And profit is what the game is all about. After you have calculated your new regional wholesale sales volume, add the regional internet sales volume to it. 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. Check the Competitive Intelligent Report. Although we are still ranked 8th in the world and 1st in the. We need to adjust the number of productions to optimal these decisions. 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. Okay! 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. We have two plants in year 11, and growth rate of market is about 5-7%, during 10 years from year 11 to year 20 we will need to double may be triple production capacity. And then I would just follow my tips and adjust all other values to maximize profits. But if i decrease my model, I dont think I will be competitive enough to compete with him if he stays with his strategy, what do you think? Learn tips & tricks, from a BSG Grand Master! Currently, were selling 150 models. Please delete one if there is an extra comment. . The decision is due tonight I am so nervous but the performance score so far looks good. im at year 17 and perfect score twice, 1st in last 3 years and 2nd twice. We have quite large Total Shareholder Equity of 446,571. These include; Lowering the costs come with lots of benefits. We need to look at bottom line to see Cost of Pairs available for Sales. Besides, you can set best practice training high, maybe at 5.000. View full document. This is why building additional capacity is so important. Two of the most important things to do here are analyzing your competition and optimizing your values. PS: I left a comment, but I did not see it and thus retyped. You can lower the costs by increasing training and upgrading facilities. I adjusted a little bit and the forecast is now close to previous years. We are in shoes industry, so we can provide the differentiation with larger Collections. Okay! 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. G-Brand has been performing for many years Higher than Investors Expectation. But you need to identify your strategy first in the following three aspects: How can you identify your strategy? The Business Strategy Game (BSG) comes in handy as a realistic representation of the actual practices in a virtual setup. Again, trying out different combinations and optimizing net profits is key for these values. So the question is: would you recommend for my team to still increase capacity despite this fact? you should repurchase stock whenever you can. Recommendations for Improving the Image Rating in The Business Strategy Game Everything else like earnings per share (EPS), return on equity (REO), and image rating (IR) will automatically follow. Key pharmaceutical distribution warehouse questions to ask a 3PL. If it is 0%, that is fine as well, do not worry about it. I have extra capacity in the LA plant (worst place to ship from to any place outside of LA) which I tried to sell off. Right now I am doing the second year decision, Im doing star 8 and 100 models, did 7 stars and 100 models in first round and the result was not very good. Largest network of retailers around the world. Increase models? Can you tell us more about the strategy you had ? That is overall good. What is the companys differentiation strategy? Im glad I was able to help and good luck to you! Let us take a look at the Plant Capacity / Upgrades page first. 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. Concerning changing others values, I recommend reading my initial post where I have explained everything in detail. You will also receive a copy of Currency Made Simple. 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. I would definitely increase your S/Q rating to 8* and lower your models to 50 (this should be the lowest you can go if I remember correctly). 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 So, multiply your sales volume for the wholesale segment for each region by 1.2. This requires an overhaul of teaching practices and learning techniques that cater to the changing economic trends. That being said, when you go with the strategy explained in my post, you will have maximized profits. Hi Yvonne. For example, a WMS can: Another important indicator of profitability is the return on equity (ROE). I would always encourage you to bid on available celebrities. Unlock this data. Almost done, the last decision page. You should pay attention that your S/Q Rating of Branded Pairs Produced matches your value on the Sales Forecast page. Percentage of Superior Materials, Number of Models, Enhanced Styling / Features, TQM / Six Sigma Quality Program, and Best Practices Training all affect the S/Q Rating. Moreover, you can benefit from Business strategy game help where professional BSG players have many years of experience. When we do so, look at estimations to keep control of ROE and EPS. This is the key to affect our strategy in the next five years. You can still ship pairs from LA to somewhere else if needed. 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. We have never looked in very details of business management like sales margins or even a few percent of market shares. Thank you so much! I recommend building additional 1,000 capacity for the North American plant in the first year, if your cash balance allows it. I like to have around $8-10 million ending cash available after all my decisions are made. View Distribution & Warehouse.pdf from MGMT 5355 at Texas A&M University, Corpus Christi. However, when pricing your shoes, keep in mind to set the price at least $5 below the wholesale price average. 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? Hey!! 11/4/2016 1/2 I . So I run into problem again! 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. If numbers do not add up correctly and your total pairs shipped do not match your total pairs available, go back to the Branded Distribution page and adjust your numbers accordingly. No worries, it will be easier after the first few years. Besides, you can lower the cost per pair of shoes. If you find capacity available for purchase, I would always directly purchase it. By clicking on the Purchase Capacity button, you can see whether someone else did the mistake and sold capacity. I wish you the best of luck for your game. We can check that before making decisions. Key Term business strategy game year 11 decisions; This preview shows page 1 - 2 out of 2 pages. 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%. Do that by answering the following questions? However, the private-label market is set up the way that only a limited demand is given each year. Be careful: Sometimes, especially for advertising, numbers that are way off (for example $100 and $8,000) can yield about the same net profit with only a little difference. This is probably the most important decision entry page in the game and you will be spending most of your time here. Download the iOS With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. 