
period is below the regional average suffers a competitive disadvantage that negatively impacts its
regional sales volume and market share. The further a company’s warranty period is above/below
the regional average, the bigger the positive/negative impact.
9. Company Image (brand reputation)—Just as with action-capture cameras, market research
confirms that the current company image ratings (which reflect company brand reputations) of rival
drone-makers have a moderately strong influence on the brand choices of drone buyers in the
upcoming twelve months. Thus, companies with current image ratings above the industry average
have a competitive advantage over rival companies with below-average image ratings in attracting
drone buyers to purchase their brand for a period of one year (at which time new end-of-year image
ratings and brand reputations become available and widely publicized). The bigger a company’s
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image rating advantage or disadvantage against the industry average, the bigger the positive or
negative impact on its sales of UAV drones in the upcoming year.
Companies with comparatively weak brand reputations must exert enough extra effort on some (or
many) of the other 8 competitive factors to overcome a weak image disadvantage and boost overall
buyer appeal in order to increase sales and market shares above prior-year levels. Winning big
chunks of sales and market share away from rivals with strong image ratings in a single year is
difficult. But it is certainly feasible for drone-makers with below-average image ratings to nibble
away at the business of strong-image rivals, gaining 1 or 2 points of market share in a single year,
(maybe more) if they significantly improve the overall buyer appeal and competitiveness of their
drone models relative to the models of rivals. Should companies with below-average brand images
boost their image ratings to above-average over a period of several years, they can definitely turn
the liability of a below-average brand image into a stronger brand image and competitive asset.
Just as in the real world, the 11 competitive factors for action cameras have differing impacts—some
carry more weight than others in a company’s sales volumes and market shares in each geographic
region. As indicated above, the prices and P/Q ratings of camera rivals are the two most
important competitive factors affecting buyer decisions of which camera brand to purchase.
Moreover, buyer decisions to purchase one brand instead of another are more influenced by brand
reputation, number models, number of retail outlets, advertising, the warranty period, and the size of
promotional discounts than by differences in the number of promotional campaigns, in retailer support
expenditures, and in website expenditures. The weight for brand reputation falls somewhere in
between the weights for the most and least important competitive factors.
Similarly, the 9 competitive factors for UAV drones have differing impacts on which drone brands have
more buyer appeal than other. The prices and the P/Q ratings of rival brands are usually the two
most influential competitive factors affecting buyer decisions of which UAV drone brand to
purchase. Furthermore, the brand preferences of drone shoppers are likely to be more influenced by
such competitive factors as brand reputation, the number of models, and warranty periods than they
are by search engine ads and the efforts of rival companies to enhance their websites (where many
sales transactions occur) and market their drones at the websites of other online electronics retailers.
The influence of brand reputation falls somewhere in between the importance for the most and least
important competitive factors.
The Weighting of Each Competitive Factor Is Not a Fixed Amount. The weighting placed on the 11
competitive factors for action cameras and the 9 competitive factors for drones closely mirror what is
believed to actually prevail in real-world marketplaces. While knowing precisely the weighting used
for each competitive factor might seem helpful, such knowledge is not as useful as you might
think.
Price is most definitely a very influential competitive factor. Big price differences in a region matter a
lot in accounting for differences in sales/market share. But as the spread between the highest-priced
company and the lowest-priced company becomes smaller and smaller, the weaker is the unit
sales/market share impact of price differences and the greater is the role of the differences on other
competitive factors in causing the sales and market shares to differ. For example, in the rare instance
that all companies should happen to charge the same price in a region, then price becomes a total
competitive non-factor and has zero impact on buyer appeal for one brand versus another—in such a
case, 100% of the regional sales and market share differences among rivals will stem directly from
differences on the other competitive factors. So how much price matters in determining a company’s
unit sales/market share in a region is not a fixed amount but rather is an amount that varies from
“big” (when price differences are also “big) to “small” (when prices differences are “small”) to “zero”
(when the prices of rivals are identical). Precisely the same is true for the other competitive factors. So
while it is true that some competitive factors affect buyer brand preferences more than others, what
matters most in determining sales and market shares is the sizes of the differentials on each
competitive factor. Big differences on a less important competitive factor like the length of warranty
The Importance of the Competitive Factors that Determine Sales and Market Share
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periods can end up having a bigger sales/market share impact than very small/insignificant differences
on more important competitive factors (like price and P/Q rating).
Essential understanding: The more that a company’s brand appeal to buyers on any one competitive
factor (whether it be price, P/Q rating, brand reputation, number of models to choose from, length of
warranty, and so on) is above/below the industry average in a region, the bigger is the weighting/impact
of that factor in accounting for why its regional net sales/market share is above/below the industry
average. Conversely, the closer to the industry regional average is a company’s price or P/Q rating or
brand reputation or number of models and so on, the smaller is the weighting/impact of that factor in
accounting for why its unit sales/market share is above/below the industry average. When a company’s
competitive effort on each of the various competitive factors approximates the industry averages in a
region, then its resulting unit sales volume/market share will also approximate the region’s industry
average. So which particular competitive factors actually turn out to be most important all
depends on how that company’s competitive effort stacks up against the industry average
competitive effort, factor by factor. All unit sales and market share outcomes in all regions are thus
100% competition-based and are a function of the size of each company’s competitive advantage or
disadvantage versus the industry averages for all the competitive factors.
Special Note: After each decision round, you can review a Comparative Competitive Efforts
Report (1-page for each geographic region) showing each company’s competitive effort on each
of the competitive factors for action cameras and UAV drones. It is imperative that you review
this information to determine how well your company’s competitive effort on each factor
compares to the industry averages—on which factors does your company have a competitive
advantage and on which factors is your company at a competitive disadvantage? This
information puts you in position to correct any important competitive disadvantages and to
consider ways to further exploit any competitive advantages in the upcoming decision round.
Ignoring the information in the Comparative Competitive Efforts report puts your
company in the risky position of heading into a market contest with little or no clue as to
competitors’ prior-year prices, P/Q ratings, brand reputations, models, warranties, and so forth
and the extent to which your company was or was not outcompeted by rivals.
With so many competitive factors determining unit sales and market shares of and with the sales and
market share impacts of these factors varying from year-to-year because of shifts in each company’s
competitive advantage/disadvantage versus rivals on all these factors, you have wide-ranging options
for crafting a strategy capable of producing good overall company performance and competing
successfully in the AC camera and UAV drone market segments. For example, you can:
• Employ a low-cost leadership strategy and pursue a competitive advantage keyed to
operating more cost-efficiently than rivals and thereby being in a strong position to profitably
sell action cameras and/or drones at prices below those of rivals.
• Employ a strategy to differentiate your company’s cameras and/or drones from rival brands
based on such attributes as product performance and quality, number of models, warranties,
and other competitive factors that matter to buyers—and thereby outcompete rivals with a
product offering that has greater overall appeal to a highly profitable number of buyers.
• Employ a “more value for the money” strategy (for example, selling 8-star cameras and
drones at lower prices than other 8-star brands) where your competitive advantage is an
ability to incorporate “upscale” product attributes with high buyer appeal at a lower cost than
rivals—and thereby underprice rival brands having comparable attributes and P/Q ratings.
• Focus your strategic efforts on being the clear market leader in either action-capture
cameras or UAV drones.
• Focus your company’s competitive efforts on gaining sales and market share in those
geographic markets where your company already has high sales and/or attractively large
profit margins (as compared to other regions) and putting less emphasis on winning sales in
Crafting a Strategy to Be Competitively Successful
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those regions where your company has a low market share or small profit margins and
regions where competition is especially fierce (as compared to other regions).
• Pursue essentially the same strategy and competitive advantage across all four regions or,
instead, craft regional strategies tailored to improve the company’s competitiveness regionby-region
and counteract/overcome the strategic actions and competitive maneuvers of
specific rivals in specific regions.
There’s a very big window of opportunity for you to craft some version of the above strategic
approaches. And because GLO-BUS has no built-in bias that favors any one strategy over all the
others, there are multiple strategic approaches and sets of competitive efforts/action that, if properly
designed and well-executed, are capable of producing competitive success in the global market for
cameras/drones, provided they are not overpowered or thwarted by even more potent strategic
approaches and competitive actions/efforts that are well-executed by rival companies.
No One Strategy for Competing “Guarantees” Success. Because the sales and market share
outcomes for a company are 100%-based on the competitiveness and overall buyer appeal of its brand
versus the competitiveness and overall buyer appeal of rival brands, it is neither conceptually nor
competitively possible for there to be some preselected surefire strategy or competitive approach or
some undefeatable combination of competitive efforts/actions that is “guaranteed” to propel a company
into the ranks of the top-performing companies, irrespective of the strategies and competitive efforts
undertaken by rival companies. Consider the following:
• Are the companies that are being outperformed by the company pursuing a so-called
surefire strategy going to sit idly, do nothing, and watch that company overwhelm them,
decision round after decision round thereby running the risk of a poor grade? Not likely. It
is unreasonable to expect any company to passively accept competitive defeat and
unconditionally surrender.
• Do managers of rival companies whose performance is suffering have strong incentives to
aggressively pursue actions to boost the performance of their companies? Certainly.
• Do all the managers of rival companies lack the capacity figure out why their companies are
being outcompeted and outperformed? Very unlikely.
• Aren’t the reasons fairly obvious? Don’t these reasons revolve around prices and/or P/Q
ratings and/or number of models offered and/or warranties and/or assorted marketing efforts
that are not sufficiently competitive with those of the high-performing company and that have
resulted in weak buyer appeal? Most certainly.
