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Source: Chris Aquino, Bellevue College Instructor, used with permission

Glo-BusQuestions and Answers

Q: How can you print a screen you are working in the Decision/Reports module?

Use the Print button in the upper right corner of the screen. It will print a singlepage report summarizing all 45 of your decisions and does NOT require that you Savethe decisions before printing.

Q: If money is invested into R&D will the company reap the benefits through improvedfeatures such as more megapixel, more zoom options, or lower costs? In the real world,a company that spent more on R&D would receive technological improvement to theirproduct verses just improved image ratings.R&D expenditures do not directly affect the cost of camera components. However, R&Ddoes allow one to achieve a desired P/Q rating using lower cost components than wouldotherwise be necessary.

Q: Does the program include any regional price sensitivity adjustments to reflect real-world circumstances? In other words, would it be advantageous to try to "corner" theNorth American high end market over the Asian-Pacific market because the population ofNorth-America tends to be more affluent and less sensitive to higher prices meaning ahigher per camera profit could be achieved?

No. Because all companies start out on equal footing from a financial perspectivebut their regional market share percentage are different, the program was writtento keep the demand elasticities the same in all regions. This means any regionalstrategy has as good a chance as any other of being successful; independent of real-world economic conditions.

Q: How is the image rating score determined?

The image rating calculation is based on a companys (1) P/Q rating for both entry-leveland multi-featured cameras, (2) market share for both entry-level and multi-featured

cameras in each of the four geographic regions, and (3) actions that display corporatecitizenship and socially responsibility over the past 4-5 years. The impact each factorhas on the image rating score is as follows: P/Q rating = 40%, market share = 40%, andcorporate citizenship and social responsibility = 20%.

Q: Is the Match Assembly to Orders function most efficient or just easy?

Use of the Match Assembly to Orders button is a quick and dirty way of resettingassembly after changes have been made in product design and marketing. However,

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you should understand that there may be a more efficient and thus more profitable wayto assemble the cameras.

Q: How are the Game-to-Date scores determined?

Game-to-Date scores are NOT simply an average of the companys annual I.E. andB.I.I. scores. EPS and ROE are short-term measures, stock price and credit rating are

long-term measures, and image rating is a medium-term measure. Game-to-Date scoresfor all years completed to date are based on a companys:

(1)weighted-average EPS as compared to an average of the EPS targets for all yearscompleted,

(2)weighted-average ROE as compared to an every-year ROE target of 15%,

(3)average image rating for the 3 most recent years as compared to an every-yearimage-rating target of 70 (A 3-year average image rating is used to measuregame-to-date performance, as opposed to an all-year average, so as not to burden

a companys performance by image ratings that are not representative of theimage and reputation it has recently achieved with its strategy.),

(4)most recent stock price as compared to the most recent years stock price target(The latest stock prices of companies are used here because a companys lateststock price is a function of EPS growth, ROE, credit rating, dividend per sharegrowth, and managements ability to consistently deliver good results (asmeasured by the percentage of these 5 performance targets) and thus includes aheavy long-term element.), and

(5)most recent credit rating as compared to the ongoing credit rating target of B+(The latest years credit rating is used here, as opposed to an all-year averagecredit rating, because a companys latest credit rating is largely reflective ofmanagements entire multi-year record of finance-related actions/decisions andthe overall financial condition and balance sheet strength that management hasengineered to date. The game-to-date scores for credit rating are always the sameas for the current-year scores because both are based on the most recent yearscredit rating.).

One very important point about the GLO-BUS scoring methodology warrants emphasis: acompanys overall score is what matters (how close company scores are to 100-120 inthe case of the I.E. standard and how close they are to 100 in the case of the B.I.Istandard), not whether a company is in first or third or fifth or tenth place. There willalways be a last place company, but what is truly telling is whether it is in last place witha score of 85 or in last place with a score of 60.

Q: How will individual grades be determined for the Glo-Bus group project? (note:revised for Judiths class)The Glo-Bus group project is worth 30% of the final grade in the class. An individualsgroup project grade will be determined by summing the following five four figures:

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(1)Quiz 1 score times 2.5%,(2)Quiz 2 score times 7.5%,(3)Overall Company Game-to-Date (following SDR7) score times 80%,(4)Peer evaluation scores (including self-evaluation) times 10%, and(5)Group Presentation score times 5%.

Q: How are the number of available retail dealers determined and should all that are

available each year be utilized?

On the Marketing Decision screen, you will see the number of retail chains, onlineretailers, and local camera shops in each geographic area that are willing to stock anddisplay your brand of digital cameras in the upcoming yearthis number is based on theprior-years appeal of your companys camera models and theres nothing you can do inthe upcoming year to attract additional retailers.The companys four regional salesoffices (Milan, Singapore, Sao Paulo, and Toronto) incur costs of $10,000 annually inrecruiting and supporting the digital camera sales efforts of the chain-store retailershandling the companys brands. Support costs for each online retailer stocking thecompanys cameras are $4,000 annually, and support costs for each local camera shop

that carries the companys cameras is $200 annually. Worldwide retailer support costs tosupport the 8,288 dealers stocking the companys cameras in Year 5 were about $3.3million. However, if, for any reason (perhaps to cut back on retailer support costs), youdo not want to ship cameras to all of the retailers currently willing to merchandise yourcameras, then you have the flexibility to drop retailers and restrict deliveries to a smallernumber of retailers.Q: What drives competition for cameras? In other words, what factors determineconsumers choice of whether or not to buy our products?

Competition in each of the two product market segments (entry-level and multi-featureddigital cameras) is based on 10 factors: price, camera performance and quality (asmeasured by P/Q), number of quarterly sales promotions, length of promotions in weeks,the size of the promotional discounts offered, advertising, the number of camera models,size of retail dealer network, warranty period, and the amount/caliber of technicalsupport provided to camera buyers.

Q: Is there one best strategy or will any reasonable strategy be effective?

Each company typically seeks to enhance its performance and build competitiveadvantage via more attractive pricing, greater advertising, a wider selection of cameramodels, more appealing camera performance/quality, longer warranties and/or moreaggressive sales promotion campaigns.Any and all competitive strategy optionslow-cost leadership, differentiation, best-cost provider, focused low-cost, and focuseddifferentiationare viable options. A company can have a strategy aimed at being theclear market leader in either entry-level cameras or multi-featured cameras or both. Itcan focus on one or two geographic regions or strive for geographic balance. It canpursue essentially the same strategy worldwide or craft slightly or very differentstrategies for each of the four geographic regions. Theres no built-in bias favoring anyone strategy and no secret to being an industry leader. Which strategies end updelivering the best performance in any given group of 4 to 12 companies that arecompeting head-to-head always depends on the competitive interplay among the

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specific decisions and strategies of rival companiesthere absolutely is no magicbullet strategy or competitive approach that co-managers are challenged to discover intrying to out-compete rivals. Most any well-conceived, well-executed strategy is capableof succeeding, provided it is not overpowered by the strategies of competitors ordefeated by the presence of too many copycat