Competitive Strategy Game: Week 8, 9 & 10

By Lu



(Washington DC) Home to American policies’ decision making

Almost a month had passed by since this game ended. My memory of the thought process that went into making the decisions is a little hazy by now. After Week 10 results are announced, the cost for each tram was finally revealed to others. We looked back at how the costs affected the entry decision of each team: which cost that truly matters and how some teams managed to bluff their way to immense profit despite having higher costs structure than the other teams.

I will summarized the collective action of our team into the following thoughts:

  • By this time, our team is quite profitable and (in hindsight, we grew complacent). We do not know the profits that other teams are having or the range that participants in previous games had achieved. Steps were taken to make sure that such information was not freely transferred between the participants. Hence, this show the benefit of market research, it gave further insight into the market and competitors to allow better decision making. We stick to our initial markets, not foraying into any new markets considering the short remaining periods left.
  • As our capacities are expiring, we decided not to renew them because the depreciation for earlier periods are not worth the initial investment gains. We saw our market share in each market dropping as another firm increased its capacity and began undercutting the rest. That impudent fool! I was a bit slighted because the new entry disturbed the market power and reduced the dividends that we had been enjoying. In retaliation, we did not pick a fight with the new entry. Instead we conceded our market share and raise prices continuously to keep our revenue steady. Now, I understood how those big firms felt when uprising new startups began digging into their own market share.
  • Because we are flushed with cash by now, I made suggestions to enter another market, but perhaps because of my weak argument and my own belief that investing this late who do us not much better, we decided to sit on our cash and wait for the remaining period to expire.


  • The results was announced and turns out, there a twist to this game. Turns out that in order to achieve the highest profit, the winners had been consistently invested in one market. That was the key behind gaining immense profit in this game. I learnt that this is comparable to the real world, why some companies grew to multinational level while others remained mom and pop stores. The answer was in the different markets that each company invested in. To rub salt into the wounds, this aforementioned market was not originally that appealing to us but it was also the market that I had recommended to enter earlier.
  • My team was in the third place out of the rest of the teams. As consolation, the professor mentioned that my team was the most profitable team who has never invested in the aforementioned market. The first place team gained roughly almost 8 million, second place had 5 million while we earned 4.6 million over the initial investment of 1 million. The teams after us barely break beyond 1.5 million threshold. Our team has the smarts to extract the most surplus out of our markets but not enough to identify the most promising growth market. In addition, the professor even put up quotes that we had written in our reports: “Those who don’t take risk don’t drink champagne!”
  • Ironically, the first place team had rather high cost in the profitable market and managed to overcame this by producing beyond their capacity. They are willing to incurred additional cost just to sell more goods. I had been considering this tactic before and practiced in our markets but their was done at a much grandeur scale.  In the end, they revealed that they had done the calculations and concluded that they would be profitable enough to justify for the additional expenses. Indeed, they took a calculated gamble and it paid off. I even joked that the team deserved the first place because they had two mathematicians in their team while we only had one: me. I observed that the teams that had great returns all had a few members with mathematical background like me. This reinforced my belief that good decisions should be made with good data support. The top teams are able to made it this far because they could calculate the returns from their investment in aiding them to make investment decisions.

Still, this was an interesting competition and I learnt a lot about making decisions here. Making decisions appears easy on book but it is different in real life. There is often much more at stake with the decisions made in real life. A key reminder for myself is to always prepare beforehand and speak up.