• Might part of the reason for their underperformance also be due to “high” unit costs that are
squeezing profitability? Yes—at least for some companies.
• Can one or more of the companies being outcompeted and outperformed be reasonably
expected to launch a strong counterattack and initiate new and potentially potent
competitive efforts to improve their company’s performance? Yes. There is nothing to
prevent any company from reducing prices and/or increasing P/Q ratings and/or adding
models and/or lengthening warranties and/or boosting its marketing efforts (perhaps by
significant amounts), and there is plenty of reason for underperforming companies to pursue
such actions aggressively.
• Might such actions prove effective in bolstering the competitiveness and overall buyer
appeal of their brands, thereby narrowing the competitive gap and the performance gap
between the underperforming companies and the industry leader? Definitely. It is common
for underperforming companies to reverse their fortunes by undertaking actions that
succeed in boosting buyer appeal for their product offerings and greatly improving their
overall performance—this occurs both in GLO-BUS and in the real world.
• Is there a reasonable chance that one or more companies could even overtake the industry
leader by devising a potent strategy and series of competitive actions/maneuvers that
enable it to outcompete the former industry leader in the marketplace and become the best-
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performing company in the industry? It should come as no surprise—there are many
instances, both in GLO-BUS and the real-world, where well-managed trailing companies
have overtaken industry leaders.
There is no such thing as an “unbeatable” strategy and competitive approach that will always
overpower and outperform all other strategies, irrespective of the strategies and competitive
efforts employed by rival companies. What drives the sales/market share success/failure of any one
company’s strategy for competing in the marketplace is always how well the overall buyer appeal and
competitiveness of its cameras/drones matches up in each decision round with the overall buyer appeal
and competitiveness of the cameras/drones of rival companies on each of the competitive factors. As
long as your company’s competitive efforts/actions and operating decisions produce an overall buyer
appeal for your camera/drone product line as compared to the offerings of rival companies and so long
as your company exerts sufficiently aggressive competitive efforts, then you can expect a satisfactory
percentage of buyers to prefer purchasing your cameras/drones over rival company brands.
While it is important to win attractive sales/market shares in each region, such outcomes are
not sufficient to produce the best profit outcomes. For a company to rank among the industry’s
top-performers, its net revenues must cover costs by an amount sufficient to produce good-to-excellent
profitability. This requires not only sufficient competitive success in the marketplace to produce
attractively large revenues but also consistent managerial success in operating the company costefficiently—operating
inefficiencies and wasteful spending impair a company’s profitability and overall
performance.
Just as in real-world companies that operate in competitive marketplaces, your company’s strategy
and competitive actions/efforts will need to evolve as the decision rounds unfold in order to
respond and adjust to the shifting strategies and competitive efforts of rival companies. So
even if your company’s performance in the year just completed is quite good, do not expect to lock your
competitive efforts and decisions entries in concrete—some adjustments (maybe many adjustments)
will almost certainly be needed to counter the freshly initiated competitive efforts/actions of rivals.
Be Very Wary about Following the Advice of Outside Sources. You are well-advised to be highly
skeptical about following any advice and tips regarding what to do that comes from prior
participants in the GLO-BUS exercise at your school or from sources you discover from internet
searches. While you might be tempted to view such anecdotal information as “helpful” or “important to
know” or “worth considering,” just bear in mind that your company will be competing against companies
run by students in your class—any information you run across about the experiences of companies run
by other teams of students in other industries at your school or elsewhere in the near or distant past are
of dubious relevance. Why? Because the chance that the head-to-head competition and outcomes in
whatever past industries produced the tips and advice you have gotten will closely match the exact
levels of competitive effort in each region that the companies in your industry have already undertaken
and will undertake in the future is very small (most likely close to zero). So, following such advice
carries significant risk of being “off the mark” or even “dead wrong” in helping you identify what levels of
competitive effort are needed to compete effectively against the rival companies in your class. The
most accurate and dependable source of information for guiding your efforts to compete successfully is
always found in the Competitive Intelligence Report you receive after every decision round.
As indicated earlier, there are 56 different types of decision entries and 17 entries involving
assumptions about the competitive actions that rivals are likely to take. In some cases, entries for the
same decision type (like selling price or advertising and the length of warranties) are required for each
of the four geographic regions of the world market. Each of the decision pages displays the projected
outcomes of your decision entries. These projections appear instantaneously as soon as each decision
is entered, allowing you to isolate the incremental impacts of each decision entry. Also, on each
decision page are calculations showing projections of earnings per share (EPS), return on average
equity investment (ROE), credit rating, image rating, revenues, net profit, and year-end cash balance.
Making Decisions
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These, too, are instantly updated with new entry, allowing you to see the probable impacts of each new
decision entry on company performance. You will find these built-in decision support calculations
invaluable in evaluating alternative decisions and deciding what to do. You can easily try out any
number of “what if we do this” decision alternatives, review the projected outcomes, and thereby search
for a combination of decision entries that appears to offer the best overall performance and meets with
the consensus approval of your company’s management team.
The first time you visit a decision entry page, you will need to take time to explore the page and digest
all the information. If you feel the need for additional information while you are working on a
particular page, click the Help button at the top-right. The Help sections provide detailed entry-byentry
guidance, including important cause-effect relationships, explanations of all on-screen
calculations, and decision-making tips. Totally ignoring the Help information is unwise. Most likely,
you will find the information valuable in making wiser decision entries and avoiding the desperation of
entering “some number” in hopes that the outcome will be “good” or “okay.”
Upon visiting a decision entry page, the numbers you see in the entry boxes represent either (1) the
decisions made in the prior year or (2) the latest decision entries you and/or your co-managers saved
while previously working on the current decision round. No decision entry for the upcoming year is
considered final until the deadline (set by your instructor) for entering decisions arrives. GLO-BUS
considers the last set of decision entries saved prior to the decision round deadline as “final”. It is
critical that you and your co-managers save your entries for the decision round before the deadline passes.
Product Design Decisions
The product design page involves deciding on the components, enhancements, and extra performance
features to incorporate in your cameras/drones, the number of models to have in each product line, and
how much to spend on product R&D. Initially the numbers appearing in the decision entry fields (or
beside the decision filed for product R&D) are the entries from the prior round (year). The Product
Design entries are important because they determine the P/Q ratings assigned to your cameras/drones.
The better the design-related specifications and the greater the number of extra performance features,
the better the resulting performance and quality (but the higher the associated production costs). As
decisions are entered, you can review the on-screen calculations of the expected P/Q ratings and the
associated costs to determine which combination of design specifications is “best” for implementing the
strategy you have chosen to pursue.
All parts, product enhancements, accessories, and components needed for extra performance features
are purchased from outside suppliers; these suppliers sell essentially the same items at the same
prices to all companies. The costs of extra performance features increase as the number incorporated
into the designs of cameras/drones increases (the cost impacts are shown in the Production Costs
section of the page).
Number of Models. Prior management elected to have a product line-up consisting of 3 action camera
models and 2 drone models. While there is considerable merit in trying to expand sales by adding
more models, the addition of more models introduces quality control difficulties that negatively impact
P/Q ratings and warranty claims and that also reduces the number of cameras/drones that product
assembly teams (PATs) can assemble annually. PATs cannot assemble 5 models of cameras/drones
as proficiently and as problem-free as they can assemble 3 models. Model increases reduce
camera/drone PAT productivity by some percentage that depends on whether the model increase is 1
model, 2 models, 3 models, or 4 models. The addition of more models also tends to increase warranty
costs because of faulty assembly and/or components that prematurely become defective. Reducing
the number of models has the reverse effects. It is easy enough to track the effects of increasing or
decreasing the number of models by observing the changes in the on-screen calculations of the P/Q
rating, warranty costs, and labor costs.
Product R&D Expenditures. In Year 5, prior management spent $20 million on product R&D for
cameras and $15 million on product R&D for drones. Substantial R&D spending is required to improve
product performance, discover and test easier-to-assemble camera/drone designs, develop new and
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improved models, and program more sophisticated software capabilities for both cameras and drones.
The R&D challenges for improving drone performance are more formidable than for action cameras,
partly because video camera technology is better understood and more mature, partly because drones
are a relatively new product, and partly because the company just recently entered the drone
marketplace and has yet to fully develop its drone designs. Drone buyers, of course, are highly
interested in drones that can stay up in the air longer than the current maximums of 15-30 minutes, fly
distances well beyond the view of the person operating the flight controller, and avoid crashing into
obstacles in their flight path—such capabilities present formidable R&D challenges that will require
sustained R&D efforts.
The combination of current year spending and cumulative spending over time for product R&D (1)
reduce the costs of components, accessories, and enhancement features used in assembling
cameras/drones, (2) provide a pipeline of tested ways to add more features, improve performance, and
build the company’s proficiencies in designing new and improved camera/drone models, (3) improve a
company’s camera/drone P/Q ratings—higher P/Q ratings are realized as soon as current and
cumulative R&D spending reach levels sufficient to produce better camera/drone performance and
quality, (4) reduce warranty claims and costs (these two benefits stem from the positive impact of R&D
expenditures on P/Q ratings), and (5) increase the productivity of PATs in assembling camera/drone
models—productivity gains occur as soon as current and cumulative R&D spending reach levels
sufficient to identify and develop easier to assemble product designs.
