We also ship from AP to EA, AP and some to LA. However, do not price your shoes too high, so that your competitors have a lower price than you and will sell their shoes first. Try out each and every value and note down the highest net profit values. 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. 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. It makes sense; the more ads you run, the more your celebrity endorsement will be seen and the more effective it is. I would like to ask about the Pay Dividends. My stupidness did not know that I should not pay dividends while Im in LOAN mode. Definitely helps! 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. You and your co-managers are taking over the operation of an athletic footwear company that is in a neck-and-neck race for global market leadership, competing against rival athletic footwear companies run by other class members. Yes, its not too late yet to follow through with my tips. thank you:). We need to keep track of cost in more details in next years. You will need those numbers later on. 14. Free shipping will most likely not increase your profits. View Adopters Arthur A. Thompson, Jr. John R. Miller Professor Emeritus What are the core competitive advantages? I did not stock issues or issue purchase in the those years. If you found your highest value for the best net profit, move on to the next value and do the same. One week they might increase, the other they might increase by just a little or even decrease. With remaining the cash on hand, try to buy back stock, pay off your loans from the beginning of the game, pay back dividends, and upgrade your plants. While this was driven . The Business Strategy Game (BSG) comes in handy as a realistic representation of the actual practices in a virtual setup. Models Available weighted average Wholesale Wholesale Price to Retailers span Marketing Brand Advertising (5000 Decisions Mail-in Rebate 9 to $15 por part Delivery Time (1 to 4 wek delivery Retailer Support (50 to $10000 Retail Outlets witing to cry your brand Marketing variables de termined by prior year Celebrity Appeal am creeper However, traditional warehouse management systems are not designed with the flexibility or technology capacities to address ongoing challenges in the . Increase S/Q ratings? You will get the hang of it after the first few decision rounds as it is always the same procedure. 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. This support strategy of expansion and getting high Sales, Higher Net Profit and higher market shares. ROE indicates how much profit is generated with the investments that shareholders made. More than two groups following the same strategy suffer the same difficulties since they create direct competition among their target market. Again, try out each percentage for each region and set it to the percentage that yields the highest profits. Advantage of this is, that you dont have to pay too much attention to your competitors. . 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. That being said, when you go with the strategy explained in my post, you will have maximized profits. We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. Okay! In the above example, we ship from NA factories to NA and LA. When we do so, look at estimations to keep control of ROE and EPS. Thank you very much for your kind words! Decades of experience in warehousing and distribution can be an incredible advantage. I never really watched my EPS or credit rating (ofc credit rating should be a B at least). My group and I are about to complete year 17 for the game. In the first few years, this will be pretty difficult to determine. The key factors need to be considers is Cost of Branded Pairs Sold, e.g. Is it too late to reduce that to 50 as you suggested in your recommendation? The most crucial thing is the find out what prices your competitors have. 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. That is regardless of the low price, high quality, or variety of models. 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. If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. Net Profit must over 110 million every year to keep ROE higher than 25% or more. How can the company jump over other competitors? Then we can analyze business results to identify new marketing, production strategy. Hence, find the combination that gives you the highest profit. Again, trying out different combinations and optimizing net profits is key for these values. As always, do not forget to save your decisions after you are done. Thanks a lot! However, the private-label market is set up the way that only a limited demand is given each year. I am so thankful for your post!!!!!!!!!!!! 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. Your interest rates depend on your credit rating and the duration of your loan. However, keep in mind that your regional endorsement value should not be higher than 400 in any region. This is very helpful. I started with paying $0.05 dividends and increased it by $0.05 every year. But keep in mind the risk of jumping up or going down with the high bid price. Ship all the other shoes for the Europe-African warehouses and the Asia-Pacific warehouses from the Asian-Pacific plant. If you have any questions, feel free to come back and ask them. In the first years, the estimate of the industry average might be a little off the +2%. To do so, first plug in your N.A. To win BSG game simulation, you need to follow some ingenious tips that are essential business strategy game tips that your team should focus on: Business Strategy Game simulation isnt easy to win, but if you work with these ingenious tips, you can make profits and win your BSG game without a hassle. Play with your numbers around and tweak them to generate maximum net profit. 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. you should repurchase stock whenever you can. Learn tips & tricks, from a BSG Grand Master! I will talk about the Celebrity Endorsements page later. 