Author Topic: The Business Strategy Game Tips  (Read 150716 times)

WinBusinessStrategyGameTips

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« Last Edit: April 07, 2013, 12:51:23 AM by WinBusinessStrategyGameTips »
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WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #1 on: May 28, 2010, 01:33:13 PM »
Business Strategy Game Tips - Which Market Should I Be in and Should Production Be There?

This is a commonly asked question in which market to be in by many people who plan to do "niche marketing" and plan to dominate certain market segments to win. The trick of the game is not to get hung up on focusing on one market, as that limits you.

In the real world, Pepsi and Coke fight for dominance in the soft drink industry. Pepsi focused upon North America and therefore has the huge advantage in this part of the world. Coke's strategy is different, they went into several countries and tried to carve out a market share everywhere. It is because of this Coke is the greater corporation internationally while Pepsi is the greater corporation domestically. In terms of risk and just overall greater success, it is because of Coke's greater global coverage over Pepsi that makes it a less risky and more profitable company.

So to bring it back to BSG terms, you need to compete in every single market competitively if you want to do very well. Make sure you are taking your respective piece of the market share in each area and a little more if you can. The profits of controlling the industry will help you win the business strategy game.

While being in every market is a goal of a successful multinational company. This is also linked to having production facilities in that market to support it. As a company wants to be in every market, it will be important to choose a factory that supports it. Having a European plant is a strategic move that is not often chosen by companies because it is not realistic to have the European plant produce shoes for many of the regions. But having a European plant does serve immense uses when it builds shoes for the European market. The slogan for international business is "think global, act local", and in winning the business strategy game, that becomes true when a company builds specific factories for specific markets.



This is a commonly asked question in which market to be in by many people who plan to do "niche marketing" and plan to dominate certain market segments to win. The trick of the game is not to get hung up on focusing on one market, as that limits you.

In the real world, Pepsi and Coke fight for dominance in the soft drink industry. Pepsi focused upon North America and therefore has the huge advantage in this part of the world. Coke's strategy is different, they went into several countries and tried to carve out a market share everywhere. It is because of this Coke is the greater corporation internationally while Pepsi is the greater corporation domestically. In terms of risk and just overall greater success, it is because of Coke's greater global coverage over Pepsi that makes it a less risky and more profitable company.

So to bring it back to BSG terms, you need to compete in every single market competitively if you want to do very well. Make sure you are taking your respective piece of the market share in each area and a little more if you can. The profits of controlling the industry will help you win the business strategy game.

While being in every market is a goal of a successful multinational company. This is also linked to having production facilities in that market to support it. As a company wants to be in every market, it will be important to choose a factory that supports it. Having a European plant is a strategic move that is not often chosen by companies because it is not realistic to have the European plant produce shoes for many of the regions. But having a European plant does serve immense uses when it builds shoes for the European market. The slogan for international business is "think global, act local", and in winning the business strategy game, that becomes true when a company builds specific factories for specific markets.



This is a commonly asked question in which market to be in by many people who plan to do "niche marketing" and plan to dominate certain market segments to win. The trick of the game is not to get hung up on focusing on one market, as that limits you.

In the real world, Pepsi and Coke fight for dominance in the soft drink industry. Pepsi focused upon North America and therefore has the huge advantage in this part of the world. Coke's strategy is different, they went into several countries and tried to carve out a market share everywhere. It is because of this Coke is the greater corporation internationally while Pepsi is the greater corporation domestically. In terms of risk and just overall greater success, it is because of Coke's greater global coverage over Pepsi that makes it a less risky and more profitable company.

So to bring it back to BSG terms, you need to compete in every single market competitively if you want to do very well. Make sure you are taking your respective piece of the market share in each area and a little more if you can. The profits of controlling the industry will help you win the business strategy game.

While being in every market is a goal of a successful multinational company. This is also linked to having production facilities in that market to support it. As a company wants to be in every market, it will be important to choose a factory that supports it. Having a European plant is a strategic move that is not often chosen by companies because it is not realistic to have the European plant produce shoes for many of the regions. But having a European plant does serve immense uses when it builds shoes for the European market. The slogan for international business is "think global, act local", and in winning the business strategy game, that becomes true when a company builds specific factories for specific markets.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #2 on: May 28, 2010, 01:34:03 PM »
BSG Tips - How Much Capacity Should My Company Have?

This is a common question in the first year as companies strive to be the first in the industry and win the business strategy game. A very simple concept to imagine is that by being the biggest company you will be successful, and therefore people expand by enormous amounts and putting their company into significant debt in the first year.

