1. Retail Challenge an exploration of business This computer simulation gives you and the others: an opportunity to manage a “real” business for several simulated quarters making decisions as part of a small team covering: –Marketing –Operations –Finance your objective, while competing against the other teams, is to make your business a success

2. The Simulation The simulation consists of three stages: Preparation Decision-making Review Preparation –Familiarization –Organization –Consider objectives –Consider strategies Decision-making –Submit Decisions –Simulate –Analyse Results –Replan Review –Discuss & Compare Results

3. The Situation a subsidiary currently operating sells three product ranges –Staples –Fashion –Big Ticket has staff who sell all ranges all costs & prices are a universal currency You will run this business for several periods, each of which represents one trading quarter

4. Marketing Sales are influenced by –price (mark-up) –advertising –staffing –stock availability –the actions of the other teams You decide mark-up for each product range separately. Advertising and sales staff sell all product ranges.

5. Cost Data Sales staff – 500 AUs per quarter Other Expenses – 7000 AUs per quarter Advertising – decided by you RangeDiscount LevelDiscount Staples40,0005% Fashion15,00020% Big Ticket20,00010% Discounts

6. Other Data Prompt Payment Discount - up to 5% Interest on Overdrafts – 20%/year Interest earned on Cash – 12%/year Mandatory Payment to Parent –75% of Operational Income – plus 4% of Total Equity

7. Decisions For each range separately Percent Mark-up Gross Purchases And in general Advertising Sales Force Size Creditor Days Use the decision form supplied and complete it carefully and legibly and hand to the simulation controller at the specified times.

8. Results Results are returned to you in three stages: Preliminary Results –demand at cost & ending stock –Sales, operating profit, cash and overdraft Full Results –Purchases & sales –Profit & Loss –Balance Sheet –Key Measures Business Research –Market News (prices & market shares) –Company Reports –Company News

9. Observations it takes time to understand but the business still has to be run therefore your decisions will not be perfect time will be a constraint by the end you should (just) be in charge of your business your business skills will be challenged remember the purpose is to learn! (rather than just to win!) so, take time to reflect & review and have fun!