Bevco Business Simulation

Decision entries required in each competitive round include choices concerning:

Purchasing

• Standard or organic ingredients
• Various optional ingredients such as preservative-free, non-GMO, and nutraceutical ingredients
• Selection of suppliers based upon reputation
• Grade of packaging materials
• Optional packaging materials such as plant-based bioplastics, recycled materials, or glass
• Optional use of sustainable farming partners

Production

• Number of cases of beverages ordered from contract manufacturers
• Number of flavors and varieties
• Quality control budget to supervise the bottling process

Marketing

• Wholesale price per case charged to retailers
• Size of retail network
• Level of customer service provided to retailer accounts
• Size of the advertising budget
• Online retail price per case charged to consumers
• Level of customer service provided to online consumers
• Optional free delivery to online consumers

Informational popups are provided for all student dashboard navigation bar items and decision entries. The Purchasing, Production and Marketing informational popups discuss how the particular decision choice affects the company’s value proposition and competitiveness and how the company’s unit costs are impacted by various decision entry choices.

The student dashboard navigation bar also provides projected and actual income statements and cost reports allowing students to assess the effectiveness of its business model and profit formula. The iterative decision-making process and availability of results provide a Proof of Concept allowing the co-founders/managers of each company to validate their business model and competitive approach.

Up to 12 decision rounds may be scheduled by the instructor depending on course objectives. Instructors establish a deadline for company co-managers to complete entries for each decision round. Deadlines may be set as often as every day or scheduled less frequently to match the term for the course. Month-based decision rounds are processed at the deadline without any additional action by the instructor.

When the instructor-specified deadline for a decision round arrives, the decision entries of rival companies are automatically processed. Bevco Business Simulation^TM algorithms allocate unit sales in the wholesale and online markets for nutritional beverages based upon the relative strength of the company’s value proposition and competitive strategy. The factors determining sales volume include Wholesale and Online Pricing, Quality Rating, Health & Wellness rating, Brand Image and Sustainability Rating.

The greater the differences in the overall competitiveness of the product offerings of rival companies, the bigger the differences in their resulting sales volumes and market shares. Conversely, the smaller the overall competitive differences in the product offerings of rival companies, the smaller the differences in sales volumes and market shares. This algorithmic approach is what makes Bevco Business Simulation^TM a "competition-based" entrepreneurship and strategy simulation and accounts for why the sales and market share outcomes for each decision round are always unique to the particular strategies and decision combinations employed by the competing companies. There's no built-in bias favoring any one business model or strategic approach and no "secret set of competitive moves" that are sure to result in a company becoming the industry leader. Which strategies end up delivering the best performance in any given group of companies that are competing head-to-head always depends on the competitive interplay among the specific decisions and strategies of rival companies.

Once unit sales and market shares are awarded, the company and industry reports are then generated and become available to students by accessing their company Dashboard. The Dashboard provides the Current Month Score and the Game-to-Date score along with key financial metrics and competitive KPI data for the company. Students can assess the strength of their business model and strategy by comparing the company’s results to the high, low, and average data for the entire industry. The Current Month Score is determined by how actual results compare to performance targets for four criteria: Sales Revenue, Gross Margin, Operating Margin, and a Triple Bottom Line rating. A triple bottom line rating is a composite rating reflecting your performance on health and wellness, environmental sustainability and financial metrics. Performance targets for the four performance criteria are provided for each decision round in the Performance Targets report.

Company performance may also be assessed by reviewing projected, current and historical Income Statement data. Students should compare the company’s projected performance relative to current month targets prior to finalizing their decision entries. Projected unit sales and revenue is calculated based upon the number of cases ordered from contract manufacturers. Actual sales volume and revenue may vary from projected if sales volume is lower than the number of cases ordered. Any ending inventory is automatically liquidated at direct cost, eliminating any positive or negative impact of an inaccurate sales forecast.

Projected performance will differ from actual performance if students’ assumptions about the strength of competitive rivalry are inaccurate. Projected, current, and historical cost report data showing all costs on a per case basis is also available. Students also have a record of decision entries in projected and prior years by accessing the Decision Entry History report. The industry and company statistics are available to company co-managers after each decision round to use in making strategy adjustments and decisions for the next competitive round.

All cause-effect relationships and underlying algorithms in Bevco Business Simulation^TM are based on sound business and economic principles and connect tightly to the real-world workings of the nutritional beverage market. The "real-world" character that has been carefully and systematically designed into Bevco Business Simulation^TM allows company co-managers to think rationally and logically as they test the viability of their business model and competitive strategy during the Proof of Concept period of up to 12 decision rounds. The thesis is that the more Bevco Business Simulation^TM mirrors real-world market conditions and real-world managerial decision-making, the more pedagogical value it has. Why? Because tight linkages between the functioning of Bevco Business Simulation^TM and "the real world" provide class members with a robust experiential learning opportunity and enhance competency goal attainment and learner success.