Running head: BEEROK
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BeeRok: Company Strategy and Analysis
Angela Deaton and Geff Garcia
MGMT585 – Strategic Management
February 15, 2014
Dr. Michael Corriere
Southwestern College Professional Studies
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Abstract
BeeRok has executed several actions to develop core competencies and competitive capabilities.
These actions contribute to good strategy execution and competitive advantage. Throughout the
simulation, BeeRok used strategic execution to stay ahead of the competition. Many of these
strategies have been copied by rival companies; however, by staying ahead of the competition,
BeeRok enjoyed the successes of the strategies earlier in the simulation.Ideally, the CEOs want
BeeRok to be seen as a green company utilizing efficient methodologies and green packaging
materials. This was achieved while growing the company over eight years. As an executed goal,
BeeRokwas known throughout the market for efficiency in methods and processes. The CEOs
envisioned a market standing of best in the industry. BeeRok made decisions that drove first and
second place rankings among the other companies. A ranking at this level requires a high market
share as well as a substantial profit increase year over year. This paper describes in detail the
methodology behind execution of the mission and vision of the company as well as actual and
forecasted financial analysis. In the end, BeeRokproved successful and earned recognitions in
three different weeks at national levels.
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BeeRok: Company Strategy and Analysis
BeeRok, also known as Company B, produces footwear at two plants. One is a two
million-pair plant in North America and the other is a four million-pair plant in Asia. Both
plants can utilize overtime to boost annual capacity by 20%, thus giving the company an initial
capacity of 7,200,000 pairs. Sales volume in Year 10 equaled 5.2 million pairs. In Year 10, the
company sold4.5 million pairs of branded shoes to retailers and individuals, and it bid
successfully for contracts to supply740,000 pairs of private label shoes to large multi-outlet
retailers of athletic footwear. The company's stock price rose from $11.00 in Year 6, when the
company went public, to $30 at the end of Year 10 (Thompson, Stappenbeck, &Reidenbach,
2014). The new CEO’s, Angie and Geff, took over the company at this stage.
Strategic Vision
“At BeeRok, our vision is to be the best-cost athletic shoe company that provides highquality athletic shoes at a competitive price to serve the needs of customers around the world.”
“The company will employ a global differentiation strategy that sets the company’s footwear
apart from rival brands based on more models/styles, more advertising, greater celebrity appeal,
and a bigger network of retail outlets carrying the company’s brand.”
BeeRokCEO’s wanted to ensure prosperity for the company as a whole, the employees,
and the customers. Improvement of the customer satisfaction rating (CSR) and overall quality of
the shoes, including raw material and processes are required for long-term financial health. In
order to meet the strategic vision of the company, BeeRok CEO’s made commitments to enhance
its sales volume and standing in the marketplace via attractivepricing, advertising, contracting
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with celebrities to endorse its brand, convincing footwearretailers dealers to carry its brand, and
promotion of online purchases.
BeeRok CEOs wanted the company to be known for quality and service at a level of
excellence that exceeds consumer expectations. Customer satisfaction rating is a metric that was
extremely important to management and will be monitored closely. Ideally, the CEOs want
BeeRok to be seen as a green company utilizing efficient methodologies and green packaging
materials, thereby increasing BeeRok’s customer satisfaction rating (CSR). Another way that
BeeRok increased the CSR, was to increase the quality of the shoes. Quality plays a major role
in consumer satisfaction and assisted in driving additional demand. Higher quality products will
allowed higher shoe prices overall. Quality and consumer expectations were monitored and
pricing was updated to accommodate new consumer satisfaction rating (CSR) and quality
initiatives.
Branded Footwear Analysis
BeeRok’s executive team approached the branded footwear market by implementing and
monitoring two key components of BeeRok’s strategy. The first component was to run an
efficient production and distribution channel that provided a high quality product that garnered a
high profit margin compared to competitors. The second component that BeeRok examined for
the branded footwear market was how to market and sell the product to consumers that would
create an effective market share that matched production targets.
The first strategic component, consisting of creating an efficient production and
distribution chain, encountered the most change during the simulation. The initial priority was to
increase the S/Q rating and evenly distribute the product evenly to each geographic region.
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BeeRok did not pay much attention to the exchange rates or the operating profit margins when
shipping to each region. BeeRok also made a critical mistake in being far too conservative in
building capacity during the early years of the simulation. Executives were expecting a market
recession to hit that would slow growth and they did not want to be affected by not “right sizing”
the company. As the simulation played out, the game was built on growth and this proved to be
critical mistake compared to the competition. BeeRok consistently had to change its production
capacity strategies to try to accommodate demand and this proved to be a reactive strategy, rather