AC Camera Marketing Decisions
At the top of this second decision page is a section displaying the 7 marketing-related decisions your
company will make for action cameras. Just below the entry fields for the 7 marketing decisions is a
section labeled Market Segment Statistics. The first two lines show your company’s (1) actual sales of
cameras in the prior year and projected sales in the current year and (2) camera market share in the
prior year and projected market share in the current year. The last three lines of this section report the
numbers of multi-store chains, online retailers, and local retail shops in each region stocking and
merchandising your brand of action cameras in the prior-year and the current year—the current year
numbers were updated at the end of the prior year to reflect the year-end appeal of your company’s
camera models, and there’s nothing you can do in the current year to attract additional retailers (the
updated numbers of retailers willing to stock each company’s camera brands are reported in the
Competitive Intelligence Reports). The company’s regional sales offices (Milan, Singapore, Sao Paulo,
and Dallas) are staffed with people who help recruit and service the accounts of retailers in the region.
Each time you enter a different value for any of the marketing decisions, you will see the effects on
projected unit sales and projected market share. In addition, you will see on-screen calculations
showing the projected price-cost-profit outcomes associated with the marketing decision entries.
The decision entries on the page are pretty much self-explanatory, but click on the Help button at the
top-right if you have questions, want additional information, or need guidance.
There are several things you need to keep in mind as you make entries for the marketing decisions:
• All seven marketing decisions (along with your company’s P/Q rating and number of models
offered, both of which are determined by your entries on the Product Design page) will
largely determine the degree to which your company’s camera products are competitive with
the camera products of rival companies and whether your company’s brand will be
sufficiently appealing to buyers to generate net sales revenues big enough to cover
operating costs and yield attractive operating profits and operating profit margins.
• The accuracy of the on-screen projections of your company’s unit sales and market shares
is a function not just of your company’s competitive efforts but also the competitive efforts of
rival companies (which will almost certainly include adjusting their P/Q ratings, number of
models, wholesale prices, advertising, sales promotion efforts, and so forth). At the bottom
of this page is a section labeled Competitive Assumptions containing entry fields for the
competitive factors affecting sales and market share in each region. The first time you visit
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this page these entries represent the prior-year average competitive efforts of rival
companies. Unless these are updated, the on-screen projections of your company’s unit
sales/market shares will be based on how your company’s competitive effort for the current
year compares against the competitive conditions your company faced last year.
Note: The reason there are entry boxes for only 9 of the 11 competitive factors is that the
two missing competitive factors—number of retailers and brand reputation—are already
known for the current year because they are updated at the end of every decision round
and are reported in the Competitive Intelligence Report.
Needless to say, the managers of rival companies can be counted upon to alter aspects of
their competitive effort in all four regions as they prepare their current-year decisions and
seek to boost the performance of their respective companies. This means that the onscreen
projections of your company’s unit sales and market share in each region are of
questionable validity because they are based on how your company’s competitive effort in
the current year stack up against the prior-year competitive efforts of rival companies, not
their forthcoming competitive efforts.
If you believe that rival companies are likely to alter their competitive efforts by raising or
lowering prices, P/Q ratings, models offered, advertising, and so on, then you will definitely
need to enter your anticipated changes in the some/all of the industry average marketing
efforts in the Competitive Assumptions section. The whole purpose of updating the prior
year industry-average levels of competitive effort is to obtain projections based on the
forthcoming-year industry-average levels of competitive effort in each region. Make a point
of consulting the historical data in the Regional Average Competitive Efforts selection in the
Competitive Intelligence menu which shows the historical changes of the regional averages
for all year completed to date—this information will prove highly valuable in making your
updates.
Consequently, before you get very far along in making entries for the 7 marketing decisions,
it makes sense to first enter your anticipated updates of the industry averages for the 9
competitive factors. Yes, especially for Year 6, these are likely to be “guesstimates” or
“approximations”, but sales/market share projections based on reasonable assumptions of
what rivals are likely to do may be more reliable than projections based on what rivals did a
year ago. The updates will be easier to make in later years, as more historical information
becomes available. It is reasonable for you to expect that the competitive efforts of rivals
will, on average, be stronger than in the prior year, if only because poorly-performing
companies that were outcompeted last year have strong incentive to initiate actions to boost
their competitiveness and because all competitive have incentives to correct any competitive
disadvantages and to try to improve their overall financial performance.
Even if you overestimate the strength of competition from rivals in the upcoming year (which,
in turn, will lower the projected sales/market shares for a given level of marketing effort on
the part of your company) and actually end up with bigger sales/market shares than were
projected, your company will still assemble, ship, and sell the unexpected units demanded
provided your company has sufficient idle workstation capacity to assemble the unexpected
orders. It is far better to have the pleasant surprise of selling more than the projected sales
volume (and enjoying the accompanying extra revenues and profits) than having the
unpleasant surprise of selling less than the projected sales volume because you
underestimated the strength of the competitive efforts from rivals.
Trying different decision entries and experimenting with different assumed changes in the industry
average levels of competitive effort for the current year, enables you to evaluate the merits of different
decision entries and arrive at a consensus of what strategic actions to take in striving to combat the
anticipated strategies and competitive maneuvering of rivals.
Exchange Rate Adjustments. In the section labeled Price-Cost-Profit Breakdown, you will notice that
in the Revenue Projection entries just under selling price is a line labeled “± Exchange Rate
Adjustment.” Exchange rate adjustments result from the fact that (1) the exchange rate of one currency
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for another fluctuates on a daily basis and (2) the company assembles, ships, and sells action cameras
in Taiwan (where the local currency is Taiwan dollars) to buyers in other parts of the world (where local
currencies are different). Further, the orders tend to occur at some agreed price in a period when
exchange rates are one value while buyer payments are not received until some later period (when
exchange rates are very likely a different value). There’s a second reason for exchange rate
adjustments: the local currency payments the company receives from buyers over the course of a year
must be converted into Taiwan dollars and ultimately into U.S. dollars (since the company reports its
financial statements in U.S. dollars and the company’s stock is traded on a U.S. stock exchange).
Thus, the company’s business is one with potentially significant foreign exchange risks.
To help manage these risks, company officials have negotiated a long-term currency exchange
agreement with the Global Community Bank through which the company does most of its business.
The agreement calls for the bank’s foreign currency department to handle the company’s many foreign
currency transactions. For simplicity, the agreement entails combining both of the reasons for currency
adjustments (enumerated in the above paragraph) into a single adjustment whereby the net revenues
the company actually receives on cameras assembled and shipped from its Taiwan assembly facility
and sold to buyers in various parts of the world to be adjusted upward or downward is based on the
real-world currency swings during the period from one decision round to the next as concerns the U.S.
dollar against the Taiwan dollar, the euro against the Taiwan dollar, the Brazilian real against the
Taiwan dollar, and the Singapore dollar against the Taiwan dollar. Specifically:
• The net revenue per camera the company actually receives from camera sales to retailers in
North America is a result of adjusting the company’s average wholesale price up or down for
exchange rate changes between the U.S. dollar and the Taiwan dollar.
• The net revenue per camera the company actually receives from camera sales to retailers in
Europe-Africa is a result of adjusting the company’s average wholesale price up or down for
exchange rate changes between the euro and the Taiwan dollar.
• The net revenue per camera the company actually receives from camera sales to retailers in
the Asia-Pacific is a result of adjusting the company’s average wholesale price up or down
for exchange rate changes between the Singapore dollar and the Taiwan dollar.
• The net revenue per camera the company actually receives from camera sales to retailers in
Latin America is a result of adjusting the company’s average wholesale price adjusted up or
down for exchange rate changes between the Brazilian real and the Taiwan dollar.
The procedures for adjusting revenues on sales to retailers in Latin America, Asia-Pacific, and North
America are handled in like fashion. The sizes of the exchange rate adjustment each year are always
equal to 5 times the actual period-to-period percentage change in the real-world exchange rates for
US$, €, Brazilian real, Sing$, and Taiwan$ (multiplying the actual % change by 5 is done so as to
translate exchange rate changes over the few days between decision periods into changes that are
more representative of a potential full-year change). However, because actual exchange rate
fluctuations are occasionally quite volatile over a several-day period, the maximum exchange rate
adjustment during any one period is capped at 20% (even though bigger changes over a 12-month
period are fairly common in the real world). All the pertinent calculations are done automatically, thus
relieving you from mastering the intricacies of the exchange rate adjustments.
In making sales to buyers in Europe-Africa, the company provides price quotes in terms of both the
buyer’s local currency and in euros. Buyers, while making payment in their local currency (which can
be either euros or some other denomination), agree when the order is placed to tie the amount of their
local currency payment per camera to the local currency equivalent of that number of euros per
camera—the company’s global bank handles converting the local currency payments of Europe-Africa
buyers into the equivalent of euros and then into Taiwan dollars at the appropriate exchange rates.
Should the exchange rate of euros per Taiwan dollar fall from one decision period to the next, say from
0.0250 to 0.0249 euros per Taiwan dollar, then buyer payments of the agreed number of euros per
camera at the time the order was placed equate to more Taiwan dollars at the time of payment and an
upward adjustment in the company’s revenues. Conversely, when the exchange rate of euros per
Taiwan dollar rises, say from 0.0250 to 0.0251 euros per Taiwan dollar (meaning that a specified
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number of euros equate to fewer Taiwan dollars), then the company does not receive as many Taiwan
dollars in payment for the cameras sold and shipped to Europe-Africa buyers and net revenue is
accordingly adjusted downward. The size of the Europe-Africa revenue adjustment is equal to 5 times
the actual period-to-period percentage change in the exchange rates of euros to Taiwan dollars
(multiplying the actual % change by 5 is done so as to translate the exchange rate change over a few
days into a change that is more representative of what might realistically occur over a full year). Thus,
if the exchange rate between euros and Taiwan dollars should change by −0.40% from one decision
period to the next, the size of the exchange rate adjustment will be −2.0% (−0.40% x 5 = −2.0%).
