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23
Section 2 Using a Strategy Simulation in Your Course
The comparative amount (relative to rival brands) of merchandising and promotional support that a company
oerstoitsretailersrelativetotheaverageamountsoeredindustry-wide.
The relative aggressiveness with which a company promotes online purchases at its website.
The extent to which the buyers of a company’s brand of footwear remain loyal to repurchasing that same
brand.
Any and all competitive strategy options—low-costleadership,dierentiation,best-costprovider,focusedlow-
cost,andfocuseddierentiation—are viable choices for pursuing better company performance and competitive
advantage in the branded footwear segment. There’s no built-in bias favoring any one strategy and no “secret
set of strategic moves or decision combinations” that are sure to result in a company becoming the industry
leader. A company can try to gain an edge over rivals in the branded footwear segment with more advertising
orawiderselectionofmodelsormoreappealingstyling/qualityorbiggerrebatesorsecuringmoreappealing
celebrity endorsements, and so on. It can focus sales eorts on one or two geographic regions or strive to
build strong market positions in all four geographic regions. It can pursue essentially the same branded strategy
worldwideorcraftslightlyorverydierentstrategiesforeachofthefourgeographicregions.Itcanputmore
or less emphasis on selling branded shoes to footwear retailers as opposed to selling to individual consumers at
the company’s Web site. Most any well-conceived, well-executed competitive approach in branded footwear is
capable of succeeding, provided it is not overpowered by the opposing strategies of competitors or defeated by
the presence of too many copycat strategies that dilute its effectiveness.
However, vigorous price competition prevails in the private-label segment. For obvious reasons, chain retailers
prefertosourcetheirrequirementsforprivate-labelfootwearfromcompaniesoeringthebest(lowestprices).
Companies desirous of winning a contract to supply private-label footwear to chain retailers across the world
mustfirstagreetoproduceshoesthatmeetglobally-setbuyerspecificationsforqualityandvarietyofmodels/
styles.Thentheymustbesuccessfulinbiddingagainstrivalcompaniesforcontracts.Companiesoeringto
supplyspecifiedquantitiesofprivate-labelfootwearwithlowerpricebidsareawardedcontractsovercompanies
that bid higher prices. A low-cost, low-price strategy is thus mandatory in the private-label segment if a company
expectstobeprofitable(butthisdoesnotrequirepursuingthesamestrategyinthebrandedsegment).
How the Outcomes Are Determined
Instructors specify a deadline (date and time) for company co-managers to complete for each decision round
andotherrelatedassignments.Instructorshavetheexibilitytochangethedeadlinesatanytimeforanyreason.
Decision rounds can be scheduled once per week, twice per week, daily, or even twice daily, depending on how
youwanttoconducttheexercise.Youwillbeabletoperusesampledecisionscheduleswhenyouaresettlingon
the times and dates for the deadlines.
Whentheinstructor-specifieddeadlineforadecisionroundarrives,theBSG algorithms allocate sales and market
shares to the competing companies, region by region. How many branded pairs a company sells in a geographic
region is governed by:
For instance, a company’s branded footwear price in a region is determined to be more competitive the further
it is below the average price in that region charged by all companies and less competitive the further it is
abovetheregionalaverage.Acompany’sstyling/qualityisdeterminedtobemorecompetitivethefurtherits
styling/qualityratingisabovetheaveragestyling/qualityratingofallcompaniescompetingintheregionand
less competitive the further its rating is below the industry average in the region. The overall competitiveness
24
Section 2 Using a Strategy Simulation in Your Course
of a company’s product offering in a region is a function of its combined competitive standing across all
competitive factors. For example, a company can oset the adverse impact of an above average price with
above-averageproductperformanceandquality,and/orabove-averageadvertising.Thegreaterthedierences
intheoverallcompetitivenessofthebrandedproductoeringsofrivalcompanies,thebiggerthedierencesin
Once branded sales volumes and market shares are awarded based on the strength or weakness of each company’s
overallcompetitiveeortandtheoutcomesofthebiddingtosupplyprivate-labelfootweararedetermined,then
each company’s performance is calculated and all the various company and industry reports are generated.
