Welcome to the Business Strategy Game (BSG)
BSG, an online game, modeled to reflect the real-world character of the globally competitive athletic footwear industry and structured 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, North America, Europe Africa, Asia Pacific and Latin America.
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)
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 Return On Equity of about 17%
- Net Profit of $25 million a Stock Price of $30.00
- Earnings Per Share of $2.50 a Credit Rating of B+
The company is in sound financial condition and is performing adequately.
The score will be weighted by EPS– earning per share (20%), ROE – return on equity (20%), Stock Price(20%), Credit Rating (20%), and Image Rating – tied to style/ quality, market share, social responsibility and citizenship(20%).
Suggested Procedures
Name your company, Read the player’s guide, Know the schedule
What we have decided during the year11 – year15
Year 11:
- Choose Low cost leadership Strategy;
- Build plant in Latin America to expand capacity by taking 10 years loan;
- Spend on advertising, mall in rebate, delivery time to boost demand;
- Invest in retailer support to ensure more channel in the future;
- Improve productivity by employee training.
Year 12/ 13
- Purchase capacity in AP plant;
- Upgrade plant;
- Stick to strategy, keep spend on marketing/ wages/ training/ retailers.
Year 14
- Initiate new construction in LA plant
- Focused on branded shoes instead of private label to maximise profit.
- Payback two loans when we had good Credit Ranking, and retook another new loan with lower interest. –Minimise financial cost.
Year 15
- Gave dividend to attract more investors in the future.
Some thoughts
Net profit = Price – Cp – Cd – Cf
About Production:
Quality improve needs time to be received by customers.
eg: Apple has more margin than Samsun because its quality is assumed higher by customers. Let’s why when we choose to decrease form 5 stars to 4 stars , it easier maintain demand than high quality product.
Private label is the way to improve the production efficiency, but branded product are more profitable considering when bidding private, only the price matters.
Marketing
How to Price: two benchmarks: Knowing cost, Competitors, short-term strategy. When you don’t know competitor, talk low margin, low risk.
Price war should always be a short term technique
(and should be the last choice). To decrease the nomber of competitors by merge and consolidation; Then increase the price.
There is only one price online.
This reminds me in the book “Information Rules, chapter 2, page 70″, it talked about when pricing online, the strategy is commonly used as lower price to cost sensitive users. With basically the same products we offered, differential international price will be unlikely. Thus in order to maximise the profit, company is likely to choose the high price, thus deprive customers in certain segmentation and revenue from this group. This is quite interesting.
Finance
Keep spending money in growing stage, huge ending cash is negative.
The operation profit need to cover the financial cost.
Objective of operating a company should always be profit instead of market share.
Low cost is easy to get result in short term. That is why it’s not surprising that the winners in the first 5 years are always are low cost companies. In this game, the capacity of plant in Asia is imperative for us, while the quality in Europe plant is very important.
User Interface
Further Reading
The Business Strategy Game © is a registered trademark of GLO-BUS Software.
What Is GLO-BUS?
GLO-BUS is a completely online exercise where teams of students run companies that are in a neck-and-neck race for global market leadership in two product categories:
- wearable video cameras and
- sophisticated camera-equipped copter drones.
The companies compete in a global market arena, selling to buyers in four geographic regions—Europe-Africa, North America, Asia-Pacific, and Latin America.
Company co-managers must make decisions relating to R&D, component usage, product performance, product line breadth, production operations, work force compensation, outsourcing, pricing, sales and marketing, finance, and corporate citizenship and social responsibility. The challenge is to craft and execute a competitive strategy that results in a respected brand image, keeps your company in contention for global market leadership, and produces good financial performance as measured by earnings per share, return on investment, stock price appreciation, and credit rating.
All aspects of the GLO-BUS simulation parallel the functioning of the real-world markets, thus allowing you and your co-managers to
- think rationally and logically in deciding what to do and
- get valuable practice in making a variety of different business decisions under circumstances that mirror real-world competitive conditions.
Why need to further reading
BSG is a game for entrepreneur to practice the experience and familiar with Business strategic operations, the mode and simulation competition is very good for boot camp of MBA students.
But , DO NOT forget the technical world outside of the traditional business. Sometimes, you need to jump from the old economy thinking to the new, digital thinking. Maybe further reading, or extended searching basing on the background information is the hobby of myself, I always want to find the other angle of surface, and try to find why this one, not another one.
That’s why , if we have enough time and energy, we need to keep the curious that why we think the BSG is so good to us, who created this product ? and what they are focusing on now?
Then you can find that BSG is one product from GLO-BUS, and also you can find this company focus on the wearable video cameras. Why?
Do NOT forget the digital world around you, at all time.
Bonjour Rafe 