If I have further questions do you mind I ask you for help? You can still ship pairs from LA to somewhere else if needed. You always want to make sure that you produce your sales volume for N.A. Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. Do not worry about the Plant Capacity / Upgrades page. That’s a game changer!! The information is these guides is laid out, and displayed, in such a way... that crucial decisions should be a breeze. You are almost done for the Sales Forecast decision page. Thank you in advance! If you really need money, I would rather advise you to issue some of your stock. First, set your Number of Models to 50, as determined earlier at the Sales Forecast page. Hi! Now you begin to understand why I earlier said, that if you use overtime for branded production, you should expand your plant capacity for the next year. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. Let me walk you through the various decision pages and explain you how to optimize each entry. But do whatever is necessary to maximize your profits. Leave everything else unchanged. Sales Forecast. Should I decrease the “pay dividends” and do “stock repurchase” in Y13? my advice would be to read my guide and follow the steps. Which wholesale are you referring to? From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. honestly i started with 150 models at 6 stars and went to 200 and 7 stars, 8 in private label. 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. Let me know if you have any more questions. I have experienced different behavior with bidding on celebrities. You can only do one upgrade at a time in each region and a total of two updates per region. Any advice? This means, without increasing your superior material or enhanced styling / features, you gain 1 star. It might be tedious work and consumes a lot of time, but it will definitely worth it and will let you win the BSG. Be careful: Sometimes, especially for advertising, numbers that are way off (for example $100 and $8,000) can yield about the same net profit with only a little difference. If not, I don’t see the need to purchase equipment in order to make more shoes until the demand begins to encroach upon my shoe making capacity. You will need those numbers later on. Again, maximizing net profit is all you care about with our strategy determined at the beginning. 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 aren’t going to end well any advise on what we should do on inventory and other sections of the game. Try and set it to “Yes”. I put $1.00 pay dividends, which turned out 20,000k in total. So your costs will be relatively low as well and the private label will be a very important factor of yours. Your estimate of the industry average for the internet retail price does not change with your adjusted competitive that you set to +2% before. Thank you very much for your kind words! . Please delete one if there is an extra comment. With our strategy in mind, I would recommend addition capacity to already existing plants rather than constructing a plant in a new region. What matters so much more than anything else is making reasonable quality shoes and selling them for a lower price. With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. For only $35, get instant access to the Business Strategy Game Guide. Helped me get to the second place! I guess because i grew too fast last week, this week’s net profit is negative (I didn’t make any adjustment yet). I would like to ask you about the Dividends. Hi You have to base it off the HIGHEST wholesale price, just to be safe Like that, all 4 regions are guaranteed to be 40% above wholesale price. (In Y11, I did the 5-year loan with 12,000k (7% interest). Superior & Standard material forecasting and the mistakes almost all teams start out making when predicting them. Hence, find the combination that gives you the highest profit. Purchasing capacity is 20% cheaper than building new capacity on your own. Okay. Private-Label Operations. The two most important values you want to have as precisely estimated as possible are the industry’s average wholesale price and S/Q rating. 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? I followed your recommendations, and I have a good rank. You can decide to sell or purchase available capacity, upgrade your plants, build new plants in other regions, or add capacity to already existing plants. Hi, I would recommend purchasing the upgrade for both of your plants within the first four years. I hope that helps and good luck! You do not want that to happen, especially because your internet sales only account for a small percentage of your entire sales. It is all about trying out all possible combinations. We were actually thinking on building capacity in LA for next year, however, two of the other teams already built capacity for 6,000 pairs in total (we are only 4 teams in total). So the question is: would you recommend for my team to still increase capacity despite this fact? Thank you, Fin! At the lower half of the page, you also determine how many branded pairs you want to manufacture in each region you have a plant. I don’t 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. Otherwise, their endorsement effect declines. Thank you so much for your reply! It’s not too bad, no worries. (I’m adjusting for Y13 now). After you are done, move on the left side and do the same for your internet sales. 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. I usually go ahead and plug in whole dollar amounts for the wholesale price and see how net profit changes. 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. Again, it is important that you keep in mind to optimize your profits. Your interest rates depend on your credit rating and the duration of your loan. While +2% might now always be spot on, I have made the best experience with it so far. But it is definitely worth it. For further explanation, please read my blog post. thank you:). Oprah Winfrey has openly struggled with her weight for years, so her longtime pairing with Weight Watchers feels uniquely authentic. 