Because actual exchange rate fluctuations are occasionally quite volatile over a several day period, the
maximum exchange rate adjustment during any one year is capped at 20%, thus limiting the size of
gains and losses from exchange rate adjustments.
Since the sizes of the expected exchange rate adjustments in dollars per camera/drone are known
during the course of making the current-year decisions, you can pursue actions to mitigate the adverse
effects of unfavorable (those with a minus sign) exchange rate adjustments. One option is to adjust
sales and marketing efforts in a manner that results in (1) added sales in those areas where the
exchange rate adjustments are positive (favorable) and (2) somewhat smaller sales in the regions
where the exchange rate adjustments are negative (unfavorable). Another option is to raise the selling
prices in a particular region to help offset negative revenue adjustments and realize higher net revenue
per camera sold. Because all competing companies have assembly facilities in Taiwan and are thus
subject to comparable exchange rate impacts on net revenues per camera sold, you may be able to
make offsetting price adjustments without much risk of putting your company at a price disadvantage.
Consult the information in the Help section for more details on the mechanics of the exchange rate
adjustments and their managerial relevance in making decisions.
There will be no exchange rate adjustments in Year 6. The prevailing real-world exchange rate
values at the beginning of Year 6 and the real-world rates at the beginning of Year 7 will serve as the
base for calculating the Year 7 exchange rate adjustments. The real-world changes in the exchange
rates between the beginning of Year 7 and the beginning of Year 8 serve as the basis for exchange
rate adjustments in Year 8. And so on throughout the exercise.
Since the company’s financial statements are reported in U.S. dollars, company accountants go
through the necessary accounting procedures to accurately record and report the revenues collected in
Taiwanese dollars in U.S. dollars and to otherwise accurately portray the company’s financials in U.S.
dollars. The procedures are in full compliance with generally accepted accounting procedures and
have been approved by the company’s auditors.
UAV Drone Marketing Decisions
At the top of this third decision page is a section displaying the 6 marketing-related decisions for UAV
drones. Initially the numbers appearing in the decision entry fields (or beside the decision filed for
product R&D) are the entries from the prior round (year). Just below the entry fields for marketing
decisions is a section labeled Market Segment Statistics. The first two lines show your company’s (1)
actual sales of drones in the prior year and projected sales in the current year and (2) drone market
share in the prior year and projected market share in the current year. The last line of this section
displays the number of third-party online retailers marketing your drone models at their websites in the
prior-year and the current year—the current-year number was updated at the end of the previous year
to reflect the year-end appeal of your company’s drone models and there’s nothing you can do in the
current year to attract additional 3rd
-party online retailers (the updated numbers of 3rd
-party online
retailers willing to stock and merchandise each company’s drone brands in the current year are
reported in the Comparative Competitive Efforts report). Each time you enter a value for any of the
marketing decisions, you will see the effects on projected unit sales and projected market share.
The third section of the UAV drone marketing page shows price-cost-profit breakdowns flowing from the
marketing decision entries and the projected sales volumes in each region. At the bottom of the
decision page is a section for entering your anticipated changes in the industry averages for 8 of the 10
competitive factors affecting each company’s sales/market shares in each region. The current-year
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industry averages for 2 of the 10 competitive factors—the number of third-party retailers merchandising
each company’s drone models and company brand reputation—are already known (and can always be
viewed in the Comparative Competitive Efforts report).
Just as was the case with the AC Camera Marketing Decision page, before you get very far along in
making entries for the 6 drone marketing decisions, it makes sense to first enter your anticipated
updates of the industry averages for the 8 competitive factors in the Competitive Assumptions section
at the bottom of the page. Again, your will be entries are “guesstimates” (especially in Year 6), but
starting in Year 7 and thereafter, the historical changes in the regional averages shown in the Regional
Average Competitive Efforts report will prove very valuable in entering updates for the regional
averages for the forthcoming year. Bear in mind that sales/market share projections based on your best
judgment of the forthcoming-year industry-average levels of competitive effort in each region may be a
less risky basis for evaluating the profit prospects of alternative marketing decision entries than relying
on sales/market share/ profitability projections based on the prior-year regional average levels of
competitive effort. Furthermore, it is wise to expect that the competitive efforts of rivals will, on
average, be stronger in the current year than in the prior year, because of the incentives that all
companies (and most especially poorly-performing companies) have to correct their competitive
disadvantages, strengthen their overall competitiveness and thereby improve company performance.
Again, even if you overestimate the strength of competition from rivals in the current year (which, in
turn, will lower the projected sales/market shares for a given level of marketing effort on the part of your
company) and actually end up with bigger sales/market shares than projected, your company will still
assemble, ship, and sell the unexpected units demanded provided your company has sufficient idle
workstation capacity to fill the unexpected orders from buyers. You will quickly find it is better to have
the pleasant surprise of selling more than the projected sales volume (and enjoying the accompanying
extra revenues and profits) than having the unpleasant surprise of selling less than the projected sales
volume because you underestimated the strength of the competitive efforts from rivals.
Note: In the first several decision rounds, updating the regional average levels of competitive efforts
in the Competitive Assumptions section admittedly involves more guesswork than insightful
judgement because there’s little hard evidence about what actions rivals will take. Thus, it is usually
wise to be cautious and make relatively small adjustments in the averages. But making reasonably
accurate guestimates become easier as the number of completed decision rounds increases; this is
because with more data points in the Regional Average Competitive Efforts report, trends in one or
more of the industry averages become more evident and because careful analysis of the data in the
Time Series Competitive Efforts report for specific companies will help you judge what moves
industry-leading companies and companies you consider as close competitors may make next.
Your task on this decision page is to try out a variety of combinations of the 6 market decisions in each
region and search for a set of entries which, in conjunction with your company’s P/Q ratings for drones
and number of drone models (as determined from your entries on the Product Design page), number of
3rd-party online retailers, and prior-year brand reputation, produces an overall competitive effort versus
rival companies with appealing projected outcomes for unit sales, market shares, operating profits, and
operating profit margins.
Exchange Rate Adjustments. Exchange rate adjustments in the company’s selling prices for drones
have to be made for all the same reasons as for action cameras and the adjustment procedures are
identical. The adjustments appear in the section labeled Price-Cost-Profit Breakdown on the line just
under selling price labeled “± Exchange Rate Adjustment.” As explained earlier, a negative adjustment
represents an unfavorable shift in exchange rates that results in the company receiving net revenue per
drone sold that is below the company’s selling price in the region. A positive adjustment represents a
favorable exchange rate shift that causes net revenue per drone sold to be higher than the posted
selling price.
It is up to you to decide whether to just ignore favorable/unfavorable exchange rate shifts or whether to
make proactive adjustments. One option is to adjust sales and marketing efforts in a manner that
results in (1) added sales in regions where the exchange rate adjustments are positive (favorable) and
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(2) somewhat smaller sales where the exchange rate adjustments are negative (unfavorable). Another
option is to raise the selling prices in regions with negative revenue adjustments by amounts sufficient
to recover the lost revenue and preserve the company’s profit margins.
There will be no exchange rate adjustments in Year 6. The prevailing real-world exchange rate
values at the beginning of Year 6 and the real-world rates at the beginning of Year 7 will serve as the
base for calculating the Year 7 exchange rate adjustments. The real-world changes in the exchange
rates between the beginning of Year 7 and the beginning of Year 8 serve as the basis for exchange
rate adjustments in Year 8. And so on throughout the exercise.
Compensation, Training, and Facilities Decisions
This page contains 4 decision entry fields for compensating workers engaged in assembling action
cameras and 4 decision entry fields for compensating workers engaged in assembling drones. The
compensation decisions are the same for both types of workers: (1) how much to raise/lower the base
pay of PAT members, (2) whether and by how much to change each PAT’s assembly quality incentive
payment per unit assembled, (3) whether and by how much to alter the annual bonus for perfect
attendance, (4) whether and by how much to raise/lower payments for fringe benefits. It is up to you
whether to establish identical or different compensation packages for the two types of workers.
PAT Productivity. Just under the compensation-related decisions is a field for entering the amount
management wishes to spend for training PAT members and improving PAT productivity. The
productivity of each four-person PAT (how many units they can assemble in a given year) is
influenced by 8 factors:
• Annual base wage increases—Annual increases in base pay of 2% or more lead to higher
levels of productivity, chiefly because higher annual base wages help attract and retain workers
with better skills and work habits. The maximum annual base pay increase is 10%. Cuts in
base pay are allowed, up to a maximum of 15% in any one year; as might be expected, base
pay reductions act to reduce PAT productivity. Small pay cuts do not entail a “big” drop in
productivity but cuts of 5-15% will have a major negative impact.
