Competitor Manual

The price at which you offer your product to the market. It is the variable with the greatest impact on demand: a lower price attracts more customers but reduces your margin. A high price improves the margin but may drive away cost-sensitive consumers. The engine computes your company's demand considering the relative price against the market average. Each segment has a different price sensitivity: the Economy segment is extremely sensitive, while Premium barely reacts to price changes.

Budget for the sales force and direct commercial activities: account executives, trade shows, point-of-sale promotions. It generates short-term demand and is especially effective when your price is competitive. The return decays with diminishing marginal returns: doubling the budget does not double sales.

Investment in digital channels: social media, SEO, online platform advertising, email marketing. It reaches high-value segments with highly measurable returns. It complements traditional campaigns: combining both amplifies the effects synergistically.

Advertising in mass media: television, radio, press and billboards. It has a higher cost per impact than digital, but builds large-scale brand presence and reaches segments that are not on digital channels. Effective for positioning mass-consumption products.

Generates competitive intelligence about the market. It works with a system of individual modules you can buy separately according to what you need to know. The cost of each module is proportional to the market's reference price.

The value you set is the total annual payroll you pay all active employees that year (period = one year). The engine divides that total by the number of employees to get the annual salary per person and compares it to the annual salary expectation of the candidates you hired. It has two simultaneous effects: it improves team efficiency (higher pay = more productive team) and it determines whether new employees arrive motivated or not. A candidate hired at a salary well below their annual expectation starts with lower performance and drags down their area's efficiency.

Training investment raises the team's efficiency each period directly and consistently. It is not a "one period and done" effect: stopping training makes efficiency stagnate while the competition advances. If Leadership Development (N4) is already available at your level, training becomes up to 30% more effective.

The number of employees impacts three different places: (1) how many production operatives you have to run the machinery, (2) how many salespeople execute the marketing campaigns, and (3) how much HR staff manages the whole team. If any of these areas is left without enough people, that process's efficiency drops with a progressive penalty.

At levels N3+, you can distribute hires among specific areas (marketing, HR, production, finance). At N1 and N2, the distribution is automatic and proportional.

The number of units you plan to manufacture this year. If you set a number higher than your real capacity, the system automatically adjusts to the maximum your machinery and team allow — it never produces more than possible. If you produce less than the market demand, you lose sales and share. The unsold balance goes into inventory and can be sold the following year.

Investment in new equipment and plant expansion. It permanently increases your production capacity. Machinery depreciates period after period, reducing its net value. It is a long-term investment: plan when you'll need more capacity before demand outstrips you. Requires available cash or financing.

Budget for preventive and corrective maintenance of your plant. Adequate maintenance reduces accelerated depreciation and keeps operating capacity at its maximum. Neglecting maintenance is saving today to pay more tomorrow — in lost production or equipment replacement.

Investment in robots, manufacturing software and automated processes. It progressively reduces the variable cost per unit produced. It is the high-volume producer's bet: if you plan to produce at scale, automation gives you a cost advantage that competitors cannot easily replicate in the short term.

The effect is cumulative (like a stock that decays 10% per period): sustaining the investment reduces the variable cost up to a cap of ~8% (≈2% with $2k/period, ≈5% with $5k, ≈8% with $8k). The investment is charged to the period's cash.

📚 Learning curve (extra and free): independent of automation, your cumulative production throughout the game naturally reduces the unit cost (experience/scale economies), up to a cap of −15%. Producing more, period after period, makes you cheaper — with no extra investment.

ISO certification, Six Sigma and quality-control programs. Improves the product's perceived quality, reduces defective units and opens access to markets and segments that demand high quality standards. At the Elite level, quality is a differentiation factor as important as price or brand.

Every dollar invested adds $0.06 to brand value (quality perception across all segments), which in turn feeds your attractiveness and customer retention. The investment is charged to the period's cash.

Additional bank-debt amount you request this period. It increases your available cash immediately but raises your debt and future interest. Use it to finance investments with a return higher than the cost of credit. Leverage is a powerful tool — misused, it destroys value.

Voluntary repayment of the principal of your bank debt. Reducing debt lowers interest in future periods and improves your financial profile. However, paying down debt excessively when you have profitable investment opportunities can be suboptimal. Find the balance between financial solidity and investment capacity.

Distribution of profits to shareholders. Paying dividends improves the perception of the company's financial health and can positively impact the valuation. However, it reduces the cash available for reinvestment. In stages of accelerated growth, retaining earnings is usually more valuable than distributing them.

💵 Only what's in cash is distributed: the dividend is paid after tax and at the end of the period, capped at available cash. If you declare more than you have, it is automatically trimmed — a dividend never leaves you with negative cash or pushes you into emergency debt.

Collection Days (AR): how many days it takes to collect from your customers after the sale.
Payment Days (AP): how many days it takes to pay your suppliers.
The working capital you immobilize has a financial cost (the money doesn't vanish each period: you pay interest to finance that tied-up capital). The reference value is 30 days for both.

Place cash surpluses in short-term financial instruments (money-market funds, term deposits). It works like a one-period deposit: the principal leaves your cash when you invest (it is immobilized) and returns with a 4% yield the following period. It is not free money — to earn the yield you must have the cash and not use it for anything else that period. Useful when you have idle cash you don't need right away.

Increases equity by issuing new shares. It generates no debt and pays no interest, but it dilutes existing shareholders' stake (reduces EPS). You can issue at most 20% of your current equity per period. The bank charges a 5% underwriting fee, so you don't receive the full amount — the 5% is deducted as a financial expense. Also, you can only issue shares if your credit rating is BB or higher; companies in financial distress do not have access to this option. It is a strategic financing source when you want to grow without raising leverage.

Lets you buy back your own company's shares, reducing the number of shares outstanding. With fewer shares, EPS (earnings per share) and BVPS (book value per share) increase, improving valuation metrics. It is a cash outflow — you need available cash. Strategically useful when your company generates cash surpluses and you want to improve per-share indicators instead of paying dividends or reinvesting in operations.

Instruments that protect the company against exchange-rate volatility when you operate in international markets. It only takes effect if your company has a production plant abroad (N5). Without international operations, this field does not influence results. When there is a foreign plant, that period's exchange rate affects the production cost in that region — investing in FX hedging reduces that volatility and makes your costs more predictable.

Business insurance policies: assets, liability, business interruption. Protects against adverse events that can hit your cash when you least expect it. In competition, insurance reduces the impact of negative market events (adverse news). A small expense that can save an entire period.

Fixed-rate financing with a 3-period term. Bonds are corporate debt placed in the market in exchange for a predefined interest rate. They generate immediate liquidity without affecting the banking relationship, but they commit future flows. Ideal to finance long-maturing projects such as plant expansion or massive R&D.

Amortization of the principal of issued bonds. Manage the maturity of your market-debt obligations. Make sure you have available cash when the bonds mature — default impacts your company's financial reputation.

Investment in environmental, social and good corporate-governance practices. Improves the company's public image and opens access to market segments and corporate customers who prioritize suppliers with ESG standards. In a world where consumers and investors reward sustainability, ESG stops being a discretionary expense and becomes a real competitive advantage.

On the pre-tax profit (EBIT − interest) the simulation's tax rate is applied (typically 25%, set by the professor). Debt interest reduces the taxable base — this is the tax shield, one of the reasons some debt can create value.

📉 Loss carry-forward: if you lose in a period you pay no tax, and that loss accumulates to reduce the tax of future profitable periods. The net profit you see is already after tax.