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. Yes, I would only add capacity onto existing plants and not build new plants. We would like to show you a description here but the site won’t allow us. I started with paying $0.05 dividends and increased it by $0.05 every year. You have successfully adjusted to your competitors. congrats on your success! Do you have any suggestions? My group and I are about to complete year 17 for the game. Exactly. If you have more cash available, go ahead and spend it for either one of the other options. Celebrity Endorsement Contracts. In the world of the BSG simulation, being a celebrity must be a much better career choice than being the executives of a shoe manufacturer. havr the highest stock price, image rating at 90, A+ still, and double digit EPS. It can be very beneficial for you. You will get the hang of it after the first few decision rounds as it is always the same procedure. Hello. If you tweak those numbers, your demand will adjust accordingly. 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 can see that advertisng budget from 30.000 t0 50.000, so we can spend 10.000 to 20.000 for PR. Yes, I would definitely do plant upgrade option C! Right now I am doing the second year decision, I’m doing star 8 and 100 models, did 7 stars and 100 models in first round and the result was not very good. Here, you will plug in your previously calculated regional total sales volume for each region. You are playing the BSG but do not want to read the 35-page Player’s Manual? Start off with the values that you know for sure: For the high quality, low models strategy, I recommend starting off with a S/Q rating of 7 stars and 50 models available. Unused capacity kills your numbers and profits! To do so, first plug in your N.A. Write down each region’s reject rates and add them up to the region’s estimates sales volume. There’s everything explained in detail. The Business Strategy Game (BSG) is online games in which students form teams that are assigned tasks and compete in running the business of an athlete footwear company. The end result counts. Yeah I will hold on to that for now. How and when to buy celebrity endorsements at the BSG-Online. 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. However, if done right, it is worth the time as it will yield the maximum profit possible and success in your industry. Learn how your comment data is processed. Increase Model available b. 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. My team and I are going to the second round of decisions, so I think we’re still on time to switch towards another area in the market. unfortunately I have no experience with adjusting to my strategy in the late-game. If you are completely new and your projected performance box is not showing yet, you have to click the “Save Decisions” button on the upper right-hand corner for the projected performance box to appear. ?… 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 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. Here, you will decide for how much your shoe is going to sell. 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. Free shipping will most likely not increase your profits. So do you mean although we sell exactly same shoes it does not matter even my rival’s price is lower than mine so long as i can maximize my profit? While celebrity endorsements certainly help to attract consumers, its direct influence on the consumers’ purchasing decisions are inconclusive. Most of the teams usually bid way too high. I recommend increasing capacity and keep focusing on your profits. However, there are still some other “voluntary” decision that will prepare you for future decisions. That combined will give you a good boost for the last year. Question is: Marketing, Celebrity Endorsement, and Market Share – are there relationships in the BSG among these three factors? But this year the shipping is too high from AP to LA so I cannot make any money from LA. . By clicking on the “Purchase Capacity” button, you can see whether someone else did the mistake and sold capacity. The private-label market is a very nice opportunity to gain an advantage off your competitors and take their market share. at least one of the two teams has an S/Q of 8* and low prices so far (yes, they are in first place for now)… what do you think we should do?. is it because I need to add capacity? Almost done, the last decision page. I believe it varies based on your game’s situation. It’s not too late to do that yet. It almost worked TOO WELL. I still think it’s a waste to build a plant there, unless you’re selling tons of shoes (high models, mid SQ). I was thinking about building a LA plant because I took the majority of private label there last year. Hi! Sounds good, congrats! Otherwise you will not sell any shoe either. Especially with our high quality and low models strategy, this will be very beneficial and will safe you some money. Like I said before, you should be building capacity, yes. and L.A. in North America to reduce costs because of NAFTA. 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 he also purchase 4000 capacity in the first year but no advertising expenses. I now have another question about capacity. List of Joe Biden 2020 presidential campaign celebrity endorsements. Does it hurt any other factors? $50.66 but $50.67 gives you higher profits, go for the higher prices. One week they might increase, the other they might increase by just a little or even decrease. Thanks for your strategy! I suggest to go for maximum profits. So far I have only build a 1000 EA plant and additional 500 NA plant. Hi. When doing so, you have to plug in numbers for the assumptions section in the new window. Do not bid too high for Celebrity. Celebrity endorsements, along with the impressions and perceptions people gain from watching a company’s media ads over time, combine to define how strong a brand image a company enjoys in the minds of athletic footwear buyers. I am so thankful for your post!!!!!!!!!!!! In the first years, the estimate of the industry average might be a little off the +2%. I would still go for the 50 models and make sure to buy or build capacity so you have enough for your private label. The BSG tends to underestimate those values by about 20% and hence, you need to correct them for a more precise