External and Internal Analysis, Strategic Direction, Key Learning Outcomes - Example

RЕРОRT FОR СОMРАNY B Name of student Institutional Affiliation Date Contents Introduction…………………………………………………………………………………3 Competitive Strategy……………………………………………………………………… 3 External analysis……………………………………………………………………………4 Internal analysis………………………………………………………………………… 5 Decision took…………………………………………………………………………… 7 Final Results……………………………………………………………………………… 9 Starategic direction…………………………………………………………………………10 Underlying strategic principles…………………………………………………………… 11 Key Learning Outcomes ………………………………………………………………… 11 Reflections ………………………………………………………………………………12 Conclusions ………………………………………………………………………………… 12 Introduction The accompanying report delineates an investigation for a long time in B Company. The report is demonstrating the competitive techniques, external analysis, internal investigation, and the choices that are taken to guarantee the competitiveness of this organization. Moreover, the report incorporates the outcomes of the running of the organization, key directions, hidden strategic standards, key learning results, and reflections and conclusions. Note that Business recreation diversions, called economic simulations games or tycoon games, and are games that emphasize on the organization of economic techniques, normally as a business. Pure business simulations have been named as improvement and administration simulations without a development section, and can consequently be called management simulations. Competitive Strategy In North America, at year 11, B Company created evaluating techniques procedures in worth method to keep up a competitive system. This incorporated entry, economy, skimming, pack and restricted time approaches. Entrance valuing uses low initial expenses to get the business and progressively creates the expense to its commonplace level. Economy pricing offers crucial items that have the most bring down customer value possible. Skimming is a quality technique in which associations set high starting item costs that decrease to match lower costs from new contenders. Pack assessing is a framework where associations join a couple of discrete items under one cost. This allows a business to give more products to purchasers at a possibly lower cost. Restricted time evaluation methods allowed B Company to offer additional points of interest to purchasers, for instance, a buy one get without one business framework (Baldissin 2013). In Europe- Africa, after year 12, B Company utilized focused business systems to differentiate the Company items from others in the business. Differentiation was actual. Actual differentiation included making things that are not in the open in the economic, business sector. B Company commonly uses publicizing messages that depict an item like those in the business with several actual differentiations. This strategy urges customers to separate products as a part of their identities. In Asia – Pacific and Latin America, at year 13, B Company used Cost initiative system. This is a business technique that allows B Company to transform into the most bring down cost production organization in an industry. B Company has two choices for improving advantages: extending benefits or reducing costs. Cost leadership frameworks focus on securing unrefined materials that are the high quality at any rate cost. B Company ought to use the best work to change rough materials into imperative customer stock. Insignificant exertion activity interprets into astounding items at low shopper costs. The ability to undercut a competitor cost as often as possible prompts augments in piece of the pie (Chaffey 2011) External Analysis Political Economic Opportunities Threats - Foreign Investment Rules - Crack of currency exposure - Competitive tax system that is international Opportunities   - expansion of the shoe industry performance - Economic recovery in the country - Strong product equity in the country Threats - Raise in interest rates in the nation - Raise in cost of labor and inflation in Asia Socio-Cultural Technological Opportunities - Quality over price is valued in this industry - Average lifespan in the North America is 78 and due to the economic fall, people over 68, are worth 47 times greater than people who are below the age of 35. Threats - Obesity rates in the North America. Have risen indicating that some people are not interested in activities that bring down the weight like running. Opportunities - Raise in the application of trade performed electronically - Raise in the application of mobile trade - New technologies up-and-coming that let corporations turn into more energy efficient as well as lessen manufacturing costs Threats Internal Analysis Strengths The firm can forecast the shoe trade and come up with shoes that will fit the markets. Variety its shoes into the cutthroat market Strong, encouraging results from its high-quality operation presentation New skills make the company be able to create better shoes. The top company in the shoe production Weaknesses Some shoes current place in the apparel business is not strong Going to many sections, so corporation cannot grip all of them well, and it may cause the corporation to lose its marketplace in the end. Position on the