Business Simulation Report

Global Strategy and Emerging Markets

The YOURS Group
Leading bike seller in the Global Market
By Shamima Marzia
STUDENT ID: 30047765
 Table of Content
Introduction……………………………………………………………………………………………………………………………………3

Company Cost Positioning………….…………………………………………………………………………………………………..4

Swot Analysis…………………………………………………………………………………………………………………………….4

Attractiveness of the Company…………………………………………………………………………………………………………5

Porter’s Five Forces Framework………………………………………………………………………………………………..6

The Company's Position in the Market……………………………………………………………………………………………..7

Strategic planning……………………………………………………………………………………………………………………………8

Firms Structure……………………………………………………………………………………………………………………..9

Ansoff Matrix…………………………………………………………………………………………………………………………9

International Strategy……………………………………………………………………………………………………….............10

Expansion Possibilities………………………………………………………………………………………………………………..11
Conclusion……………………………………………………………………………………………………………………………………..12

References………………………………………………………………………………………………………………………..............13

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INTRODUCTION

This report is based on a business simulation performed by our team members on a virtual company, which
assesses the Company's performance for six virtual years due to each team member's strategic and
operational decisions. ‘The YOURS Group’ is a Japanese bike manufacturer with headquarters in Tokyo. That
sells products like Aventra Sportex, Atlas and Pendleton to Brazil Russia, India, and China respectively. The
technology allows multiple teams to compete against one another to achieve the greatest results for the
firm.

‘The Yours Group’ aims to create a bicycle brand that consumers will repeatedly patronize and connect with.
The Company eventually spread to other countries such as France, Brazil, Indonesia, Germany, Europe,
South Africa, Germany, and Nigeria. In 2020, Yours Group was founded, and our team took over in the year
2021. Before the results were revealed based on the previous year's performance, each virtual year had one
round. From 2023 through the end of 2024, Yours Motor performed successfully and began to profit.
However, it was unable to sustain the same pace over time, resulting in a considerable loss.

The purpose of this report is to study the strategic thinking process that emerged throughout the simulation
and to grasp the crucial judgments made when making difficult decisions in order to obtain a better result.

The report will include the following sections:

i. Recognise and comprehend internal and external business conditions

ii. Strategic planning process and a possible conclusion
iii. The influence of the decision-making process on the business
iv. Evaluating the outcomes and finding opportunities for improvement

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The Company's Position in the Market

As a new firm, the first hurdle was to create a business strategy by analysing the internal and external factors
and assessing market potential to meet the requirements of the forces framework, three essential values for
the Company's vision were chosen as the first phase in the strategic planning process.

 High-end bikes
 Transformed the nature of technology
 Extremely durable

The three values stress the organisation's excellence and long-term direction. Financial services, marketing,
and human resources each have their own set of goals. Education was chosen as our key performance
indicator because we believe that well-trained and educated personnel are an essential resource for a
company's success. (Brewster, 2017).

SWOT Analysis

SWOT analysis is a strategic planning process that evaluates internal strengths and weaknesses of a firm as
well as external threats and opportunities. According to (Chermack and Kasshanna, 2007) The SWOT analysis
gives data to match company resources and capabilities to external environmental elements to compete.

Strengths Weaknesses

 Benefits and incentives  Limited product choice

 High-end technology  Poor decision making
 Product creation and design  High administrative cost
capabilities

Opportunities
• Market expansion in new areas
• New technology is available.
Threats
 Local marketplaces are highly
competitive.
 Different buying habits of clients
 Regional and economic

Figure 1: Swot Analysis

The attractiveness of the Company

The Company chose France as the first stage in its expansion. The market's attractiveness and
competitiveness were factors in this decision. To identify which marketplace is optimal for our Company, our
team opted Hofstede's cultural dimension and Porter's five forces framework.

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Hofstede’s Cultural Dimension

Greet Hofstede proposed speculative concepts to grasp cultural differences. Hofstede claims that this is critical for our
employees, investors, and clients (Soares, Ana Maria and Farhangmehr, 2007). When we examined each location in
our business simulation, it became clear that each country had its own set of advantages and disadvantages when it
comes to running a firm. The following are a few judgments based on Hofstede's cultural characteristics.

