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the business strategy gameoverview and orientation

What Is The Business Strategy Game All About?. It

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the business strategy gameoverview and orientation

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    3. Your Company’s Situation All companies start out in sound condition & with identical numbers Each decision period represents a year. The company began operations 10 years ago: the first set of decisions will be for Year 11. Each company had Year 10 revenues of $238 million, net profit of $25 million (equal to $2.50 per share), an ROE of ~17%, and a solid B+ credit rating.

    4. The Decisions You Will Be Making You and your co-managers will make decisions in up to eight categories each period relating to: Corporate social responsibility and citizenship (up to 6 decisions) Production of branded and private-label athletic footwear (up to 10 decisions each plant, with a maximum of 4 plants) Plant capacity additions/sales/upgrades (up to 6 decisions per plant) Worker compensation and training (3 decisions per plant)

    5. Decisions (cont.) Shipping (up to 8 decisions each plant) Pricing and marketing (up to 10 decisions in 4 geographic regions) Bids to sign celebrities to endorse your company’s footwear (2 decision entries per bid) Financing of company operations (up to 8 decisions) Plus there is a screen for making annual sales forecasts and deciding whether to have inventory clearance sales

    6. Competitive Variables That Determine Company Sales and Market Shares The head-to-head competition among companies to persuade consumers to buy their brand of athletic footwear is based on 10 factors: Price Number of models/styles Styling/quality (S/Q) rating Advertising Size of retailer network Celebrity endorsements Delivery time Retailer support Mail-in rebates Shipping charges (Internet sales only)

    7. You Have Many Strategic Options Company managers have wide strategic latitude in striving for competitive advantage and good performance. There’s no built-in bias that favors any one strategy. Some examples: Low-cost/low-price Differentiation Emphasize branded footwear Emphasize private-label or internet

    8. More Strategy Options Focus on one or two geographic regions or strive for geographic balance. Put little or much emphasis on private-label footwear Pursue essentially the same strategy worldwide or craft slightly or very different strategies for each geographic region.

    9. No One Strategy Is “Best” Most any well-conceived, well-executed competitive approach is capable of succeeding, provided it is not overpowered by the strategies of competitors or diluted by the presence of too many copycat strategies. Which strategies deliver the best performance depend on the strength and interplay of each company’s strategy and decisions against the strategies and decisions employed by rival companies—there is no mystery “best” strategy.

    10. A Company’s Competitive Effort vis-ŕ-vis Rivals Is Crucial All the sales and market share differences among companies are attributable to differing competitive efforts on price, S/Q rating, advertising, models offered, delivery times, retailer support, etc. Every company’s strategic challenge is to craft a competitive strategy (and related decisions) that it believes will produce the desired sales and market share outcomes when pitted against the competitive strategies of rival companies, region by region.

    11. The Contest in the Marketplace Is a “Battle of Strategies” Following each year’s decisions, you’ll get Industry & Competitive Intelligence reports It is vital to study these reports and understand what your competitors are doing. You need to implement your strategy, while anticipating and countering moves by your competitors

    12. Outcompeting Rivals Is the Key to Market Success You’ll have to stay on top of changing market and competitive conditions, try to avoid being outmaneuvered by competitors, and make sure your footwear is attractively priced and competitively marketed. It is the competitive power of your strategy vis-ŕ-vis the competitive power of rivals’ strategies that is the deciding factor in determining sales and market shares.

    13. 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, the only things separating the best-performing companies from the others will be the caliber of the decisions and strategies of the management teams. It’s an exercise calculated to spur competition and to get your competitive juices flowing.

    14. PC Requirements and Mechanics Virtually all BSG activities take place online, on any PC with an Internet conection, Internet Explorer and Microsoft Excel (any of the 2000, XP, 2003, or 2007 versions). BSG-Online automatically transfers the needed software from the BSG server to the PC you are working on quickly; when you exit a session, your work is saved and transferred back to the server. The last decisions saved to the BSG server at the time of the decision deadline are the ones used to generate the results.

    15. How Company Performance Is Judged Board members and shareholders/investors have set five performance objectives for the company: Grow earnings per share at least 7% annually through Year 15 and at least 5% annually thereafter. Maintain a return on equity investment (ROE) of 15% or more annually. Maintain a B+ or higher credit rating. Achieve stock price gains averaging about 7% annually through Year 15 and about 5% annually thereafter. Achieve an “image rating” of 70 or higher

    16. 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 30% ROE 20% Credit Rating 15% Stock Price 20% Image Rating 15%

    17. The Two Scoring Standards The best-in-industry standard (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?) The investors expectations standard (How well did you meet or beat the annual performance targets for each of the 5 performance measures?)

