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T HE B USINESS S TRATEGY G AME Overview and Orientation

THE BUSINESS STRATEGY GAME

Overview and Orientation

What Is

Business Strategy Game ?

BSG

What Is Business Strategy Game ? BSG
What Is Business Strategy Game ? BSG

What Is The Business Strategy Game ?

  • BSG is an online exercise where you manage an athletic footwear company in competition against companies run by other class members.

  • The marketplace is worldwide production and sales activities can be pursued in 4 regional markets:

What Is The Business Strategy Game ?  BSG is an online exercise where you manage
  • And in each region there are 3 market segments: Internet Segment (online footwear sales direct to retail customers) Wholesale Segment (footwear sales to local retailers) Private-Label Segment (unbranded sales to large retailers)

What Is

Business Strategy Game ?

BSG

is

an

online

exercise

where

you

manage

an

athletic footwear company in competition against companies run by other class members.

What Is Business Strategy Game ?  BSG is an online exercise where you manage an

You need to be

BIG

What Is

Business Strategy Game ?

BSG

is

an

online

exercise

where

you

manage

an

athletic footwear company in competition against companies run by other class members.

What Is Business Strategy Game ?  BSG is an online exercise where you manage an

You need to be

Leader

What Is

Business Strategy Game ?

BSG

is

an

online

exercise

where

you

manage

an

athletic footwear company in competition against

companies run by other class members.

What Is Business Strategy Game ?  BSG is an online exercise where you manage an

You need to be

On

The

Top

What Is

Business Strategy Game ?

BSG

is

an

online

exercise

where

you

manage

an

athletic footwear company in competition against companies run by other class members.

What Is Business Strategy Game ?  BSG is an online exercise where you manage an
What Is Business Strategy Game ?  BSG is an online exercise where you manage an

Only 1

Winner

What Is

Business Strategy Game ?

BSG

is

an

online

exercise

where

you

manage

an

athletic footwear company in competition against companies run by other class members.

What Is Business Strategy Game ?  BSG is an online exercise where you manage an

You need a

Team

What Is The Business Strategy Game ?

  • BSG is an online exercise where you manage an athletic footwear company in competition against companies run by other class members.

  • The marketplace is worldwide production and sales activities can be pursued in 4 regional markets:

What Is The Business Strategy Game ?  BSG is an online exercise where you manage
  • And in each region there are 3 market segments: Internet Segment (online footwear sales direct to retail customers) Wholesale Segment (footwear sales to local retailers) Private-Label Segment (unbranded sales to large retailers)

What Is The Business Strategy Game ?

4 regional markets:

3 market segments:

Company Situation

  • All companies start out in the same position with equal sales volume, market share, revenues, profits, costs, and so on.

  • Each decision-making round represents one year of company operation.

  • There are 10 years of history and you will assume management of the company beginning with Year 11.

  • In Year 10 the company had:

Sales Revenues of $238 million Net Profit of $25 million Earnings Per Share of $2.50

Return On Equity of about 17% a Stock Price of $30.00 a Credit Rating of B+

  • The company is in sound financial condition and is performing adequately.

Company Situation

  • 10 years of history

Now You: Year 11 Year 20 At least: survive, grow 10% per year

At most: champion

Rate: 20% ?

Company Situation

  • 6 keys - In Year 10 the company had:

Rev:

Sales Revenues of

$238 million

ROE:

Return On Equity of about

17%

Profit:

Net Profit of

$25 million

Stock:

Stock Price of

$30.00

EPS:

Earnings Per Share of

$2.50

Credit:

Credit Rating of

B+

The Decisions

You Will Be Making

Each decision round (year) you and your co-managers will make decisions relating to:

  • 1. Corporate social responsibility and citizenship

  • 2. Plant capacity additions/sales/upgrades
    3. Production of branded and private-label footwear

  • 4. Worker compensation and training

  • 5. Shipping and warehouse operations
    6. Pricing and marketing
    7. Celebrity endorsement contracts

  • 8. Financing of company operations

Plus,

you

will

management.

be

responsible

for

annual

sales

forecasting

and

inventory

Competition

The competition among companies to sell their brand of athletic footwear is based on 10 factors:

  • Price

  • Styling/quality (S/Q) rating

  • Number of models/styles

  • Advertising

  • Size of retail network

  • Celebrity endorsements

  • Delivery time

  • Retailer support

  • Mail-in rebates

  • Shipping charges (internet sales only)

There Are Many Strategic Options

  • There is no built-in bias that favors any one particular market or strategic approach. There is no secret “answer” or approach that will guarantee success.

  • Most any well-conceived, well-executed competitive approach is capable of succeeding unless:

    • it is not overpowered by the strategies of competitors, or

    • it is defeated by the presence of too many copycat strategies that dilute its effectiveness.

  • In other words, which strategies deliver the best performance hinges on the strength and interplay of each company’s strategy and decisions against the strategies and decisions employed by rival companies.