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. 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. Learn tips & tricks, from a BSG Grand Master! I only ever paid attention to my profits and I never ever sold capacity. I guess because i grew too fast last week, this weeks net profit is negative (I didnt make any adjustment yet). In the first few years, this will be pretty difficult to determine. 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. 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. 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. 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. 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. 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. Plant Capacity / Upgrades. However, do not forget to calculate your possible additional expenses for your celebrities. The Business Strategy Game is a simulation game that allows players to experience the complexities of running a business. Optimizations are the last task you can do before finalizing each year. I would look at the Margin Over Direct Costs value at the very bottom of the page to see where it is most profitable to ship your shoes to. You will get the hang of it after the first few decision rounds as it is always the same procedure. BSG Guide - How to Win the Business Strategy Game.pdf. Should you have excess capacity, consider this market and manufacture at full capacity. This can be a very tricky decision and you need to analyze your competitors prices. Dont forget to upgrade your plants as a strategy. Repurchasing stock will boost both your EPS and ROE. 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! Never give up, we can always find a good way to improve a company, despite its position in a market. Total Wholesale Marketing is 12.92 is good now, we will keep maintaining strong marketing to get higher sales volume. It is important to toggle your values and find the best combination to maximize your net profit. You dont have to care about your retail outlets anymore so adjust the price so maximize your net profit, without the 40% rule. With that, you can do the same over and over again, for every decision round. The same accounts for your Change in Annual Base Wages and Incentive Pay values. Hi, Im glad to hear that it helped! 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. Winning the BSG game is essential. If you found your highest value for the best net profit, move on to the next value and do the same. Hi! If you tweak those numbers, your demand will adjust accordingly. Graduates are expected to possess broad competencies like problem-solving, critical thinking, and cognitive skills when entering the job market. Let us move on to the tricky part of this decision page. 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. Most of the decisions you can make here are a waste of money and will not benefit your company. Should I continue expanding NA or AP and by how much? Try to move away from your competitors if they are applying the same strategy. If you demand for branded production is met, put everything else into private label to make sure you dont have unused capacity. Hence, find the combination that gives you the highest profit. My question is what if I decreased the pay dividends to $0.15 from $1.00? I did not forget it, but we will take a look at it later. You said that the internet price should be 40% above wholesale. 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. It sometimes works. Hi Lee, 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. 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. Yes, I would only add capacity onto existing plants and not build new plants. In the first year (Year 11), you only have two factories, and you need to distribute to four markets. We were actually thinking on building capacity in LA for next year, however, two of the other teams already built capacity for 6,000 pairs in total (we are only 4 teams in total). construction cost to be financed with debt. This is the case of iPhone or any other high end products are bringing values to customers such as cars and fashions. Theres everything explained in detail. We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. As such, you can play the game frequently, any time you get it interesting. Entering year 15 I am still doing 8 star but the demand forecast is super low. Looking at Company Operating Report, Marketing and Admin, Private Label, we also need to focus on reading and understanding Business and Financial Statement. Often provided as part of an integrated enterprise resource planning (ERP) suite of business applications, a WMS can support and help to optimize every aspect of warehouse management. With revised strategy, G-Brand will focus on offering higher quality products, more models, more fashion, to be industry leader in cost for value. Several colleges and universities use the Business Strategy Game in teaching and learning strategic management at their schools of Business Management. Now you begin to understand why I earlier said, that if you use overtime for branded production, you should expand your plant capacity for the next year. 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. Let me know if you have any more questions. I started with paying $0.05 dividends and increased it by $0.05 every year. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. 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 am having trouble getting my company back into the positive ending cash after taking out a loan. Do you have any suggestions? Net Profit must over 110 million every year to keep ROE higher than 25% or more. Then we can analyze business results to identify new marketing, production strategy. (0 for both stock issues and stock repurchase). But again, thanks! In the Private-Label Production field, use all your remaining available capacity, even overtime. This essay was written by a fellow student. Set your price to whatever maximizes your profits. Market share is not crucial for your success in the BSG, but profit is. I started with 250 models and S/Q rating of 5. 14. 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. Decades of experience in warehousing and distribution can be an incredible advantage. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. You do not want that to happen, especially because your internet sales only account for a small percentage of your entire sales. Annual leasing and maintenance fees of $1 million per distribution center/warehouse in each region Per. total sales volume estimate into the Branded Pairs to be Manufactured in Year XXslot for North America, write down your reject rate and add it to your previous total N.A. So, after expansion of new factory in LA with 120 million, we reduce the number of shares to increase EPS. 