estimate. That being said, when you go with the strategy explained in my post, you will have maximized profits. Now, I am worried about the future rounds. Three Best Decisions 1. You might think that using green footwear materials or using recycled boxing / packaging is a good decision, especially with the currently ongoing environmental debates. This site uses Akismet to reduce spam. The same accounts for your Change in Annual Base Wages and Incentive Pay values. And profit is what the game is all about. Hence, make sure to plug in every possible value to reach the highest net profit possible. so idk what i may have done LOL, Hello, may I ask my is not that great at the moment and we are onto year 13 which is like 2nd year maybe of the game and i try my best to like follow your tips though not as fully cause I still don’t understand much especially the calculation one a bit confusing cause I am bad at that, so far I have 7 s/q rating though I am unsure should I do lower models or not cause I am afraid it might not be enough for profit and all because most I see at average of rating and high models , I was wondering what can I do to make it better? Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. The private-label sector is something you do not want to miss out on, especially with our high quality, low models strategy. 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. It is important to toggle your values and find the best combination to maximize your net profit. Should I continue expanding NA or AP and by how much? This is probably the most important decision entry page in the game and you will be spending most of your time here. This decision page deals with your plants. 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. Now, decide to which region you want to ship your private-label shoes. Increase Market Share a. Increase models? ... * Only 3 of a total of 12 celebrities are available for endorsements in year ’11. Bernie Sanders for Joe Biden. PS: I left a comment, but I did not see it and thus retyped. construction cost to be financed with debt. Let us take a look at the Plant Capacity / Upgrades page first. I am currently dominating my industry, and closing in on the top 100 list! Set Models Offered to “50” and Free Shipping to “No”. I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. On this page, you will set your values for your branded production. Same for your superior material. I did not forget it, but we will take a look at it later. Do not worry about me skipping the Internet Marketing, Wholesale Marketing, and Celebrity Endorsements pages. In the upper left box, you have available sources of additional cash. Or you have read it but still do not know what strategy to pursue or what is going on? Celebrities will enhance your marketing efforts and help you sell more shoes. You basically do the same thing over and over again, for every decision round. Some teams will get a ton of celebrities at wasteful prices as you can see in the screen below. In The Business Strategy Game, 1 to 5 class members are assigned to operate an athletic footwear company that produces and markets both branded and private-label footwear and competes head-to-head against footwear companies run by other members of the class.As many as 12 companies can compete in a single industry grouping (class sizes above 50 are typically divided into two or more … Hi, you’re welcome. In the end it is your product that will make or break you. First, click on the “Adjust Competitive Intensity” button that can be found on the top middle of the page. In The Business Strategy Game, 1 to 5 class members are assigned to operate an athletic footwear company that produces and markets both branded and private-label footwear and competes head-to-head against footwear companies run by other members of the class.As many as 12 companies can compete in a single industry grouping (class sizes above 50 are typically divided into two or more … Paying off these loans in advance has the advantage that you will pay less interest over the coming years. You will soon know why. (“0” for both stock issues and stock repurchase). So when following the steps described above, you will have positive ending cash really soon again. Try out different combinations that keep you at 8* and the highest possible net profit. In this section, you can upgrade your plants. This has been very useful. In the first few years, this will be pretty difficult to determine. The good news is you don't have to worry at all about Internet Sales (stay out), Private Label (the sucker's play), Celebrity endorsements (don't waste money here) or any of that fluff. We should consider with Advertising budget to decide PR budget, which is between $3,000 and $6,000. However, to be able to do so, you need available capacity. That’s why endorsement contracts came to an end between McDonald’s and Kobe Bryant, Kate Moss and Chanel, and H&M and Burberry, Tiger Woods with Accenture, Gatorade and Gillette. It is usually best to repurchase stock at the beginning, when your stock prices are relatively low. Low price cost provider - we think that this was an unexplored area by the teams 3. Hi Dennis. Decision Entries for the BSG. Bids for Celebrity Endorsements, Finance & Cash Flow]. Hi, I’m glad to hear that it helped! This game can be overwhelming, so anything to help other players! You are now done with all your decisions for the Corporate Citizenship decision page and should hit the “Save Decisions” button on the upper right-hand corner. If you found your highest value for the best net profit, move on to the next value and do the same. However, it will also decrease your ending cash. How did your 2nd decision go? Buy Now with PayPal. Important: Your Sales volume, not the production volume that includes the rejected pairs! Sorry for the late reply.. Been starting my new job and working a lot lately. I recommend building additional 1,000 capacity for the North American plant in the first year, if your cash balance allows it. 