THE GLOBAL BUSINESS GAME

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THE GLOBAL BUSINESS GAME

• Sales Forecasting

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Fundamental Demand

• Markets population.
• Per capita income.
• Product saturation level.
• Market growth trend.
• Seasonality

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Population
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Per Capita Income
5
Product Saturation
6
Market Growth Rates
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Seasonality

• Americas sales for TV sets are the most seasonal
  in the industry.
• Mexicos sales are almost as seasonal.
• The seasonal factor is very low in Thailand.

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Seasonal Effects on Sales
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Company Demand

• Prices
• Sales Promotion effort
• Number of Sales Representatives
• Sales Rep incentives
• Advertising budgets
• Channel effort
• Sales Offices
• Distribution Centers
• Wholesalers
• Product quality, reliability and innovativeness

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Available Reports and Studies

• The Global Industry Report
• Operations Report
• Merlin Group forecasts
• Merlin Group sales results

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The Global Industry Report Economic Indicators

• Index shows next quarter GDP changes.
• Index shows one-year GDP change.
• Indices shown for all countries.

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Using the Economic Indicators

• Assuming total unit sales in each country of
  100,000 sets, the indicators indicate the
  following sales results would occur.

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Using the Operations Report

• The sales reported includes filling Backorders.
• Lost Sales are sales that could have been made in
  the current quarter.
• Backorders are sales that should have been made
  in the current quarter.

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Actual Current Quarter Demand

• After assuming American Backorders of 31 25 sets
  and 2,890 27 sets, the following demand was
  created by the company.

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Actual Industry-Level Sales

• The total industrys sales by country can be
  determined by dividing the firms actual sales by
  its market share.
• The result does not indicate what sales could
  have been.

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A Near-Term Demand Forecast

• Create an index that combines the GDP Index with
  the relevant quarters Seasonal Index.
• Apply the new indices to the current quarters
  corrected demand to determine the next periods
  demand.

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Using Merlin Group Studies

• Can check on the competitions sales for the
  current quarter.
• Purchase the Merlin Studies Numbers 1 and 2.

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Using Merlin Group Studies

• Can get a fairly accurate forecast of next
  quarters total industry sales.
• Purchase the Merlin Studies Numbers 3 and 4.
• Divide the totals shown by the number of firms in
  the industrys different country markets to get
  an estimate of the demand a normal firm could
  have for itself.

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The End