product on high end may lead to loss market share in the long-run Putting the business operation overseas may get business possible risks. Opportunities The marketplace is big, and the increasing demand is predictable. Producing overseas will help business to cut down its cost on work, and make more margins on its items. Newer equipment development or innovations can assist business to get more income and market share on its upcoming products. Threats The business is controlled by fads as well as they fads are almost not predictable. Product must be exclusive and have aggressive distinction. B company facing strong competitors in the casual marketplace and competitor's products are fashionable, stylish, and fleshy. Decisions Taken 2011 Objectives Strategic Action Outcome To raise Stock price We raised the prices in all of the marketplaces by 20% and raised the model availability of the manufactured shoes -Raise the stock price to 76.55 To raise earnings per share Raised the prices from $75 to $90 at the internet section and the wholesale section from $41 to $58 by keeping the same SQ 5 Yr11 the EPS was4.21 in the Yr12 we raised the EPS to 4.66. 2012 Objective Strategic Action Outcome Improve Image Rating to meet the stockholder expatiations of 70 Raise the quality of the product. Raise the cost of the superior materials by 1$ per trainer Image Rating rose to 62 from, 53. The raise made our image rating the expected amount for the stockholders. Raise market share in all operating industry Bring down the price from $90 to $74 on the internet section for all operating market. Bring down the price from $58 to $52 at the wholesale section in all working market -from all operating market the average marketplace share raised from 3.5% to 13.7% - raise the pairs sold on internet and the whole section 2013 Objective Strategic Action Outcome Raise the cost of goods by %43 (153,572 -218,890) to differentiate with the SQ rating Raise better-quality materials to 100% Raise annual base wages by 4% -Our net profit reduce from $54,982 to $41,677 - To raise the productivity of the plan operation to convene its full capacity utilization rate Best practice preparation for each employer in N. America $400 and Asia $300 The plant utilization was up by 5.8 point from yr12. Overall standard reject was 5.3% compared to 8.5% from yr12 2014 Objective Strategic Action Outcome Enter Out Asia Pacific Market We closed all operations in Asia Pacific, internet section, and wholesale segment. Our market share was decreasing due the price instability from Asia Pacific Raise market share in N. America and Europe-Africa Raise price by $0.66 Decreased the replica of offering to 175 Raise marketing budget by 3,500 Our market share rise to 16.5% in the Internet section 2015 Objective Strategic Action Outcome To improve profitability by moving out of Latin America We stopped all operations in Latin America, internet section, and wholesale section. Our market share was decreasing due the price fluctuation from Latin America Bring down debt We have brought down the debt by $52,000 We used the debt equity ratio to analyze the debt In yr15, our debt ratio has on down from 0.38 to 0.0275 Final Results B company had a 17.3% ROE in Year 15; this is great so far contrasted with alternate years. Return on investment is described as net income divided by the aggregate total shareholders' value theory toward the beginning of the year and the end of the year. As expounded on the association's fiscal record. Keep up a B+ or higher FICO score. The association's FICO rating was B+ toward the end of Year 11. The image rating is considering the association's checked S/Q evaluations in every geographic area. The association's bits of the general business for both stamped as private-imprint footwear in each of the four geographic areas. Moreover, B Company exercises show corporate citizenship and conduct operations, in a socially dependable way in the course of the process of the keep going 4- 5 years. B Company had an image rating of 70 toward the end of Year 10. 5. Stock raises averaging around 7% consistently through Year 15 and around 5% yearly from that point on. B company ensure that such stock worth increments are certainly inside the extent if the association meets or covers the yearly EPS targets and pays arising benefit to shareholders. The association's stock cost was $30 each offer toward the end of Year 10. BB Company stock expense is a capacity of benefit each offer improvement, ROE, FICO assessment, benefits advancement. And organization's ability to pass on extraordinary results dependably.-mention when we raised the price to $90 we have lost a large market share, and that was one of the worst decisions we have taken. Say the decisions we have taken are not good then compare them with the summary of the results. Strategic Direction B organization uses the complete organized way to choose a method of completing its corporate targets. B organization infers that concentrating on item improvement will permit it to keep on expanding upon the establishing inhabitant that has secured a position that verge on influence and upkeep inside the footwear business. Since B organization has such a great history of viable advertising in key worldwide locales, concentration is a substitute method. Market advancement is a third technique for thought because of B Company’s capacity to geologically grow the product offerings. The three methods are nearly connected. To figure out which would win as the overriding vital position, four assessment criteria were weighed by system: particular competency, culture, timing, and demographics. With an aggregate weighted score of 4.40-item improvement surpasses second place, fixation, and third place, market advancement (Meijer 2014) Underlying Strategic Principles The Business Strategy Game includes a clash of methods in a competitive commercial center, where the key to achievement is viewing rivals' activities nearly. Foreseeing their next moves, and after that making aggressive moves and choices that hold great prospects for conveying great results. Taking after each year's choices, taking after procurement of Competitive Intelligence Reports containing former period costs. Also S/Q evaluations, promoting, et cetera on every organization in the business B organization have the capacity to see precisely what competitors are dependent upon. And what they did to catch the business and pieces of the overall industry they got. Outfitted with this data, B organization will be in a great position to make sense of a portion of the things they are liable to do in the anticipated choice period (Cruz-Cunha 2012) As in games where it is standard for each group to scout its next rival completely and add to a course of action to thrashing them. So additionally in the Business Strategy Game we are called upon to scout the systems of opponents, attempt to judge what new vital activities and choices they will make next. Moreover, after that art a focused technique you could call you're own is for "overcoming" their techniques Furthermore, boosting your organization's footwear deals and market share. B Company needs to stay on top of evolving business sector and focused conditions, attempt to abstain from being defeated and put into a competitive tie. This is by the activities of opponents and verify that the footwear is alluringly estimated and competitively promoted (Sekhar 2010) Key learning outcomes Each new movement, each new item, every new extend in the work environment is made in light of a business need. We regularly end up in circumstances where, regardless of investing enormous time and assets, there is a crisscross between what has been outlined and what is required. Despite whether the key arrangement destinations are inside or remotely centered, utilizing both inward and outer activities to attain to the company objectives, can expand that shot of success.Consider an outside objective, for example, picking up a piece of the overall industry, for instance. This external objective can influence opportunities in the business utilizing promoting strategies to reach new clients. Blending these strategies with internal centered quality change activities can support the adequacy of the promoting campaigns, pushing a piece of the overall industry significantly higher (Dimaria 2012). Adapting to the unpredictability of today's business surroundings is not about foreseeing the future or decreasing the risks. It is about building the limit, in yourself, your kin, and the association to adjust persistently and learn rapidly, with a specific end goal to augment the possibilities of seizing transitory open doors. Since the desires of stakeholders will contrast, it is very typical for clash to exist in regards to the significance or attractive quality of numerous parts of the procedure. Much of the time, a bargain will need to come with desires that cannot all be attained to all the while. Reflections and Conclusions Business simulations investigate market information, structure a general business technique, and afterward make an arrangement of vital and strategic choices with the objective to end up beneficial and to be the best rival in the business. The business sector they serve aggressive and quick paced, the clients are demanding, and the opposition is striving to build their business sector share.What contrasts in every business reproduction is the level of point of interest and choice many-sided quality in the different useful ranges of business. Interdependent decision-making; experiential learning of running a business; and independent reflections and thinking are all components of business simulation techniques. Appendix Author’s name Instructors’ name Course Date Table of Contents Table of Contents 14 Competitive Strategy of company B 15 External Overview of Company B 16 PESTLE Analysis for Company B 16 Internal Overview 19 Decisions Taken for five years 19 Final Results 20 Strategic Direction 21 Underlying Strategic Principles 21 Strategic Learning 21 Conclusions 22 PART B Report for Company B The following paper intends to analyze the business performance of company B for the last five year. Company B is a business firm that was started in 2011. It deals in wholesale and retail supplier of footwear for all ages. Since the last five years, the company has been able to venture into the four markets namely: North America, Europe-Africa, Asia Pacific, and Latin America.. For this reason, this paper intends to critically