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Business Strategy Game
Transcript of Business Strategy Game
How our strategy changed
What would we do differently?
What we learned
Complete First Year 11 Practice Decision
Read Participants Guide
Experiment and see how certain actions affected Revenue, EPS, ROE, Stock Price, Credit Rating, and Image Rating
Try to increase Revenue, EPS, ROE and Stock Price while keeping credit rating high and image rating above 'Investor Expectations'
Complete Year 12 Practice Decision
Go through the same steps as in Year 11 Practice Decision
Try increasing all the numbers above 'Investor Expectations' without letting image rating fall below 70
Changes learned over time:
Keep debts paid off (Good credit rating looks good to investors)
Always utilize close to all Retail Dealers (This will increase scoring measures for the company)
Use maximum overtime available to increase productivity of labor force
Invest a little in Corporate Social Responsibility/Citizenship
Changes learned over time (cont.)
Keep selling price under corresponding industry-wide average selling price
Number of special promotions need to be set at the right amount in order to satisfy customers and still make a profit
Advertising expenditures need to be above industry average
Number of retailers need to be above industry average
Ways to Increase ROE
Improve Profit Margin by increasing net income and decreasing expenses
Improve asset turnover
Our ROE fell in year 15 and never recovered
There are many factors that can either hurt or help the company
You must be ready to run a business from the start, not a year into it because by then your business will be bankrupt.
Investors have expectations that you must meet in order to have a profitable business.
For example, once measure such as ROE may be high, but image rating may be low. All measures need to be above investor expectation, one really low number may mean a certain investor or investors may decide to choose another company.
Customers are looking for the greatest value for the least amount of money.
Earnings Per Share
Return on Equity
After Year 14, we never met Investor Expectations when it came to Image Rating.
Ways to improve Image Rating:
Invest more in Corporate Citizenship
We lost Private-Label shoe sales in Year 15, which affects Image Rating
Improve S/Q Ratings