The Business Strategy Game

Table of Content

1. Table of Content P.1

2. Introduction p.2

3. Competitive Strategy p.3

4. Industry Overview p.4-5

5. Company Overview p.5

6. Decisions Made

6.1 The beginning stage p.6

6.2 The Mid-game stage p.7-8

6.3 The End-game stage p.8-9

7. Final Results p.9-10

8. Reflection p.11

9. Underlying Strategic Principles P. 12

10. Key Learning Points about Strategy p.13-14

11. Conclusion ….p.15

12. Reference ….p.16

2. Introduction

The Business Strategy Game (BSG) is a computer based online game with a group of members acting as co-managers in a company. It is a simulation game of running an athletic footwear company to compete with different groups in the game. We are required to run for eight years to make decision at different aspect on every year. Each aspect has an interrelated effect with others, for example, reducing the market price of other teams will affect the sales of our own team, winning the beat for celebrity will increase the image. All these decisions are made to bet the competitors and to achieve the target, like having a earning per share equal to or more than 10%, maintain company’s credit rating on B+ or higher, achieve image rating with 70 or more. With the results from the game, we are required to provide a report of the key decision during the game, and the reflection and key learning points from the game.

3. Competitive Strategy

The differentiation in Generic Competitive Strategy (see Appendix A) was applied in our company. It is an approach to provide different products or services to enjoy competitive advantage. This strategy can be applied when the target market segment not only price-sensitive. The customers’ needs are specific and the firms have the necessary resources to fulfill these needs. At the beginning, the average styling and quality is four star in the market and the celebrity appeal is relatively low. We tend to provide different products in the market, which is a high quality of athletic shoes and with greater image and brand mark on our company.

Appendix A

4. Industry Overview

After setting strategy to achieve competitive advantage, we need to understand and analyze the industry of our products. We used Porter’s five forces to analysis the level of competition in the athletic footwear industry (see Appendix B).

Appendix B

Bargaining Power of Buyer

Customers’ bargaining power is high since there are many competitors in the market. Customers usually buy in small quantities like one to two pairs of shoes. They are very price sensitivity as they can easily switch to the firms who can offer a lower price with the same quality. They are allowed to search for any information they want through the internet. Firms with high-end brand will reduce the bargaining power of buyer.

Bargaining Power of Supplier

The market is surrounded by suppliers who can provide the same quality of raw material lending their bargaining power to be very low. Suppliers are not easy to forward integrate because of high entry barriers of the shoes industry.

Threat of New Entrants

Although the entry of footwear industry does not restrict by government policies. However, the cost required to start up a new business is relatively high keeping threat of the entrance to the market very low. Mary costs are required to build up a new plant, train up new staff, advertising and create brand identity.

Threat of Substitutes

The substitution is quite low as limited substitutes are available for the athletic footwear industry. The athletic footwear cannot be replaced by other types of shoes since it is a gear of exercise.

Competitive Rivalry

High level of competitive rivalry due to a large number of shoes company in the market. Each firm