BSG Guide – How to Win the Business Strategy Game

You are playing the BSG but do not want to read the 35-page Player’s Manual? Or you have read it but still do not know what strategy to pursue or what is going on? I feel you. In this blog post, I will run you through everything important that you have to know about the BSG and how to win it. The most important advice in advance: it is all about PROFIT.

 

Your Strategy for the BSG

Before you even start plugging in any numbers, it is important that you decide for a strategy to pursue for the game. Even more important is, to stick to it! I have encountered two successful strategies so far: medium-quality shoes (S/Q rating of 5-6 stars) paired with high number of models (250-350 models) and high-quality shoes (S/Q rating of 8-10 stars) paired with low number of models (50 models). For this blog post, I will concentrate on the high-quality + low model strategy. I personally find it easier to pursue and had more success with it in the past. However, you can successfully apply most of the following tips to either strategy. Even though this game is said to be a business simulation, get rid of the thought that all decisions have to make sense and be logical. You will soon know why. With the high-quality shoes + low model strategy, the only thing you care about is your PROFIT. Everything else like earnings per share (EPS), return on equity (REO), and image rating (IR) will automatically follow. After clicking on the green “Go to Decisions/Reports”-button in the corporate lobby, you can see your profits in the lower left-hand corner.

Projected Performance (BSG)

If you are completely new and your projected performance box is not showing yet, you have to click the “Save Decisions” button on the upper right-hand corner for the projected performance box to appear.

 

 

Decision Entries for the BSG

We will now look at all the decisions you have to make to actually play the game and be successful with your strategy. Two of the most important things to do here are analyzing your competition and optimizing your values. Optimizing your values is the essence of the game, even though it might be very time-consuming. However, if done right, it is worth the time as it will yield the maximum profit possible and success in your industry. You will get the hang of it after the first few decision rounds as it is always the same procedure. Let me walk you through the various decision pages and explain you how to optimize each entry. I will walk you through each page chronologically.

 

Corporate Citizenship

Corporate Social Responsibility and Citizenship (BSG)

This decision page is mainly a waste of money and we will not spend a lot of time with this page. As already mentioned earlier, not every decision has to make sense. You might think that using green footwear materials or using recycled boxing / packaging is a good decision, especially with the currently ongoing environmental debates. It is not. Most of the decisions you can make here are a waste of money and will not benefit your company. While they might boost your image rating, they will decrease your profit. And profit is what the game is all about. Hence, you will only focus on the two following decisions that are worth their money as they increase your image rating the most. You want to set Ethics Training / Enforcement to “All Employees” and Workforce Diversity Program to “Yes”. Leave everything else unchanged. You are now done with all your decisions for the Corporate Citizenship decision page and should hit the “Save Decisions” button on the upper right-hand corner. For all following decision rounds, you do not have to return to this page, as I advise you to always keep those two options and not change anything else on this page.

 

Sales Forecast

This is probably the most important decision entry page in the game and you will be spending most of your time here. On this page, you will optimize your entries and toggle each value until your reach the maximum profit possible for each entry. Do not worry about your market share percentage or any other value than your net profit. Market share is not crucial for your success in the BSG, but profit is. I recommend having a pen and piece of paper next to you so you can write down your net profit and compare when plugging in different values.

 

Adjusting to Competition

First, click on the “Adjust Competitive Intensity” button that can be found on the top middle of the page. A window should pop up where you can select each of the four regions and change the industry average S/Q rating and competitive impact. Select +2% for the “Percent Change in Competitive Impact of All Other Factors from Previous Year”. Do this for all four regions.

Anticipated Changes in Competitive Intensity (BSG)

You have successfully adjusted to your competitors. In the first years, the estimate of the industry average might be a little off the +2%. This is because your competitors are adjusting and trying to find their strategy. However, after 3-4 years, your competitors will settle and changes will be more predictable. The two most important values you want to have as precisely estimated as possible are the industry’s average wholesale price and S/Q rating. While +2% might now always be spot on, I have made the best experience with it so far. However, if you want to do it more precisely, note down each industry’s percentage change over the years and use this number instead of the +2%.

After you have done this, you might notice that your “Your Estimate of the Ind. Avg.” values have changed. They have all changed by +2%, just as you plugged it in. However, some values, such as the Wholesale Price have decreased instead of increased. No worries, this is logical and you did nothing wrong. With increased competition, prices tend to decrease.