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. The company that offers the lowest price will sell all its supply first, followed by the company with the second lowest price offered, and so on. First, set your Number of Models to 50, as determined earlier at the Sales Forecast page. In 2020 digital game sales outpaced physical sales for the first time. You are playing the BSG but do not want to read the 35-page Players Manual? You can only do one upgrade at a time in each region and a total of two updates per region. . If you have more cash available, go ahead and spend it for either one of the other options. . Here, you will plug in your previously calculated regional total sales volume for each region. Sorry for the late reply.. Been starting my new job and working a lot lately. Any advice? You now have an estimate of how many shoes you are going to sell in each region. It almost worked TOO WELL. What I like about my strategy is that you do not necessarily have to keep an eye on your competitors. 7.39 to 12.81 over last three years, much higher than Investor Expectation of 4.3. It might be tedious work and consumes a lot of time, but it will definitely worth it and will let you win the BSG. Select +2% for the Percent Change in Competitive Impact of All Other Factors from Previous Year. Should you win, it would mean your tips are more favorable, and your competitors may learn from you. Furthermore, G-Brand will continue focus on what we are top leading like S/Q, models, strong advertising, retailer support, celebrities. This can have a positive impact on energy levels and your overall health. However, it will also decrease your ending cash. Do this for all four regions. Like I said before, you should be building capacity, yes. I have experienced different behavior with bidding on celebrities. Purchasing capacity is 20% cheaper than building new capacity on your own. So far I have only build a 1000 EA plant and additional 500 NA plant. If your team faces these kinds of challenges, seeking BSG help online could be the best option. . Do not worry about your market share percentage or any other value than your net profit. Again, maximizing net profit is all you care about with our strategy determined at the beginning. Here, you will decide for how much your shoe is going to sell. Do not worry about me skipping the Internet Marketing, Wholesale Marketing, and Celebrity Endorsements pages. Keep in mind that you are managing a multi-national company, and shareholders are not interested in dividends but the stock price. Strategic warehousing impacts all warehouse operations, from inventory management to order fulfillment. 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. And Im so thankful for your post!!!!!!!! Then, just like you did before, plug in different values for your internet price and see, which price yields the highest net profit. At Top Academic Writers, we have writers with experience in different fields be it in high school, college or university. In my opinion, I believe the other teams are thinking on exploit the private label. Business Strategy Game - Week 5 (Year 14) Commissar BRO 9.95K subscribers 10K views 6 years ago And so we creep into Year 14. You basically determine and run the market. 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. My group and I are also playing the new version of the game and were little bit lost. Do you know why is that? Texas A&M University, Corpus Christi. I never really watched my EPS or credit rating (ofc credit rating should be a B at least). 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. Also, I suggest not decreasing your dividends. In todays education system, developing students with a high level of competencies and capabilities is a challenging task for every instructor. I cant seem to find it. We need to keep continue going up to expand and to create new markets. They have all changed by +2%, just as you plugged it in. The ROE in Year 18 is good back to 24,3% compared with Investor Expectation of 15%. Higher Net Profit is a key to win the BSG Online Game. How can the company defend the position if you are leading? 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. or A-P plant. 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 the governments of Canada, Mexico, and the United States that entered into force in January 1994. Therefore, the first set of decisions your team of managers makes is for year 11. After you have calculated the manufacturing volume for each region, add up your N.A. 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. We note to see Return on Equity, so keep Total Equity lower than increase Ratio of Net Profit. I usually go ahead and plug in whole dollar amounts for the wholesale price and see how net profit changes. So, should I decrease pay dividends here to $0.15? 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. The private-label market is a very nice opportunity to gain an advantage off your competitors and take their market share. Fin. Your estimate of the industry average for the internet retail price does not change with your adjusted competitive that you set to +2% before. Exactly. 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. So for the last year I didnt stick to the rule that the internet price has to be 40% higher than the wholesale price. Its not too bad, no worries. You will not have any complaints about the quality of the assignments we deliver. 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. No worries, this is logical and you did nothing wrong. That combined will give you a good boost for the last year. You always want to make sure that you produce your sales volume for N.A. For only $35, get instant access to the Business Strategy Game Guide. Avg. values have changed. What should I do for year 12 and 13? We also thank the Professor and creators of BSG Online to give us a good environment to learn, to practice with full of knowledge, competitions and emotion close to business life. In Y12, I paid early payment 12,000k at 8.5% and continued borrowing 70,000k at 4.5% for 5-year). Keep focus, year 17, we over sleep in Victory, and ignore competitors. Learn how your comment data is processed. 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. 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. However, my net profit is still negative even after i have adjusted the private-label. Each decision period in the BSG represents a year, and the company you will run began its operations 10 years ago. Our G-Brand Company will continue to pursue its existing High Quality Average Price Large Collection strategy; However, to increase its market share and thereby increase revenue, our company, focus on Net Profit to increase ROE. We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. Moreover, this may be a lesson in the real world of business as everything comes with quality, models, and price. If this is still not enough, add the missing shoes to the other plants Branded Pairs to be Manufactured in Year XX number.
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