Business Strategy Game

After playing hundreds of Business Strategy Game or BSG rounds, I’ve seen typically what usually happens to the average industry at each step of the game. There are several factors that can create highly profitable boom times and terrible recessions that make people go bankrupt. The greatest of these factors are exchange rates, industry capacity (and by default shoe supply) and Industry Competitor aggressiveness.

Usually at the start of a new game because of everyone’s newness and very rarely afterward is what I like to call “Soft”, “Good” or “Boom” Years. The overarching strategy of these types of years is to gather as much net profit as your company can absorb and make good use of the year’s opportunities.

These are the key factors to watch out for Boom Years. Positive exchange rates usually helps the whole industry improve. Good balance of supply and demand allow for a future of growth for smart minded companies. But the best of all… is when other companies just aren't very aggressive or don’t understand what they are doing which makes them ripe targets to DOMINATE!!!

It is from Boom Years that your company can really jump ahead and gain huge advantages over the competition that may secure future victories in tougher years. Unfortunately Boom Years can be very scarce and companies must usually contend with “Bad” Years or Recessions that make up the bulk of the game.
Although competitor aggressiveness may increase as the game continues and industry capacity may never be healthy again. Exchange rates sometimes act as a little financial oasis in the middle of a recession acting as a mini boom against adverse circumstances.

n the last article I covered Boom Times, how they are caused, and what to do in the event of one. Pure boom times are very rare in the game because usually there is one smart competitor in the industry who wants to be significantly stronger and better off than everyone else. When several of these competitors hold that mindset and have an idea on how to win BSG, they will ultimately create a very competitive and aggressive marketplace. This sets the platform for a recession as prices begin to drop as competition heightens and it only takes a few aggressive companies to greatly expand their factories to create oversupply in the industry. As these factors go against the remaining companies, the death knell to the industry when exchange rates turn into the negative, this is a surefire sign to expect most companies to drop in points. In the above circumstances only the strongest will survive the recession and for some companies dropping in points means never gong back.
But are recessions truly good or bad? It’s a fact of life for sure and this is something that has to be dealt with. In boom times companies are more “buoyant” and there is an upward tendency for the whole industry. In a recession companies are more opt to sink, and this downward tendency may be used as an advantage.
In my personal views on how to play a recession is that all the companies must prepare for a massive “onslaught” and everyone is going to get hit. All the companies raises their shields and defenses to protect themself, and those who get hit will fall back, and those who can maintain their position or possibly even advance will benefit. A recession acts as a force against everyone, and if you can hold your own, it pushes everyone else back and the net outcome is that your company’s position has actually improved.
Sometimes the greatest fortunes are made in recessions.

n the previous articles we’ve explained both boom times and recessions, how they are caused, and how you should play when they are in effect. Boom times are a time for great prosperity, while recessions opens the gateway to bankruptcy. But can the two be manipulated in a way that they both exist and even controlled?
In boom times your profits roar, but the question stands when and in recessions will your profits proportionally drop the same way the other companies The pinnacle of industry power is when you have the largest company and control a huge amount of the supply. All the customers want your shoes because you've created other strategic advantages such as celebrities, good advertising, and strong distribution lines to reinforce financial security. In the case of a recession where your company greatly controls 2/3 variables being supply and industry aggressiveness (as your company adds to that). It is possible to create a situation where you “ride the recession”.

The metaphor I like to use is that your company is on a surfboard  the recession is the wave, and your competitors are going to be hit by the wave. Like a surfer when they are on a crest, it looks almost as if they “control” the wave just like your company sort of “controls” the industry. The innate danger itself is very real and as long as you stand on top of it, you are effectively immune to whatever misfortune happens to those who are standing in the recession’s path.

Getting to this position creates a situation where everyone has next to zero net profits with a few market challengers being a little better, while your company is doing extremely well. It is possible to tame a recession to your favor and use the recession’s power to destroy your enemies. The real trick is understanding your industry well enough that you can create this situation without wiping out.

The Grand Champion of The Business Strategy Game and The Glo-Bus Simulation Game
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