The scoring of each company’s performance is based on a balanced scorecard that includes brand image,
earnings per share (EPS), return on equity investment (ROE), stock price appreciation, and credit rating.
operations that have been designed into The Business Strategy Game allows company co-managers to
think rationally and logically as they go about the tasks of diagnosing and responding to the competitive
moves of rival companies, making strategy choices and adjustments, and deciding how to manage their
athletic footwear company. The Business Strategy Game is predicated on the principle that the more BSG
mirrors real-world market conditions and real-world managerial decision-making, the more pedagogical
Data from our servers indicates that each company team spends an average of about 2.5 hours working on
each decision round.Thefirstcoupleof decisionroundstakelongernot onlybecauseco-managershave to
explore the menus, familiarize themselves with the information on the screens, and absorb the relevance of the
calculations shown whenever new decisions are entered but also because it takes time for them to establish a
working relationship with one another and debate what sort of long-term direction and strategy to pursue.
2.5hoursperdecisionround,9to12decisionrounds(includingpracticerounds),andthetimeneededtocomplete
optional assignments (quizzes, strategic plans, company presentation, and peer evaluations). As discussed
earlier,youcanosetthehoursstudentsspendonthesimulationbytrimmingthenumberofcaseassignments,
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Section 2 Using a Strategy Simulation in Your Course
A BIRDS-EYE VIEW OF GLO-BUS
4-6%annuallyforthesecondfiveyears.Globalmarketdemandforcommercialdronesgrowsbrisklyatrates
averaging20%forthefirsttwoyears,thengraduallyslowsover8yearstoarateof4-6%.
Company Operations
Companies assemble action cameras and drones of varying designs and performance capabilities at a Taiwan
facility and ship finished goods directly to buyers in NorthAmerica,Asia-Pacific, Europe-Africa, and Latin
They impact production costs by raising/lowering specifications for parts/components and expenditures for
product R&D, adjusting work force compensation, spending more/less on worker training and productivity
improvement,lengthening/shorteningwarrantiesoered(whichaectswarrantycosts),andhowcost-eciently
theymanageassemblyoperations.Theyhaveoptionstomanage/controlsellingandcertainothercostsaswell.
Tocapitalizeonongoingtechnologicaladvancesandthepipelineofproductenhancementcapabilitiesowing
The Decisions That Company Managers Have to Make
Each decision round, company co-managers make some 50 types of decisions relating to the design and
performance of the company’s two products (21 decisions, 10 for cameras and 11 for drones), assembly operations
and workforce compensation (up to 8 decision entries for each product), pricing and marketing (7 decisions for
camerasand5fordrones),corporatesocialresponsibilityandcitizenship(upto6decisions),andthefinancing
On-Screen Support Calculations
Each time co-managers make a decision entry, an assortment of on-screen calculations instantly shows the projected
eects on unit sales, revenues, market shares, total profit, earnings per share, ROE, costs, and other operating
outcomes. All of these on-screen calculations help co-managers evaluate the relative merits of one decision entry
versusanother.Companymanagerscantryoutasmanydierentdecisioncombinationsastheywishinstitching
26
Section 2 Using a Strategy Simulation in Your Course
The Quest for a Winning Strategy
1. How each company’s average wholesale price to retailers compares against the all-company average
wholesale prices being charged in each geographic region.
2. Howeachcompany’scameraperformanceandqualitycomparesagainstindustry-widecameraperformance/
quality.
3. How the number of week-long sales promotion campaigns a company has in each region compares against
the regional average number of weekly promotions.
4. Howthesizeofeachcompany’sdiscountsotheregularwholesalepricesduringsalespromotioncampaigns
compares against the regional average promotional discount.
