2. Overview  As senior managers, you run an athletic footwear company that produces and markets shoes worldwide.  Your management team will make the strategic decisions to produce, distribute, market, and sell shoes in a global market.  You will compete head-to-head against the other companies in the class.  Your sales, costs, and profits are determined by comparing your decisions with the decisions of all the other teams in the class.

3. Your Company  10 year-old company  10M shares outstanding @ $30 ($300M market cap); B+ credit rating  Two existing factories; 2M pair/year in NA, 4M pair/year in A/P  Sales of 5.2M pairs worldwide, revenue of $238M, net earnings of $25M

4. World Markets The ‘World’ is divided into four regions North America South America Europe/ Africa Asia/ Pacific Production, marketing, and sales can take place in any of the regions and shoes can be shipped between the regions. There are tariffs, shipping charges, and foreign exchange adjustments for shipments between regions

5. NAAsiaEULA NAASEULA BL WWW PLBL WWW PL Stores

6. Decisions You and your co-managers will make decisions each period relating to  Factory locations and facilities (up to 6 decisions per plant)  Production (up to 10 decisions per plant)  Worker compensation and training (3 decisions per plant)  Distribution (up to 8 decisions each plant)  Pricing and marketing (up to 10 decisions in 4 geographic regions)  Bids to sign celebrities to endorse your company’s footwear (up to 3 decision entries per bid)  Financing of company operations (up to 8 decisions)  Corporate Social Responsibility Spending  Plus there is a screen for making annual sales forecasts and deciding whether to have inventory clearance sales

7. How It Works Simulation Decisions Yearly Results Annual Reports Company Decisions

8. How it Works Branded Retail Sales Branded Internet Sales Private Label Sales RevenueCostsAdjustmentsProfits

9. Market Share Determinants Price Mail-in Rebates Style/Quality Rating Number of Models/Styles Advertising Celebrity Endorsements Retailer Network Retailer Support Timely Delivery Internet Sales: Demand: Expect steady long-term growth Retail Sales: Price Models Shipping Charge Style/Quality Rating Advertising Celebrity Endorsements

10. Private Label Sales Shoes produced by your company but sold under someone else’s name Must produce specifically for PL market Must meet minimum SQ Rating Contract awarded by retailer strictly on price

11. Performance Measures Earnings Per Share Return On Equity Credit Rating Stock Price Image Rating Score each round is based on Investor Expectation Standard Best in Industry Standard

12. Cost Price Value SQ Models Advert’s Endorse Retailers Location Utilization Upgrades HR Finance

13. How Do You Win? Control Costs Differentiate MS = W 1 (F 1 – F 1,AVE ) + W 2 (F 2 – F 2,AVE ) + ····· Price Right

14. NAAsiaEULA NAASEULA BL WWW PLBL WWW PL Stores Retailers Support Celebrities Marketing Sales Revenue Production Costs Distribution Costs Marketing Costs Financial Costs Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Strategy STRATEGY!!