BSG Year 11 Strategy Guide: Competitive Assumptions, S/Q Ratings, Private-Label Bids and Financing

Introduction: How to Approach Your Year 11 Decisions

To win Year 11 in the Business Strategy Game (BSG), your team should do three things: benchmark your competitive assumptions against real industry data, invest early in advantages that accumulate, and build a plan that still hits its targets if every risky bid is lost. This guide walks you through each decision screen and tells you what to enter and why.

Year 11 is your first decision round. What you decide now shapes your S/Q rating, image rating, cost structure and credit rating for the rest of the simulation. Get the foundations right and later years become fine-tuning instead of recovery.

Work through the BSG Online decision screens in this order:

• Competitive assumptions and projections

• Compensation, training and best practices

• Branded production, models offered and plant capacity

• Distribution and warehouse operations

• Internet (online) marketing and wholesale marketing

• Private-label operations

• Celebrity endorsements and corporate social responsibility (CSR)

• Finance and cash flow, including loans, stock repurchases and dividends

Keep one goal in view on every screen: beat your rivals on the scoring measures, including earnings per share (EPS), return on equity (ROE), stock price, credit rating and image rating, while meeting or beating investor expectations.

BSG updates its screens and labels from time to time. If a field name looks slightly different in your version, the logic below still applies. The figures in this guide come from a sample Best Strategy Invitational game; treat them as starting points and let your own projections decide.

Competitive Assumptions: Benchmark With Real Industry Data

Start Year 11 by setting your competitive assumptions from real data, not the defaults. The projections on every decision screen are only as good as these assumptions, and accurate forecasts can also earn bonus points in some BSG formats.

Step 1: Pull past industry reports

Go to the BSG website, open the Best Strategy Invitational section, pick a past competition and view its Footwear Industry Report. The industry trend pages show how S/Q ratings, prices and other averages moved in every year of those games.

Step 2: Build a benchmark spreadsheet

Take five or six of these reports and enter their numbers in Excel. Calculate the annual average and median for each region, focusing on Year 11. Look for the overall trend too; in most past industries, average S/Q ratings rise through the middle years and ease back toward the end.

A composite of six past reports produced these Year 11 averages, which you can use as a sanity check for your own benchmark:

The same composite showed an average internet price of about $73 per pair and a North America wholesale price of about $52 per pair.

Step 3: Enter your assumptions

• S/Q rating: raise the projected industry average from the usual default of 4 stars to 5. The field caps at 5, so expect the real average to land a little higher.

• Wholesale price: set it near the benchmark, roughly $51 to $56 depending on region.

Step 4: Revisit assumptions after every big move

When you make a large change, move the matching assumption too. If you push brand advertising up to $30,000 (in thousands), your own spending raises the industry average, so raise the projected average. If you cut a budget to zero, lower it.

If you leave the defaults in place after a big decision, your projections will look better than your real results. Make checking this screen the last step before you submit.

Compensation and Training: Invest in What Accumulates

On this screen, invest heavily in best-practices training and keep compensation just above the industry average. Training benefits build up over time; pay only needs to stay competitive.

Put real money into best practices training.

Best practices training is cumulative. Every dollar adds to a stock of benefits that stays with your plants even if you cut the budget later, so it is a low-regret Year 11 investment.

If a rival’s move forces you to change strategy in Year 13 or 14, you can scale training back and keep what you have already built. The earlier you start, the more years the benefits have to pay back through higher productivity, fewer rejects and a stronger S/Q rating.

Keep compensation slightly above average.

Set regular compensation and incentive pay a little above the industry average. That keeps your workforce productive without overpaying, and protects you if competitors skimp on wages.

Avoid two mistakes:

• Falling below the average. Low pay hurts productivity and can raise your production cost per pair.

• Overshooting. Paying far more than rivals raises labor costs without a matching gain in output.

Treat compensation as a maintenance decision and training as your growth decision.

Branded Production and Plant Operations: Aim Just Above the Market

Target an S/Q rating a few tenths of a star above the projected industry average. If your benchmark says the market will sit around 5.2 stars, aim for 5.6 to 5.7. That gives you an edge without the runaway cost of chasing the top of the chart.

Set your S/Q rating and models offered

Your S/Q (style and quality) rating drives how attractive your branded footwear is to buyers. A good starting point:

• S/Q target: 5.6 to 5.7 stars in your main plants.