 

Factors Affecting Wholesale Sales

Factors Affecting Wholesale Sales (BSG)

Let us move on to the tricky part of this decision page. Looking at the North America column, you now have to plug in your values for Wholesale Price, S/Q Rating, Models Available, etc. Start off with the values that you know for sure: For the high quality, low models strategy, I recommend starting off with a S/Q rating of 7 stars and 50 models available. In addition, your Retail Outlets values should always be the highest number possible that you are allowed to enter. Your Delivery Time should be set to 3 weeks. After you have done this, play around with the values for Wholesale Price, Advertising Budget, Rebate Offer, and Retailer Support (increase/decrease by 100s only, as everything else makes no sense). Again, it is important that you keep in mind to optimize your profits. This like a trial and error process and does not necessarily have to make sense. You might have the highest profits with 0 advertising budget. Just plug in numbers and note down your net profit values. The value that yields the highest profit value is the one you want to go with for this decision round. Be cautious though: Do not only look at the percentage change in net profits, but also at the total value as the total value might change sometimes but the percentage change remains the same. I usually go ahead and plug in whole dollar amounts for the wholesale price and see how net profit changes. It typically keeps increasing until a certain price point and then starts to drop. From this highest whole dollar amount, I plug in every possible value around it and find the price that yields the highest net profit. Be careful: Sometimes, especially for advertising, numbers that are way off (for example $100 and $8,000) can yield about the same net profit with only a little difference. Hence, make sure to plug in every possible value to reach the highest net profit possible. Do this for all the four regions. It might be tedious work and consumes a lot of time, but it will definitely worth it and will let you win the BSG.

 

Factors Affecting Internet Sales

Factors Affecting Internet Sales (BSG)

After you are done, move on the left side and do the same for your internet sales. Set Models Offered to “50” and Free Shipping to “No”. Free shipping will most likely not increase your profits. Try and set it to “Yes”. If it increases your profits, leave it at “Yes”, otherwise set it to “No”. Your estimate of the industry average for the internet retail price does not change with your adjusted competitive that you set to +2% before. Hence, keep track of the industry’s internet price and how it changes. According to the change, you can estimate the next year’s average industry internet price and plug it in. In the first few years, this will be pretty difficult to determine. However, try your best. The Models Offered estimate seems pretty fair and you do not have to worry about it. Then, just like you did before, plug in different values for your internet price and see, which price yields the highest net profit. However, you should keep on thing in mind: Your internet price should ideally be 40% higher than your wholesale price. If it is lower than 40%, your wholesale price will be in competition with your internet price. This means, you have a channel conflict, meaning that your Retail Outlets number will decrease in the next year and less retailers are willing to sell your shoes. You do not want that to happen, especially because your internet sales only account for a small percentage of your entire sales. Hence, try to keep your internet price at least 40% higher than your wholesale price. You possible might decrease your net profits with this, but it is definitely worth it and will pay off in the long-run.

 

Inventory Clearance

Inventory Clearance (BSG)

If you have beginning inventory from last year (you did not sell all your shoes), try and use the Inventory Clearance option in the lower half of the page. Sometimes, clearing your beginning inventory at a discount will boost your profits. Again, try out each percentage for each region and set it to the percentage that yields the highest profits. If it is 0%, that is fine as well, do not worry about it.

 

Company Sales Forecast

Company Sales Forecast (BSG)

You are almost done for the Sales Forecast decision page. All you have to do now, is writing down your forecasted Regional Sales Volume for both the Internet Segments and Wholesale Segments in all four regions. You will need those numbers later on.

 

 

Branded Production

Do not worry about the Plant Capacity / Upgrades page. I did not forget it, but we will take a look at it later. On this page, you will set your values for your branded production. This means, you decide about the S/Q Rating of your branded pairs produced and your compensation and training for your employees. Again, maximizing net profit is all you care about with our strategy determined at the beginning. At the lower half of the page, you also determine how many branded pairs you want to manufacture in each region you have a plant.

 

S/Q Rating of Branded Pairs Produced

Branded Production (BSG)

Here, you will determine the Percentage of Superior Materials, Number of Models, Enhanced Styling / Features, TQM / Six Sigma Quality Program, Change in Annual Base Wages, Incentive Pay, and Best Practices Training. First, set your Number of Models to 50, as determined earlier at the Sales Forecast page. You should pay attention that your S/Q Rating of Branded Pairs Produced matches your value on the Sales Forecast page. So for our strategy, it should be 7 stars at the beginning. Again, trying out different combinations and optimizing net profits is key for these values. Percentage of Superior Materials, Number of Models, Enhanced Styling / Features, TQM / Six Sigma Quality Program, and Best Practices Training all affect the S/Q Rating. So, play around and find the best combination for your given S/Q rating that yields the highest net profit. I usually have the highest net profit when setting Enhanced Styling / Features to $50k, TQM / Six Sigma Quality Program at around $0.70, and Best Practices Training at $5,000. I would then adjust the Percentage of Superior Materials to whatever is needed to match my S/Q Rating with the value plugged in on the Sales Forecast page. However, do not rely on those values. Go ahead and try out which combination yields the highest profits. One time, I was able to increase my net profit by lowering TQM / Six Sigma Quality Program to $0.20 and increasing Percentage of Superior Materials to maintain my S/Q Rating. It is all about trying out all possible combinations. After a couple of decision rounds, you will get a feeling for it and it will become easier, no worries.

