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HOW TO PLAY
MORE DETAILS
Copyright © 2012 by Harvard Business School Publishing.
About Back Bay Battery, Inc.
• You are the President of Back Bay Battery, Inc. a division of a $40 billion
consumer electronics manufacturer.
• Back Bay Battery produces 2 types of batteries:
– Nickel Metal Hydride (NiMH), the mainstay business, makes up 80% of revenue
– Ultracapacitor batteries (UC), a newer battery technology, represents 20% of
revenue
• Batteries are sold to businesses that produce consumer electronics in 3
primary markets:
– Portable power tools: drills, sanders, electric screwdrivers, and other wireless
tools
– Two-way radios: commercial radios and walkie-talkie systems used by service
people, taxi companies, and outdoor expeditions
– Portable power packs: used for emergency back-up power, industrial products,
medical equipment, and small electric appliances.
Copyright © 2012 by Harvard Business School Publishing.
How to Play
1. Prepare – review the Prepare tab and read the foreground
reading.
2. Analyze reports – the reports will give you information
about current and historical sales, product features that are
desired by your customers, how feature performance is
changing over time, and financial statements showing the
health of the company.
3. Enter decisions – click on the Decide tab to enter sales
estimates and decisions for the next year. Set prices and
allocate R&D spending across the product lines and
performance features.
4. Review results and continue through 8 simulated years.
Copyright © 2012 by Harvard Business School Publishing.
PREPARE
This section gives information on your role, a company overview, and provides basic
steps for How to Play.
The Foreground Reading
provides key background
information about:
• Back Bay Battery, Inc.
• Battery technology
• Market trends
The Scenario Description
informs what kind of
decisions you’ll have to
make in the simulation
and if you’re instructor has
set a run limit.
Copyright © 2012 by Harvard Business School Publishing.
Estimated Project Investments
Annual
Project Cost
Project
Length
Total
Cost
Potential
Performance Range
NiMH: Energy Density
$3.0 – $9.0 M
4 – 6 years
$12.0 – $54.0 M
900 – 5,200 watt
hours/kg
NiMH: Recharge Cycles
$1.0 – $6.0 M
5 – 8 years
$5.0 – $48.0 M
530 – 1,050 cycles
NiMH: Self Discharge
$2.0 – $4.0 M
5 – 8 years
$10.0 – $32.0 M
11 – 21 months
NiMH: Recharge Time
$1.0 – $5.0 M
4 – 7 years
$4.0 – $35.0 M
105 – 210 minutes
NiMH: Process
Improvement
$1.0 – $6.0 M
4 – 7 years
$4.0 – $42.0 M
10% - 56% reduction in
unit costs
UC: Energy Density
$4.0 – $10.0 M
5 – 7 years
$20.0 – $70.0 M
900 – 1,700 watt
hours/kg
UC: Recharge Cycles
$2.0 – $9.0 M
5 – 8 years
$10.0 – $72.0 M
8,750 – 17,490 cycles
UC: Self Discharge
$2.0 – $8.0 M
5 – 8 years
$10.0 – $64.0 M
32 – 63 months
UC: Recharge Time
$1.0 – $6.0 M
5 – 7 years
$5.0 – $42.0 M
9 – 17 minutes
UC: Process Improvement
$3.0 – $7.0 M
5 – 7 years
$15.0 – $49.0
10% – 74% reduction in
unit costs
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Dashboard Overview
(Advanced Scenario)
This page provides a visual summary of the current status of the simulation.
1. Sales by Market graph
(with Total Sales)
2. Sales by Product graph
(with Total Sales)
3. Previous Year’s R&D
Spending chart
4. Previous Year’s Sales
Variance graph
5. Historical Feature
Spending spark lines for
each battery type
6. Timeline tracks your
progress through the
simulation
1
3
5
6
2
4
5
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Dashboard Overview
(Introductory Scenario )
This page provides a visual summary of the current status of the simulation.
1. Sales by Market graph
2. Sales by Product graph
3. Previous Year’s R&D
Spending chart
4. Total Sales chart
5. Historical Feature
Spending spark lines for
each battery type
6. Timeline tracks your
progress through the
simulation
1
3
5
6
2
4
5
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Unit Sales
This screen tracks the unit sales for both battery types, color coded by market
segment.
On this screen, like most others in the simulation, click View Data to see the data
presented in tables.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Desired Features
The 2 battery types vary in performance across 5 technology features:
1. Energy density – a measure of
how long a battery lasts
2. Recharge cycles – how many
times the battery can be
recharged before it is no longer
able to hold a charge
3. Self-discharge to 50% – how
quickly a fully charged battery
loses its charge when it is left
unused
4. Recharge time – the minutes to
fully recharge the battery
You can monitor how both battery types perform across the feature categories
compared to customer desired feature performance. Toggle between the different
market segments to view how preferences vary by customer type.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Feature Performance
You can monitor your R&D investment and feature performance for each battery type
across each of the 5 categories.
If you want to see substantial performance improvements, you have to invest in your
own R&D.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Potential Customers
The potential customers for all three markets is large. The portion of potential users
and installed base vary from market to market and from year to year.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Income Statement
The Income Statement provides a summary of yearly net income with two years’
historical data.
Cumulative Profit is the yearly net income accumulated through the course of the simulation.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: Dashboard Overview
(Advanced Scenario)
Your sales variance determines how successful you were at setting your sales forecast.
If your variance is too great, you'll get fired. There are three ways that you can get
fired:
1.
2.
3.
You have very large negative sale variance in one year.
You have a large negative variance for several years in a row.
You lose money for several years in a row.
Copyright © 2012 by Harvard Business School Publishing.
ANALYZE: News
Market News is updated annually based on the previous year’s performance.
New market news stories are denoted with
a number in the navigation bar at the
beginning of each round. Clicking on that
number launches that year’s news.
Click “View All News” to
launch the Market News
screen and read all market
news stories for all years.
Copyright © 2012 by Harvard Business School Publishing.
DECIDE: Decisions
This is where all Decisions are entered. For each battery type,
• Enter the next year’s Sales Forecasts
• Set the Price
• Select R & D Investments for each feature area
You must also
submit a brief
statement
explaining your
strategy. This entry
is mandatory in the
first year, but can
be revised in later
years. Your entries
will be viewable by
your professor.
Copyright © 2012 by Harvard Business School Publishing.
DECIDE: Additional Screens
After you submit your first year’s decisions, these screens will populate and help you
track and review your decisions as you progress through the simulation:
• R&D Investment Opportunities
• R&D Spending History
• Sales Forecast History
(Advanced Scenario)
• Price History
Copyright © 2012 by Harvard Business School Publishing.
Archived Runs
Depending on simulation setup
determined by your facilitator,
you may be able to run the
simulation more than once. The
simulation saves each run you
start.
To view or resume your prior
run attempts, click the
“Archived Runs” link at the
bottom of your screen.
Copyright © 2012 by Harvard Business School Publishing.
Cumulative Profits
Depending on simulation setup
determined by your facilitator,
you may be able to view a list of
your classmates’ cumulative
profits, and possibly, their
corresponding strategies.
To see the Cumulative Profits
list, click the link at the bottom
of the screen.
Copyright © 2012 by Harvard Business School Publishing.