final report

Section 3 Only

The weekly journal entries and reports should serve as source material for your paper and presentation. The journals ensure that you have a perspective of the simulator from each point in time versus simply evaluating from the endpoint.

The paper is to be an analysis of your strategy and firm performance.

Section 1: What is your firm’s strategy? What were your top priorities? How did this guide your approach to the simulator?

Our firm's strategy was an ever changing strategy to best meet the needs of the market, our strategy constantly changed and adapted to better perform in a market that was full of competitors. With the constant flux of changes we continually learned more about the market and about what strategies would provide the best strategy to meet or out-perform the expectations of our investors.

Differentiation strategy was also used by introducing more models, features, and styles which gave us a competitive advantage over our competitors.  We started with the 3rd highest quality shoe of all companies for the highest price and we are on the high end of the quality and price range of all competitors. As a team we had already begun to separate ourselves from the competition. 

Our top priority was the clear emphasis on EPS and ROE. Every week we strived to increase EPS even going so far as to almost double expectations in certain years and average that surpasses the weighted average of all companies combined in EPS. The earnings per share is an indicator of success and failure for most businesses. We had brought back as much stock as possible (5000)  and increased the stock price immensely.  

ROE was definitely our other  top priority as it was critical in the understanding of the profitability of the company. We focused on ROE by paying off all loans that we used and paying dividends to investors. Improve Asset turnover, increase profit margin, distribute ideal cash (dividends, or investmenting into furthering the businesses by buying equipment etc.). Which is well documented in our decisions in the BSG game where we were in the top 100 groups worldwide with our highest ROE percentage that doubled previous and the percentages of some of our competitors in the same year. 

Workforce compensation and training were one of our top priorities as well because worker’s productivity plays a significant role in the success of a firm. Every year I increased the annual base pay by 1% because it helps the firm retain and attract employees. Our firm had also begun to implement incentive pay by $0.50 every year which had allowed an exponential increase in workers productivity and that could be seen in Year 18, Year 19, and Year 20 where EPS and ROE met investor’s expectations and the production statistics increased year after year. Our firm also added a higher supervisory compensation. Every year our firm increased the compensation by 1% which had allowed the firm to attract quality supervisors and as a result, enhanced the productivity of production workers.

For example, in the pictures below, we can see a decrease in reject rates on pairs produced. In Picture 1 for year 18, the total reject rate in all facilities was 9.7% for branded footwear, for year 19 the reject rate was 8.7%, and year 19 was 9.0%. We can see that from year 18 to year 19, the reject rate’s difference is 1.0% and between year 19 to year 20, the reject rate increased by only 0.3% for branded footwear in all facilities.

Section 2: Simulation narrative. I prefer to read about trends and themes, not a year by year rundown of what was done (so translate your journals into something more concise) Discuss how you deployed your management decisions and what justifications guided you. Also, discuss competitors, which teams were a threat and how did their actions impact your firm? Do not neglect to also offer up a short discussion of the larger systemic influences that impacted the entire industry. Then, discuss how successful you were… what challenges did you face? How did your competitors influence you or thwart your actions. How did the overall market and trends impact you? Was there turmoil within your team?

  Failure is history’s greatest teacher and we learned a lot playing this game. We tried to start the game off with a strategy that would separate us from the pack and make us stand out while placing an increased emphasis on increasing the quality of products,styling, variety, which can be easily showcased best in the differences of strategy. 

It is much easier to see the various strategies analyzing the prices and S/Q rating over the course of the game and market share in relation. The prices and S/Q put into better perspective the strategy whether it was low cost or differentiation while the market share is an indicator of sales made with both together it paints a much greater picture of the company. For example, A company that is primarily focused on high quality products selling at a higher price they are not seeking to have the entire market for consumers just those seeking higher quality products so their sales would be much lower than those who seek to accommodate most customers in the market.

The first strategy was a low cost strategy that we tried to focus on higher quality shoes at lowest prices but our shoes continued to routinely be the highest in the game for two weeks straight. So in seeing this we initially tried to focus on increasing quality, lowering costs,and increasing sales. At this point I had even talked to the professor exactly what had gone wrong since the estimations were higher than what we had accomplished which was much to be informed if we were just undercut by our competition. So we started to think about what had worked for the current group leader (company F)  in the game bsg strategy which seemed to maximize on the amount of consumers but the revenue they could receive by not having to invest so much into Styling quality and features. 

Reflecting onto the strategies that had been effective for our two time champs Company F. We also saw how all companies in a sense at this point in the game were like crabs in a barrel fighting for the same customers ultimately pulling each other down and being beat by company F who managed to meet them in the middle as they all essentially had very similar products at similar prices.

