business strategy game distribution and warehouse

The BSG company co-managers must make decisions relating to plant operations, distribution and warehouse operations, workforce compensation, marketing, online sales at the companys website, sales, and finance. Logistics strategy as an enabler of new business models. Set your price to whatever maximizes your profits. We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. Hence, it should be your goal to price your shoes lower than everyone else and take their market share so that other companies will not sell any private-label shoe in this region. Sometimes, clearing your beginning inventory at a discount will boost your profits. Besides, you can lower the cost per pair of shoes. Moreover, the key is a rational debate with a compromise for everyone to understand why the decision is taken and commit to make it a success. After you have plugged in your numbers for both plants and your Branded Pairs Available for Shipment matches your Total Branded Pairs Shipped from each Plant, go ahead, click the Save Decisions button, and move to the Private-Label Operations page. I personally would not bid higher than $5,000 $6,000. The BSG tends to underestimate those values by about 20% and hence, you need to correct them for a more precise estimate. From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. I dont understand why it did this as this capacity was unused and there was upside to having it as my production was max out for the demand. Moreover, this may be a lesson in the real world of business as everything comes with quality, models, and price. How can you apply the knowledge from the textbooks? I only ever paid attention to my profits and I never ever sold capacity. First, click on the Adjust Competitive Intensity button that can be found on the top middle of the page. Moreover, consider the best margin for this market and ensure you can have the contract. How can you apply the ancient wise in the Arts of War of Sun Tzu? I am so thankful for your post!!!!!!!!!!!! If not, I dont see the need to purchase equipment in order to make more shoes until the demand begins to encroach upon my shoe making capacity. Hence, make sure to plug in every possible value to reach the highest net profit possible. I usually go ahead and plug in whole dollar amounts for the wholesale price and see how net profit changes. For the upgrade option C is the one to raise 1 star, but the actual cost it can save me every year is not a lot, should I still do that? Thanks for your strategy! Company operations parallel those of actual athletic footwear companies. View full document. Results in a one-time productivity increase of 100 pairs per year at each facility. Your Delivery Time should be set to 3 weeks. After you have done this, play around with the values for Wholesale Price, Advertising Budget, Rebate Offer, and Retailer Support (increase/decrease by 100s only, as everything else makes no sense). You need your capacity and it is never a good idea to sell your existing capacity. I adjusted a little bit and the forecast is now close to previous years. Buy I have quite a lot ending cash. Economic Impact of Hurricane Harvey and Hurricane Irma, Temporary Oil Price Changes Hold Back Consumer Spending. Yes, its not too late yet to follow through with my tips. All footwear You are now done with your private-label decisions and all significant decisions that affect your net profits. It is good to expand or build on the existing plants. Net Revenue of 52.76, but cost of 25.43; 3.16 for warehouse; 10.50 for marketing; 1.16 for Admin, make the Net profit of 12.53. Ship all the other shoes for the Europe-African warehouses and the Asia-Pacific warehouses from the Asian-Pacific plant. This Branded Distribution table of decisions seem to need more time. I recommend increasing capacity and keep focusing on your profits. However, if you loose and the share price will go down. Advantage of this is, that you dont have to pay too much attention to your competitors. Five ways that warehouse strategy can benefit your business include: Inventory Management Accuracy Price Stabilizing Tools Technology for Packing & Processing Locations that Meet Your Needs Outsourcing to Fulfillment Services Authorize your construction and you save your decisions. One of the most useful skills we learnt from BSG in Financial Analysis, we have had the chance to read Income Statement and Financial Reports every years, for last 8 years, many time, which we understand more about cost and revenues, details of cost, details of revenue, we notice the importance of loans, interest rate, credit ratings. If I have cash available after doing all my decisions, I like to alternate between building additional capacity, purchasing plant upgrades, paying off loans and repurchasing stock in the following years. If you happen to end up with a large surplus of shoes the next year, lower your 1.2 multiplier a little bit to 1.18. We also regularly pay old loans to get higher Credit Rating. So for our strategy, it should be 7 stars at the beginning. Play with your numbers around and tweak them to generate maximum net profit. No matter the location, our goal is to satisfy our customers foot fashion desires and provide them with the best style and quality in footwear. If you bid on multiple celebrities, it is good to set a ranking priority and a spending cap so that you do not spend more money than you want or have available. But my profit is still a little bit low for a second place, guess my price is too low and I need to cut some of my expenses, right? Hi Lee, A warehouse management system (WMS) is a software solution that aims to simplify the complexity of managing a warehouse. I always went with 500 every second year, but it depends on your market and competitors. Is it too late to reduce that to 50 as you suggested in your recommendation? Moreover, we will invest on advertising and make use of celebrity appeal to gain brand consciousness. Does it affect any other factors? While +2% might now always be spot on, I have made the best experience with it so far. Right now I am doing the second year decision, Im doing star 8 and 100 models, did 7 stars and 100 models in first round and the result was not very good. Learn how your comment data is processed. Besides, your team of managers will develop the critical thinking they need to move beyond the