Final Report – Business simulation

Team 1: Anthony Antoun, Raghavendra Nihal Saraf, Sailee Wagh, Gokulkrishnan

Srinivasan, Eric John, Devika Sreenivasan

I. Mission statement and vision of the company

“Straddling a bicycle means freeing oneself from urban constraints, embracing the horizon,
and communing with nature. It is to feel master of one's destiny, free to choose one's destination
and one's pace. With the wind in their hair and the sun on their face, the cyclist blends in with
the landscape, becoming one with their environment.” – PEDALDREAM

PEDALDREAM is a custom-built bicycle company combining carbon fiber technology with

3D printing technology. Our mission is to inspire everyone, from the recreational rider to the
high-performance athlete, to explore and rediscover the landscapes around them and to enjoy
the cycling experience.

Our company first targets consumers eager for fun, experience, and comfort through its
"Recreation" line of bikes.
Secondly, We target consumers who are looking for adrenaline, sport, and speed through its
"Speed" line of bikes.

PEDALDREAM is a company that is:

- Ethical with working conditions strongly improved compared to other companies in the
market in terms of salary, health benefits, vacation, pension, and training of employees. (Q5)
- Innovation, always at the top of the technology, with new material stronger and lighter
- Transparent with an ambition to expand internationally with the opening of new stores.

We are a company that wishes to share its passion for cycling with its customers. This is what
it does with its specialized salesmen in its different stores around the world.

In the medium-long term future, we will develop new bike designs within its "Recreation" and
"Mountains" ranges to continue to offer new products. Moreover, after having invested
massively to make our brand known all over the world, we will invest massively in Research
& Development to increase our competitive advantage and to remain in a system of
technological excellence to offer the best to our customers.
Finally, in the medium to long term, we will continue to improve the working conditions of its
employees and modify its means of production and logistics to remain aligned with the deep
ecological aspect of the company. These points are increasingly important and considered for
our customers, so they are also very important for us and require strong commitments that
PEDALDREAM is ready to make now.

With PEDALDREAM, we are driving towards a promising, quality and security, hand in hand
with our customers!

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 II. Summarize your business strategy.

The business strategy of PEDALDREAM has evolved along with the company. And we are
quite satisfied with it! While the PEDALDREAM adventure started with the priority focus on
the "Recreation" line, leaving the "Speed" line in second place and the "Mountain" line in third
and last place, very quickly PEDALDREAM took another turn by focusing on the "Mountain"
line because we had enough market share in the other brands, and we wanted to obtain as much
brand share as possible. The “Mountain” brand was very difficult for us, in every sense of the
word, whether in terms of marketing, design or even production. Our competitors were already
well established, but that motivated us even more.
This radical change took place after the entire PEDALDREAM management team became
aware of this. Indeed, we had started with the “Recreation” brand this brand could speak to
more people, and get more market share, but the Mountain brand fell between the two brands
and was more complicated to locate in the bike market, and even that of the consumer. "Speed"
range was our second priority because, despite a lower number of users, the sales price was
very high compared to the two other ranges offered. We hoped to have a high turnover by
focusing on consumers eager for speed. Moreover, we had created a bike model for each
existing range, but it soon became clear that for a new company to launch directly into 3
different ranges was risky but we took this challenge and it paid! We had the most market share
in the “Recreation” and “Speed” bikes. It motivates us to continue like that and to be more focus
on: gain more market share in “Recreation” and “Speed” and to improve our “Mountains” brand
PEDALDREAM therefore put its "Mountain" brand his priority to improve it.
These changes allowed us to focus on the evolution of our market share, and on the quality of
our bikes. This allowed us to evolve and grow PEDALDREAM in a safer way to achieve our
long-term mission.

PEDALDREAM also made an impactful decision during its development to invest in and focus
on its popularity through advertising in various media, organic search engine marketing and
social media. This investment has been an incredible opportunity for PEDALDREAM.

