Wharton’s MarketSpace places students in the role of product managers responding to a new competitor entering the marketplace
During the first phase of the exercise, students are presented with information about their company’s current product and its competitive position in the market. When a new competitor enters the market, students must find an effective counter strategy to reposition their product. In the classroom, the instructor can use MarketSpace to extend the exercise to show the impact of a competitor’s response to the student’s position and to demonstrate the tradeoffs of various strategies.
In the first phase of MarketSpace—typically given as a homework assignment—students are presented with the details their company’s position in a competitive market. When a new competitor enters the market, the student product managers need to determine how their company will react to this new market entrant.
Using MarketSpace, students can test various strategies to explore how different levels of price and product features are likely to affect their market share and profit.
MarketSpace’s main student interface provides an interactive “dashboard” that allows students to test various product strategies. By adjusting their product’s features and price, MarketSpace lets students test their ideas on how to respond to a new competitive market entrant.
In Class: Results
In class, the instructor can view the results of the students’ exercises. MarketSpace’s administrative interface allows the instructor to display the best strategies for the entire class or to “drill down” to show the strategy for each round for a particular player.
In Class: Counter Moves
Through MarketSpace’s administrative interface, the instructor can use the student’s stategy as a starting point to show the impact of counter moves competitors may make in response to the student’s product positioning.
Using this interface the instructor can illustrate that stategies differ not only in their profitability, but also in their robustness. The position that is initially the most profitable may not be the most sustainable. For example, using MarketSpace the instructor can demonstrate how a defensive move in response to one competitor may be perceived as predatory attack by another.
In Class: Interactive Demonstration
MarketSpace’s administrative interface also includes an interactive Flash-based module for demonstrating many of the key concepts underlying the MarketSpace simulations. This interface lets the class explore how the efficient frontier is determined, how market share is calculated, and how different utility functions affect product choice.
Like many Wharton Learning Lab applications, MarketSpace is not a single simulation—it is a toolkit that allows the instructor to create a large universe of different simulations.
Below is the main configuration screen in MarketSpace’s administrative interface. Using this screen, the instructor can change all the major parameters of the simulation—the number and type of products in the market, the initial positions of each product, the market characteristics, the consumer preference distribution, and even a “fudge factor” that introduces a specific level of inaccuracy into the simulation’s calculation of each product’s market share and revenue.