functional management of the company as a whole. Again, trying out different combinations and optimizing net profits is key for these values. So do you mean although we sell exactly same shoes it does not matter even my rivals price is lower than mine so long as i can maximize my profit? I would look at the Margin Over Direct Costs value at the very bottom of the page to see where it is most profitable to ship your shoes to. Like I explained in my blog post, do everything that is necessary to increase and maximize your net profits. How did your 2nd decision go? Almost done, the last decision page. However, keep in mind that your regional endorsement value should not be higher than 400 in any region. In year 18, end of the game, G Company has more than 150 million Cash in hand, so we pay old loans to get A+ Credit Rating. Keep the price expand from Average to higher, but Maintain Highest quality of our shoe will continue to exceed the quality of shoes within offered by our competitors and which are with the same price-range. Our G-Brand Company will continue to pursue its existing High Quality Average Price Large Collection strategy; However, to increase its market share and thereby increase revenue, our company, focus on Net Profit to increase ROE. We also thank the Professor and creators of BSG Online to give us a good environment to learn, to practice with full of knowledge, competitions and emotion close to business life. Net Profit of 150 million with increase of 25% every year. Try and set it to Yes. Recommendations for Improving the Image Rating in The Business Strategy Game I did not forget it, but we will take a look at it later. sales volume estimate. You can lower the costs by increasing training and upgrading facilities. We will keep Expansion of Internet Sales, keep low-cost-strategy with Highest Values that customers can get Online. However, if you want to do it more precisely, note down each industrys percentage change over the years and use this number instead of the +2%. The two most important values you want to have as precisely estimated as possible are the industrys average wholesale price and S/Q rating. Also, G-Brand believes that every organization has a social responsibility to promote harmony within the community it exists. 7.39 to 12.81 over last three years, much higher than Investor Expectation of 4.3. I am on my second year and I have negative income right now, any tips on how to get in the positive? Key Term business strategy game year 11 decisions; This preview shows page 1 - 2 out of 2 pages. Your interest rates depend on your credit rating and the duration of your loan. After you have done this, you might notice that your Your Estimate of the Ind. 11/4/2016 1/2 I . For this blog post, I will concentrate on the high-quality + low model strategy. It can be very beneficial for you. unfortunately I have no experience with adjusting to my strategy in the late-game. Hello. And I would not build another plant, rather increase capacity in the plants that you already built. but out industry there is a direct competitor for me, he is also star 8 and 50 models, and he prices so low for wholesale, only 47! Besides, you dont have to spend more on high-quality materials. In the above example, we ship from NA factories to NA and LA. From round 2, there is a risk that other groups can set the same strategy with the winner can be you. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. Like I said before, you should be building capacity, yes. Most players play hard from the first round, thus increasing S/Q, the number of models, reduce the price, putting for advertisement three times higher than average, and bidding for celebrities. This is very helpful. And Im so thankful for your post!!!!!!!! With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. However, I would recommend not taking out any loan if possible. We will work tirelessly to ensure that our shoes are within reach of purchasing and get the high quality shoes with very large selection. And you can basically never have enough capacity for private label. From Year 19, if any, we have over 100 million cash in hand and Net Profit every year, it will be better financial status for us to expand or invest in upgrading new factories, or even produce at higher stars 8, 9 or 10 stars. In the first year (Year 11), you only have two factories, and you need to distribute to four markets. Should you consider selling a factory, dont upgrade it because you will lose that investment. Find out how much you want to bid for each celebrity. PS: I do the 5-year-loan 12,000k in Y11 (7% interest); In year 12, I paid #1 Long-Term (early payment) 12k at 8.2% AND borrow 70,000k 5-year-loan at 4.5%. So for the last year I didnt stick to the rule that the internet price has to be 40% higher than the wholesale price. Promise I wont have tons of question haha. Hi there! What I like about my strategy is that you do not necessarily have to keep an eye on your competitors. Theres not right amount of capacity you should purchase. Here, you will determine the Percentage of Superior Materials, Number of Models, Enhanced Styling / Features, TQM / Six Sigma Quality Program, Change in Annual Base Wages, Incentive Pay, and Best Practices Training. You always want to make sure that you produce your sales volume for N.A. On this screen, you can handle your financial decisions for your company. This can get confusing at the beginning so here is a table to show you the process. Also, we are doing better than in the past so interest rate is lower. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out. Moreover, your strategy needs to be actively communicated to each level of management regularly. Net Profit must over 110 million every year to keep ROE higher than 25% or more. You can only do one upgrade at a time in each region and a total of two updates per region. So, play around and find the best combination for your given S/Q rating that yields the highest net profit. You can decide to sell or purchase available capacity, upgrade your plants, build new plants in other regions, or add capacity to already existing plants. We give you. Warehouse management plays a strategic role in the supply chain by enabling inventory distribution, sorting, or cross-docking processes that strive to meet the growing demand of the market.

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