At the beginning of Year 11, the company has production facilities to make athletic footwear in
All four geographic regions where the company markets its footwear (North America, Europe-Africa, the Asia-Pacific, and Latin America)
Latin America (Merico) and the Asia Pacific
Latin America (Brazil) and the Asia-Pacific (India).
Latin America (Brazil) and the Asia-Pacific (India).
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the Asia-Pacific region and North America.
The Correct Answer and Explanation is:
The correct answer is:
Latin America (Brazil) and the Asia-Pacific (India).
Explanation:
At the beginning of Year 11 in the Business Strategy Game (BSG), each team-managed company starts with two production facilities:
- One in Latin America (specifically, Brazil)
- One in the Asia-Pacific region (specifically, India)
These production centers serve as the initial manufacturing base for athletic footwear and are used to produce both branded and private-label shoes. The initial facility locations are strategically chosen to help the company distribute shoes to all four geographic markets efficiently: North America, Europe-Africa, Asia-Pacific, and Latin America.
Why this matters:
Understanding the initial locations of production facilities is crucial because it affects several aspects of your company’s operations in the simulation:
- Shipping Costs: Shipping shoes to markets far from the production centers (e.g., from India to North America or from Brazil to Europe) incurs higher distribution costs. These costs impact your profitability and competitiveness.
- Capacity Planning: Initially, your company must use the existing capacity in India and Brazil. As demand grows or shifts geographically, you may need to invest in building new facilities in other regions (such as North America or Europe-Africa) or expand your current facilities.
- Competitive Strategy: Understanding where production begins allows you to make informed decisions about pricing, marketing, and inventory in each market, balancing cost and responsiveness to consumer demand.
- Game Progression: As the game moves beyond Year 11, companies can choose to expand production capacity, close unproductive plants, or enter new markets more aggressively. The location of production facilities forms the foundation for these strategic decisions.
In summary, your company starts Year 11 with production facilities in Brazil (Latin America) and India (Asia-Pacific), not in all four regions or elsewhere. Knowing this helps you plan operations, manage costs, and gain competitive advantages in the Business Strategy Game.