analyze the path the company has taken for those five years. Much emphasis has been put on the strategy used by the management and the impact this has had in the performance of the company. In addition, PESTLE analysis has been used extensively to help understand the environment surrounding the performance of the company. The paper starts with assessment of the competitive strategy followed by external and internal overview. Decisions made and their impacts have been provided. This is followed by strategic direction and underlying strategic principle of the company. Finally, the lessons learned are outlined before a conclusive summary. Competitive Strategy of company B The strategy used by the company in entering all the four markets (North America, Europe-Africa, Asia Pacific, and Latin America), is cost leadership. In the second year (2012), the company’s management started concentrating on the SQ and incremental changes were done every year, up to the rating of eight by year 15. The strategic mission of the company is to provide high quality footwear and assert its competitive advantage. External Overview of Company B As has already been indicated, Company B is a business venture that specializes in both retail and wholesale distribution of footwear for all ages. For the last five years, the company has been able to venture and establish itself in major markets of the world. These include North America, Europe-Africa, Asia Pacific, and Latin America. In all these main market entries, there has been competition, as it is well known that footwear business has been well exploited in almost every part of the world. This means that a company must have a strong business strategy in order to competitively be in the market. In order to get help in the analysis of the environment under which company B has been performing, PESTLE theory of business analysis will be used. PESTLE Analysis for Company B PESTLE is a business analysis technique that helps in assessing the Political, Economic, and Social, Technological, Legal and Technological aspects of a business (Rao et al 2008). Political Political situation of wherever any business is located is very critical in determining the success of such a business. It is important to analyze the political situation and the projections of the same, based on the business plans and the time (Henry 2008). It is agreeable that the market entry in North America had no any political problems since the governments in these regions are stable and much more democratic compared to other parts of the world. This has provided the company conducive environment for which to operate on for the last five years. However, much of politically related problems were witnessed in West Africa where distribution and operation of the business could but stopped or interfered for a while, due to the political instability in some of the western African states. Despite the normal political disagreements, the business performed relatively well in Asia Pacific and Latin America. The tax structures were however deterrent in good performance of the business. A good example is where at some point the Indonesian government introduced trade tariffs that required business investors to follow long bureaucratic procedures. At the same time, this was the case in Africa, where services offered by the government could take long before being executed due to long procedures. In addition, the fiscal policies were not business friendly in some nations. These aspects affected the good performance of the company. Economic It must be admitted that there were several economic issues affected the performance of the business. One of these is the adjustment and unpredictable nature of global oil prices. The transportation of footwear especially from one market of the other has not been such easy due to increase in the price of oil. This has resulted into increase of transportation costs and thus increasing the cost of footwear to our customers. Further, foreign exchange rates have as well affected our business. A good example is the Western African and some Asian countries where their currencies have not been strong compared to the US dollar. This made the business to adjust its operations or delay some services to assess the currencies’ performance. Social The demand and supply of footwear has been affected in all markets. The buying trend and behavior of customers has not been the same in all markets. In America, for instance, the demand has been high but this is more the case during some seasons such as when schools and colleges are being opened, holidays, or for sports. Although this is almost the case in all regions, but the rate of demand has not been such high in Africa and Asia in the last five years. Technological Technological advances, which have been taken by the company, has assisted it in ensuring that customers get to know the kind of design and products we are having at a given particular time. This has mainly been through online platforms where customers can order products and be delivered. This has helped to increase the profits for the company. Legal Legal issues have as well been different in almost all these markets. Some of the laws that have affected the business performance include labor, safety