BSG Game Report competition and business an analysis of business strategy game abstract in this competitive business arena it is crucial to strategize and come. In my "Combination Strategy", I am able to generate atypical profit margins through aggressive marketing, product pricing, and cost controls. Utilize any remaining plant capacity and overtime production and allocate it to the private label production. Invest early in plant upgrades, especially the S/Q rating improvement. 2,397 views 0 comments. Question: How can I increase the net revenue of my business? An underserved market will pay what you charge especially if you're the only player or if your product is significantly better than other offerings. Simply put, none of the above. Strategi cost leadership ini juga bisa meningkatkan pembuatan bonekamu. To avoid these tariffs, you can decide to allocate a plant to each of the four geographic locations. You can either decide to boost production by constructing a new plant in your preferred location or by purchasing an existing plant. The best-cost strategy benefits the companys image because increasing the S/Q rating while having a lower price is directly related to achieving a high image rating. The information is these guides is laid out, and displayed, in such a way that crucial decisions should be a breeze. Excessive bidding screws the bidder and under bidders will not land celebrities. Summarizing. The most common and crucial ones are explained below: Scaling refers to the process by which an organization reduces costs by increasing the volume of materials produced. . In the same breath, you are able to attract workers that seek out attractive and higher compensation packages. In other words, Ritu follows a cost leadership strategy, which makes her products more feasible for customers with less purchasing power. It is easier for large companies to adopt this strategy than for small ones. Question: My class will be limited to only playing through week 15, how do I need to alternate my strategy? High volume production. Be objective in your approaches from the beginning of the simulation right to the end. Porter argued that to be successful over the long term, a firm must select only one of these strategies. 7.0 Competitive risks of cost leadership strategy. Yes and no. They are most likely to stock up on your brand because they are assured that their inventory will not run out. Below is a list of cost leadership strategy advantages and disadvantages that all organizations must be aware of before proceeding with their cost-cutting endeavors. While playing the BSG I found the best strategy was the best-cost provider strategy. Unless we are prepared to fundamentally detach the tail of choices and costs or change it in some . Learn tips & tricks, from a BSG Grand Master! Cost leadership is one of three generic business strategies discussed by Porter in his well-known book, Competitive Strategy (1980). Deciding whether to offer standardized athletic shoes across all the regions or to customize the shoes according to the local tastes and preferences. Manufacturing shoes for the private label market allows for the proper utilization of the plant capacity. Harappas, course is designed to help navigate these challenges and show you how to master the concept of, . The simplest way to do so is to reduce the number of employees and ensure that each employee is performing at their optimal level. Here are some BSG Game Tips, Business Strategy Game Winninng Tips,If you are in need BSG Game Help,read this tips and you will be good +1(980) 213 - 0279 . The five forces are threats from competitors, powerful suppliers, powerful buyers, substitute products, and new entrants. Angelo (author) from College Park, MD on April 13, 2020: How do you improve your GTD when it is low. If you are the only one in private label production, set your prices as high as possible because you have no competition. Table 6.3 Executing a Low-Cost Strategy; Advantages: High profits can be enjoyed if a cost leader has a high market share. As said, product differentiation is the most popular type of differentiation strategy. Producing products or services in high volumes can enable companies to reduce their overall costs and benefit from economies of scale. The study guide approaches with two points of view: business strategy and game strategy. Substantial growth in revenues and net profits will fuel tremendous growth in EPS and Stock Price. Retailers are motivated to stock your brand if they are supported, for example, through advertisements, giving information about the shoe designs, style, and functionality, making it easy for the retailers to sell to the customers. In other words, it's a company's ability to maintain lower prices than its competitors by increasing productivity and efficiency, eliminating waste, or controlling costs. 3. 2. cost leadership, integration, or differentiation? This notion was met with resistance but after toggling the percentage increase back and forth it became apparent that our team member who didnt allow herself to be drowned out was well-informed. I have noticed that advertising spend and quality directly affect internet market share whereas, the cheapest goods will corner the wholesale market so you will have to manage your production/distribution accordingly. In Spring 2019 my performance broke previous records and disrupted the game scoring system. Top-20 stock price of $1,106.76 per share. C. extremely tall. Organizations that scale well tend to gain more negotiating power, greater durability against competitors and enhanced flexibility in pricing. If your speculation turns out to be correct then there are only a few drawbacks (1) Your credit rating will likely be impacted (2) When you sell shares it will dilute your stock value. The stock repurchase is also an almost instant way of increasing the stock price and EPS given the company continues to see reasonable growth. Pay attention to the needs of your customers as well as the capacity demanded by the market. This doesnt mean that an organization following focused cost leadership charges the lowest prices in the industry. The celebrity should also be compatible with the product, for instance, a football player would be ideal for a sports shoe endorsement. Your results will be a product of how well you implement the strategy you designed (did you keep your costs down, did you realistically price your shoes, etc) and a product of competitive forces encountered (did your competitors offer similar shoes, what were their prices, etc). Companies today participate in CSR initiatives to boost their corporate image rating. Yes, good news, yes. Amazon is a good example of this strategy. Answer: Great question, here is why; allowing surplus inventories to grow out of control is costly in two respects. This video shows an overview of my Year 12 decision in The Business Strategy Game in the Fall of 2019. Overspending in this sector can lead to a decrease in earnings per share (EPS), the return on equity (ROE), and even hurt the credit rating of the company. In the history of low-cost leadership, the entry of advanced technology has been a game-changer more often than any other factor. Year 14 into year 15 spend just enough cash needed to affirm an A+ image rating, pay down enough loans to secure a AAA/ A+ credit score. The emphasis is placed on the production of standardized products at a low per-unit cost for price-sensitive customers. A successful business is always able to give back! Inventory storage costs on carrying surplus inventory from one-year to the next is $1.00 per pair (handling and storage of required inventory entails annual costs of $0.50 per pair). This should give you a gigantic edge over competitors that dont see it. Here are some cost leadership strategies to establish and maintain an upper hand: Economies of scale: The costs of production decreases when there is efficient production. I hope this helps. Sorry, buy the guide. The modern business environment is a very complex and sophisticated one with consumers being aware of the choices available to them. The second bit of advice is to buy the guide. Strive for clear communication and present your agreement or opposition to a particular strategy in a structured and respectful manner. Then analyze the cost to see whether the shoe will be profitable. Cost Leadership is the mechanism of building competitive advantages through having the lowest cost of operation in the industry. Be leery of how much is spent on celebrities because there are no metrics to calculate the usefulness of celebrity endorsements. Understanding these strategies is critical to writing a good strategic business plan. Winning a bigger market share is not a typical competitive weapon that a company can use to battle rivals and attract buyers. Continuous production in large quantities decreases the . Charitable contributions to community organizations. This online business strategy game, BSG, will teach you a lot of real-life scenarios and what to expect when you get into the business world as you build a career in business and business management, so you need to pay attention to all the important lessons. In it you will find a tip on the division of labor that should decrease your meeting time to under an hour and a half (if you have to meet at all!). Ritu heads an organization thats been a market leader in food processing and products for several years in Pune. Porter (1980) developed three generic strategies for business and argues that any business can focus on cost leadership . But, a less harsh route is also available. This article will go into what each value discipline stands . As part of a cost leadership strategy or low-cost leadership, an organization usually becomes the . . Cost leadership occurs when a company is the category leader for low pricing. Initially, Ritu comes up with a strategy of introducing new products, such as gourmet chocolates and new flavors of cup noodles and ice cream to appeal to newer customers. Cost Focus Strategy. Data Science Strategy For Dummies. The game does not seem to favor any particular strategy over another. It is always better to have a surplus inventory above the pairs required to meet the retailers demand. Toggle the advertising spending to see the lowest cost at which the company can achieve the desired market share. This will create synergy. In the long run, though, it often proves to be the most effective. A cost leadership strategy is lucrative in terms of gaining market share and drawing consumers, but it isnt easy to implement. Answer: This is a unique situation I've never contended with before. Business strategy, of course, relates to the stuff