The same accounts for your Change in Annual Base Wages and Incentive Pay values. While those two values do not change your S/Q rating, they will change your net profits. Hence, find the combination that gives you the highest profit. Ideally, you can cut your employees’ wages and will increase profit. It sometimes works. If not, see what positive percentage yields the highest profit for you. After you have done this for both the N.A. and A-P plant, focus on your Total Branded Production Needed to Achieve Year XX Sales Forecast section on the lower half of the page.

 

Total Branded Production Needed to Achieve Sales Forecast

Total Branded Production Needed to Achieve Sales Forecast (BSG)

You now need the forecasted Regional Sales Volume for both the Internet Segments and Wholesale Segments in all four regions that you wrote down earlier. While your regional sales volume for the internet segment is a good estimate, the estimates for the wholesale segments are not. The BSG tends to underestimate those values by about 20% and hence, you need to correct them for a more precise estimate. The closer your actual numbers are to your estimates, the more likely it will be that you earn bonus points from the Bull’s Eye Award (be within a 5% range of the estimates). So, multiply your sales volume for the wholesale segment for each region by 1.2. This is your new, more precise regional wholesale sales volume. If you happen to end up with a large surplus of shoes the next year, lower your 1.2 multiplier a little bit to 1.18. Again, this can be trial and error for a couple of decisions but you should get a feeling for what multiplier is best for your company. It is definitely around 1.2 though and I recommend starting off with this value. After you have calculated your new regional wholesale sales volume, add the regional internet sales volume to it. Do this for all four regions. You now have an estimate of how many shoes you are going to sell in each region. This can get confusing at the beginning so here is a table to show you the process.

 

Total Branded Production Needed to Achieve Sales Forecast (BSG)

 

While you already have a good estimate of how many shoes you are going to sell in each region, you still need to consider your rejected pairs during production. To do so, first plug in your N.A. total sales volume estimate into the Branded Pairs to be Manufactured in Year XX slot for North America, write down your reject rate and add it to your previous total N.A. sales volume estimate. Then, you want to plug in your L.A. total sales volume estimate into the production slot for North America as well and add up your reject rates. You always want to make sure that you produce your sales volume for N.A. and L.A. in North America to reduce costs because of NAFTA. After you have done this, you repeat the same procedure for Europe-Africa and Asia-Pacific with the A-P plant because it is cheapest to ship shoes from A-P to E-A. Write down each region’s reject rates and add them up to the region’s estimates sales volume. After you have calculated the manufacturing volume for each region, add up your N.A. and L.A. volumes and finally plug them into the NA manufacturing slot. Do the same for your E-A and A-P volumes and plug them into the A-P manufacturing slot. Here is a chart again tho show you the process:

 

Total Branded Production Needed to Achieve Sales Forecast (BSG)

 

If your regular production capacity is not sufficient, use overtime. If this is still not enough, add the missing shoes to the other plant’s Branded Pairs to be Manufactured in Year XX number. However, if you happen to use overtime at either of the two plants, plan on increasing the plant’s capacity in this decision round. You need the capacity for the private label market. I will explain soon, how to increase plant capacity and why we need the capacity for private label. After you have successfully plugged in your branded pairs that need to be manufactured for both plants, click the “Save Decisions” button and move on to the Branded Distribution page.

 

Branded Distribution

Branded Distribution (BSG)

Here, you will plug in your previously calculated regional total sales volume for each region. Important: Your Sales volume, not the production volume that includes the rejected pairs! As already mentioned, it is important that you ship all your shoes for the North American warehouses and the Latin American warehouses from the North American plant. Ship all the other shoes for the Europe-African warehouses and the Asia-Pacific warehouses from the Asian-Pacific plant. If numbers do not add up correctly and your total pairs shipped do not match your total pairs available, go back to the Branded Distribution page and adjust your numbers accordingly. Your numbers might be a little bit off due to the reject rates.

After you have plugged in your numbers for both plants and your Branded Pairs Available for Shipment matches your Total Branded Pairs Shipped from each Plant, go ahead, click the “Save Decisions” button, and move to the Private-Label Operations page.

 

 

Private-Label Operations

Do not worry about me skipping the Internet Marketing, Wholesale Marketing, and Celebrity Endorsements pages. You can ignore the Internet Marketing and Wholesale Marketing pages because they will just reflect your internet and wholesale decisions that you already plugged in on the previous pages. I will talk about the Celebrity Endorsements page later.

