06/12/2008

Arkhelles

Arkhelles Business Simulation Anne--Laure Duncan, Esther Cerruti, Anne & Scott Duncan

Agenda „ „ „ „ „ „ „

User’s Guide Simulation Overview Managing g g the Villages g Sources of Information Available Decision Making Annual Decision Sheet Communications Challenge

Agenda „ „ „ „ „ „

Customer Satisfaction Challenge Final Presentation Contents of Team Envelopes What is Given Back After Each Decision How The Winner is Determined Questions

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User’s Guide

User’s Guide „

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Much more detailed information than the presentation Very important that you read it

Situation Overview

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Simulation Overview „

You and five of your friends are in charge of the management of Group K. „ „ „

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KAONI HOLIDAYS ALPS VILLAGE ARKHELLES VILLAGE

Define various strategies over four semesters.

Goal: Be the Team that has the highest profitability (i.e. Mo’ Money)

Group K „

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KAONI HOLIDAYS, the parent company based in France, acts both as holding company and tour operator. ALPS S VILLAGE G subsidiary, b d also l based b d in France, owns a holiday village operating in the Alps ARKHELLES VILLAGE, based in the Arkhelles archipelago, owns the second holiday village operating for the group on one the islands of the archipelago in the Indian Ocean.

Management of Group K 2 Subsidiaries

1 Parent Company

Alps Village

2 Markets

Price in € Tour Operator Holding

€ $ Darkhi (D)

Arkhelles Village

Price in $ 9

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KAONI HOLIDAYS „

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It manages the stakes and the cashflow and implements the financial policy through loans and placements on the financial market. It provides administrative services and is in charge of „ „ „ „ „

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the the the the the

group's general management sales management commercial management, financial management, business management.

Acts as tour operator and markets the holiday packages in the villages operated by the two subsidiaries, both in Europe and the USA.

Tour Operator (KAONI) „ „

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Buys services from the villages Buys transport from air carriers (including transfers) Customers „ „

European American

ALPS VILLAGE „ „

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(*** NN), located in the Alps. The current capacity is 200 beds. The maximum capacity is 400 beds. Activities vary with the seasons: „ „

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Winter: skiing and snowsnow-sports Summer: mountaineering, golf, tennis and other outdoor sports

Staff „ Permanent salaried staff, Temporary employees, Organizers.

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ARKHELLES VILLAGE „

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(**** International), located in the Arkhelles archipelago. The current capacity is 300 beds .The maximum capacity is 500 beds. The activities: „

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Tropical climate: „

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Mainly sea and water sports; Tennis, squash, gymnastics… July and August - cool and rainy; December and January - dry and hot.

Staff „

Permanent salaried staff, Temporary employees, Organizers

Products „

One or several week stays at the Villages „

Full--board accommodations Full „

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Includes 7 nights, 7 breakfasts, 7 lunches and 7 dinners

Drinks are extra

May or may not include flight and transfer „

Special flight discounts available NYC/Paris NYC/Arkhelles NYC/ Arkhelles „ Paris/ Paris/Arkhelles Arkhelles „ „

Products „

Two kinds of packages „ „

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Stay-Only StayStays, including transport

For Alps Village „

Only the StayStay-Only package is available for French customers

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Marketing „

Advertising „

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Catalogues „

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Point--ofPoint of-sale and ads in magazines Leaflets and brochures

Free Extra Week „

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One week free, if a minimum of two weeks is bought The cost falls on the subsidiary

Distribution „

Networks of Travel Agents Evasion - French Market Trans--American Travel (TAT) – USA Market Trans „ Universal Travel Agency – French and USA „ „

Markets

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Markets: Markets: „ The French market „ The American market.

Finances

Transactions by Kaoni Holidays on these markets consist in: „ Medium Medium-- and short short--term loans „ „

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France – 1 000 000€ 000€ (rests 398 603,60 603,60€ €) USA - $800 000 (rests $23 120,78)

Fixed-rate placements (Frozen Accounts) FixedTransactions on Unit Trusts in equities or bonds, The sale or purchase of currency.

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Placements (Investments) „ „ „

Frozen Accounts Unit Trust Equities Unit Trust Bonds

Intra--Group Relations Intra „

Commercial links due to the tour

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Financial links through funds made

operator's activity

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available and the management of surplus Administrative links through services.