5. How each company’s annual advertising expenditures compare against regional average advertising
expenditures.
6. How the number of models in each company’s camera line compares against the industry-wide average
number of models.
7. The number of retailers stocking and merchandising a company’s brand in each region.
8. Annualexpenditurestosupportthemerchandisingeortsofretailersstockingacompany’sbrandineach
region.
9. The amount by which a company’s expenditures for ongoing improvement and updating of its company’s
websiteinaregionisabove/belowtheall-companyregionalaverageexpenditure.
10. How the length of each company’s camera warranties compare against the warranty periods of rival
companies.
11. How well a company’s brand image/reputation compares against the brand images/reputations of rival
companies.
Competition among rival makers of commercial copter drones is more narrowly focused on just 9 sales-
determining factors:
1. How a company’s average retail price for drones at the company’s website in each region compares against
the all-company regional average website price.
2. How each company’s drone performance and quality compares against the all-company average drone
performance/quality.
5. Theamountbywhichacompany’spricediscounttothird-partyonlineretailersisabove/belowtheregional
average discounted price.
6. How well a company’s expenditures for search engine advertising in a region compares against the regional
average.
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Section 2 Using a Strategy Simulation in Your Course
7. How well a company’s expenditures for ongoing improvement and updating of its website in a region
compares against the regional average.
8. How the length of each company’s drone warranties in a region compares against the regional average
warranty period.
9. How well a company’s brand image/reputation compares against the brand images/reputations of rival
companies.
Each company typically seeks to enhance its performance and build competitive advantage via its own custom-
tailored competitive strategy based on more attractive pricing, greater advertising, a wider selection of models,
more appealing performance/quality, longer warranties, a better image/reputation, and so on.As with BSG,
all the various generic competitive strategy options—low-costleadership,dierentiation,best-costprovider,
focused low-cost, and focused dierentiation—are viable choices for pursuing competitive advantage and
good company performance. A company can have a strategy aimed at being the clear market leader in either
action cameras or UAV drones or both. It can focus on one or two geographic regions or strive to build strong
market positions in all four geographic regions. It can pursue essentially the same strategy worldwide or craft
customizedstrategiesfortheEurope-Africa,Asia-Pacific,LatinAmerica,andNorthAmericamarkets.Justas
with The Business Strategy Game, most any well-conceived, well-executed competitive approach is capable of
succeeding, provided it is not overpowered by the strategies of competitors or defeated by the presence of too
many copycat strategies that dilute its effectiveness.
How the Outcomes Are Determined
average price in that region charged by all companies and less competitive the further it is above the regional
average. A company’s product performance and quality is determined to be more competitive the further its
performance/qualityratingisabovetheaverageperformance/qualityratingofallcompaniescompetinginthe
region and less competitive the further its rating is below the regional average. The overall competitiveness
of a company’s product offering in a region is a function of its combined competitive standing across all
shares. This algorithmic approach is what makes GLO-BUS a “competition-based” strategy simulation and
accounts for why the sales and market share outcomes for each decision round are always unique to the
particular strategies and decision combinations employed by the competing companies.
Once sales and market shares are awarded, the company and industry reports are then generated and all the
results become available 15-20 minutes after the decision deadline passes.
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Section 2 Using a Strategy Simulation in Your Course
Special Note: The time required of company co-managers to complete each decision round in GLO-
BUSistypicallyabout15-to30-minuteslessthanforThe Business Strategy Game because
(a) there are only 8 market segments (versus 12 in BSG),
(b) co-managers have only one plant to operate (versus as many as 4 in BSG), and
(c) newly-assembled cameras and drones are shipped directly to buyers, eliminating the need to manage
finishedgoodsinventoriesandoperatedistributioncenters.
Guidance about which simulation might be best for your course is provided later in this section.
