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MARGA Software Manual

Industry

learn to win.
MARGA Software Manual
Table of Contents

I Preface ........................................................................................................... 2

II General instructions ..................................................................................... 3

III Planning the first decision ........................................................................... 4

III.1 Analyzing the initial situation .......................................................... 4

III.2 The decisions of the first planning period ...................................... 4

IV Completing the first decision and further decisions ...............................10

V The Menus .................................................................................................... 12

V.1 Decisions ............................................................................................ 12

V.2 Controlling ......................................................................................... 12

V.3 Strategic Planning............................................................................. 13

V.4 Competitors Analysis ....................................................................... 13

V.5 Communication ................................................................................. 13

V.6 Infos ..................................................................................................... 13

VI Logout............................................................................................................ 12
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I Preface

The MARGA software offers valuable support for your decision making. By using the PC, you will
receive instant information on the financial impact of each of your decisions, without wasting time by
calculating everything by hand. In addition, the program serves as medium for the transmission of
your decisions to the MARGA management team.

You can access the program by entering the website http://www.marga.de/en. Choose at the right
side Sign-in and enter your username and your password. If you wish to have a quick access to the
program, you should add this link to your list of favorites.

Kindly note that Popup-blockers should allow access to this website or should be switched off!

Figure 1: MARGA software sign-in screen


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II General instructions Menu path

Main menu

Show as PDF
Print screen

Warning
Help

Reload screen

Figure 2: MARGA Screen


Status window

In figure 2 the screen of the MARGA software is shown as "Decisions/Marketing/Products/ Product


1". The principle design and functionality can be described as follows:
The actual menu path will always be presented at the top of the screen, e.g.
"Decisions/Marketing/ Products/Product1".
On the left hand side of the screen is the main menu: Decisions, Controlling, Strategic planning,
Competition analysis, Communication and Infos.
You can click on the printer icon to print the actual screen or report. You can also use the PDF-
icon to generate a PDF-file.
A "warning"will be activated, if the planning of the current period is not consistent (e.g. sales
planning can not be realized due to insufficient production volume or production capacities are
too low). Click on the icon to get detailed information.
Teams in distributed planning sessions via the web should use the button "reload screen"to see
the latest input made by other team members. It is obvious that only one team member should
input data at the same time. Hence, it is necessary to use synchronous communication facilities
(e.g. chat room, phone, netviewer) to coordinate the planning session.
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The "status window" on the bottom left corner indicates contest round, period, the currently
activated scenario (cf. III.2), the scenario chosen to be delivered at the end of the period, group,
company and team. You can always change the period via the pull down menu. The pull down
menu also indicates if the period is already simulated or still in a planning mode (REAL or PLAN).

III Planning the first decision

III.1 Analyzing the initial situation

After you successfully logged into the MARGA software and changed to period 0, you can use the
function Controlling to analyze the situation of your company. First you will find the data of the
external accounting system such as the balance sheet, the profit and loss statement, the cash flow
statement and the Segment Reporting. The menu cost accounting provides the contribution margin
and full costing information. Via MIS (Management Information System) you can simulate how the
different value drivers influence the MARGA Value Added. Information on Marketing, Production and
Logistics is provided via the corresponding menus. The Results report summarises all reports (cf.
Initial Situation 'Computer Output'). This report shows the data of the computer output in a more
organised way and also provides some additional information to help you analyze the current
situation of your company.

The calculation of the contribution margin which is divided into Product 1, 2 and 3 as well as an
overall computation for all three products and the full costing information will give you valuable
insights into the profitability of the individual market segments. Please take the time to analyze in
detail the strengths and weaknesses of your company.

III.2 The decisions of the first planning period

After sufficiently analyzing the Initial Situation please change to the first period (1 PLAN).

Period 1 is your first planning period. You now have the opportunity to enter your entrepreneurial
decisions in the menu Decisions. The Controlling menu is also available in Period 1 to analyze your
decisions. Now, in the planning mode it doesnt reflect the actual figures of the previous period, but
the planned figures of the current period.
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Important:
You have the opportunity to create different scenarios for each planning period. All of them will be
stored on the MARGA server. For instance, this may be of importance for distributed teams (i.e.
team members at different locations) if alternative decisions of each team member are desired. To
create a new setting based on the currently selected scenario - kindly move to Decisions /
Scenarios and then click onto the button New. To change to a scenario which already exists, you can
make your choice by clicking onto the name and by confirming via the Save button. Additionally you
can also delete an old scenario.

Of course, as for the simulation of the MARGA competition, we will only use one of your scenarios.
Via the pull down menu Delivery scenario you can determine the final scenario which you want to
deliver. For safety reasons, there will be a final enquiry in case your Current scenario is not marked as
Delivery scenario when leaving the MARGA software. Furthermore, in the status window you are
always able to see the current and the delivery scenario.