than a proactive strategy. This is crucial because of its direct relation to pricing. According to
studies, market leaders with proactive strategies tend to rarely fight on price. In contrast, market
followers with reactive strategies must adopt a price fighting strategy (Shanker, 2006).
As the simulation continued, BeeRok had to change its strategy when it came to
operating profit margin in the branded footwear segment. In order to lower costs, BeeRok chose
upgrade option D to both the North America plant and the Asia Pacific plant. The reason behind
this was to effectively increase the productivity of existing workers by creating efficiency in the
production line. This would lower costs by doing more with less workers. The second strategic
upgrade was made to the Asia Pacific plant with upgrade option A. Since Asia Pacific was
producing the largest number of shoes between the two plants, the reject rate was causing one of
the highest cost drivers in the simulation. By addressing this issue with upgrade option A,
BeeRok invested in a value chain that paid high dividends throughout the simulation.
The second key strategic component was the sales and marketing aspect of the
simulation. Since BeeRok’s overall strategic vision was built on creating a high quality, high
profit margin product, executives knew that a strong brand image was important to help carry the
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required margins. From the outset of the competition, BeeRok was committed to creating a
brand image built on consumer appeal through celebrity advertising and corporate social
responsibility. From the very start of the game, BeeRok invested in corporate social
responsibility by investing in energy initiatives, ethical training, and by giving back to the
community through donating a percentage of profits.
The second aspect of this strategy was to
maintain a high celebrity appeal in each of the four geographic regions. Between these two
strategic initiatives, BeeRok was able to use this competitive advantage to maintain a
comparatively strong market share, even though retail and wholesale prices were far above the
competitions. Ultimately, this strategy had to be adjusted as other competitors were able to bring
up their S/Q rating and continued to offer a low price. BeeRok felt that its market share was
diminishing and they had to be more competitive from a lower price point.
Private Label Analysis
Compared to the branded footwear strategy, BeeRok’s private label strategy endured a
different evolution during the course of the simulation. During the first couple of years during
the competition, BeeRok took the approach in the private label segment of being a low cost
provider. The private label segment was going to be used as a low margin liquidation center for
extra shoes that we could not sell in the branded footwear segment. In order to achieve this
strategy, BeeRok purposely offered shoes at a low price and accepted the low margins to
discourage other competitors from participating in this arena. BeeRok also used this strategy to
keep inventory turnover strong and create a high image rating in the market.
This early strategy proved effective because Company A and Company D were quick to
move out of the private label segment. By enjoying this increased market share, BeeRok was
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able to adapt its pricing strategy for every region during Year 13 to increase profit margin in this
segment. With this new focus on enjoying a higher profit margin in the private label area,
BeeRok executives also began to invest in the long-term strategy of this segment. By increasing
the quality of materials in private label, BeeRok began to try to position its product at a higher
S/Q rating than Company C, the lone competitor left in private label. This moved the plan from
a low-cost provider to a best-cost provider strategy. By increasing the S/Q rating and only
competing against one company, BeeRok could raise prices while still maintaining a large
market share.
During the latter years of the game, Years 16 and 17,Company D and Company A began
to enter themselves back into the private label conversation. During this time period, BeeRok
also had to focus on exchange rates and tariffs and their affect on the profit margin available.
Since the exchange rates were not always beneficial in markets like Europe-Africa and Latin
America, BeeRok’s distribution plan reflected this by moving shoes into markets that had higher
bottom line profits margins. Similar to the branded footwear segment, BeeRok struggled with
meeting the market demand due to a lack of shoes available. In Year 17, BeeRok experienced its
first setback in the private label, not selling all shoes of offered in the Asia Pacific region.
BeeRok executives believe this was due to the re-entry of competition from Company A, which
stole vital market share. Despite this setback in the final year, BeeRok feels that their strategy in
the Private Label was executed effectively.
Production and Work Force Analysis
BeeRok’s production strategy was created such that supply never exceeded
demand.BeeRok focused production in two plants- one in North America and the other in Asia.
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BeeRok utilized overtime at both plants, boosting production by 20%. In order to keep pace with
demand, BeeRok added capacity in Years 15 and 16. In Year 15, 400,000 pairs were added to
the Asia plant. In Year 16, 400,000 pairs where added to the North America plant. The addition
of capacity allowed BeeRok to offer a more shoes worldwide.
BeeRok employs export strategies to pursue international sales. The amount of capital
needed to begin exporting is minimal and existing capacity is mostly sufficient to make goods
for export (Thompson, 2014). Utilizing this strategy, BeeRok limited its involvement in foreign
