For the final week of the semester, TCU MBAs must build a business, finance it, supply the product, manage employees, market it, and make it financially sound.
Welcome to the fast-paced, intense, competitive, strategic world of business. Marketplace Live: a simulation so real, the only other way to get the experience is on the job.
For one week at the end of their first semester, first-year TCU MBAs work in teams (companies), choose their product, compete for capital, vie for customers, and choose global locations for production, sales and web centers. Some even encounter a nasty loan shark if cash flow goes into the negative digits.
“Even though it was endless hours of work, it was one of my favorite experiences. It was less game takeaway and more real-life takeaway,” said Andrew Knust MBA ’17.
While other students are winding down the last days of the semester, these students are revving up and playing it fast.
“We purposely limit their time [to one week] because most business decisions are made under a time pressure,” said Marketing Professor Bill Cron, who co-teaches the class with Finance Professor Vassil Mihov.
“It exercises their mental discipline in the business culture,” said Mihov. “They develop strategic planning and execution skills in a rapidly changing environment.”
Last year, Kristin Beehler MBA ’18 and her team were in last place in the middle of the simulation, so they performed a turnaround when teammate Thomas Caldwell MBA ’18 suggested concentrating on manufacturing, where they were most productive.
“My biggest takeaway is that if something is not working, change it,” Beehler said. “We leveraged our strengths, made deals with other companies through diversification and different market segments, and went from last place to third.”
The key to success is combining management, accounting, marketing, supply chain and information systems. It may not seem like those areas have much in common, but they are so completely integrated that any business will fail if even one of these fails.
What’s the best way to get that message across to students? A project that forces them to live it.
“You could see that your income would increase or decrease according to certain decisions,” Beehler said, “whether that’s how you invested in R&D, how you invested in quality, if you were making your target point lower or higher for your inventories, or if you had capacity in the plant.”
Each team begins with $4,000,000 in virtual money and can obtain up to $5,000,000 in capital – and advice – from second-year MBAs who act as venture capitalists. That adds a new dimension to the simulation for the second-year MBAs.
“It’s interesting to see it from this side,” said Eric Coulter MBA ’17 of his venture capitalist role. “I get to see all the different strategies they have. I even saw one I hadn’t considered before.”
Sometimes the advice, money and classroom knowledge take a back seat to the ever-important lesson of teamwork. Integrating personalities, experiences and skills is as crucial to the simulation as integrating the business functions.
Jiexia Qian MBA ’18 said that before participating in the simulation, “I thought personal academic skills were the most important, now I know that collaboration and negotiation account for at least half of the final performance.”
Possibly the most nerve-wracking part of the simulation happens at the end when teams explain their strategies and results to a room full of potential employers. Fortunately, several of those potential employers were once in their shoes.
Todd Huerta MBA ’05, senior finance director of the Midwest for PepsiCo, said the realities of the simulation are very similar to the everyday experience of working in a business setting.
“As a student here I went through the simulation. This is as close to real life as you can get,” he said after the final team had presented. “Being able to work under pressure with tight deadlines, clearly set an agenda, and work together as a team to get to that common goal…I apply those objectives every day at FritoLay.”