1. Author: Mario Martínez Tercero
Theme: Catedrático de la universidad complutense y creador del
simulador
Article Title: Praxis MMT21: third generation simulators
Throughout history, the human race has acquired a vast amount of knowledge in science and
technology. This has been done through practicing a basic intuitive principle of "testing", doing
what they wanted to achieve and checking the "result" (what we now call the ‘trial and error’
method, testing out etc ...). Chances are that with every trial and error, if we analyse the ‘trial’,
we reduce the ‘error’ and therefore learning.
In natural sciences and derived techniques, it was soon thought that this process of trial and
error could be simulated with lower costs and / or danger when performed under laboratory
conditions. Galileo, instead of dropping objects into the street from a certain height, used
planes that glided towards like polished balls (very "round" in his own description). The whole
secret was that the conditions in the laboratory were more accurate and true to life.
In human sciences and techniques that have come about recently, and in developing
computers, it has been possible to develop simulators that mimic reality. Mathematics and
statistics are fundamental essence. The enormous flexibility of mathematics to describe
phenomena or events of any kind make it possible to go far. This means that nowadays, there
are flight, astronautic, medicine, climate, conflict negotiation (Nash) simulators... and even war
simulators that could predict the impossibility of an American victory in Vietnam (Robert
McNamara).
With regards to company‐market simulators that are used in Economic Sciences and more
specifically in Business Economics, we can find at least three types (three generations) of
simulator. They all want the user to run through a learning process in business decision‐making
based on trial and error by simulating the real business world. Therefore, the user
(professional / student) is integrated into a team that simulates the managerial department of
a company, which competes with other company teams in the same markets.
The first generation of these simulators in Europe have a characteristic similar to the French
company made by the Bedeaux organisation in the late 50's, which was also possibly inspired
by some previous American one. It was very simple, with just one market and two marketing
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2. variables (price and trading expenses) and completely abstract (ie, no specification of products
or the market that was being represented). In Spain, in the early 60's, the company
organisation and Taymir market studies developed the first Spanish simulator inspired by and
with similar characteristics to that of Bedeaux.
The second generation of company‐market simulators, still widely used in universities, has the
standard model in the Markstrat, which others still use. These simulators have a common
abstract nature and therefore the user does not know which particular product or products are
concerned (it only hints at the industrial sector to which they belong). The market or markets
are imaginary and therefore the authors have no commitment to reality, to the point of being
artificial "worlds", invented by the authors. This makes the user continue moving in a purely
theoretical territory. Users who get good grades in school have "all the grades" to achieve
good results in the simulator. Users actually compete "against the computer" and not against
other companies as in the real world.
Using a sports analogy, we would say that the second generation simulators behave like golf, a
player makes a hole in 4 shots, that's their result, this will not be modified because a second
player does so in 2 or 7. Of course with 4 shots they will win or lose, but their result does not
change. Whatever the other player achieves will not interfere with thier result as they are
actually playing against the course (as we said earlier: "against the computer").
It goes without saying that reality is very different and continuing with the sports analogy, it
can be compared to any interfering sport (like Tennis or Football) in that my result will depend
on the other side’s game. Here, I really am competing against my opponent and not against
the field (the computer). The latter is the case of third‐generation simulators: the second
generation being Golf the third Tennis. The leap into the reality of the third generation can
undoubtedly be described as transcendent.
The third generation simulators appeared at the end of the last century and the beginning of
the current and come from the Praxis MMT company which has development centres in
Europe and the USA and its activity is dedicated exclusively to the field of simulators.
Unlike the second generation models, these simulators are developed by people with long and
extensive business experience and relate to specific products (UTH milk, yogurt, cars,
beverages, etc ...) and specific markets. For example, in developing the simulator for the Praxis
MMT21 automotive sector, professionals from Toyota, Citroën and Ford have collaborated.
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3. They comply with the principle of interference that occurs in reality for which the decisions of
a company affect its competitors.
They have more decisions of different natures to take into consideration than any marketing
decision which affects all functional areas of a business such as purchasing, production,
finance, HR, etc ... and vice versa as in reality, the company is a system in which all elements
are interrelated. The fact that markets and products are real, forces the simulator to mimic
reality while the construction and validation of a third‐generation simulator requires at least 5
years, for a second generation simulator this can be achieved in less a year.
The realism of the products and markets allows Praxis MMT simulators request the user to
make tactical decisions, not just strategic, reaching down to all details in them and increasing
the types of decisions and thus increasing their resemblance to reality.
Dr. Mario Martínez Tercero
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