Tips on How to Win the Business Strategy Game (BSG)

Updated on November 12, 2018
Angelo Grant profile image

Master of Business Administration (M.B.A.) at Wilmington University Sigma Beta Delta

Top The Business Strategy Simulation With The Best-Cost Strategy

If you want top honors focus on the insight provided in this article as it will help you formulate a winning strategy.
If you want top honors focus on the insight provided in this article as it will help you formulate a winning strategy. | Source

Team Work is The Most Essential Factor of The Business Strategy Game

The simulation creates the environment for teams to immerse themselves in the collaborative nature of getting business done. To become successful at the simulation the first order of business is to integrate with team members learn of the different ways that members complement each other. Teams become better assets than individuals when members are able to fit into the grooves of each other like the gears on a well-oiled machine. This will create synergy. The game requires a level of precision which can only be achieved if the team is pushing the same strategy, therefore, it is very important to select a strategy that is compatible with the various points of views of members. Diverse opinions should be encouraged especially if they are grounded in research. Follow the instinct that says there is a better option, always investigate this thought and never be afraid to challenge the soundness of a decision. For example, one team member offered the opinion that giving employees an increase in base wages would lower the total cost of compensation as well as the total cost of production. This notion was met with resistance but after toggling the percentage increase back and forth it became apparent that our team member who didn’t allow herself to be drowned out was well informed.

Some Key Considerations For Teams

1. Whether to customize the firm’s offerings in each country market to match local buyer's taste or offer standardized products worldwide.

2. Whether to employ the same competitive strategy in all countries or to modify the strategy country by country.

3. Deciding where to locate facilities, distribution centers, and service operations to maximize locational advantages

Corporate Social Responsibility

The simulation involves CSR as the very first menu option. Thompson (2018) states that a company’s “license to operate,” comes with an obligation to act as a responsible citizen and do its fair share to promote the general well-being of society and has the burden to operate honorably. A balance must be struck between how much a company can afford to spend on CSR before it becomes a burden on the business to the point of which it affects future growth and prevents the company from being equally committed to CSR in the future.

Most Company's Today Participate in CSR

A successful business is always able to give back!
A successful business is always able to give back! | Source

How To Win BSG Using the Best-Cost Strategy

The best-cost strategy means offering customers a product with the highest attributes of quality and style at a lower price thus allowing them to gain the best value for their money.

Recommendations for Improving the Image Rating in The Business Strategy Game

The best-cost strategy benefits the company’s image because increasing the S/Q rating while having a lower price is directly related to achieving a high image rating. If there are 5 groups competing in the market aim for at least 20% market share in each segment because being evenly represented across the geographical regions bodes well for the company’s overall image. If there are other groups pursuing the best-cost strategy try to be the first to get to 10 stars. CSR initiatives will boost the image rating but be cautious about how much you spend in this area.

Recommendations for Improving EPS, ROE, and Stock Price in BSG Simulation

Substantial growth in revenues and net profits will fuel tremendous growth in EPS and Stock Price. Therefore, growth-minded companies should consider expanding especially if plants are operating at over 80% capacity. Stock repurchase is also an almost instant way of increasing the stock price and EPS given the company continues to see reasonable growth. Remarkable growth minimizes the need to payout dividend but when growth begins to taper off consistent dividend payments as well as steadily increasing dividends by $0.05 year over year will help stabilize the company’s stock price. On the other hand, an increase stock offering will allow the company to finance expansion at a likely cheaper cost than taking a loan but will dilute the EPS.

Tips for Lowering Cost and Other Recommendations For Winning the Business Simulation Game

Toggle the advertising spending to see the lowest cost at which the company can achieve the desired market share. Turn delivery time to 4 weeks because it has no noticeable effect on sales but significantly affects EPS and Net Profit. Marginally reduce spending on retail support each year because it has a benign effect on sales. Toggle between each set of options on the branded production screen to see which combination of materials, styling, and TQM will be the most cost-effective for production. Do this for each simulated year because the cost of materials varies. Invest early in plant upgrades especially the S/Q rating improvement. An early investment in these areas will allow the company to enjoy the return on investment for several years. The amount of loans the company carries has the greatest effect on the company’s Credit Rating. However, once an A+ Credit Rating is achieved it doesn’t get any better than that, therefore, instead of paying down loans consider stock repurchase or some other investment.

Employing a Blue Ocean Type of Offensive Strategy

Involves abandoning efforts to beat out competitors in the existing markets and, instead, inventing a new industry or distinctive market segment that render existing competitors largely irrelevant and allows a company to create and capture altogether new demand. Focus on making your product distinctive in terms of quality or style and pay less attention to out promoting your competitors.

Winning a bigger market share is not a typical competitive weapon that a company can use to battle rivals and attract buyers.

Pitfalls to Avoid in The Business Simulation Game (BSG)

Do not neglect the information in the market snapshot but pay more attention to the footwear industry report rather than the portion that provides you with strength and weakness analysis, for example, advertising may be identified as a weakness, however, spending less on advertising while yielding better results than your competitors is actually an advantage. Investing in upgrades later in the simulation does not allow enough time to break even on the investment. Avoid spending too much on CSR. Be leery of how much is spent on celebrities because there are no metrics to calculate the usefulness celebrity endorsements. Note well that lowering the internet price can cause the cannibalization of the wholesale segment because the gap between internet price and wholesale price is related to the number of retail outlets that will carry your footwear. The greatest pitfall to avoid is switching strategy because of poor execution.

Using The Footwear Industry Report To Put Things Into Perspective

Learning Which Rivals Have Winning Strategies And Which Ones Have Weak Strategies is:

The managerial payoff from spending the time and effort to gather and digest competitive intelligence about rivals' strategies and situations and gain some inkling of what moves they will be making.

Understanding the Company Intelligence Report is Integral to Success

Understanding The Company Operating Report is Integral to Staying Ahead of The Competition

Your Questions are Always Helpful

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    © 2018 Angelo

    Questions, Comments, and Other Tips are Welcomed

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