Coursecode: mt729

Coursename: Maritime Business Game

ECTS creditpoints: 3

Faculty of Mechanical Engineering and Marine Technology

Lecturer(s): Prof. Dr. Ir. U. Nienhuis MBA

Tel.:  015-2785306

Catalog data:

Strategy, investment decisions, marketing, make or buy decisions, product mix decisions, financial reporting.

Characteristics of one-of production, internal and external process parameters, market parameters, business processes, international factor differences (labour, capital, material, productivity, etc), fiscal systems, subsidies, protection, exchange rates, interest rates.

Maritime value chain, shipping, shipbuilding, maritime suppliers, banks

Course year:

MSc 1st year

Period:

At the end of 2B, start May 24,

finish June 04.

Class hours per week:

Variable

Other hours:

Business game work in groups of 1 to 3 students

Assessment:

Annual report + presentation

Assessm.period:

(see academic calendar)

Prerequisites:

3rd year Shipbuilding courses: mtp302, mtp305

Possible follow up:

mt726, mt724

Detailed description of topics:

INTRODUCTORY REMARK

In the academic year 2003-2004, this course will be given for the first time. It is currently under construction and will be finished to such an extent that the course can be successfully given. Nevertheless the complexity of the tools required for this course is such that some parts of the course will be somewhat experimental. This requires a flexible attitude of the students. Since the tools used for this course are co-developed by DUT and Antwerp University, instructors from the shipping economics department of ITTMA (headed by Professors Van de Voorde & Meersman) may decide to be involved in this course. This may lead to corresponding changes in the instructor’s schedule listed below. The students are advised to keep track of this description to stay updated.

PLANNING OF THE COURSE

The course will be given in a block-period, immediately following the seventh week of period 2B.

Thus the course will start May 24, 2004 and terminate June 4, 2004. Whitsun-Monday will be a holyday. The course will therefore last 9 days, each of at least 8 hours. The final afternoon will be devoted to the presentation session and feed back. No work is scheduled to take place after June 4, 2004.

CONTENTS

Contents and order of lectures are indicative and subject to change without notice. Planned classes are:

¨       Day 1 - 08.45 - 12.30            U. Nienhuis/J. Pruijn – Introduction to course, expected deliverables, evaluation criteria, learning goals, work division into functional areas, introduction to maritime business game, explanation of game procedures, introduction to the gaming system, group division and company assignment, designation of cross-reading students

¨       Day 1 - 13.45 - 15.30            Students – Familiarization with game procedures, trial rounds

¨       Day 1 - 15.45 - 17.30            U. Nienhuis/J. Pruijn – Fundamentals of financial reporting, explanation of financial reports generated during game

¨       Day 2 - 08.45 - 10.30            Students – Preparation for game, development of own strategy, formulation of long-term goals including 1 A4 with summary statements

¨       Day 2 - 10.45 - 12.30            U. Nienhuis – Fundamentals of strategy in the maritime context

¨       Day 2 - 13.30 - 18.00            Students – Game: From start to Year 0.5

¨       Day 3 - 08.30 - 17.30            Students – Game: Year 0.5 to Year 1.5

¨       Day 4 - 08.30 - 17.30            Students – Game: Year 1.5 to Year 2.5

¨       Day 5 - 08.30 - 17.30            Students – Game: Year 2.5 to Year 3.5

¨       Day 6 - 08.30 - 17.30            Whitsun Monday - No activities planned

¨       Day 7 - 08.30 - 17.30            Students – Game: Year 3.5 to Year 4.5

¨       Day 8 - 08.30 - 17.30            Students – Game: Year 4.5 to Year 5.5

¨       Day 9 - 08.30 - 17.30            Students – Game: Year 5.5 to Year 6.5

¨       Day 10 - 08.45 - 13.30          Students – Preparation of annual report and outlook

¨       Day 10 - 13.45 - 17.30          U. Nienhuis/J.Pruijn/TBD – Grand Annual Meeting and completion of course

Detailed description of topics (continued):

GAME WORK

The game comprises an interactive effort of all participating students: they will all work in the same situation. The participants will be divided in teams of one to three students, representing shipyards and ship owners. Each team will be supplied with a relevant initial situation stating such matters as financial structure, products, organisational structure, market information, etc. Within the teams the tasks may be split along functional lines, e.g. finance; production; commercial or similar.

