UNISIMII is a business simulation that aims to show the importance of management decision-making in the context of a competitive marketing situation. These decisions cover the areas of production, marketing, selling, finance and planning. It also involves the negotiation of suitable wages for staff and the coping of exogenous shocks.

The original UNISIM used an interactive computer model, which was developed from the original NIMEX Business model by a team from Unilever. The more recent UNISIMII has been completely rewritten and updated with the help of Nick Pratt of FX Software and the copyright is now held by the ICF. It is important to note that the model reacts to company decisions and situations that affect both the other companies and the whole market.

A number of variations of the model have been developed, those used most regularly include scenarios based upon the chocolate, bicycles and fashion industries. Each company manufactures products, which it distributes to small specialist shops and large retail stores. It is not selling direct to the consumer.

Each company is in competition with 5 other similar companies for the available market.

At the beginning of the game each team has taken over the company with its complete stock, factory, lines, crews and staff. The previous management has run it for 1 year. Typically the new management teams will then run their companies for a further 2 years.

Each company tries to make the most profit using the capital employed and the most successful company is the one that has the highest return on capital assets expressed as an annual percentage.

To win, the team must have its whole factory intact with lines producing the products. At the end of the conference the staff must not be in dispute with the management.

Decision-making

Each team makes its decisions each period (1 quarter of a year) by filling in a decision-form. Depending upon the situation this will either be either completed by hand or electronically. During the time allotted for the decision the companies may send a representative to the game's operator (or "Tutor") for their market to seek advice or negotiate terms.

The results of the companies' decisions are returned as "Marketing and Sales Information" and "Financial & Managerial Accounts". Hints as to changes in the economic climate, important Health and Safety issues etc. will come in the form of cryptic messages. It is important that the teams look out for these.

Every team is given a UNISIMII manual, where detailed help on the rules of the decision-making process may be found in the section of the entitled "Technicalities and Hints".

Production lines may be sold at any time but, if so, do not produce in the period sold as it takes 3 months to dismantle and sell them. The crews have a redundancy agreement with the management and will be paid an extra quarter's redundancy pay and will probably make their views known!

Each company takes over the existing loan negotiated by the previous management, with an interest rate quoted per quarter rather than per annum. Figures are given for the cash and loan-position, together with cash flow, in the results from each period of the game. Clearly these are important figures for the new management to consider. The Bank Manager will loan more as required but if an overdraft is wanted, because of miscalculation or unforeseen circumstances, the Bank will automatically levy a higher overdraft rate.

Production from the previous period is placed in the warehouse to be allocated for sale in the next quarter. It can be reallocated between segments, as desired, without transport charge. Any unsold stock automatically goes back into the warehouse and can be re-allocated in the next period. There is a warehousing charge. Allocation of stock is often the most common error in the submission of the decision-form.

A part of the results received each period, this form indicates clearly how each team is doing each quarter. It distinguishes clearly cash flow and profit. A successful team will appoint someone as the company accountant, who will analyse carefully the margins they are getting in each segment for the resources employed.

The companies sell their products into four market segments. The exact nature of these segments will depend upon the model being used. They can be geographical areas or segments differentiated by product type.

They are different in size and have different growth potentials. The companies have to find out how each segment is developing by watching their own sales and by asking for market research.

In some periods of the game there may also be export market accessed through a monopoly export agent, who requires a set amount decided on price alone. Mechanisms within the model account for this extra market.

Each company spends a similar amount on large-scale advertising on TV. They can also spend more on advertising in the way of posters, pages in the trade press, trade inducements or other forms of special promotional activity through its client shops.

If the orders exceed the stock allocated by a company in any particular segment, the model will allocate the unfulfilled orders to another company if it has sufficient stocks to supply the demand.

The teams have taken over the management of their companies with the market in a depressed state. It is felt, however, that some of the market segments could be developed by:

• More effective advertising and sales promotion, this can be targeted at the end consumer and/or the trade.
• New and innovative products.

Again there are mechanisms within the model that give due credit for innovation, creativity and entrepreneurial flair.

Commonly an Importer may be introduced into the simulation. If so, it will be run by the Tutor and all companies will be informed of its entry into the UK market.

It will be keen to penetrate the UK market and will do this by strong trade inducements and competitive pricing. It accepts that brand awareness of its products by UK consumers is not as strong as it might be, since it is not allowed to advertise or use any sales promotion linked to advertising during the game. It knows that any good effective targeted consumer advertising by its UK competitors will depress its sales.

The Tutor

A very important part of the UNISIMII package is the market "Tutor". Typically this will be a designated student from one of the schools or colleges. Each Tutor is responsible for a market set of 6 companies.

The Tutor has four roles:

• To help on any technical points.
• To facilitate the running of the simulation, to process the company decisions and to have the results ready to a tight schedule.
• To act as a negotiator in three main ways:
• Union representative on behalf of the staff
• To receive ideas, preferably on paper, for advertising, sales promotion or innovation to attempt to increase sales of the companies' products in any particular segment.
• To negotiate on raw material and packaging prices for a future period.
• To provide market research, as requested, at a charge.

The flexibility and versatility of UNISIMII is such that for schools, colleges and organisations to gain the maximum benefit, the ICF offers a fully serviced bespoke package - rather than merely selling the software itself.

Features of a typical package could include:

• Manuals for all the team members.
• Training for the market "Tutors"
• Provision of all software, forms etc.
• Briefings for all team members
• Overall operation of the simulation

Additionally, we are always looking to extend our range of models. Consequently we would welcome the opportunity to develop simulations "tuned" to suit the specific needs and interests of individual customers.

Finally, for more information about the UNISIMII Package please contact: