Guide On How To Make BSG Year 12 Decisions
Before you begin entering any numbers, you must first decide on a strategy for the game. Even more importantly, continue with it! So far, I’ve seen two successful strategies: medium-quality shoes (S/Q rating of 5-6 stars) paired with a large number of models (250-350 models) and high-quality shoes (S/Q rating of 8-10 stars) linked with a small number of models (50 models). In this blog post, I’ll focus on the high-quality + low-cost model strategy. Personally, I find it easier to pursue and have had greater success in the past. Most of the following recommendations, however, can be successfully applied to any technique. Despite the fact that this game is billed as a business simulation, forget the notion that all decisions must make sense and be rational. You’ll understand why very shortly. The only thing you care about with the high-quality shoes + low-model plan is your PROFIT. Everything else, such as earnings per share (EPS), return on equity (REO), and image rating (IR), will follow naturally. You may see your profits in the lower left-hand corner after clicking on the green “Go to Decisions/Reports” button in the company lobby.
Analyzing your competition and optimising your values are two of the most important things to do here. Even though it may be time-consuming, optimising your values is the essence of the game. However, if done correctly, it is well worth the time because it will return the highest profit and success in your sector. Because it is always the same procedure, you will get the hang of it after the first few decision rounds.
This decision page is primarily a waste of money, and we will not devote much work to it. As previously said, not every decision must make sense. You may believe that utilising green footwear materials or recycled boxed / packaging is a wise choice, especially given the current environmental issues. It is not the case. The majority of options you can make here are a waste of money and will not assist your business. While they may improve your image rating, they will reduce your profit. And profit is the goal of the game. As a result, you will just concentrate on the two following decisions that are worthwhile in terms of increasing your image rating.
This is most likely the most crucial decision entry screen in the game, and you will spend the most of your time on it. On this page, you will optimise your entries and toggle each value until you achieve the highest possible profit for each entry. Don’t be concerned about your market share % or any other metric other than your net profit. Profit is more important than market share for your success in the BSG. I recommend keeping a pen and paper nearby so you can record your net profit and compare it when you plug in different values.
Factors Affecting wholesale:
Let us now proceed to the difficult part of this decision page. Looking at the North America column, you must now enter your values for Wholesale Price, S/Q Rating, Models Available, and so on. Begin with the values you are certain of: I recommend starting with a S/Q grade of 7 stars and 50 models available for the high quality, low model strategy. Furthermore, your Retail Outlets values should always be the largest number that you are permitted to input. Set your delivery time to three weeks.
After that, experiment with the values for Wholesale Price, Advertising Budget, Rebate Offer, and Retailer Support (just by 100s, as anything else makes no sense). Again, it is critical to remember to maximise your revenues. This is similar to a trial and error approach and does not have to make sense. With no advertising budget, you may make the most money. Simply enter numbers and record your net profit amounts. You want to go with the value that delivers the highest profit value for this decision round. But be cautious: Look at the entire value as well as the percentage change in net profits, as the overall value may vary while the percentage change remains constant. I normally enter whole dollar values for the wholesale pricing and check how the net profit changes. It normally rises to a particular price threshold and then begins to fall. I plug in every conceivable value around this maximum whole dollar number to discover the price that produces the highest net profit. Be cautious: In some cases, especially in advertising, wildly different values (for example, $100 and $8,000) might provide roughly the same net profit with only a minor variation. As a result, make sure to enter every feasible value in order to achieve the largest potential net profit. Repeat for each of the four regions. You can refer to Tips on how to make the best BSG decisions 2022.
If you have leftover inventory from the previous year (you did not sell all of your shoes), try the Inventory Clearance option in the lower half of the page. Clearing your initial inventory at a discount might sometimes enhance your revenues. Again, experiment with each % for each region and select the proportion that produces the maximum earnings. If it is 0%, that is also acceptable; do not be concerned.
This choice page is about your plants. You have the option of selling or purchasing available capacity, upgrading your plants, constructing new plants in other regions, or adding capacity to existing plants.
You have the option to sell your existing capacity here. NEVER, EVER do this. You require your capability, and it is never a good idea to sell it. You can see if someone else made the same error and sold capacity by clicking the “Purchase Capacity” button. If you find capacity available for purchase, I would always buy it straight. Purchasing capacity is 20% less expensive than constructing new capacity.
The greater the value of your celebrity endorsement for a certain region, the greater your advantage in enticing shoppers to purchase your branded footwear. Keep in mind, however, that your regional endorsement value should not exceed 400 in any region. Otherwise, the impact of their endorsement diminishes.
Finance and Cash flow:
Sources of Additional Cash
You can see extra cash sources in the upper left box. You can get a 1-year, 5-year, or 10-year bank loan. Your interest rate is determined by your credit score and the length of your loan. However, if at all feasible, I would avoid taking out a loan. If you absolutely need money, I would recommend that you sell some of your stock.
You can spend your extra money in the upper right box. When you first start the BSG, you have two long-term loans, one for 5 years and the other for 10 years. Paying repaying these debts in advance means you will pay less interest over the next few years.
Dividends might also be paid to shareholders. Dividend payments will boost your stock price and ROE. However, it will reduce your overall cash flow. I began by paying $0.05 dividends and increasing them by $0.05 each year. Finally, I boosted dividends to increase my ROE.
You also have the opportunity to repurchase your stock. Stock repurchases will increase your EPS and ROE. However, it will reduce your overall cash flow. It is normally ideal to repurchase shares at the start, when your stock prices are low.
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