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MBA students at University of Kentucky's Gatton College of Business and Economics in Lexington participate in the CityCar simulation as part of the school's New Product Development Module. The simulation is run by representatives of Cranfield School of Management. responsible for collecting and analyzing market data. To max- imize the learning opportunity, team members are encouraged to take positions with which they are unfamiliar. Someone with marketing skills might become responsible for software, while a finance expert might manage marketing activities. Those who take on the engineering responsibilities must design the car and master the software. They use Lego RCX software and an RCX "robot brick" that can be quickly learned and programmed with a laptop. They must produce a car that can drive forward, reverse into defined spaces, and recognize road markings. Each CityCar also needs to park automatically, thereby meeting the demands of customers who live in cities where parking is always a problem. Additionally, the product must be aesthetically appealing to succeed in the competitive market. While some students are working on design, the team members in management roles must ascertain customer needs. These students make sure the product matches these needs while meeting the financial targets their backers demand. All teams are given some preliminary market infor- mation and—if they have the budget for it—they also can "buy" market research reports. These managers must decide realistically what the team can achieve before making any promises, so they must make difficult choices about product features, pricing, and time-saving measures. Concurrently, the marketing personnel must put together a coherent presenta- tion and product demonstration that will convince customers this is the car to buy. The pressure is high, not only because the timeframe is so short, but also because each group is competing directly with other teams. This competitive environment introduces a large element of risk to the project. The Market and Its Lessons When the three hours are up, the teams take their products to market by introducing them at the Geneva Car Show. There, each team has five minutes to present its product to the cus- tomers and the press. Team members describe the car's ben- 44 BizEd JANUARY/FEBRUARY 2006 efits, name its price, and demonstrate its features. They also get their first chance to see how successful their competitors have been at designing cars of their own. The performance of the cars is judged by "guest customers," who critically com- pare the products offered by the various teams and then make their purchasing decisions. Typically, teams display a wide range of performance levels. Top teams accurately assess market needs and develop a car in time for the Geneva Show. Other teams are less successful in meeting marketing needs or solving the many technical prob- lems associated with the product—a situation that accurately reflects many of the issues faced in real product development. Some teams fail to even make a profit, as they have insufficient margins or do not receive enough orders at the Geneva show. Therefore, just as in real life, many product launches in the CityCar project end in failure. While the Geneva Show is fun for the teams, it also is direct- ly responsible for teaching them specific lessons, all of which are covered again during the debriefing sessions that come next. After the hectic pace of the new product launch, we slow down to allow teams a few hours of reflective learning time. All teams—even those "winners" who made a profit— now analyze what they did well and what they would do dif- ferently if they were developing a new product in the future. When the CityCar simulation is conducted for MBA stu- dents, a number of learning points must be covered, since few students have experience of the complete NPD cycle. When such a simulation is conducted for corporations, the teams are encouraged to examine the similarities between the simulation and the difficulties with product develop- ment at their own companies. After each team has had a chance for reflection, we hold a plenary session to collate ideas from all participants. Here, we have several learning objectives. We want participants to understand the role of communication, the process of deci- sion making on product features, and the necessity of trade- offs between price and design. We also want team members to learn how to analyze risk, which is an inevitable part of