Individual Reflective Report on BSG Simulation: All Footwear Analysis

This report provides a comprehensive analysis of All Footwear's performance within a Business Strategy Game (BSG) simulation. It begins with an introduction and then dives into the company's competitive strategy, examining its approach to cost leadership, differentiation, and focus within the footwear industry. The report provides an industry overview, including PESTEL and Five Forces analyses to understand the external environment and competitive landscape. It then details All Footwear's company overview, outlining its vision and mission, and follows with a review of the strategic decisions made throughout the simulation, segmented by the beginning, mid-game, and end-game phases. The final results are presented, followed by reflections on the underlying strategic principles and key learning points. The report concludes with a summary of the overall performance and strategic implications for All Footwear in the dynamic footwear market. The report also includes references and appendices for further details.

SIMULATION REPORT
INDIVIDUAL REFLECTIVE REPORT ON BSG

Contents
1. Introduction..............................................................................................................................3
2. Competitive strategy.................................................................................................................3
3. Industry overview.....................................................................................................................4
3.1 PESTEL analysis.............................................................................................................4
3.2 Five forces model.............................................................................................................6
4. Company overview...................................................................................................................8
5. Decisions made.........................................................................................................................9
5.1 The beginning phase.....................................................................................................10
5.2 The mid-game phase.....................................................................................................10
5.3 The end-game phase......................................................................................................11
6. Final results............................................................................................................................11
7. Reflection...............................................................................................................................12
8. Underlying strategic principles..............................................................................................12
9. Learning points about strategy...............................................................................................13
10. Conclusion..............................................................................................................................13
REFERENCES..............................................................................................................................14
APPENDICES...............................................................................................................................16
1

1. Introduction
In this report, we will be discussing the overall performance of the company All Footwear as
compare to the other companies in the footwear industry. All Footwear operates in the market of
four regions i.e. Europe-Africa, North America, Latin America and Asia Pacific and the
segments of the market are the internet, private label, and the wholesale. Also, it has been
observed that the level competition is high among the companies which rely on various factors
like endorsements, time of delivery, quality, promotion, etc. Further, the competitive strategy
will be described along with the overview of the company and the industry. Moreover, the
section of decisions made will discuss the phases i.e. beginning, mid-game and the end-game.
Then, the final results will be discussed along with the reflection and the strategies of the
principles which are underlying for All Footwear in order to attain sustainability in the industry
of footwear. Then, the essential strategic points of learning will be discussed. Furthermore, this
report basically demonstrates the reflective report of All Footwear in order to analyze its overall
performance in the industry of footwear.
2. Competitive strategy
By analyzing the complete industry of footwear, we have understood that All Footwear has to
change the way of working according to the change in time and technology in order to attain the
sustainability and the profitability to a great extent. All Footwear believed in diversification by
using the technology of renewable and the green technology in order to become environmentally
friendly. All Footwear also decided to further diversify the workforce to maximize the
production along with the variations in the lines of the product. All Footwear took the decisions
to expand the operations in the various regions. Further, the decisions of strategy for All
Footwear relied on the improvement of the lines of production, availability, standards of quality,
styling, etc. Moreover, All Footwear has used the combination of the generic competitive
strategy of cost leadership in order to minimize the cost of operations along with the
maximization of the revenues (Slack, N., 2015). All Footwear wants to exploit the production
scale to a great extent. Further, the strategy of differentiation is being used by All Footwear in
order to generate unique and the innovative products along with the services for the targeted
2

segment of the customers (Brenes, E.R., Montoya, D. and Ciravegna, L., 2014). The aim of All
Footwear is to create a strong market presence and further attract the customers to a great extent
to attain sustainability. Also, the strategy of focus is being used by All Footwear in order to
provide the best quality products and the services to the customers of to further attain a
competitive edge in the niche market. Further, the vision of All Footwear is to become the leader
of the footwear industry be developing a landmark.
3. Industry overview
It has been observed that the footwear industry is dynamic and further the industry works in the
various diverse locations of the market. The regions where this industry offers products and
services are an example of astute for the internationalization and the globalization. Moreover, the
PESTEL analysis and the value chain analysis will help in understanding the overall industry of
footwear to a great extent.
3.1 PESTEL analysis
The macro environmental analysis is being used to analyze the environment externally for All
Footwear in order to identify the opportunities for the company in order to accomplish the vision
along with the maximized profitability (Ethiraj, S.K., Gambardella, A., and Helfat, C.E., 2016).
Political factors-
It has been observed that the footwear industry views distinct policies of the government in
various locations and the taxes, tariffs and duties vary according to the locations. Further, the
policy of trade in North America is liberal to some extent in comparison to the various areas of
the locations like Europe and Latin America. There is stability in the political environment which
helps the companies to explore the opportunities.
3

