You will need those numbers later on. at least one of the two teams has an S/Q of 8* and low prices so far (yes, they are in first place for now) what do you think we should do?. Hello, thanks for the great strategy, it is working (1st place) ! I recommend building additional 1,000 capacity for the North American plant in the first year, if your cash balance allows it. The Business Strategy Game Player's Guide 2 Welcome to the Online Edition of The Business Strategy Game. The Business Strategy Game is an online exercise where class members are divided into teams and assigned the task of running an athletic footwear company in head-to-head competition against companies managed by other class members. You will soon know why. Should you win, it would mean your tips are more favorable, and your competitors may learn from you. The decision is due tonight I am so nervous but the performance score so far looks good. I prioritize building additional capacity and purchasing plant upgrades. If you found your highest value for the best net profit, move on to the next value and do the same. In this section, you can upgrade your plants. You need the capacity for the private label market. Hence, keep track of the industrys internet price and how it changes. Do that by answering the following questions? You are almost done for the Sales Forecast decision page. I still think its a waste to build a plant there, unless youre selling tons of shoes (high models, mid SQ). This decision page is mainly a waste of money and we will not spend a lot of time with this page. If you set your price lower, you will sell more but lose due to low profits. Therefore, ensure your profit increases after every round to make the game better and for real business. Do not focus too much on the market share but focus more on profits. We always provide best S/Q with reasonable price just 15% higher than Industry Average, with Largest collection 500 models and also largest networks of retailers worldwide. But again, thanks! Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. That combined will give you a good boost for the last year. View Distribution & Warehouse.pdf from MGMT 5355 at Texas A&M University, Corpus Christi. With our strategy, you might want to think about getting Option A as well. We also learn that Loans from previous years may have higher interest rate, we can borrow new loans to pay off old debts, and get higher Credit Rating because we can pay loans. Do I need to change another setting on another page for this to remain positive? Keep control of Private Label market with upgraded factories that can produce most of quality at lower cost than any competitors. I suggest to go for maximum profits. Besides, your team of managers will develop the critical thinking they need to move beyond the functional management of the company as a whole. Moreover, your strategy needs to be actively communicated to each level of management regularly. Im play a new version of BSG ,we have already completed year 17 and now our team have a problem with struck in the middle stage that cost cant decrease more and this year other company in the industry have a high SQ star and low cost (price war) that we cant fight them because our cost is too high. Hello. I did not forget it, but we will take a look at it later. As such, you can play the game frequently, any time you get it interesting. We keep the Mission which we built from last 8 years. The information is these guides is laid out, and displayed, in such a way that crucial decisions should be a breeze. You can win the game if you follow the High quality and the Low number of models. Sure, you can ask anytime We do not leave it in bank or safe. The BSG company co-managers must make decisions relating to plant operations, distribution and warehouse operations, workforce compensation, marketing, online sales at the companys website, sales, and finance. From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. Besides, your team will have the opportunity to translate a high-level conceptual strategy into concrete actions for the company and team while developing their decision-making skills. Build new factory in LA and upgrade to C and one more, may be D. Keep NA and LA for controlling Private Label, this year will also requires high S/Q so we have good advantages. We had a bunch of copycats in practice year 12, but nobody has figured our profit-maximizing, low-cost strategy, and now theyre pursuing higher models in the real game. However, if you want to do it more precisely, note down each industrys percentage change over the years and use this number instead of the +2%. The Business Strategy Game is an online exercise where class members are divided into teams and assigned the task of running an athletic footwear company in head-to-head competition against companies managed by other class members. Keep in mind to check your profits and ensure they get as high as possible. Tips: We ship from NA to LA because no import tax or tariffs due to NAFTA (North American Free Trade Agreements) - The North American Free Trade Agreement, or NAFTA, is a three-country accord negotiated by . You basically do the same thing over and over again, for every decision round. I have encountered two successful strategies so far: medium-quality shoes (S/Q rating of 5-6 stars) paired with high number of models (250-350 models) and high-quality