• The assembly quality incentive—Experience indicates that bigger assembly quality incentive
payments per unit increase productivity and reduce warranty claims. PATs have responsibility
for fully testing the functioning of each action camera/UAV drone assembled and correcting any
performance problems, including replacing malfunctioning components—the costs of replacing
defective or malfunctioning parts/components are borne by suppliers. Prior management
instituted the practice of paying each PAT an assembly quality incentive for each unit
assembled, the thesis being that such incentives spurred PAT members to propose ways to cut
assembly and testing times while still accurately assembling and thoroughly testing each
camera or drone after assembly. Thus far, PAT members in the assembly facilities have taken
pride in coming up with better and more efficient procedures that help reduce warranty claims
and boost productivity. In Year 5, the incentive payments were $2.40 per camera per PAT and
$4.80 per drone per PAT; these payments are divided equally among all PAT members.
• Attendance bonus—Absenteeism on the part of PAT members has a strong negative impact
on the functioning and performance of the remaining team members. When team members fail
to show up for work a team’s assembly procedures are disrupted; and substitutes must be
assigned to fill-in for the person(s) absent or else the team must try to assemble units as best it
can. To discourage absenteeism, prior management instituted the practice of paying an $800
year-end bonus to each PAT member with a record of perfect attendance (defined as working
2000 hours per year—50 weeks at 40 hours per week, with 2 weeks off for holidays and
personal leave); missing as much as ½ day during a 2000-hour work year constituted
disqualification for the bonus. Prior management believed the attendance bonus was
successful in keeping absenteeism at a tolerable minimum, thereby enabling most PATs to
operate at full-strength and assemble at least a reasonable number of cameras/drones each
shift. However, you have the authority to discontinue the practice of paying a bonus for perfect
attendance, to continue the program as is, or to raise the size of the bonus periodically as you
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see fit. It is up to you to determine whether diverting the $800 bonus per PAT member to other
types of compensation (such as bigger incentives or higher base pay or bigger fringe benefits)
could lead to even better PAT productivity.
• Fringe benefits package—PAT members and other company personnel view a generous
company-paid fringe benefits package (health insurance, disability insurance, term life
insurance, and retirement plans) as an important element of a “good job” because the
components of fringe benefit packages add to an employees’ overall well-being.
• Total compensation—How well your company’s PAT members are being compensated
relative to rival companies with regard to base pay, assembly quality incentives, the perfect
attendance bonus, and fringe benefit packages is a major factor in the company’s ability to
attract/retain better-caliber, more productive employees. The best, most productive workers are
inclined to leave jobs at lower-paying companies for jobs at higher-paying companies. Likewise,
job seekers that exhibit motivation, pride of workmanship, good work habits, and aptitudes for
teamwork are drawn to work for those companies having the best overall compensation
package. Thus, PAT productivity tends to be higher at the companies with the highest total
compensation packages per PAT member.
• Best Practices / productivity improvement budget—The productivity of PATs is enhanced by
training PAT members in better assembly techniques, post-assembly product testing, ways to
reduce warranty claims, and overall productivity improvement. You have the authority to
raise/lower annual spending per PAT for such training. While spending greater amounts per
PAT increases productivity, the benefits from greater annual training expenditures per PAT are
subject to diminishing marginal returns (that is, the benefits become smaller and smaller,
eventually reaching a point where the added costs outweigh the added benefits). Annual
training expenditures per PAT may be reduced without losing the previous productivity gains.
• Product R&D expenditures (cumulative)—A portion of R&D expenditures is always devoted
to improving the designs of all camera/drone models in ways that reduce the amount of time it
takes PATs to assemble and test them, thus increasing the annual productivity of PATs.
• Number of models—Increasing the number of models will reduce PAT productivity, due to
lower PAT proficiency in assembling more models and increased model change-over time.
Reducing the number of models boosts productivity because PATs have fewer assembly and
post-assembly product testing procedures to master and less model change-over time.
• The total compensation of camera PATs versus drone PATs—A small difference between
the compensation packages of a company’s camera and drone PATs will be tolerated by PAT
members. However, a significant disparity in the compensation packages of camera and drone
PATs can cause dissatisfaction among the PAT members receiving the smaller compensation
package, thus negatively affecting productivity. In Year 5, the compensation packages of
camera and drone PATs were identical.
At the end of year 5, the productivity of PATs assembling action cameras was 3,000 units annually.
There is reason to believe that over the next several years the productivity of camera PATs can be
increased to 3,500 to 4,000 cameras annually. Productivity could go even higher, if managers
aggressively pursue productivity gains via attractive compensation, additional training, and robotassisted
assembly techniques.
At the end of year 5, the productivity of PATs assembling drones was 1,500 units annually (drone
assembly is more complicated and involves assembling the built-in action camera, as well as the drone
itself; moreover, thoroughly flight testing all the performance features of a UAV drone is considerably
more time-consuming). The productivity of drone assembly PATs could rise to perhaps 2,000 units
annually, if company managers are willing to invest in attractive compensation packages, additional
training, robot-assisted assembly methods, and more time-efficient flight-testing (via product R&D).
Assembly Capacity, Facilities Expansion, and Workstation Additions. The remainder of this
decision page is devoted to decision entries and on-screen calculations that enable you to (1) fill
growing buyer demand for your company’s cameras/drones by having PATs work overtime—the
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maximum number of cameras/drones that can be assembled at overtime is 20% of annual PAT
productivity (the number of units a PAT assembles each year), (2) add additional workstations as may
be needed to fill incoming orders for cameras/drones during the current year, (3) initiate projects to
expand the size of the assembly facility for cameras and/or drones whenever additional workstation
space is needed, and (4) order a robotics upgrade for all existing camera and/or drone workstations
that enables the size of PATs to be reduced from 4 persons to 3 persons and that also.
Your company’s AC Camera assembly facility for currently has space for 300 workstations, but only
280 workstations have been installed (thus, there is enough vacant space to add 20 more
workstations). The UAV Drone assembly facility currently has 110 workstation spaces, but only 100
drone workstations have been installed and 10 spaces are vacant (which can be filled with workstations
whenever you see fit). New camera/drone assembly workstations can be installed at a cost of
$125,000 each for cameras and $175,000 each for drones; adding workstations can be done quickly
(usually during a single weekend) at the beginning of each year. Your company will in all likelihood
need to expand both the camera and drone assembly facilities in the years to come in order to have
enough workstations for PATs to assemble the numbers of cameras and drones it will take to meet
growing buyer demand. Additional space for camera/drone workstations can be built at a cost per
space that declines as the size of the space expansion increases. Space expansions are undertaken
at the beginning of a year and take several weeks to complete; however, both the camera and drone
assembly facilities have enough extra storage area to accommodate the immediate delivery of
additional workstations and set them up temporarily in the extra storage space until a facility expansion
is completed. This gives you the ability to gain full-year assembly capability for newly-purchased
camera/drone workstations pending completion of a workspace expansion project.
The capital costs of new workstations, facilities expansions, and robotics upgrades are paid in full in the
year they occur. The company has enough land at its Taiwan plant site to permit expansion of the
camera assembly facility to accommodate 1000 workstations and expansion of the drone assembly
facility to accommodate as many as 800 workstations (although it is highly improbable that you would
ever need this many workstations). Fixed assets (primarily facilities, workstations, robotics upgrades,
office equipment, and furnishings) are depreciated over 20 years at the rate of 5% annually.
The two big camera/drone assembly-related decisions that have to be made each year concern (1) how
many new workstations to add and (2) whether additional facility space for workstations is needed and,
if so, how many workstation spaces to add. Just below these decision entry fields are several onscreen
calculations that will be of assistance. There is a line showing the number of units that can be
assembled with and without the use of overtime (given the projected productivity of PATs). There’s a
second line showing projected unit sales (which could prove too high if you have underestimated the
strength of rivals’ competitive efforts or too low if you have overestimated the strength of rivals’
competitive efforts) and a third line showing whether you will be unable to assemble the number of units
to fill expected orders.
It is up to you to determine whether it is more economic to have PATs work overtime to fill incoming
orders from buyers (which can have the benefit of delaying the purchase of additional workstations
and/or the expansion of assembly facilities) or whether it is more economical to always have in place
sufficient workstations/workstation space to avoid paying PATs 1.5 times the regular hourly rate for
overtime assembly. It is a quick exercise to view the on-screen projected cost-profit outcomes of using
overtime, then make the “what if we add workstations/expand facilities by amounts sufficient to avoid
overtime” entries, view the projected cost-profit outcomes, and decide which option is “best.” If the onscreen
calculations show a shortfall in the number of units assembled (meaning that projected buyer
demand for your company’s brand of cameras/drones exceeds assembly capability with maximum use
of overtime, then more workstations and/or workstation space will definitely be needed (assuming you
wish to be able to fill all of the projected orders), and it is your responsibility to enter numbers for any
new workstations and/or workstation spaces.
The GLO-BUS system will automatically employ the “optimum” number of PATs needed to fill
actual incoming orders for cameras/drones. Here is how it works:
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1. If actual orders turn out to be less than assembly capability without the use of overtime then
the GLO-BUS system will “right-size” the workforce, staffing only the number of workstations
needed to assemble the units ordered.
2. If actual orders are greater than assembly capability without the use of overtime, then the
GLO-BUS system will have PATs work overtime (up to the maximum 20% of annual PAT
productivity) to assemble enough additional units to satisfy buyer demand.
3. If actual orders for cameras/drones exceed assembly capability of all installed workstations
with maximum use of overtime, then your company is stuck with a shortfall in assembly
capability and orders in the amount of the shortfall will go unfilled (forcing the affected
buyers to purchase rival brands).
