BUSINESS STRATEGY GAME

BUSINESS STRATEGY GAME Athletic Footwear Company: ▪ Your company starts out with two factories. One in North America and the Second in Asia Pacific. ▪ The company currently sells shoes in North America, Latin America, and Asia Pacific & Europe Africa. ▪ The market currently allows each company to sell an average of 4.84 million branded shoes and 800k private label shoes. ▪ Branded shoes will grow 5­7% in the first five years for North America and Europe then fall to 3­5% the next five years. In Asia Pacific & Latin America, branded shoes will grow 9­11% in the first five years and 7­9% the last five years. ▪ Private label is expected to grow 10% universally in the first five years and 8.5% during the next four years vary up to 2% due to competition levels. ▪ Your company can produce 6 million pairs of shoes during normal time and an additional 1.2 million if overtime is used. ▪ Shoes shipped from factories to distribution centers are subject to tariffs (according to region) and any exchange rate effects. ▪ Your factory’s workers are compensated through a base pay and incentive pay (not Including defects) and overtime pay if applicable. ▪ Plant Upgrades: ▪ Upgrade A reduces defective pairs by 50%. ▪ Upgrade B cuts production run setup costs by 50%. ▪ Upgrade C increases SQ rating one star. ▪ Upgrade D increases worker productivity 25%. Business Strategy Game Quiz 1 Game Mechanics: ▪ Your company’s score is based on: ▪ EPS (Earnings per Share.) ▪ ROE (Return on Equity.) ▪ Stock Price. ▪ Credit Rating. ▪ Image Rating. ▪ Exchange rates are tied to real world rates based on: ▪ The U.S. Dollar. ▪ The Euro. ▪ The Brazilian Real. ▪ The Singapore Dollar. ▪ Your interest rate is determined by our credit rating. Your credit rating is determined by: ▪ Your default risk ratio. ▪ Your debt asset ratio. ▪ Your interest coverage ratio. ▪ Factors that effect SQ Rating: ▪ Percentage of superior materials ▪ TQM & Best Practices. ▪ Styling and Features. ▪ Plant upgrade C. ▪ Factors effecting reject rates include: ▪ Plant Upgrade A. ▪ Your incentive pay. ▪ Best Practices training. ▪ TQM/Six Sigma. ▪ Model numbers available. ▪ Worker productivity is based on: ▪ Plant upgrade D. ▪ Incentive pay relational to other companies. ▪ Base pay relational to other companies. ▪ Best practices training relational to other companies.