you have been learning in class and is supposed to be the main focus of the game. Members of the team should have skills and strengths that serve to complement each other for a perfect working synergy. To boost their productivity, consider the following key points. When coming up with a CSR initiative, ensure that the budget can be sustained over time without burdening the company. Cost leadership is a form of business strategy, believed to have been designed by American academic Michael Porter, that establishes a competitive advantage for an organization by helping it achieve the lowest cost of operation in its industry. But you can relax because the study guide will show you some very simple ways to improve your score, regardless of business strategy. The overall point of any business is to generate revenue and increase profits. A generic strategy aimed at emphasizing the uniqueness or superiority of products and services is_? Finding a balance is important so that the future growth of the company as well as the initiatives are guaranteed. 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. Optimize your advertising dollars by finding the balance between trimming excess spending, growing your market share and fetching the highest possible price for your products. The company eliminates every non-essential that might potentially increase the cost of production so it can offer lower prices. Mkhuze Game Reserve was proclaimed in 1912 and is one of the oldest extant protected areas in South Africa. Increase profit. Offering products or services at a lower price than your competitors. To help you win the business strategy game, this article explores some of the winning tips that have been tried and tested that will give you a competitive advantage and a confidence boost as you maneuver through the game. Beat the Business Strategy Game. Through this course, youll be able to interact with a world-class faculty, analyze costing problems, explore perspectives relating to costs and familiarize yourself with, in the short and long terms. Competed against more than 4,000 teams from around the world. Extremely important! The study guide approaches with two points of view: business strategy and game strategy. 3. This question is critical, but, sorry, you have to buy the guide for the answer. To get the bidding contract, make sure your S/Q rating is 4 and above. 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 view of members. 1. In such scenarios, using already existing technologies may also go a long way in realizing an organizations aim of cost leadership. That much youve probably heard. If there are numerous entrants, make sure your prices are lower than your competitors prices. These two factors give rise to five competitive strategy options A low-cost provider strategy A broad differentiation strategy A focused (or market niche) strategy based on low costs A focused (or market niche) strategy based on differentiation A best-cost provider strategy Figure 5.1: The Five Basic Competitive Strategy Options Focus differentiation strategy is a type of focus strategy by Michael Porter. When setting up the wholesale prices for your shoes, remember that the average price of your branded shoes compares to the industry average price. There is a 1-star penalty applied to the S/Q rating of unsold branded pairs carried over to the following yearthis penalty, which is part of the IFFs S/Q rating formula, is to reflect the fact that unsold pairs are last-years models and styles, making them less attractive to buyers. (Players Guide, 2018) Fix this by making sure you sell what you produce, and extending your delivery time may not affect you negatively and may benefit how much inventory you have to carry. Limiting these tendencies or getting rid of them in leaner times can be a smart low-cost leadership strategy. In this sense, the two are different concepts. The other three generic strategies of Michael Porter's are cost leadership, differentiation, and cost focus. Business strategy, of course, relates to the stuff you have been learning in class and is supposed to be the main focus of the game. 2. The strategies proposed depend on: The Competitive Advantage of the company. Inventory management is important because it allows you to determine the number of shoes per demand. Cost leadership is a term used when a company projects itself as the cheapest manufacturer or provider of a particular product or commodity in a competition. React to your competitor's strategy, anticipate their next moves. Answer: The simple answer is to increase advertising spending but a comprehensive approach is needed to get the best results. Price is the final amount that a consumer pays for a product or a service, while cost is the expense an organization incurs on producing a product or service. Use tab to navigate through the menu items. These debates and discussions should be presented professionally, as they would be in a real-life work environment. Low-cost leadership strategies enable an organization to develop standardized products in large volume at low cost, which give that organization a competitive edge over the competitors in the market. Remarkable growth minimizes the need to pay out dividends, 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 companys stock price. Because this is collaborative work, working together