You need this capacity for the private-label market. In the Private-Label Production field, use all your remaining available capacity, even overtime. I feel you. While competing with the other teams in BSG, you need to make informed decisions that can create a difference and take your team ahead of all. In 2020 digital game sales outpaced physical sales for the first time. Do not price your shoes too low, so that you will not make any profits with your sales. Advantage of this is, that you dont have to pay too much attention to your competitors. We need to keep track of cost in more details in next years. You have successfully adjusted to your competitors. Should I decrease the pay dividends and do stock repurchase in Y13? The most important advice in advance: it is all about PROFIT. Hi there! At the end, I increased dividends to boost my ROE. For instance, you can change the Industry Average to +2% or +4% to attain the optimal. We are doing very well, even up and down from 1st and 2nd position but we have a strong and clear visions for future strategy to lead the company at top of market and meet Investor Expectations. View Distribution & Warehouse.pdf from MGMT 5355 at Texas A&M University, Corpus Christi. In todays education system, developing students with a high level of competencies and capabilities is a challenging task for every instructor. On the other hand, other players gamble for the private market with a high price, a large volume to lead. Hi, thanks for the great strategy! Im playing the new version of the game, and your guide has worked perfectly for the first two years! Unlock this data. Winning the BSG game is essential. Its not too bad, no worries. I am so thankful for your post!!!!!!!!!!!! Hi, We keep the Mission which we built from last 8 years. If you found your highest value for the best net profit, move on to the next value and do the same. Id also like to point out that it appears the developers threw out NAFTA in the new version, so tariffs hurt pretty bad in Latin America. Looking at Company Operating Report, Marketing and Admin, Private Label, we also need to focus on reading and understanding Business and Financial Statement. Hence, make sure to plug in every possible value to reach the highest net profit possible. You basically do the same thing over and over again, for every decision round. Never give up, we can always find a good way to improve a company, despite its position in a market. Moreover, your strategy needs to be actively communicated to each level of management regularly. Is it too late to reduce that to 50 as you suggested in your recommendation? Therefore, ensure your profit increases after every round to make the game better and for real business. 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? I will explain soon, how to increase plant capacity and why we need the capacity for private label. In the above example, we ship from NA factories to NA and LA. We do not focus on rebate, time of delivery. With the Business Strategy Game, teams of students run an athletic footwear company in head-to-head competition against companies run by other class members.Company co-managers must make decisions relating to plant operations, distribution and warehouse operations, work force compensation, online sales at the company's web site, sales and marketing, and finance. We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. View Adopters Arthur A. Thompson, Jr. John R. Miller Professor Emeritus We aim to increase market share through factories in three continents, NA, AP and LA. After you are done, move on the left side and do the same for your internet sales. Okay! I did not stock issues or issue purchase in the those years. You need the capacity for the private label market. The issues depend on cost of production. construction cost to be financed with debt. In the upper right box, you can spend your excessive cash. 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?. so idk what i may have done LOL, Hello, may I ask my is not that great at the moment and we are onto year 13 which is like 2nd year maybe of the game and i try my best to like follow your tips though not as fully cause I still dont understand much especially the calculation one a bit confusing cause I am bad at that, so far I have 7 s/q rating though I am unsure should I do lower models or not cause I am afraid it might not be enough for profit and all because most I see at average of rating and high models , I was wondering what can I do to make it better? Im glad I was able to help and good luck to you! Also, I suggest not decreasing your dividends. Your team members will realize that the final decision usually involves compromising between what is needed for the overall company and personal preferences. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out. The Business Strategy Game Player's Guide 2 Welcome to the Online Edition of The Business Strategy Game. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. But keep in mind the risk of jumping up or going down with the high bid price. My question is what if I decreased the pay dividends to $0.15 from $1.00? Keep focus, year 17, we over sleep in Victory, and ignore competitors. They do their best to ensure that you get the best grades on your assignment. After you have decided to which region to ship your shoes to, go ahead and set your Superior Materials Usage value and your Enhanced Styling / Features value. Do not worry about me skipping the Internet Marketing, Wholesale Marketing, and Celebrity Endorsements pages. Moreover, we will invest on advertising and make use of celebrity appeal to gain brand consciousness. Like I already said in my previous post, the most important thing is to toggle each and every value and pay close attention to your net profits. It almost worked TOO WELL. Cost of pair sold, Ware house expenses, Marketing expenses, and Administrative expenses, all the 4 key contribute to Operation Cost. So, multiply your sales volume for the wholesale segment for each region by 1.2. As already mentioned, it is important that you ship all your shoes for the North American warehouses and the Latin American warehouses from the North American plant. And should I do stock repurchase this year? This Branded Distribution table of decisions seem to need more time. We get out of Year 17 with bad results in ROE because we expand too fast in that year. Even though this game is said to be a business simulation, get rid of the thought that all decisions have to make sense and be logical. unfortunately I have no experience with adjusting to my strategy in the late-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. 