Business Simulations: Everything You Need to Know
When it comes to business simulations, StratX Simulations has decades of experience leading the market forward, striving for innovation, and supporting thousands of learners on their professional journeys. So, from a field that is so full of interesting possibilities, what are the key things you need to know about business simulations before you get started? In this article, we will show you.
What is a business simulation?
A business simulation is an immersive and interactive learning opportunity that brings learners together to get a deeper level of understanding and engagement in their course material, or in their workplace and respective industry. Whereas in a typical learning environment students are taught to listen to and memorize information, in a business simulation, those involved will test and improve their practical or conceptual information and gain experiential knowledge as they play.
Business simulations provide a ‘learning by doing’ experience that replicates real-world market conditions and factors, in some cases specific to the organization that has built or procured. This activity creates a big picture view of the organization in a risk-free environment, where mistakes can be corrected and learned from, rather than punished.
Some business simulations might be for an individual player, but in general, they’re team-based so that co-operation and teamwork skills are developed. This style works towards encouraging conversation, group strategy, and delegation throughout, as well as driving peer-to-peer learning by bouncing off each other’s strengths.
What are the different types of business simulations?
If you think that business simulations are opportunities for being creative, putting theory into practice, and seeing how people thrive in different situations… you’d be absolutely right!
You might not know, however, that simulations come in all different shapes and sizes.
Read on as we discuss some of the most popular examples of business simulators that we design and build here at StratX.
Aimed at marketing students and working professionals, marketing simulations have a few main objectives:
- Help to develop and implement strategic theories without risk
- Make difficult decisions under pressure
- Create a memorable and engaging learning experience
Depending on who is requesting a marketing simulation and how in-depth it needs to be, it may typically be between two to five days in length to complete from start to finish. We’ve found that marketing simulations are most popular with businesses who are launching new products or brands, as it gives them a chance to discover new considerations, understand themselves and their competitors, and better recognize their positioning.
To learn more about Markstrat, our premium marketing simulation experience, click here.
Digital Marketing Simulations
The marketing world has evolved, and now the vast majority of marketing activities are performed in a digital sense, thanks largely to social media, search engines, and app-based targeting. With so many technological additions to the foundations of marketing, digital marketing simulations are seen by many as more strategic opportunities.
Digital marketing simulations encourage the participants to think in a long-term way, looking at research & development, the combination of digital & traditional marketing overlap, and factors that affect a Share Price Index.
Will seasoned industry veterans be able to challenge the digital natives and younger participants? Find out more.
Business Strategy Simulations
For businesses and business schools, developing business strategy through business simulations has become one of the highest-engagement methods of the 21st century. Many kinds of technology have tried to help develop strategic thinking, but none have succeeded in the way that simulated environments have.
Where business strategy simulations excel is in helping leaders to define their attributes and give them insight into where their future careers might lay. This kind of intuition is useful not only to the individual and understanding themselves but to their employers (present and future) who spot opportunities to utilize them better. As a result, students, professionals, and entire industries have a lot to gain by using simulations to develop strategic business thinking.
Our premium business simulator is called Blue Ocean Strategy, click here to watch a video and learn more.
Sales and Negotiation Training Simulations
Whilst business simulations are quite broad and generalized, sales and negotiation training simulators are not. They address one of the biggest issues in almost every industry - making sales while creating long-term value. Training salespeople to be more effective sellers can be very difficult, despite all of the workshops, manuals, and meetings that you might offer. Ultimately, technology can be the saving grace of sales training, thanks to simulated experiences.
By giving salespeople the opportunity to run through sales and negotiation training simulations, they start to see things introspectively, learning about themselves in the process. They also get to try out their theories in a risk-free environment, giving them the confidence to be themselves and see what works and what doesn’t.
We’ve developed a world-leading sales and negotiation simulator called REVMANEX, which helps participants adopt a value creation mindset in sales. The simulator will help them become more convincing, build long-term value for their firms, and improve client satisfaction - all at the same time. Aimed at corporate training and higher education, the simulation runs for 2-3 hours and has been proven to help the mastery of negotiation skills and develop more complete salespeople.
Participants can be expected to:
- Practice in realistic scenarios
- Analyze results
- Discuss strategy and actions
- Plan ahead
- Visualize short and long-term impact
- Launch their plan & receive feedback
- Embrace the new knowledge they gained through experience
What do you learn in business simulations?
Perhaps we should ask StratX Simulations founder, Jean-Claude Larréché. He developed MarkStrat on the theory that if you give students a way to apply under real market conditions the lessons they learned, they will not only devote more energy but will also learn from their mistakes and successes alike.
How do business simulations compare with other forms of experiential learning, such as case studies and role-playing exercises?
Business simulations, case studies, and role-playing exercises are all forms of experiential learning that can help individuals and organizations develop skills and knowledge in a practical and hands-on way. Each approach has its unique benefits and limitations.
Business simulations provide a more immersive and dynamic learning experience compared to case studies and role-playing exercises. They allow participants to experience the consequences of their decisions and gain a better understanding of complex systems.
However, case studies and role-playing exercises provide a more direct way to develop specific skills, such as communication and interpersonal skills. Ultimately, the choice of learning approach depends on the specific learning objectives and the needs of the participants. For more information, read our simulation game vs business game vs case study guide.
