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Introduction to the Business Strategy Game

Introduction to the Business Strategy Game. Please note: Administrators of the BSG routinely change the software. If you notice something out of date in this presentation, please let me know and I’ll correct these notes. Getting Started.

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Introduction to the Business Strategy Game

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  1. Introduction to theBusiness Strategy Game Please note: Administrators of the BSG routinely change the software. If you notice something out of date in this presentation, please let me know and I’ll correct these notes.

  2. Getting Started • Form a team of players who you can work with throughout the semester • Complete a ‘sign-up card’ and I will give you the registration code needed to access your company • Long on to www.bsg-online.com • Practice using the site • Practice making decisions

  3. Basics of BSG • $238M athletic footwear manufacturer • 3 to 4 students per team, depending on class size • At the start, each team is identical • Approximately 10 teams per industry • Industry winner: • Added to BSG plaque & web page • Gets “A” for BSG component of course grade. • Each team represents members of management • 2 practice decision sets, 9 actual decision sets • Make decisions according to weekly schedule

  4. Revenue / cost / profit relationship How the functional areas (acct., Finance, mkt., H.R., I.S., O.M.) Of business fit together Aspects of global competition Decision making, business judgment skills Work together in teams, compromise, set goals and agendas Organizing / analyzing data and reports Balancing cooperation and competition What You Can Expect to Learn

  5. Company Operations • Manufacturing plants in • N.A. (2M capacity) • Asia (4M capacity) • Warehouses in Memphis, Milan, Bangkok & Rio • Compete on a variety of aspects, including price, quality, service, models, advertising, image, rebates • Compete in both private label and branded markets • Have average S/Q rating (5-stars) • Access to three distribution channels: • Independent retailers • Online sales • Private label sales

  6. Company Operations, cont’d • Good financial condition • Strong industry growth rate expected for next 4 years • Exchange rate impacts • Manufacturing: Piecework incentives Quality control to manage reject rates (5%) May use overtime to expand production capacity Base wages vary between plant locations

  7. Price S/Q ratings Product line breadth Advertising Rebates Celebrity appeal Delivery time Retailer support Number of retail outlets Online sales efforts Customer loyalty Factors That Drive Market Share

  8. How Performance Is Judged • Growth in earnings per share (EPS): 7% to 5% • Return on equity: 15% • Credit Rating: B+ or higher • Image rating: 70 or higher • Stock price gains: 7% and 5% These factors are view from two perspectives – an investor expectations standard, and a best-in-industry standard.

  9. Pending Strategic Decisions • Establish a long-term strategy • Determine Market position of company • Decide on appropriate distribution channels for your strategy • U.S. Based or international manufacturing • Possible expansion of product line (100 models) • Use of celebrities to enhance brand image

  10. Production and Markets Plants N. A. Europe Asia L. A. Warehouses Memphis Milan Bangkok Rio Ave. Market Demand (000s) Branded 1,432 1,432 990 990 P. L. 200 200 200 200

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