  • The Contest in the Marketplace Is a “Battle of Strategies”

    • Following each decision round, you will be provided with a Competitive Intelligence Report containing information of the actions rivals took to capture sales and market share.

    • With this information, you will be in good position to anticipate some of the strategic moves that rival companies are likely to make in upcoming years.

    • Just like in football or other competitive sports, you will need to scout the strategies of rivals, try to judge what they will do next, and come up with a competitive strategy of your own aimed at “defeating” them and boosting your company’s performance.

    It’s All About Developing Winning Strategies

    • The Business Strategy Game is all about practicing and experiencing what it takes to develop winning strategies in a globally competitive marketplace.

    • At the end of the simulation, what will separate the better-performing companies from those with weaker performances is the caliber of the decisions and strate-gies that company managers have employed.

    BSG

    is

    an

    exercise

    designed

    to

    spur

    competition juices flowing.

    and

    to

    get

    your

    competitive

    It’s All About Developing Winning Strategies  The Business Strategy Game is all about practicing and

    How Your Company

    Performance is Judged

    Board members and shareholders/investors have set five performance

    objectives for the company:

    • 1. Grow EPS (earnings per share) by at least 7% annually through Year 15 and at least 5%

    annually thereafter.

    • 2. Maintain ROE (return on equity investment) of 15% or more annually.

    • 3. Grow Stock Price at about 7% annually through Year 15 and about 5% annually

    thereafter.

    • 4. Maintain Credit Rating of B+ or higher.

    • 5. Maintain Image Rating of 70 or higher

    (a company’s image rating is tied to the styling/quality of a company’s branded footwear, market share penetration, and its actions to display corporate citizenship and social responsibility).

    Scoring Weights

    The weights that will be placed on your company’s achievement of each of the five annual performance targets are as follows:

    EPS

    20%

    ROE

    20%

    Stock Price

    20%

    Credit Rating

    20%

    Image Rating

    20%

    Your Company Performance Is Measured

    Against Two Standards

    • The Investors Expectations Standard (I.E.) Did you meet or beat the annual performance targets for each of the 5 performance measures ?

    • The Best-In-Industry Standard (B-I-I) How well does your company’s performance stack up against the company with the best EPS, ROE, Stock Price, and Image Rating and against an

    industry-best A+ Credit Rating ?

    These scoring standards are explained in the Player’s Guide and even more fully on the “Help” pages associated with the Footwear Industry Report.

    What You Can Expect To Learn

    Managing a company in competition with rivals will allow you to experience the things you

    are reading in your text about crafting and executing strategy in a globally competi-tive marketplace:

    • chart a long-term strategic direction

    • set and achieve strategic and financial objectives

    • craft a strategy and adapt it to changing conditions

    • analyze industry, operating, and financial data

    • think strategically about competitive and market position

    • assimilate information and lessons of prior courses

    • better understanding of revenue-cost-profit relationships

    • practice in making sound, responsible business decisions

    • accountability for delivering good company performance

    • and much more

    Tips and Advice

    • Watch the Videos The Player Materials drop-down contains a link to the Intro to BSG video and a link to a page of a dozen or so Video Tutorials.

    • Use the Help Pages Every decision entry screen and report page has a Help button. When you need more information than is contained in a Video Tutorial, click on the Help button.

    • Follow the Recommended Decision-Making Procedures click the BSG Support button at the top of the Corporate Lobby.

    • Take Advantage of the Practice Round(s) the purpose of the practice round(s) is to help you become fully acquainted with the decision entry screens and the reports that come available at the end of each round. The more you learn from the practice rounds, the better your chances for getting off to a good start !

    Tips and Advice

    (concluded)

    • Manage the Company in a Serious, Professional Manner The overriding purpose of The Business Strategy Game is to give you practice in making business decisions, crafting winning strategies in a competitive market, and being fully accountable for the results of your actions (just as managers in the real-world are held accountable for the performance of the companies

    they manage).

    • Be very wary of trying things that are imprudent, highly risky, or un-

    businesslike (things that would get a manager fired in a real company) You are not playing a game, you are running a business. This is NOT the time to be a daring adventurer out to win some variant of a videogame by making wild and extreme decisions. Those who approach the simulation as a game usually end up shooting themselves in the foot.

    Your Group will include 6 Top Leaders in Business

    CEO

    CFO

    • • CHRO

    CPO/COO

    CMO CIO/CECO

    Your Group will Run 250 Million Company

    Competing with about 3-11 others

    10 Years (in 10 days)

    Group competition Learn from Success and Failure Only 1 Group Champion Other compete again

    Industry Champion (2014) - many

    Industry Champion (2014) - many

    Grand Champion (2014) 5%

    Grand Champion (2014) – 5%

    To begin

    Read User guide

    Using username/ password provided by your Instructor

    View Video Guides www.youtube.com/ecomftu2012

    Any question Email to: tttt@ftu.edu.vn

    Enjoy your Game!

    Thank you

    Let’s Go

    BSG

    Thank you Let’s Go BSG
    Thank you Let’s Go BSG