ICBSC

This past weekend was the intensive phase of the semester long International Collegiate Business Strategy Competition (ICBSC). For those that I have yet to regale with the details of this endeavor, the ICBSC is a collegiate competition at both the undergraduate and MBA level where teams of contestants create a fictional company and manage it through seven years of operations. These operations run the entire gamut of what can be expected of executive level management, from sales forecasts and production management to marketing and finance.

My company, representing Cal-State Long Beach, and manufacturing waterproof and shock proof MP3 players (For the active lifestyle that those of us in Southern California enjoy) was called “Long Beach Sound” (get it?) and I took over the reins as the CFO (Chief Financial Officer) My original goal as CFO was to finance the company through our operating income. This is a risky strategy, as it keeps us from having to pay interest, dividends, or diluting existing outstanding stock, but it also relies on current and existing cash flow in order to expand – which we did, very quickly, and very aggressively. Combine this with the company’s commitment to training and research & development, and we were cutting it close to the wire every quarter in terms of financing our operations.

Decisions were made every quarter (represented as usually once a week and gradually speeding up all the way to once every two hours during the intensive phase.) and I am proud to say that we were completely successful in being a self-sufficient company. We never had to issue bonds, or dilute our stock with a further issue, nor were we forced into emergency bank loans – known as the financial kiss of death in this competition. In fact, Long Beach Sound made a serious dent in our capital structure by buying back about 20% of our shares outstanding, and retiring much of our bond debt, therefore increasing shareholder value and overall stability, all while reinvesting in the company.

Without getting too far into the details of the competition – which may bore many readers (we joked that it was similar to the number crunching Olympics, that we were “Matheletes,” and I even referred to the competition as the Business world’s varsity dungeons & dragons team) I learned a great deal. One of the main lessons learned was that everything depends on everything else. To say business is a vicious cycle is far too cliché, but also very accurate. Finance depends on sales, which depends on production, which depends on forecasts, which depends on infrastructure, which depends on finance. Somewhere in that mix, throw in marketing, training, R&D, advertising, and oh yes, the competition. That is something else that you have to worry about. Much like the old military saying of “The plan never survives the first contact” a business plan depends largely on what your competitors do. Their price points, their capacity, their production, all have to be carefully monitored and kept in mind in order to optimize your own.

In the end, I think we performed well. Long Beach Sound placed 1^st in Business Documents (Strategic Business Plan, Annual Report, 10K, etc.) and 3^rd in Overall Performance. We also stood in a division that had some very stiff competition. We faced down, and ultimately outperformed such illustrious MBA programs as Purdue, and Northwestern’s Kellog School of Business. The program was a lot of work, and a good bit of fun. I am glad that I did it, and it will be a nice bullet point on my resume, but I am glad it is over. It truly was like having another job, in addition to the one I already have, my full time Grad School schedule, and my obligations to the California National Guard. If you are an MBA student or Business Undergrad then see if your school is putting together a team for next year. It will be well worth your time.