    18. The Two Quizzes There are two “open book” 20 multiple-choice question quizzes built into the exercise. The quizzes are taken online and scored immediately upon completion: Quiz 1 (required): Covers the Player’s Guide—its purpose is to spur you to read and absorb how things work in preparation for managing your company. Time Limit = 45 minutes. Quiz 2 (not required) Click on the links for the quizzes on your “Corporate Lobby” web page for more information—the three sample questions for each quiz give you an idea of what to expect.

    19. The Peer Evaluations At the end of the semester, you will be asked to complete a confidential evaluation of the contributions of each of your co-managers and yourself. Individuals who contribute significantly more or less than the team may receive BSG grades higher or lower than the team The professor will supply the form; it will not be the long BSG online form The peer evaluations are for your professor only and are completely confidential.

    20. What You Can Expect to Learn Running the athletic footwear company in head-on competition with rivals will give you a chance to put into play the very kinds of things you are reading in the text about crafting and executing strategy in a globally competitive marketplace. You and your co-managers will have to chart a long-term direction for your company, set and achieve strategic and financial objectives, craft a strategy, and adapt it to changing industry and competitive conditions. You’ll have to wrestle with a full array of industry statistics, company operating reports and financial statements, and an assortment of benchmarking data and competitive intelligence on what rivals are doing. You’ll have to match strategic wits with the managers of rival companies, "think strategically" about your company's competitive market position, and figure out the kinds of actions it will take to out-compete rivals. Learning to do all these things and gaining an appreciation of why they matter are the heart and soul of courses in business strategy.

    21. What You Can Expect to Learn In addition, The Business Strategy Game is designed expressly to provide you with an experience that will: Draw together the information and lessons of prior courses, consolidate your knowledge about the different aspects of running a company, and provide a capstone experience for your business school education. Deepen your understanding of revenue-cost-profit relationships and build your confidence in utilizing the information contained in company financial statements and operating reports. You’ll see why you cannot hope to understand a company’s business and make prudent decisions without full command of the numbers—it won’t take you long to appreciate why shooting from the hip is a sure ticket for managerial disaster. Provide you with practice in sizing up a company’s situation, making sound, responsible business decisions, and being accountable for delivering good results.

    22. How Do You Register and Get Started? The registration process consists of five steps: Step 1: Have your assigned company registration code handy (this code is used to put you into the database for this specific course and to certify you as a co-manager of your assigned industry and company). See link in New & Misc. Notes. Step 2: Go to www.bsg-online.com Step 3: Click on the “Create Student Account” button and enter the company registration code provided by your instructor in the box. Step 4: Continue on to the next step of the registration process where you will need a credit card.

    23. How Do You Register and Get Started? Step 5: Complete the personal registration information (user name, password, and so on) and the credit card payment process. The Web site for credit card payment is fully secured; you will receive a receipt e-mail. If you have no credit card or Prepaid Access Code, the easiest way to complete this step is to arrange to use a friend’s or co-manager’s credit card and reimburse them directly with cash or a check.

    24. The Corporate Lobby Page Each time you log-on to www.bsg-online.com, you are automatically routed to your company’s “Corporate Lobby” web page. The Corporate Lobby page is your gateway to all BSG activities. Near the top of this page is a series of menu selections that provide instant access to all the necessary information, materials, and tools you will need, including the Player’s Guide & decision schedule. Below these menu items are (1) a Decisions and Reports box for accessing the decision entry screens and viewing reports, (2) a message center box, and (3) information showing the latest exchange rate adjustments, current interest rates, and a company performance scoreboard. You have anywhere, anytime access to your Corporate Lobby page from any PC that is connected to the Internet.

    25. Creating a Name for Your Company Shortly after registering, you and your co-managers should decide on a name for your athletic footwear company. Your company’s name must begin with the letter of the alphabet that you have been assigned. Names can be up to 20 characters. To name the company, click on the Company Name menu item near the top of the Corporate Lobby screen and enter your company’s full name in the space provided. All company names are “public” and appear in the Footwear Industry Report; thus you should select a name that you are proud of and that reflects the image you want to project to your customers, shareholders, other company stakeholders, and the general public.

    26. Some Procedures Check the Decision Schedule link on your Corporate Lobby page for the dates and deadlines for the decisions. The decision deadlines are strictly enforced, since the results are processed automatically on the BSG servers minutes after the deadline. The results of each decision will be available online about 15-20 minutes after the decision deadline. You will be notified via e-mail as soon as the results are ready. At that point you can log-on, see what happened, and proceed with the next decision.

    27. Losers Don't understand company operations Don't understand how to run the game Fail to develop & implement a specific strategy Typically change strategies several times as they try to copy successful competitor's strategies Don't analyze what is going on and consequently miss-guess competition Are always trying to "catch-up"

    28. Winners Understand company operations Learn well how to run the game Develop a specific strategy & stick with it (many different strategies can work) Analyze competitors and industry trends Maintain balance between demand and supply Are assertive & proactive

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