business strategy game distribution and warehouse

I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. Yes, I would only add capacity onto existing plants and not build new plants. You need this capacity for the private-label market. If Im wrong, Ill post another comment. This is the key to affect our strategy in the next five years. I will talk about the Celebrity Endorsements page later. That combined will give you a good boost for the last year. You dont have to care about your retail outlets anymore so adjust the price so maximize your net profit, without the 40% rule. is it because I need to add capacity? These strategies are easy to see in the real world of business. But this year I have a lot of cash on hand, I upgraded my plant, should I also build the LA plant although I dont need that much capacity at the moment? While this was driven . Company operations parallel those of actual athletic footwear companies. For the upgrade option C is the one to raise 1 star, but the actual cost it can save me every year is not a lot, should I still do that? If you have any questions, feel free to come back and ask them. Most players play hard from the first round, thus increasing S/Q, the number of models, reduce the price, putting for advertisement three times higher than average, and bidding for celebrities. We will keep the largest market shares in Internet Sales. While competing with the other teams in BSG, you need to make informed decisions that can create a difference and take your team ahead of all. Similar to the branded production, try out the different values to see which combination will give you the lowest Average Production Cost value for your plant and hence, the highest profits. Let us move on to the tricky part of this decision page. That is regardless of the low price, high quality, or variety of models. You can also ensure the S/Q since it is the first decision. thank you for your help. This can get confusing at the beginning so here is a table to show you the process. You can also win if you settle for Mid quality and a High number of models. In the later years, when the cost in NA is high, we have built a new factory in LA, we can ship from LA to NA (eg. However, with a reasonable price. I would like to ask about the Pay Dividends. My stupidness did not know that I should not pay dividends while Im in LOAN mode. Advantage of this is, that you dont have to pay too much attention to your competitors. Thanks! This has been very useful. Use the remaining 30% capacity to sell shows in private-label! We also thank the Professor and creators of BSG Online to give us a good environment to learn, to practice with full of knowledge, competitions and emotion close to business life. If you reach the last decision round, comment down below and I will give you some hints on how to boost your net profits for the last year and gain some extra points. But you need to identify your strategy first in the following three aspects: How can you identify your strategy? From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. You will need those numbers later on. Exactly. Our G-Brand Company will continue to pursue its existing High Quality Average Price Large Collection strategy; However, to increase its market share and thereby increase revenue, our company, focus on Net Profit to increase ROE. Were at the middle of the pack and wanted the best strategy to move up the ranks. However, traditional warehouse management systems are not designed with the flexibility or technology capacities to address ongoing challenges in the . It is definitely around 1.2 though and I recommend starting off with this value. Keep focus, year 17, we over sleep in Victory, and ignore competitors. Sometimes, clearing your beginning inventory at a discount will boost your profits. What is the companys differentiation strategy? . Theres everything explained in detail. G Brand has a Vision to establish a worldwide brand dedicated to innovative design and best provider in quality at reasonable prices, allow becoming a global leader in the athletic branded shoe market. G-Brand continue to be a good steward of the environment and social responsibility. We will get ROE higher soon, and faster than other competitors. Profit is crucial in the BSG game. Graduates are expected to possess broad competencies like problem-solving, critical thinking, and cognitive skills when entering the job market. We can keep and sell NA after year 16 if we have good and large LA factory. When evaluating the 3PL provider in charge of your pharmaceutical distribution warehouse, safety is the name of the game. You will also receive a copy of Currency Made Simple. If you add capacity it will show you the price. Thats one of the things you should never do because you can always use capacity. I am so thankful for your post!!!!!!!!!!!! Hence, you will only focus on the two following decisions that are worth their money as they increase your image rating the most. Hi, thanks for the great strategy! We can check that before making decisions. Q&A. I was thinking about building a LA plant because I took the majority of private label there last year. This is because your competitors are adjusting and trying to find their strategy. I will just adjust it first and see what happens, thanks a lot:). We even understand the very details such as marketing per pair of shoes, cost of warehouse, administration per pair of shoes, which can contribute to the total cost making the Net Profit higher or lower then decide the Business Results and overall market development. Looking at Company Operating Report, Distribution and Warehouse Reports, we see Cost of Branded Pairs Sold in Year 18 is $25 and Warehouse Operating Expenses is 3.71. However, the private-label market is set up the way that only a limited demand is given each year. After you have done this, you repeat the same procedure for Europe-Africa and Asia-Pacific with the A-P plant because it is cheapest to ship shoes from A-P to E-A. I like to have around $8-10 million ending cash available after all my decisions are made. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. Toward that end, it put in place responsible environmental policy that ensures more decisions for community. The same accounts for your Change in Annual Base Wages and Incentive Pay values. 7.39 to 12.81 over last three years, much higher than Investor Expectation of 4.3. While you already have a good estimate of how many shoes you are going to sell in each region, you still need to consider your rejected pairs during production. If numbers do not add up correctly and your total pairs shipped do not match your total pairs available, go back to the Branded Distribution page and adjust your numbers accordingly. Let me know if you have any more questions. Do that by answering the following questions? Moreover, this may be a lesson in the real world of business as everything comes with quality, models, and price. The key factors need to be considers is Cost of Branded Pairs Sold, e.g. Hence, find the combination that gives you the highest profit. I suggest to go for maximum profits. Team members run the simulation company efficiently while competing successfully. and L.A. in North America to reduce costs because ofNAFTA. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. So when following the steps described above, you will have positive ending cash really soon again. So your costs will be relatively low as well and the private label will be a very important factor of yours. Hello, thanks for the great strategy, it is working (1st place) ! we are having a horrible time of having left over inventory .. we are in year 13 and our numbers are ok we were 1st place last on year 11 and second place on year 12 but i having a feeling we have been focusing so much on our current numbers we arent going to end well any advise on what we should do on inventory and other sections of the game. As such, you can play the game frequently, any time you get it interesting. You are now all set to dominate your industry and win the BSG! If you found your highest value for the best net profit, move on to the next value and do the same. On this page, you will set your values for your branded production. If not, I dont see the need to purchase equipment in order to make more shoes until the demand begins to encroach upon my shoe making capacity. We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. We need to look at bottom line to see Cost of Pairs available for Sales. How can you apply the knowledge from the textbooks? Everything else like earnings per share (EPS), return on equity (REO), and image rating (IR) will automatically follow. If you bid on multiple celebrities, it is good to set a ranking priority and a spending cap so that you do not spend more money than you want or have available. You can still ship pairs from LA to somewhere else if needed. And Im so thankful for your post!!!!!!!! Whenever you change and sharpen any decisions, you should keep track of your net profits. Unlock this data. You can ignore the Internet Marketing and Wholesale Marketing pages because they will just reflect your internet and wholesale decisions that you already plugged in on the previous pages. After you have done this, you might notice that your Your Estimate of the Ind. From Company Operating Reports, we focused on Balance Sheets and Cash Flow, we see Total fixed Assets of 573,906; Total Liabilities of 127,335 and Total Shareholder Equity of 446,571. Results in a one-time productivity increase of 100 pairs per year at each facility. What are the niche markets that your competitors dont see? Thank you so much for your suggestion! If it increases your profits, leave it at Yes, otherwise set it to No. What I like about my strategy is that you do not necessarily have to keep an eye on your competitors. If you find capacity available for purchase, I would always directly purchase it. This can be a very tricky decision and you need to analyze your competitors prices. In next five years, G-Brand will be more competitive with production capacity at the top and also high quality with largest collection. You have successfully adjusted to your competitors. These are the three most crucial decisions to make in the game. View full document. Keep in mind to check your profits and ensure they get as high as possible. With that, you can do the same over and over again, for every decision round. It is best to build only as much capacity as you can afford without taking any loans. Again, it is important that you keep in mind to optimize your profits. Like I already said in my previous post, the most important thing is to toggle each and every value and pay close attention to your net profits. Is it too late to reduce that to 50 as you suggested in your recommendation? When contracting a celebrity, your