Economic factors-
It has been observed that the economic factors like rate of exchange among the different
countries, the stock market, interest rates of the banks, etc. impact the overall functioning and the
performance of the industry. It is necessary to take these factors into consideration for the
companies otherwise, they will not be able to take the decisions related to the finances. Further,
the industry is contributing greatly towards the growth of the country.
Socio-cultural factors
It has been observed that the footwear cannot be manufactured in order to cater a wider group. It
is important to consider the products along the targeted age group in order to provide high-
quality products in order to satisfy them according to their needs and the demands. Further, the
athletic industry of footwear has maximized the awareness among the people in order to be
conscious about health by initiating various programs of awareness.
Technological factors
It has been observed that the various companies in the footwear industry are utilizing the
innovative and the advance technology to manufacture the products of footwear to attract the
customers and further retain them for a longer period of time. Also, the companies are able to
attain the sustainability along with the competitive edge by focusing on the factors of technology
and changing the way of working accordingly.
Environmental factors
It has been observed that some companies in the footwear industry are using the environmentally
friendly process of production in order to attain the sustainability and protect the environment.
The companies are also using the technology of re-cycling in order to re-use the products
completely without causing any wastage of the resources. Further, companies have to take the
4

environmental factors seriously in order to hold the strong market presence and maximize the
sales along with the revenues.
Legal factors
It has been observed that the footwear industry has to follow the legal rules and the regulations
according to the regions in which they are offering products and services, for example, the law of
employment, consumer and taxation law, regulations of safety and health. It is also being
observed from the analysis that the environment of the footwear industry is overall satisfactory.
3.2 Five forces model
Buyer’s bargaining power
It has been observed that there are various companies in the footwear industry like Lifeful, Kung
Hei Fai Choi, HK Hunter, etc. along with All Footwear. So, the buyers get enough options in
order to purchase the desirable product. Also, it is observed that some companies have retained
the customers from a longer period of time and this helped them in making strong market
presence along with the maximization of profitability. The buyer's power of bargaining is high,
and further the sales of the companies rely on the acceptance only. Therefore, the companies of
the footwear industry have to keep the requirements of the buyers in mind while manufacturing a
unique product.
Supplier’s bargaining power
It has been observed that there is a high demand for the footwear of athletics, the suppliers have
the opportunity in order to switch to other company or the brand which are already ruling the
industry. Further, it is being observed that the supplier’s power of bargaining is quite limited
because the companies of the footwear industry are mainly operating in various locations and
don't rely on the particular supplier. But, the cost of switching is extremely high, and the
companies prefer to switch the suppliers timely in order to ensure that the monopoly of the
suppliers should not take place.
5

Threat of substitute products
It has been observed that the substitute products in this industry of footwear can be manufactured
by the local suppliers and can be provided at cheaper prices but, mostly users are conscious
about the brand which helps the companies of the footwear industry in order to attract them and
further retain them to attain sustainability (Zott, C. and Amit, R., 2013). Furthermore, it has been
observed that the threat of the substitute products is comparatively high because the various
companies are offering unique and innovative products by using the advance technology at
higher prices but are offering better quality which are influencing the customers to switch.
Threat of new entrants
It has been observed that the initial cost of investment are high which are becoming the barrier
for the entrants in order to enter the market and due to this the threat of entrants is low. The
industry of footwear is led by few companies only. Further, the new entrants require huge capital
in order to enter the industry of footwear, and it is quite risky to enter the market because the
industry is being ruled by the various companies which have a strong market presence along with
the sustainability for a longer period of time.
Competitive rivalry
It has been observed that the spirit of competitiveness in the industry of footwear is high.
Further, the companies are looking forward to having the highest share in the market along with
the maximization of the profitability. Also, there are various companies in the industry which are
offering similar products in the market globally (Barney, J.B., and Hesterly, W., 2015).
Furthermore, the manufacturing of products changes according to the change in technology and
the preference of the consumers.
6