The company maintains an updated list of several hundred appropriately-skilled workers living within
commuting distance of the company’s assembly plant that it can draw upon to form new PATs to staff
any idle workstations that are needed to fill incoming buyer orders. These workers have sufficient
experience and qualifications that they can be adequately trained in a matter of days to assemble
cameras/drones at productivity rates equal to the company average.
Robotics Upgrades. You have the option to shift to robotics-assisted assembly of cameras and/or
drones—there is a section near the bottom of this page for entering decisions to shift to robot-assisted
assembly. The manufacturers of robots have recently developed small robots capable of performing
some of the tasks in assembling both action cameras and UAV drones. Installing one of these robots
at each workstation enables the size of PATs to be cut from 4 members to 3 members. These robots
cost $150,000 each. If the company decides to shift from manual assembly to robotics-assisted
assembly, all existing workstations in a camera or drone assembly facility must be upgraded to include
the use of a robot at a cost of $150,000 each, and all future workstations the company purchases for
that facility must include use of a robot (which means that (1) the capital cost of each additional camera
workstation will increase from $125,000 to $275,000 and (2) the capital cost of each additional drone
workstation will increase from $175,000 to $325,000). Robot-assisted assembly can be used in one
facility and manual assembly can be used in the other facility, either indefinitely or until such time as
management decides to shift over to robot-assisted assembly. Once robot-assembly has been adopted
for a facility, it is not feasible to revert back to manual assembly.
The on-screen calculations will help in evaluating the cost impact of a robotics upgrade. Cash outlays
for capital costs associated with robotics upgrades of existing workstations and any new robotequipped
workstations are incurred in the year of purchase. Depreciation of these assets occurs over
20 years at the rate of 5% annually. As with all types of capital expenditures, the associated cash
outlays can be paid for from cash on hand, by issuing new shares of stock, or by borrowing. Shifting to
robot-assisted assembly also results in added annual maintenance costs of $9,000 per workstation,
pushing the total maintenance cost per workstation from $6,000 annually to $15,000 annually.
Corporate Social Responsibility and Citizenship (CSRC)
This decision page concerns spending for such things as charitable contributions, “green” initiatives to
promote environmental sustainability, the use of renewable sources of energy, improved working
conditions for plant personnel, and institution of a supplier code of conduct and compliance monitoring
of supplier factories. The decisions on this page are straightforward, and you will find ample
information and calculations on this page and in the Help section to guide your entries. The degree to
which your company displays good corporate citizenship and conducts operations in a socially
responsible manner affects your company’s image rating. However, the image gains are minimal
unless your company’s actions are “comprehensive” (involve several, but not necessarily all, of the
optional citizenship and social responsibility programs), entail more than token efforts (as indicated by
how much money is being spent), and represent an ongoing effort of at least 4-5 years.
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Finance and Cash Flow Decisions
The Finance and Cash Flow decision page involves 8 decision entries and provides projections of cash
inflows and cash outlays for the current year, along with projections of other important year-end
financial statistics. Going into Year 6, your company has a B credit rating and a reasonably strong
balance sheet. At the end of Year 5, the company’s total assets were financed with 59% debt and 41%
equity, putting the company in good position to cover its interest and principal payments on loans
outstanding to the Global Community Bank (GCB), with which the company does all of its banking,
financing, and foreign exchange transactions.
Interest Rates. Officials at GCB, under terms of the long-term banking agreement with your company,
have agreed to lend the company additional monies should you elect to use debt to help finance growth
and other financial needs. The interest rate on such loans is tied to the company’s credit rating and the
going rates of interest in world financial markets. Just as interest rates in real-world financial markets
change intermittently and unpredictably, there is no way to predict in advance what future interest rates
will be. The interest rate on 1-year (short-term) loans for companies with an A+ credit rating can range
from a low of 4% to a high of 7%; the interest rate on 1-year loans for companies with a C− credit rating
can range from a low of 10% to a high of 13%. Going into Year 6, the interest rate on 1-year loans for
companies with an A+ rating is 4.5%; C− rated companies pay 11% interest on 1-year loans. The
GCB’s present interest rate for 1-year loans carrying a B rating is 6.5%. Longer-term loans are
available at somewhat higher interest rates—a 5-year loan carries a 0.50% interest rate adder and a
10-year loan carries a 1.0% interest rate adder; these adders apply to 5-year and 10-year loans granted
at all credit ratings. New interest rates for 1-year, 5-year, and 10-year loans are announced at the
beginning of each year and appear in the Interest Rates table on the Corporate Lobby page.
The company's banking arrangement with GCB calls for the company to be paid interest on any
positive cash balance in the company’s checking account at the beginning of each year. The agreedupon
interest rate is set at 2.5 percentage points below the prevailing interest rate for short-term loans
carrying an A+ credit rating. Going into Year 6, the interest rate of A+-rated 1-year loans is 4.5%, which
means the money market rate paid on cash balances will be 2.0%. If the company overdraws its
checking account, GCB will automatically issue your company a 1-year “Overdraft” loan in an amount
sufficient to bring your ending cash balance up to zero. The interest rate charged on overdraft loans is
always 2% above whatever interest rate your company would otherwise pay for a 1-year loan, given the
company’s credit rating. The potential for overdrawing your checking account is signaled by a negative
“Ending Cash” number in the Projected Performance box at the left of each decision page (however,
even a very small positive Ending Cash number runs the risk of having an overdraft loan, since there is
always uncertainty whether sales volumes, revenues, and cash inflows will be as high as projected).
Factors Determining the Company’s Credit Rating. Analysts at independent credit rating agencies
review the company’s financial statements annually and assign the company a credit rating ranging
from A+ to C−. A company’s credit rating is a function of three factors: (1) its debt-to-equity
percentages (defined as the percentage of total assets financed by debt and the percentage financed
by shareholder equity investment in the business); (2) its interest coverage ratio (defined as annual
operating profit divided by annual interest expense); and (3) its current ratio (defined as current assets
divided by current liabilities). Your company’s prior-year and projected performance on these three
credit rating measures is shown in the section at the bottom right of the Finance Decisions page. This
allows you to see when actions are needed to maintain a good credit rating. (See the Help section for
full details about how the three factors combine to determine the company’s credit rating.)
Financial Decisions. Finance decision entries should always come last in the decision-making
process. Until all of the other decision entries have been finalized there is no way to get reliable
projections of cash inflows and outflows for the year and estimate the company’s projected year-end
cash balance. The eight finance-related decision entries revolve around the following issues:
• Borrowing money—To finance operations the company may take out loans with 1-year, 5years,
and/or 10-year terms. One-year loans are granted at interest rates corresponding to the
company’s current credit rating; 5-year loans carry an additional 0.50% and 10-year loans carry
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a full 1% interest rate adder. In addition to a lower interest rate, a 1-year loan has the
advantage of quicker debt pay-down and smaller total interest costs, but also has the
disadvantage of having to re-finance the debt in the following year at perhaps less favorable
interest rates should cash flows not be sufficient to fully fund a 1-year loan repayment. Longer 5
or 10-year loans have the advantages of locking in what may be an attractive long-term interest
rate and lowering annual principal payments; however, 5-year or 10-year loans, in addition to
their higher interest rates, have the further disadvantage of paying out bigger sums for interest
over the life of the loan (which, in turn, depresses the company’s interest coverage ratio over a
longer period of time).
• Issuing shares of stock—Additional capital may be raised by issuing new shares of common
stock. New issues of common stock have the effect of diluting earnings per share and ROE and
should be done cautiously. From time to time, you may determine that the company needs to
raise additional equity capital to (1) help pay down a portion of the outstanding loans (because
of burdensome interest costs or because lowering debt is the best way to improve the
company’s credit rating) or (2) help pay for added assembly capacity and/or robotics upgrades.
The company’s board of directors has established a 40-million share maximum on the total
number of shares outstanding and there’s an on-screen calculation showing the maximum
number of shares that can be issued in any one year (given the company’s financial condition).
The company cannot issue new shares in the same year that it elects to buy back (retire)
outstanding shares. At the end of Year 5 the company had 20 million shares outstanding. Each
time you make an entry specifying how many shares are to be issued, there are accompanying
calculations showing the total amount of new equity capital raised (see the cash inflows section)
and the price at which investors will agree to buy the newly-issued shares (the price declines as
more shares are issued because additional shares dilute earnings per share). In deciding how
many shares to issue, you can try several “what if” entries and check out the effects on earnings
per share, return on equity, and the amount of money raised.
• Early repayment of long-term bank loans—You may accelerate debt retirement (or refinance
high interest debt) by using excess cash on hand, new issues of stock, or proceeds from new
loans to pay off the outstanding principal on up to 2 of the outstanding 5 and 10-year loans.
This is accomplished by simply selecting the number of the loan you want to pay off (loan
numbers are indicated in Note 8 to your company’s balance sheet). All such loan repayments
are considered end-of-year repayments; thus, the company will still make the current-year
annual principal payment and interest payment on any long-term loan that is repaid early.
• Paying dividends—The company paid no dividend to shareholders in Year 5. You have the
authority to declare a dividend, subject to certain conditions. The maximum allowable dividend
entry is 2 times projected earnings per share; moreover, projected total shareholder equity must
always remain at or above $100 million after any and all dividend payments. No dividend can
be paid should projected total shareholder equity fall below the $100 million minimum
established by the company’s board of directors (a policy that won the enthusiastic approval of
credit rating agencies). Higher dividends are welcomed by shareholders and have a positive
effect on the company’s stock price (unless dividend payments exceed earnings per share and
can’t be sustained at present levels).