So that was the basis we used going to week 13 where you can see the drastic drop in internet and wholesale price. To better meet the needs of the market and this was also a massive increase in sales in both the internet and the wholesale market.  Around this time North America had taken a malfunctions that disabled half the equipment as well. This seemed like a step in the right direction by week 14 when we had seen increases in our targets like EPS at $4.04, a more than 6% increase in ROE from the previous year, more than doubled the stock price $24.45 to $48.66. Although Company B had matched our price and S/Q rating in year 14 we had better advertising and celebrity influence for it to not drastically affect sales. We learned that we would look into operations to expand so we could outsell our competition and save in costs especially since company G was stepping into our customer base. 

We had noticed two things using the value for value strategy: one was that value costs money, and that was about the cost of the shoe or more than. So, to compensate for those costs and stay profitable we cut advertising and celebrity influence since it was our primary costs. This strategy was super effective at raising our stock price and ROI above standards. The stock price rose to $6.25 from below expectations at $3.93, which was an $1.00 above expectations for the year.This effect can be better displayed in the tremendous rise in ROI from the low of 19.2 to the 31.2 high which is the first time in the last of the last 5 years that the ROI was actually above investor expectations.This S/Q rating may have been lower and the Credit rating was lower but the exchange for ROI and Stock price was worth the change. We gave up the more value for the money strategy to be more cost efficient and effective. This was a great strategy but the overall market was getting much closer to where we had essentially been. So in order to better compete in the market we chose to embrace the low cost leadership strategy. We have also begun to open more space so if we need to sell more in the U.S. market we can because it has no currency exchange to worry about has the best growth potential and we have drastically increased the amount of advertisements done by our company and sales. 

The next big change came at week 17 after reading the age of superabundant capital there was a big change as it challenged the way I played the game and the ways I looked in the game. So I had seen that I was below expectations and it seemed like there was not much I could do to change it so we decided to continue with our expansions in North America and Latin America. We started to evaluate the most successful company in the game (company A or peepeeepoo) who had seem to overcome a large layer of adversity. I analyzed what this company had did and tried to emulate it. Taking note of the parts of the strategy I found the most effective and which areas I thought Company B could do better which is clearly shown in the effectiveness of the strategy.

We have increased revenues last week from about 400k to 900k, and this week those numbers are expected to be above 1140k. The ROE is expected to be at about 60%, EPS at about $15 which is almost double consumer expectation. With a profit that shatters last week's profit and doubles it. Although last week's results were lower than projected, they were the basis and catalase point that shall propel us forward to meet our goals and meet the needs of the market. We continued to use this strategy to push forward. Me and my team had an almost systematic approach and comporated really well as we agreed and commonly came to compromises that we thought would benefit the Company. 

Section 3: What did you learn? Offer up a brief forecast for what comes next (would you be fired or was your performance so amazing that you should be showered with bonuses and stock options). Use this section to really apply concepts from the course. I will be looking for a substantive discussion… not, ‘I learned a lot.’ Note: you can take concepts within the simulation.

You are not required to apply strategy tools unless they fit (e.g. Five Forces or VRIO chart)

Be sure to include exhibits to illustrate the points you are making. If you want to claim that your moves were successful, then be sure to have proof to demonstrate it. The key is to be sure you demonstrate what you have learned in the report… and to also diagnose errors that you made.

I grade these reports on the thoroughness of your analysis of firm, competitor, and industry performance. The paper is not to be an opinion piece (therefore don’t use phrasing of ‘I believe’ or ‘in my honest opinion’).

The length of the paper is undefined. Write what you feel is necessary to demonstrate your analytic, diagnostic, and rhetorical capabilities. If you need guidance… use your textbook (don’t forget to cite where appropriate).

Final Tips: The weekly journals serve as a way to track the progression of your firm and how you reacted to the competition of others. Your paper is about what you have LEARNED, not about how every decision was the correct move, while ignoring what went wrong. Think of this paper as your post-mortem of the simulator. I want to evaluate what you have learned, what drove your decisions, and how you dealt with competition. Some of the learning could be on how you navigated infighting amongst your team (this happens in many firms… e.g. JCPenney and former CEO Rod Johnson), how you analyzed your own managerial efficiencies and performance (Sales & Marketing vs. Operational aspects), diagnosis of competitors, and of the overall market.

Also, do NOT use the phrase ‘begs the question’ unless you truly know how to use it properly (as a trained philosopher this is ‘nails on a chalkboard’ to me… usually you mean to say ‘raises the question’).