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. It is all about trying out all possible combinations. Paying dividends will increase your stock price and your ROE. Texas A&M University, Corpus Christi. Sometimes, clearing your beginning inventory at a discount will boost your profits. 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. Especially with our high quality and low models strategy, this will be very beneficial and will safe you some money. You might have the highest profits with 0 advertising budget. I would then adjust the Percentage of Superior Materials to whatever is needed to match my S/Q Rating with the value plugged in on the Sales Forecast page. In 2020 digital game sales outpaced physical sales for the first time. 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. After you have done this, play around with the values for Wholesale Price, Advertising Budget, Rebate Offer, and Retailer Support (increase/decrease by 100s only, as everything else makes no sense). Ideally, you can cut your employees wages and will increase profit. You are playing the BSG but do not want to read the 35-page Players Manual? Go ahead and try out which combination yields the highest profits. This is a good lesson in class that can be valuable in life. And you can basically never have enough capacity for private label. However, it is not necessary and Option C is definitely more effective. 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. We will get ROE higher soon, and faster than other competitors. This game can be overwhelming, so anything to help other players! I guess because i grew too fast last week, this weeks net profit is negative (I didnt make any adjustment yet). Distribution Warehouse Business's typically involve a much greater degree of movement than other lines of work. Two of the most important things to do here are analyzing your competition and optimizing your values. For only $35, get instant access to the Business Strategy Game Guide. Company operations parallel those of actual athletic footwear companies. How can the company defend the position if you are leading? The Business Strategy Game provides your team with the opportunity to discuss the real business issues while working together to assess the options and make decisions linked to the overall company strategy. Also, G-Brand need to keep high market shares, year 17 market shares are reduced, but G-Brand has get back to Top in Year 18. I personally would not bid higher than $5,000 $6,000. Go up and down each decision a couple of times to get the optimal profits. 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. This has been very useful. Your estimate of the industry average for the internet retail price does not change with your adjusted competitive that you set to +2% before. You can know your strategy in several ways. We will keep the largest market shares in Internet Sales. You will also receive a copy of Currency Made Simple. This is because your competitors are adjusting and trying to find their strategy. G-Brand has been performing for many years Higher than Investors Expectation. I wish you the best of luck for your game. 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. I would still go for the 50 models and make sure to buy or build capacity so you have enough for your private label. or A-P plant. You basically determine and run the market. Like I explained in my blog post, do everything that is necessary to increase and maximize your net profits. In the first year (Year 11), you only have two factories, and you need to distribute to four markets. The same accounts for your Change in Annual Base Wages and Incentive Pay values. 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. in years 13-14-15. Repurchasing stock will boost both your EPS and ROE. The information is these guides is laid out, and displayed, in such a way that crucial decisions should be a breeze. In addition, your Retail Outlets values should always be the highest number possible that you are allowed to enter. Strategies, decision screens, reports and tests. Should you have excess capacity, consider this market and manufacture at full capacity. 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. If so, we need to start building a new factory in LA, eg. Thats a game changer!! We note to see Return on Equity, so keep Total Equity lower than increase Ratio of Net Profit. So when following the steps described above, you will have positive ending cash really soon again. However, you must tie your values and settle for the best combination to optimize your net profit. Thats a relief. Find ways to break the inertia. Looking at Company Operating Report, Marketing and Admin, Private Label, we also need to focus on reading and understanding Business and Financial Statement. $50.66 but $50.67 gives you higher profits, go for the higher prices. Buy I have quite a lot ending cash. Does it hurt any other factors? Let me know if you have any more questions. Its not too late to do that yet. im at year 17 and perfect score twice, 1st in last 3 years and 2nd twice. 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. I was wondering how much more additional capacity that I should purchase after Ive bought the first 1000 for NA. Sounds good, congrats! Hi Dennis. This can have a positive impact on energy levels and your overall health. These include; Lowering the costs come with lots of benefits. If it is lower than 40%, your wholesale price will be in competition with your internet price. We will upgrade new factory in LA to produce top high quality shoes with C options an B for large quantity. Again, maximizing net profit is all you care about with our strategy determined at the beginning. Business Strategy Game - Week 5 (Year 14) Commissar BRO 9.95K subscribers 10K views 6 years ago And so we creep into Year 14. While they might boost your image rating, they will decrease your profit. Set your price to whatever maximizes your profits. Promise I wont have tons of question haha. In year 18, end of the game, G Company has more than 150 million Cash in hand, so we pay old loans to get A+ Credit Rating. Let us move on to the tricky part of this decision page. Results in a one-time productivity increase of 100 pairs per year at each facility. 