This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Planning is essential in creating a new venture. This task remains principally on the entrepreneur starting the business. A good entrepreneur needs to have a variety of skills in order to be successful. SimVenture which is a business simulation game, is a good way of practising these skills. Indeed, teaching entrepreneurial and business skills is one of the main purposes of SimVenture, by allowing the users to create and run their own virtual company. SimVenture also gives the opportunity to learn how to make efficient decisions in all the different sectors of a business including marketing, human resources, operations, finance, and more.
As a business administration student and perhaps future entrepreneur, it is fundamental to understand how to successfully operate a company and to practice and deal with diverse skills. I have learned many lessons by using that simulation and many of these will definitely be useful in my future life and enhance my knowledge and personal development. Three of the main that I have learned are how to manage time and people, how to develop a business model, and how to research and analyse the market.
Managing time and people
Firstly, managing time and people has been a crucial lesson that I have learned using SimVenture. An entrepreneur's most important and most difficult job is to manage these two components.
The first component of the business that has to be well managed is people. Starting a business is not only a one person deal, in the contrary, well developed and directed teams are behind most of the most successful business start-up. Indeed, developing strong entrepreneurial teams are key to a well functioning venture. It is the entrepreneur's task to find individuals that can offer knowledge, experience, skills, and, thus, add up a to the social capital of their company. Furthermore, once the good ones are chosen, employees have to be motivated, leaded, inspired, and encouraged in order to be efficient and to increase their commitment to the company. With SimVenture, I have learned that this process is crucial for a business, because choosing inefficient or unsuitable employees can increase remarkably its costs. Also, the simulation taught me that not only choosing the best candidate is important, but especially giving them the job position in concordance with what they are the best in.
The second component of the venture that has to be greatly managed is time. Effectiveness, productivity, and efficiency, are aspects that can be excessively increased if time is managed correctly. Especially during the business start-up process, at every step of it, time should be spent on elements that are really relevant for the creation of the company. SimVenture clearly showed that time can really be an issue in a company as time management was one on the main problems that my team and I had while using the simulation. Sometimes employees were spending time idle, and some other times, they were not able to finish their task due to lack of time. In the future, I will know that time is the component of a business that is probably the most essential to be well managed in order to be successful.
Developing a business model
Secondly, creating a business model has been an essential lesson that I have learned with SimVenture. Building a business model can be a very long and difficult process, because it is a complex, precise, and specific task. However, it is indispensable for a new venture to develop an effective one because it is the heart of a company. "Management writer Joan Magretta defined a business model as "the story that explains how an enterprise works"" (Casadesus-Masanell and RicartÂÂ , 2011). Being part of a business strategy, a business model is used to represent core aspects of a venture. A business model can be separated in five main features.
The first section is understanding the customers and their purchase decision. A customer in a purchase decision process will pass through some stages before buying a product or service. He will research information, seek value, evaluate alternative, and assess value before making any decision. Using the simulation, I learned that understanding the customers that are in the target market can greatly benefit the company in making products in concordance with their needs. Also, through SimVenture, I realized that customers are the wheels of the business and that it is primordial to make decisions in relation to them.
The second feature of a business model is the value proposition, or the benefits that customers gain. It is very important for a company to understand and be aware of what their customers gain and benefit from their products or services. Developing a value proposition relies on analysing qualitative and quantitative aspects and finding a way to be different from competitors by knowing who they are and what they do. The value proposition is used to attract customers and ensure the company's financial healthiness.
The third part of a business model is the architecture of the business. That feature describes the structure and the organisation of the company. It also defines how the venture creates and distributes its products and services. The business architecture discusses whether there is a market or not for what the company is selling, by analysing the external environment such as geography. All these different components are put together to create value for the customers. Using SimVenture, it was a challenge to make efficient decisions because all the features of the business and the target market were to be taken in account.
The fourth section is the revenue model of the business. Its goal is for the company to find a profitable way to deliver great value to their customers and satisfying their needs. In other words, by doing better than its competitors, the venture has to manage its costs and expenses in order to increase its return on investments. Pricing is also an important aspect of that stage, indeed the price should be fixed so that it is high enough to make profit but not too high for the sales to decrease. Furthermore, the company has to decide which revenue mechanism will be adopted and how the benefits will be delivered to their customers. SimVenture taught me that it is essential to have a great knowledge of our costs and expenses in order to fix the price of the product at a profitable level.
The fifth feature of the business model is the strategic direction. The strategic direction is how the organization strategy will be achieve and which actions will be in place to do so. It demonstrate the position that the venture is planning to take over its competitors in a long term view. It is also a projection of where the business wants to be in a certain amount of years. Using SimVenture, I have learned that the strategic plan of the business is always to be kept in mind if you want the long term objectives to be achieved. In the simulation, I would have made different decisions than my team. In my opinion, we were thinking too much about the present month and not enough of the future of the venture.
Researching and analysing the market
Thirdly, researching and analysing the market has been a crucial lesson that I have learned with SimVenture. The market analysis is essential to be done at the starting point of every new venture. It allows the entrepreneur to know more about the global environment of its business. The market analysis is extremely important because it "helps define the nature of the business and the remainder of the plan. [...] Similarly, the more a start-up understands the needs of its target market, the more it can match its product attributes to those needs" (Barringer, 2009). Indeed, the venture will have to segment the market and select a target market.
The "market segmentation is the process of dividing a market into distinct subsets (or segments) that behave in the same way or have similar needs" (Barringer, 2009). As the market segmentation was already done in SimVenture, nothing was learned from that section.
Before selecting a target market, the company should research and study the size and the trends of the different market segments. This is critical because a good selection will allow the business to be successful in terms of profit and sales growth. With SimVenture, I have learned that selecting the best market segment is one of the most important things, because if you don't make a good selection, keeping a financially healthy company can be problematic in the future. I had difficulty selecting the appropriate target market for the business. Therefore, what I have learned from that for the future is that a deeper research and analysis of the market and of the segments should be done in order to make the best decision possible.
To conclude, through SimVenture, I have learned many important lessons including managing time and people, creating a business model, and researching and analysing the market. The simulation made me aware that a business can face many difficulties and that the entrepreneur needs the knowledge and the ability to make the best decision according to any situations that can occur. Running my own business for a few weeks has definitely helped me in my personal development, because I would now feel more confident and experienced if, in the future, I would decide to start my own company.