4. Company overview
All Footwear has a great variety of footwear products which is being offered in four different
regions i.e. Europe-Africa, North America, Latin America and Asia Pacific and the segments of
the market are the internet, private label, and the wholesale. Further, All Footwear offers the
shoes of athletics for the people of all age group. All Footwear believes in diversification by
using the technology of renewable and the green technology in order to become environmental
friendly in order to be competitive enough and attain the sustainability for a longer period of time
(Kor, Y.Y. and Mesko, A., 2013). Moreover, All Footwear is using the combination of generic
competitive strategy which includes the combination of the strategy of cost leadership,
differentiation and the niche (focus) in order to attract the customers and attain the sustainability
for a longer period of time along with the strong market presence. The below are the vision and
the mission statement of All Footwear:
Vision-
The Vision of All Footwear is to be the leader in the footwear industry and develop a new
landmark for the industry of footwear.
Mission-
The mission of All Footwear is to provide a diverse range of the footwear products to the
customers with the best quality by attaining the sustainability and further maintaining it.
Further, the SWOT analysis will help in understanding the operations and the overall
functionality of Company A in a better way.
Strengths
 All Footwear has a strong market presence globally.
 All Footwear has a strong base of customer loyalty.
7

 All Footwear provides products with high quality at an affordable price.
 All Footwear has expertise in the section of research and development in order to become
a pioneer in the industry of footwear.
Weaknesses
 All Footwear doesn't have any retailers as they are highly sensitive to the prices and
further affects the overall margin of the profit.
 All Footwear relies on the industry’s market share which as a result makes the company
vulnerable and facing various challenges and the problems.
Opportunities
 The market of the footwear is emerging and further contributing to the growth of the
countries which will help the company to have a strong market presence along with the
expected and the maximized profitability.
 All Footwear has an opportunity to explore various new technologies apart from
renewable and green technology in order to offer more innovative and unique products to
the targeted customers.
Threats
 There is tough competition among the existing companies of the footwear industry in
order to attain the highest share in the market along with the sustainability for a longer
period of time. If they attract the customers to a great extent, then it might impact the
functionality of All Footwear.
 All Footwear might face high risk due to the currency fluctuations while entering the new
regions.
5. Decisions made
This section will provide a complete description of the decisions which are being made by All
Footwear at the three phases of the business simulation game. The below given are the three
phases which help in understanding the overall functionality of All Footwear.
8

5.1 The beginning phase
 All Footwear decided to finance the operations from the collection of the debt and the
funds which are being borrowed from the debtors. Furthermore, the equity and debts are
being utilized for the operations in order to barrel with the risks (Wilden, R. and
Gudergan, S.P., 2015). It is expected to offer the enough funds in order to run the
operations smoothly.
 All Footwear decided to generate footwear with the private labels in order to develop the
image of the brand and change the perception of the customers accordingly. It is expected
to create the recognition of the brand in order to ensure the competitive edge along with
the sustainability for the company.
 All Footwear decided to come up with the program of health awareness globally in order
to fulfill the social responsibility, and it further impacted the revenues of the company. It
is expected to create the awareness which will help in targeting the great number of
customers.
 The decision of sales forecasting is being taken by relying on the previous performance
of the company. Further, it is expected to maintain the overall expenditure according to
the sales forecast in a respective time.
5.2 The mid-game phase
 The decision to increase the capacity of the plant is taken depending on the demand of the
forecasting. Further, it is expected to maximize the volume of the sales along with the
profitability to attain the sustainability to accomplish the vision and the mission.
 The decision to provide training and compensation to the employees is taken to maximize
the capabilities of the personnel to further maximize the revenues and the overall sales
within a particular framework (D. Banker, R., Mashruwala, R. and Tripathy, A., 2014).
Moreover, it is expected to attain the sustainability to further expand the operations in
future.
9


5.3 The end-game phase
 The decision of marketing and pricing is being taken depending on the prices which are
being offered by the competitors. It is expected to control the production cost and provide
high-quality products and services to the targeted customers.
 The decision of endorsement is being taken by ensuring that the celebrity’s personality is
being matched with the products which the company is offering in order to promote them
and attract the larger segment of the customers. Furthermore, it is expected to maximize
the sales to a great extent and further holding a strong market presence along with the
expected share in the market which will help the company to attract more customers and
retain them for a longer period of time (Ortega, A.G., Jalón, M.L.D., and Menéndez,
J.Á.R., 2014).
 The decision of operations of the warehouse is being taken relying on the capacity of
operations. Further, it is being expected to increase the volume of sales within a particular
framework of time.
Therefore, the investors are expecting to increase the profitability of All Footwear as this will
help them get the high returns on the investments. The overall profitability of All Footwear is
maximized in the past four years that demonstrates the expectations are completely met. Further,
the rating of credit is A+ that shows the overall growth of All Footwear. The company is ranked
on the 5th position. The overall score is 92, and 69 is the industry score of All Footwear.
6. Final results
As All Footwear is operating in the three segments i.e. wholesale, internet and the private label,
the score of All Footwear in the segment of the internet is 69 along with the share of the market
i.e. 6.6 percent which demonstrates that Company A is having a great share in the market of the
footwear industry. Furthermore, in the segment of wholesale, the performance of All Footwear is
great along with the share of the market i.e. 3.3 percent. Then, in the segment of private label, the
price of the bid is 34.8 for All Footwear.
10