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. If you have more cash available, go ahead and spend it for either one of the other options. Several colleges and universities use the Business Strategy Game in teaching and learning strategic management at their schools of Business Management. View full document. Keep in mind that you are managing a multi-national company, and shareholders are not interested in dividends but the stock price. Look at the demand for each market, then divide each plant supply for each regional market. Your team will experience the challenge of coming up with a successful strategy, especially when frequently faced with changing competitive business environment. You will soon know why. If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). if you have left over inventory, you should either work on your numbers as I described in my post or put the left-over shoes into private-label. Hey!! This is probably the most important decision entry page in the game and you will be spending most of your time here. 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. After you have calculated the manufacturing volume for each region, add up your N.A. Try out different combinations that keep you at 8* and the highest possible net profit. 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. Almost done, the last decision page. . This means, without increasing your superior material or enhanced styling / features, you gain 1 star. And I would not build another plant, rather increase capacity in the plants that you already built. For the next five years from Year 18, we will continue: To provide highest quality branded athletic shoes to the global market at a competitive price. It is best to build only as much capacity as you can afford without taking any loans. If not, see what positive percentage yields the highest profit for you. No worries, it will be easier after the first few years. 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. Play with your numbers around and tweak them to generate maximum net profit. 14. 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. My guide follows the rule highest net profit is key to success. However, with a reasonable price. Thats one of the things you should never do because you can always use capacity. You can decide to sell or purchase available capacity, upgrade your plants, build new plants in other regions, or add capacity to already existing plants. You are now done with your private-label decisions and all significant decisions that affect your net profits. With increased competition, prices tend to decrease. And then I would just follow my tips and adjust all other values to maximize profits. Although we are still ranked 8th in the world and 1st in the. This has been very useful. Does it hurt any other factors? On this decision page, you can bid on celebrities. Moreover, this may be a lesson in the real world of business as everything comes with quality, models, and price. I will just adjust it first and see what happens, thanks a lot:). Then, just like you did before, plug in different values for your internet price and see, which price yields the highest net profit. Our company will provide its customers provide multiple choices in footwear that will satisfy any of their footwear needs. you should repurchase stock whenever you can. After you have found the right price, click the Save Decisions button. Then we can analyze business results to identify new marketing, production strategy. If you set your price lower, you will sell more but lose due to low profits. We also learn a lot from the BSG itself and from our class mates, other teams, even we compete in the games, but in order to run effectively, we have to look at our competitors to learn their strategies and we see what they did well or not very well, we learn by doing this. No matter the location, our goal is to satisfy our customers foot fashion desires and provide them with the best style and quality in footwear. With more inventory, however, you can put more shoes into private label which is a really important aspect of the game. 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 can check that before making decisions. 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. To do so, first plug in your N.A. Okay! Strategies, decision screens, reports and tests. You can know your strategy in several ways. Exactly. Working Conditions Improved Ventilation, Lighting, and Safety Continue Involves one-time capital investment of $3.0 million and increased administrative costs of $500k annualy per facility. The decision is due tonight I am so nervous but the performance score so far looks good. I would still go for the 50 models and make sure to buy or build capacity so you have enough for your private label. Paying dividends will increase your stock price and your ROE. This would leave you with a bunch of shoes unsold. Your numbers might be a little bit off due to the reject rates. One option that you definitely want to purchase is Option C. Option C increases your S/Q rating by 1 star. Also, we can upgrade NA in C and one other option. Yeah I will hold on to that for now. How did your 2nd decision go? We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. You want to setEthics Training / Enforcement to All Employees and Workforce Diversity Program to Yes. My group and I are about to complete year 17 for the game. After you have done this, you repeat the same procedure for Europe-Africa and Asia-Pacific with the A-P plant because it is cheapest to ship shoes from A-P to E-A. 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. Profit is crucial in the BSG game. (meaning I decreases it from $1.00 to $0.15). Recommendations for Improving the Image Rating in The Business Strategy Game However, you can successfully apply most of the following tips to either strategy. (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. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. I would like to ask you about the Dividends. Over Year from 15 to 18, ROE changes up and down 22.5, 18.2 then 20.0 then in year 17 down to 16.8 then up to 24.3 in Year 18. To this point, you are set to dominate your industry and win the Business Strategy game. im at year 17 and perfect score twice, 1st in last 3 years and 2nd twice. Which wholesale are you referring to? and L.A. volumes and finally plug them into the NA manufacturing slot. Do not focus too much on the market share but focus more on profits. I dont understand why it did this as this capacity was unused and there was upside to having it as my production was max out for the demand. You are playing the BSG but do not want to read the 35-page Players Manual? Our ROE fluctuated over the years due to expansion of factories, we now have paid all the old loans and have quite good cash in hand, we do not have to increase equity in next five years, at least we do not have to borrow for expansions. 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. So I run into problem again! Again, trying out different combinations and optimizing net profits is key for these values. On this screen, you can handle your financial decisions for your company. Hi. Theres everything explained in detail. This essay was written by a fellow student. in year 17-18-19 and 20). I believe it varies based on your games situation. Were at the middle of the pack and wanted the best strategy to move up the ranks. Also, we are doing better than in the past so interest rate is lower. On this page, you will optimize your entries and toggle each value until your reach the maximum profit possible for each entry. I was thinking about building a LA plant because I took the majority of private label there last year. If your team faces these kinds of challenges, seeking BSG help online could be the best option. 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. With respect to our employees well-being, our G-Brand Company intends is to continue its practices of investing in employee-development and utilize a compensation model that encourages our employees to work hard, while simultaneously striving to be more productive and efficient. So, after expansion of new factory in LA with 120 million, we reduce the number of shares to increase EPS. It is good to expand or build on the existing plants. NEVER do this. However, if you loose and the share price will go down. However, keep in mind that your regional endorsement value should not be higher than 400 in any region. 24.51 is low, we can reduce with good factory in AP so increase the margin to much higher. I wish you the best of luck for your game. 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 . But you need to identify your strategy first in the following three aspects: How can you identify your strategy? It will be, trust me. 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. Theres not right amount of capacity you should purchase. These strategies are easy to see in the real world of business. You are now all set to dominate your industry and win the BSG! Optimizing your values is the essence of the game, even though it might be very time-consuming. 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. My team and I are going to the second round of decisions, so I think were still on time to switch towards another area in the market. Company operations parallel those of actual athletic footwear companies. . How can the company lead the market in 10 years? The most crucial thing is the find out what prices your competitors have. 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. as I described in my post, Id go with the low models, maximum profit strategy as it is easy to follow and you determine the market. Now, decide to which region you want to ship your private-label shoes. Decades of experience in warehousing and distribution can be an incredible advantage. With revised strategy, G-Brand will focus on offering higher quality products, more models, more fashion, to be industry leader in cost for value. What should I do for year 12 and 13? However, I would recommend not taking out any loan if possible. However, if you need a few points for the image, consider using the Corporate Citizenship but take note of the expenses. Decide right time to upgrade factories or expand or build a new factory is a key to success. In next five years, G-Brand will be more competitive with production capacity at the top and also high quality with largest collection. ROE indicates how much profit is generated with the investments that shareholders made. Yes, its not too late yet to follow through with my tips. With our strategy in mind, I would recommend addition capacity to already existing plants rather than constructing a plant in a new region. I let the rest remain the same in the entry. G Brand has a Vision to establish a worldwide brand dedicated to innovative design and best provider in quality at reasonable prices, allow becoming a global leader in the athletic branded shoe market. I dont know why the game suddenly changed your numbers but I recommend using every last bit of your capacity. I am on my second year and I have negative income right now, any tips on how to get in the positive? Do not worry about the Plant Capacity / Upgrades page. Keep control of Private Label market with upgraded factories that can produce most of quality at lower cost than any competitors. After that, loot to the left of screen to check if we have high Net Profit. This means, you decide about the S/Q Rating of your branded pairs produced and your compensation and training for your employees. My stupidness did not know that I should not pay dividends when I am in 5-year-loan, so I did not adjust any part in Finance Cash Flow except for borrowing. The same accounts for your Change in Annual Base Wages and Incentive Pay values. That combined will give you a good boost for the last year. Here, you will plug in your previously calculated regional total sales volume for each region. Promise I wont have tons of question haha. Plant Capacity / Upgrades. The