Figure 2: Hofstede Cultural Dimensions on Countries entered during 2021-2025

Cultural Dimensions of Hofstede's Decisions

The degree to which power is evenly distributed across society's members is the power distance. Among
the countries we decided to conquer, Indonesia clearly had the biggest power distance. According to
(Basabe, Nakane, and Ros, 2005)there is a relationship between the power distance index and wealth
inequality. We were able to save a substantial amount of money on salary and social security charges by
choosing this alternative over joining a nation with a high power distance index.

Figure3: Income statement of Yours Group in 2025 (Source: Edumundo Business Simulation)

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Furthermore, due to low income equality and in nations with low power distance, there is a big demand for
luxury bicycles. According to Hofstede (2011), people with a high degree of education and social status have
a low power distance index, making them a suitable target group for marketing our goods. As a result, we
made a significant profit in the first year of operation in Japan in 2024.

Individualism Hofstede, describes the degree to which individuals of society are expected to look after
themselves and their immediate families. Individualist indices are associated with a strong preference for
personal gain above community achievement in countries with high individualist indices. As a result, they
favour more prizes and incentives than countries with strong collectivist indicators. Individualists value
competitive and achievement-oriented mindsets. Staff turnover is directly related to the individualism-
collectivism component. According to (Gong and Wang, 2019), if person-job fit is a significant factor,
decreased employee turnover is expected in individualist countries. The person-organization fit model
predicts lower employee turnover in collectivist nations. Employee motivation, inventiveness, and
performance are all influenced by performance-based incentives. According to (Harder, 2009), if employees
are not motivated by rewards and work satisfaction, they will leave the company.

Masculinity is a social dimension that describes a culture with more masculine features. Material incentives,
success, and recognition are valued more in cultures with high masculinity indices. Feminist societies, on the
other hand, value business and quality of life Hofstede, (2011). Other countries have lower values on the
scale than Japan, which has a very high masculinity index. Uncertainty avoidance is how society enjoys
dealing with change and is prepared to take chances (Yeh, 1988). Except for a few neutral nations like the
United States and Australia, most of the countries we visited had an extremely high risk of avoiding us.
Diffusion of a new product into various markets can be difficult since consumers may be unsure about the
product's quality and performance. The component of long-term orientation relates to how society is
focused on the future. They exist in nations such as the United States and Australia. Instead of taking a
programmatic strategy like Japan and Belgium, they want to take a normative approach and see immediate
effects.

Indulgence- is a new dimension added as a consequence of "happy research," according to Hofstede (2011).
It is the extent to which society refers to life as enjoyable. According to(Rinne, Steel, and Fairweather, 2012)
countries with high indulgence indices have a strong sense of personal control over their lives, and leisure
time is highly prized. In terms of work-life balance, job load plays a conflicting role. Employees aim to leave
the Company due to a lack of work-life balance.

Porter’s Five Forces Model

Our team used Michael Porter's five forces model to assess the competitiveness of the business environment
and establish sound strategic plans that were appropriate for the company. A summary of judgments made
based on this hypothesis is seen below.

Yours Group usually favoured nations with little or no rivalry, except Monaco, Singapore, Germany, Japan,
Brazil, and Indonesia, all of which had significant local competition and were subjected to various
competitive strategies, detailed in the last chapter. Due to the high cost of switching products, market share
will be shared among rivals when there is a lot of competition. A customer's switching cost is purchasing a

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new bike from a new company. In order to reach a nation with a high completion rate, our product must be
of excellent quality and have certain distinguishing characteristics.

The threat of new entry — before entering new nations, the political state of each country was investigated.
The expense of the area was also taken into account. Compared to other nations, countries like the United
States and Germany require large capital investments for location, and advertising costs are considerable for
market penetration and brand recognition. Yours Group chose not to enter China since the investment costs
were considerable and local competition was fierce.

