Business Strategy Game

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In three months your enterprise team will ramp up to bring your enterprise products and services into global markets. Your team will sharpen global strategizing skills in the experiential Business Strategy Game then turn that attention to your enterprise. Smart enterprises will test strategies here then apply lessons to current operations.

The Business Strategy Game is a head-to-head competition: company against company. Each company's team competitive effort vis-á-vis rivals is crucial to market success. Your team is in as realistic a company and competitive market setting as possible and are managing all aspects of the company's operations.

This MBA level online, PC-based real world simulation has been used by over 500 business schools in 25 countries and has had 500,000 players. It is a proven testing ground for strategic theory in an experiential learning environment.

Formulated by GLO-BUS Software based on Strategy: Core Concepts and Analytical Approaches by Arthur A. Thompson, Jr. and marketed through McGraw Hill Irwin.

The Playing Field

All companies start out on the same footing. Each decision period represents a year from Year 10 through Year 20. The company is in sound financial condition, is performing well, and its products are well regarded by buyers. Revenues at Year 10 are $238 million, net profits at $25 million (equal to $2.50 per share), an ROE of ~17%, and a solid B+ credit rating.

Board members and shareholders/investors have set five performance objectives for the company:

  • Grow earnings per share at least 7% annually through Year 15 and at least 5% annually thereafter.
  • Maintain a return on equity investment (ROE) of 15% or more annually.
  • Maintain a B+ or higher credit rating.
  • Achieve stock price gains averaging about 7% annually through year 15 and about 5% annually thereafter.
  • Achieve an "image rating" of 70 or higher.
Scoring Weights

The weights that are placed on all competitors company achievements of each of the five annual performance targets are as follows:

Two scoring standards are used in calculating "performance scores" for each company:
The Players

Each enterprise brings to the field a management team of three individuals; each team assigned to run an athletic footwear company competing in a global market arena, selling branded and private-label athletic footwear in four geographic regions—Europe-Africa, North America, Asia-Pacific, and Latin America. Company operations parallel those of actual athletic footwear companies Nike, Adidas-Reebok, and New Balance.

The challenge for each company's management team is to craft and execute a competitive strategy that results in a respected brand image, keeps their company in contention for global market leadership, and produces good financial performance as measured by earnings per share, return on equity investment, stock price appreciation, credit rating and image rating.

All companies begin the exercise on the same footing from a global perspective—with equal sales volume, global market share, revenues, profits, costs, product quality and performance, brand recognition, and so on. Company managers have wide strategic latitude in staking out a market position and improving their performance.

Companies have a full range of competitive strategy options — low-cost leadership, differentiation, best-cost provider, focused low-cost, and focused differentiation. They can:

•Employ a low-cost leadership strategy and pursue a competitive advantage keyed to having lower costs and selling at lower prices than rivals.
•Employ a differentiation strategy that sets their company's footwear apart from rival brands based on such attributes as a higher rating, more models/styles to select from, and such marketing attributes as more advertising, greater celebrity appeal, or higher mail-in rebates.
•Employ a more value for the money strategy (providing good quality footwear at lower prices than other good quality brands) where a company's competitive advantage is an ability to incorporate appealing attributes at a lower cost than rivals.
•Focus strategic efforts on being the clear market leader in one or more market segments—wholesale sales to footwear retailers or Internet sales or private-label footwear manufacture for chain retailers.
•Focus strategic efforts on one or two geographic regions (as opposed to competing in all regions).
•Pursue essentially the same strategy worldwide or else have regional strategies tailored to match differing competitive conditions in North America, Europe-Africa, the Asia-Pacific, and Latin America.
Company managers can pursue essentially the same strategy worldwide or craft slightly or very different strategies for the Europe-Africa, Asia-Pacific, Latin America, and North America markets. They can try to gain an edge over rivals with more advertising or a wider selection of models or more appealing styling/quality or bigger rebates or securing more appealing celebrity endorsements, and so on. They can alter their emphasis on selling their branded shoes through footwear retailers or at the company's Web site. They can place more or less emphasis on winning bids to produce private-label footwear for chain retailers.