• Repurchasing shares of stock—Using cash on hand to repurchase and retire outstanding
shares has the advantage of increasing earnings per share, returns on equity investment, and
the company’s stock price. While you have the authority to initiate stock repurchases, the
Board of Directors has reserved the right to limit the number of shares repurchased in
any given year—such limits vary from year to year and are shown on the Finance Decisions
page just below the stock repurchase entry field. The company must maintain a minimum of
15 million shares outstanding and a minimum total shareholder equity of $100 million.
The company cannot repurchase outstanding shares in the same year that it elects to issue new
shares. Each time you enter a number for share repurchases, you are provided calculations
showing the total cost of the repurchased shares (see the cash outlays listings) and the price at
which investors will agree to sell the shares you want to buy back (the price rises as more
shares are repurchased because of the upward impact on earnings per share and the bigger
fraction of ownership that fewer shares represent).
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Decision-Making Procedures
It is feasible (often normal) for co-managers to log-on simultaneously and each be engaged in entering
decisions. In the communication section at the bottom-left of all decisions/reports pages there is a
microphone button that connects teammates to audio mode (live voiceover internet communication).
The adjacent button (with the arrows) enables collaboration mode, synchronizing each connected
team member so that all see the same page at the same time. You will find it highly desirable to work
jointly in “audio mode” and “collaboration mode”.
Any time a co-manager clicks the Save button (upper-right), all of the entries on all decision entry
pages are written to the GLO-BUS server. Any and all co-managers can enter save decisions, and all
entries can be changed and resaved as many times as desired prior to the decision round deadline set
by the course instructor. The last set of decision entries saved (by any team member) before the
decision round deadline are the entries used to generate the results for the round. Coordination
and consensus on the decision entries is strongly urged but is left as a matter for you to work out with
your co-managers.
The Board of Directors has charged you with developing a strategic direction and crafting a
strategy that delivers consistently good results. Board members have set five clear-cut performance
objectives for the company’s management team:
1. Grow earnings per share from $0.75 at the end of Year 5 to $1.25 in Year 6, $2.00 in Year
7, $3.00 in Year 8, $4.25 in Year 9, $5.50 in Year 10, $7.00 in Year 11, $8.50 in Year 12,
$10.50 in Year 13, $12.50 in Year 14, and $14.50 in Year 15.
2. Grow return on average stockholders’ equity investment (ROE) from 14.0% at the end
of Year 5 to 17.5% in Year 6, 20% in Year 7, 25% in Year 8, 30% in Year 9, 35% in Year 10,
40% in Year 11, and by an additional 2.5% annually in Years 12 through 15 (thus reaching
50% in Year 15). The return on average stockholders’ equity is defined as net income
divided by the average of total shareholders’ equity at the beginning of the year and the end
of the year. Average ROE for each company is reported on page 2 of the Camera & Drone
Journal. Data for calculating your company’s average ROE appears on page 4 of the
Company Operating Reports in the notes to the company’s Balance Sheet.
3. Achieve stock price gains from $12 at the end of Year 5 to $20 in Year 6, $35 in Year 7,
$60 in Year 8, $100 in Year 9, $150 in Year 10, $200 in Year 11, $250 in Year 12, $300 in
Year 13, $330 in Year 14, and $350 in Year 15. Board members believe these stock price
gains are within reach if the company meets or beats the annual EPS targets, achieves the
targeted rates of return on average shareholders’ equity (ROE), rewards shareholders with
growing dividends, and from time to time prudently uses its financial capabilities to
repurchase shares of stock. The company’s stock price was $12 per share at the end of
Year 5.
Note: Stock price is a function of revenue growth, earnings per share growth, average
ROE, credit rating, the rate of growth in the annual dividend paid to shareholders, and
management’s ability to consistently deliver good results (as measured by the
percentage of each year’s 5 performance targets that your company achieves).
4. Maintain a healthy credit rating, defined as B+ or higher in Years 6 and 7, at least A- in
Year 8 through Year 10, and at least A in Year 11 through Year 15. The company’s credit
rating was B at the end of Year 5.
5. Achieve an image rating (brand reputation) of 70 or higher in Year 6, 72 in Years 7-8, 75 in
Years 9-10, 77 in Years 11-12, and 80 in Years 13-15. The image rating is a function of (1)
your company’s P/Q ratings for action cameras and UAV drones, (2) your company’s global
market shares for both action cameras and UAV drones (as determined by your company’s
market shares in the four geographic regions), and (3) your company’s actions to display
What the Board of Directors Expects: Results in Five Key Areas
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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corporate citizenship and conduct operations in a socially responsible manner over the past
4-5 years. Your company had an image rating of 70 at the end of Year 5.
Board members believe all of the performance targets for Years 6-15 are reasonable and
achievable by company managers, given the strong growth and profit opportunities that exist in
the global market for action cameras and UAV drones during the Year 6 to Year 15 period.
The Board of Directors has given you broad strategy-making and operating authority to pursue the
achievement of these 5 performance objectives, subject to two primary constraints: (1) your company
may not merge with another company—the Board wishes the company to remain independent, and (2)
company co-managers are expected to comply fully with all legal and regulatory requirements and to
conduct the company’s business in an ethical manner. Furthermore, the Board has made all of the
above performance targets publicly available to all shareholders and to the investment community;
thus, investors are expecting the company to achieve these annual targets.
Reporting the Results
When the deadline for a decision round passes, the GLO-BUS system processes the decision entries
of all companies in the industry and sends an e-mail notification that the results for the round are ready
(usually less than 20 minutes after the deadline). The results are presented in the form of three reports:
• The Camera & Drone Journal which contains (a) a 3-page company performance
scoreboard, (b) a 1-page statistical overview of the global market for cameras and drones
and unit sales forecasts of cameras and drones for the next two years—with breakouts by
geographic region, (c) 1 page of comparative financial statistics for all companies, and (d) 2
pages of data containing comparisons of how certain costs and profitability measures for
your company compare against industry low, average, and high benchmarks.
• The Competitive Intelligence Report which has highly useful three menu selections: (1) a
Comparative Competitive Efforts report that shows the levels of competitive effort exerted by
each company on all 11 competitive factors for AC cameras and all 9 competitive factors for
drones, plus unit sales and market share outcomes, for each company in each region; (2) a
Regional Average Competitive Efforts report that shows the all-company regional-average
levels of competitive effort in each region for all years completed to date, and (3) a Time
Series Competitive Efforts report for any company of interest that enables you to easily track
the competitive maneuvering of any rival company for all years completed to date.
• A set of Company Operating Reports consisting of 1-page showing your company’s
assembly and facilities operations, 1-page detailing the performance of your company’s
action camera business in each of the four geographic regions and worldwide, 1-page
showing the performance of your company’s UAV drone business in each of the four
geographic regions and worldwide, and 1-page with your company’s financial statements.
You will find the information in these reports essential in guiding your decisions for the current year.
You are strongly urged to click on the Help button at the top of each report page to see
discussions of (a) how to use each report and what some of the numbers mean, (b) cause-effect
relationships, and (c) analysis recommendations and decision-making tips. When you receive e-mail
notification that the results for a round are ready, the first thing you should do is review the three
reports. You may access the current-year and all prior-year reports through the Decisions/Reports
program at any time, but you may also find it advantageous to have printed copies of the reports during
decision-making.
It is especially important to evaluate how well your company fared on the company performance
scoreboard (the first three pages of the Camera & Drone Journal). Also, you should review the
benchmarking data on pages 6 and 7 of the Camera & Drone Journal to determine whether some of
your company’s costs are out-of-line with those of rivals. Further, always make a point of carefully
scrutinize the information on all four pages of the Comparative Competitive Efforts report to discover
the competitive factors where your company had a competitive advantage versus rivals and where your
company suffered from a competitive disadvantage. Do not fail to read the Help pages for this
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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report for guidance about how to properly interpret the information and for decision-making
suggestions. Also, you should use the data in the Regional-Average Competitive Efforts report to help
make you make informed updated competitive assumptions entries on the AC camera marketing and
UAV marketing decision screens. Finally, you should study pages 2 and 3 of the Company Operating
Reports to discover how your company’s camera and drone businesses performed in the four
geographic regions. Then you can begin to assess what corrective actions need to be taken to improve
company profitability and consider the changes you want to make in the next decision round.
Your instructor has placed weighted the relative importance of the five scoring variables: Earnings
Per Share (EPS), Return on Average Equity (ROE), Stock Price, Credit Rating, and Image Rating.
These weights translate into some number of points for each of the scoring variable, with the sum of the
points adding to 100. Your company’s performance on the five scoring variables is measured using two
different scoring standards:
1. The Investor Expectations (I.E.) Standard. This scoring standard involves calculating an
annual “Investor Expectation Score” based on the extent to which your company meets or
beats the annual performance targets for EPS, ROE, stock price, and image rating and the
ultimate credit rating of A+. There is also a Game-to-Date Investor Expectation Score that
measures the degree to which your company achieves or exceeds the expected
performance targets over all years of the exercise completed so far. Meeting each expected
performance target is worth some percentage of 100 points, as determined by your
instructor. For example, if the scoring weight for EPS is 20% or 20 points, meeting the EPS
target earns a score of 20 on the EPS scoring variable. Beating one of the performance
target results in a point award of 0.5% for each 1% the annual target is exceeded (up to a
maximum of 20%). So, if achieving the EPS target is worth 20 points, a company can earn
a score of 24 points if it exceeds the annual EPS target by 40% or more. Failure to achieve
a given target results in a score equal to a percentage of that target’s point total (based on
its weight out of 100 points). If your company earns an EPS of $2.00 at a time when the
EPS target is $4.00 and achieving the investor-expected ROE target is worth 20 points, then
your company’s EPS score would be 10 points (50% of the 20 points awarded for meeting
the EPS target). Exactly meeting each of the 5 performance targets results in an Investor
Expectation Score of 100. With potential point awards of up to 20% for exceeding each
performance target by 40% or more, it is possible to earn an Investor Expectation Score as
high as 120.