Invoicing Between the Group „

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The tour operator marketing the packages is invoiced by the subsidiaries for the service provided p The holding invoices head office expenses and collects or pays interests on loans taken out or placements made by the subsidiaries. „

Every semester

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Managing the Villages

Managing the Villages „

Investments: „ „ „

Increase their capacity of accommodation Improve the standard of comfort Develop the kit for organized activities

Managing the Villages „

Staff „ „ „

Permanent salaried staff Temporary employees Organizers

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Managing the Villages

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Food & Catering „ Each semester, must decide on the cost of foodstuff and drink per consumer Extras „ Bars, Disco & Shops Maintenance „ Each semester, must decide on a maintenance budget Kits for Organized Activities „ Equipment & Supplies „ Hire Organizers

Mandatory Services (by semester) „

Insurance: „

Mandatory minimum: Civil responsibility Holding g – 10 000€ 000€ Alps – 10 000€ 000€ „ Arkhelles – 100 000 D „ „

Sources of Information Available

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Sources of Information „ „ „

Accountant Services The Economist’s Newsletter MarkinForm

Account Service „

An Accountancy Firm will draft for you at the end semester for the whole Group: The Balance Sheet The Profit and Loss Account „ Cashflow Table „ „

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Cost: 10 000 000€ € (Mandatory)

The Economist’s Newsletter „

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Provides information on the financial and economic environment of the company. It conveys y useful additional information on the evolution of the environment environment.. Cost: Free

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MarkinForm „ „ „

Quality of Service & Facilities Quality Reputation & Image Cost: 10 000€ 000€ each & per village. „

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Purchase MANDATORY at the end of semester 2 Other VERY useful studies are available (see French decision sheet) at the cost of 10 000€ 000€ each & per village.

MarkinForm „

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You must indicate on your decision sheet that you want to buy MarkinForm (Studies & Surveys Surveys). y )). If you want to buy it after the decision has been turned in, „

the price will be doubled (i.e. 20 000€ 000€ per study and per village).

Decision Making

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RULES „

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Write the numbers CLEARLY on the decision sheet REMINDER: You must indicate on the decison sheet that you want to purchase the customer satisfaction survey survey..

Organizers are NOT responsible for: „

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Calculating exchange rates when needed (Dharkis, Dharkis, Euro or Dollars) Decision sheets that have not been fille out properly properly.. „ „

Unclear writing Lines that should be filled out, but are left blank.. blank

Decision Making „ „ „ „ „

Villages Sundry Expenses & Earnings Tour Operator Financial Market Intra--Group Intra

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Which Semester? Financial Year (Year is divided into 2 semesters) Villages •Investment •Accommodation •Organized Organized Activities

Sundry Expenses & Earnings •Insurance •Studies

(indicate which ones)

•Accounting Fees •Dividends

Which Semester? Financial Year

Tour Operator •Price •Marketing •Network Network

Financial Market •Loans •Unit Trust •Cashflow

Intra-Group

•Reciprocal Services •Loans & Payments •Price of stay invoiced to holding •Transfer from subsidiaries to holding •Transfer from holding to subsidiaries

The Challenges & The Presentation

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Communications Challenge Create company name and a logo Identify Target Market & Positioning What you want to promote (communicate) about your Villages (ambiance, (ambiance price, price quality, quality location, service...) Mock--up print ad that reflects your promotion Mock strategy (A4 paper size).

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Customer Satisfaction Challenge End of Decision 2 – must buy the 2 Markinform studies (20 000€ 000€) Must explain if results coincide with your overall strategy gy (Communications ( Challenge) g ) If answer is Yes

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How to you plan to pursue it

If answer is No

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What will you do to correct it

Final Presentation „ „ „ „ „ „ „ „ „

No longer than 10 minutes Business Strategy Communication Strategy (show mockmock-up logo and ad) Results of Customer Satisfaction Challenge Key Decisions Brief analysis of overall results Not all members have to speak Small number of slides (5 to 7 is ideal) Content rather than form (but should be detailed)

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Team Envelopes (Says Group 1, but applies to all teams)

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Blank Decision Sheets A copy of the French Decision Sheet „

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Demand & Sales Performance Year 0 „ „

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Alps – Semester 1, 2 Arkhelles – Semester 1, 2

Structure of Villages Year 0 „

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Breakdown of the Insurance & Market Studies available)

Alps – Semester 1, 2 Arkhelles – Semester 1, 2

Extracts from Catalogues Year 0 Customer Satisfaction Year 0 ((MarkinForm MarkinForm))

Team Envelopes „

Alps & Arkhelles Villages „ „ „ „

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Cashflow Year 0 Balance Sheets Year 0 Expenses Year 0 Earnings Year 0

Koani Holidays (Parent Company) „ „

Cashflow Year 0 Balance Sheets Year 0 „

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HINT: Look at your overdraft

Detailed Income Year 0 Detailed Expenses Year 0

Team Envelopes „ „ „

Communications Challenge Customer Satisfaction Challenge Presentation Guidelines

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After Each Decision: „

Each Team will receive: 1. 2 2. 3. 4. 5.

Economic Results of the Company (Free) The Balance Sheet Profit and Loss Account Cashflow Table (all for € 10 000) The Economist Newsletter (Free)

For Each Decision: „

It is Strongly Suggested that each Team Purchase: 1.

Customer Satisfaction Studies (€ (€ 10 000 each & per village)

Who is the Winner? „

Two winners: „

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The team that has the highest profitability over the four decisions. The team that has the highest profitability + village quality + best presentation analysis.

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Questions ?

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