Then we can analyze business results to identify new marketing, production strategy. Increase S/Q ratings? havr the highest stock price, image rating at 90, A+ still, and double digit EPS. Hence, find the combination that gives you the highest profit. This can be a very tricky decision and you need to analyze your competitors prices. . We will keep going with this rate in next five years with expansion strategy, based on large volume, higher S/Q and reasonable Prices. We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. Thank you in advance! For this blog post, I will concentrate on the high-quality + low model strategy. Never give up, we can always find a good way to improve a company, despite its position in a market. Just plug in numbers and note down your net profit values. 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 important to toggle your values and find the best combination to maximize your net profit. 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. On this screen, you can handle your financial decisions for your company. Thank you! Net Revenue of 52.76, but cost of 25.43; 3.16 for warehouse; 10.50 for marketing; 1.16 for Admin, make the Net profit of 12.53. 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?. 14. I still think its a waste to build a plant there, unless youre selling tons of shoes (high models, mid SQ). The end result counts. Decades of experience in warehousing and distribution can be an incredible advantage. It was set Pay Dividends $1.00, which turned out 20,000k in total. From round 2, there is a risk that other groups can set the same strategy with the winner can be you. Before you even start plugging in any numbers, it is important that you decide for a strategy to pursue for the game. From Year 19, if any, we have over 100 million cash in hand and Net Profit every year, it will be better financial status for us to expand or invest in upgrading new factories, or even produce at higher stars 8, 9 or 10 stars. 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. 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. But keep in mind the risk of jumping up or going down with the high bid price. We need to figure out most effective ways to increase ROE by increasing Net Profit but keep Total Equity low, not expanding faster than increase of Net Profit. Let us take a look at the Plant Capacity / Upgrades page first. So, play around and find the best combination for your given S/Q rating that yields the highest net profit. Beat the Business Strategy Game. Unused capacity kills your numbers and profits! 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 should pay attention that your S/Q Rating of Branded Pairs Produced matches your value on the Sales Forecast page. Most of the decisions you can make here are a waste of money and will not benefit your company. like should I just follow your tips through all because I kind of get on a bad start. Any thoughts? 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. Try and set it to Yes. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. I started with paying $0.05 dividends and increased it by $0.05 every year. 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. So if one of your markets is not satisfied or prices are high, I would built capacity to attack this market and sell a lot of shoes for a cheap price, to guarantee you the lowest price so that you sell all your offered shoes. Then, you want to plug in your L.A. total sales volume estimate into theproductionslot for North America as well and add up your reject rates. The most important advice in advance: it is all about PROFIT. You can lower the costs by increasing training and upgrading facilities. Id 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. 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. I let the rest remain the same in the entry. This is the case of iPhone or any other high end products are bringing values to customers such as cars and fashions. You almost can never have enough capacity because what you dont sell in branded, you can sell in private label and dumb prices there and take away your competitors market share. Again, it is important that you keep in mind to optimize your profits. Besides, you can lower the cost per pair of shoes. And profit is what the game is all about. After you have done this, you might notice that your Your Estimate of the Ind. The closer your actual numbers are to your estimates, the more likely it will be that you earn bonus points from the Bulls Eye Award (be within a 5% range of the estimates). However, I would recommend not taking out any loan if possible. You are almost done for the Sales Forecast decision page. 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? The higher your celebrity endorsement value for a specific region, the more your advantage in attracting buyers to purchase your branded footwear. If you add capacity it will show you the price. Should you win, it would mean your tips are more favorable, and your competitors may learn from you. Besides, your team will have the opportunity to translate a high-level conceptual strategy into concrete actions for the company and team while developing their decision-making skills. My question is what if I decreased the pay dividends to $0.15 from $1.00? 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? View Distribution & Warehouse.pdf from MGMT 5355 at Texas A&M University, Corpus Christi. How can the company jump over other competitors? Tips: We ship from NA to LA because no import tax or tariffs due to NAFTA (North American Free Trade Agreements) - The North American Free Trade Agreement, or NAFTA, is a three-country accord negotiated by . 