ONE WAY TO GET ACQUAINTED WITH THE BSG COMPANY PROGRAM
RCM - 1/25/04
1. Create a Company Disk, make one or more copies, and have a copy in the floppy drive when you start the company program
2. Start the program and, when asked, click on Aenable macros@
3. You get a Menu Bar Guide, with two columns (previously, the first time you run the program you need to enter and record your company identification information):
* The left column lists ADemand Forecast@ plus 9 decision screens
* The right column starts with 4 reports, then 4-6 analysis and supporting choices, and finally an exit choice
* Initially, ignore the right-column choices and look generally at some of the screens in the left-column choices, without entering or changing any of the items
4. Note some general features typical of all the decision screens:
(a) They have a top section (with blue background) that has three types of entries:
(i) some boxes with white (or yellow) backgrounds, which are variables re which you can make decisions, i.e., change the past decision shown
(ii) some boxes with grey backgrounds, which are variables on which you might be able to make decisions in the future, but not at present; e.g., variables for Latin America, but you are not yet operating there
(iii) some items without anything other than the blue background, which are items for your information
(b) They have a middle section (with purple background) that gives you information about various parameters and costs. As you change decision variables some of these numbers will change.
(c) They have a bottom row (with red background) that gives estimates of five company performance variables: sales revenues, net profit, EPS, ROI, and cash balance. As you change decision variables, these give you a rough idea of the direction of the effect on performance that the changes will have. However, the actual performance results may be quite different, influenced by many things including the various decisions you and the other companies make.
(d) Note the top menu bar with icons for all the items on the Menu Bar Guide - plus a blue rectangle that takes you back to the text-version of the Menu Bar Guide
5. Go to the Demand Forecast screen:
(a) Re-read p.33-37 of the Players= Manual
* This screen can be used to do Awhat-if@ trials to estimate the numbers of branded pairs your company can sell in each region, both wholesale and internet; i.e., as you change wholesale price, quality rating, etc. in the white-background columns, you will see estimates of the market share and quantity of shoes you can sell in the two blue-background lines just below your decision entries. Further, you will see a summary of estimated manufacturing parameters in the purple-background lines.
(b) Try changing a few numbers in one of the white-background columns and watch the changes in the five lines just below
* Ignore the bottom row (red-background) figures for now
(c) Now, try changing the internet price (left-middle) and watch the changes in the expected internet market share and quantities in all regions (internet price and parameters are common for all geographic regions)
(d) You also can change some items in the Projected Industry Average columns (yellow-background boxes) - to reflect your best guesses on the collective effects that will result from the decisions of all the other companies
(e) It is often useful to generate two (or three) cases in this screen: a most optimistic case (i.e., highest practical sales), a most pessimistic case (i.e., lowest sales you might experience), and (optionally) a most-likely case
(f) Before exiting this menu, it is useful to record or print your entries (since you will want to use them as you work in the various decision screens). To print this or any screen, click on the printer icon in the top line and select APrint Current Decision Screen.@
* Later, you may make entries in the S&P Fluctuation and Competitive Aggressiveness boxes, but ignore them for now
* Note that the changes you make in the Demand Forecast screen are not decisions - only the decisions you enter in the nine Decision Screens will be entered into the files you save and give to the professor when it is time to run the industry simulation for a year
6. As an example of making decisions, first look at the Branded Marketing screen:
(a) Try changing some decision variables, one at a time - and watch the changes in both the purple-background numbers and in the bottom line (red-background); only some of the parameters will vary with the decision variable you are changing
* You should view the effects on the bottom line numbers primarily for their direction, rather than the absolute magnitudes, since your company=s performance in this competitive industry depends on all the decisions you make, and also on the decisions all the other companies make plus changes in the external environment (see also item 8)
* Note that the column for Latin America has zeros initially, although the decision boxes have white backgrounds and you can enter new numbers in them. However, the warehouse in Latin America will not be operational until Y12, so no shipments to or sales in Latin America can be made in Y11 (PM66); therefore, the Adecisions@ you enter will have no effects.
