Slide 1What Is The Business Strategy Game All About?Your Company’s SituationThe Decisions You Will Be MakingCompetition Is Head-to-Head: Company Against CompanyYou Have Many Strategic OptionsNo One Strategy Is “Best”Slide 8Slide 9Outcompeting Rivals Is the Key to Market SuccessIt’s All About Developing Winning StrategiesSome Features of the Market and Company EnvironmentSlide 13PC Requirements and MechanicsHow Company Performance Is JudgedScoring WeightsThe Two Scoring StandardsThe QuizThe Peer EvaluationsWhat You Can Expect to LearnWhat You Can Expect to LearnHow Do You Register and Get Started?Registration CodesHow Do You Register and Get Started?The Corporate Lobby PageCreating a Name for Your CompanySome ProceduresTips for SuccessTips for SuccessSlide 30PlantsDistributionDemand is GrowingMaterials CostsExchange Rate ImpactsWhat Drives Sales In Branded Markets?ImplicationsMaking DecisionsCSR & CitizenshipBranded Sales ForecastPlant Capacity DecisionsBranded Production Decisions (for each plant)Branded Production Decision (per plant)Branded Distribution (for each plant)Internet MarketingMarketing DecisionsCelebrity BidsPrivate LabelFinance & Cash FlowSAVE YOUR RESULTS!Special ReportsSlide 52Near Term ScheduleMcGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights ReservedThe Business Strategy GameOverview and Orientation1-2What Is The Business Strategy Game All About?It’s an online, PC-based exercise where you run an athletic footwear company in head-to-head competition against companies run by other class members. The marketplace is worldwide—production and sales activities can be pursued in North America, Latin America, Europe-Africa, and Asia Pacific There are 12 market segments—4 geographic segments each for branded footwear sales to retailers, for online footwear sales direct to consumers, and for private-label sales1-3Your Company’s SituationAll companies start out on the same footing—with equal sales volume, global market share, revenues, profits, costs, footwear quality, and so on.Each decision period in The Business Strategy Game represents a year. The company you will be running began operations 10 years ago, and the first set of decisions you and your co-managers will make is for Year 11. The company had Year 10 revenues of $238 million, net profits of $25 million (equal to $2.50 per share), an ROE of ~17%, and a solid B+ credit rating. Your company is in sound financial condition, is performing well, and its products are well-regarded by the buyers of athletic footwear.1-4The Decisions You Will Be MakingYou and your co-managers will make decisions each period relating to Corporate social responsibility and citizenshipProduction of branded and private-label athletic footwear (maximum of 4 plants)Plant capacity additions/sales/upgradesWorker compensation and trainingShippingPricing and marketingBids to sign celebrities to endorse your company’s footwearFinancing of company operationsPlus there is a screen for making annual sales forecasts and deciding whether to have inventory clearance sales1-5Competition Is Head-to-Head:Company Against CompanyThe head-to-head competition among companies to persuade consumers to buy their brand of athletic footwear is based on 10 factors: Price Number of models/stylesStyling/quality (S/Q) ratingAdvertisingSize of retailer networkCelebrity endorsementsDelivery timeRetailer supportMail-in rebatesShipping charges (Internet sales only)1-6You Have Many Strategic OptionsCompany managers have wide strategic latitude in staking out a market position and striving for good performance. There’s no built-in bias that favors any one strategy. Companies can pursue a competitive advantage keyed to low-cost/low-price or top-notch footwear features and styling or more value for the money. Companies can have a strategy aimed at being the clear market leader in (a) selling branded footwear to retailers or (b) selling directly to online buyers or (c) both. Companies can put as little or as much emphasis on producing private-label footwear as management prefers. Companies can focus on one or two geographic regions or strive for geographic balance. Companies can pursue essentially the same strategy worldwide or craft slightly or very different strategies for each geographic region.1-7No One Strategy Is “Best”Most any well-conceived, well-executed competitive approach is capable of succeeding, provided it is not overpowered by the strategies of competitors or defeated by the presence of too many copycat strategies that dilute its effectiveness. In other words, which strategies deliver the best performance hinges on the strength and interplay of each company’s strategy and decisions against the strategies and decisions employed by rival companies—there positively is no mystery “silver bullet” strategy or decision combination that players are challenged to discover.1-8A Company’s Competitive Effort vis-à-vis Rivals Is Crucial All the sales and market share differences among companies are attributable to differing competitive efforts on price, S/Q rating, advertising, models offered, delivery times, retailer support, and so forth.Hence, every company’s strategic challenge is to craft a competitive strategy (consisting of its prices, S/Q ratings, advertising, models, delivery times, retailer support, and so on) that it believes will produce the desired sales and market share outcomes when pitted against the competitive strategies of rival companies, region by region.1-9The Contest in the Marketplace Is a “Battle of Strategies”Following each year’s decisions, you’ll be provided with Competitive Intelligence reports containing information of the actions rivals took to capture the sales and market shares they got. Armed with this information, you will be in pretty good position to figure out some of the strategic moves that rival companies are likely to make in the upcoming decision period. Just as in sports where it is customary for every team to scout its next opponent thoroughly and develop a game plan to defeat them, you will need to scout the strategies of rivals, try to judge what they will do next, and come up with a competitive strategy of your own aimed at “defeating” their strategies and boosting your company’s