Virtual Coffee, Ice Cream Shops Help Students Learn Business

Students at West Virginia University began running Mountaineer Ice Cream earlier this spring and lost $14 million in a day. But the undergraduates adjusted their business tactics that day and turned that loss into a profit within a mere hour.

While such a dramatic reversal of fortune is unrealistic in the business world, the scenario is possible in the virtual reality world that business schools are increasingly deploying in their classes, making supply chain, logistics and operations management not only more palatable for students, but also more immersive.

“A big part of supply chain management is experiential. Not many students understand what supply chain management is, even after they declare the major,” said John Saldanha, a professor in global supply chain management at WVU. “This allows them to break something down, look at it and say ‘This is what we learned’ and then learn from their mistakes.”

Virtual reality is not new in college settings, it’s been used in medical schools and campus counseling programs, and to help students sharpen their public speaking skills. But as more corporations are utilizing the technology for training, the increased use of VR has trickled down to business school classrooms.

Arizona State University began working in the virtual reality realm with its Dreamscape Learn partnership in 2020. The university partnered with the lab and launched a pilot program last fall to test a student-run virtual coffee shop and teach students the ins and outs of supply chain management, without the risk of running a real business. The virtual experience also goes deeper than the surface-level knowledge gleaned from a site visit to an actual business.

“There’s been a long history of simulations in business education and a long history of case studies,” said Daniel Gruber, associate dean for teaching and learning at ASU's W.P. Carey School of Business. “The virtual reality environment fuses some of the best elements of simulation and case studies and allows us to invent something new and innovative.”

Roughly 160 ASU students have donned the VR headsets over the last two semesters and entered the virtual W.P. Carey Coffee Shop, where they immediately encounter a long line of customers. The participating students in the supply chain management course discuss and decide what may help the shop operate more efficiently—which could be adding more staff or more coffee machines—and then implement the plan in real time to see if it brings a boost or dip in revenue.

“There’s this immediate reaction of, ‘This is great,’ or, ‘What happened,’” Gruber said of students making in-the-moment decisions. “I think supply chain is a natural space and place to illuminate in virtual reality. There’s so many decisions and it’s seeing how they’re made, how they impact the customer experience, the organization’s experience and theories.”

ASU plans to eventually expand the pilot program to include virtual manufacturing facilities and hospital settings.

West Virginia University implemented its own virtual reality addition to its supply chain management course in 2023. The technology allows students to go where they haven’t been able to before, whether it is a far-flung manufacturing plant or an area that is typically off-limits to visitors.

“Students are able to go right up to the action and see manufacturing up close,” Saldanha said. “They can go into the hull of a ship and … [see] the domino effect of things going wrong; versus getting into a port itself [in the real world] which is an extremely hard endeavor.”

Los Angeles-based Loyola Marymount University held a virtual reality pilot program earlier this spring across nearly two dozen modules, ranging from training for interviews to pitching. The technology company that developed the program, Bodyswaps, gave feedback to students, including on whether they used too many filler words such as “um,” or didn't use their hands enough while speaking.

“The virtual reality inhabits a space in the middle [between teaching assessments and real world interviews],” said Jeffrey Schwartz, senior director of digital learning and innovation at Loyola Marymount University. “Students can jump in, practice and get feedback in a low stakes environment that can help their success.”

Schwartz believes virtual reality will extend beyond the classroom and become more pervasive in the business world, and that familiarizing students with virtual reality in their undergraduate courses will better prepare them for employment.

Part of our work is trying to imagine what’s on the horizon and making sure our students are prepared.”

Jeffrey Schwartz, senior director of digital learning and innovation at Loyola Marymount University

“There is a question of what the business world will look like in five years—will students work together, or will they work with a virtual room?” he said. “Part of our work is trying to imagine what’s on the horizon and making sure our students are prepared.”

For all of its benefits, the professors all also noted virtual reality drawbacks. An oft-cited complaint by institutions is the cost of VR headsets, which clock in between $200 and $500 per headset. Some institutions, like Loyola Marymount, are able to secure grants to cover the headset costs, while others like WVU work with technology companies to receive headsets for free.

Others pointed out that while VR boosts accessibility in some ways, for others, including those with visual impairments, it can be a hindrance. Schwartz from Loyola Marymount suggested that offering desktop or mobile app platforms with the same type of content as the virtual reality headsets could address accessibility barriers. Saldanha said students can initially be distracted by the technology itself and focus on the novelty instead of the content.

“I feel a bit like an air traffic controller, [but instead of] saying, ‘We have a bit of bad weather,’ it’s, ‘We have two students who can’t hear in the headsets,’” Gruber said. “New things come up each time and we’re just trying to keep learning from the student experience and continue to work with faculty.”

And as those hurdles are continually overcome, there is the strong belief among the professors that virtual reality usage could become the norm among business schools and beyond in the future.

“There’s tremendous potential for virtual reality in the business world; it’s used by learning and development, human resources,” Schwartz said. “It can prepare students for that post-college workplace but it’s also a really powerful teaching and learning tool. As the hardware becomes more affordable and as the experiences become more inclusive, I do think this will become a part of higher education.”