Here are some of the big learning opportunities:
Critical decision-making skillsBusiness simulations offer students and participants the immediate opportunity to learn skills as if they were actually positioned in a company. The significant difference is that in this case if they make any mistakes, there won’t be any costly consequences for their decisions, but rather the opportunity to get feedback and take a hard lesson. This is incredibly effective and is proven to quickly alter attitudes and behaviours. Much like training on the job, some simulation-based activities prepare learners for the real thing without the associated risks.
Working under pressure and time constraintsIn the real world, you have to act, and you have to act fast, especially in a high-pressure business environment. Dawdle, and the opportunity might be long gone. Business simulations teach students to operate well under pressure when time is not in abundance, helping them to consider different factors, make reasoned decisions, work with team members who might have good ideas, and to think on their feet. These are massively valuable skills in the business world. As they say, ‘time waits for no man’.
Teamwork skillsWhen a common goal is presented, even if participants have different roles to play, there’s a level of team engagement that presents itself that is immensely difficult to replicate in other forms of training. Learners are driven to think and make decisions collectively, as well as resolving conflict, considering differences of opinion, and listening to alternative perspectives as they arise. If teams are working together to beat other teams, the introduction of competition creates another level of learning engagement that creates even better results.
“We see an amazing transformation in our students into highly analytical, confident, and finance-savvy marketing decision-makers.”
- Professor Lewis Lim, Nanyang Business School
Ways educators can benefit from business simulations
- Provide a platform to bring business theory to life
- Boost student engagement & excitement
- Increase knowledge retention, decision making & collaboration skills
- Give the flexibility to run courses in any format: online, blended or face-to-face
Ways that companies and their employees can benefit from business simulations
- Developing and testing business strategies: Employees can have free range to create and try out business strategies in a risk-free, controlled environment. This can help target the most effective strategies to pursue and avoid costly mistakes.
- Team building: Business simulations can be used to bring teams together and improve collaboration and communication skills.
- Risk management: Business simulations can help companies prepare for potential risks by allowing them to explore different scenarios and evaluate their impact on the business.
- Decision-making: Business simulations provide a realistic environment that allows employees to make decisions, test different options and evaluate their outcomes.
How do you win in business simulation games?
The answer is simple: work well together, experiment, and make the best decisions throughout the game. There’s no shortcut, hack, or cheat when it comes to business simulation games, especially because usually you’re pitted against the brains of another team of competitors. There’s an element of chance, of reacting to the situation presented, and keeping cool under pressure so that reasoned decisions can be made. Expecting the unexpected is also a good tactic.
The key things to remember to be a solid team or participant are:
- Think of the big picture, understanding how each department and role interacts and functions
- In many business simulation games, the winner is the one who generates sustainable profits, so long-term wins should be balanced out with short term gains
- Forecast and predict what will happen later in the simulation so that you can be best prepared for different potential scenarios, however…
- Be ready to pivot at any moment, you never know how quickly things can change
What are the benefits of simulation games at work and at school?
The benefits of business simulations are countless, and that’s regardless of whether they are used in secondary education, higher education, or as an internal system in businesses to help develop and challenge employees.
Take a look behind the scenes of the largest BrandPRO Business Simulation challenge which involved 1,400 Business School students across 3 campuses
5 benefits to learners regardless of age or learning situation:
1) Risk-free learning
In the real world, many people are crippled by indecisiveness, it’s normal. The fear of doing something wrong often outweighs the courage to do something right, and so a vicious cycle emerges. Business simulations, by providing an environment where decisions do not result in real-world risk, teach people to make balanced decisions and feel confident in executing them. This is a classic confidence-building activity.
2) The application of theory
There’s so much that we know, that we don’t really know we know. Until the opportunity to use our knowledge and theory arise, often it lays dormant or unknown inside of us. Providing environments to test this concept is vital to bringing out the best in people and showing them how capable and pragmatic they can be.
As shown in the 70/20/10 model, business simulations are effective because, when done properly, they can replicate realistic market environments. The essence of the process is to begin with a real and complex situation, glean the essentials from it, and recreate it in a simulation. The workflow should be very detailed and the developers should make a good number of adjustments and test them against corporate environments. The simulation is a success when testers are unable to detect whether a situation was created for the game or is from a real business.
“The simulation was very realistic and was an excellent learning experience. It gave a greater understanding to topics covered in the course.” – Amisha, Warwick University
Unlike in a real business environment, time is limited in most simulations. Learners don’t have lots of time to make a decision. This can prove to be beneficial as it forces them to react under pressure, and the decision-making processes become engrained in their minds. It also teaches them how to think on their feet and be able to make quick decisions.
5) The Big Picture
With the broad range of challenges that students face within a simulation, they tend to be better apt at grasping big picture concepts. They get to play an actual job role, and not just read and analyze. They make their own decisions and then see the results of their decisions as well as the response of other players. Read more about professors & participants who have used business simulations in their courses.
There we have it, all the basic information you need to know before you start a business simulation learning experience of your own. You can find out more by downloading our guide, Exploring Business Simulations.
If you are an instructor and would like to get hands-on access to one of our business simulations, get in touch to schedule a demo today.