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 If you notice something out of date in this presentation, please let me know and Ill correct these notes.

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

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

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

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

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

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

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.

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

Production and Markets

Plants N. A. Warehouses Europe Asia L. A.

Memphis
Ave. Market Demand (000s) Branded 1,432

Milan

Bangkok

Rio

1,432

990

990

P. L.

200

200

200

200