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SECTION
2
Using a Strategy Simulation
in Your Course: What’s Involved,
The Compelling Benefits,
and How to Proceed
14
Section 2 Using a Strategy Simulation in Your Course
Since2005,impressivenumbersofstrategyinstructorsatbusinessschoolsworldwidehavetransitionedfrom
a purely text-cases course structure to what we contend is a more robust and energizing text-cases-simulation
course structure. Incorporating a competition-based strategy simulation has the strong appeal of providing class
members with an immediate and engaging hands-on opportunity to apply the concepts and analytical tools
covered in the chapters and personally assume responsibility for crafting and executing a strategy for a virtual
company they have been assigned to manage.
Two of the world’s most widely-used and pedagogically eective online strategy simulations, The Business
Strategy Game and GLO-BUS, are optional companions for this text.
The Business Strategy Game is the world’s most popular strategy simulation, having been used by 2,800
dierent instructors for courses involving some 800,000 students at 1150+ university campuses in 72
countries.
GLO-BUS, a newer and somewhat simpler strategy simulation introduced in 2004, has been used by 1,620+
dierentinstructorsforcoursesinvolvingover240,000studentsat715+universitycampusesin51countries.
Arthur A. Thompson, a senior author of this text, is a co-author of both The Business Strategy Game and GLO-
HOW THE STRATEGY SIMULATIONS WORK
In both The Business Strategy Game (BSG) and GLO-BUS,1to5classmembersareassignedtorunacompany
that competes head-to-head against companies run by other class members.
In BSG, team members run athletic footwear companies that produce and market both branded and private-
label footwear in a global market arena with four distinct geographic regions—Europe-Africa, North
America,Asia-Pacific,andLatinAmerica.
In GLO-BUS, team members operate companies that design, assemble, and market professional quality
action-capture video cameras and unmanned aerial view drones in a global market arena that also consists
offourdistinctgeographicregions—Europe-Africa,NorthAmerica,Asia-Pacific,andLatinAmerica.
In both simulations, each management team is called upon to craft a strategy for their company and make
decisions relating to production capacity, plant operations, workforce compensation, pricing and marketing,
socialresponsibility/citizenship,andfinance.
Company co-managers are held accountable for their decision-making. Each company’s performance is scored
on the basis of earnings per share, return on equity investment, stock price, credit rating, and image rating.
Rankings of company performance, along with a wealth of industry and company statistics, are available to
(6to10roundsarebetterthan3-5roundsbecauserequiringclassmemberstoruntheircompaniesforagreater
number of decision rounds prompt them to consider the longer-term impact of their decisions and strategies rather
thantofocusonshort-termdecision-makingandimmediateoutcomes/financialresults.Eachdecisionround
15
Section 2 Using a Strategy Simulation in Your Course
represents a year of company operations and will entail roughly two hours of time for company co-managers
to complete. Decision rounds can be scheduled weekly, bi-weekly, or at whatever intervals instructors wish.
Sample schedules for courses of varying length and numbers of class meetings are provided.
Whentheinstructor-specifieddeadlineforadecisionroundarrives,thesimulationserverautomaticallyaccesses
the saved decision entries of each company, determines the competitiveness and buyer appeal of each company’s
productoeringrelativetotheoeringsofrivalcompanies,andthenallocatessalesandmarketshares,geographic
region by geographic region, based on:
how each company’s prices compare against the prices of rival brands,
how each company’s product quality compares against the quality of rival brands,
how each company’s product line breadth and selection compares to those of rival companies,
how each company’s advertising effort compares to rivals’ advertising, and so on for a total of 11
competitive factors that determine a company’s unit sales and market shares in the four geographic
regions.
The competitiveness and overall buyer appeal of each company’s product oering in comparison to the
Restassured thatbothsimulationsweremeticulously designedtobe instructor-friendly.You’ll bepleasantly
surprised—and we think quite pleased—at how little time it takes to gear up for and to administer an automated
online simulation like The Business Strategy Game or GLO-BUS.
Thisremainderofthissectionprovidesyouwithinformationaboutthetwostrategysimulationsandoerssuggestions
for successfully using either BSG or GLO-BUS in your course. Here is a quick reference guide to the contents of this
A Birdseye View of GLO-BUS ....................................................... 25
Special Features and Extras of Both Strategy Simulations ............................... 28
Which Simulation Makes the Most Sense for Your Course ............................... 32
The 4-Step Course Setup Procedure ................................................. 35
How Do Class Members Register and Gain Full Access to the Simulation Website? .......... 36
16
Section 2 Using a Strategy Simulation in Your Course
THE TEACHING/LEARNING BENEFITS OF USING A
STRATEGY SIMULATION IN YOUR COURSE
There are three exceptionally important teaching/learning benefits associated with using a competition-based
simulation in strategy courses taken by seniors and MBA students:
1. The three-pronged text-case-simulation course delivery model delivers significantly more teaching-
learning power than the traditional text-case delivery model. Having class members run a company in
head-to-head competition against companies managed by other class members provides a truly powerful
learning experience that engages students in the subject matter of the course and helps achieve course
learning objectives. This added learning power of a strategy simulation stems from three things:
broad exposure to a variety of companies and industry situations and insight into the kinds of strategy-
related problems real-world managers face. But what a competition-based strategy simulation does
far better than case analysis is thrust class members squarely into an active, hands-on managerial
role where they are totally responsible for assessing market conditions, determining how to respond to
the actions of competitors, forging a long-term direction and strategy for their company, and making
lessons learned and higher achievement of course learning objectives.