Buyers' Purchasing Power - Buyers in nations like Singapore, Brazil, and Japan have a lot of bargaining
power. There is a lot of competition in Germany, and customers have the option of selecting the greatest
goods for their money. Each country's market is divided into three categories: price, quality, and client
intimacy. Before entering the nation, it’s crucial to figure out how big the client's market is and how sensitive
they are to pricing changes. France had the best market segment to fit our product plan in 2022, with
758,625 clients in the price group, excellent for a business with a cost leadership market strategy.
Furthermore, because there were few rivals, purchasers' pricing power was limited. Supplier negotiating -
our suppliers had a lot of bargaining power because the agreement with the manufacturer only had a few
alternatives to pick from.

Although we had control over R&D and price, we did not influence other elements. Similarly, shipping
service providers had their own set of rules and regulations that we couldn't deviate from. In this context,
the only substitutes available to the firm were substitute or alternative solutions.

Company Cost Positioning

The cost drivers -The key cost drivers affecting the Company's profit may be classified according to the
Company's value chain. The mapping of a value chain analysis, which might include a qualitative or
quantitative tool, from product input to output via several manufacturing stages, is known as a value chain
analysis (Frederick, 2014).

Figure 4: Value Chain Analysis

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Purchasing - Our inventory management was so bad in round one that we couldn't keep up with demand in
Belgium owing to limited inventory. For the next five years, a huge harbour area warehouse with the
capacity to store 25000 bikes was obtained at a 30% discount. Whoever boosted replenishment massively in
the subsequent years, exceeding consumer demand, imposed additional expenses on the business.

As a result, each country's warehouses were decreased, saving a significant amount of money on storage.
The organisation believes the biggest error it made was not comprehending the client demand during the
simulation in all countries.

Product and HR - In 2021, € 56,250,000 was spent on research and development, which was a poor start.
The € 12,500,000 R&D machine, which may be operated until 2030, is included in this figure. The equipment
will boost the R&D department's efficiency by 50 per cent. Hector currently employs 50 researchers and
manages his time effectively. To align with our organisational goal, the greatest time is devoted to high-
quality research (91 per cent).

Similarly, 86 per cent was set aside for research on dependability. Moreover, the time allotted for innovation
was low (47%), which was not a sensible decision. The cost of R&D by the end of 2026 was € 37,500,000, a
reduction of 33% from the initial budgeted amount. Recruitment and salary are unavoidable expenses for
businesses. The organisation's recruitment costs have grown as it has expanded to new nations. In addition,
the entire pay increased by 8.5 per cent, excluding the social security cost, which accounts for 30% of the
income. Another major factor in HR is education level. Education and training in developing skills that are
essential to boost production and performance. Yours Motor plans to raise the cost of education from €
2.100 in 2021 to € 360,950 by 2026. In 2022, we implemented the HCM system, which boosted our
employees' productivity and loyalty. A high potential program was also created to lower personnel turnover.

Management and Marketing - The business should be in charge of positioning the brand to fulfil client
expectations. We spent a lot of money on R&D since the Company's main goal is to create high-quality
phones for customers]. The outcome demonstrates ongoing product improvement but inadequate client
demand targeting. Marketing costs were distributed at each level, and by 2026, the overall marketing cost
had risen to € 125,320,000 from € 1,325,000.

Aside from that, the corporation has run a few above-the-line marketing initiatives on many occasions. The
management fee for the two management team members was restricted to a minimum of € 85,000. The
firm opted to hire a French origin specialist marketing manager to join the French market in 2022, which was
the highest ever for the previous six years. However, in 2025, we replaced him since we chose to hire a
specialised marketing professional to penetrate two common-wealth countries.

Distribution - bicycles manufactured in Asia were sold in Europe, and the firm had a significant issue in
locating the best logistic service supplier. During the simulation, the company used SBP transportation for its
high quality and because delivery time and cost per item are important factors. However, rather than relying
on one weak for transportation, it would have been preferable to have direct distribution. Just – In-time
items are more efficient since they are delivered straight to the store, saving the firm money on storage
costs.