Objective of the game for each team is to optimise the company’s performance. Typically the teams can do any of the following to that end:

·         Set the price for offered ships, supplies or financing;

·         Hire & fire personnel;

·         Set the offered delivery time for any ship or its components;

·         Insource & outsource activities & man-hours;

·         Invest in facilities (docks, slipways, quays, cranes, robots, etc);

·         Negotiate with clients and suppliers;

·         Invest in marketing;

·         Request market surveys to be performed;

·         Assess his/her business results.

The MBG is played in a number of rounds. The game administrator may change the environment, e.g. by:

·         Changing exchange rates;

·         Altering labour costs;

·         Introducing subsidies & barriers;

·         Affect the macro-economical developments;

·         Introducing political changes;

·         Changing the base interest rates;

·         Etc, etc.

During each round, each team is expected to analyse the market, analyse their own financial position, determine the course of action, negotiate, perform litigation, formalise binding agreements and deposit the decisions taken at the GameAdministrator’s office, who will feed the simulation accordingly.

Each round of the game thereby results in a new financial position with corresponding information on e.g. market, product and clients. Everything is to be reported by means of an “Annual Report” at the end of the game.

The game period (the "round") is a 1-month period which is set equal to 45 minutes of gaming. The game is set to run continuously from 830 in the morning to 1800 in the evening. Decisions may be made continuously but will be registered by the system once per 45 minutes.

Course material:

To be supplied during the course.

References from literature:

To be supplied during the course.

Remarks assessment, entry requirements, etc.:

Assessment will be on the basis of:

Annual report. The report must include a survey of the financial results, a discussion of the most relevant decisions taken during the game and their outcomes, a projection for the near future of the company and the resulting strategy and strategic changes, if any. The report to be submitted in threefold, in the English language:

·         One for the lecturers present during the Grand Annual Meeting

·         Two for designated fellow students from other teams

Presentation at the Grand Annual Meeting

Each team gets 10 minutes (depending on the number of teams) to present its companies’ views relative to strategy, competition, market, results and future outlook. After this the audience gets 5 to 10 minutes for Q&A. The cross-reading students are expected to each pose one critical question. Remaining Q&A-time is available to the floor and the lecturers.

Grading

Grading is done in the following way.

·         25% of the grade is based on the average Return on Invested Capital over the last five periods of the game, calculated in a standard way. The maximum ROIC receives maximum credit, the minimum ROIC gets minimum credit. Cooking the books or other types of criminal behaviour, when discovered, results in negative credit, the severity of which is to be decided by the Game Administrator.

·         25% of the grade is based on the judgement of the fellow students relative to the future plans of the company. They are expected to grade according to the upward potential of the company shares in their judgement as potential investors. A formal scheme for this will must still be designed.

·         The remaining 50% of the grade is based on the judgement of the lecturers.

Learning goals:

The following learning goals are pursued. Upon completion of the course the student must be able to:

1.       Develop and execute a sound company strategy;

2.       Analyse and interpret financial statements;

3.       Synthesise a consistent marketing plan and modify and execute it under changing circumstances;

4.       Negotiate with potential clients and formalise agreements;

5.       Understand the procedures and obstacles in litigation;

6.       Evaluate investment possibilities and make sound decisions relative to their adoption;

7.       Evaluate the dynamics and regional differences involved in the maritime business environment and optimise decision making accordingly;

8.       Make rational evaluations of business opportunities and decide accordingly, e.g. relative to the product mix, order book filling, pricing, etc.;

9.       Understand the conflicts between short-term and long-term objectives and mediate between them;

10.   Understand the workings of the maritime business dynamics and the interactions between different stakeholders.

Computer use:

Game simulation tool, based on business process simulation tool

Laboratory project(s):

None

Design content:

None

Percentage of design:  0%