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This video will quickly show you ho to devise your basic business strategy in GoVenture CEO. Make sure to watch the more detailed video tutorial and read the user guide before you begin. Click play to launch the simulation. Pick either an existing simulation or enter a new simulation number. It may be requested to submit a short quiz. This will appear in a pop-up window if the quiz is required by your instructor. Once you enter your business, start by reviewing the backstory that outlines your role and objectives size of the market may be revealed here. But for full details, go the customers and competitors screen on the customers and competitors screen. You can purchase a consumer profile report, and there may be more than one available. One for each territory usually, if your simulation is set up for more than one territory. Let's take a look at the report for one of the territories. The report shows the consumer and market demand. Market demand is the total amount of money that all consumers in the territory spend on the type of product you and your competitors are selling. You compete with other businesses for a share of this money, for example if market demand is $1,000 and there are two companies competing in the market then an average each company maybe be able to earn is one half of the $1000, which is $500. $500 is the average market demand per company, but a company may earn much more or much less than the average depending on the business decisions made by each company. Notice that the report shows you the average market demand per company, the total market demand will be revealed later one all the competing businesses join the simulation. it is also important to note that market demand amount is what consumers will pay to buy products. Companies selling products may earn less revenue than this amount if there is a resale or discount sales commissions, or other compensation earned by the seller of the product. For example: if the average market demand per company is $500 and there is a reseller discount of 20% which equals $100 then the average revenue per company is $500 minus $100 which equals $400. If there is a reseller discount or other seller compensation you will be able to see this on the manufacturing screen when setting your product price.
Now that you know how money is spent by consumers to buy products like yours, next you should review the consumer population numbers. These numbers show you how the market demand breaks down by consumer profile. What's a consumer profile? When consumers have several competing products to choose from, each consumer will buy the product that best matches their desired price, brand, and features. Consumers that buy similar products are considered to have the same consumer profile. For example, one consumer may want to buy a car that has the most luxurious features while another may want to buy a car that is the lowest price. These two consumers have different profiles and therefore are segmented into different groups. You can see the various consumer groups here, what's important to identify is the popular percentage of each group. Some groups may spend a lot more money than other groups for example if the consumers who buy luxury cars are only a small percentage of the market, the market demand of those consumers may not be large enough to support several competing products or if the population percentage is high this could mean there is an opportunity for more competing products.
Now that you know how much money is spent by consumers, next you have to figure out the type of products consumers want to buy. Our consumers interested in a low price, are they interested in a company with a strong brand, do they desire specific product features? These factors contribute to which products consumers will buy. The factors that influence consumer purchasing decisions can be discovered by reviewing the consumer psychographics. Psychographics tell us how the consumer thinks and what they find important when making a purchase decision. The consumer profile report show us this information here, for example, we can see here that the consumer group number 10 is completely price conscious, this means we can see here that consumer group number 10 is complete price conscious. This means they are going to purchse the lowest priced product in the market regardless of brand or features. On the other hand, consumer group number 9 wants luxury and is willing to pay extra for it. Your strategy you have to decide which consumers you will try and attract. Keep in mind that each consumer group may represent a different percentage of the market demand once you know the market demand you can use that number to help pricing and forecasting how many units of product you might be able to sell. For example if the average market demand per company is $1000 dollars and you set your product retail selling price to $200 you can estimate that you might sell five units. Keep in mind there is no preset price that consumers are expecting to pay for your product. Price expectation is based on supply and demand, including how attractive your products are compared to those offered by competing businesses.
Once your strategy is defined you must make business decisions that are consistent with the strategy you have identified, review your budget and use the strategy journal and what-if calculator to help with your planning. Then make investment decisions for manufacturing, research, development sales, marketing, and human resources.
As the simulation advances each period you will be able to discover new information about the market and your competitors use that information to adjust your strategy so that you cna best reach your business goals.
Good luck and GoVenture!
Compare GoVenture CEO with other business simulations