shoes (S/Q rating of 8-10 stars) paired with low number of models (50 models). Same for your superior material. To do so, G-Brand has to improve on the effectiveness of its operation, especially increasing Net Profit higher than ratio of expanding its Factories. Economic Impact of Hurricane Harvey and Hurricane Irma, Temporary Oil Price Changes Hold Back Consumer Spending. I followed your recommendations, and I have a good rank. This game can be overwhelming, so anything to help other players! Check the Competitive Intelligent Report. I let the rest remain the same in the entry. Important: Your Sales volume, not the production volume that includes the rejected pairs! After you have found the right price, click the Save Decisions button. So the question is: would you recommend for my team to still increase capacity despite this fact? While they might boost your image rating, they will decrease your profit. However, if done right, it is worth the time as it will yield the maximum profit possible and success in your industry. In the upper right box, you can spend your excessive cash. I am in Y12, and I am adjusting for Y13. The same accounts for your Change in Annual Base Wages and Incentive Pay values. If this is still not enough, add the missing shoes to the other plants Branded Pairs to be Manufactured in Year XX number. You then want to select 0% as the Portion of the $XX mil. But my profit is still a little bit low for a second place, guess my price is too low and I need to cut some of my expenses, right? After you have done this, you might notice that your Your Estimate of the Ind. The most crucial thing is the find out what prices your competitors have. Again, this can be trial and error for a couple of decisions but you should get a feeling for what multiplier is best for your company. Moreover, the key is a rational debate with a compromise for everyone to understand why the decision is taken and commit to make it a success. On this decision page, you can bid on celebrities. G-Brand continue to be a good steward of the environment and social responsibility. A warehouse management system (WMS) is a software solution that aims to simplify the complexity of managing a warehouse. This way, you end up buying the share at a lower price. Increase from 3 to 6 activities to support society and environment. With that, you can do the same over and over again, for every decision round. Keep in mind that you are managing a multi-national company, and shareholders are not interested in dividends but the stock price. You can do this by checking the bid prices for the previous year. However, it will also decrease your ending cash. And you said I should only add capacity onto existing ones instead of building a new one in LA right? Warehouse management plays a strategic role in the supply chain by enabling inventory distribution, sorting, or cross-docking processes that strive to meet the growing demand of the market. So, should I decrease pay dividends here to $0.15? How can you apply the knowledge from the textbooks? Do not sit on it. Hi. This means, without increasing your superior material or enhanced styling / features, you gain 1 star. After you have done this for both the N.A. I will talk about the Celebrity Endorsements page later. or A-P plant. You need this capacity for the private-label market. And you can basically never have enough capacity for private label. If I have cash available after doing all my decisions, I like to alternate between building additional capacity, purchasing plant upgrades, paying off loans and repurchasing stock in the following years. Keep focus, year 17, we over sleep in Victory, and ignore competitors. View Invitational Current Adopters of BSG Schools (campuses), institutions, and companies using BSG during the last 12 months. After that, loot to the left of screen to check if we have high Net Profit. Because with more capacity, you can offer more pairs in private label and dominate the market there. The most important advice in advance: it is all about PROFIT. While those two values do not change your S/Q rating, they will change your net profits. Hi, As such, your views and analysis of the information in the latest Company Reports, in Footwear Industry Report, and the Competitive Intelligence Reports will serve as the basis for agreeing upon any strategy changes or making a revised set of decisions for the following year. In this blog post, I will run you through everything important that you have to know about the BSG and how to win it. Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. Sometimes, clearing your beginning inventory at a discount will boost your profits. Hence, you will only focus on the two following decisions that are worth their money as they increase your image rating the most. As always, do not forget to save your decisions after you are done. Keep the price expand from Average to higher, but Maintain Highest quality of our shoe will continue to exceed the quality of shoes within offered by our competitors and which are with the same price-range. From Year 19, if any, we have over 100 million cash in hand and Net Profit every year, it will be better financial status for us to expand or invest in upgrading new factories, or even produce at higher stars 8, 9 or 10 stars. If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. sales volume estimate. It can also be crippling