After 6 days of intense competition, Intopia has come to an end. The international operations simulation, which made 9 MBA teams compete for the highest return in the fast-paced PC and semiconductor industries, proved to be a greater challenge than expected. Formed by chip manufacturers, PC integrators and wholesalers, the industry was characterized by constant innovation – and huge losses. Unlike real life, chip manufacturers, who profited from the excess demand and constant introduction of new models, were the big winners in terms of margins and profits. Among these suppliers, Chips R Us was definitely the most notorious of all chip manufacturers, not only because of its impressive profits but also because of the envy it raised among rival companies. In fact, the company was attacked so often by mischievous players, that if they had received royalties each time competitors talked about them behind their backs, they could have easily doubled up their profits 🙂
Disregarding the chip manufacturer advantage -lets face it, chip manufacturers were lucky to operate in an oligopoly-, there were also other companies who ended up performing remarkably well, despite of their location in the value chain and initial mistakes. For instance, PC integrator SLTD realized that the constant introduction of new chip grades at higher prices did not benefit their business model, and therefore, decided in the last quarters to partner with technology laggards to buy old chips at very low prices and increase their margins.
LEAD EasyMarket also escaped the dark fate of other wholesalers by minimizing the amount of sales offices, optimizing their advertising expenses and understanding that the best way to engage suppliers was to offer them a profit split -“this is what the chip costs you and this is how much I can sell it for in the market, let’s go 50-50”.
Of course, each company has a story to tell, and for me to judge who was the best is not easy, so lets finish this post by saying that the lessons learnt from this simulation are definitely invaluable and that ESMT has made a good decision by exposing us to this kind of experiences. Thumbs up for the organizers!