markets by contracting with foreign wholesalers experienced in importing to handle the
distribution to target markets. BeeRok uses these wholesalers to minimize its direct investments
in foreign countries. This method proved effective in the simulation.
Another decision that was made to aid with increased production numbers was employee
training. BeeRok decided to incorporate training for all employees in Six Sigma and ethical
behavior. Although this cost the company money each year, it decreased the number of rejects at
each plant, therefore allowing additional shoes offered to the market. The benefit of revenue
outweighed the cost of the training, making this decision effective. The ethical training portion
was beneficial to a higher image rating by employees.
BeeRok’s work force compensation strategy was to compensate employees based on
level of quality in the production of the shoes. This compensation was calculated on a per-shoe
basis. The higher the quality in the shoe, the more the employee was compensated as a bonus.
This bonus was in addition to the hourly wage established by the company. Lean production
activities, ordering structure, and shipping techniques were utilized to drive an increase in image
ratings as well as employee satisfaction. The CEOs will maintain elevated levels of customer
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satisfaction ratings by maintaining a high level of ethics, training in all areas of the company, and
company charitable contributions.
Financial Strategy
BeeRok’s strategy has been to maintain a highly efficient company in every aspect of the
organization’s operations. While the current expenditures per pair are far below the industry
average for corporate citizenship, BeeRok has an enjoyed an industry leading image rating.
BeeRok executives feel that this is because the company utilized its resources in the most
efficient way possible. If the company were to sustain a setback in the overall image rating of
the company, then initiatives would be implemented to address the shortfall.
In order to run efficiently, BeeRok’s strategy included execution of all finances to an Aor better credit rating. A credit rating at an A-, A, or A+ rating provided for lower interest rates
on loans to lower risk of investment. BeeRok decided to pay dividends when an increase in ROE
was needed. The first payout of dividends was in Year 17 at $2.30 per share. BeeRok was shy
in the beginning to using debt as a means to build capacity. In two of the years, BeeRok decided
to add capacity in both plants, however only utilized 20% of the payment as credit. BeeRok
eventually changed strategy and in future years will increase use of credit to add capacity to meet
demand and to build equity. In Year 17, BeeRok bought stock as a repurchase strategy to
decrease the amount of owner’s equity outstanding. Since Return on Equity was one of the key
financial performance targets, BeeRok knew they could not significantly increase net income
without more shoes. The easiest way to accomplish this was to decrease owner’s equity.
Some financial decisions were based on external influences. BeeRok monitored
exchange rates in every region that it operated. The exchange rates affected the decisions of
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BeeRok executives and decisions had to be made to capitalize on favorable exchange rates and
minimize the adverse impact of unfavorable exchange rates. For example, during Year 13
simulation, BeeRok noticed a less than favorable exchange rate from the US Dollar to the
Brazilian Real. This caused a strategic decision to place less units for sale in the branded
distribution screen to be available for sale in Latin America. While this decision gave up
considerable market share, BeeRok’s decision paid off by capitalizing on the high margin
regions of Asia-Pacific, Europe-Africa, and North America regions. Another example came
during the Year 14 simulation. BeeRok executives noticed a favorable exchange rate between
Asia-Pacific and Europe-Africa. This decreased overall cost per pair to send units into EA from
AP. This increased margin and market share in the region by putting additional units into this
region from the unfavorable exchange rate region of Latin America.
BeeRok’s executive team has had to adapt the company’s strategy to take into account
the differences in import tariffs for Latin America and Europe-Africa. While the tariffs for
Europe-Africa are similar from a cost per pair perspective, the branded footwear draws a higher
wholesale price per pair. Therefore, this increases the profit margin in Europe-Africa. Latin
America does not enjoy this higher wholesale price per pair so it minimizes profit margin per
pair. Taking this into consideration, along with the unfavorable exchange rate, BeeRok has
elected to not allocate as many pairs for sale in the Latin America region in some years.
Financial Data
Below are charts that BeeRok CEO’s established during the simulation. Narratives are
included with each chart to explain the significance of the analyses. It was important for
BeeRok’s CEOs to review the historical data of BeeRok’s performance, as well as the historical
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and current performance values of BeeRok’s competitors. The charts show trends in BeeRok’s
annual total revenues, trends in annual earnings per share (EPS), trends in annual return on
equity investment (ROE), trends in BeeRok’s annual credit rating, trends in the year-end stock
price, trends in the annual image rating, trends in global unit sales (both branded and privatelabel footwear), and trends in BeeRok’s global market share.
(BSG online, 2014)
According to the Company Operating Report Corporate Social Responsibility and Citizen Effort
expenditure represented a small portion of total net revenues in Year 15:

