(Which affects all 5 factors: EPS, ROE, Image Rating, Credit Rating and Stock Prices). We are reaching the last decision round and would like some hints on how to boost net profits for the last year and gain some extra points. Please delete one if there is an extra comment. Percentage of Superior Materials, Number of Models, Enhanced Styling / Features, TQM / Six Sigma Quality Program, and Best Practices Training all affect the S/Q Rating. More capacity also brings down your costs. Besides, you can set best practice training high, maybe at 5.000. Graduates are expected to possess broad competencies like problem-solving, critical thinking, and cognitive skills when entering the job market. Set Models Offered to 50 and Free Shipping to No. How can the company jump over other competitors? Once you get the Main Menu for running the company, print a copy of the Year 10 company reports, a summary of the footwear industry report for year 10, and competitive intelligence reports. I like to have around $8-10 million ending cash available after all my decisions are made. How to solves this situation ,have you given us any suggestion. Im playing the new version of the game, and your guide has worked perfectly for the first two years! Leave everything else unchanged. Increase models? If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). Should you have excess capacity, consider this market and manufacture at full capacity. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. Students use the BSG to cultivate managerial skills for decision-making purposes. The BSG tends to underestimate those values by about 20% and hence, you need to correct them for a more precise estimate. After you have done this for both the N.A. With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. Beat the Business Strategy Game. Everything else like earnings per share (EPS), return on equity (REO), and image rating (IR) will automatically follow. Thanks! 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. Any advice? But this year the shipping is too high from AP to LA so I cannot make any money from LA. Decide right time to upgrade factories or expand or build a new factory is a key to success. We will get ROE higher soon, and faster than other competitors. However, the private-label market is set up the way that only a limited demand is given each year. Distribution Warehouse Business's typically involve a much greater degree of movement than other lines of work. We need to adjust the number of productions to optimal these decisions. If your results in the first year are not too good, its not a big deal. Another important indicator of profitability is the return on equity (ROE). Thank you so much for your suggestion! It sometimes works. However, you must tie your values and settle for the best combination to optimize your net profit. However, do not forget to calculate your possible additional expenses for your celebrities. 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. 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. Otherwise you will not sell any shoe either. You have successfully adjusted to your competitors. We keep the Mission which we built from last 8 years. For all following decision rounds, you do not have to return to this page, as I advise you to always keep those two options and not change anything else on this page. In the last section of the Plant Capacity / Upgrades decision page, you can construct a new plant in either of the two regions where you do not have a plant yet or you can build additional capacity to your N.A. Exactly. Purchasing capacity is 20% cheaper than building new capacity on your own. However, there are still some other voluntary decision that will prepare you for future decisions. You should pay attention that your S/Q Rating of Branded Pairs Produced matches your value on the Sales Forecast page. It will be, trust me. View Invitational Current Adopters of BSG Schools (campuses), institutions, and companies using BSG during the last 12 months. Can GameStop Win (In The Long-Term)? Lessons For Digital - Forbes 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. My friend and I walk through the simulation on how it works. Before you even start plugging in any numbers, it is important that you decide for a strategy to pursue for the game. We also learn a lot from the BSG itself and from our class mates, other teams, even we compete in the games, but in order to run effectively, we have to look at our competitors to learn their strategies and we see what they did well or not very well, we learn by doing this. You can also ensure the S/Q since it is the first decision. 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. Always check the market snapshot and the private-label segment. The issues depend on cost of production. You now have an estimate of how many shoes you are going to sell in each region. 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. This requires an overhaul of teaching practices and learning techniques that cater to the changing economic trends. When starting the BSG, you have two long-term loans; one for 5 years, the other one for 10 years. However, if you loose and the share price will go down. And Im so thankful for your post!!!!!!!! Moreover, we will invest on advertising and make use of celebrity appeal to gain brand consciousness. Strategic warehousing impacts all warehouse operations, from inventory management to order fulfillment. You will soon know why. my advice would be to read my guide and follow the steps. In the upper right box, you can spend your excessive cash. In Y12, I paid early payment 12,000k at 8.5% and continued borrowing 70,000k at 4.5% for 5-year). We can keep and sell NA after year 16 if we have good and large LA factory. Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. Find out how much you want to bid for each celebrity. If I have further questions do you mind I ask you for help? After clicking on the green Go to Decisions/Reports-button in the corporate lobby, you can see your profits in the lower left-hand corner. And you said I should only add capacity onto existing ones instead of building a new one in LA right? This is the key to affect our strategy in the next five years. Hi! But my profit is still a little bit low for a second place, guess my price is too low and I need to cut some of my expenses, right? Even more important is, to stick to it! You will also receive a copy of Currency Made Simple. Do you know why is that? Also, we can upgrade NA in C and one other option. I would always encourage you to bid on available celebrities. 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. 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. Repurchasing stock will boost both your EPS and ROE. This support strategy of expansion and getting high Sales, Higher Net Profit and higher market shares. How can the company overcome tough competitors who seem to know most of the things you know? Hello, In addition, you have the option to repurchase your stock. At the end, I increased dividends to boost my ROE. So the question is: would you recommend for my team to still increase capacity despite this fact? You might have the highest profits with 0 advertising budget. 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. With our strategy, you might want to think about getting Option A as well. The following tips can help you get around the BSG and possibly be the winner. Hence, make sure to plug in every possible value to reach the highest net profit possible. 11/4/2016 1/2 I . I prioritize building additional capacity and purchasing plant upgrades. Branded Distribution Hi Fin, Thanks for the detail post and the screen shots. We will adjust collection online lower to 400 compared with 500 in stores. 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. You will soon know why. However, if you happen to use overtime at either of the two plants, plan on increasing the plants capacity in this decision round. congrats on your success! Key pharmaceutical distribution warehouse questions to ask a 3PL. Yes, I would only add capacity onto existing plants and not build new plants. Distribution & Warehouse.pdf - 3/29/2021 BSG Decisions - Course Hero As the CEO, you need the support of the other company managers. However, it will also decrease your ending cash. The information is these guides is laid out, and displayed, in such a way that crucial decisions should be a breeze. trying to find the best way to earn some cash for | Chegg.com We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. This means, without increasing your superior material or enhanced styling / features, you gain 1 star. You are almost done for the Sales Forecast decision page. When you found the best combination to produce your shoes at the lowest cost possible while meeting the S/Q rating requirement, move to the Private-Label Bids section. On this page, you will set your values for your branded production. Is your strategy also works for my situation? 7.39 to 12.81 over last three years, much higher than Investor Expectation of 4.3. If you happen to end up with a large surplus of shoes the next year, lower your 1.2 multiplier a little bit to 1.18. You will get the hang of it after the first few decision rounds as it is always the same procedure. I adjusted a little bit and the forecast is now close to previous years. Hello, thanks for the great strategy, it is working (1st place) ! Our ROE fluctuated over the years due to expansion of factories, we now have paid all the old loans and have quite good cash in hand, we do not have to increase equity in next five years, at least we do not have to borrow for expansions. Annual leasing and maintenance fees of $1 million per distribution center/warehouse in each region Per. I personally would not bid higher than $5,000 $6,000. Set your price to whatever maximizes your profits. Hi, youre welcome. However, if you experience difficulty winning your game, type Help with My BSG. You will get professional from BSG game help. 24 Pros & Cons Of Starting A Distribution Warehouse Business (2023) Hi, This is a good lesson in class that can be valuable in life. Plant Capacity / Upgrades. I believe it varies based on your games situation. Net Profit must over 110 million every year to keep ROE higher than 25% or more. A window should pop up where you can select each of the four regions and change the industry average S/Q rating and competitive impact. Recommendations for Improving the Image Rating in The Business Strategy Game PS: I left a comment, but I did not see it and thus retyped. Like I explained in my blog post, do everything that is necessary to increase and maximize your net profits. Keeping track of the closest competitor you would like to get ahead of, check their price, S/Q, and other things like celebrities, advertising, plant capacities, and bidding price. total sales volume estimate into the Branded Pairs to be Manufactured in Year XXslot for North America, write down your reject rate and add it to your previous total N.A. This means, you decide about the S/Q Rating of your branded pairs produced and your compensation and training for your employees. You can win the game if you follow the High quality and the Low number of models. For further explanation, please read my blog post. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out. I started with paying $0.05 dividends and increased it by $0.05 every year. But if i decrease my model, I dont think I will be competitive enough to compete with him if he stays with his strategy, what do you think? If this is still not enough, add the missing shoes to the other plants Branded Pairs to be Manufactured in Year XX number. If you have beginning inventory from last year (you did not sell all your shoes), try and use the Inventory Clearance option in the lower half of the page. This site uses Akismet to reduce spam. I am currently dominating my industry, and closing in on the top 100 list! Free shipping will most likely not increase your profits. Should you consider selling a factory, dont upgrade it because you will lose that investment. Thats a relief. Here is a chart again tho show you the process: If your regular production capacity is not sufficient, use overtime. This way, it becomes a living guide for decision-making for the entire company. You basically determine and run the market. BSG Guide - How to Win the Business Strategy Game Profit is the key to success in this game! Look at the demand for each market, then divide each plant supply for each regional market. You can either take out a 1-year, 5-year, or 10-year bank loan. After you have calculated the manufacturing volume for each region, add up your N.A. Paying off these loans in advance has the advantage that you will pay less interest over the coming years. Select +2% for the Percent Change in Competitive Impact of All Other Factors from Previous Year. 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 is the case of iPhone or any other high end products are bringing values to customers such as cars and fashions. You can also pay dividends to your shareholders. This way, you end up buying the share at a lower price. 1. Go ahead and try out which combination yields the highest profits. Try out different combinations that keep you at 8* and the highest possible net profit. We aim to increase market share through factories in three continents, NA, AP and LA. For instance, you can change the Industry Average to +2% or +4% to attain the optimal. With revised strategy, G-Brand will focus on offering higher quality products, more models, more fashion, to be industry leader in cost for value. Again, maximizing net profit is all you care about with our strategy determined at the beginning. Increase S/Q ratings? Moreover, this may be a lesson in the real world of business as everything comes with quality, models, and price. We need to control this better in next five years. ? 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). It typically keeps increasing until a certain price point and then starts to drop. Keep focus, year 17, we over sleep in Victory, and ignore competitors. First, click on the Adjust Competitive Intensity button that can be found on the top middle of the page. After you have plugged in your numbers for both plants and your Branded Pairs Available for Shipment matches your Total Branded Pairs Shipped from each Plant, go ahead, click the Save Decisions button, and move to the Private-Label Operations page. We do not focus on rebate, time of delivery. How can the company defend the position if you are leading? If it is 0%, that is fine as well, do not worry about it. Also, we are doing better than in the past so interest rate is lower. My group and I are also playing the new version of the game and were little bit lost. Do not sit on it. More than two groups following the same strategy suffer the same difficulties since they create direct competition among their target market. However, if you want to do it more precisely, note down each industrys percentage change over the years and use this number instead of the +2%. Best-Strategy Invitational High-performing companies worldwide face off in a 2-week competition hosted 3 times a year by the BSG author team. According to the change, you can estimate the next years average industry internet price and plug it in. For example, a WMS can: Yes, I would definitely do plant upgrade option C! Also, G-Brand believes that every organization has a social responsibility to promote harmony within the community it exists. I never really watched my EPS or credit rating (ofc credit rating should be a B at least). You and your co-managers are taking over the operation of an athletic footwear company that is in a neck-and-neck race for global market leadership, competing against rival athletic footwear companies run by other class members. That being said, when you go with the strategy explained in my post, you will have maximized profits. I will explain soon, how to increase plant capacity and why we need the capacity for private label. Tips on How to Win the Business Strategy Game (BSG) That is overall good. Any thoughts? Also, G-Brand need to keep high market shares, year 17 market shares are reduced, but G-Brand has get back to Top in Year 18. 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. I feel you. In the first few years, this will be pretty difficult to determine. The Business Strategy Game: A Reflection
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