Choice of the

delivery scenario

Choice of the

current scenario

Display of current
and delivery scenario
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Figure 3: Creation and choice of scenarios

After the current period has been simulated, all additional scenarios will be deleted. Consequently
only one scenario will be available for your further planning. In case you want to keep some of the
information on the alternative scenarios, please take copies (e.g. of balance sheet, profit and loss
account, etc.) in advance, before the scheduled deadline.

When you click on the Marketing menu you will see the subdivision into Products, R&D, Sales,
Market research, Call for tenders and Overview. You can enter your decisions in these five submenus.
For example, when you go to Decisions / Marketing / Products / Product 1, you will find the
summary of the most important information about Product 1 in the European market (see fig. 1).
Here it is now possible to enter your price for Period 1, your advertising budget as well as your
planned sales quantity for this period. On the right hand side you can immediately see what effects
your decisions have had on the overall contribution margin. This information is only valid if you have
already planned your costs under the menu Decisions/Production.

After having taken the decisions for Product 1 in Market 1 (Europe) you can go through the other
markets accordingly by simply clicking on their corresponding symbols. In addition to the European
market you may find up to three other markets, depending on the initial situation given. You will find
the market of Eastern Europe (represented by the church spires), the US market (represented by the
Statue of Liberty and the US banner) and the Asian market (represented by the rising sun and a
pagoda). Your MARGA company operates in these four markets. As you can see from figure 2, the
Asian market has been deactivated which is why the corresponding symbol does not appear. The
globe as the fifth symbol enables you to see the decisions taken in Period 1 in comparison with the
decisions in Period 0. It provides the opportunity to make changes in your marketing decisions if
necessary.

When planning the marketing strategy for the Markets 2 to 4 you can adjust the shipping quantities
to the sales quantities (see fig. 4). After you have entered your planned sales quantities and
confirmed them by clicking the button Save, just click the button Calculate shipments and the
software will automatically calculate the quantities which you need to ship into the market. In doing
so MARGA takes into consideration your current inventory levels deducting them from your planned
sales, which means that your planned inventory levels will be 0. It is still possible to change theses
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inputs manually if, for example, you would like to build up inventories deliberately in a particular
market. In this case you simply overwrite the value suggested by the MARGA software.

Adjust shipping
quantity manually

Planned
inventory levels

Figure 4: Adjusting shipping quantities

Via the submenus Decisions / Marketing / R&D and Decisions / Marketing / Sales you decide on the
R&D budget per product and the sales budget per market.

In the submenu Decisions / Marketing/ Market research / Call for tenders you order the market
research report and enter your price quote for the special public tender. In the first decision of the
test round no public project has been put up for tender so that the decision on the special public
tender is not required in this particular case.

The submenu Decisions / Marketing / Overview merely serve for your information. No additional
decisions can be entered here.
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The production menu has a similar structure. Once the marketing planning has been completed the
obvious route to follow is to take the production decisions in a top-down approach. You begin with
Decisions / Production / Production quantities.

In this menu you can enter your current production decisions. In this context the MARGA software
provides you with the information which quantities are required as a minimum on the basis of your
marketing planning (planned sales and shipments). It makes sense to keep the production quantity
equal or above the minimum quantity required. If your current production decision is less than the
minimum quantity required, the software is not able to draw up the balance sheet or the profit-and-
loss statement afterwards. Appropriate warning signs will then appear on the screen. Warning signs
will also appear if there are insufficient production capacities.

In the submenu Decisions / Production / Investments you will get an overview of your machinery.
You can select the machine type and buy or scrap a machine. The purchased or scrapped machines
are immediately shown in the investment report. Purchased machines will be marked with a star
because their capacity will not be available until the following period (see Initial Situation).
Scrapped machines will be deleted from the investment report. The MARGA software always scraps
the oldest machines first.

In addition you can analyse maintenance costs and the utilization of your machinery.

In the submenu Decisions / Production / Personnel you can determine your personnel policy. A
special feature of this functionality is the entry of the rate of social expenditure. In the first period
you can freely select the rate of social expenditure between 30 % and 99 %. In the subsequent
periods you can then only correct the rate downwards by 2 percentage points each time. On the
other hand, increases are always possible up to the maximum level of 99 %.

The change of the rate of social expenditure does not run parallel to the personnel fluctuation rate
and the absenteeism caused by sickness. In the planning period, once you have entered the rate of
social expenditure, you have to enter the estimated repercussions on the fluctuation rate and the
rate of absenteeism in the upper half of the menu. After the completed market simulation you will
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learn what the actual development of the fluctuation and the absenteeism rates was like. These
changes will be entered during the actual update.

In the submenus Decisions / Production / Raw material and Decisions / Production /


Merchandise you can now plan your purchases. On the right hand side you will in each case find the
graduated price range while you can take your quantity decisions on the left hand side of the screen.
After having taken all the production decisions please check again whether you have enough staff
and the machine capacity is sufficient for the planned production and whether enough raw materials
have been ordered. Differences between the needed and the actually available numbers will in all
three cases involve negative consequences for your company.

