Case spotlight: Launching BoatShare: A Simulation

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This case was featured in Connect, issue 52, June 2021.

Who – the protagonist

In this simulation case, each student makes their decisions as the founder of a new platform venture in the sharing economy, BoatShare.

What?

Echoing real-life examples such as Airbnb and Uber, BoatShare rents small boats for people to use for a few hours on a lake. In this fictionalised scenario, the company do not own the boats, and students are required to find other boat owners (sellers) who are interested in renting their boats out through BoatShare.

Rowing boat on water

Why?

The ultimate objective of the student in the simulation is to maximise their company’s ending cash balance, the sum of its profit and prior cash balance, by the tenth and final round after its launch. In each round, the student makes decisions about pricing and marketing.

When?

In the simulation, students make decisions as if the situation was unfolding in the present time. The simulation can typically be completed in 45 minutes, with a 20-60 minutes debrief with their instructor and class afterwards.

Where?

No physical location is specified in the simulation, but BoatShare would primarily be an app-based product like Uber and AirBnb.

Key quote

“Both buyers and sellers respond to prices in a traditional way. If you set a high price for buyers, fewer people will want to rent a boat, but you will make more revenue for each rental.”
An excerpt from the case.

What next?

In each of the ten rounds, students must make three different decisions. For example, they first have to decide what percentage of marketing expense they’d like to spend on attracting boat renters.

Once students have made their choices for the decisions in a round they submit them to move through to the next round. The options they see are informed by their previous choices.

Decision from the simulation

AUTHOR PERSPECTIVE 

Traditional vs. simulation

Ted said: “Both a traditional case and a simulation require that the reader/player solve a specific problem. Whereas in a traditional written case, the reader only contemplates a solution, the player in a simulation actually makes a decision and takes an action – often many times in a row.

“Writing a traditional case is otherwise entirely different than writing a simulation. The former is in prose; the latter is in math. But don’t let that scare you. I designed a multi-round game in Excel with about 20 variables. A software service from Forio turns this Excel sheet into a multi-player, multi-round simulation without any need for coding.”

Person wearing headphones looking at a screen

Shifting from traditional to simulation cases

Ted commented: “Our students consume more and more of their entrainment via video and games. Many of the challenges they will face as managers will arrive live, not in neat prose. This will – and should – merit a shift from traditional text-based cases into video-based cases and simulations.

“The written word is still vital for conveying the subtleties of theory. In my classrooms, we learn theory by reading and watching. Then we embody and apply by doing.”

A more engaging experience

He added: “People can certainly learn by absorbing information without knowing or seeing the author. However, when they can see and hear the author, they develop a connection with another human being. This is what drives student engagement and retention in a video case.

“A simulation, especially if students are playing against other people in their class, elevates that connection into a bi-lateral relationship that more closely mirrors actual business activity.”

Theory behind the case

Ted concluded: “This project started with a theory that is simple to explain but difficult to apply. Here is the theory: The manager of a multi-sided platform marketplace must use price and advertising to balance the number of buyers and sellers. An excess of buyers due to a dearth of sellers is both a disappointment to the buyers and a missed opportunity for growth in the platform. Students nod quickly at this concept. They understand it. But they do not yet have mastery over it. Only when they actually change pricing and advertising and see changes to the numbers of buyers and sellers do they internalise the idea.

“In a more recent version of the simulation, I also added another theory.

“Disintermediation describes the activity where some buyers and sellers meet in the marketplace but conduct their transaction outside of the platform, avoiding the payment of the platform’s commission. This is the revenue that a platform does not see. I describe this theory a few days before I run the simulation. Students nod quickly at this idea, too. I do not tell them that the simulation includes a loss of revenue due to disintermediation until the simulation is over, when I show them how much money they failed to collect.

“As a result, the simulation is also vital for demonstrating important principles of management that, if not identified and addressed, will undermine success.”

THE CASE 

The case

Who – the protagonist

In this simulation case, each student makes their decisions as the founder of a new platform venture in the sharing economy, BoatShare.