advertising efforts in the Sales Forecast section should not be low. Your interest rates depend on your credit rating and the duration of your loan. However, it will also decrease your ending cash. Like in the real world, the BSG companies compete in the international market arena, selling branded and private-label athletic footwear in different geographic regions such as Europe-Africa, North America, Asia-Pacific, and Latin America. However, some values, such as the Wholesale Price have decreased instead of increased. Do this for all four regions. On the other hand, other players gamble for the private market with a high price, a large volume to lead. Over Year from 15 to 18, ROE changes up and down 22.5, 18.2 then 20.0 then in year 17 down to 16.8 then up to 24.3 in Year 18. Its a lot of trial and error until you find the best possible value and it takes a lot of time at the beginning. Theres not right amount of capacity you should purchase. The Business Strategy Game is a hands on learning exercise that will give The Students valuable decision-making practice and develop powers of business judgment. unfortunately I have no experience with adjusting to my strategy in the late-game. But strategy wise I always sticked to my maximum net profit strategy which you can do no matter your competitors strategy. And I would not build another plant, rather increase capacity in the plants that you already built. Celebrities will enhance your marketing efforts and help you sell more shoes. It might be tedious work and consumes a lot of time, but it will definitely worth it and will let you win the BSG. . We will upgrade AP in C and one other option. In this blog post, I will run you through everything important that you have to know about the BSG and how to win it. and L.A. volumes and finally plug them into the NA manufacturing slot. Almost done, the last decision page. (Which affects all 5 factors: EPS, ROE, Image Rating, Credit Rating and Stock Prices). It typically keeps increasing until a certain price point and then starts to drop. Since youre only in the second year, I would honestly decrease your models to 50. Then we can analyze business results to identify new marketing, production strategy. Like I said before, you should be building capacity, yes. The company that offers the lowest price will sell all its supply first, followed by the company with the second lowest price offered, and so on. It is good to expand or build on the existing plants. Logistics strategy as an enabler of new business models. How did your 2nd decision go? We also learn that Loans from previous years may have higher interest rate, we can borrow new loans to pay off old debts, and get higher Credit Rating because we can pay loans. Hi! Definitely helps! The cost of the game varies depending on the version and the number of players, but typically ranges from $50 to $100. Like should I add up all my wholesale prices from the 4 regions and then divide by 4 to get an average wholesale price and multiply by 1.40 to get the internet price or should I base it off the lowest wholesale and then multiply by 1.40 to get the internet price? Thats a game changer!! I usually have the highest net profit when setting Enhanced Styling / Features to $50k, TQM / Six Sigma Quality Program at around $0.70, and Best Practices Training at $5,000. Therefore, the first set of decisions your team of managers makes is for year 11. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. Private label will help you dominate your competition. Also, I suggest not decreasing your dividends. Key Term business strategy game year 11 decisions; This preview shows page 1 - 2 out of 2 pages. In the first years, the estimate of the industry average might be a little off the +2%. The end result counts. Also, G-Brand believes that every organization has a social responsibility to promote harmony within the community it exists. I am on my second year and I have negative income right now, any tips on how to get in the positive? Plant Capacity / Upgrades. You are now done with your private-label decisions and all significant decisions that affect your net profits. Distribution Warehouse Business's typically involve a much greater degree of movement than other lines of work. Im playing the new version of the game, and your guide has worked perfectly for the first two years! This is your new, more precise regional wholesale sales volume. How can the company jump over other competitors? I only ever paid attention to my profits and I never ever sold capacity. To win BSG game simulation, you need to follow some ingenious tips that are essential business strategy game tips that your team should focus on: Business Strategy Game simulation isnt easy to win, but if you work with these ingenious tips, you can make profits and win your BSG game without a hassle. This decision page deals with your plants. This is why building additional capacity is so important. Entering year 15 I am still doing 8 star but the demand forecast is super low. You always want to make sure that you produce your sales volume for N.A. If it is 0%, that is fine as well, do not worry about it. However, with effective BSG simulation tips, you can keep your company ahead of the competition. So for the last year I didnt stick to the rule that the internet price has to be 40% higher than the wholesale price. Do not worry about the Plant Capacity / Upgrades page. It can