Business Strategy Game (BSG Game)

In an ever-increasing competitive world of business, it is important for learners to get first-hand, one-on-one experience of how to run a business while they are still learners in preparation for their career.

The business strategy game is therefore an online game that lets learners studying courses like business administration run a virtual footwear company that simulates real-world competitive conditions. Learners are divided into teams, who are your co-managers, and they go head to head with other teams to determine who comes up with the winning strategy.

Why is the business strategy game important?

Since the running of the operations of these virtual games mirrors the functioning of a real-life company, there are many benefits of learning the business strategy game. They are

• Enhanced critical thinking. Coming up with a high-quality strategy will force each team to analyze all the variables in the stages of making different business decisions in order to have a competitive advantage over the other teams.
• Increased collaboration. Just like in the real world where individuals are forced to work in the same space as a diverse group of people, the BSG game will enhance your collaborative abilities because you will be working as a team.
• Practicality. The game allows the students to consolidate all the knowledge they have acquired into practical use. This gives room for flexibility and adaptability when deciding which business decisions will work and which ones will not work in a particular situation.
• It sharpens the learner’s judgment. Through the BSG online game, students get valuable practice that sharpens their skills in preparation for the business industry that will require them to analyze business risks and competitive conditions and factors like the best cost strategy before selecting a particular decision.

Apart from letting your competitive nature run free, the BSG online game is a fun and engaging way of interacting with content to see who comes up with the winning strategy.

How does the business strategy game work?

You are given a virtual company that has been in operation for the past ten years, and your task is to continue operations beginning in year eleven. The whole point of the game is to provide a realistic experience in a real-world operating company, so your athletic shoe company should operate in each of the world’s four geographical markets. These are Europe-Africa, Asia-Pacific, Latin America, and North America.

To get a better grasp of how the business has been running, you should go through all the reports for the business for the past ten years to get a full summary of the company’s position before you begin making decisions for year eleven. These reports are the competitive intelligence report, the footwear industry report, and the company reports.

These reports will guide you and your team in making the following decisions.

Corporate social responsibility and citizenship. A conscious effort towards this sector will help improve the image rating of your company. When you invest in practices like the use of green raw materials, ethics training for workforce personnel, hiring a diverse group of people, and the use of renewable energy, you will gain a positive image for your brand.

Branded and private-label footwear production. These decisions involve the kinds of models and styles of footwear you will choose, the ratio of the usage of superior materials, and the amount of money to spend on the styling features of the shoes. The difference between branded and private-label footwear, is that production for private label footwear can be up to 75% lower than that of branded footwear.

Plant capacity and upgrades to the existing plant. You and your co-managers are required to decide which is the better option among constructing a new plant, expanding the existing ones, upgrading to boost production capacity, or selling a plant altogether. You should take note that constructing a new plant takes up to one year, whereas upgrading a plant can only boost its production capacity by up to 50%.

Worker’s remuneration and training. This decision focuses on how much you decide to pay the workers at each plant and also how much money should be spent on best practices training to increase productivity. The amount of pay a worker gets has a direct impact on the kind of workmanship they put in. This translates into either quality shoes or shoes that are not up to standard, which has the potential to lower the S/Q ratings.

Shipping and distribution center operations. Producing footwear in one country and shipping it to another country will be affected by a number of things, namely

• The exchange rate. Different geographical locations use different currencies, hence the disparities in the exchange rates, which are subject to fluctuations. A negative exchange rate will affect the revenue of a business negatively and vice versa.
• The tariffs. The shoes imported will attract different tariffs depending on the region. For example,

Pricing and marketing. You and your co-managers will have to set the wholesale prices for the different geographic regions and the website prices for your shoes. You will also be required to come up with a high-quality strategy for your marketing efforts across the different marketing platforms. This will include advertisements.

Bids to sign celebrities to endorse your footwear. Celebrities have the potential to open up and even increase the presence of a brand in the market share. When bidding for celebrities, look out for those that have a higher regional consumer appeal index. The higher the rating, the better the celebrity endorsement will help to boost sales in a particular geographic region.