BeeRok Year 15 Total NET Revenues = $381,728,000

BeeRok Year 15 CSR Expenditure (chart above): = $12,226,000

Percentage of revenues corporate citizenship expenditures represented =
$12,226,000 / $381,728,000 = .0320 = 3.2%
According to the Company Operating Reports, Corporate Social Responsibility and Citizen
Effort expenditure represented a larger portion of pretax profits in Year 15:

BeeRok Year 15 Total PreTax Profits = $78,613,000
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
BeeRok Year 15 CSR Expenditure (chart above) = $12,226,000

Percentage of pretax profits corporate citizenship expenditures represented =
$12,226,000 / $78,613,000 = .1555 = 15.6%
BeeRok is below the industry average level for corporate citizenship expenditure based on total
dollars spent.

Industry Average for Corporate Citizenship Expenditures: $13,563,000

BeeRok Year 15 Social Responsibility Expenditures: $12,226,000
BeeRok is below the industry average level for corporate citizenship expenditure based on a per
pair basis.

Industry Average for Corporate Citizenship Expenditures per pair: $1.85

BeeRok Year 15 Social Responsibility Expenditures per pair: $1.56
The chart below was filled out by the BeeRok CEOs in order to determine areas of
potential differentiation from the offerings of rivals. The columns in the chart include the
specific areas that could be differ between company’s, BeeRok’s differentiation efforts in Year
14, the industry average in Year 14, and the last column is the amount that BeeRok is above or
below the Year 14 industry average. From the chart, it is evident that BeeRok performed better
than the industry average in the number of models offered, advertising budget, celebrity appeal,
and in rebate offer. Areas for improvement included the number of retail outlets utilized. The
results are illustrated below.
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(Thompson, 2014)
Simulation Forecasting – Estimated versus Actual
Performance targets were set in the three year plan. The three year plan was created to
set performance targets for Years 15, 16 and 17. The forecasting effort was conducted by
BeeRok’s CEOs at the end of Year 14. BeeRok utilized historical data to create the forecasted
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values as well data from the competitor’s financial performance ratings. This forecasting effort
focused the CEO’s concentration on evaluation of past and current strategies in an attempt to
create a competitive and realistic forward-looking analysis. Forecasting is important in order to
mitigate possible risks and prepare the company for the future (Bowen, 2011).
(Thompson, 2014)
(Thompson, 2014)
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(Thompson, 2014)
(Thompson, 2014)
15
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(Thompson, 2014)
So, how well did BeeRok forecast the financial values? BeeRok expected that the image
rating would continue to rise, however soon realized that this proved difficult in an attempt to
keep the other variables high, including ROE and EPS. Excerpts from the plan for projected and
actual values are depicted in the chart below:
BeeRok
Year 15
Performance
Measures
Target Actual
Year 16
Score
Target Actual
Year 17
Score
Target Actual Score
EPS
$5.00
$5.50
16
$5.10
$6.92
16
$5.20
$9.58
16
ROE
16%
16%
16
16%
17%
16
16%
22%
16
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Credit
Rating
A+
A+
20
A+
A+
20
A+
A+
20
Image Rating
78
83
18
80
83
18
81
80
18
$70.00
$77.03
16
Stock Price
$72.00 $97.16
16
$73.00 $192.31
16
Total Annual
86
Score
86
86
(Thompson, 2014)
Financial Performance Outcome - End of Simulation
BeeRok came out in second place relative to the other teams in the simulation. Buying
back stock in Years 16 and 17 helped to raise EPS. Selling shoes at higher prices without
overpricing relative to the competition allowed BeeRok to increase gross revenues. From the
income statement below, the profitability and payout for Years 16 and 17 can be seen. In Year
16, no dividends were paid. This is the same for all previous years as well. However, in Year
17, $2.30 in dividends per share was paid out. This decision was made to appropriate adjust
owner’s equity. The owner's equity is the bottom line of a business because the figure is used to
assess whether investors will choose to buy into the company and is an indicator of the overall
health of a business (Lovering, 2014).
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(Thompson, 2014)
The following chart shows the revenue-cost-profit performance in the wholesale and
internet segments for BeeRok in Year 16 and 17, the last two years. The internet market
operated at an operating profit margin of 28.6% in Year 16 and 30.1% in Year 17 for North
America. The internet market operated at an operating profit margin of 21.0% in Year 16 and
29.3% in Year 17 for Europe-Africa. The internet market operated at an operating profit margin
of 37.2% in Year 16 and 40.3% in Year 17 for Asia-Pacific. The internet market operated at an
operating profit margin of 30.6% in Year 16 and 29.2% in Year 17 for Latin America. Overall,
BeeRok ended with an operating profit margin of 32.0% in Year 17 among all regions in the