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. 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. That combined will give you a good boost for the last year. Try to move away from your competitors if they are applying the same strategy. Same for your superior material. Check the Competitive Intelligent Report. Again, maximizing net profit is all you care about with our strategy determined at the beginning. 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. Key Term business strategy game year 11 decisions; This preview shows page 1 - 2 out of 2 pages. Hey!! Your interest rates depend on your credit rating and the duration of your loan. In next five years, G-Brand will be more competitive with production capacity at the top and also high quality with largest collection. To do so, first plug in your N.A. Key pharmaceutical distribution warehouse questions to ask a 3PL. You might have the highest profits with 0 advertising budget. I personally find it easier to pursue and had more success with it in the past. Any advice? Private label will help you dominate your competition. This means, you have a channel conflict, meaning that your Retail Outlets number will decrease in the next year and less retailers are willing to sell your shoes. Write down each regions reject rates and add them up to the regions estimates sales volume. With remaining the cash on hand, try to buy back stock, pay off your loans from the beginning of the game, pay back dividends, and upgrade your plants. Because with more capacity, you can offer more pairs in private label and dominate the market there. 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. Set Models Offered to 50 and Free Shipping to No. sales volume estimate. What are the core competitive advantages? You can still ship pairs from LA to somewhere else if needed. Market share is not crucial for your success in the BSG, but profit is. However, it will also decrease your ending cash. You now have an estimate of how many shoes you are going to sell in each region. Winning the BSG game is essential. Also do you know the cost of building additional capacity. For example, a WMS can: However, to be able to do so, you need available capacity. Two of the most important things to do here are analyzing your competition and optimizing your values. Were at the middle of the pack and wanted the best strategy to move up the ranks. And you said I should only add capacity onto existing ones instead of building a new one in LA right? Thank you very much for your kind words! We keep the Mission which we built from last 8 years. After you have calculated your new regional wholesale sales volume, add the regional internet sales volume to it. Now we learn from the game and be more knowledgeable in making business decision. However, do not rely on those values. Does it affect any other factors? For only $35, get instant access to the Business Strategy Game Guide. For further explanation, please read my blog post. If your results in the first year are not too good, its not a big deal. You do not want that to happen, especially because your internet sales only account for a small percentage of your entire sales. Also, G-Brand believes that every organization has a social responsibility to promote harmony within the community it exists. Moreover, your strategy needs to be actively communicated to each level of management regularly. Also, we are doing better than in the past so interest rate is lower. If so, we need to start building a new factory in LA, eg. After you have done this, play around with the values for Wholesale Price, Advertising Budget, Rebate Offer, and Retailer Support (increase/decrease by 100s only, as everything else makes no sense). As always, do not forget to save your decisions after you are done. Please delete one if there is an extra comment. However, do not price your shoes too high, so that your competitors have a lower price than you and will sell their shoes first. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. ROE indicates how much profit is generated with the investments that shareholders made. Do not worry about me skipping the Internet Marketing, Wholesale Marketing, and Celebrity Endorsements pages. I am currently dominating my industry, and closing in on the top 100 list! Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. I like to have around $8-10 million ending cash available after all my decisions are made. Also, I am concerned about the prices strategy; the group who is in the first place has the plan of highest S/Q rating (7) with 200 models and lowest prices. I always went with 500 every second year, but it depends on your market and competitors. I followed your recommendations, and I have a good rank. We can check that before making decisions. 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. In the first few years, this will be pretty difficult to determine. I was wondering how much more additional capacity that I should purchase after Ive bought the first 1000 for NA. . What should I do for year 12 and 13? Keep in mind to check your profits and ensure they get as high as possible. If it is 0%, that is fine as well, do not worry about it. However, you should keep on thing in mind: Your internet price should ideally be 40% higher than your wholesale price. When contracting a celebrity, your advertising efforts in the Sales Forecast section should not be low. If I have further questions do you mind I ask you for help? Ship all the other shoes for the Europe-African warehouses and the Asia-Pacific warehouses from the Asian-Pacific plant. 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.
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