The concept of a lot of capacity wins has truth to it, as usually the company with the biggest capacity does win. But this does not mean that they are any smarter for it. Being the biggest company and losing to a smaller one is embarrassing and it happens if the company isn't skillfully managed.

A company that is overaggressive and overexpands to the limit will definitely put itself in financial straits immediately. Krispy Kreme doughnuts is such a company that overexpanded beyond their management skills and they paid dearly for it. There is a market for doughnuts for sure, and Tim Hortons skillfully expanded in a way that Krispy Kreme did not.

Especially in an industry where everyone overexpands and the market crashes with oversupply, it is the few companies who did not expand and wisely choose to advance their company the second year. Therefore it is best to hedge your bet between the long term goal of being the big company and putting yourself in a bad spot in the second year to limit your plant capacity in the first year if you really want to win the business strategy game.

View capacity as a weapon, and the bigger it is, the harder you can hit the other companies. But if you can't lift it or skillfully wield such a great weapon, someone else who is more astute with smaller capacity can humble your company quickly.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #3 on: May 28, 2010, 01:34:50 PM »
Winning the Business Strategy Game - The Celebrity Mistake

In all the games I've seen, oftentimes a company won't think one of the most overrated aspects of the business strategy game that wins. And that is celebrities.

Celebrities for a fixed cost, give a boost to the desirability to your shoes. Most people think really materialistically when they think of celebrities and want them to promote their shoes. Celebrities are known for getting outrageous amounts of money and therefore in the first year, people put up insane bids without even thinking. When I say insane I mean over $10,000, I've seen people max it out at $50,000. Thinking of it logically, if you are starting a new game, your company sees a net profit of about $30,000 a year. So to bid anything above $10,000, you are basically throwing away your net profits. Most companies put themself in a bad start by bidding way too high for celebrities.

Realistically, your celebrity bids are $1000-$3000 to put you in the right direction. A game can be won without celebrities.

Celebrities though can be a strategy in themselves. A mid game company that has all the celebrities for possibly $5000 on average has stifled his competition who has no celebrities. This strategy is not a surefire winner, but it is a strategy that I have employed for a round.

Overall though, take celebrities with a grain of salt. Celebrities in the game don't have enough clout singly to win the Business strategy game. In the end it is your product that will make or break you.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #4 on: May 28, 2010, 01:35:23 PM »
BSG Game Tips - Net Profit Or Cash in the Bank?

In the Business Strategy Game, there are a large host of people who wonder if whether it is better to sacrifice net profit for a large cash reserve or to deplete a cash reserve for the sake of a slightly higher net profit.

The answer to the question is extremely critical for anyone who wishes to win the game on bsg-online. A large cash reserve and no debt is able to raise your credit rating to a very high level and you're able to get points. Whereas having a good net profit raises EPS, RoE, and stock price (to a lesser extent). Ultimately it is far more worthwhile to have a higher net profit than a large cash reserve.

This question can evolve is that is it better to have a high net profit at the expense of great debt? In my experience as a BSG Grand Champion, I've learned that it is better to see your company loaded with debt to create a high net profit than be a blue chip "no debt" company with mediocre profits. Too many people believe that having no debt is this awe inspiring feat.

In Finance class you will probably learn that debt is a financial lever. Using debt to bolster your company with greater abilities leads to greater net profit which in turn pays off the debt in time. A company does not need to be debt free to be extremely successful and capable of an A+ credit rating in the industry.

« Last Edit: May 28, 2010, 01:48:56 PM by WinBSGTips »
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WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #5 on: May 28, 2010, 01:36:08 PM »
BSG Online Game Tips - The Advantages of Debt and Equity

When playing the Business Strategy Game (BSG), none of the companies have much money in year 11. Companies need to raise funds using either debt or equity. By financing your company via debt, you accept risk of bankruptcy. Bankruptcy occurs if you default upon your loan for 3 consecutive years. Defaulting upon your loan also causes your credit rating and stock price to drop. Equity is the alternative to debt in raising capital through the sale of common shares. The loss of shares decreases your Return on Equity ratio (ROE) and Earnings Per Share ratio (EPS). The advantage of selling equity is that there's no risk of bankruptcy.

I have learned an intriguing strategy from 2 successful Industry Champions. The strategy is to build a financially strong company and sell shares when the stock price is high. Then after purposefully executing a bad fiscal year, buy back the shares when the stock price has sunk. This allows your company to gain huge amounts of capital using a "build and sink" strategy for your company on a manipulated stock price. This is terribly risky and rather unethical, but also innovative and it catches most companies off guard. The concept of people buying shares low and selling shares high is worth noting when raising funds via equity.