as a unit will be crucial in coming up with the best strategy for the business strategy game. Advanced frameworks and techniques such as the Multiple Whys and the Synthesis Technique will enable you to attain greater practical clarity in terms of implementing cost leadership successfully and sustainably. Definition: Cost leadership is a strategy that companies use to achieve competitive advantage by creating a low-cost-position among its competitors. Purchasing raw materials for manufacturing can be expensive as suppliers will naturally mark up their prices to make a profit. click-and-mortar firms). In the case of cost leadership, one advantage is that cost leaders' emphasis on efficiency makes them well positioned to withstand price competition from rivals (Table 5.3 "Executing a Low-Cost Strategy"). Answer: Warehouse cost is a fixed cost. The decisions and the strategies that you will come up with as a team will mostly revolve around finances. Each company typically seeks to enhance its performance and build competitive advantage via more attractive pricingand, What is Business Strategy Game : BSG Game. focused low-cost strategy, focused differentiation strategy, best-cost provider strategy. For instance, rivals may become technologically innovative and make the processes used by the cost leader outdated (Kozami, pp.231). Dont blindly waste resources on a celebrity tag; be strategic to make sure you will get the return on investment . Increasing the annual base pay. When it comes to loans, longer-term loans offer a more friendly interest rate as compared to short-term loans. However, game strategy is a completely different subject. Investing in upgrades later in the simulation does not allow enough time to break even on the investment. Things like low overhead, lower rates from venders than what your competitors receive, and lower costs on raw materials. . The tail on a strategy could be anything from physical infrastructure to legacy costs or services. An integrated cost leadership/differentiation strategy will allow Titanium Man to focus on efficient production methods while also focusing on unique value features to offer to consumers. Studying these reports will give you insights into the plant operation reports, distribution channels, private label and branded sales reports, income, and cash flow statement, and the balance sheet. Diverse opinions should be encouraged especially if they are grounded in research. Price leadership means that an organization offers the lowest-priced products or services, as opposed to overall cost leadership, where an organization is the lowest cost producer in an industry. from a BSG Grand Master! This strategy helps them . I would suggest looking into upgrades that specifically improve plant operations. Answer: Early investments in upgrades to plants and training can pay big dividends in the following years by lowering the cost per pair. Turn delivery time to four weeks because it has no noticeable effect on sales but significantly affects EPS and Net Profit. There are several strategies that companies may use to achieve a competitive advantage. Investing in plant upgrades. If an organization is in the business of offering a series of products and services, a useful way of cutting costs may be to eliminate some of the offerings and focus on the most profitable products and services. Change and toggle the superior materials and styling features to make sure you get the lowest possible prices. This is done to clear old styles and designs and can be done at a discount. In Year 10, the company spent about $44 million on standard and superior materials, so making use of best practices training to achieve (over time) materials cost savings of even 5-10% annually (and maybe 15% to 20% annually over a period of years with an all-out long-term best practices training effort) is one way to achieve a sustainable cost advantage over rival companies." Competed against more than 3,000 teams from around the world. EPS and ROE will increase and the following year I can sell stock to pay the loan and keep the earning due to stock price increase. For example, Reebok sneakers arent the cheapest sneakers around. Beat the Business Strategy Game. Without a well conceived game strategy, it will be tough to win no matter how awesome your business strategy is implemented. Recent Posts See All. If your competitors are 'besting' you at applying their strategy then they will continue to dominate. However, you must ensure that prior to investing in any upgrades that there is adequate time remaining in the simulation for ROI. However, I am contemplating doing a YouTube video. Angelo (author) from College Park, MD on March 05, 2019: Sorry Jay, I do not. A lower S/Q rating will disqualify you from other bidders. Whether to customize the firm's offerings in each country's market to match local buyers' tastes or offer standardized products worldwide. Cost Focus. But when it comes to customers looking to purchase sneakers from the biggest and most reputable brands, Reebok would be a cheaper option than Adidas, Nike, Puma or New Balance. For long-term celebrity contracts and endorsement, bid for them in the early stages of the simulation. This is because it requires the management to constantly work on minimizing costs at every level.

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