7. Reflection
I am satisfied with my performance as I did really well and I considered all the factors along with
the reports of the game in order to come up with the desirable results for All Footwear. Also, I
have learnt various strategies and the methods which should be used by the companies in order to
attain sustainable competitive edge by having a strong market presence and the maximized
profitability. Further, the business simulation game was interesting for me as it helped in
understanding that how to analyze the overall performance of the companies by considering the
historical reports as well. I have also learned that it very important to change the way of working
according to the change in time and technology in order to attain sustainability and provide
satisfactory products and services to the customers according to their needs and the requirements
and this will also help the company to retain them for a longer period of time.
8. Underlying strategic principles
It has been observed that the principles of strategy are oriented towards action which further
helps in responding quickly and offers guidance to attain the vision and the mission along with
the long term goals. Furthermore, it helps in determining the action of the strategy which is
supposed to be taken to manage and formulate the strategies in an effective way. The Vision of
All Footwear is to be the leader in the footwear industry and develop a new landmark for the
industry of footwear (Shapiro, C. and Varian, H.R., 2013). Moreover, it is being observed that
the companies are effectively managing the strategies in an effective and efficient way possible
which can be analyzed from the index of the profitability and share in the market. Therefore, All
Footwear included all the factors which affected the volume of the sales positively. The
company’s operating profit shows that the strategies and the operations of the company are
effective to a great extent.
11

9. Learning points about strategy
The learning points about the strategy are as follows (Hill, C.W., Jones, G.R. and Schilling,
M.A., 2014):
 The analysis of the strategy helps in identifying the external and the internal
environment which helps the company to attain sustainability and maximize the
revenues and the sales accordingly.
 It also helps in managing the overall profitability of the organization according to the
change in technologies and change in the framework of time.
 It helps in analyzing the performance of the competitors as well in order to
manufacture and provide the products and services accordingly.
 It helps in analyzing the risks which are being associated with the overall
functionality of the company.
 It helps in understanding the requirements and the demands of the internal and
external stakeholders which impacts the overall functioning.
10. Conclusion
The game of business simulation helped in understanding and learning the significance of the
strategy in order to run the business efficiently and effectively. Further, the stakeholders are
impacted directly and indirectly by the overall functioning of the company, so it is essential to
think strategically and further implement it. Further, it can be stated that All Footwear has the
satisfactory overall performance. All Footwear believed in diversification by using the
technology of renewable and the green technology in order to become environmentally friendly.
Moreover, All Footwear has used the combination of the generic competitive strategy of cost
leadership, niche (focus) and differentiation to attain the sustainable competitive edge to
accomplish the vision. The section of decisions made helped in understanding the performance
and the functionality of All Footwear in three phases which helped in analyzing the effectiveness
of the decisions which were taken in every phase.
12

REFERENCES
Barney, J.B., and Hesterly, W., 2015. Strategic management and competitive advantage concepts
and cases. Pearson.
Brenes, E.R., Montoya, D., and Ciravegna, L., 2014. Differentiation strategies in emerging
markets: The case of Latin American agribusinesses. Journal of Business Research, 67(5),
pp.847-855.
D. Banker, R., Mashruwala, R., and Tripathy, A., 2014. Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic
management. Strategic Management Journal, 37(11), pp.2191-2192.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Kor, Y.Y. and Mesko, A., 2013. Dynamic managerial capabilities: Configuration and
orchestration of top executives' capabilities and the firm's dominant logic. Strategic Management
Journal, 34(2), pp.233-244.
Ortega, A.G., Jalón, M.L.D. and Menéndez, J.Á.R., 2014. A strategic analysis of collective urban
transport in Spain using the Five Forces Model. Investigaciones Europeas de Dirección y
Economía de la Empresa, 20(1), pp.5-15.
Shapiro, C. and Varian, H.R., 2013. Information rules: a strategic guide to the network economy.
Harvard Business Press.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Wilden, R. and Gudergan, S.P., 2015. The impact of dynamic capabilities on operational
marketing and technological capabilities: investigating the role of environmental
turbulence. Journal of the Academy of Marketing Science, 43(2), pp.181-199.
13

Zott, C. and Amit, R., 2013. The business model: A theoretically anchored robust construct for
strategic analysis. Strategic Organization, 11(4), pp.403-411.
14

APPENDICES
15

16

17

18

19