Bsg Strategy Guide Essay

3595 Words15 Pages
Plan a factory in Latin America with a capacity of at least (eventually) 3000 because of low wages to latino workers and fluctuation of Brazilian real. Focus on large plants in AP/LA and avoid building in US/EA. * Do not build small plants in any region Borrow, Borrow, Borrow! First, go to Finance and Cash Flow page: Borrowing, Stock Dividends. This is where you will borrow money. In the first few rounds, you will borrow the maximum in long term (10 year) loans (usually $250 million). * By focusing on scores most important, you will lose ground on credit rating in all but the late rounds. * Borrowing heavily is essential to winning this game! * Focus on predatory investment decisions. In early rounds, you will be borrowing to expand capacity and upgrade equipment, as well as to buy stock back. In round one, you should try to expand your starting capacity in AP, and expand the maximum allowed for a new plant in LA (usually 2000, maybe 1000). * You will be able to start a new plant in LA and use the remainder to increase the size of your AP plant as well as upgrade for setups and buy back some stock. Your success depends upon your production capacity. * Production capacity needs to be hinged on “economy of scale”: by increasing your capacity in specific environments, you not only increase the ability to satisfy any market demand, but also lower the cost of your shoes, since fixed costs are spread over ever-larger numbers of shoes. * Thus, a single plant of 8,000 in one region is vastly superior to plants of 2,500 in each of 4 regions, despite the seeming inferiority in numbers. Each plant operates independently. In round 1, your credit rating is as good as it will ever be in the game. You will want to borrow extensively to take advantage of this relatively low interest rate. Use only long term (10 year) loans when
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