• Models/styles offered: around 300 per plant, adjusted until your projected S/Q hits the target.

More models give buyers more choice but add setup costs. Pair a high model count with a strong S/Q rating only if you plan to produce large volumes.

Run your plants near full capacity.

Spread fixed costs over as much output as you can. Running production facilities near capacity lowers your cost per pair, because overhead, depreciation and facility costs are shared across more units.

On this screen you should:

• Use your available production capacity to the fullest.

• Buy upgraded equipment if you need it to reach your S/Q target.

• Invest in layout and setup cost reductions; this is almost always worth it when you produce many pairs across many models.

Invest early in Six Sigma.

Make Six Sigma quality programs a major Year 11 investment. Like best practices training, the benefits accumulate, so early spending keeps paying off through fewer rejects and better quality even if you trim the budget later.

The rule to follow: lock in cumulative investments (Six Sigma, best practices) early, and treat everything else as a lever you can adjust each year.

Distribution and Warehouse Operations: Cut Tariffs Without Overbuilding

Ship in a fixed regional order and add just enough plant capacity to avoid import tariffs. Tariffs quietly eat your profit, while unused capacity wastes capital.

Use a consistent shipping order.

A fixed order keeps the distribution and warehouse screen manageable:

1.        Fill North America first.

2.        Then Europe-Africa.

3.        Then Asia-Pacific.

4.        Send whatever remains to Latin America.

Add capacity to avoid tariffs.

If you expect production needs to rise, build new plant space in Year 11. Adding around 2,000 (thousand pairs) is a reasonable step. It lets you supply more regions from local plants instead of paying import tariffs.

Get the balance right:

• Build too little and tariffs erode your net profit and margins.

• Build too much, and you pay for idle space, which drags down ROE.

Add capacity in measured steps tied to demand you can forecast. Keep new plants in Europe-Africa or Asia-Pacific as options for later years, once you see how competitors move.

Internet and Wholesale Marketing: Raise Prices, Test Every Lever

If your S/Q rating is above average and you have plenty of supply, raise prices in both the internet (online) and wholesale segments. Then test each marketing lever, starting with search engine advertising.

Internet marketing

• Online price: raise it; a stronger S/Q rating and ample inventory support a higher price.

• Search engine advertising: try setting it to zero in every region. In the sample game, zero beat every alternative, whether rivals cut their search ads or raised them sharply.

• Free shipping: skip it unless your projections show a clear return.

Don’t take the zero result on faith. Set search engine advertising to zero in your own game and compare projected net revenues and net profit. If zero wins, keep it and lower the projected industry average on the competitive assumptions screen.

Wholesale marketing

• Wholesale price: raise it toward the benchmark average.

• Advertising: spend at a competitive level, not an extreme one.

• Retailer support: push it above the industry average. Outspending rivals here brings more independent retailers on board over time.

• Delivery time: three weeks is a sensible default.

• Mail-in rebates: keep around $5. Test before cutting; in the sample game, dropping the rebate hurt results, regardless of what rivals did.

Keep a buffer of extra pairs.

Plan to finish each region with roughly 200 to 300 (thousand) pairs of inventory left over. If you run short, buyers go to a rival, and you hand them revenue for free. A small surplus costs far less than a stockout. Size the buffer to your market and to what competitors are doing.

Private-Label Operations: Bid to Win, Plan to Lose

Bid competitively for private-label contracts, but make sure your plan works if you win none of them. Treat every win as a bonus that lifts profit and image rating, never as a pillar of your strategy.

Model the worst case first.

Set every private-label bid to “No” and check your projections. They will look worse; that is expected. Confirm your company still hits its targets for EPS, ROE, credit rating and image rating without any private-label sales.

Only then switch the bids back to “Yes.”

Don’t over-commit pairs.

Private-label bidding is risky. In one MBA-class BSG game, a team committed so many pairs that it was left with a huge unsold surplus, and the excess inventory weakened the company. Size your bids so a loss can’t sink you.

Price to win, and watch your image rating

Price your bids competitively while keeping a small margin. The bigger prize is the image rating boost. In the sample game, winning every bid lifted the projected image rating by 10 points:

A higher image rating supports your branded sales in later years, so private-label wins pay off long after the contract ends. Check the same comparison in your own projections before you set prices.

Cut spending above the minimum.

If any related spending is already at or above the minimum requirement, set the extra to zero. Money spent beyond the minimum earns you nothing here.