2. The Best-In-Industry (B-I-I) Standard. This scoring standard is based on how your
company’s performance compares (1) to the industry’s best performing company on EPS,
ROE, Stock Price, and Image Rating and (2) to the ultimate Credit Rating of A+. After each
decision round, company performances on EPS, ROE, Stock Price, and Image Rating are
arrayed from high to low. The Best-In-Industry performer on each of these 4 scoring
variables earns a perfect score (the full number of points for that measure as determined by
the weights chosen by your instructor)—provided the industry leader’s performance equals
or exceeds the investor-expected performance target established by the company’s Board
of Directors. Each remaining company earns a fraction of the points earned by the Best-InIndustry
performer that is equal to its performance divided by the performance of the
industry-leading company. For instance, if ROE is given a weight of 20 points, an industryleading
ROE performance of 25% (that is above the investor-expected ROE) gets a score of
20 points and a company with an ROE of 20% (which is 80% as good as the industry
leader’s 25% ROE) gets a score of 16 points (80% of 20 points). Likewise, if EPS is given
an instructor-assigned weight of 20 points, a company with an industry-leading EPS
performance of $4.00 gets a score of 20 points and a company with an EPS of $3.00 (which
is 75% as good as the industry leader’s EPS) gets a score of 15 points (75% of 20 points).
Scoring Your Company’s Performance
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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The procedure for assigning best-in-industry scores for credit rating is a bit different.
Each credit rating from A+ to C− carries a certain number of points that scales down from
the maximum for an A+ credit rating to 1 point for a C− rating.
Each company’s combined point total on the five scoring variables is its score for the BestIn-Industry
standard. Your company will receive an annual Best-In-Industry score as well as
a B-I-I score for all years completed. In order to receive a score of 100, a company must (1)
be the best-in-industry performer on EPS, ROE, stock price, and image rating, (2) achieve
the investor-expected targets for EPS, ROE, stock price, and image rating set by the
company’s Board of Directors, and (3) have an A+ credit rating.
After each decision round, you will be able to review all company performance scores for both the
Investor Expectations and the Best-In-Industry standard, along with an overall “game-to-date” (G-T-D)
score for each standard. The annual and game-to-date Overall Scores are determined by combining
the I-E Score and the B-I-I Score into a single score using whatever weighting your instructor has
chosen (often 50-50). All scores are reported on the first 3 pages of each issue of the Camera & Drone
Journal, and you can read the full scoring details by clicking on the Help button for each of these pages.
In making decisions, you are strongly encouraged to manage your company in a serious,
professional manner. Running a GLO-BUS company entails practicing and experiencing what it
takes to develop winning strategies in a globally competitive marketplace and being held fully
accountable for the results of your actions—just as managers in the real-world are held accountable for
the performance of the companies they run. Be wary of trying something that is highly risky,
managerially irresponsible, or un-businesslike (things that might get a manager fired in a real
company)—operating a GLO-BUS company like a daring adventurer with no regard for the dangers of
“shoot-from-the hip” decision-making can result in poor company performance. The odds of success
are better when you assume the role of a business professional who is trying to achieve the best
possible company performance using managerially prudent and competitively astute business
approaches.
Also, be alert to the dangers and risks of following the advice of friends or acquaintances (who have
previously participated in the GLO-BUS exercise) or relying on tips from Internet sources regarding
what to do to “win” or get a good grade. The GLO-BUS exercise is very much a contest where the
success of your company’s competitive efforts and overall performance depends on competing
effectively against the rival companies in your particular industry—whatever went on in other
industries at other times and places has little bearing on the competitive circumstances of your industry.
So following tips and advice recommended by outsiders carries significant risk of being “wrong” or “off
the mark” when it comes to figuring out what your company needs to do to combat the specific actions
and decisions that other companies in your class are.
Stay focused on the fact that the upcoming decision rounds involve a series of head-to-head battles
among the strategies, competitive maneuvering, and operating decisions of the companies competing
in your particular industry. At the same time your company’s management team is crafting maneuvers
to outcompete and outperform rivals, rival company managers are scheming to outcompete and
outperform your company. Consequently, it is critically important for you to (a) use the information in
the 4-page Comparative Competitive Effort Report to learn exactly how the attributes of rivals’ product
offerings stack up against the attributes of your company’s brand of cameras/drones, (b) try to match
wits with rivals and anticipate their next moves (to raise/lower prices, increase/decrease their P/Q
ratings, and so on), and (c) make competitive moves and decisions of your own that you believe hold
good prospect for delivering good profitability and achieving other investor-expected outcomes. Just as
in sports where it is customary for every team to scout its next opponent thoroughly and develop a
game plan to defeat them, so also in GLO-BUS you are called upon to scout the strategies and
competitive maneuvering of rivals, try to judge what moves they will make next, and then craft a
competitive strategy of your own aimed at “defeating” their strategies and boosting your company’s
overall performance.
Important Advice
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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Therefore, our recommended recipe for success in becoming one of the top-performing companies in
your industry is to stay on top of changing market and competitive conditions, try to avoid being
outmaneuvered and put into a competitive bind by the actions of rival companies, strive to price and
market your brand of cameras/drones in ways that produce acceptable revenues and profits, be diligent
in operating your company cost-efficiently, and observe sound financial management practices.
When the exercise is over, the only thing separating high-performing companies from those with
weaker performances will be the caliber of the strategies and decisions of each company’s management
team. All that the GLO-BUS system does in processing the decision entries is to referee the
competitive contest and declare whose decision entries produced the best results.
GLO-BUS is a hands-on, learn-by-doing exercise designed to:
• Connect directly to the material in your textbook and give you practice in applying basic
strategy concepts, using the tools of strategic analysis, and crafting strategies. GLO-BUS
provides the opportunity to put into play much of what you have read and gain some
proficiency in utilizing the concepts and tools of strategic analysis. You will have to assess
industry developments and competitive conditions in the different market segments, chart a
long-term direction for your company, set and achieve strategic and financial objectives,
craft strategies that produce good results and perhaps lead to competitive advantage, and
adjust strategic plans in response to changing conditions. You will be provided with
competitive intelligence on what rivals are doing and anticipate what moves they are likely to
make next. You will be responsible for doing the strategic thinking needed to successfully
lead your company in a globally competitive marketplace. Learning these things and
understanding of why they matter are the heart and soul of a business strategy course.
• Draw together the information and lessons of prior courses, consolidate your knowledge
about the different aspects of running a company, and provide a capstone for your business
school education. GLO-BUS incorporates a wealth of material covered in earlier business
courses. Wrestling with accounting and financial data, production operations, workforce
compensation, marketing, and financial management issues will give you a stronger
understanding of how all the different functional pieces of a business fit together and teach
you the importance of looking at decisions from a total-company perspective and unifying
functional area decisions to create a cohesive strategy. You will see why and how decisions
made in one area spill over to affect outcomes in other areas of the company. GLO-BUS is
very much a capstone learning experience that ties together material from other core
courses and gives you a better grasp of what running a business is all about.
• Deepen your understanding of revenue-cost-profit relationships and build your confidence in
utilizing the information contained in company financial statements and operating reports.
The numbers-oriented nature of GLO-BUS, where you repeatedly make decisions and
immediately see their impacts on revenues, cost, profits, cash flow, and other important
factors, and where you are confronted with all kinds of statistical information about your
company and your industry, has the beneficial result of helping you gain command of “all the
numbers” that surround the tasks of managing a company’s operations. The power of
having the computer instantaneously calculate the consequences of each decision will make
you appreciate the importance of basing decisions on solid numbers instead of the
quicksand of "I think", "I believe", and "Maybe it will work out okay." Moreover, because you
will have frequent occasion to review all kinds of operating data, identify costs that are outof-line
and take corrective action, try to boost the profitability of the company’s business in
under-performing geographic regions, and pursue proactive approaches to take to improve
your company’s performance, you will see why you cannot hope to make prudent decisions
without full command of the numbers—you won’t have to participate in the GLO-BUS
exercise very long to appreciate why shooting from the hip is a sure ticket for disaster.
What You Can Expect to Learn
GLO-BUS: Developing Winning Competitive Strategies Participant’s Guide
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• Provide valuable decision-making practice and help you develop better business judgment.
While making the strategic and operating decisions that arise in GLO-BUS, you will get
practice in deciding what to do. You will experience the thrill of “good” decisions (good in
the sense they contributed to above-average or superior company performance) and the
consequences of “bad” decisions (bad in the sense that the company’s performance turned
out worse than expected). Repeatedly making decisions on the factors that make up GLOBUS
will sharpen your sense of business judgment. With of all this decision-making
practice, you will get to test your ideas about how to run a company, and there will be
prompt feedback on the caliber of your decisions.
The bottom line is that being an engaged participant in the GLO-BUS exercise will make you better
prepared for a career in business and management. Further, we predict that GLO-BUS will make your
competitive juices flow and that you will have a lot of fun.