business strategy game simulation the business strategy game is the most widely played computer...
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Business Strategy Game SimulationBusiness Strategy Game Simulation
The Business Strategy Game is the most widely played computer simulation in the strategic management market and is used in business schools all across the world. The industry's product is athletic footwear and the geographic scope of the market is global.
Each company in the industry is managed by a team of students/players who must match their strategic wits against the other company strategic wits against the other company teams-competition is head-to-head.
The company that players manage has plants to operate, a work force to compensate, distribution expenses and inventories to control, capital expenditure decisions to make, marketing and sales campaigns to wage, a website to operate, sales forecasts to consider, and ups and downs in exchange rates, interest rates, and the stock market to take into account.
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DecisionsDecisions Operation Decisions
Plant Decisions
Marketing Decisions
Financial Decisions
Product Quality and PriceMaterial PricesLabour ProductivityReject Rate
Plant construction, Purchase, Sale, ShutdownExpansionAutomation Options
Private Label MarketsBranded MarketsService RatingSales ForecastAnnual AdvertisingNumber of modelsProduct ImageNumber of Retail Outlets
Financial StrategyShort-term loansBondsCommon Stock
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FlexWear Decision MistakesFlexWear Decision Mistakes
Operation Decisions
Plant Decisions
Good service rating: 100 (50 is considered satisfactory) at the beginning
Stock outs and inadequate delivery times drove service rating for 2 years to 0
Steady declining productivity- Layoffs of workers - Cutting the costs on salaries - Insufficient investment in improving production methods and plant upgrades
Opening new plant in North America and investing USD 11 650 000 at Y10
2 Years plan to shift production capabilities to cheaper geographic areas: Asia, Latin America completed in Y14
- Gradually cutting production- Layoff personnel in North America and hiring personnel in Asia and Latin America
Shutdown of North American plant at Y14
Failing to arrange financial resources for productivity upgrade investments in the new plant
Selling 1 000 000 capacity units to competitors in Y20 in its efforts to rearrange its financial resources and getting back its competitiveness.
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FlexWear Decision MistakesFlexWear Decision Mistakes
Marketing Decisions
External Factors
Highest number of megastores – 13 in Y11
Focusing on private label market- Didn’t justify the expectations for market leadership because of:
+ Low profit margins+ Requires lowest prices and satisfactory quality
- Ignoring branded wholesale market and the highest profit margins+ Inadequate retailers’ service (stock outs, inadequate delivery times)+ Decreasing the number of retailers
Relying only on megastores for product placement
Decreasing the number of retailers by 12 times – lowest number of outlets in the industry
Entering the Asian and Latin American branded markets by Y19
Increasing retailers by 12 times in Y19
Unfair trade practices Subsidizing of competitors by the government made company unable to produce at costs lower than its competitors and forced it to sale its production at a loss.
0
1000
2000
3000
4000
5000
6000
Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20
US
Asia
Europe
LA
Distribution of FlexWear’s retailers by regions
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FlexWear Strategy Goals MistakesFlexWear Strategy Goals Mistakes
Lack of clear strategic vision for market development according to its requirements
Inadequate Production Facilities Investments
Private Label Market Branded Wholesale Market
Internet Market
North America Asia and Latin America
Established Inadequate Key Success Factors
High quality image
Service Level
Productivity
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FlexWear’s InsolvencyFlexWear’s Insolvency
Suspended by “Government” in Y19
Closing its facilities after 19 years on the market
Laying off more than 2380 employees
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Thank you for your timeThank you for your time
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