Teams battle diving dollar

Independent Management Game !995
Click to follow
The Independent Online
CONTESTANTS in this year's Independent NatWest Management Game are beginning to take control of their businesses after a rather mixed start to the proceedings.

Those that have combined good forecasting with a tight grip on stocks and raw materials are making the early running for the pounds 20,000 prize money and the chance to compete in Europe. But while these "companies" are seeing their shares trade at about 1.5 ecu, compared with a starting price of about 1.42 ecu, others are suffering from poor liquidity through stockpiling and extra borrowing costs.

The teams, representing a wide range of business sectors, are finding contrasting conditions in this quarter between their domestic European Union market and the United States. Although sales have risen more than 20 per cent in the former, partly due to expansion into Eastern Europe, the latter has been hit by the weakening American economy. With the dollar trading below 1 ecu, and interest and unemployment rates having risen sharply, sales of imported goods are being hit.

Furthermore, companies that had been backed by long-term funding from institutions which had faith in the strength of the US economy are now encountering finance difficulties.

The Independent NatWest Management Game, which was won in 1994, the inaugural year, by a team from Severn Trent Water, is based on a computer-generated business simulation developed by Edit 515 of Edinburgh. It is played in three knockout rounds by teams of up to six members, who take on the roles of board directors responsible for such areas as marketing, production and finance in a fictional medium-sized manufacturing company.

It is seen by many organisations as a cost-effective way of letting employees experience and learn about the various parts of a company without incurring real-life risks.

After the first round of five reporting periods or quarters, the teams showing the best share prices will go forward into the semi-finals and face a variety of business problems while managing the same companies. The winners of the semi-finals will meet in the national final towards the end of November.

In the meantime, though, contestants can look forward to the challenges posed by the next quarter - which simulates the never-buoyant trading period immediately after Christmas.

Comments