In this simulation, you are the CEO of Sunflower Nutraceuticals [SNC], a privately-held Miami, Florida based nutraceuticals distributor. SNC is essentially breaking-even with flat annual sales growth on total revenues of $10 million. The nutraceutical distribution business is working capital intensive and margins are generally thin. Sunflower Nutraceuticals started in 2006 as an Internet-based direct to consumer distributor and retailer of dietary supplements. Product offering spans 100 SKUs from 50 third-party brands. SNC experienced ambitious growth including expansion into new retail outlets and private label production.
The nutraceutical industry is a relatively new sector with strong growth potential. In 2010, the global nutraceuticals market was worth approximately $128.6 billion. The global market is forecasted to grow at a compound annual growth rate [CAGR] of 4.9% and reach $180.1 billion by 2017.
There are four major elements of the simulation for you to consider:
1.Prepare – Review the Prepare tab for an introduction to the company, How to Play, and download the terminology primer.
2.Analyze Reports – The financial statements report the company’s historical and current financial picture and how the financial condition of Sunflower Nutraceuticals has changed over time.
3.Enter Decisions – Click on the Decide tab initially to make your financing decision and then to enter investment decisions for the next phase. You can choose to invest in or reject any or all of the opportunities available to you in the 3-year phase. When you have finished entering your investment decisions, click the Submit Decision button to advance to the next phase.
4.Review – Look at the Synopsis page and your financial statements to see how each opportunity you selected impacted Sunflower Nutraceutical’s performance.
Although you are not required to describe in detail your thought process for accepting or rejecting each individual proposal, it may be more difficult to describe your over-all decision process without doing so. Quantitative analysis may be useful in making decisions. In many cases, the projects are inter-related, a fact that complicates the decision process and any quantitative analysis.
Success in this assignment will be measured based on the following criteria: [1] completion of the simulation in timely fashion, [2] clarity and cohesiveness of your self-assessment in your PowerPoint presentation, [3] effective analysis of what worked and didn’t and what you would have done differently; [4] a clear and technically correct description of the critical issues that you must consider in balancing growth and liquidity.
source: https://hbsp.harvard.edu/im- port/887164 Working Capital Simulation: Managing Growth, V.2 [Product Number: 7070-HTM-ENG]