also be crippling if leaders . I feel you. After that, loot to the left of screen to check if we have high Net Profit. We do not focus on rebate, time of delivery. Okay! We also regularly pay old loans to get higher Credit Rating. Even though this game is said to be a business simulation, get rid of the thought that all decisions have to make sense and be logical. The decision is due tonight I am so nervous but the performance score so far looks good. Hi, G-Brand will continue to build on its existing strategy (Globa Differentiation Strategy) of attempting to gain a competitive advantage primarily by differentiating the Value and Quality for Price, customers pays for Real High Quality Value and Fashionable athletic shoes with much higher Quality what our competitors would charge for similar products. Your estimate of the industry average for the internet retail price does not change with your adjusted competitive that you set to +2% before. We are doing well, so Stock Price is high too, over 120, we will buy back some with extra money, cash in hand of G-Brand will be over 150 million every years. While +2% might now always be spot on, I have made the best experience with it so far. ? We have good market share in NA and, last year, we needed to ship the rest of the shoes from AP (incurring in shipping and tariffs costs, hence, the thought of adding capacity in LA). You said that the internet price should be 40% above wholesale. Otherwise you will not sell any shoe either. . The Business Strategy Game is an online exercise where class members are divided into teams and assigned the task of running an athletic footwear company in head-to-head competition against companies managed by other class members. However, when pricing your shoes, keep in mind to set the price at least $5 below the wholesale price average. You might have the highest profits with 0 advertising budget. you should repurchase stock whenever you can. Thank you! For this reason, you and your team members need to start the BSG by spending more time analyzing the results of each year to figure out the best effective strategies to lay for the next round of the game. It almost worked TOO WELL. It depends on how much private label you sell and whether you want and can sell more depending on the market, whether its satisfied or not. No worries, this is logical and you did nothing wrong. I dont understand why it did this as this capacity was unused and there was upside to having it as my production was max out for the demand. This decision page is mainly a waste of money and we will not spend a lot of time with this page. All you have to do now, is writing down your forecasted Regional Sales Volume for both the Internet Segments and Wholesale Segments in all four regions. The ROE in Year 18 is good back to 24,3% compared with Investor Expectation of 15%. The S/Q upgrade is the best option if you choose high-quality strategies, while setup cost reduction is ideal if you decide to have several models. The styles or features can be at 50, while the TQM can be set at 2.50. Paying off these loans in advance has the advantage that you will pay less interest over the coming years. However, if you experience difficulty winning your game, type Help with My BSG. You will get professional from BSG game help. The Models Offered estimate seems pretty fair and you do not have to worry about it. However, you should keep on thing in mind: Your internet price should ideally be 40% higher than your wholesale price. Avg. values have changed. They have all changed by +2%, just as you plugged it in. (Darius White) The business strategy was a very practical and real-world experience of what it is like to run a major corporation and the rigor it takes to increase earnings per share, return on equity, credit and image rating. The higher your celebrity endorsement value for a specific region, the more your advantage in attracting buyers to purchase your branded footwear. In the first few years, this will be pretty difficult to determine. Also, consider workforce diversity and ethics training. If so, we need to start building a new factory in LA, eg. Does it affect any other factors? I have extra capacity in the LA plant (worst place to ship from to any place outside of LA) which I tried to sell off. Furthermore, G-Brand will continue focus on what we are top leading like S/Q, models, strong advertising, retailer support, celebrities. So I doubt on his strategy. Optimizations are the last task you can do before finalizing each year. I am in Y12, and I am adjusting for Y13. Beat the Business Strategy Game. Check the Competitive Intelligent Report. Especially with our high quality and low models strategy, this will be very beneficial and will safe you some money. sales volume estimate. Annual leasing and maintenance fees of $1 million per distribution center/warehouse in each region Per. In order to be continue higher competitive and perform to the higher levels, there are still some areas in which the company can focus to operate better. Here, you have to tie materials, styles, or features and TQM until you attain the desired S/Q. You need your capacity and it is never a good idea to sell your existing capacity. You will also receive a copy of Currency Made Simple. However, if you loose and the share price will go down. View Adopters Arthur A. Thompson, Jr. John R. Miller Professor Emeritus I adjusted a little bit and the