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. In todays education system, developing students with a high level of competencies and capabilities is a challenging task for every instructor. Thank you so much! 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. In the upper left box, you have available sources of additional cash. When you found the best combination to produce your shoes at the lowest cost possible while meeting the S/Q rating requirement, move to the Private-Label Bids section. First, set your Number of Models to 50, as determined earlier at the Sales Forecast page. For further explanation, please read my blog post. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. From round 2, there is a risk that other groups can set the same strategy with the winner can be you. So I would recommend you to decrease your models to 50 and remain at 8* for most of the time, if not even for all the remaining game. And should I do stock repurchase this year? After you have found the right price, click the Save Decisions button. Your numbers might be a little bit off due to the reject rates. What I like about my strategy is that you do not necessarily have to keep an eye on your competitors. Before you even start plugging in any numbers, it is important that you decide for a strategy to pursue for the game. We are in shoes industry, so we can provide the differentiation with larger Collections. We get out of Year 17 with bad results in ROE because we expand too fast in that year. More capacity also brings down your costs. No worries, it will be easier after the first few years. congrats on your success! 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. Even more important is, to stick to it! Furthermore, G-Brand will continue focus on what we are top leading like S/Q, models, strong advertising, retailer support, celebrities. And I would not build another plant, rather increase capacity in the plants that you already built. Do this for all the four regions. If it increases your profits, leave it at Yes, otherwise set it to No. So for the last year I didnt stick to the rule that the internet price has to be 40% higher than the wholesale price. In Year 18, we have increased ROE to 26.3% vs. IE of 15%. Find out how much you want to bid for each celebrity. The BSG tends to underestimate those values by about 20% and hence, you need to correct them for a more precise estimate. Company operations parallel those of actual athletic footwear companies. With our strategy, you might want to think about getting Option A as well. This Branded Distribution table of decisions seem to need more time. You almost can never have enough capacity because what you dont sell in branded, you can sell in private label and dumb prices there and take away your competitors market share. The demand depends on your retails, price and quality. 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. However, if you experience difficulty winning your game, type Help with My BSG. You will get professional from BSG game help. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. I believe it varies based on your games situation. G-Brand continue to be a good steward of the environment and social responsibility. Do not worry about those numbers, they will just show you whether your investment is profitable or not. I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. This can be a very tricky decision and you need to analyze your competitors prices. 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. Also, I suggest not decreasing your dividends. Market share is not crucial for your success in the BSG, but profit is. 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. It typically keeps increasing until a certain price point and then starts to drop. These three strategies can help. Your Delivery Time should be set to 3 weeks. Hi there! Its a lot of trial and error until you find the best possible value and it takes a lot of time at the beginning. and L.A. in North America to reduce costs because ofNAFTA. Check the Competitive Intelligent Report. Our EPS increase fast from 7.36. 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. If not, see what positive percentage yields the highest profit for you. We will build new Plants in LA, keep focus on different segments, high and very high quality. Hence, it should be your goal to price your shoes lower than everyone else and take their market share so that other companies will not sell any private-label shoe in this region. And then I would just follow my tips and adjust all other values to maximize profits. Unlock this data. Please delete one if there is an extra comment. Graduates are expected to possess broad competencies like problem-solving, critical thinking, and cognitive skills when entering the job market. However, my net profit is still negative even after i have adjusted the private-label. we are having a horrible time of having left over inventory .. we are in year 13 and our numbers are ok we were 1st place last on year 11 and second place on year 12 but i having a feeling we have been focusing so much on our current numbers we arent going to end well any advise on what we should do on inventory and other sections of the game. As the CEO, you need the support of the other company managers. 