Celebrity Endorsements and Corporate Citizenship: Spend With Discipline

Bid on every celebrity endorsement, cap your wins at three, and never overpay. For CSR, start with a modest budget and scale up once you see what rivals spend.

Celebrity endorsements

These bids are among the hardest calls in BSG, because you can’t know whether competitors will bid aggressively or barely at all. Protect yourself with three rules:

• Bid on every available celebrity. This maximizes your chance of landing some contracts.

• Cap total wins at three. Your best outcome is three endorsements at the lowest possible cost.

• Don’t overpay. An endorsement bought at an inflated price can wipe out the image and the sales boost it brings.

You may underbid and win nothing. Accept that risk; it is far better than overpaying for contracts that damage profitability.

Corporate citizenship and social responsibility

Corporate citizenship initiatives, such as ethical supply chain programs and environmental efforts, build your image rating gradually over the game's five-year horizon.

In Year 11, keep the budget modest. Use the first industry report to see what competitors spend, then decide how much more to invest. That keeps you from over-investing before you know the competitive level.

Finance and Cash Flow: Refinance, Repurchase, Delay Dividends

Refinance your existing loans at the lowest rate available, borrow to fund expansion, buy back stock whenever cash allows, and hold off on dividends. Each move targets the measures investors care about most: EPS, ROE, stock price and credit rating.

Refinance and borrow for growth.

Refinance existing loans to lock in a lower rate; 7.5% was available in the sample game. If you are expanding plants or buying new equipment, take out the loan you need to fund it. Borrowing makes sense when the added capacity and higher S/Q rating will earn more than the interest.

Protect your credit rating.

BSG’s credit rating draws on several financial ratios. Watch two in particular:

• Debt-to-assets ratio: new borrowing pushes this up.

• Interest coverage ratio: keep this strong, so operating profit comfortably covers interest costs.

A high debt-to-assets ratio is manageable if interest coverage stays strong. Hold your credit rating, and you can refinance again next year at an even lower rate.

Repurchase stock

Buy back shares whenever you have the cash. Fewer shares outstanding lift EPS and ROE directly, both major parts of your score, and a higher EPS supports your stock price.

Hold off on dividends.

Skip dividends in Year 11. Early cash does more good funding growth and buybacks. Start paying dividends later in the game, once the company is established and investor expectations for payouts rise.

Avoid issuing stock

Don’t issue new shares if you can avoid it. New shares dilute EPS and ROE and work against your buyback strategy. Borrowing is usually the better way to raise capital as long as your credit rating holds.

Year 11 Checklist and Final Thoughts

A strong Year 11 comes down to realistic assumptions, early cumulative investments, and a plan that survives the worst case. Use this checklist before you submit your decisions:

• ☐ Benchmark industry averages using past Invitational Footwear Industry Reports.

• ☐ Set competitive assumptions for S/Q rating and prices from that benchmark.

• ☐ Update competitive assumptions after any major spending change.

• ☐ Invest heavily in best practices training and Six Sigma.

• ☐ Keep workers' compensation slightly above the industry average.

• ☐ Target an S/Q rating just above the projected market average.

• ☐ Run plants near full capacity; invest in setup cost reductions.

• ☐ Add enough plant space to cut tariffs, but not more.

• ☐ Test search engine advertising at zero and compare net profit.

• ☐ Keep 200 to 300 (thousand) pairs of buffer inventory per region.

• ☐ Raise retailer support above the industry average.

• ☐ Check projections with all private-label bids at “No” first.

• ☐ Cap celebrity endorsements at three and never overpay.

• ☐ Refinance loans and protect interest coverage.

• ☐ Repurchase stock; skip dividends and stock issues for now.

Final thoughts

No Year 11 plan survives the first industry report unchanged. Rivals will surprise you on price, S/Q rating, advertising and bids. The strategy described here is built for that uncertainty: cumulative investments keep paying off even when you pivot, and the core plan works without winning a single private-label contract or celebrity endorsement.

After Year 11 results come in, study the Footwear Industry Report closely. Compare your competitive assumptions with what actually happened, update your benchmarks, and adjust your Year 12 decisions from there. That cycle of forecast, compare and adjust is how you turn one good year into a winning BSG game. For a structured way to read each new set of results, from rivalry and driving forces to rivals' likely next moves, see our BSG industry analysis guide.