• The achievement of course learning objectives is further enhanced because of the extremely tight
connection between the issues and decisions that company managers face in running their BSG or
GLO-BUS company and the concepts, analytical tools, and strategy options they encounter in the 12
chaptersofthe5th edition. Having class members use an interactive “learn-by-doing” tool to apply and
listening to your lectures, and wrestling with assigned cases—partly in the hope they will come across
ideas and approaches that will help their company outperform rivals and partly because they begin to
see the practical relevance of the subject matter and the value of taking the course.
To provide you with quantitative evidence of the boost in learning power and achievement of course ob-
jectives that occurs with using The Business Strategy Game or GLO-BUS, there is a built-in Learning
2. The competitive nature of a strategy simulation arouses positive energy and steps up the whole tempo of
the course by a notch or two.
17
Section 2 Using a Strategy Simulation in Your Course
or better than concerted efforts on the part of class members to gain a high industry ranking and
avoid the perilous consequences of getting outcompeted by other members of the class. It is hard to
duplicate the excitement and hallway chatter that occurs when the results of the latest decision round
3. Incorporating a fully automated online simulation reduces the time instructors spend on course
preparation, course administration, and grading.
• Since the simulation exercise involves a 20 to 30-hour workload for students-teams (roughly 2 hours per
decision round times 10-12 rounds, plus optional assignments), simulation adopters often compensate
bytrimmingthenumberofassignedcasesfrom,say,10to12toperhaps4to6,whichsignificantly
reduces the time instructors spend reading cases, studying teaching notes, and otherwise getting ready
toleadclassdiscussionofacaseorgradeoralteampresentations.Thecases-for-simulationtradeois
a sound one because class members will learn as much or more from their experience managing their
simulation company and retain it longer, as compared to the learning gleaned from covering 4 to 6 more
cases.
• Course preparation time is further cut because you can use several class days to have students meet in
• The speed and ease with which you can conduct a fully-automated strategy simulation for your course
freestimeforotheractivities.Plus,everytaskcanbeperformedfromanoceorhomePCthathasan
Internet connection and an Internet browser.
Special Note: Both simulations work especially well for online classes or in distance-learning situ-
ations. This is because team members running the same company who are logged-in simultaneously
on different computers at different locations have two tremendously valuable functional capabilities:
1. They can click a button to work collaboratively in viewing reports and making decision entries.
When in “Collaboration Mode,” each team member sees the same screen at the same time as all
18
Section 2 Using a Strategy Simulation in Your Course
2. They can click a second button to talk to one another (using the built-in real time VOIP audio
chat feature). Chat capability among team members working in Collaboration Mode enables team
memberstodebateanddiscussthemeritsofalternativedecisionentriesandstrategies.Ineect,they
canhaveanonlinemeetingtoconvenientlyandeectivelycollaborateinrunningtheirsimulation
company (as opposed to meeting face-to-face and gathering around a single computer).
arise that requires your participation.
Even if you are not teaching an online course, you will find that a big majority of class members
will opt to take advantage of the built-in collaboration and voice chat features because the
members of many company teams will like the convenience of having an online meeting to
prepare their decision entries as opposed to having face-to-face meetings and gathering around
HOW MUCH TIME WILL IT TAKE TO LEARN ABOUT
AND CONDUCT EITHER ONE OF THE SIMULATIONS
FOR YOUR COURSE?
Oneofthebiggestfactorsprobablyweighingonyourmindifyouarecontemplatingbeingafirst-timeuseris
“how much time will it take me to learn about The Business Strategy Game or GLO-BUS, conduct the simulation
exercise for my course, and assign grades on the simulation exercise?” Here are some honest estimates of what
you can expect:
You should probably spend 30 minutes viewing two orientation videos: (1) the introductory tour of the
student portion of the website (which is also readily available to all class members) and (2) the introductory
tour of the instructor portion of the website. These are both accessible directly by clicking on the Instructor
Essentials menu item on the left side of your Instructor Center screen.