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Strategic plans

We began our planning procedure after thoroughly examining the market. We employed the Ansoff Matrix,
cost leadership/differentiation, and internationalisation techniques to achieve this.

Firm’s Structure

The corporation opted to keep to the functional structure in the first round. Because Company was working
in a single nation, it was easier to collaborate across different departments. According to (Ballou and
Srivastava, 2007), A functional organisational structure organises corporate activity around specialised areas,
and it is the simplest and most cost-effective structure accessible.

The corporation opted to invest in a worldwide division structure in round two. The board members decided
it would be the right structure for Yours bike because the firm is implementing a standardisation approach.
As a result, €4,000,000 was invested (including the 20% headquarters discount) to keep Tokyo as the
headquarters.

Ansoff Matrix

The Ansoff Matrix is a planning tool that helped us identify whether we wanted to maintain or raise our
income. The method focuses on two linkages that the company must manage (Meldrum & McDonald,
1995).The first focus of our team was on market penetration. We needed to attract new clients on board
from the existing market because the firm was losing money at the time, so

Figure: 5 Ansoff Matrixes

On a local budget of € 1,200,000, we built brand awareness on local televisions, radios, and newspapers. In
order to increase market share, we also decided to stick with our cost-leadership strategy. In 2021, our
product was offered in Belgium for €370, allowing us to provide low-cost items to our consumers. According
to (Sandvik, 2003) cost leadership organisations must avoid paying high costs for innovation and marketing
and rigorously regulate and monitor costs. During round 1, we did not invest heavily in marketing, and the
cost allocation for R&D was €56,250,000, which was a poor shift for the Company. However, we were able to
sustain quality of bikes throughout our simulation.

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In round 2, we learned that the bike sector is a continuously shifting market and that we needed a
differentiation strategy to obtain a competitive edge and maintain profit. A corporation may justify its higher
costs by providing high-quality items with unique features that no one else can match. This necessitates a
significant investment in research and development. Our focus was similarly shifted from cost leadership to
product leadership. As a result, the product price in Belgium was raised to €420 in 2022. The team also
opted to use the market development plan because the firm now produces trustworthy and high-quality
items. Expanding into new markets to find new clients is a market development approach.

However, when we reflect on our decisions, we realise that we haven't yet met the complete need that
existed in the home nation. According to Hussain (2013), a market development strategy is employed when
a company has reached maturity in its current market and wants to attract new clients in other geographic
areas. As a result, entering France in 2022 was a risky option.

Internationalisation Strategy

The sale of goods and services outside of one's own country is referred to as internationalisation strategy.
Firms are motivated to operate successfully and efficiently in a globally competitive environment. (Jain,
1989)Companies may find new prospects as a result of globalisation.

 Increased market share

 Competitive advantage in a certain country
 Global brand awareness
 High return on investment

Exporting, overseas licencing, and direct investment are the three main ways to reach an international
market (Abor, Adjasi and Hayford, 2008). Our team had to choose between local responsiveness and global
integration as decision-makers. 'Yours Group' employed a standardised plan to penetrate the international
market. The organisation has forced corporations to offer the same items with global standards across all
nations in order to maintain brand identification, according to(Levitt, 1993) Companies have been able to
offer more dependable and high-quality products over the world because of the standardisation approach.
It's also made it easier for the firms to have a single goal. On the other hand, The Yours had the option of
running its local advertising campaign by designating a local budget for each nation.

Expansion Possibilities

 Round one – 2020 (Tokyo)

Throughout the simulation, Yours Group chose Tokyo as its headquarters because the economy is mostly
rely on trade and the Company's first focus was pricing, Yours had a target of 635,000, for which the
company was able to sell 120,000 bikes in 2021. In Belgium, the product was provided for €370 for first time,
but by the end of 2026, it had been hiked to €700, resulting in a net revenue of €27.336.500, 00. Belgium, on
the other hand, will have a net profit of €1.123.253, 68 by the end of 2026, representing a 110 percent gain.