III. Review your financial, market, operational, HR and CSR performance during
the period. Explain why you were able to achieve or not achieve your goal.

a. Financial performances

Quarter 4 marked a pivotal turning point for our company, characterized by a strategic and
targeted investment exceeding $2 million. This significant financial commitment was driven
by a singular objective: to reclaim lost market share and propel our company back on a path
of growth and prosperity. Most of these funds, $1.7 million, went towards strengthening our
research and development (R&D) capabilities. Recognizing the pivotal role of innovation in
today's dynamic market, we prioritized the development of groundbreaking products and
services that cater to evolving consumer preferences. This unwavering commitment to R&D
ensures we remain at the forefront of our industry, poised for future expansion and sustainable
competitiveness.

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Furthermore, we strategically allocated $105,000 to amplify our brand message through
targeted advertising campaigns. With a clear understanding of the power of effective
communication, these campaigns aimed to re-engage existing customers and capture the
attention of new markets, ensuring brand awareness and consideration throughout the
customer journey. Additionally, $245,000 was invested in expanding our physical presence
through the opening of new stores. This strategic move enhances accessibility and
convenience for our customers, fosters brand loyalty, and ultimately drives sales growth.
While these investments represent a substantial financial commitment, they reflect a well-
considered and calculated approach to reclaiming our market position. The anticipated
return on this investment is promising. Looking ahead to the beginning of the 5th quarter,
projections indicate that despite exceeding the $2 million mark in expenses, we will achieve a
profit of $3 million. This will allow us to not only reimburse our debt but also generate a
net profit of $1 million. By bolstering our R&D capabilities, amplifying our brand message,
and expanding our physical reach, we are laying the groundwork for sustainable and long-
term success. The success of these investments will be closely monitored and analyzed in the
coming quarters, providing valuable insights and guiding future strategic decisions.

b. Market performances
The bike company focused on developing a strong brand identity through effective marketing
strategies. The company utilized social media platforms and sponsored cycling events. The
marketing strategies were successful in creating brand awareness and attracting new customers.
Our market share was 10%, for recreation bike and end at 36%, an increase by 26 points.
For the speed bike we started at 56% and end at 36%. The market demand was 4936. The
company adopted a pricing strategy to position its products in a mid/low position. The pricing
strategy was successful as it helped the company increase its profit margins and maintain a
strong brand image. We used social media platforms to promote our brand, engage with our
followers, and offer promotions and incentives. We used paid SEM to attract new customers
and we did multiple ads to promote new products and generate interest among potential
customers. By showcasing the features and benefits of new bikes such as ComforterPD1and
City PD1. The brand judgement for ComfortPD1 and CityPD1 was in the first and third place.

c. Operational performances

We produce Speed, Mountains, and Recreation. We were able to meet customer demand
and maintain high quality standards while also operating efficiently and profitably in the
first 2 quarters but after that the demand was more and we forgot to increase our capacity
to produce, that why we lost our market share, we were focused on the quality and the price
of our bike and trying to make some good advertisement. We tracked the defected products
and minimized them, and we implemented corrective actions to improve quality. For the
production we calculated the number of bicycles produced to the number of resources used,
such as labor hours or raw materials. The units produced was 876 while the demand was
1187 and that lead to a loss in sales for 311. In the last two quarters our productivity was
the highest at 375%. We were the first team in the productivity percentage. These results
show that we need to increase our capacity to reduce sales lost and to make higher profits.
d. Human Resources performances

PEDALDREAM' employees and their working conditions are of paramount importance to the
company. We consider them to be one of the essential pillars of our brand. Indeed, without
them, PEDALDREAM would not have the capacity to spread its values to the four corners of

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the world and even less to satisfy the needs and desires of the bicycle and cycling enthusiasts
that we count among our customers. Thus, starting from this obvious fact, the PEDALDREAM
teams have chosen to make the working conditions of our employees a priority. We have
therefore increased their salaries as well as their pensions and vacation time per year. But what
we are most proud of is the fact that we have been able to provide employees and their families
with access to comprehensive health benefits in a health clinic where several general
practitioners as well as specialized physicians practice for their benefit and for the benefit of
PEDALDREAM. Indeed, these decisions were also motivated by the fact that we want to
encourage and motivate our employees as much as possible, because we are convinced that
employees who are in good health, with fewer financial problems and who feel considered by
their employees are more likely to give their best in their jobs.