forecast is now close to previous years. The Business Strategy Game provides your team with the opportunity to discuss the real business issues while working together to assess the options and make decisions linked to the overall company strategy. And then I would just follow my tips and adjust all other values to maximize profits. If you demand for branded production is met, put everything else into private label to make sure you dont have unused capacity. If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). as I described in my post, Id go with the low models, maximum profit strategy as it is easy to follow and you determine the market. Yeah I had that in the first weeks as well. Do not price your shoes too low, so that you will not make any profits with your sales. I will explain soon, how to increase plant capacity and why we need the capacity for private label. If you set your price lower, you will sell more but lose due to low profits. The following tips can help you get around the BSG and possibly be the winner. Besides, you can lower the cost per pair of shoes. My stupidness did not know that I should not pay dividends when I am in 5-year-loan, so I did not adjust any part in Finance Cash Flow except for borrowing. But the plant page did say not recommend to build the plant so I was hesitating. You want to setEthics Training / Enforcement to All Employees and Workforce Diversity Program to Yes. My direct competitor is now selling 8 stars with more than 400 models in wholesale so I think i will be at a even better position selling 50 models. Is there anyway to increase the demand for my shoes in the internet/wholesale markets? Do this for all the four regions. You will soon know why. My group and I are about to complete year 17 for the game. Recommendations for Improving the Image Rating in The Business Strategy Game Currently, were selling 150 models. First, click on the Adjust Competitive Intensity button that can be found on the top middle of the page. These include; Lowering the costs come with lots of benefits. I cannot make any money there. Largest network of retailers around the world. It is important to toggle your values and find the best combination to maximize your net profit. After you have successfully plugged in your branded pairs that need to be manufactured for both plants, click the Save Decisions button and move on to the Branded Distribution page. We had a bunch of copycats in practice year 12, but nobody has figured our profit-maximizing, low-cost strategy, and now theyre pursuing higher models in the real game. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out. 14. We note to see Return on Equity, so keep Total Equity lower than increase Ratio of Net Profit. Besides, your team of managers will develop the critical thinking they need to move beyond the functional management of the company as a whole. This way, it becomes a living guide for decision-making for the entire company. We need to keep track of cost in more details in next years. Promise I wont have tons of question haha. Hi. However, to be able to do so, you need available capacity. Yes, its not too late yet to follow through with my tips. Please delete one if there is an extra comment. Higher Net Profit is a key to win the BSG Online Game. One week they might increase, the other they might increase by just a little or even decrease. We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. It is not. In the upper left box, you have available sources of additional cash. Keep track of total Net Profit to have enough money to build new factory, or we can always borrow to do so. Best-Strategy Invitational High-performing companies worldwide face off in a 2-week competition hosted 3 times a year by the BSG author team. Thank you in advance! (0 for both stock issues and stock repurchase). On initial input of the change there was a big boost to my numbers, but when I left the page the game suddenly dropped my numbers below my original ones. I am having trouble getting my company back into the positive ending cash after taking out a loan. Select +2% for the Percent Change in Competitive Impact of All Other Factors from Previous Year. Hi, Im glad to hear that it helped! My group and I are also playing the new version of the game and were little bit lost. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. Like I explained in my blog post, do everything that is necessary to increase and maximize your net profits. if you have left over inventory, you should either work on your numbers as I described in my post or put the left-over shoes into private-label. The Business Strategy Game is a simulation game that allows players to experience the complexities of running a business. If you have more cash available, go ahead and spend it for either one of the other options. Again, trying out different combinations and optimizing net profits is key for these values. That being said, when you go with the strategy explained in my post, you will have maximized profits. Set your price to whatever maximizes your profits. So for our strategy, it should be 7 stars at the beginning. Hi Fin, Thanks for the detail post and the screen shots. As I keep reading online about different strategies to win, there are some postings that are aligned with the strategy of low quantity of models offered at a high quality and keep increasing capacity.

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