The private-label sector is something you do not want to miss out on, especially with our high quality, low models strategy. It can be very beneficial for you. However, the private-label market is set up the way that only a limited demand is given each year. The company that offers the lowest price will sell all its supply first, followed by the company with the second lowest price offered, and so on.

 

Private-Label Production

Private-Label Production (BSG)

In the Private-Label Production field, use all your remaining available capacity, even overtime. Now you begin to understand why I earlier said, that if you use overtime for branded production, you should expand your plant capacity for the next year. You need this capacity for the private-label market.

Now, decide to which region you want to ship your private-label shoes. I would look at the Margin Over Direct Costs value at the very bottom of the page to see where it is most profitable to ship your shoes to.

After you have decided to which region to ship your shoes to, go ahead and set your Superior Materials Usage value and your Enhanced Styling / Features value. Similar to the branded production, try out the different values to see which combination will give you the lowest Average Production Cost value for your plant and hence, the highest profits.

When you found the best combination to produce your shoes at the lowest cost possible while meeting the S/Q rating requirement, move to the Private-Label Bids section.

 

Private-Label Bids

Private-Label Bids (BSG)

Here, you will decide for how much your shoe is going to sell. This can be a very tricky decision and you need to analyze your competitors’ prices. No worries, it will be easier after the first few years. Do not price your shoes too low, so that you will not make any profits with your sales. However, do not price your shoes too high, so that your competitors have a lower price than you and will sell their shoes first. Worst case, all the demand is already satisfied in your region before your shoes at a certain price is being considered. This would leave you with a bunch of shoes unsold. However, when pricing your shoes, keep in mind to set the price at least $5 below the wholesale price average. Otherwise you will not sell any shoe either.

The private-label market is a very nice opportunity to gain an advantage off your competitors and take their market share. Hence, it should be your goal to price your shoes lower than everyone else and take their market share so that other companies will not sell any private-label shoe in this region. However, to be able to do so, you need available capacity. This is why building additional capacity is so important.

After you have found the right price, click the “Save Decisions” button. You are now done with your private-label decisions and all significant decisions that affect your net profits. However, there are still some other “voluntary” decision that will prepare you for future decisions. Let us take a look at the Plant Capacity / Upgrades page first.

 

 

Plant Capacity / Upgrades

This decision page deals with your plants. You can decide to sell or purchase available capacity, upgrade your plants, build new plants in other regions, or add capacity to already existing plants.

 

Capacity Sales / Purchases

Capacity Sales / Purchases (BSG)

Here, you have the opportunity to sell your existing capacity. NEVER do this. You need your capacity and it is never a good idea to sell your existing capacity. By clicking on the “Purchase Capacity” button, you can see whether someone else did the mistake and sold capacity. If you find capacity available for purchase, I would always directly purchase it. Purchasing capacity is 20% cheaper than building new capacity on your own.

 

Plant Upgrade Options

Plant Upgrade Options (BSG)

In this section, you can upgrade your plants. One option that you definitely want to purchase is Option C. Option C increases your S/Q rating by 1 star. This means, without increasing your superior material or enhanced styling / features, you gain 1 star. Especially with our high quality and low models strategy, this will be very beneficial and will safe you some money. I would recommend purchasing the upgrade for both of your plants within the first four years. With our strategy, you might want to think about getting Option A as well. However, it is not necessary and Option C is definitely more effective. You can only do one upgrade at a time in each region and a total of two updates per region.

 

Self-Construction of Additional Capacity

Self-Construction of Additional Capacity (BSG)

In the last section of the Plant Capacity / Upgrades decision page, you can construct a new plant in either of the two regions where you do not have a plant yet or you can build additional capacity to your N.A. or A-P plant. With our strategy in mind, I would recommend addition capacity to already existing plants rather than constructing a plant in a new region. I recommend building additional 1,000 capacity for the North American plant in the first year, if your cash balance allows it. When doing so, you have to plug in numbers for the assumptions section in the new window. Do not worry about those numbers, they will just show you whether your investment is profitable or not. It will be, trust me. You then want to select “0%” as the Portion of the $XX mil. construction cost to be financed with debt. It is best to build only as much capacity as you can afford without taking any loans. Authorize your construction and you save your decisions.

 

 

Celebrity Endorsements

On this decision page, you can bid on celebrities. Celebrities will enhance your marketing efforts and help you sell more shoes. When contracting a celebrity, your advertising efforts in the Sales Forecast section should not be low. It makes sense; the more ads you run, the more your celebrity endorsement will be seen and the more effective it is. The higher your celebrity endorsement value for a specific region, the more your advantage in attracting buyers to purchase your branded footwear. However, keep in mind that your regional endorsement value should not be higher than 400 in any region. Otherwise, their endorsement effect declines.