if leaders . This requires an overhaul of teaching practices and learning techniques that cater to the changing economic trends. (Darius White) The business strategy was a very practical and real-world experience of what it is like to run a major corporation and the rigor it takes to increase earnings per share, return on equity, credit and image rating. I will just adjust it first and see what happens, thanks a lot:). However, traditional warehouse management systems are not designed with the flexibility or technology capacities to address ongoing challenges in the . One of the most useful skills we learnt from BSG in Financial Analysis, we have had the chance to read Income Statement and Financial Reports every years, for last 8 years, many time, which we understand more about cost and revenues, details of cost, details of revenue, we notice the importance of loans, interest rate, credit ratings. I am so thankful for your post!!!!!!!!!!!! Yes, I would definitely do plant upgrade option C! Yeah I will hold on to that for now. but out industry there is a direct competitor for me, he is also star 8 and 50 models, and he prices so low for wholesale, only 47! You will not have any complaints about the quality of the assignments we deliver. Hence, try to keep your internet price at least 40% higher than your wholesale price. In order to be continue higher competitive and perform to the higher levels, there are still some areas in which the company can focus to operate better. We always used the 10 decision groups of Finance and Cash Flows in most careful ways to maintain high EPS, in fact we should spend more Cash in hand to buy back Share in early years. In the above example, we ship from NA factories to NA and LA. Whenever you change and sharpen any decisions, you should keep track of your net profits. Any thoughts? This way, you get a clue on the actual standing of the company entering into year 11. My guide follows the rule highest net profit is key to success. After a couple of decision rounds, you will get a feeling for it and it will become easier, no worries. thank you for your help. If you find capacity available for purchase, I would always directly purchase it. If you happen to end up with a large surplus of shoes the next year, lower your 1.2 multiplier a little bit to 1.18. Otherwise you will not sell any shoe either. Otherwise, their endorsement effect declines. Cost of pair sold, Ware house expenses, Marketing expenses, and Administrative expenses, all the 4 key contribute to Operation Cost. Also, we are doing better than in the past so interest rate is lower. With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. I recommend having a pen and piece of paper next to you so you can write down your net profit and compare when plugging in different values. Which wholesale are you referring to? 24.51 is low, we can reduce with good factory in AP so increase the margin to much higher. To this point, you are set to dominate your industry and win the Business Strategy game. It is not. You can ignore the Internet Marketing and Wholesale Marketing pages because they will just reflect your internet and wholesale decisions that you already plugged in on the previous pages. How can the company overcome tough competitors who seem to know most of the things you know? Let us take a look at the Plant Capacity / Upgrades page first. For all following decision rounds, you do not have to return to this page, as I advise you to always keep those two options and not change anything else on this page. How can the company jump over other competitors? Its not too bad, no worries. The two most important values you want to have as precisely estimated as possible are the industrys average wholesale price and S/Q rating. We can keep and sell NA after year 16 if we have good and large LA factory. While this was driven . I am currently dominating my industry, and closing in on the top 100 list! Yes, I would only add capacity onto existing plants and not build new plants. Regardless of what the other competitors do in Year 11, your focus should be winning. Can you tell us more about the strategy you had ? No worries, this is logical and you did nothing wrong. We are in shoes industry, so we can provide the differentiation with larger Collections. Helped me get to the second place! 3/29/2021 BSG Decisions & Reports Projected Year 12 Performance Scoring Measures EPS (earnings per . From round 2, there is a risk that other groups can set the same strategy with the winner can be you. This is quite good at the year 19 and later. Also, I am concerned about the prices strategy; the group who is in the first place has the plan of highest S/Q rating (7) with 200 models and lowest prices. However, if you happen to use overtime at either of the two plants, plan on increasing the plants capacity in this decision round. ? We have good market share in NA and, last year, we needed to ship the rest of the shoes from AP (incurring in shipping and tariffs costs, hence, the thought of adding capacity in LA). So do you mean although we sell exactly same shoes it does not matter even my rivals price is lower than mine so long as i can maximize my profit? So if one of your markets is not satisfied or prices are high, I would built capacity to attack this market and sell a lot of shoes for a cheap price, to guarantee you the lowest price so that you sell all your