Business Strategy Game (BSG) Coaching: Build a Coherent Competitive Strategy

The Business Strategy Game Explained: Every Decision Stage and What to Watch

In the Business Strategy Game your team runs an athletic footwear company that starts level with every rival: same sales, market shares, costs and prices in all four regions (North America, Europe-Africa, Asia-Pacific and Latin America). Each decision round is one year, and demand per company is forecast to roughly double over the game, so capacity, cost and marketing choices compound year after year.

Your sales and market share in each region are decided by how your company compares with the all-company average on each competitive factor, not by any absolute level of effort. Below, the game is broken into the eight stages a team works through each round, with the main factors in each and the points that most often decide results.

1. Stage 1 Read last year's results before changing anything

   Every round starts with the reports. They show where you out-competed rivals, where you fell short and which costs are out of line.

   Major factors

   • Footwear Industry Report: the performance scoreboard, industry statistics, demand forecasts and cost benchmarks against rivals
   • Competitive Intelligence Report: every company's effort on each competitive factor, region by region, plus the regional averages over time
   • Company Operating Reports: production, workforce, warehouse, marketing, income statement, balance sheet and cash flow

   What to watch out for

   • List the factors where you were below the regional average; those explain lost share
   • Check the benchmarking pages for costs per pair that are higher than rivals'
   • Treat tips from past classes with caution: they reflect different rivals, so your own industry's reports are the reliable guide

2. Stage 2 Workforce compensation and training

   Labour decisions set productivity (how many workers you need) and reject rates (how many pairs fail inspection) at each plant.

   Major factors

   • Base pay, incentive pay per non-defective pair and fringe benefits, compared with other plants in the same region
   • Best-practices training spending per worker
   • Workers per supervisor and supervisor pay

   What to watch out for

   • Pay packages below the regional average cost you productivity; cuts to base pay reduce it further
   • Incentive pay lifts productivity only up to about a quarter of total pay; beyond that workers slow down to avoid defects
   • Training lowers rejects, raises S/Q ratings, cuts materials waste and lifts productivity, with diminishing returns; gains already made stay if you later spend less

3. Stage 3 Branded production: quality, product line and volume

   Here you set the styling/quality (S/Q) rating buyers see, how many models you offer, and how many pairs each plant makes.

   Major factors

   • Share of superior materials, styling and features spending per model, and TQM/Six Sigma quality spending (current and cumulative)
   • Number of models in the line, which drives production run set-up costs
   • Pairs to produce at each plant, and the resulting reject rate

   What to watch out for

   • Many mixes reach the same S/Q rating; test combinations to find the cheapest per pair
   • Sustained TQM/Six Sigma spending counts for more than one-off bursts
   • More models lift sales but raise set-up costs and rejects, especially at small plants
   • Materials prices move with industry-wide use of superior materials and with overtime levels, so actual costs can differ from projections
   • The production-needed figure changes whenever marketing entries change; come back and adjust it

4. Stage 4 Facilities, equipment and capacity

   Capacity decisions take effect with a delay, so they need to be made ahead of demand.

   Major factors

   • New versus refurbished equipment (new raises S/Q and productivity and lowers rejects)
   • Overtime, which adds up to 20% more output at time-and-a-half pay
   • Production improvement options: lower reject rates, halved set-up costs, a higher S/Q rating or robot-assisted assembly
   • New plant space, which takes a year to build, and where to put it

   What to watch out for

   • Plan space a year before you need it; sustained heavy overtime raises costs and, industry-wide, materials prices
   • Low wages alone do not make a region cheapest once productivity, tariffs, freight and exchange rates are counted
   • Improvement options take effect the following year; weigh their payback plant by plant
   • Original equipment reaches the end of its life mid-game and must be replaced

5. Stage 5 Distribution, inventory and exchange rates

   Every pair ships from a plant to a regional warehouse, and the route you choose changes its landed cost.

   Major factors

   • Shipments from each plant to each region, with tariffs and higher freight on cross-region shipments
   • Exchange-rate adjustments on imported pairs and on regional revenue, which are shown in advance
   • The minimum inventory needed for your delivery time and model count, and clearance of leftover pairs

   What to watch out for

   • Unsold pairs carried into the next year lose S/Q rating and cost more to store
   • Keep a modest surplus above projected demand rather than cutting it to zero; lost orders go to rivals
   • When exchange-rate adjustments are large, change shipping patterns to avoid the costly routes
   • Producing inside each region avoids tariffs and currency swings on that region's sales

6. Stage 6 Wholesale and online marketing

   Most of the competitive factors are set here, region by region, for sales through retailers and at your own website.

   Major factors

   • Wholesale: price to retailers, brand advertising, mail-in rebates, delivery time and retailer support
   • Online: website price, search-engine advertising and free shipping
   • Competitive assumptions: your estimate of what rivals will do on average this year

   What to watch out for

   • Update the competitive assumptions before trusting any projection; assume rivals, especially those who did badly, will push harder
   • A lower price raises volume but can lower regional profit; judge by operating profit, not unit sales
   • Keep your online price well above your wholesale price (the guide's benchmark is at least 40% higher) or retailers drop your brand
   • Retail outlets, celebrity appeal and brand image are fixed for the year; if they are weak, compensate on the other factors
   • Growing a retailer network takes several years of good S/Q ratings, share, delivery and support

7. Stage 7 Private label, celebrity endorsements and social responsibility

   These optional areas can use spare capacity and build brand appeal, but each carries cost and risk.

   Major factors

   • Private-label bids in each region: a price and a quantity, made to the chain retailers' S/Q and model specifications
   • Offers to celebrities, whose appeal differs by region and whose contracts run two or three years
   • Corporate social responsibility and citizenship initiatives, such as ethics training, better working conditions and supplier monitoring

   What to watch out for

   • Private-label offers must be well below the average branded wholesale price (the guide sets at least $10 lower) and must still cover full costs
   • Do not plan around winning a bid; if you are underbid, that capacity sits idle
   • Celebrity appeal adds less and less as your combined appeal index grows, and nothing past a ceiling; fees start the year after you win
   • Social responsibility spending lifts the image rating only when it is broad, more than token and kept up for four to five years

8. Stage 8 Finance and cash flow

   Complete this page last, once every other entry is settled, because it shows the year-end cash position.

   Major factors

   • One-, five- and ten-year loans, early repayment of existing loans
   • Issuing new shares or buying shares back, and the dividend
   • The credit rating, driven by interest coverage, debt-to-assets and the ratio of operating cash flow to principal due

   What to watch out for

   • A small or negative projected cash balance triggers an overdraft loan at a higher rate
   • New shares dilute earnings per share and return on equity; use them sparingly
   • Longer loans lower annual repayments (good for the credit rating) but cost more interest overall
   • Dividends and buybacks support the stock price, within the board's limits on equity and share count

The 13 Competitive Factors That Decide BSG Sales and Market Share

Buyers compare brands on 13 factors. Price, S/Q rating and model selection carry the most weight, but what matters in practice is the size of your lead or gap against the regional average: a big difference on a lower-weight factor can outweigh a tiny difference on a high-weight one.

Strategy Options in the Business Strategy Game

Summarised in our own words from The Business Strategy Game Player's Guide (2026 edition, GLO-BUS Software). Instructors can change some settings, such as tariffs, so always check the figures in your own industry.