We have encountered some concerns about the balance between the salaries and benefits of
workers and supervisors. A rebalancing of the latter helped reduce the sense of injustice felt by
the workers without instilling a sense of revolt in the supervisors. A good balance between the
two allowed us to have a productivity rate of 96.88% during quarter 7.
Our dedication to employee satisfaction has yielded impressive results. As of the end of Quarter
7, we boasted a turnover rate of only 5%, a significant achievement and the lowest among our
competitors. This incredible statistic underscores the effectiveness of our employee-centric
approach.

e. Corporate Responsibility performances

Quality is very important in our operation. We tried to improve our performance by

taking actions for the environmental concerns. We Retrofit production facility with
system to collect, store, and dispose of all chemicals. We Separated the employees
from chemicals with respirators, protective clothing, and gloves. Also, we Placed air-
filtering plants throughout the production facility.

For the worker training, we Cross-trained the employees to work on multiple tasks
within their department, to help with departmental planning, including issues related to
workflow, equipment, materials, job assignments, vacation scheduling. Also, we
scheduled time for department planning with coworkers and supervisors and we
developed teamwork skills, including interpersonal, communication, and negotiation
skills. We Trained operators to detect errors and adjust machines, so they produce
within tolerance.

We measured and rewarded purchasing agents on both the cost and quality of
incoming materials, parts, and services. We worked with suppliers to launch and
maintain their own quality improvement programs. We provided fitness and day care
services center for employees and for the families of the employees. We Setup and
run a health clinic that includes general practitioners plus a few specialists for
employees and families of employees.

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 IV. Main results in comparison with other teams in the same group. Note that you
should use financial statements/figures/tables to demonstrate the key results.

We can see from the above graphical representation of the Market share,
That all the companies started very well (except for Bicicleta) and were fighting for their
major part of market share. But we can see that we were dominating the market share
with more than 35%. For the beginning is a lot. But we can see that during the game,
we lost more and more market share to end at less than 15% of the market share on
the Q4.
But after the Q4 we decided to invest a lot, to modify completely our bikes, to make
more advertising, to rework our marketing strategy and it works. In Q5 we were the
first with more than 30% of the market share and we are reinforcing our position by
taking 17 points of market share to end at 34% at Q6 we have regained our initial
market share after a sharp decline

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Success is ringing in our ears! We're thrilled to announce that we have received over 4,800
demands, significantly exceeding our expectations, and demonstrating the trust our customers
place in us.
Compared to our competitors, this number of orders is exceptional. It solidifies our position as
a leader in the market and underlines the quality of our products and services.
This success is the result of several factors:
Unwavering commitment to customer satisfaction. We strive every day to offer flawless
products and services, and to respond to our customers' needs quickly and efficiently.
Continuous innovation. We never stop searching for new solutions to improve our products and
services, and to meet the ever-increasing expectations of our customers.
A dedicated and passionate team. Our employees are our driving force. Their commitment,
expertise, and passion are the keys to our success.

With the help of the above graph, we can see that we have a below average
performance when compared with other firms at the beginning. We can see also that
at Q4 we improve completely our financial performance thanks to good investment, we
have listen our consumer, and our feedback.

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Our company seems to have almost the same marketing effectiveness as the other
companies, even better than some of the companies, which is positive for our business
as it will create more demand.

Here we can see that our company, have invest a lot of money in the R&D, in the Q4 and above
you can see what happened when we have invested, our market share improve a lot, our
demands too, everything was increasing.

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This graph shows that we have the highest manufacturing productivity when compared
to the other companies. We have the most reliable and best quality production when
compared.

We can interpret that we have high sales force productivity, which is similar to the other
teams when we compare it with our own.