Your planning process in the first period will be concluded by the financial planning.

When you click on Decisions / Finance / Loans you are able to order long-term and/or short-term
loans and if necessary, you can receive a financial rating for your company. Early redemption of long-
term loans are also possible.

Under Decisions / Finance / Payment policy you have the possibility of determining your own mode
of payment on the left hand side of the screen. At the top of the right hand side you can determine
your own cash discount rates. These are the cash discount rates (between 0 and 2%) that you offer
your customers and that influence their speed of payment. Your customers speed of payment in
turn has repercussions on the liquidity situation of your own company, which you can gather from
the diagram in the bottom left hand corner of the screen.

In the submenu Decisions / Finance / Exchange rate guarantee / Financial investments Surplus cash
can be invested in the capital market. On the right hand side you can hedge the $ incomes from your
foreign markets (Markets 2, 3 and 4) against exchange rate fluctuations. This is done by putting a
simple cross.

Via Decisions / Finance / Administration you can cut your administration expenses by pursuing
efficiency improvement strategies.

An overview of your current planning can be found under Decisions / Decision matrix.
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In the submenu Controlling you can now analyze in detail the effects your decisions have generated.

IV Completing the first decision and further decisions

After your group decisions have been simulated, you can access the results of the first period via the
function Controlling / Results report.

You can see and print out the report with all results and relevant data, which you can tailor to your
needs. Obviously you can also show the report as a PDF.

Figure 5: Creating a results report

As described in III.1 you can analyse again the situation of your company using the features of the
menu Controlling.

To plan the next period please switch to the corresponding period in the MARGA software.

Before you start entering decisions into the new planning period you should discuss with which
parameters you would like to initialize the input fields. By default, the MARGA software transfers the
values from the Strategic planning (cf. V.3). If you dont use the Strategic planning all the valued will
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be the same as in period 0. Still, if you prefer to transfer the values from the previous period you do
this via the submenu Decisions / Transfer decisions from last period.

Of course, you can and should overwrite these values with your new planning data.

Attention: All decisions which have been entered into the actual period so far (incl. strategic
planning) will be overwritten! Hence, you should use this function before you start entering your
decisions.
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V The Menus

Figure 6: MARGA software menu

V.1 Decisions

The menu Decisions contains the functional areas Marketing, Production and Finance. In the submenu Decision
Matrix you can check and print out your decisions. Via Transfer decisions from last period (only in PLAN mode)
you can transfer the decisions of the last period to the actual period. Every single decision will be overwritten by
the decision of the last period. Please remember that this is only a preliminary decision. It is sheer comfort, that
the values you probably want to keep constant do not have to be entered again.

Attention: All decisions which have been entered into the actual period so far (incl. strategic planning)
will be overwritten!

V.2 Controlling

The Controlling menu will provide you with the data both for the external accounting and for the internal
accounting. In addition to the contribution margins you can analyze the balance sheet, the profit and loss and the
cash flow statement. Via MIS (Management Information System) you can simulate how the different value drivers
influence the MARGA Value Added. Information on Marketing, Production and Logistics is provided via the
corresponding menus. Results report summarizes the results of the simulated periods (cf. Initial Situation 'Results
Report').
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V.3 Strategic Planning

Within the Strategic Planning you can enter all the decisions for all planning periods that you also entered in the
marketing, production and finance areas. So, here you have the opportunity to do long-term planning and to
review decisions taken in previous periods over a longer period of time. The area of Strategic planning is broken
down into Marketing, Production and Finance.

V.4 Competitors Analysis

In the Competitors Analysis you can compare your Market development, Market share, Performance (e.g. Profit)
and BCG-Portfolios with the figures of your competitors. All of this information is only provided, if you ordered the
Market research report via Decisions / Marketing / Market research / Call for tenders. The Annual Report is only
available after the second and the last period.

V.5 Communication

GoToMeeting is a conferencing solution that lets users initiate or participate in spontaneous or pre-planned
meetings via internet. It takes only a few mouse clicks and no prior installation. In particular, MARGA companies
with distributed teams (i.e. team members at different locations) benefit from using a streamlined web
collaboration tool while performing their team sessions via internet in real-time.

V.6 Infos

The submenu Environmental Data gives you some quantitative information, which you can also find in the Initial
Situation. You can also access different documents, namely the MARGA manual and the Initial situation. The
menu item Team data enables editing of your name, address, phone, fax and email address.

If you have any further questions please turn to the MARGA Service Line: +49 (0) 2235 406-364

VI Logout
When you have clicked Logout, you will see the input acknowledgement of your current scenario. You will also
get an information whether your current scenario is your delivery scenario. Please check the data and click on
Back to go back to the last screen or on OK to confirm the data. You can change all data anytime until the
deadline.
MARGA Business Simulations
Schloss Gracht
50374 Erftstadt
Germany
+49 2235 406364
info@marga.net
www.marga.net