Raising capital through debt is the traditional way of raising money which completely exposes your company to bankruptcy. However, debt financing can be cheaper than equity financing with an extremely profitable company because money can be repaid at a fixed annual rate while buying back shares can become expensive with a rising share price. The great disadvantage that debt has is that it can weaken the profit margins annually through interest expense - a feature that equity does not have.

Both debt and equity have their advantages and disadvantages when raising capital. Finding the right debt to equity ratio will help your company finance it's growth and profitability to win the Business Strategy Game.

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WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #6 on: May 28, 2010, 01:36:35 PM »
BSG Online Tips - Know Your Competition

When I first played the Business Strategy Game, I was intimidated by the amount of numbers and I didn't feel I would ever be able to master the game. I talked to a lot of my friends who expressed the same sentiment, but in different ways. Ultimately as I rose the ranks of BSG by winning the business strategy game, I began to realize a trend of the "typical" individual who would usually win the business strategy game.

The individual may have an academic background, hard working, analytical, skills such as creativity are a plus, but being an individual who deeply analyzes and is very motivated to win the game acts as one of the most common recurrent themes in top BSG players.

The second characteristic that is typical of a high ranking BSG player is a competitive or gaming component. Those who play lots of video games (usually RTSs or Real time Strategy) have the background understanding of how games work and what to look for to win it. Someone who is labeled as a "gamer" in a business class, but not someone extremely academic, is someone who can potentially do very well in BSG.

And as unfair or prejudice as the last component is, is that someone who does very well in BSG is a male. Very, very rarely are there high ranking female BSG players, one only has to look at the Hall of Fame and find feminine names as Grand Champions. And the very few who are, are they in groups, potentially with a guy? It is extremely rare to find a lone female as a Grand Champion of BSG, although there are several male counterparts.

It is good to look at your class and see "is that someone who fits the profile of a good BSG player, they may be academic, but do they understand "games" or if they play lots of games are they smart enough to lend that skill to something academic like the business strategy game. And of course it is important to realize where you fit in the typical profile of the business strategy game. For those of you who are female and probably don't play games, you need to really utilize your high academic motivation to win you the game.

A joke I have for other males who are struggling in an industry who describe to me their class. Whenever it comes to that pretty blond girl, you can almost bet she isn't going to make it in BSG by herself. That guy who is specializing in IT and knows how to take apart computers.... that's the guy to watch out for.
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WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #7 on: May 28, 2010, 01:37:05 PM »
BSG Online Game - Riding the Tide With Exchange Rates

A totally uncontrolled area of the business strategy game is exchange rates. They are punishing and extremely beneficial to the whole industry. Understanding exchange rates is the equivalent of taking advantage of the winds at sea in the sense that they are totally uncontrollable, but can be "tamed". Here's a fictitious set of exchange rates, remember all BSG companies work in American dollars at the end of the day.

* EA 0.9 per American dollar (-10%)
* Asia 1.10 per American dollar (+10%)
* LA 1 per American dollar (therefore it's even.)

Taking into account that shipping international simply costs more through tariffs and shipping charges, the fact of the matter is revenues in Europe lose value through the exchange rate by 10%, Asia increases revenue by 10% and LA does nothing either way.

Selling in Europe is comparatively less profitable than Asia due to exchange rates so therefore it's important to have emphasis in selling products in Asia as far as revenues are concerned. But exchange rates also change production costs, so therefore it is 10% cheaper to produce shoes in EA and 10% more expensive to produce shoes in Asia. For companies who have a big Asian plant will be hit hard, and during this year, it actually pays to make shoes cheaply in Europe.

Therefore the big picture is Europe will have less profitable revenues this year, but it will be cheaper to produce shoes there, and Asia will be more profitable to sell shoes this year, but it will be more expensive to produce in that region. Understanding this simple concept and planning accordingly due to the 4 currencies and how they interact with each other, allows you the unique ability to "control the winds" of BSG.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #8 on: May 28, 2010, 01:37:40 PM »
BSG Online Simulation Tips - The JIT Decision

If you're a business student like me you've probably heard of the wonderful JIT (Just In Time) systems that exist in the world. Even the mention of a JIT system brings about the concept of an extremely efficient and highly profitable supply chain. It is no wonder that most people who play BSG think that implementing a JIT system in the game would greatly improve their chances to win.

The game's shipping methods runs between 1-4 week delivery times. Hence 1 week delivery times represent the theoretical JIT systems that product arrives quickly and in a very timely fashion. It's slower counterpart is the 4 week delivery time which is so the exact opposite of JIT. Most people just jump at the thought of implementing a JIT system, but there is something that most people don't understand. Shorter delivery times require more inventory to "front" the supply chain which leads to a superficial inventory requirement to float the game's logistics.

