HOW TO PLAY

MORE DETAILS

Copyright2012byHarvardBusinessSchoolPublishing.
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.
Copyright2012byHarvardBusinessSchoolPublishing.
 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.

Copyright2012byHarvardBusinessSchoolPublishing.
 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 youll have
to make in the
simulation and if
youre instructor has
set a run limit.
Copyright2012byHarvardBusinessSchoolPublishing.
Estimated Project Investments
Annual Project Total Potential
Project Cost Length Cost Performance
Range
NiMH: Energy $3.0 $9.0 M 4 6 years $12.0 $54.0 M 900 5,200 watt
Density hours/kg

NiMH: Recharge $1.0 $6.0 M 5 8 years $5.0 $48.0 M 530 1,050 cycles
Cycles

NiMH: Self $2.0 $4.0 M 5 8 years $10.0 $32.0 M 11 21 months

Discharge

NiMH: Recharge $1.0 $5.0 M 4 7 years $4.0 $35.0 M 105 210 minutes
Time

NiMH: Process $1.0 $6.0 M 4 7 years $4.0 $42.0 M 10% - 56%

Improvement 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 $2.0 $9.0 M 5 8 years $10.0 $72.0 M 8,750 17,490

Cycles 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 $3.0 $7.0 M 5 7 years $15.0 $49.0 10% 74%
Improvement reduction in unit
costs

Copyright2012byHarvardBusinessSchoolPublishing.
 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) 3
1 5
2. Sales by Product
graph (with Total
Sales)
6
3. Previous Years R&D
Spending chart 2 5
4
4. Previous Years Sales
Variance graph
5. Historical Feature
Spending spark lines
for each battery type
6. Timeline tracks your
progress through the
simulation
Copyright2012byHarvardBusinessSchoolPublishing.
 ANALYZE: Dashboard Overview
(Introductory Scenario )

This page provides a visual summary of the current status of the

simulation.
1. Sales by Market
graph
3
2. Sales by Product 1 5
graph
3. Previous Years R&D
Spending chart 6
4. Total Sales chart
2 5
5. Historical Feature 4
Spending spark lines
for each battery type
6. Timeline tracks your
progress through the
simulation

Copyright2012byHarvardBusinessSchoolPublishing.
 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.
Copyright2012byHarvardBusinessSchoolPublishing.
 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
You can monitor how both battery types perform across the feature
minutes to fully recharge
categories compared to customer desired feature performance.
the battery
Toggle between the different market segments to view how
preferences vary by customer type. Copyright2012byHarvardBusinessSchoolPublishing.
 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.
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 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.

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 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.
Copyright2012byHarvardBusinessSchoolPublishing.
 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. You have very large negative sale variance in one year.
2. You have a large negative variance for several years in a row.
3. You lose money for several years in a row.
Copyright2012byHarvardBusinessSchoolPublishing.
 ANALYZE: News
Market News is updated annually based on the previous years
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 years news.

Click View All News to

launch the Market
News screen and read
all market news stories
for all years.

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 DECIDE: Decisions
This is where all Decisions are entered. For each battery type,
Enter the next years 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
Copyright2012byHarvardBusinessSchoolPublishing.
 DECIDE: Additional Screens
After you submit your first years 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

Copyright2012byHarvardBusinessSchoolPublishing.
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.

Copyright2012byHarvardBusinessSchoolPublishing.
 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.

Copyright2012byHarvardBusinessSchoolPublishing.