BSG Game Final Presentation 2017 - Champion footwear 12 18-2017 version 1

Final Presentation for Business Strategy Game Simulation (BSG) in 2017

1. Champion Footwear
Saiteja Venkatapuram
Aderito Campos
“Adapting to change quickly is a key to sustained growth”

2. Strategic Vision
●Bring best quality footwear to consumers
●Sustainable prices
●Social responsible where People, Profit and Planet and are in balance

3. Strategy Objectives Results – Year 20
Customer/Employee
●Provide shoes at low cost at high S/Q rating
●Reliable celebrity appeal
●Invest in styling and six sigma
●Increase % of superior material
●Invest in best practices training
●8 S/Q rating/50 models
●255 – Industry leader (25 more than the
next team)
●Maximum styling (50K)
●Maximum best training ($5000)
Financial
●Become industry leader in operating/net profit
●Maximize stock price
●Decrease cost of pairs sold
●Decrease shares outstanding
●Reduce defects
●Increase revenues - 27.6% Operating/
19.2% Net (Industry leaders)
●Give dividends (192 - Industry leader)
●49.2% cost of pairs sold (industry leader)
●7,590 shares outstanding (industry
leader)
●Factory upgrades (Average rate of
rejects - 1.2%)
Initial Objectives

4. Indicators Year 11 Year 20 % Change Year 21 Year 22
EPS $3.01 $14.04 366.45% $15 $18
ROE 18% 29.8% 65.56% 32% 36%
Credit
Rating
A- A+ A+ A+
Image
Rating
68 83 22.06% 86 90
Global
Market
Share
14.3% 18.1% 26.57% 20% 23%
Stock Price $41.93 $192.17 358.31% $250 $350
Net Sales$288,136,000$556,624,000 93.18% $600,000,000 $620,000,00
Performance Targets
●EPS always above the
investor expectation
●ROE was average
compared to IE during the
years 14 & 15 and
increased continuously
since then
●Image rating took a big hit
during the first 4 years and
was below IE the first 1
year. Steadily improved
from Year 14
●Stock price was stable for
first 5 years and increased
drastically from year 15
●Global market share
increased steadily
throughout the stimulation

5. Performance Charts

6. Game Performance Charts 1 of 2

7. Game Performance Charts 2 of 2

8. During the weeks of Monday, 6-Nov thru 12-Nov (Y 16)
& 13-Nov thru 19-Nov (Y 17), we were in the top 100.
-5,444 teams from 278 colleges/universities
participating in a world-wide simulation.
-Overall Game-To-Date Scores were:

9. Weak Functional Area

10. Six Initiatives
●Use of "Green" Footwear Materials
●Use of Recycled Boxing / Packaging
●Energy Efficiency Initiatives
●Charitable Contributions
●Ethics Training / Enforcement
●Workforce Diversity Program

11. ●CSR Actual Results for the last five years
are listed. Based on BSG’s help tutorials,
the first two initiatives on the list did not
provide much of a return in this game.

12. ●BSG Game did not reward investment in
CSR in a clear cause & effect differentiated
manner
●In the future, we would take on more
corporate social responsibility.
●Our investments included the following:
-Recycled Packaging Y 11 - 15
-Energy Efficiency Y 14 - 16, 18
-Charitable Contribution Y 13 - 16, 18
-Workforce Diversity Y 11 - 20

13. Three Biggest Mistakes
1.Not buying large amounts of company stock early on in the game (i.e. years 11-15)
2.Not trying strategy of high volume lowest price/cost provider position
3.Not buying more Celebrity Endorsements early on in the game
Why?
1.Buying company stock early - We found out later in the game that it helps the metrics of the game
2.Low price cost provider - we think that this was an unexplored area by the teams
3.Celebrity Endorsements - we think buying them early is cheaper and can lead to higher celebrity
appeal numbers

14. Three Best Decisions
1.Started out with Strategy of High Quality/High Price position - ~200 models (Y 10-14) then switched to
~50 models (Y 15-20)
Why? - We were No 1
2.Buying back company stock with extra proceeds from revenue
Why? - Found out BSG metrics easier to attain i.e. EPS etc.
3.Buying additional plant capacity even though BSG Financial reports said capacity was not needed
Why? - Individual teams extra capacity can be used up with right strategy

15. One thing to change
●Try Strategy of High Volume Low Price provider. If executed well could of led to much higher
sales as no other team members chose that strategy.
Why?
-Higher EPS, ROE, Net Revenues and Net Profits

16. Do’s and Don’ts
Do’s
●Look over all the financial & other reports in detail every round especially closest competitors
●Know the demand of the market - Win Private-Label bids
●After all the numbers are entered, look at the over-all again and have a separate managers meeting
to fine tune and try different possibilities
●Manage capacity well - focus on markets where there seems to be the most demand
●Change strategies when market is saturated with same strategy
●Continue with best practice methods that align with strategy
Do Not
●Implement similar strategies to many others in class
●Run operations in-efficiently: “It’s not how much you earn but how much you keep…”
●Buy more plant capacity than your strategy calls at a time
●Presume that others won’t figure out your winning strategy
●Produce in regions with lower profit margins

17. Thank You - Danke - Obrigado - 谢谢
Merci - Ευχαριστώ - Gracias - Tack -
Grazie