THE BUSINESS STRATEGY GAME

Overview and Orientation

 What Is
The Business Strategy Game ?
BSG is an online exercise where you manage an
athletic footwear company in competition against
companies run by other class members.
The marketplace is worldwide production and sales
activities can be pursued in 4 regional markets:

And in each region there are 3 market segments:

Internet Segment (online footwear sales direct to retail customers)
Wholesale Segment (footwear sales to local retailers)
Private-Label Segment (unbranded sales to large retailers)
 Company Situation

All companies start out in the same position with

equal sales volume, market share, revenues, profits,
costs, and so on.
Each decision-making round represents one year of
company operation.
There are 10 years of history and you will assume
management of the company beginning with Year 11.
In Year 10 the company had:
Sales Revenues of $238 million Return On Equity of about 17%
Net Profit of $25 million a Stock Price of $30.00
Earnings Per Share of $2.50 a Credit Rating of B+
The company is in sound financial condition and is
performing adequately.
 The Decisions
You Will Be Making
Each decision round (year) you and your co-managers
will make decisions relating to:
Corporate social responsibility and citizenship
Plant capacity additions/sales/upgrades
Production of branded and private-label footwear
Worker compensation and training
Shipping and warehouse operations
Pricing and marketing
Celebrity endorsement contracts
Financing of company operations
Plus, you will be responsible for annual sales forecasting and
inventory management.
 Competition

The competition among companies to sell their brand of

athletic footwear is based on 10 factors:
Price
Styling/quality (S/Q) rating
Number of models/styles
Advertising
Size of retail network
Celebrity endorsements
Delivery time
Retailer support
Mail-in rebates
Shipping charges (internet sales only)
 There Are Many
Strategic Options
There is no built-in bias that favors any one particular
market or strategic approach. There is no secret
answer or approach that will guarantee success.
Most any well-conceived, well-executed competitive
approach is capable of succeeding unless:
it is not overpowered by the strategies of competitors, or
it is defeated by the presence of too many copycat strategies
that dilute its effectiveness.
In other words, which strategies deliver the best
performance hinges on the strength and interplay of
each companys strategy and decisions against the
strategies and decisions employed by rival companies.
The Contest in the Marketplace
Is a Battle of Strategies
Following each decision round, you will be provided
with a Competitive Intelligence Report containing
information of the actions rivals took to capture sales
and market share.
With this information, you will be in good position to
anticipate some of the strategic moves that rival
companies are likely to make in upcoming years.
Just like in football or other competitive sports, you
will need to scout the strategies of rivals, try to judge
what they will do next, and come up with a
competitive strategy of your own aimed at defeating
them and boosting your companys performance.
 Its All About Developing
Winning Strategies
The Business Strategy Game is all about practicing and
experiencing what it takes to develop winning
strategies in a globally competitive marketplace.
At the end of the simulation, what will separate the
better-performing companies from those with weaker
performances is the caliber
of the decisions and strate-
gies that company managers
have employed.
BSG is an exercise designed
to spur competition and to
get your competitive juices
flowing.
 How Your Company
Performance is Judged
Board members and shareholders/investors have set five
performance objectives for the company:
1. Grow EPS (earnings per share) by at least 7% annually through Year 15
and at least 5% annually thereafter.
2. Maintain ROE (return on equity investment) of 15% or more annually.
3. Grow Stock Price at about 7% annually through Year 15 and about 5%
annually thereafter.
4. Maintain Credit Rating of B+ or higher.
5. Maintain Image Rating of 70 or higher
(a companys image rating is tied to the styling/quality of a companys branded
footwear, market share penetration, and its actions to display corporate citizenship
and social responsibility).
 Scoring Weights

The weights that will be placed on your companys

achievement of each of the five annual performance
targets are as follows:
EPS 20%
ROE 20%
Stock Price 20%
Credit Rating 20%
Image Rating 20%
 Your Company Performance Is
Measured Against Two Standards
The Investors Expectations Standard (I.E.) Did you
meet or beat the annual performance targets for each
of the 5 performance measures ?
The Best-In-Industry Standard (B-I-I) How well does
your companys performance stack up against the
company with the best EPS, ROE, Stock Price, and
Image Rating and against an industry-best A+ Credit
Rating ?
These scoring standards are explained in the Players Guide and
even more fully on the Help pages associated with the Footwear
Industry Report.
 BSG Quiz 1 and Quiz 2