What?

Echoing real-life examples such as Airbnb and Uber, BoatShare rents small boats for people to use for a few hours on a lake. In this fictionalised scenario, the company do not own the boats, and students are required to find other boat owners (sellers) who are interested in renting their boats out through BoatShare.

Rowing boat on water

Why?

The ultimate objective of the student in the simulation is to maximise their company’s ending cash balance, the sum of its profit and prior cash balance, by the tenth and final round after its launch. In each round, the student makes decisions about pricing and marketing.

When?

In the simulation, students make decisions as if the situation was unfolding in the present time. The simulation can typically be completed in 45 minutes, with a 20-60 minutes debrief with their instructor and class afterwards.

Where?

No physical location is specified in the simulation, but BoatShare would primarily be an app-based product like Uber and AirBnb.

Key quote

“Both buyers and sellers respond to prices in a traditional way. If you set a high price for buyers, fewer people will want to rent a boat, but you will make more revenue for each rental.”
An excerpt from the case.

What next?

In each of the ten rounds, students must make three different decisions. For example, they first have to decide what percentage of marketing expense they’d like to spend on attracting boat renters.

Once students have made their choices for the decisions in a round they submit them to move through to the next round. The options they see are informed by their previous choices.

Decision from the simulation

AUTHOR PERSPECTIVE 

Author perspective

Traditional vs. simulation

Ted said: “Both a traditional case and a simulation require that the reader/player solve a specific problem. Whereas in a traditional written case, the reader only contemplates a solution, the player in a simulation actually makes a decision and takes an action – often many times in a row.

“Writing a traditional case is otherwise entirely different than writing a simulation. The former is in prose; the latter is in math. But don’t let that scare you. I designed a multi-round game in Excel with about 20 variables. A software service from Forio turns this Excel sheet into a multi-player, multi-round simulation without any need for coding.”

Person wearing headphones looking at a screen

Shifting from traditional to simulation cases

Ted commented: “Our students consume more and more of their entrainment via video and games. Many of the challenges they will face as managers will arrive live, not in neat prose. This will – and should – merit a shift from traditional text-based cases into video-based cases and simulations.

“The written word is still vital for conveying the subtleties of theory. In my classrooms, we learn theory by reading and watching. Then we embody and apply by doing.”

A more engaging experience

He added: “People can certainly learn by absorbing information without knowing or seeing the author. However, when they can see and hear the author, they develop a connection with another human being. This is what drives student engagement and retention in a video case.

“A simulation, especially if students are playing against other people in their class, elevates that connection into a bi-lateral relationship that more closely mirrors actual business activity.”

Theory behind the case

Ted concluded: “This project started with a theory that is simple to explain but difficult to apply. Here is the theory: The manager of a multi-sided platform marketplace must use price and advertising to balance the number of buyers and sellers. An excess of buyers due to a dearth of sellers is both a disappointment to the buyers and a missed opportunity for growth in the platform. Students nod quickly at this concept. They understand it. But they do not yet have mastery over it. Only when they actually change pricing and advertising and see changes to the numbers of buyers and sellers do they internalise the idea.

“In a more recent version of the simulation, I also added another theory.

“Disintermediation describes the activity where some buyers and sellers meet in the marketplace but conduct their transaction outside of the platform, avoiding the payment of the platform’s commission. This is the revenue that a platform does not see. I describe this theory a few days before I run the simulation. Students nod quickly at this idea, too. I do not tell them that the simulation includes a loss of revenue due to disintermediation until the simulation is over, when I show them how much money they failed to collect.

“As a result, the simulation is also vital for demonstrating important principles of management that, if not identified and addressed, will undermine success.”

THE CASE 

The author

Read the case

Educators can login to view a free educator preview copy of this simulation case and its teaching note.

WEB-BASED CASE - Reference no. HLT5-27-21-1029E
TEACHING NOTE - Reference no. HLT5-27-21-1030TN
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