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? I like to have around $8-10 million ending cash available after all my decisions are made. In my opinion, I believe the other teams are thinking on exploit the private label. I will talk about the Celebrity Endorsements page later. Hi Fin, Thanks for the detail post and the screen shots. It typically keeps increasing until a certain price point and then starts to drop. 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. Here is a chart again tho show you the process: If your regular production capacity is not sufficient, use overtime. sales volume estimate. However, if you want to do it more precisely, note down each industry’s percentage change over the years and use this number instead of the +2%. Even more important is, to stick to it! Ideally, you can cut your employees’ wages and will increase profit. total sales volume estimate into the Branded Pairs to be Manufactured in Year XX slot for North America, write down your reject rate and add it to your previous total N.A. Weaknesses: Enygma lacked in celebrity appeal for both wholesale and internet segments as the company lost out in a number of bidding wars for celebrity endorsement contracts in Year 12. The Business Strategy Game is all about. 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. At the end, I increased dividends to boost my ROE. You said that the internet price should be 40% above wholesale. Set your price to whatever maximizes your profits. Same with all the other values, like I described in my blog post And then use all your remaining shoes for the private label market. Again, this can be trial and error for a couple of decisions but you should get a feeling for what multiplier is best for your company. May be increasing 1.000 every year, when we have higher Net Profit. 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. And should I do “stock repurchase” this year? No worries, it will be easier after the first few years. I will explain soon, how to increase plant capacity and why we need the capacity for private label. The overriding purpose of The Business Strategy Game is to give you practice in making business decisions, learning to craft winning strategies in a competitive market, and being held fully accountable for the results of your actions-just as managers in the real-world are held accountable for the performance of the companies they run. Thank you so much for the good recommendations. We had a bunch of copycats in practice year 12, but nobody has figured our profit-maximizing, low-cost strategy, and now they’re pursuing higher models in the real game. It is not as strong as Advertising Spending. In addition, you have the option to repurchase your stock. My group and I are also playing the ‘new’ version of the game and we’re little bit lost. I never really watched my EPS or credit rating (ofc credit rating should be a B at least). Thank you! Okay! Hi Lee, The belief of getting high quality product. Re-Financing Loans. If not, see what positive percentage yields the highest profit for you. You need your capacity and it is never a good idea to sell your existing capacity. It makes sense; the more ads you run, the more your celebrity endorsement will be seen and the more effective it is. I only ever paid attention to my profits and I never ever sold capacity. After you have found the right price, click the “Save Decisions” button. Celebrity Endorsements Marketing variables de-Retail Outlets (willing to carry your brand) Celebrity Appeal (sum of appeal indices for al 1,451 2,137 60 1,171 1,168 Corporate Citizenship termined by prior-year decisions / outcomes. One time, I was able to increase my net profit by lowering TQM / Six Sigma Quality Program to $0.20 and increasing Percentage of Superior Materials to maintain my S/Q Rating. I’d also like to point out that it appears the developers threw out NAFTA in the new version, so tariffs hurt pretty bad in Latin America. Optimizing your values is the essence of the game, even though it might be very time-consuming. If you demand for branded production is met, put everything else into private label to make sure you don’t have unused capacity. If your results in the first year are not too good, it’s not a big deal. As already mentioned earlier, not every decision has to make sense. So I doubt on his strategy. Prior to Michael Jordan,Nike primarily sponsored tennis and track athletes. This is why building additional capacity is so important. Also, I suggest not decreasing your dividends. On the talent side, BSG helps celebrities and influencers build their personal brands by pinpointing and executing authentic brand partnerships and endorsements. 4. In the upper right box, you can spend your excessive cash. On this page, you will optimize your entries and toggle each value until your reach the maximum profit possible for each entry. According to the change, you can estimate the next year’s average industry internet price and plug it in. From experience I’d say tho that it is already too late to adjust to my strategy presented. . Branded Distribution. or A-P plant. as I described in my post, I’d go with the “low models, maximum profit” strategy as it is easy to follow and you determine the market. With increased competition, prices tend to decrease. A game can be won without celebrities. When contracting a celebrity, your advertising efforts in the Sales Forecast section should not be low. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. I feel you. practicing and experiencing what it takes to develop winning strategies in a globally competitive marketplace. I will just adjust it first and see what happens, thanks a lot:). 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? But again, thanks! However, try your best. So, from 1.000 to 10.000 for year from 11 to 20 is good and reasonable. Do this for all the four regions. Yes, it’s not too late yet to follow through with my tips. That’s one of the things you should never do because you can always use capacity. I would then adjust the Percentage of Superior Materials to whatever is needed to match my S/Q Rating with the value plugged in on the Sales Forecast page. Paying dividends will increase your stock price and your ROE. Celebrity Endorsements Footwear companies can contract with celebrity sports figure to endorse their footwear brand and appear in company ads.
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