There is no built-in bias favoring any one strategy, no "secret" to being the industry leader, and no "magic bullet" strategy that co-managers are challenged to discover in trying to out-compete their rivals. Which strategies end up delivering the best performance in any given group of rival companies that are competing head-to-head always hinge on the interplay and competitiveness of strategies that the rival companies are employing.

Most any well-conceived, well-executed strategy and competitive approach is capable of succeeding, provided it is not overpowered by the strategies of competitors or defeated by the presence of too many copycat strategies that dilute its effectiveness or.

In this real world simulation labor, resource, political and financial challenges add to the adventure of being in business. Facilitator Dale Bruder will input anticipatable and uncontrolled market forces from the current international press to challenge teams react and response decisions.

How Dale Bruder's Business Strategy Game Works

In this rendition of the game six companies field teams to compete in an industry. The time period begins at the tenth year and proceeds through the twentieth anniversary of the company.

There will be 10 decision rounds beginning with 2 practice rounds: to become familiar with the processes, over the 12 week simulation period. Each decision period in the Business Strategy Game represents a year.

The Time Commitment

It will take company team members anywhere from 2-4 hours each (depending on the speed at which they work) to study the market results and decide on new decisions each round. Expect to take more time in the early decision rounds (to become familiar with the software and various aspects of company operations), but a fast learning curve brings time requirements down quickly to the 3 to 5 hour range after the first 3-4 rounds.

Everything Delivered Online

Everything that team members need is delivered online — participants can make hardcopy printouts of anything they desire while online. The Business Strategy Game requires use of PCs equipped with Microsoft Excel (versions 2000 - 2010).

Each time company teams make a decision entry, an assortment of on-screen calculations instantly shows the projected effects on unit sales, revenues, market shares, unit costs, profit, earnings per share, ROE, and other operating statistics. Just like dynamic pro forma's, the on-screen calculations allow company teams opportunities to evaluate the relative merits of one decision entry versus another and make it easy to try out many decision combinations in stitching the separate decisions into a cohesive whole that optimizes projected performance.

There are detailed, built-in Help screens that walk team members through all of the decisions and describe cause-effect relationships. All of the reports offer "?/Help" links containing line-by-line explanations of how the numbers are calculated and what they mean. The ?/Help screens also offer "consulting advice" in the sense of providing guidance on "what to think about and why."

All aspects of The Business Strategy Game closely mirror the competitive functioning of the real-world athletic footwear market. Cause-effect relationships and revenue-cost-profit relationships are based on sound business and economic principles. Everything about the company and industry environment has been made as realistic as possible in order to provide company teams with a close-to-real-life managerial experience where they can apply what they've learned in enterprise experience, logically decide what to do, and otherwise practice being businesslike.

When the Business Strategy Game decision round arrives, the decision entries made by the companies are automatically "processed" and BSG algorithms award sales and market shares to the competing companies, region by region.

The all-important factors governing how many pairs a company sells in each geographic region are how its price compares against the prices of rival brands, how its footwear styling and quality compares against rival footwear brands, how the breadth of its product line compares, how its advertising effort compares, and so on for a total of 11 competitive factors that determine pairs sold.

The competitiveness of each company's footwear offering relative to rivals is decisive—this is what makes The Business Strategy Game a "competition-based" strategy simulation. Once sales and market shares are awarded, the company and industry reports are then generated and all the results are made available 15-20 minutes after the decision deadline.

The processed industry reports are e-mailed to all team members. Complete outcomes for each decision period, which are available to all company managers online, include assorted industry statistics, company financial statements and operating reports, benchmarking data showing each company's competitiveness on a variety of cost measures, competitive intelligence on rival companies, and their company's competitive strengths and weaknesses in each geographic area.

Company team members can go online at their convenience to review the market outcomes and company results, then meet in person or chat online with other team members to agree upon any strategy changes and make their decisions for the next round.

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