world's most streamed artist Bad Bunny, a Puerto Rican rapper, alone claims 8.3 billion streams. If you add capacity it will show you the price. With that, you can do the same over and over again, for every decision round. Furthermore, G-Brand will continue focus on what we are top leading like S/Q, models, strong advertising, retailer support, celebrities. Besides, you can set best practice training high, maybe at 5.000. Can you tell us more about the strategy you had ? Like in the real world, the BSG companies compete in the international market arena, selling branded and private-label athletic footwear in different geographic regions such as Europe-Africa, North America, Asia-Pacific, and Latin America. Check the Competitive Intelligent Report. Best-Strategy Invitational High-performing companies worldwide face off in a 2-week competition hosted 3 times a year by the BSG author team. After you have done this, you might notice that your Your Estimate of the Ind. Do this for all the four regions. 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. I would always encourage you to bid on available celebrities. Try out each and every value and note down the highest net profit values. In the first few years, this will be pretty difficult to determine. congrats on your success! Here, you will decide for how much your shoe is going to sell. However, do not forget to calculate your possible additional expenses for your celebrities. In the later years, when the cost in NA is high, we have built a new factory in LA, we can ship from LA to NA (eg. 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. Texas A&M University, Corpus Christi. The key factors need to be considers is Cost of Branded Pairs Sold, e.g. If you bid on multiple celebrities, it is good to set a ranking priority and a spending cap so that you do not spend more money than you want or have available. At Top Academic Writers, we have writers with experience in different fields be it in high school, college or university. 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. But do whatever is necessary to maximize your profits. Yeah I had that in the first weeks as well. As the CEO, you need the support of the other company managers. If it is 0%, that is fine as well, do not worry about it. Fin. You then want to select 0% as the Portion of the $XX mil. Graduates are expected to possess broad competencies like problem-solving, critical thinking, and cognitive skills when entering the job market. We need to control this better in next five years. It will be very helpful for us and will be very grateful Do you still have your upload reports of all your years ? And you can basically never have enough capacity for private label. You will get the hang of it after the first few decision rounds as it is always the same procedure. 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). I just have a quick question. So, play around and find the best combination for your given S/Q rating that yields the highest net profit. 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. However, my net profit is still negative even after i have adjusted the private-label. If you have beginning inventory from last year (you did not sell all your shoes), try and use the Inventory Clearance option in the lower half of the page. With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. Paying off these loans in advance has the advantage that you will pay less interest over the coming years. What is the companys differentiation strategy? With our strategy, you might want to think about getting Option A as well. Let me walk you through the various decision pages and explain you how to optimize each entry. Results in a one-time productivity increase of 100 pairs per year at each facility. After you have successfully plugged in your branded pairs that need to be manufactured for both plants, click the Save Decisions button and move on to the Branded Distribution page. All footwear You can also pay dividends to your shareholders. Annual leasing and maintenance fees of $1 million per distribution center/warehouse in each region Per. Five ways that warehouse strategy can benefit your business include: Inventory Management Accuracy Price Stabilizing Tools Technology for Packing & Processing Locations that Meet Your Needs Outsourcing to Fulfillment Services my advice would be to read my guide and follow the steps. Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. You will also receive a copy of Currency Made Simple. Hi! Therefore, the first set of decisions your team of managers makes is for year 11. Hi! You will also receive a copy of Currency Made Simple. After you have calculated your new regional wholesale sales volume, add the regional internet sales volume to it. It might be tedious work and consumes a lot of time, but it will definitely worth it and will let you win the BSG. Thats a relief. Hi Dennis. As always, do not forget to save your decisions after you are done. This game can be overwhelming, so anything to help other players! We are in shoes industry, so we can provide the differentiation with larger Collections. So I have plant in NA, EA and AP, but right now I am only using 70% of the capacity because the demand is quite small for me. Winning your Business Strategy Game is not easy as it involves wide-ranging decisions on various aspects of the companys operations. Learn how your comment data is processed. You might think that using green footwear materials or using recycled boxing / packaging is a good decision, especially with the currently ongoing environmental debates. For further explanation, please read my blog post. Leave everything else unchanged. Go ahead and try out which combination yields the highest profits. This can make Net profit quite simple, if we produce 12.000.000 pair of shoes, we will get about 144 million Net Profit. Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. The private-label market is a very nice opportunity to gain an advantage off your competitors and take their market share. But this year I have a lot of cash on hand, I upgraded my plant, should I also build the LA plant although I dont need that much capacity at the moment?
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