Business Strategy Game Intro Week 1 RTM

2. Today�s Agenda (50 mins) Role of the BSG & Class Admin Demonstrate the Game Tips of How to do Well & �Compete� Strategic Mindset Slides Assignment Reminder Groups Behaviour Contract (hardcopy & electronic)

3. What is Strategy? �Strategy is the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations� Pattern of decisions

4. Excellent Companies in Industry* Walmart logistics & warehouse SCA EOS of buying plus executes every day Dell (low cost producer) drives out costs BTO & direct model JIT inventory competitors are eroding BTO (Future Shop, MDG) Marcom execution Database SCA? Air Miles Cdn transactional database EOS over 120 coalition sponsors to share costs Cost efficiency advantage Internet SCA rapid DM deployment & selectivity (SCA) Amex (brand & base) consumer & business base marcom control packages

5. Role & Admin Section 1

6. Overview You wil be running an international shoe business from Years 11 to Year 17 Your mission is build a competitive advantage & optimize 6 scoring factors but you must manage 10 decisions areas with over 130 variables 4 reports & lots of data to analyze Head-to-Head competition & written reports for marks

7. What�s the Purpose of the BSG? Educational Outcomes devise/ plot & track strategies apply previously learned decision tools apply strategy theory * cause & effect strategic critical thinkers informed decision making strategies Role Play Situation practice reading a company�s competitive position react to changing markets tradeoffs between ST & LT actions/metrics align production, mktg, finance & HR Problem to Be Solved develop a competitive vision and unique business strategy to out grow your competitors assess levl of competition be aggressive

8. The BSG Journey Students where qualitative brainstorming meets quantative reality real life simulation (complexity, focus, team dynamics & pressure) students competing vs students read yourself & discuss with groups Professors �Guides� offer tips & suggestions plus answer reasonable questions we will not do work for you have a game plan written Explain Strategy Business Theory capstone course means brings together all business subjects into one!

9. The Company You Will Manage** Industry Background fast growth worldwide use of products competition prod�n in low wage regions Company Background 1 mm NA & 3 mm Asia Finances Years 6-11 Company Performance exhibit 1-1 p macro economics What the Board Expects enhance reputation & comp standing grow EPS & positive ROI Build SH value (stock price) Preserve financial integrity & Bond rating You will be �automatically� scored Investor Expectation ROE Sales Revenues EPS ROI Bond rating Market Capitalization 10% Strategy rating (how different & what comp is known for & whether it has a SCA)

10. Teams Are assigned by the instructor (posted on MN/GL website) mix of skills alphabetical letter Peer Feedback no free riders onus is on each student to complete documentation Brainstorm a group name & submit a handwritten memo with behaviour contract/group members full name & section

11. Topline BSG Demonstration Section 2

12. Strategic Mindset Slides Section 3

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14. Pick One of Three Generic Strategies Focus Leadership Cost plus Mo�s transparencies

15. Learning the BSG Technology Section 4

16. Recap of Decision Making Procedures** (section 9 p109) Step 1: Footwear Industry report Step 2: Benchmarking report Step 3: Competitor strategy comparisons report Step 4: Print Your Key Functional Reports (Manu, Warehouse, Cost, Geographic) Step 5: Demand Forecast Screen Step 6: What�if Scenarios Step 7: Final Synchronization (do regular synchs) Step 8: Examine forecasts & reports for major variances vs LY Step 9: Print all decision entries Step 10: Submit decisions

17. Let�s Demo Take a Tour www.bsg-online.com

18. How to Perform Well Section 3

19. How to Do Well in the Strategy Course Read & Be Prepared Essential of Business Strategy BSG Manual Re-Read Chapters Be consistent Think strategically before you leap Be patient & take small steps (it will come together�light will go on)

20. Tips During the Game Do not worry about all the metrics at once ROI will come if you strategy is correct �How do you eat an elephant� break it down Use all the screens do not rely primarily on mktg typically takes students team 2-3 hours at a screen for decisions (4+ hours the first time) There is no hiding your rank depend on how good your strategy is relative to your peers Longer gamer goes the harder it is to depend on �luck� Stick to a written game plan anticipate competitors moves run �what if scenarios�

21. Developing Your Strategy Objective determine your team/company�s competitive advantage Options pick one of 3 generic competitive strategies (low cost, differentiation, focus) note differentiation is only one option Tips Write a game plan complete Master Planning & Analysis forms in Appendix p113

22. How to be a Winner in the Game Make bold & unique decisions (but be logical) don�t be a follower or real life copy cat Be aggressive in planning (not in interpersonal interactions) Due Diligence sketch & refine a blueprint read manual several times allocate prep & decision making roles Predefine a strategy & stick to it Thorough business decision making draw diagrams & track your key metrics in a scorecard be market-aware and competitor-aware Committed, efficient and shared team work

23. Suggested Strategic Planning Steps for BSG** 1. Strategic Mindset analyze industry draw your business model anticipate competitors focus on what matters & building a SCA 2. Select Generic Strategy 3. Highlight Your SCA(s) 4. Write Game Plan draft** 5. Test Sensitivities of Assumptions pro-forma analysis find factors that �move the needle: 6. Decision Tree Analysis major decisions probable outcomes your desired path & fall back positions 7. Hand-in Final BSG Game Plan