Severn Trent team manages it again

Independent NatWest Management Challenge 1995

SEVERN TRENT WATER has successfully defended its Independent Management Challenge title, winning a tightly fought final at the Kensington Hilton Hotel in London last weekend.

As well as a first prize of pounds 10,000, the five-man team led by Paul Smith won the right to represent Britain in the international final in Lisbon in February. Severn Trent was closely challenged until the final stages of the game, sponsored by National Westminster Bank in association with the Independent, by "The Borg", a pairing of two individual contestants, which won pounds 3,200, and BPP Courses, the accountancy training group, which was awarded pounds 1,750 for coming third. The fourth team was BT Laboratories of Ipswich.

As in previous rounds, the contestants were required to manage a simulated medium-sized manufacturing company with a view to maximising the company's share price as measured in ecus. The game, devised by Bill Robertson and his team at Edinburgh-based Edit 515, is more realistic than many others, since the teams have to compete against each other as well as against the computer. They must do conventional jobs, such as marketing, production, finance and personnel, with a view to outperforming rivals in Britain, Europe and the United States.

The final found the US market to be depressed, with a weak dollar tending to inflate the prices of European producers. As a result, the European market became the focus of team attention. Mr Robertson said: "All of the teams grasped what was likely to happen from the start, and since there was no shortage of capital, made moves to expand the production resources to supply growth in the European Union."

Severn Trent's success stemmed from its strategy of providing quality products at a high (but not the highest) price in the marketplace, while using advertising to promote the company and product image over the long term. Design quality was kept in the forefront, while the high manufacturing quality meant few items were returned. The strong marketing image was backed by a manufacturing capacity that enabled the team to avoid expensive shift working and overtime.