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Business Strategy Game, BSI analyzed

Business Strategy Game, BSI analyzed

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Published by Frederic_Pattyn
This document has been written by http://www.BsgConsultancy.com
and provides an in depth analysis of all 255 industries that ever played (2005-2011) the BSI. There the topic that is taken into scope: production decisions!!

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This document has been written by http://www.BsgConsultancy.com
and provides an in depth analysis of all 255 industries that ever played (2005-2011) the BSI. There the topic that is taken into scope: production decisions!!

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Published by: Frederic_Pattyn on Oct 04, 2011
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01/25/2013

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BSI Analyzed
Production Decisions
Based on the 255 industries that battled each other
between 2005 and 2011 in the ‘Best Strategy Invitational’. Here you get more information about the
production facilities; there location, their capacity andmore.
Senior Partner, Pattyn Frédéric
 
BSI Analyzed
 
BsgConsultancy.com Senior Partner, Pattyn Frédéric Pagina 2
M
ETHODOLOGY 
The
Best Strategy Invitational
has been around for a couple of years now. This is the game where
Industry Champions
from all over the world battle it out to become
Grand Champion
.Throughout the many years this international competition has been played, there were 255industries, with each one winner over the period of 2005 and 2011.For this paper, the decisions of each winner of each industry have taken into account. Thatmakes that the population is 255 Grand Champions. The main documents that have been usedare the footwear industry reports of year 20 of each industry that can be found on www.bsg-online.com.The needed data has been imported into excel where statistics did therest. When talking about the amount of produced pairs of shoes; all graphs are x1000.
T
OPIC
:
 
P
RODUCTION
 
One of the most important decisions the managers need to take is; where are we going toproduce our shoes and how much? This is important because the whole industry starts with 2plants; one in NA ( capacity of 2.000.000 pairs ) and one in AP ( capacity of 4.000.000 pairs ). Why is this important? Well because this has an impact the future production cost of yourshoes, the possibility to shield your company from elevating exchange rates and import/exporttaxes, the efficiency of your distribution,
all of this taken into account will determine of youcan hold your ground while fighting for market share.
How many plants should I own?
This question in fact depends on your strategy: specializing in one or two facilities, ordiversifying your activities in 3 or 4 facilities. The only thing I can stay is: the average is 2.65plants.
What to do with your plant in NA?
In general there are 3 possibilities; sticking to the status quo, selling it, boosting it up to be your main production facility. When analyzing the figures, it
s clear that most great players see the plan in NA as a financialburden. This can be concluded by the observation that 50% liquidates his assets there.
 
 Year # industries
May/April August December
2011
11 9
2010
15 7 6
2009
33 14 7
2008
27 13 14
2007
15 20
2006
20 22
2005
10 12
255
 
BSI Analyzed
 
BsgConsultancy.com Senior Partner, Pattyn Frédéric Pagina 3
54%26%20%>80004000-8000<4000
But what can be said about the Grand Champions that decided after all to stick with their plantthere?11% of them considers their NA plant theircore business because they increase thecapacity of it to nearly the maximum(<8000), furthermore, the capacity of thisplant surpasses always the capacity of theother locations.Most of them (54%), increase the capacity of their plant, but, nearly never favor thisfacility to be their number one productionsite.Somewhat more than a third, prefer thestatus quo.Of all players that kept their facilities in NA, the average production capacity is 4.200.000pairs, this means they doubled their capacity over the 10 year.
What to do with your plant in AP?
Besides your starting plant in NA, you have a newer, more efficient one in Asia as well. What todo with that plant. Well, the figures are clear: you would be an idiot to sell it. Each and every Grand Champion has kept his plant and tried to make it a goldmine.It
s clear that most of them (54%) try tomaximize the inherent potential of thisplant and using it for economies of scale.More than a quarter of the population doesin fact try to expand the capacity of thisplant to support their future or currentproduction needs.For me the strangest observation is the factthat 1 out of 5 Grand Champions thinks
it’s a
 good idea to not only stand with a statusquo, but even go further and sell a part of his plant
  When checking the average size of the APplant, we can say without any doubt that it is by far the most important plant of all with its7.800.000 pairs. This means that, on average, that here as well, the capacity of the plants hasdoubled up throughout the year. Furthermore, this plant provides 50% of all the needed shoesfor the company because the average size of the whole production capacity of the population is14.800.000 pairs.
11%54%35%> 80003000-8000<3000

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