Celebrity Endorsements (BSG)

I have experienced different behavior with bidding on celebrities. I would always encourage you to bid on available celebrities. However, with a reasonable price. I personally would not bid higher than $5,000 – $6,000. If you see little action on the celebrity market, go ahead and get your celebrities for the lowest price possible ($500). If you bid on multiple celebrities, it is good to set a ranking priority and a spending cap so that you do not spend more money than you want or have available. As always, do not forget to save your decisions after you are done.

 

 

Finance & Cash Flow

Almost done, the last decision page. On this screen, you can handle your financial decisions for your company.

 

Sources of Additional Cash

Sources of Additional Cash (BSG)

In the upper left box, you have available sources of additional cash. You can either take out a 1-year, 5-year, or 10-year bank loan. Your interest rates depend on your credit rating and the duration of your loan. However, I would recommend not taking out any loan if possible. If you really need money, I would rather advise you to issue some of your stock.

 

Uses for Excess Cash

Uses for Excess Cash (BSG)

In the upper right box, you can spend your excessive cash. When starting the BSG, you have two long-term loans; one for 5 years, the other one for 10 years. Paying off these loans in advance has the advantage that you will pay less interest over the coming years.

You can also pay dividends to your shareholders. Paying dividends will increase your stock price and your ROE. However, it will also decrease your ending cash. I started with paying $0.05 dividends and increased it by $0.05 every year. At the end, I increased dividends to boost my ROE.

In addition, you have the option to repurchase your stock. Repurchasing stock will boost both your EPS and ROE. However, it will also decrease your ending cash. It is usually best to repurchase stock at the beginning, when your stock prices are relatively low.

 

 

The Following Years for the BSG

If I have cash available after doing all my decisions, I like to alternate between building additional capacity, purchasing plant upgrades, paying off loans and repurchasing stock in the following years. I prioritize building additional capacity and purchasing plant upgrades. If you have more cash available, go ahead and spend it for either one of the other options. Do not sit on it. However, do not forget to calculate your possible additional expenses for your celebrities. I like to have around $8-10 million ending cash available after all my decisions are made.

Wow, you are done! You are now all set to dominate your industry and win the BSG! You basically do the same thing over and over again, for every decision round. It is important to toggle your values and find the best combination to maximize your net profit. Profit is the key to success in this game! If you reach the last decision round, comment down below and I will give you some hints on how to boost your net profits for the last year and gain some extra points. 😉

 

I wish you the best of luck for your game. If you have any questions, suggestions, or comments feel free to comment and I will do my best to help you out.

52 thoughts to “BSG Guide – How to Win the Business Strategy Game”

  1. Hi, thanks for the great strategy! Right now I am doing the second year decision, I’m doing star 8 and 100 models, did 7 stars and 100 models in first round and the result was not very good. Do you have any suggestions? Is your strategy also works for my situation? Thanks a lot!

    1. Hi, you’re welcome.
      Since you’re only in the second year, I would honestly decrease your models to 50. It’s not too late to do that yet. If your results in the first year are not too good, it’s not a big deal. The end result counts.
      So I would recommend you to decrease your models to 50 and remain at 8* for most of the time, if not even for all the remaining game. Like I already said in my previous post, the most important thing is to toggle each and every value and pay close attention to your net profits. If you have your AP price set to e.g. $50.66 but $50.67 gives you higher profits, go for the higher prices. Try out each and every value and note down the highest net profit values. If you found your highest value for the best net profit, move on to the next value and do the same. It’s a lot of trial and error until you find the best possible value and it takes a lot of time at the beginning. But it is definitely worth it.
      I hope that helps and good luck!

      If you have any questions, feel free to come back and ask them. 🙂
      Fin

      1. Hey!! Thank you so much for your reply! but out industry there is a direct competitor for me, he is also star 8 and 50 models, and he prices so low for wholesale, only 47! And he also purchase 4000 capacity in the first year but no advertising expenses. So I doubt on his strategy. But if i decrease my model, I don’t think I will be competitive enough to compete with him if he stays with his strategy, what do you think? The decision is due tonight I am so nervous but the performance score so far looks good. Thanks a lot!

        1. Hi Lee,
          When I played the game, I barely looked at what my competitors were doing. I mainly looked at what they were doing in the private label sector. But strategy wise I always sticked to my “maximum net profit” strategy which you can do no matter your competitors’ strategy. I would still go for the 50 models and make sure to buy or build capacity so you have enough for your private label.

          1. So do you mean although we sell exactly same shoes it does not matter even my rival’s price is lower than mine so long as i can maximize my profit?