V. Lessons learnt.

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There were many Lessons that we learned during the Business simulation week. Some of the
most important ones were,
Adapting continuously to Market Changes: In order to remain competitive, we must be able to
change with the times. Keep abreast of market developments and trends and be prepared to
adapt your business plan as necessary. Importance of adaptability: The business world is
constantly changing, so being able to adapt to new situations and challenges is crucial.
Managing Costs: Inadequate financial management will strain our company's cash flow and
make it challenging to engage in expansion. When cutting costs, we should focus our attention
on maximizing the pricing strategy and profit margins. We had created a model which used all
the basic components, and we had a compromising price for it, this led to the costs of producing
to be more than the profits. So, we should carefully manage our costs and prices.
Impact of competition: You might have learned how to analyze your competition and develop
strategies to compete effectively.
Maintaining our Commitment to Quality: The success of our company depends on the quality
of the goods. We need to make sure that we spend money on quality assurance and work hard
to enhance the functionality, robustness, and aesthetics of our bicycles.
Embrace Innovation: Innovation is essential for surviving in the market and satisfying
customers' changing wants. We need to create new goods and enhance old ones and invest in
research & development and keep up with current trends and developing technologies.
We must Focus on what is important and what creates value in demand in the market for our
business to thrive.
Importance of teamwork and communication: Working effectively with others and
communicating clearly is essential for any successful business.

VI. Explain how you have prepared your firm to compete in the future.

Our Company performed above average in the last quarter of the business simulation. In the
start we made a few decisions which led to the impressive growth of our business. But in the
middle of the game we missed some opportunities, we take too much time to take decisions if
we have to open in another city or if we must consolidate our presence in Amsterdam and we
forgot to invest in Research and Development. We hence analyzed the issue/problems that led
to this event. And have proposed a few ideas/strategies and improvements for our firm to be
able to compete effectively in the future. Expand Our Product line: By providing a larger
selection of goods, we can better meet the varying demands and tastes of our customers. We
can take into account creating and releasing new bicycle models or accessories to enhance our
current product line. This will help us to be ahead in the market and offer unique and various
different models of the bicycle in order to capture a larger part of the market and the demands.
Indeed, actually we have 5 models of bikes, 2 “Recreation” 2” Mountains” 1” Speed” we have
the most market share comparing to our competitors, but our objectives is to dominate complete
in all sectors, so we will soon launch a new “Speed” bike and try to improve all the others bikes
Focus more on Sustainability: Consumers are placing more and more value on sustainability,
and incorporating even more sustainable practices into our company's operations will help us
draw in and keep clients. Giving more importance to the environment and society in the future
will help our company grow positively. To reach this goal we have to invest in research and
development, indeed, is this sections that makes us successful.

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Concentrate on Distribution: Making sure our bicycles are accessible through a variety of
distribution avenues will help us reach a wider audience and make it simpler for the clients to
purchase our goods. In order to grow widely, we must open different stores across the continents
in the future, as we were not able to completely open it in these past 6 quarters. This will help
us immensely.
Price Competitively: In a market where there is competition, it is critical to price your products
favorably. We will investigate the pricing tactics used by our rivals and modify our own pricing.
But we won’t adopt an aggressive pricing strategy as it will affect the perceived value of our
product. Even if our bike is one of the cheapest, but with the best quality, that why we are
competitive, we can improve our bike and make them even cheaper, bearing in mind that we
need to make a profit from these velos so that we can develop and continue to grow.

Recommendations:
Expand Production Capacity:
Invest in scaling up production to
meet growing demand and avoid
losing market share.
Develop Mountain Bikes: Enter
the mountain bike market with
high-quality, competitively
priced offerings to capture new
customers.
Strengthen Marketing and
Customer Support: Implement
targeted marketing campaigns
to raise brand awareness and
build a robust customer support
system.
Address Wheel Quality: Prioritize R&D and quality control to ensure the safety and
reliability of your wheels.
Embrace Innovation: Continuously improve your technology and explore new product
possibilities to stay ahead of the curve.
Monitor External Environment: Proactively track economic trends and potential
regulatory changes to adapt your strategies accordingly.

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