The question of implementing a Just in Time system becomes even more precarious when the minimum inventory requirement is actually greater than the demand shorter delivery times generates. If this is the case, then a JIT system is actually a money loser. All the shoes caught up in the supply chain at the end of the year become part of next year's beginning inventory and their quality takes a small decrease as well as there are increased storage costs to pay off.

Ultimately a company must look at their distribution screen to fully understand if implementing a JIT system is truly worth the cost or if maybe they should choose a slightly slower delivery time despite the fact it goes against the high street opinion of JIT being the pinnacle of perfection.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #9 on: May 28, 2010, 01:38:10 PM »
BSG Online Help - Cash Flow

The lifeblood of any company is the cash flow that exists between costs and profits. In the Business Strategy Game, cash flow is something that must be carefully watched and prepared for. Being too short on cash runs the risk of going into overdraft and paying a premium interest charge. Too much cash flow is a waste of a valuable resource within the game that should either be paying off debts, building capacity, issuing dividends, etc.

In the many years that I've played BSG, the recurring number that seems to be a good ending cash balance is about $20,000. This provides for a hefty cushion in case the worse comes to pass. For companies that are extremely large and vast in size, I may increase the ending cash balance to be more around 35,000. There is one element in the whole game that is incredibly risky and can make it appear that your cash balance is very high, but in reality it is not 100% reliable. I am talking about the private label market.

It is possible to be defeated in a private label market incurring substantial costs and thus lowering your net profit and subsequently your cash account. The only way to reliably know where your cash balance will be in the worst case scenario is unclick all the PL markets to see where the company would be without PL revenues. This ending balance should be about $15,000- $25,000 depending on the size of the company.

Acknowledging the worst kind of situation that could befall a BSG company allows a shrewd manager to brace themselves for an unexpected surprise. Following this rule will prevent your company from going into overdraft and all the avoidable costs associated with it.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #10 on: May 28, 2010, 01:38:40 PM »
BSG Online Game - Economic Stages Part One - Boom Times

After playing hundreds of BSG rounds, I've seen typically what usually happens to the average industry at each step of the game. There are several factors that can create highly profitable boom times and terrible recessions that make people go bankrupt. The greatest of these factors are exchange rates, industry capacity (and by default shoe supply) and Industry Competitor aggressiveness.

Usually at the start of a new game because of everyone's newness and very rarely afterward is what I like to call "Soft", "Good" or "Boom" Years. The overarching strategy of these types of years is to gather as much net profit as your company can absorb and make good use of the year's opportunities.

These are the key factors to watch out for Boom Years. Positive exchange rates usually helps the whole industry improve. Good balance of supply and demand allow for a future of growth for smart minded companies. But the best of all... is when other companies just aren't very aggressive or don't understand what they are doing which makes them ripe targets to DOMINATE!!!

It is from Boom Years that your company can really jump ahead and gain huge advantages over the competition that may secure future victories in tougher years. Unfortunately Boom Years can be very scarce and companies must usually contend with "Bad" Years or Recessions that make up the bulk of the game.

Although competitor aggressiveness may increase as the game continues and industry capacity may never be healthy again. Exchange rates sometimes act as a little financial oasis in the middle of a recession acting as a mini boom against adverse circumstances.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #11 on: May 28, 2010, 01:39:16 PM »
BSG Tips - Economic Stages Part Two - Recession
 
In the last article I covered Boom Times, how they are caused, and what to do in the event of one. Pure boom times are very rare in the game because usually there is one smart competitor in the industry who wants to be significantly stronger and better off than everyone else. When several of these competitors hold that mindset and have an idea on how to win BSG, they will ultimately create a very competitive and aggressive marketplace. This sets the platform for a recession as prices begin to drop as competition heightens and it only takes a few aggressive companies to greatly expand their factories to create oversupply in the industry. As these factors go against the remaining companies, the death knell to the industry when exchange rates turn into the negative, this is a surefire sign to expect most companies to drop in points. In the above circumstances only the strongest will survive the recession and for some companies dropping in points means never gong back.

But are recessions truly good or bad? It's a fact of life for sure and this is something that has to be dealt with. In boom times companies are more "buoyant" and there is an upward tendency for the whole industry. In a recession companies are more opt to sink, and this downward tendency may be used as an advantage.

In my personal views on how to play a recession is that all the companies must prepare for a massive "onslaught" and everyone is going to get hit. All the companies raises their shields and defenses to protect themself, and those who get hit will fall back, and those who can maintain their position or possibly even advance will benefit. A recession acts as a force against everyone, and if you can hold your own, it pushes everyone else back and the net outcome is that your company's position has actually improved.