          2. Exactly. Set your price to whatever maximizes your profits. 🙂 One week they might increase, the other they might increase by just a little or even decrease. But do whatever is necessary to maximize your profits. Same with all the other values, like I described in my blog post 🙂 And then use all your remaining shoes for the private label market.

          3. Thank you so much for your suggestion! Definitely helps! If I have further questions do you mind I ask you for help? Promise I won’t have tons of question haha. But again, thanks! 🙂

          4. Hi! Thanks for your strategy! Helped me get to the second place! My direct competitor is now selling 8 stars with more than 400 models in wholesale so I think i will be at a even better position selling 50 models. But my profit is still a little bit low for a second place, guess my price is too low and I need to cut some of my expenses, right?

          5. Sounds good, congrats!
            Like I explained in my blog post, do everything that is necessary to increase and maximize your net profits. Sometimes that’s cutting expenses, sometimes that’s increasing expenses (even though it might not make sense at first).
            Same for your superior material. Try out different combinations that keep you at 8* and the highest possible net profit.

          6. Okay! I guess because i grew too fast last week, this week’s net profit is negative (I didn’t make any adjustment yet). I will just adjust it first and see what happens, thanks a lot:)

          7. Yeah I had that in the first weeks as well. It’s not too bad, no worries. 🙂 Let me know if you have any more questions.

          8. Hi! I now have another question about capacity. So I have plant in NA, EA and AP, but right now I am only using 70% of the capacity because the demand is quite small for me. But this year I have a lot of cash on hand, I upgraded my plant, should I also build the LA plant although I don’t need that much capacity at the moment? Thank you!

          9. Hi,
            Use the remaining 30% capacity to sell shows in private-label! That’s a game changer!!
            And I would not build another plant, rather increase capacity in the plants that you already built. You almost can never have enough capacity because what you don’t sell in branded, you can sell in private label and dumb prices there and take away your competitor’s market share. With remaining the cash on hand, try to buy back stock, pay off your loans from the beginning of the game, pay back dividends, and upgrade your plants.

          10. Okay! I was thinking about building a LA plant because I took the majority of private label there last year. But this year the shipping is too high from AP to LA so I cannot make any money from LA. But the plant page did say not recommend to build the plant so I was hesitating. Yeah I will hold on to that for now. For the upgrade option C is the one to raise 1 star, but the actual cost it can save me every year is not a lot, should I still do that? thank you:)

          11. Hi there! So I run into problem again! Entering year 15 I am still doing 8 star but the demand forecast is super low. I adjusted a little bit and the forecast is now close to previous year’s. However, my net profit is still negative even after i have adjusted the private-label. I cannot make any money there. Buy I have quite a lot ending cash. Do you know why is that? is it because I need to add capacity? So far I have only build a 1000 EA plant and additional 500 NA plant. Thank you so much!

          12. Hi,

            Like I said before, you should be building capacity, yes. Because with more capacity, you can offer more pairs in private label and dominate the market there. More capacity also brings down your costs.

          13. Okay. And you said I should only add capacity onto existing ones instead of building a new one in LA right?

          14. Sorry for the late reply.. Been starting my new job and working a lot lately.
            Yes, I would only add capacity onto existing plants and not build new plants.

    2. honestly i started with 150 models at 6 stars and went to 200 and 7 stars, 8 in private label. havr the highest stock price, image rating at 90, A+ still, and double digit EPS. im at year 17 and perfect score twice, 1st in last 3 years and 2nd twice. so idk what i may have done LOL

  2. Hello, may I ask my is not that great at the moment and we are onto year 13 which is like 2nd year maybe of the game and i try my best to like follow your tips though not as fully cause I still don’t understand much especially the calculation one a bit confusing cause I am bad at that, so far I have 7 s/q rating though I am unsure should I do lower models or not cause I am afraid it might not be enough for profit and all because most I see at average of rating and high models , I was wondering what can I do to make it better? like should I just follow your tips through all because I kind of get on a bad start

    1. Hi 🙂

      Yes, it’s not too late yet to follow through with my tips. I would definitely increase your S/Q rating to 8* and lower your models to 50 (this should be the lowest you can go if I remember correctly). And then I would just follow my tips and adjust all other values to maximize profits.

  3. Hello, thanks for the great strategy, it is working (1st place) ! We are reaching the last decision round and would like some hints on how to boost net profits for the last year and gain some extra points. Thank you in advance!

    1. Hi, I’m glad to hear that it helped! 🙂 So for the last year I didn’t stick to the rule that the internet price has to be 40% higher than the wholesale price. You don’t have to care about your retail outlets anymore so adjust the price so maximize your net profit, without the 40% rule. Furthermore, I spent all my cash on hand for dividends and stock repurchase to increase my ROE and EPS as much as possible. That combined will give you a good boost for the last year.