Youshouldreadthefirst20pagesoftheInstructor’sGuide(writtenexpresslyforfirst-timeusers)togeta
solidoverviewofthesimulationandlearnhowthingsworkinthemosttime-ecientmanner.Youshould
also skim through the Participant’s Guide to familiarize yourself with what running a company is all about
from a student perspective—but this can be deferred until later if you wish.
to be completed, indicating which optional assignments you want company co-managers to complete (the
quizzes, strategic plans, peer evaluations, and company presentation exercise), and distributing company
registrationcodesand/orregistrationprocedurestoclassmembers.Recommendationsforhandlingeachof
the options are provided in the Course Setup procedure. It will take you 30-40 minutes or so to complete the
CourseSetupprocedurethefirsttimeyoudoitand10-5minuteseachtimethereafter.
19
Section 2 Using a Strategy Simulation in Your Course
20-30-minutes of class time is needed to cover these slides adequately, but it will take a few more minutes
of class time to assign class members to the various companies).
Youwillfindthere’slittleneedtospendmuchclasstimeonintroducingclassmemberstoallthemechanics
andfeaturesofthesimulationortofieldquestionsfromclassmembersabout“howthingswork.”Why?
• Because there is a 17-minute introductory video that provides students with an overview of the simulation
about.
• Because all class members should be required to read the Participant’s Guide that covers what company
co-managers need to know about the simulation, the industry, and the company they are running to get
readytobeginworkonthefirstpracticedecisionround.
• Because there are brief Video Tutorials for every decision screen and there are more video tutorials
by clicking on the Help button and reading the Help pages that accompany every decision screen and
every page of every report. The Help sections provide
(a) detailed explanationsoftheinformationoneachdecisionentryscreenandallrelevantcause-eect
relationships,
(b) detailed explanations of the information on each page of the Industry Reports,
(c) detailed explanations of the numbers presented in the Company Reports, and
(d) analytical guidance and decision-making tips.
If a few of your students seem to be full of questions, it’s because they are coming to you for hand-holding
andnottakingthetimetowatchthevideotutorialsand/ortoreadandabsorbthecomprehensiveinformation
in the Help sections. (Note:You have one-click access to all these same Help pages and all the video
tutorials directly from the menu on the left side of your Instructor Center screen.)
Once you complete the Course Setup Procedure, class members are registered, and the decision rounds
are underway, everything occurs automatically based on the schedule and deadline times you specified
during the Course Setup Procedure. While the simulation is underway, it’s your call on how much time
to spend in monitoring what is going on—you can simply be an interested observer or play a more active,
20
Section 2 Using a Strategy Simulation in Your Course
If you want to follow the competition among the rival companies more closely, you can spend 15-20
minutes after each decision round browsing the industry report (which shows the details of each company’s
performanceandprovidesassortedfinancialandoperatingstatistics)andthespecialAdministrator’sReport
(which provides a quick, convenient summary of select decisions and outcomes for each company that will
(and most every other mainstream strategy text), there is ample opportunity—if you are so inclined—to
use the happenings and managerial challenges class members encounter in the simulation as examples for
yourlectures.Youcan also opttoissuespecial news ashes altering certain costs or import taris, and
youmaywishtooertocoachtheco-managersoftroubledcompaniesonhowtoachievebettercompany
performance.
eachclassmemberareautomaticallycalculated.Youwillhavetodecidewhethertoscalethescoresornot.If
you want to examine data pertaining to each co-manager’s use of the simulation website as part of the grade
assignment process, there’s an activity log that reports the frequency and length of log-ons, how many times
decision entries were saved to the server each decision round, and how many times each set of reports was
viewed each decision round.
A BIRDS-EYE VIEW OF THE BUSINESS STRATEGY GAME
The Business Strategy Game (BSG) is modeled to mirror the global athletic footwear industry (where the longtime
industry leaders are Nike and Adidas-Reebok). Athletic footwear makes an excellent setting for a simulation
because it is a product that students are intimately familiar with and the workings of the industry can easily be
graspedbystudents—conditionswhichgreatlyenhancetheeectivenessofasimulationfromateaching/learning
perspective. The global athletic footwear industry is particularly suitable for a strategy simulation because
the product is used worldwide, there’s competition among companies from several continents, production is
concentrated in low-cost locations, and the real-world marketplace is populated with companies employing a
variety of competitive approaches and business strategies.
Using a strategy simulation with a global industry setting is especially desirable because globalization of the
Companies begin the simulation producing branded and private-label footwear in two plants, one in North
America and one in Asia. Both plants can be operated at overtime to boost annual capacity by 20%. Management
has the option to establish production facilities in Latin America and Europe-Africa as the simulation proceeds,
either by constructing new plants or buying previously-constructed plants that have been sold by competing
companies.Atmanagement’sdirection,acompany’sdesignstacancomeupwithmorefootwearmodels,new
21
Section 2 Using a Strategy Simulation in Your Course
Each company markets its brand of athletic footwear to footwear retailers worldwide and to individuals buying
online at the company’s web site. If a company has more production capacity than is needed to meet the demand
for its branded footwear, it can enter into competitive bidding for contracts to produce footwear sold under the
private-label brands of large chain retailers. Company co-managers exercise control over production costs based
on the styling and quality they opt to manufacture, plant location (wages and incentive compensation vary from
region to region), the use of best practices and six sigma programs to reduce the production of defective footwear
and to boost worker productivity, and compensation practices.