There are 2 open book 20 multiple-choice question

quizzes built into the exercise. The quizzes are taken
online by each individual company co-manager:
Quiz 1: Covers the Players Guide its purpose is to
assure that you to read and absorb the
information in the Players Guide in preparation
for managing your company.
Quiz 2: Covers the Company Operating Reports and
certain information in the Footwear Industry
Report this quiz serves as a check to see if
you understand the numbers and how they are
calculated.
 The Peer Evaluation Exercise

When the simulation ends,

you will be asked to complete
a 12-question evaluation of
each of your co-managers as
well as a self-evaluation of
your own performance.
Peer evaluations are done on-
line within your BSG account.
Peer evaluation results are
kept confidential, only to be
seen by the course instructor.
What You Can Expect To Learn

Managing a company in competition with rivals will allow

you to experience the things you are reading in your text
about crafting and executing strategy in a globally competi-
tive marketplace:
chart a long-term strategic direction
set and achieve strategic and financial objectives
craft a strategy and adapt it to changing conditions
analyze industry, operating, and financial data
think strategically about competitive and market position
assimilate information and lessons of prior courses
better understanding of revenue-cost-profit relationships
practice in making sound, responsible business decisions
accountability for delivering good company performance
and much more
 Account Registration
How To Get Started

Step 1: Go to www.bsg-online.com and

click the button for New Students.
Step 2: Enter the Company Registration Code provided by your
course instructor. Check the box to accept the BSG Terms
of Use. Then click the Continue button.
Step 3: Fill out the registration form creating your account user
name (your e-mail address) and password. Then click the
Continue Registration button.
Step 4: Pay the one-time account registration fee by credit/debit
card using the secure online payment form.
If you have a Prepaid Access Code (payment code) that you
received from a school official or that came on a card bundled
with your text, you may enter it (rather than credit card info) to
complete your account registration.
 The Corporate Lobby

Upon registration (and each time you log in) you will arrive at
your Corporate Lobby page.

The Corporate Lobby page is your gateway to all BSG

activities. Near the top of this page is a series of buttons
that provide access to all of the information, materials, and
tools you will need.
 Suggested Procedures

Name Your Company You and your co-managers should decide on a

name for your company. The company name must begin with your assigned
company letter. To enter a name for your company,
click the Enter Company Name button at the top-right
of the Corporate Lobby page. All company names are public, so choose a
name that you will be proud of.
Read The Players Guide It is important that you read and under-
stand the material in the Players Guide. Click the Player Materials button
and choose Players Guide from the drop-down menu.
You can read it online, print, or download the Players
Guide PDF. To be a strong contributor to your companys management
team, thorough knowledge of the material in the Players Guide is vital.
Know the Schedule Click the Decision Round Schedule button to see
the deadline dates/times that your instructor has entered for each decision
round, quiz, and assignment. Decision round dead-
lines are strictly enforced, and the results for each
round are automatically generated by the BSG system and made available
within about 15 minutes of the scheduled deadline.
The Decisions / Reports Program

For every decision round, all company management

activities (decision entries and data review/diagnosis) are done
using the Decisions/Reports Program. To launch the decision program in a new
window, click the green button.

Use the Decisions/Reports Menu at the left to navigate the decision entry
screens and available reports.
There is a Help and Print button at the top of every screen and report page.
Use the Save Decisions button to save your decision entries to the BSG server.
You may change and save entries a often as you like until the scheduled dead-
line for the decision round arrives.
 Tips and Advice

Watch the Videos The Player Materials drop-down contains a

link to the Intro to BSG video and a link to a page of a dozen or
so Video Tutorials.
Use the Help Pages Every decision entry screen and report
page has a Help button. When you need more information than
is contained in a Video Tutorial, click on the Help button.
Follow the Recommended Decision-Making Procedures click
the BSG Support button at the top of the Corporate Lobby.
Take Advantage of the Practice Round(s) the purpose of the
practice round(s) is to help you become fully acquainted with
the decision entry screens and the reports that come available
at the end of each round. The more you learn from the practice
rounds, the better your chances for getting off to a good start !
 Tips and Advice
(concluded)

Manage the Company in a Serious, Professional Manner The

overriding purpose of The Business Strategy Game is to give
you practice in making business decisions, crafting winning
strategies in a competitive market, and being 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
manage).
Be very wary of trying things that are imprudent, highly risky,
or un-businesslike (things that would get a manager fired in a real
company) You are not playing a game, you are running a
business. This is NOT the time to be a daring adventurer out to
win some variant of a videogame by making wild and extreme
decisions. Those who approach the simulation as a game
usually end up shooting themselves in the foot.