Introduction to the Business Strategy Game

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 If you notice something out
  of date in this presentation, please let me know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 Ill 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
What You Can Expect to Learn

• 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

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, contd

• 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
Factors That Drive Market Share

• Price
• S/Q ratings
• Product line breadth
• Advertising
• Rebates
• Celebrity appeal

• Delivery time
• Retailer support
• Number of retail outlets
• Online sales efforts
• Customer loyalty

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)
1,432
1,432
990
990
Branded
200
200
200
200
P. L.