All newly-produced footwear is shipped in bulk containers to one of four regional distribution centers (North
America,LatinAmerica,Asia-Pacific,and Europe-Africa).Allincomingordersfrom internetcustomersand
retailersinageographicregionarefilledfromfootwearinventoriesinthatsameregionaldistributioncenter.
Sinceinternet and retailer orders cannotbe filled from inventories in adistribution center in another region
(because of prohibitively high shipping and distribution costs), company co-managers have to be careful to
match shipments from plants to the expected internet and retailer demand in each geographic region. Costs at
the four regional distribution centers are a function of inventory storage costs, packing and shipping fees, import
tarispaidonincomingpairsshippedfromforeignplants,andexchangerateimpacts.
Manycountrieshaveimporttarisonfootwearproducedatplantsoutsidetheirgeographicregion;atthestartof
thesimulation,importtarisaverage$4perpairinEurope-Africa,$6perpairinLatinAmerica,and$8inthe
Asia-Pacificregion.However,theFreeTradeTreatyoftheAmericasallowstari-freemovementoffootwear
between all the countries of North America and Latin America. The countries of North America, which strongly
supportfreetradepoliciesworldwide,currentlyhavenoimporttarisonfootwearmadeineitherEurope-Africa
orAsia-Pacific.Instructorshavetheoptiontoaltertarisasthegameprogresses.
In running their footwear companies, the challenge for each management team is to craft and execute a competitive
strategy that results in a respected brand image, keeps their company in contention for global market leadership,
7-9%annuallyforthefirstfiveyearsand5-7%annuallyforthesecondfiveyears.However,marketgrowthrates
varybygeographicregion,andgrowthratesarealsoaectedbytheaggressivenesswithwhichcompaniesgo
afteradditionalsalesbymakingtheirproductoeringsmoreappealing.
The Decisions That Company Managers Have to Make
In BSG, company co-managers make up to 53 types of decisions each period, spread across the functional
spectrum as follows:
Production operations (up to 10 decisions for each plant, with a maximum of 4 plants)
Upgradingplantsandexpanding/reducingplantcapacity(upto6decisionsperplant)
Worker compensation and training (3 decisions per plant)
Shippingandinventorymanagement(upto8decisionseachplant/geographicarea)
Pricing and marketing (up to 10 decisions in each of 4 geographic regions)
Bids to sign celebrities (2 decision entries per bid)
Corporate social responsibility and citizenship (up to 6 decision entries)
Financing of company operations (up to 8 decision entries)
Experience confirms that having this many decisions is right on the money—enough to keep company co-
managers engaged and challenged but not too many to confuse and overwhelm.
22
Section 2 Using a Strategy Simulation in Your Course
On-Screen Support Calculations
Each time co-managers make a decision entry, an assortment of on-screen calculations instantly shows the
projectedeectsonunitsales,revenues,marketshares,totalprofit,earningspershare,ROE,unitcosts,and
other operating outcomes. All of these on-screen calculations help co-managers evaluate the relative merits of
onedecisionentryversusanother.Companymanagerscantryoutasmanydierentdecisioncombinationsas
they wish in stitching the separate decisions into a cohesive whole that is projected to produce good company
performance.
Ifcompany co-managers want additional help/assistance in makingdecision entries, they can watch the 2-4
minute video tutorials for each decision screenand/orconsultthecomprehensive Help sections that explain
cause-eectrelationships,providetipsandsuggestions,explainhowthenumbersinthecompanyandindustry
reports are calculated, and otherwise inform company co-managers how things work.
The Quest for a Winning Strategy
Allcompaniesbegintheexercisewithequalsalesvolume,globalmarketshare,revenues,profits,costs,product
quality and performance, brand recognition, and so on. Global demand for athletic footwear grows at the rate of
7-9%annuallyforthefirstfiveyearsand5-7%annuallyforthesecondfiveyears.However,marketgrowthrates
varybygeographicregion,andgrowthratesarealsoaectedbytheaggressivenesswithwhichcompaniesgo
afteradditionalsalesbymakingtheirproductoeringsmoreappealing.
Each company typically seeks to enhance its performance and build competitive advantage based on some
industry-wide average number of models.
How the numbers of retailers carrying a company’s brand of footwear compares against the average number
of retailers carrying various brands.
How the number and appeal of the celebrities a company has contracted with to endorse its footwear