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. We do not focus on rebate, time of delivery. One option that you definitely want to purchase is Option C. Option C increases your S/Q rating by 1 star. For only $35, get instant access to the Business Strategy Game Guide. When contracting a celebrity, your advertising efforts in the Sales Forecast section should not be low. But do whatever is necessary to maximize your profits. You then want to select 0% as the Portion of the $XX mil. As such, you can play the game frequently, any time you get it interesting. Do you know why is that? So I doubt on his strategy. If your results in the first year are not too good, its not a big deal. The company operations run parallel to those of actual athletic footwear companies. 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. Paying off these loans in advance has the advantage that you will pay less interest over the coming years. Keep track of total Net Profit to have enough money to build new factory, or we can always borrow to do so. After you are done, move on the left side and do the same for your internet sales. Also do you know the cost of building additional capacity. It is definitely around 1.2 though and I recommend starting off with this value. G-Brand will continue to make all efforts to use good materials which environment friendly. 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. All you have to do now, is writing down your forecasted Regional Sales Volume for both the Internet Segments and Wholesale Segments in all four regions. Theres not right amount of capacity you should purchase. Economic Impact of Hurricane Harvey and Hurricane Irma, Temporary Oil Price Changes Hold Back Consumer Spending. I mainly looked at what they were doing in the private label sector. I did not forget it, but we will take a look at it later. 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. I adjusted a little bit and the forecast is now close to previous years. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. At the lower half of the page, you also determine how many branded pairs you want to manufacture in each region you have a plant. Select +2% for the Percent Change in Competitive Impact of All Other Factors from Previous Year. Most players play hard from the first round, thus increasing S/Q, the number of models, reduce the price, putting for advertisement three times higher than average, and bidding for celebrities. However, you can successfully apply most of the following tips to either strategy. Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. 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. In the upper right box, you can spend your excessive cash. 3/29/2021 BSG Decisions & Reports Projected Year 12 Performance Scoring Measures EPS (earnings per . We need to adjust the number of productions to optimal these decisions. 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. If Im wrong, Ill post another comment. Keep in mind that you are managing a multi-national company, and shareholders are not interested in dividends but the stock price. This way, you get a clue on the actual standing of the company entering into year 11. 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. You basically do the same thing over and over again, for every decision round. Quiz 2 Chapters 1 an 2.docx. Helped me get to the second place! Decide right time to upgrade factories or expand or build a new factory is a key to success. You are now all set to dominate your industry and win the BSG! Write down each regions reject rates and add them up to the regions estimates sales volume. While those two values do not change your S/Q rating, they will change your net profits. In this blog post, I will run you through everything important that you have to know about the BSG and how to win it. Then, you want to plug in your L.A. total sales volume estimate into theproductionslot for North America as well and add up your reject rates. Here, you will plug in your previously calculated regional total sales volume for each region. What should I do for year 12 and 13? in year 17-18-19 and 20). If you add capacity it will show you the price. However, if you need a few points for the image, consider using the Corporate Citizenship but take note of the expenses. This way, it becomes a living guide for decision-making for the entire company. I followed your recommendations, and I have a good rank. 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. It is good to expand or build on the existing plants. However, the challenge is in crafting and executing a competitive strategy that delivers a respected brand image, keeping the company in contention for an international market leader, produce a good financial performance as that is measured by the earnings per share, return per share, return on investment, stock price appreciation, and credit rating. Also, we are doing better than in the past so interest rate is lower. I still think its a waste to build a plant there, unless youre selling tons of shoes (high models, mid SQ). Do not worry about your market share percentage or any other value than your net profit. Were at the middle of the pack and wanted the best strategy to move up the ranks. Do this for all four regions. Sorry for the late reply.. Been starting my new job and working a lot lately. If you have more cash available, go ahead and spend it for either one of the other options. It almost worked TOO WELL. 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? I have experienced different behavior with bidding on celebrities. Download the iOS But this year the shipping is too high from AP to LA so I cannot make any money from LA. Total Admin Expenses is very low, just 1.49 per pair of shoes. You said that the internet price should be 40% above wholesale. 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? I hope that helps and good luck! Toward that end, it put in place responsible environmental policy that ensures more decisions for community. To this point, you are set to dominate your industry and win the Business Strategy game. Q&A. Whenever you change and sharpen any decisions, you should keep track of your net profits.
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