  4. Hi. I was wondering how much more additional capacity that I should purchase after I’ve bought the first 1000 for NA. Should I continue expanding NA or AP and by how much? Also do you know the cost of building additional capacity. I can’t seem to find it.

    1. Hi. There’s not right amount of capacity you should purchase. It depends on how much private label you sell and whether you want and can sell more – depending on the market, whether its satisfied or not. So if one of your markets is not satisfied or prices are high, I would built capacity to “attack” this market and sell a lot of shoes for a cheap price, to guarantee you the lowest price so that you sell all your offered shoes. I always went with 500 every second year, but it depends on your market and competitors.

      If you add capacity it will show you the price. I believe it varies based on your game’s situation.

  5. You said that the internet price should be 40% above wholesale. Which wholesale are you referring to? Like should I add up all my wholesale prices from the 4 regions and then divide by 4 to get an average wholesale price and multiply by 1.40 to get the internet price or should I base it off the lowest wholesale and then multiply by 1.40 to get the internet price?

    1. Hi 🙂 You have to base it off the HIGHEST wholesale price, just to be safe 🙂 Like that, all 4 regions are guaranteed to be 40% above wholesale price.

  6. Hi Fin, Thanks for the detail post and the screen shots. This is very helpful.
    As I keep reading online about different strategies to win, there are some postings that are aligned with the strategy of low quantity of models offered at a high quality and keep increasing capacity.
    My team and I are going to the second round of decisions, so I think we’re still on time to switch towards another area in the market. We were actually thinking on building capacity in LA for next year, however, two of the other teams already built capacity for 6,000 pairs in total (we are only 4 teams in total). With this, they raised the global capacity to 30,000 when the potential global demand (including private label) is only 24,218. So the question is: would you recommend for my team to still increase capacity despite this fact??… We have good market share in NA and, last year, we needed to ship the rest of the shoes from AP (incurring in shipping and tariffs costs, hence, the thought of adding capacity in LA). In my opinion, I believe the other teams are thinking on exploit the private label. at least one of the two teams has an S/Q of 8* and low prices so far (yes, they are in first place for now)… what do you think we should do?.
    Thanks!

    1. Hi Yvonne. What I like about my strategy is that you do not necessarily have to keep an eye on your competitors. You basically determine and run the market. That being said, when you go with the strategy explained in my post, you will have maximized profits. So your costs will be relatively low as well and the private label will be a very important factor of yours. And you can basically never have enough capacity for private label. Yes, despite your competitors building capacity as well, I recommend increasing capacity in a reasonable amount. You can still ship pairs from LA to somewhere else if needed.

      I recommend increasing capacity and keep focusing on your profits. 🙂

  7. I am in a box where every move I make to lower cost or shift production lowers my EPS or credit rating. I have extra capacity in the LA plant (worst place to ship from to any place outside of LA) which I tried to sell off. On initial input of the change there was a big boost to my numbers, but when I left the page the game suddenly dropped my numbers below my original ones. I don’t understand why it did this as this capacity was unused and there was upside to having it as my production was max out for the demand.

    Do I need to change another setting on another page for this to remain positive?

    1. Hi Dennis. I never really watched my EPS or credit rating (ofc credit rating should be a B at least). I only ever paid attention to my profits and I never ever sold capacity. That’s one of the things you should never do because you can always use capacity.
      I don’t know why the game suddenly changed your numbers but I recommend using every last bit of your capacity. If you demand for branded production is met, put everything else into private label to make sure you don’t have unused capacity. Unused capacity kills your numbers and profits!

      Concerning changing others values, I recommend reading my initial post where I have explained everything in detail.

  8. I am on my second year and I have negative income right now, any tips on how to get in the positive?

  9. Hello,
    I am having trouble getting my company back into the positive ending cash after taking out a loan. Any advice?

    1. Hello Samantha,

      my advice would be to read my guide and follow the steps. My guide follows the rule “highest net profit” is key to success. So when following the steps described above, you will have positive ending cash really soon again. 🙂

  10. Hi,
    I followed your recommendations, and I have a good rank. Now, I am worried about the future rounds. I started with 250 models and S/Q rating of 5. What should I do for year 12 and 13? Increase S/Q ratings? Increase models? Also, I am concerned about the prices strategy; the group who is in the first place has the plan of highest S/Q rating (7) with 200 models and lowest prices.

    Thank you so much for the good recommendations.

    1. Hi Mary,

      as I described in my post, I’d go with the “low models, maximum profit” strategy as it is easy to follow and you determine the market. Advantage of this is, that you don’t have to pay too much attention to your competitors.