internet market. This was a significant milestone in the company strategic plan and one of the
main reasons behind the success of the company. Similar results can be found in the wholesale
segment as indicated in the chart below.
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(Thompson, 2014)
Future Performance Expectations – Post Simulation
Performance targets for Year 18 and 19 are listed below in the chart. Values were
established for EPS, ROE, credit rating, image rating,global market share, stock price targets,
and dividend increase due to EPS targets. Specifically, targets were created to ensure successful
execution of corporate strategy and to gain market share in the athletic shoe industry. Increasing
market share has several advantages for BeeRok’s situation. First of all, higher volume can be
instrumental in developing a cost advantage, and secondly, when the industry is not growing, the
firm can still grow its sales by increasing its market share (Market share (2010).
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BeeRok
Performance
Measures
Year 16
Year 17
Year 18 / 19 / 20
(completed)
(completed)
(forecast)
Target Actual Target Actual Target Target Target
$5.10
$6.92
$5.20
$9.58
$9.75
$10.00
$10.25
16%
17%
16%
22%
23%
25%
26%
A+
A+
A+
A+
A+
A+
A+
80
83
81
80
80
79
79
$200.
$225.
$250.
EPS
ROE
Credit
Rating
Image Rating
$72.00 $97.16
Stock Price
Global
Market
Share
(Internet)
Global
Market
Share
(Wholesale)
$73.00 $192.31
N/A
22.6%
N/A
24.2%
24.6%
25%
25.5%
N/A
23.3%
N/A
24.5%
25%
25.5%
26%
N/A
0
N/A
$2.30
$2.25
$2.25
$2.25
Dividend
Competition Analysis
BeeRok had two main competitors in the branded footwear market. The first and largest
of the two competitors was Company D. Their late surge in years 16 and 17 provided them with
enough momentum to be considered the best in industry and garner the highest score. Their
overall strategy was a best-cost provider strategy. According to our textbook, the five basic
competitive strategies are: a low-cost provider strategy, a broad differentiation strategy, a
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focused low-cost strategy, a focused differentiation strategy, and a best-cost provider strategy.
These strategies help a company determine if their market target is too broad or too narrow and
whether the company is pursuing a competitive advantage linked to lower costs or
differentiation. This is especially important in order to ensure higher profits (Thompson, 2014).
In contrast, Company A was the low cost provider that BeeRok had to compete with during the
simulation’s latter years. A low-cost provider strategy is a strategy in which companies focus to
provide a product or service at lower overall costs than rivals and then using the low-cost
advantage to attract a broad spectrum of buyers with a lower-priced product offering (Thompson,
2014). BeeRok had established themselves as best-cost providers from the outset of the
competition and its success was evident through the first part of the simulation. One of the
primary downfalls of BeeRok versus Company D, was the amount of shoes available for
production. In order to compete in years 18 and 19, BeeRok would have needed to address this
long-term growth structure.
For the majority of the simulation, Company C was BeeRok’s only competitor in the race
for the private label segment. BeeRok’s initial strategy was to be a low cost provider and operate
at low margins in order to drive others out of the private label segment. After doing this,
Company C was the only rival left until the final years. Company C’s competitive strategy was a
best-cost provider in the private label segment. During the final years of the simulation,
Company D reasserted itself into the conversation as a best-cost provider. In order to adapt and
continue to compete with Company D, BeeRok would have needed to change from a low-cost
strategy to a best-cost strategy and use its strong market share to beat rival competitors.
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The strongest of the five competitive forces for BeeRok is the market maneuvering for
buyer patronage that goes on among rival sellers in the athletic footwear industry. BeeRok is
constantly competing for market share in the four geographic regions against similar athletic
footwear companies.The “weapon of competition” that BeeRok’s footwear rivals can use to gain
sales and market share is innovating to improve product performance and quality, using
advertising to enhance a company’s brand name and image, delivering better customer-service,
and providing quicker or cheaper delivery (Thompson, A. A., 2014).
Supplemental Strategies
BeeRok utilizes the “think global, act local” strategic approach to compete successfully
in the four geographic regions comprising the global athletic footwear market. Using this
approach, BeeRok can tailor the company’s product offering in each country based on buyer
expectations while employing the same basic competitive strategy in all country markets, bestcost. BeeRok was able to differentiate their products based on region. The elements that
characterize BeeRok’s strategic approach to competing in North America are:

Utilize a best-cost competitive approach

Build a global brand name; focusing on global brand image and reputation

Focus on high quality products utilizing energy efficient production methods a

Focus on high quality products utilizing six sigma training
The elements that characterize BeeRok’s strategic approach to competing in Latin America are:

Make adjustments in production, distribution, and marketing strategies to be
responsive to local market conditions (specifically related to export fees)

Incorporate variations in product attributes to address buyer’s expectations
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Utilize a best-cost competitive approach
Elements that characterize BeeRok’s strategic approach to competing in the Asia-Pacific region:

Utilize a best-cost competitive approach (high quality)

Make adjustments in production, distribution, and marketing strategies to be
responsive to local market conditions

Focus on high quality products utilizing energy efficient production methods

Focus on high quality products utilizing six sigma training
Elements that characterize BeeRok’s strategic approach to competing in Europe-Africa:

Utilize a best-cost competitive approach (high quality)

Make adjustments in production, distribution, and marketing strategies to be
responsive to local market conditions
Lessons Learned
The old adage that hindsight sees 20/20 always comes into play when discussing
strategies in business. While BeeRok enjoyed sustained growth and financial success throughout
the competition, they ultimately took second place versus rival company D. There were two
crucial lessons learned during the simulation that BeeRok executives can take away for future
endeavors.
The first of these lessons was the importance of using debt to leverage to build capacity
and fund capital improvements instead of solely relying on cash. Once BeeRok executives
realized that they were not producing enough product to meet demand, they were using cash to
fund and purchase additional capacity. The company enjoyed a sustained A+ credit rating for
most of the simulation, but this positive company attribute was not used efficiently. BeeRok also
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used cash instead of leveraging debt to fund the plant upgrades in Asia Pacific and North
American plants. Had they used the cash instead to decrease owner’s equity earlier in the
simulation, they would have not been playing catch-up at the end to improve the return on equity
for the company.
The second lesson learned during the simulation was the importance of corporate social
responsibility to building a strong brand image for the company. While other groups felt that the
CSR aspect did not carry a strong business case during the simulation, BeeRok executives feel
that it directly added to the bottom line of the company. Business leaders must demonstrate an
ethical approach by example as this will show that middle and junior managers will be rewarded
for taking an ethical stance and create the appropriate organizational culture (Incorporating ethics
into strategy, 2010). Taking an ethical stance in business is more than just watching the bottom
line. Customers and people in the surrounding community take notice when a company becomes
socially responsible. For example, if a company takes a stance on becoming more green and
energy efficient, people may react more fondly of the products that that company offers.
Ultimately, this can increase company image and as a follow-on effect, profits.
Corporate social responsibility (CSR) strengths are perceived as value-creating by
analysts, and as such, they are rewarded with more favorable recommendations which means that
analysts are more likely to recommend a stock “buy” for CSR-strong firms (Ioannou & Serafeim,
2011). This realization would indicate that companies should take interest in increasing their
corporate social responsibility focus. I agree with you that companies can do this by modifying
their product line to be increasingly more favorable with customers and also by leaning
production and operations by incorporating efforts that are pleasing to the social norms (i.e.
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greener material). This is especially true for firms that are consistently in the public eye.
According to Ioannou and Serafeim, higher visibility firms are more likely to receive favorable
recommendations when implementing CSR strategies, suggesting that positive CSR strategies
are more likely to be perceived as value-creating for higher visibility firms.
BeeRok exercised social corporate responsibility and good corporate citizenship in
multiple ways. First, BeeRokused recycled boxing and packaging. This involved the use of
recycled packaging materials to box each pair of athletic footwear at company distribution
