SABRE Simulation

This is the time of year when the marketing faculty as well as Ivey MBA and HBA students begin the SABRE simulation. SABRE is a computer-based business simulation that offers students the opportunity to work in teams on marketing strategies in competition with teams who are assigned to the same virtual industry. Each team plans grand strategies to launch new products, position them right on top of fast-growing and affluent segments with the hopes of achieving the largest revenue, market share and cumulative profit of any team in the industry. This business simulation is truly interactive; a brilliant strategy directed at a competing team’s products can indeed preempt them and even wipe them out. A great part of the art of winning in SABRE is the art of seeing where the growth in the markets is occurring and what the larger segments want by way of specific product attributes. Of course this necessitates buying market research which is usually helpful in describing the future markets, but alas just like the real world of market research, it is sometimes woefully imprecise in describing customer segment’s future wants and needs.

If that isn’t enough uncertainty, there is always the rickety R&D effort which may be successful in the current year to bring forth the new product or it may deliver the product in the following year. Even when the market is clearly foreseen, the product designed and launched, there is that ugly question of how much inventory to build so that just enough will be available to satisfy market demand. Clearly, this business simulation offers challenges to the brightest and most eager of teams. The marketing faculty regard SABRE as the key learning experience in the first year marketing management courses 301 and 501. In fact, the marketing faculty plan the course so that each of the approximately 28 preceding class sessions will build tools for student teams to be more effective in this very realistic simulation. This is the time when students must really live with the consequences of their strategic decisions – well at least on paper and in the cyber world!

Ivey faculty have been using a variety of business simulations since the mid 1960s when they were among the first to use computers to operate INTOP created by Dr. Hans Thorelli of Indiana University business school. INTOP stood for International Operations Management, and used card decks to harness the entire 8K of computing power for an entire week on the big IBM 1140 down in the School’s air conditioned basement computer room! Several functional areas worked together to make this a great capstone experience for first year students. It was also one of the students first exposures to international dynamics. By the mid ‘70s we began to use Mark Strat as developed by Jean-Claude Lareche at INSEAD in Fontainebleau, France in second year marketing electives such as Strategic Market Planning and Business-to-Business Marketing (using a variant of Mark Strat) . Professor Lareche and Professor Weinstein founded a company called StratX to market these business simulations and they became widely used teaching tools throughout the US, Canada and Europe.

Within about three years, we saw the tremendous power of Mark Strat to provide a great experience for first year students as a wrap-up challenge and major learning experience. Here again, several area groups such as Organizational Behavior, Operations Management and Communications joined in the teaching and learning from Mark Strat, and many students would later testify at their first five-year reunion that their two best learning experiences at Ivey were Mark Strat and what is now called the Ivey Consulting Project. SABRE shares a lot of the parameters first found in Mark Strat and its slightly less challenging sister MarkOps which stands for Marketing Operations. During a 1987 visiting professorship at INSEAD, Jean-Claude asked Professor Ken Hardy to test the newly-developed MarkOps in his first year marketing class – and it was a huge success. Professor Mark Vandenbosch who also spent a semester at INSEAD was one of the developers of SABRE with its own unique marketing challenges. About a decade ago, Ivey converted to the locally-operated SABRE simulation. To this day, there are still opportunities to involve more faculty groups and experiment with SABRE in new ways to tap its vast potential to challenge and fascinate a group of very bright young minds who have spent six months learning the theory and the practicalities of marketing, operations, accounting, finance, org behavior via case histories – and then have the opportunity to learn the really tough lessons in a very realistic competition. We expect your comments five years after graduation about some of your best learning experiences.

Thanks for the contribution Professor Ken Hardy!

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