Sometimes the greatest fortunes are made in recessions.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #12 on: May 28, 2010, 01:39:57 PM »
How to Win BSG - Economic Stages Part Three - Riding the Recession

In the previous articles we've explained both boom times and recessions, how they are caused, and how you should play when they are in effect. Boom times are a time for great prosperity, while recessions opens the gateway to bankruptcy. But can the two be manipulated in a way that they both exist and even controlled?

In boom times your profits roar, but the question stands when and in recessions will your profits proportionally drop the same way the other companies The pinnacle of industry power is when you have the largest company and control a huge amount of the supply. All the customers want your shoes because you've created other strategic advantages such as celebrities, good advertising, and strong distribution lines to reinforce financial security. In the case of a recession where your company greatly controls 2/3 variables being supply and industry aggressiveness (as your company adds to that). It is possible to create a situation where you "ride the recession".

The metaphor I like to use is that your company is on a surfboad, the recession is the wave, and your competitors are going to be hit by the wave. Like a surfer when they are on a crest, it looks almost as if they "control" the wave just like your company sort of "controls" the industry. The innate danger itself is very real and as long as you stand on top of it, you are effectively immune to whatever misfortune happens to those who are standing in the recession's path.

Getting to this position creates a situation where everyone has next to zero net profits with a few market challengers being a little better, while your company is doing extremely well. It is possible to tame a recession to your favor and use the recession's power to destroy your enemies. The real trick is understanding your industry well enough that you can create this situation without wiping out.
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WinBusinessStrategyGameTips

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Re: The Business Strategy Game Tips
« Reply #13 on: May 28, 2010, 01:40:29 PM »
Win BSG - BSG 7.20 and BSG Online

Back in 2002, the authors of the Business Strategy Game released version 7.2 (or BSG 7 for short). This is most likely the oldest version that any post secondary institution may still use. The game was administrated by the professor within the post secondary school. However, in 2004 the newest version of the Business Strategy Game known as "BSG 8" or "BSG Online" emerged, and today most universities play this version of the game which is entirely run by Business Strategy Game Central.

I happened to transfer universities around this time period and was lucky enough to play both BSG 7.2 and later BSG Online. The game at it's core was the same, but there were several fundamental differences. I would personally say that BSG 8 became easier with the introduction of "Investor Expectations" which creates a set bar of what companies should at least be achieving. Therefore if they at least achieve these very low expectations, they will not be failures. BSG 7.2 was completely bell curved and the frequency of people going bankrupt was not unheard of. BSG 8 is also much more forgiving in mistakes, such as celebrity bids, in BSG 7.2 if a new company makes the noted "Celebrity Mistake" it would be impossible to immediately undo it. In the new Online version it is very possible to correct the mistake within a year.

If you're looking around for a university be warned that if you end up playing BSG 7.2, the chances of failing and going bankrupt are significantly higher.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.

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Re: The Business Strategy Game Tips
« Reply #14 on: May 28, 2010, 01:40:57 PM »
BSG Game Tips - Price Elasticity

An in depth analysis can be done on a BSG company regarding price elasticity. There is usually a $5 price spread where the demand for shoes will not experience a significant change. I've seen many companies plot the price vs the demand and see where the price elasticity range is. Of course though being on the upper end of the price range is usually the most profitable and should be sought after to attain. But what are the effects of price elasticity if you are go below or above the range?

If you go above the range, demand will start to be noticeably lower. In some rare cases where supply isn't enough to meet demand, this would prove to be more profitable. This is because prices must go up if there isn't enough supply to meet demand.

If you go below the range, demand will rise exponentially, which is a key way to maintain market share. In very common circumstances where there is a recession with an oversupply of shoes for the demand, stealing other company's market share is a way of survival.

Although the price of your shoe does have affect on the industry, the great industry trends won't usually be affected by what you decide I've seen companies fret they have gone below or above the price elasticity range and are concerned of what negative effects can occur by going against the norm. These negative effects include diminished market share with increased prices, or a furthered recession with decreased prices.

In essence, every year a new price elasticity range will be created due to the collective industry forces that control the market. While one company does have input to the industry average of prices, it is because there are usually several other competitors that creates a situation that no one really can control. Therefore it is best to play each year with the best decision set, as price elasticity is constantly changing.

For the most up to date support in winning The Business Strategy Game (BGS) and the Global Business Simulation Game (Glo-Bus) visit www.bsgtips.com and Contact the Grand Champion.