Financial decisions. These decisions look at the financial decisions of the company. You will analyze the company’s projections for the coming year, the credit rating, the cash outflows, and the balance sheet. You will assess the debt-to-asset ratio, and the interest rates on the outstanding loans that you have or wish to take.

Financial decisions are usually the last to be made because they are dependent on all the other decisions. Some of these decisions are

• Whether to borrow to finance operations and, if so, what kind of loan; short term with high-interest rates; longer-term loan with higher interest.
• The amount of dividends to be paid per shareholder annually
• Whether to repurchase the outstanding shares, which have the ability to boost the company’s stock price, the return on equity investment, and earnings per share.

In addition to the aforementioned decisions, your team is expected to consider import tariffs and annual changes that affect exchange rates, as well as meet the requirements of the shareholders.

Competitive factors that affect market share

wholesale price

In a particular geographical location, the wholesale price of the shoe will determine the market share of the brand. When all other factors are kept equal, a lower than average wholesale price will raise the unit price for the retail footwear. While charging an above-the-market wholesale price will result in fewer retailers stocking that particular brand as it will mean higher retail prices that the customers might shun,

S/Q ratings

This is the style-quality rating that is determined by the International Footwear Federation. It ranges from 0–10. Since consumers have access to the S/Q ratings of the different athletic shoes on the market, a higher S/Q rating is important to get good sales.

Advertising

When looking at the market snapshot, one of the important things to determine is the amount of expenditure spent on advertising. A lower budget allocated to advertising efforts will result in lower revenues. Aggressive advertising boosts the retailers’ efforts by increasing brand awareness.

Amount of support to retailers

Retailers who receive support from athletic shoe manufacturers are more likely to stock that particular brand on their shelves. This support comes in the form of providing helpful information concerning particular styles, and shoe features, among other things. This information helps the retailers sell and is thus a symbiotic relationship.

Duration of delivery time

The duration of delivery from the time customers place an order to the time they receive their orders can range from one week to four weeks. Oftentimes, the shorter the delivery period, the higher the sales projected because it takes a shorter period for the retailers to stock. This, however, means that the shipping charges will be higher for shorter delivery periods.

Customer loyalty

When consumers are pleased with a particular product from a brand, they are more likely to return and buy from the brand again. Some of the ways a brand can ensure buyer appeal are through high S/Q ratings, maintaining a high image rating, and customer incentives through rebates.

Product line variety

A customer is more likely to spend their money on a product when a particular brand produces a wide range of styles and models. For example, there is a large selection of shoes for running, tennis, and other sports.

The number of retailers carrying the company’s brand.

The greater the number of retailers the manufacturer can convince to carry the footwear brand, the greater the visibility for the brand, which ultimately results in an increase in the net profit. This is usually determined by the amount of support the retailers receive, the S/Q ratings, as well as the time it takes to deliver orders.

Celebrity endorsement appeal

A popular celebrity, especially a sports celebrity endorsing your footwear, has the ability to ramp up popularity for your shoes. This ensures you are staying ahead of your competitors.

Get a celebrity that is already well known in the sports niche. This will boost your advertising efforts.

Company’s online sales effectiveness

Part of the revenue the company generates comes from the online retail on the company’s website. These sales are made possible through aggressive advertising, the number of models and styles sold on the site, their quality, as well as the shipping options available for the buyers.

The above are the highlights of what you should expect when you sign up for the business strategy game. Your ability to make decisions under different circumstances along the business journey, and how you collaborate with others just like you would in the real world industry will determine the overall score and the success of your team.

Take time to read through the rules of the game. Go them over thoroughly. Actively participate in the decision-making of the team so that you can learn more. Be professional in your undertakings and courteous as you communicate with your co-managers and treat the process like a real job. The mentioned points are some of the additional tips that will help you get the most out of this online game.