SPECIAL BSG/GLO-BUS FEATURES AND NOTEWORTHY
EXTRAS
The Internet delivery and user-friendly designs of both BSG and GLO-BUS make them incredibly easy to
administer,evenforfirst-timeusers.Andthe menus and controls for BSG and GLO-BUS are so similar that
you can readily switch between the two simulations or use one in your undergraduate class and the other in
an MBA class. Ifyouhavenotyetusedeitherofthetwosimulations,youmayfindthefollowingofparticular
interest:
In the course of running their company (making decision entries and viewing reports), class members
have one-click access to 2-5 minute video tutorials for each decision screen and each page of each
report. In addition, they have one-click access to “Help” sections containing detailed explanations of (a)
theinformationoneachdecisionentryscreenandallrelevantcause-eectrelationships,(b)theinformation
on each page of the Industry Reports, and (c) the numbers presented in the Company Reports. The Help
ison-screenguidanceforeachofstepofthestraightforward/easy-to-understandCourseSetupProcedure;
should you encounter any issues or have questions, you can easily call Tech Support for hands-on assistance
in completing the Course Setup procedure, getting answers to questions, or resolving any problems you are
having.
Sample course outlines for integrating BSG or GLO-BUS into your strategy course can be found in Section
semester-longcourses,10-weekorquarter-longcourses,and5-weekcourses;eachcourseoutlineconsists
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Section 2 Using a Strategy Simulation in Your Course
An online Instructor Center serves as your hub for conducting all administrative activities and monitoring
the results of the company decisions. The Instructor Center is the screen you are sent to when you enter your
user name and password to log-in. Every function and feature that you need for using the simulation in
your course is on the Instructor Center page or accessible from it. Online grade books provide you with
using the automatically calculated numerical averages in the online grade book to determine the overall
grades to assign class members on the entire simulation exercise.
Both participants and instructors conduct all activities online (at www.bsg-online.com for The Business
Strategy Game and at new.glo-bus.com for GLO-BUS). All materials are delivered digitally to class members
and instructors.
Both simulations offer integrated text chat, audio chat, and collaboration features for team members
(students) who are logged-on simultaneously to facilitate collaboration among company co-managers.
• Use of the built-in audio-chat capability requires that each team member work from a computer with a
built-in microphone (if they want to be heard by the rest of the team) and speakers (so that they may hear
their teammates) or else have a headset with a microphone. A headset is recommended for best results,
engaged in collaboration.
• Eachteammembercontrolsacolor-codedmousepointer(withtheirfirst-nameappearinginacolor-
coded box linked to their mouse pointer) and can make a decision entry or move the mouse to point to
particular on-screen items.
• A decision entry change made by one team member is seen by all, in real time, and all team members
all attendees are then viewing the same screen) have a red-colored mouse pointer linked to a red box labeled
Instructor. The ability of instructors and company co-managers to have an online meeting at a mutually
agreeabletimeisoftenmoreconvenientthanschedulingface-to-facemeetingsduringaninstructor’soce
hours.
The audio and collaborationfeatures make the simulations highly suitable for use in distance-learning or
30
Section 2 Using a Strategy Simulation in Your Course
The deadlines for each decision round and other related assignments are set and totally controlled by the
instructor (and can be changed at any time for any reason). Decision rounds can be scheduled once per
week, twice per week, daily, or even twice daily, depending on how you want to conduct the exercise.
a 1-page Competitive Intelligence report for each geographic region that includes strategic group
maps and bulleted lists of competitive strengths and weaknesses, and a 4-page set of Company Reports
(consisting of assorted sales, cost, and operating statistics and a set of financial statements (income
statement,balancesheet,cashowstatement).
targets that were established. The scores are recorded in your online grade book. Assigning completion of
3-year strategic plans is entirely optional—you can have company managers complete no plan, 1 plan, or 2
plans.