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  Round two -2021 (Belgium entered in to the business)

In Belgium, the pricing and customer intimacy category was the target market in 2022. Yours was only able
to sell 330,274 bikes out of a total demand of 1,222,500 from both segments. The first bike was sold for
€410, and the corporation lost money by the end of 2026, even though the market had grown during the
first year.

 Round three- 2022 (Brazil and USA entered into the business)

Brazil has one of the world's fastest-growing economies. In Brazil, Your began selling its first model for €500.
However, the corporation could not determine the country's prospective market sector. Brazil is the most
expensive market sector, although the focus has previously been on quality and customer intimacy. As a
result, Brazil's organisation suffered a significant loss.

The United States operated as a separate entity, with the national managers having complete responsibility
for the organisation's actions. The bike was initially priced at €710 but was discounted to €699 in 2025,
resulting in increased sales. However, the United States came out on top, with a profit of €182,242,735.60.

 Round Four -2023 (Japan and Monaco entered into the business)

There is a huge potential market for the quality sector in Japan. The original price of the motorbike on the
market was € 650 even though Japan was doing well in 2024. The firm lost 49.5 per cent of its revenue and
ended up losing money.

Despite the fierce local competition, Hector chose to compete because Monaco is a tourist destination with
a train link to France. It also has a modest annual site cost of €500,000. The price was set at €800, which is
very costly for a market niche such as Monaco. By the end of 2026, the country had lost money.

 Round five- 2024 (Germany, Singapore, & Indonesia entered in to the business)

Germany enjoys a high level of life and is a technological leader worldwide. It was introduced at €650 in the
first year because the market is excellent for high-quality bikes (2025). The market made a profit of
€29,218,123.34 in 2018 and will make a profit of €35,361,598.93 in 2026. In Germany, the firm had a thriving
operation.
Singapore has become an international trade centre, and it is also a good market for expanding your
business into Asia. The product was initially priced at €600, but was then decreased to €580, at which point
the country began to see increased sales. However, even though Singapore lost money, the country grew by
81 per cent from 2024 to 2025.

Indonesia has Southeast Asia's largest economy, and the pricing category is the most important market
segment to concentrate on. The initial price was set at €550, but it was eventually decreased to €5500,
resulting in a loss in 2025.

 Round six- 2025 (Nigeria and South Africa entered the business).

Nigeria has Africa's greatest economy, and the starting price of a bike was €549. It was again unable to
reach the market's pricing sector, resulting in a loss for the corporation.

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The economy of South Africa is Africa's second-largest. V600 was the product's pricing. The market, on
the other hand, was unable to succeed. Customer desire for price segment was neglected, resulting in
poor net turnover and inability to cover costs.

The reason for not entering China

For certain nations, standardisation is inappropriate. China, in particular, is a Communist country with direct
government involvement in the business. The government has a tight grip on overpricing and salaries.
People have a strong sense of patriotism. Companies must be capable of responding to local responsiveness
in order to join a similar market. As a result, the most successful model for China would be a multi-domestic
approach that allows the corporation to tailor its product to unique circumstances. In our scenario, the cost
of locating in China (€26,000,000) was well above fiscal capabilities, and the base compensation per full-time
employee was € 14.000,00. To enter into the marketplace, a large investment will be required. As a result,
the company decided not to raise business in China.

Conclusion

The company's overall strategic position was weak towards 2026 (virtual year). Because the company's costs
were so high, it could not produce the desired outcomes, resulting in a loss.
Regardless of the predetermined tactics, Yours Group had difficulty making decisions and estimating client
demand.
Excess stocks originated from a lack of coordination in inventory forecasts, planning, ordering, and
distribution.
However, markets such as Germany, Belgium, and the United States did well and were able to keep their
profits.
The company was not long-term oriented since it was unable to sustain the same strength as in 2023-2024
and began to lose money in 2025.
Furthermore, the firm was largely focused on R&D to increase product quality while neglecting the financial
consequences of its choices.
When compared to competitors, the team members took immediate rather than positive actions.
The staff was underutilised, resulting in a heavy workload and poor employee motivation.
It increased the company's personnel turnover, which resulted in greater expenditures for severance and
relaxation packages.

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