* If you make decisions in the other three geographic areas for Y11, they will have effects.
7. Now, go to the Production & Labor Decisions screen:
(*) Note the same general structure as for the Branded Marketing and Demand Forecast screens.
(a) Try changing some decision variables, one at a time - making use of the tentative demand level numbers you obtained in the Demand Forecast screen. As you make tentative decision choices, watch the changes in the bottom line and other non-decision parameters (which parameters change vary with the decision variable you are changing).
* Note that you initially can not make decisions for an European or Latin American plant because you don=t have one in either region (i.e., you start off with one plant in North America and one in Asia; to have plants in either of the other two regions, you have to build them, using the Plant Automation & Construction decision screen)
(b) When you are (tentatively) through with this decision screen, move to another - either by clicking on the decision screen icon on the top-row menu or by returning to the text menu (using the blue rectangle icon in the top row) and choosing the decision screen you wish. Do not click on the Exit icon - this will exit the company program. You can return to any decision screen and make further changes as many times as you wish; the program will not save the new decisions until you exit the program.
8. When you have (tentatively) finished making decisions/changes in the various decision screens (up to all nine), go back to the Demand Forecast screen and click on all five Update buttons (one above the Internet block to the middle left and four above the four geographic regions), although some may be greyed out. This synchronizes the Demand Forecast screen with all the decisions you have entered in the various decision screens. Now and only now, it will be useful to look at the bottom line (red-background) of estimates of five key performance parameters. These now will provide the best-available estimates of your potential company performance, given the various decisions you have made. However, note again that these still are only estimates, not guarantees, and your actual performance will depend on what the other companies decide plus changes in the environment.
* There is a messy interaction between the Demand Forecast screen and the decision screens B which means that the only time you get a best-available estimate of your potential performance is after you have synchronized the decision screens and the Demand Forecast screen (as described earlier in this step 8 and repeated below). Note the following re what information is used to generate the forecasts in the bottom row (red background): projected revenue is projected pairs sold (from numbers in Demand Forecast screen) times prices (from Decision screens). Profitability comes from revenue minus costs (from Decision screens). Therefore, all these depend on numbers in both the Demand Forecast and Decision screens, and it is vital to have them in synchronization, with the process given below:
9. If you are not satisfied with the estimated performance numbers, go back to and make further iterations in selected decision screens, then return to the Demand Forecast screen and click on the update buttons again to get another estimate of your company=s performance for the next annual cycle.
10. When you are finished with making changes in your decisions, and have synchronized the Demand Forecast Screen at the end, then print at least one copy of your decision entries (use the print icon or menu choice ...and choose Print All Decision Entries). Then, you can exit the program and it will save your decisions on your Company Data Disk.
* When you are making decisions for the class, make back-up copies of both the decision print-out and your Company Data Disk with the latest decisions. Give one of each to the professor by the specified time.
* Although there are many choices in the Menu Bar Guide in the program, for the practice rounds you should concentrate on using the Demand Forecast screen plus making (changed) decisions in four of the decision screens: Production & Labor Decisions, Shipping, PrivateLabel Marketing, Branded Marketing, and possibly a 5th (Internet Marketing). The remaining four decision choices on the menu are ones you are likely to use at some times in the regular competitive rounds (i.e., Plant Automation & Construction, Financing Bids for Celebrity Endorsements, Plant Purchase/Sale/Closing). You will need to use the Strategic Plan utility when you prepare your business plan, and may choose to use the Capacity Construction Analysis menu choice at some point. The Company Identification menu choice lets you edit your company information, if necessary. The Chart & Graph and E-mail choices will not be needed.
* For the 2nd practice round, use a copy of the company data disk returned to you by the professor, which contains the industry results for Y11 of the practice round. You will then enter decisions for Y12 for the 2nd practice round on this disk.
* Then, when we start Y11 of the competitive round, use a fresh, new copy of your original data disk on which to save your decisions. Thereafter, for each subsequent competitive round, use a copy of the company data disk from the previous round, as returned to you by the professor.
* Always keep back-up copies of everything!!