At the conclusion of the simulation, you can choose to have each company management team prepare
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Section 2 Using a Strategy Simulation in Your Course
There is an Activity Log that provides an informative summary of each co-manager’s use of various parts
of the website—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. The
combined information from the peer evaluations and the Activity Log provide good evidence about whether
to which your school’s academic curriculum is delivering the desired degree of student learning as concerns
accreditation standards. The LAR is useful in two very important respects.
• It provides you with a clear overview of how well your students rank relative to students at other schools
worldwide who have gone through this same competition-based simulation exercise over the past 12
months.
ongoing evidence of whether their academic programs meet the Assurance of Learning Standards now
being applied by the Association to Advance Collegiate Schools of Business (AACSB); a prime goal of this
LearningAssuranceReportistocontributesignificantlytothiseort.
There is a weekly ranking of the best-performing companies worldwide posted on the homepage—all
co-managersandinstructorswhosecompaniesappearintherankingsareautomaticallynotifiedbye-mail.
résumé.
The co-managers of each industry-winning company playing the two simulations across the world
are invited to participate in the “Best Strategy Invitational.” The BSIs for GLO-BUS and The Business
Strategy Gameareheldthreetimeseachyear—inlateApril/earlyMay,inAugust,andinlateNovember/
early December. Those teams that accept the invitation to participate are divided into industries of 11-
12 companies and compete for a period of 10 decision rounds for “Global Industry Championships.” All
participantswhocompletethecompetitionreceiveframe-ablecertificatesand theindustrywinnersgeta
“GrandChampion”certificate.Receiptofthesecertificatesalsomeritsalineonastudent’srésumé.
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Section 2 Using a Strategy Simulation in Your Course
Alternatively, you can go to www.bsg-online.com and/or new.glo-bus.com, register as an Instructor, and gain
full access to the websites and all of the materials you will need to conduct the simulation. Once you register
(there’s no obligation), you’ll be able to access the videos tours of the website, the Instructor’s Guide and the
Participant’s Guide for the simulations, explore the Instructor Center menus on your own, and complete the
software “glitches” and system malfunctions are still being ironed out. The Web site and related software have
longsincebeenthoroughly“de-bugged.”Thereisastathatmonitorsandmaintainsthefunctioningofthetwo
Websites24/7/365—ifausercangetconnectiontotheInternet,thenthechancesofthesystembeing“down”
are virtually nil.
Adopters of the 21st edition of Crafting and Executing Strategy who also want to incorporate use of one of
details about the bundled book-simulation package. However, be aware that bookstore markups on the book-
simulation package often result in a $10-$15 higher student cost for the simulation than will registering via
credit card at the website.
WHICH SIMULATION MAKES THE MOST SENSE
FOR YOUR COURSE?
Both The Business Strategy Game and GLO-BUS are suitable for either senior-level or MBA-level courses.
Whether to use The Business Strategy Game or go with GLO-BUS is really a matter of preference, how much
time you are comfortable with having class members spend working on the simulation exercise, and the degree
to which the faculty believe that there should be a clear distinction between the content and rigor of a senior-level
course in strategy and the MBA-level course in strategy.
The time that class members will spend on GLO-BUS typically works out to be a bit less than for The Business
Strategy Game. With GLO-BUS, you can expect that class members will spend an average of 1½-2 hours per
decision. With BSG, it will take company co-managers about 2-2¼ hours per decision. Company co-managers
can speed through their GLO-BUS decision-making a bit quicker than in BSG because all production/assembly
ofcamerasandcamera-equippeddronestakesplaceatasinglelocation(Taiwan)andtherearenofinishedgoods
managethefinishedgoodsinventoriesinthesecenters.InGLO-BUS,therearenofinishedgoodsinventories
and distribution centers to operate—all units produced are immediately shipped to buyers.
Companies compete in 12 market segments (versus 8 in GLO-BUS).
Both simulations have 2 built-in quizzes, strategic plan assignments, company presentation capabilities, and peer
evaluations(eachofwhichcanberequiredorskippedasyouseefit).SeeTable1forcomparisonsofthetwo