  11. Hi Fin,

    I would like to ask you about the Dividends. My stupidness did not know that I should not pay dividends when I am in 5-year-loan, so I did not adjust any part in Finance Cash Flow except for borrowing. I let the rest remain the same in the entry. It was set Pay Dividends $1.00, which turned out 20,000k in total. (“0” for both stock issues and stock repurchase). I am in Y12, and I am adjusting for Y13.

    So, should I decrease pay dividends here to $0.15? (meaning I decreases it from $1.00 to $0.15). Does it hurt any other factors? And should I do “stock repurchase” this year?

    I am so thankful for your post!!!!!!!!!!!!

    PS: I do the 5-year-loan 12,000k in Y11 (7% interest); In year 12, I paid #1 Long-Term (early payment) 12k at 8.2% AND borrow 70,000k 5-year-loan at 4.5%.

  12. Hello Fin,

    I would like to ask about the “Pay Dividends.” My stupidness did not know that I should not pay dividends while I’m in LOAN mode. I put $1.00 pay dividends, which turned out 20,000k in total. (In Y11, I did the 5-year loan with 12,000k (7% interest). In Y12, I paid early payment 12,000k at 8.5% and continued borrowing 70,000k at 4.5% for 5-year). I did not “stock issues” or “issue purchase” in the those years.

    My question is what if I decreased the “pay dividends” to $0.15 from $1.00? Does it affect any other factors? What should I do in this case? (I’m adjusting for Y13 now). Should I decrease the “pay dividends” and do “stock repurchase” in Y13?

    And I’m so thankful for your post!!!!!!!!

    PS: I left a comment, but I did not see it and thus retyped. Please delete one if there is an extra comment.

    1. Hi Gwen,

      you should repurchase stock whenever you can. Also, I suggest not decreasing your dividends. You should slightly increase your dividends year by year.

  13. we are having a horrible time of having left over inventory .. we are in year 13 and our numbers are ok we were 1st place last on year 11 and second place on year 12 but i having a feeling we have been focusing so much on our current numbers we aren’t going to end well any advise on what we should do on inventory and other sections of the game

    1. Hello Stephanie,

      if you have left over inventory, you should either work on your numbers as I described in my post or put the left-over shoes into private-label.

  14. Hi! thank you for your help. This has been very useful. I am currently dominating my industry, and closing in on the top 100 list! I just have a quick question….

    Is there anyway to increase the demand for my shoes in the internet/wholesale markets? If not, I don’t see the need to purchase equipment in order to make more shoes until the demand begins to encroach upon my shoe making capacity. Any thoughts?

    Thank you!

    1. Hey Jax,

      congrats on your success! The demand depends on your retails, price and quality. If you tweak those numbers, your demand will adjust accordingly. With more inventory, however, you can put more shoes into private label which is a really important aspect of the game. Private label will help you dominate your competition.

  15. Hello. My group and I are about to complete year 17 for the game. We’re at the middle of the pack and wanted the best strategy to move up the ranks. Currently, we’re selling 150 models. Is it too late to reduce that to 50 as you suggested in your recommendation?

    1. Hi Raymond,

      unfortunately I have no experience with adjusting to my strategy in the late-game. From experience I’d say tho that it is already too late to adjust to my strategy presented.

  16. I’m playing the “new” version of the game, and your guide has worked perfectly for the first two years! 🙂 Thank you, Fin! 🙂 🙂

    It almost worked TOO WELL. We had a bunch of copycats in practice year 12, but nobody has figured our profit-maximizing, low-cost strategy, and now they’re pursuing higher models in the real game. I worried that another team would have stumbled onto your blog, but few people Google tips it seems! That’s a relief.

    I’d also like to point out that it appears the developers threw out NAFTA in the new version, so tariffs hurt pretty bad in Latin America. I still think it’s a waste to build a plant there, unless you’re selling tons of shoes (high models, mid SQ). If I’m wrong, I’ll post another comment. This game can be overwhelming, so anything to help other players!

    1. Hello. My group and I are also playing the ‘new’ version of the game and we’re little bit lost. Can you tell us more about the strategy you had ? It will be very helpful for us and will be very grateful 🙂 Do you still have your upload reports of all your years ?

      1. Hi,

        I suggest to go for maximum profits. Play with your numbers around and tweak them to generate maximum net profit. For further explanation, please read my blog post. There’s everything explained in detail.

  17. Hello,

    I’m play a new version of BSG ,we have already completed year 17 and now our team have a problem with struck in the middle stage that cost can’t decrease more and this year other company in the industry have a high SQ star and low cost (price war) that we can’t fight them because our cost is too high.

    How to solves this situation ,have you given us any suggestion.

    Thank You!

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