Level 3 (subscribers) – Food Distribution
(Understanding Life Cycles)
You have played the first sessions in very different environments (Internet and bakeries) but with some similarities: they were service industries with similarly sized competitors and the goal was to conquer geographic territories (international or national). Did you manage to stand out? Congratulations!
This new game session simulates a battle in the field of food distribution. The geographic playing field is that of a medium-sized city. The game simulates the fierce competition between several family groups that own supermarkets and traditional restaurants.
The economic context
The food trade is a basic and very old profession. One might think it is a stabilized world, but it is far from it! With a bit of perspective, we realize that things are currently evolving very quickly.
About fifty years ago, housewives would get most of their food from supermarkets, and lunch and dinner at home were still the norm.
With the increase in purchasing power and the development of women’s work, collective catering took off in France as in many countries.
Initially, this resulted in an increase in the number of restaurants and company canteens, then new forms of fast-food restaurants developed.
More recently, we have seen a strong acceleration in meal delivery from central kitchens, restaurants, or the catering departments of distributors.
Competitive Positions(companies and data are fictitious)
The competitive situation at the start of the game:
- You are the head of the family group AliGroup which owns food stores (supermarkets, mini-markets) and some traditional restaurants.
- You have historically been competing with two other more diversified players, FoodBro and RestoZ.
- A newcomer (Fasty) has entered the game by developing a fast-food franchise.
- Three players share the company canteen market, your two distributor competitors and a historical player (GlobalRest) who holds a strong dominant position.
- The meal delivery niche is already occupied by a pure player (Eaty) with over 40% market share, but also by the fast-food specialist (Fasty) and to a lesser extent by the canteen specialist (GlobalRest) and your distributor competitors FoodBro and RestoZ.
Game parameters:
You will play for 20 virtual years. Each year in the game lasts two minutes, so a game lasts 40 minutes. You can of course pause and resume the game when you have some time. By replaying, you will improve your scores and know your ranking in real-time.
Will it be able to develop or will it stagnate? That is the challenge.
You have at your disposal, if necessary, the leverage of debt, which you will repay in 5 years, at a rate that will be specified to you.
Be careful, however, that your repayments do not create cash flow problems, you will not be able to negotiate a payment schedule with your banker!
Board of Directors
The game, although it simplifies the economic reality, closely resembles it in important ways:
. By integrating the notion of life cycle which causes demand in certain niches to vary, up or down.
. By creating systems of over- and under-capacities to reflect the fact that when there is too much investment, margins are depressed and conversely when there is not enough investment, they are above the experience curve. Following life cycles is not enough, you must constantly analyze the supply-demand ratio.
. Beware of the concept of dominant position, the regulator will forbid you from having too strong a market share in one sector, as it happens in real life.
. Finally, be careful to monitor your cash flow: you can temporarily have a slightly negative cash flow, but if it exceeds 10% of your total assets, you will be declared bankrupt and the game will end for you (game over 🙁 )!
As in the other sessions, you will need to work on one of the cornerstones of strategy, which is understanding competitors’ strategies.
Have fun, that’s how you will progress!
Cumulative investments of competitors
Your turn to play!
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. If you are on a computer: Click here
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