The Independent Management Game: Distillers make a show of strength

Click to follow
The Independent Online
UNITED DISTILLERS continues to make good progress as tough conditions confront competitors in the Independent Management Game, sponsored by National Westminster Bank, writes Roger Trapp.

The team of managers from the scotch whisky maker is at the head of its group, with a share price of ecu 1.53 after the second round of the semi-final. But the other team being closely followed in the closing stages of the contest is also doing well. The representatives of the Student Industrial Society have recovered much of the ground lost in the previous quarter by turning in a profit of nearly 10 per cent of sales. They are also chasing export orders by cutting prices.

Other teams turning in strong performances include BPP Courses, with a share price of ecu 1.56; Lucas Aftermarket Operations, with ecu 1.55; NPI, with ecu 1.52; and Oki, with ecu 1.42.

Overall, however, teams are seeing profits fall, as margins drop in the face of tougher competition within the European Union as well as rising interest rates, increasing unemployment and a weakening dollar in the United States.

Orders are falling off sharply in the US because the combination of these factors is making it difficult for the game's European companies to compete. Some have tried to counter this by cutting prices. But since they are also faced with a 20 per cent tariff, the reductions have to be fierce to work - with corresponding effect on profitability.

All 30 teams, including two from NatWest, are trying to run a medium-sized manufacturing company selling to the European Union and the US. In trying to forecast likely sales and make the best of financial, human and plant resources, they are pitting themselves against a computer and each other.

The simulation, designed by Edit 515, which organises the competition, takes in all these functions, plus marketing. But to be successful, a team needs to make good use of teamwork, communication and trust, to cope with a host of other problems.

Six winners of the semi- final go through to a national final to be held in London next month. The winners of that receive pounds 10,000 and the chance to represent Britain in a European final in Lisbon in January.