dc.description.abstract | In practice, investors can only get business performances and conditions from financial statements, but they cannot neither know the content and timing of management’s decision making, nor understand how professional managers develop Business models. If investors cannot understand the business model of the firm, they cannot truly differentiate the underlying reasons that cause a business to succeed or to fail.
The goal of this study is using decision database from “2015 Business Model and Decision Simulation Game” to explore the decision content and timing between successful and failure business and compare a successful business model to a failure business model.
The system used in “2015 Business Model and Decision Simulation Game” is called “My brand 2014 Business Model and Decision Simulation System” and its structure is based on 8-Cross Business model. The quality of the digital system will influence system users’ learning effectiveness. Therefore, this study also attempts to debug the digital system through the analyses decision data for future improvement.
The conclusions of this study are as follows. First, a successful business model implements cash planning and develops new product lines on a timely basis. Conversely, a failure business model does not develop new products in time, and is forced to pay additional cash outflows and incurs cash deficit. Second, faced with the financial crisis or poor operating performance, a successful business model uses short-term borrowing to avoid cash flow shortage. Conversely, a failure business model lacks of the skills of making good use of short-term cash management to avoid business failure. Third, a successful business model controls raw materials purchases and avoid redundant inventory costs. Conversely, a failure Business model is lack of good control of raw materials and labor costs. Forth, a successful business model utilizes working capital, cash dividend or capital reduction tactics to enhance investors’ return. Conversely, a failure business model lacks the ability to use financial engineering.
Finally, for the system deficiencies, this study finds that players can easily generate high ROIC and use long-term and short-term borrowings at a relatively low cost of capital to create huge economic value added. Besides, the effect of the supplier relationship management decision is not significant.
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