Some questions you may have...
If you have other questions that you would like to see answered on this page please
Can you tell me more about how the game works?
The game is built on a sophisticated and rigorous underlying dynamic
model that handles 'accumulations' [a decision today to add restaurants
or improve the menu continues to have repercussions for long periods],
feedback [more customers > worse service > fewer customers] and
thresholds/non-linearities [customers are OK with waiting a bit, but not a lot]
The underlying system dynamics method is rock-solid theoretically and was developed
specifically to handle these complexities - something that spreadsheet models
and regression-based methods cannot. A consise textbook on our implementation
of system dynamics is "Strategy Dynamics Essentials"
If you would like a look at a more transparent, short time-scale model
[not a game, though] of a single restaurant, many [but not all] of whose
features are handled in the White Label Restaurants game, see
a small Sysdea example
[it includes a short video demo].
So … the model captures the developing performance of an average restaurant,
and multiplies this [and adds some whole-business factors] to model the whole
company. The average restaurant, of course, changes, as growth uses up the
market potential and competitors encroach.
How is the game used to teach different strategic frameworks?
The main strategy issues the model demonstrates include …
- The 'value curve' idea that customers are won and retained by a mix of factors
.. price, service, product range, word-of-mouth, marketing promotions … and
the relative influence of those factors changes, depending on their relative values.
- The RBV concept of 'resources' that are hard to replicate [reputation, HQ support]
and the asset-stock phenomenon [Dierickx and Cool] which says that even tangible
resources that should be easy for a competitor to copy can be powerful,
simply because you accumulated them before the other guy - in this case,
the rival restaurant.s
- Economies of scale: e.g. the menu development cost and other central costs
are defrayed across a rising number of units.
- over-extending the business: it's easy to pull in more customers, but that
increasingly over-stresses the restaurants' physical and service capacity,
leading to customer losses and killing recommendations to other new customers.
- Industry life-cycle: the game goes right through from early emergence to
maturity, when the issue becomes how much to continue expanding, if at all.
- Relationships beween business units and HQ, and target-setting:
HQ has other [unknown] businesses to invest in, so this one has to build
and sustain HQ support to keep getting the funding it needs to grow …
HQ expectations rise faster if performance rises, but keeps rising or
falls slower if performance falters.
- Competitive rivalry plays out in the race to exploit the market's potential …
if we don't develop the restaurants, the rival will take the sites, leaving
fewer decent opportunities for us. The built-in challenges include some
contrasting competitive situations … you have got a head start but a new
challenger is after you, you have been asleep while a rival has grown fast.
- Product-range expansion to extend the market potential: menu development
does not only increase the appeal to current customers - it attracts other
customers [if I add vegetarian options/kids meals/small portions,
vegetarians/families/old-folk become available who were not available
before [the game is not explicit about exactly which extensions are done].
This has the further consequence of expanding the viable-limit to the chain's
expansion - a location with a too-small catchment population when it had a
limited menu now has a viable catchment because it can appeal to a larger
fraction of local people.
- Management team 'generations': it is easy for one generation of
managers to push the business hard, taking big bonuses, but damaging its
underlying health, so leaving it wrecked for those who inherit its leadership -
some of the built-in 'challenges' reflect just such a situation, where the
team is taking on the business at a point where some previous team has left
it damaged [or in other cases, in very good shape].