offered shoes. Total Wholesale Marketing is 12.92 is good now, we will keep maintaining strong marketing to get higher sales volume. Select +2% for the Percent Change in Competitive Impact of All Other Factors from Previous Year. Thank you very much for your kind words! What should I do in this case? We will keep the largest market shares in Internet Sales. Business Strategy Game is an online business simulation game where class members are grouped into teams and assigned the task of running an athletic footwear company in head-to-head competition against businesses managed by groups formed by other class members. What is the companys differentiation strategy? Free shipping will most likely not increase your profits. What are the niche markets that your competitors dont see? I would always encourage you to bid on available celebrities. Hi, Im glad to hear that it helped! It can be very beneficial for you. They have all changed by +2%, just as you plugged it in. These strategies are easy to see in the real world of business. As I keep reading online about different strategies to win, there are some postings that are aligned with the strategy of low quantity of models offered at a high quality and keep increasing capacity. However, do not price your shoes too high, so that your competitors have a lower price than you and will sell their shoes first. Should I decrease the pay dividends and do stock repurchase in Y13? Largest network of retailers around the world. Besides, you can set best practice training high, maybe at 5.000. Moreover, we will invest on advertising and make use of celebrity appeal to gain brand consciousness. Try out different combinations that keep you at 8* and the highest possible net profit. It is best to build only as much capacity as you can afford without taking any loans. Again, trying out different combinations and optimizing net profits is key for these values. The Models Offered estimate seems pretty fair and you do not have to worry about it. 1. The Strategy Business Game learned all aspects such as production, distribution, sales forecasting, finance, marketing, celebrity endorsements, private label operations, corporate . We even understand the very details such as marketing per pair of shoes, cost of warehouse, administration per pair of shoes, which can contribute to the total cost making the Net Profit higher or lower then decide the Business Results and overall market development. Hi Yvonne. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out. And should I do stock repurchase this year? After you have plugged in your numbers for both plants and your Branded Pairs Available for Shipment matches your Total Branded Pairs Shipped from each Plant, go ahead, click the Save Decisions button, and move to the Private-Label Operations page. Through the games, we learn more in-depth knowledge and skills in making decision in big business fields, from Corporate Social Responsibility, to Sales Forecast, which is very important. Here, you will plug in your previously calculated regional total sales volume for each region. While you already have a good estimate of how many shoes you are going to sell in each region, you still need to consider your rejected pairs during production. Use the remaining 30% capacity to sell shows in private-label! . We give you. The higher your celebrity endorsement value for a specific region, the more your advantage in attracting buyers to purchase your branded footwear. G-Brand will continue to build on its existing strategy (Globa Differentiation Strategy) of attempting to gain a competitive advantage primarily by differentiating the Value and Quality for Price, customers pays for Real High Quality Value and Fashionable athletic shoes with much higher Quality what our competitors would charge for similar products. Leave everything else unchanged. We are doing well, so Stock Price is high too, over 120, we will buy back some with extra money, cash in hand of G-Brand will be over 150 million every years. Does it hurt any other factors? Let me know if you have any more questions. and L.A. volumes and finally plug them into the NA manufacturing slot. Hence, make sure to plug in every possible value to reach the highest net profit possible. unfortunately I have no experience with adjusting to my strategy in the late-game. I feel you. The key information form balance sheet is not just Total Cash outlays of 711,362 or Net Cash balance for every year. I started with paying $0.05 dividends and increased it by $0.05 every year. G-Brand has been performing for many years Higher than Investors Expectation. We need to keep continue going up to expand and to create new markets. My friend and I walk through the simulation on how it works. Our EPS increase fast from 7.36. Hi Fin, Thanks for the detail post and the screen shots. Entering year 15 I am still doing 8 star but the demand forecast is super low. Net Profit of 150 million with increase of 25% every year. You should slightly increase your dividends year by year. You dont have to care about your retail outlets anymore so adjust the price so maximize your net profit, without the 40% rule. You can also win if you settle for Mid quality and a High number of models. I was wondering how much more additional capacity that I should purchase after Ive bought the first 1000 for NA. 14. My group and I are about to complete year 17 for the game. In the Private-Label Production field, use all your remaining available capacity, even overtime. Do not worry about those numbers, they will just show you whether your investment is profitable or not. The S/Q upgrade is the best option if you choose high-quality strategies, while setup cost reduction is ideal if you decide to have several models. construction cost to be financed with debt. As already mentioned earlier, not every decision has to make sense. We have never looked in very details of business management like sales margins or even a few percent of market shares. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. You might think that using green footwear materials or using recycled boxing / packaging is a good decision, especially with the currently ongoing environmental debates. If you are completely new and your projected performance box is not showing yet, you have to click the Save Decisions button on the upper right-hand corner for the projected performance box to appear. One time, I was able to increase my net profit by lowering TQM / Six Sigma Quality Program to $0.20 and increasing Percentage of Superior Materials to maintain my S/Q Rating. In the last section of the Plant Capacity / Upgrades decision page, you can construct a new plant in either of the two regions where you do not have a plant yet or you can build additional capacity to your N.A. As the CEO, you need the support of the other company managers. With increased competition, prices tend to decrease. Looking at Company Operating Report, Marketing and Admin, Private Label, we also need to focus on reading and understanding Business and Financial Statement. If it is 0%, that is fine as well, do not worry about it. How To Win BSG Using the Best-Cost Strategy The best-cost strategy means offering customers a product with the highest attributes of quality and style at a lower price thus allowing them to gain the best value for their money. Avg. values have changed. We increase wage, compensation, bonus and keep high training, TQM as we used to doing in the last 8 years. You will soon know why. I mainly looked at what they were doing in the private label sector. For this reason, you and your team members need to start the BSG by spending more time analyzing the results of each year to figure out the best effective strategies to lay for the next round of the game. We need to adjust the number of productions to optimal these decisions. Each decision period in the BSG represents a year, and the company you will run began its operations 10 years ago. This means, you have a channel conflict, meaning that your Retail Outlets number will decrease in the next year and less retailers are willing to sell your shoes. However, it will also decrease your ending cash. How can we apply the wisdom of strategies like Cao Cao to Professors Peter Drunker, Igor Ansoff, Philip Selznick, James Collins, Bruce Handerson, Michael Porter, and Alfred Chandler, among others? When starting the BSG, you have two long-term loans; one for 5 years, the other one for 10 years. However, with effective BSG simulation tips, you can keep your company ahead of the competition. Again, maximizing net profit is all you care about with our strategy determined at the beginning. in year 17-18-19 and 20). Start off with the values that you know for sure: For the high quality, low models strategy, I recommend starting off with a S/Q rating of 7 stars and 50 models available. This decision page deals with your plants. Like should I add up all my wholesale prices from the 4 regions and then divide by 4 to get an average wholesale price and multiply by 1.40 to get the internet price or should I base it off the lowest wholesale and then multiply by 1.40 to get the internet price? Unused capacity kills your numbers and profits! An ingenious business strategy for your team will help your team members to appreciate the significance of the strategy, identify the kinds of trade-offs needed, and demonstrating that with limited resources, not every project can be pursued. The world's most streamed artist Bad Bunny, a Puerto Rican rapper, alone claims 8.3 billion streams. However, keep in mind that your regional endorsement value should not be higher than 400 in any region. Thanks a lot! With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. The Business Strategy Game or BSG is a simulation game used by, different colleges for their Business capstone. Paying dividends will increase your stock price and your ROE. A window should pop up where you can select each of the four regions and change the industry average S/Q rating and competitive impact. This is very helpful. Thats a relief. On this page, you will set your values for your branded production. You are now all set to dominate your industry and win the BSG! Study on the go. Looking at Company Operating Report, Distribution and Warehouse Reports, we see Cost of Branded Pairs Sold in Year 18 is $25 and Warehouse Operating Expenses is 3.71. For instance, you can change the Industry Average to +2% or +4% to attain the optimal. Go ahead and try out which combination yields the highest profits. However, after 3-4 years, your competitors will settle and changes will be more predictable. However, some values, such as the Wholesale Price have decreased instead of increased. Plant Capacity / Upgrades.

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