Best team carries away honours
Managing a profitable business requires ensuring that all units and functions of a company are interlinked, and making strategic decisions to respond to market conditions and competitors.
A team of actuary-major students from Chinese University pulled off a sweeping victory against 24 rivals at the Hong Kong Management Game 2009.
The Management Game, introduced by the Hong Kong Management Association in 1971, is a competition based on the Simbusi computer program which simulates a competitive business environment. The competition is open to the public and is aimed at honing the general management skills and business insights by running a virtual enterprise. Six teams qualified for the final, which took place at the association's Johnson Electric Management Development Centre in Wan Chai on August 1.
The business challenge for this year's contestants was to sell laptop computers through retail and export channels. Their business objective was to outperform all other competitors by making the highest profit. This year's winning team formed a virtual enterprise called IFA-Prophet, comprising four final year undergraduate students from the insurance, financial and actuarial analysis programme at Chinese University. The team was the only one that made a profit so it took the prize.
Russell Morris, designer of the simulation game, said the winners saw how the market was developing and set their strategies to ensure the best advantage. 'They saw how the market worked, had very good business thinking in their heads and were very quick in making good decisions,' he said.
According to the rules of the game, teams have to analyse business data, respond to the moves of rivals, develop appropriate business strategies and make decisions in six rounds to outwit one another. The performance of each team was measured on the basis of the amount of profit they made.
The main objective of the game, according to Mr Morris, is for participants to realise that in a company each department or function has a specific role to play, and the success of a business hinges on the interdependence of all departments.
'The contestants had to make decisions about their profit,' he said. 'There were many business areas they had to take into account such as pricing, production, purchasing, finance and marketing. These are all different aspects of management they need to think about.' Analysing financial data and economic scenarios is important in laying the groundwork for IFA-Prophet's success. Lau Chi-hang, leader of the winning team, said the team members had started analysing financial data and different business scenarios sent to them for the game as early as June.
'We had to look at the economic situation and analyse the company's previous management reports to understand the company's finances and decide on the amount of products to manufacture, the amount of marketing effort involved, product development and devise special promotion schemes,' Mr Lau said.
All team members agreed that it was important to make business decisions based on the moves of their competitors. 'That involves evaluating the market trends and we also realised that we should not be afraid to make investments,' Mr Lau said. 'Some rival companies kept a tight rein on their purse strings and did not invest, thinking that tightening expenses would lead to more profit. But our strategy was to invest to reap returns.'
Although each member had a different role to play within the team, he said there were never any arguments.
'After receiving the reports and data, we studied them and shared our individual observations and insights,' Mr Lau said. 'We worked closely and automatically shared responsibility.'
One of the reasons the team beat their competitors was probably their like-mindedness in seeing things and tackling problems.
Cheung Hoi-ki, the only female member of the team, said: 'We didn't [have] any arguments at any stage during the game. We always saw eye-to-eye on issues and we shared a similar thinking probably because we study the same programme at university.'
Another team member, Lau Chun-ho, said the game required him and others to look at the cost structure of their company and decide whether to adopt a high or low pricing strategy.
Ms Cheung said the competition gave her valuable insights into how to run a business. 'We understand when running a company it is not enough to mind your own business, you need to predict market trends and think of strategies to respond to other companies in your industry,' she said. 'The game helped us look at a single thing from different perspectives.
'For example, we took into consideration issues in the final, such as inventory control, that we had never thought about in the semi-final.'
The winning team will represent Hong Kong in the regional final of the Simbusi game next month in Chennai, India, against winners from India, Macau and Singapore.
Cathay Pacific Airways will provide members of the winning team with round-trip air tickets. The team was presented with the SCMP Perpetual Trophy by Elsie Cheung, South China Morning Post's director of advertising.
The winners had no hesitation in recommending the competition to students for next year.
The team will prepare for the competition in India and the individual members have high expectations for the trip.
'We think it will be a good experience,' Ms Cheung said. 'We will be able to learn more about the Indian culture, which I believe is quite different from ours, and understand how people in that culture think.'