centers. Although this action increased shoe packaging costs by $0.02 per pair, it increased
BeeRok’s investment in corporate responsibility to protect the environment.
Second, BeeRokinvested in energy efficiency initiatives. BeeRok contributed $500k per
distribution center and million pairs of plant capacity. This action invested money to improve
energy efficiency and the use of renewable energy sources. Third, BeeRok invested 5% of
operating profit to charities. This action allowed BeeRok to invest in charitable causes in the
community, thereby increasing BeeRok’s social responsibility. Fourth, BeeRok invested in
ethics training and enforcement for all employees to provide training and development, including
enforcement of, a code of ethics. The importance of these actions proved critical in allowing
BeeRok to maintain a strong position in every industry standard throughout the simulation.
Summary
BeeRok has executed several actions to develop core competencies and competitive
capabilities. These actions contribute to good strategy execution and competitive advantage.
Throughout the simulation, BeeRok used it strategic execution to stay ahead of the competition.
Many of these strategies have been copied by rival companies due to their success. However, by
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staying ahead of the competition, BeeRok has enjoyed the successes of the strategies for a longer
period of time. One prime example is that many of the rival companies cut prices quickly to try
to gain market share from other companies. However, BeeRok was able to maintain a high
margin, high demand execution strategy through its efficient value chain activities.
BeeRok employed a variety of value chain activities in an attempt to better execution of
the company strategy. The most crucial activities are effective marketing through strong brand
recognition and controlling market share in the Private-Label operations. By using high quality,
superior materials BeeRok was able to develop a shoe that was highly regarded for its quality.
Then, BeeRok used a marketing campaign that included celebrity endorsements that spread the
brand name throughout the geographic regions. By investing capital expenditures on this value
chain, BeeRok was able to demand a higher price in the competitive market, which led to higher
profit margins.
The Business Strategy Game involved a battle of strategies in a competitive marketplace,
where the keyto success is watching rivals' actions closely, anticipating their next moves, and
then making competitivemoves and decisions that hold good prospects for delivering good
results (Thompson, Stappenbeck, &Reidenbach, 2014).
BeeRok earned world-wide ranking in three of the six weeks:
1.
Congratulations for achieving Global Top 100 performance on the following performance
criteria during the week of 3-Feb-14 through 9-Feb-14.
o
Earnings Per Share - Your EPS of $9.58 was the 56th best EPS performance of
the week, worldwide!
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o
Stock Price - Your Stock Price of $192.31 was the 38th best Stock Price
performance of the week, worldwide!
2.
Congratulations for achieving a Global Top 100 performance on Overall Game-To-Date
Score during the week of 27-Jan-14 through 2-Feb-14.
o
Your Overall Score of 107.5 tied for the 37th best Overall Score performance of
the week, worldwide! Your instructor has also been sent an e-mail message
acknowledging your Top 100 Overall Game-To-Date Score performance.
3.
Congratulations for achieving a Global Top 50 performance on Overall Game-To-Date
Score during the week of 20-Jan-14 through 26-Jan-14.
o
Your Overall Score of 106.5 tied for the 50th best Overall Score performance of
the week, worldwide! Your instructor has also been sent an e-mail message
acknowledging your Top 50 Overall Game-To-Date Score performance.
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References
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Ioannou, I &Serafeim, G. (2011).Harvard Business School. Retrieved from: http://www.
hbs.edu/faculty/Publication%20Files/11-017.pdf.
Lovering, C. (2014). Houston Chronicle. Retrieved from: http://smallbusiness.chron.com/calculateowners-equity-business-22374.html.
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Shankar, V. (2006).Proactive and Reactive Product Line Strategies: Asymmetries Between Market
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sckans.edu/docview/213261940/fulltextPDF?source=fedsrch&accountid=13979.
Thompson, A. A. (2014). Strategy: Core concepts and analytical approaches. Retrieved from:
http://www.bsg-online.com.
Thompson, A., Stappenbeck, G., Reidenbach, M. (2014). Player’s guide. Retrieved from:
https://www.bsg-online.com/users/PlayersGuide.pdf.