Strength begins to show

WEAKER companies are losing business to their more aggressive rivals as the Independent Management Challenge passes the halfway mark in the first round. As a result, marked differences in share prices are appearing, writes Roger Trapp.

Success in the event, sponsored by National Westminster Bank, is generally marked by a share price of more than 1.4 ecu. One early contender for a share of the pounds 20,000 prize money appears to be a team called Shermans Tanks, which has achieved a share price of 1.5 ecu on the back of strong profitability. However, its net asset position is slightly weaker than that of one of its closest competitors.

The main problem confronting teams in this latest period was the anticipated post-Christmas fall in sales. In attempting to deal with that, companies could either seek to improve profitability through trying to cut costs or take a more forward-looking approach and use the quiet period to manufacture for the stronger sales periods in the coming weeks. However, this strategy is expensive in the short term and would put off some of the less confident.

The Independent NatWest Management Challenge, which last year was won by a team from Severn Trent Water, is based on a computer-based business simulation developed by Edit 515 of Edinburgh. It is played in three knockout rounds, with teams of up to six members who take on the roles of board directors in a medium-sized manufacturing company.

After the first round of five quarters, teams with the best share prices will go forward into the semi-finals and face a variety of business problems while managing the same company. Winners of the semi-final will take part in the national final, towards the end of November. The winner of that has the opportunity to compete in a European final a few weeks later.