From Policy to Profit: Tariff Simulation Makes a Big Impact at ATD

As part of Advantexe’s tradition at ATD, we like to feature a special business simulation designed just for conference learners. Something timely, relevant, and hands-on. This year, we introduced a new experience focused on a hot-topic business challenge: tariffs.

Rather than just talking about simulation-centric learning, we invited attendees to experience it through a scenario that put them in the role of a decision-maker responding to a sudden surge in global tariffs.

The goal wasn’t to teach global trade policy. It was to demonstrate how external business disruptions ripple across everyday business decisions and how simulation, combined with our new AI feedback tool, Simi™, can create immersive and hands-on learning that makes an impact.

About the Simulation

In the simulation, participants stepped into the role of an executive at ArcticNest Inc., a fictional baby care company known for its flagship product, Snugguins diapers.

Overnight, the fictional government of Libertas imposed reciprocal tariffs on imported raw materials from two key supplier nations:

• Sundari – hit with a 30% tariff
• Pacificana – hit with a 20% tariff

ArcticNest’s cost of goods sold surged, gross margin declined, and EBIT dropped, all while revenue and pricing remained flat.

Learners were tasked with stabilizing the business and rebuilding profitability by using a set of realistic strategic levers. Their decisions weren’t theoretical; they played out in real time, across financial metrics. What could they do?

• Adjust pricing, knowing the market was highly sensitive and price increases could negatively impact unit sales or CSAT.
• Redesign the product to reduce raw material costs,  but risk the perception of compromising quality.
• Cut back on marketing or R&D to reduce operating expenses,  but potentially compromise growth and innovation.
• Shift to local or regional suppliers, absorbing short-term switching costs in exchange for long-term stability.

Each decision triggered a systemic business impact. Some improved gross margin but damaged volume. Others protected sales but hurt future competitiveness. There was no “correct” answer, only trade-offs to manage.

That’s the power of simulation. It doesn’t just tell you what good business looks like. It lets you feel the pressure of uncertainty and the complexity of cause and effect.

The Leaderboard: What the Data Told Us

Across nearly 50 participants, we saw meaningful variation in strategy and outcome.

Here are a few insights based on the final leaderboard:

• Players named Diapers R Us and ATD1 posted the highest EBIT ($1.47M and $1.05M), likely driven by tight control of expenses and solid margin recovery.
• Players that maintained strong unit sales (like Snowblowers at 300,000 units) saw healthy revenue, but when COGS weren’t contained, gross margins fell, and EBIT was dragged down.
• Players like Flames, who had one of the lowest gross margins (25.89%) and the highest expenses, ended in the red and basically went down in Flames (sorry).
• Top-performing teams balanced trade-offs between short-term fixes like price, COGS, and customer satisfaction, while keeping a close eye on the long-term health of the business.

AI Coaching

One of the new features we introduced was Simi™, our AI-powered simulation coach. After each round, Simi analyzed decisions and delivered feedback based on decisions and on actual results, like this:

"Reducing price and switching suppliers likely tightened margins. Combined with cuts in marketing and R&D, EBIT remained under pressure as cost-saving decisions played out.”

This real-time, personalized debrief helped participants quickly understand the impact of their choices and how to improve going forward.

An “A-Ha” Moment: Who Chose Not to Play

While the simulation generated a lot of buzz and engagement, we were surprised by how many attendees were apprehensive and declined to participate. The most common responses?

“That’s not my area.”
“I don’t know finance.”
“I’d probably get it wrong.”

At a talent development conference, in a low-stakes, 10-minute experience, we could not believe how many people hesitated to step outside their comfort zone.

But that’s the point of simulation. Learning in a risk-free environment. Simulation is not about being right; in fact, being wrong often teaches you more. Simulations are about exploring, practicing, and building confidence.

Summary

The ATD simulation wasn’t about tariffs. It was about learning some of the challenges of business in a compressed time. Participants got to see firsthand how:

• External changes impact financials
• Strategic trade-offs affect multiple metrics
• Simulation + AI feedback = practical, scalable learning

If we want to empower people to take a seat at the table, we need to give them tools that build confidence in business conversations and show them that business is not just for “finance people.” 

If you would like to play the Tariff simulation, feel free to reach out to me at james.brodo@advantexe.com, and I can set up access for you.