and consumer laws. This has been mostly the case in Asia Pacific where labor laws are strict and an investor is needed to follow and abide by. The process of following these procedures has taken much of company’s time. Environmental There are several environmental factors, which have affected the performance of Company B. A good example is the weather conditions. In some instances, the distribution of footwear is done to some outlets only for these products to stay in the stock for months. The best reason has been as a result of change of weather, where it may be expected to rain but it takes longer than expected to fall or vice versa . This has been witnessed in Africa and Asia, because of poor weather projections, or which we rely on. Internal Overview Company B has an internal system of managements that has been well integrated with its operations. This has been duplicated in all its outlets and employees are supposed to comply through introduction of policies and procedures. The management culture has been participatory style of leadership where employees are involved in decision-making processes. The strength of this system is because innovation has been the driving force of performance and creation of competitive advantage. As a result, the company has come up with various new designs of footwear, which have been appealing to new and existing customers. The company has however had its share of weaknesses including failure to extensively invest in research and development. This has made some of the new products disappear after a short period. Decisions Taken for five years 2011 The main action taken in 2011 was the increase of prices of various services or products for instance the wholesale prices. This was intended to increase the profit and competitiveness. Although the market share increased tremendously, the company was able to increase its profit by 98.58% (24,644). 2012 The main objective in this year was to improve the company’s image in order to have a bigger market share. As a result, prices were reduced and the level of quality was increased including increase in labor pay. The mage rating increased from 53 to 62 as well as market share from 3.5% to 13.7%. 2013 In order to differentiate from the SQ, the management intended to increase cost of goods by 43%. The superior materials would then be increased by 100%. This resulted into reduction of net profit $54,982 to $41,677. 2014 The objective in this year was to enter out the Asia Pacific market, as well as increasing the market share of N. America and Europe-Africa. All operations in this region were stopped, which led to market share reduction. The main action to increase market share in N. America and Europe-Africa was the increase of this regions’ budget by $3,000. As a result, both internet and wholesale segments recorded an increase in market shear of over 16% and 19% respectively. 2015 The objective is to increase profitability by entering out of Latin America, as well as reducing the company’s debt. The market share reduced in Latin America and the debit ratio went down from 0.38 to 0.0275. Final Results Based on some of the decisions made, it is clear that they were not well informed . Compared to the competitors’ performances, the company has been performing dismally. One of the bad decisions made is where the management decided to increase the price from $75 to $90 . This decision was taken without doing proper market research especially about the prices that was being offered by competitors. As a result, the market share is reduced in that year. Another example is where the wholesale prices were increased by $ 17. However, the profit margin increased, but this was not sustainable. At the same time, it affected the net revenue by more than 9%. Other bad decisions include increasing the cost of good in 2013 by 43%, which led to decrease in net profit. Therefore, the decisions made in this period could have been different to improve the performance of the business. Strategic Direction The initial strategy of the business was to expand its presence in all the four market entries and have a competitive advantage. However, it must be agreed that the decision made could have been separately applied, such that in some markets other forms of strategies could have been used instead of cost leadership. However, changing the SQ was not effective and thus led to reduction of market share in some regions. Further, much effort was not applied to increase the quality of footwear. Underlying Strategic Principles As mentioned above, the main principle applied in the company is that of Management By Objective. This is where representatives from all areas of management are consulted in decision-making. However, the implementation of strategic plans is interfered with. This has been because of failure to put in place monitoring and evaluation measures in order to amend the mistakes made in the process, leading to drastic actions being taken (Miller 2011). Strategic Learning Some of the lessons learned include: It is critical to adhere to planed strategies There is need to carry out market research before applying a given strategy Changing prices without investing in the quality of products or services is not advisable Different strategies need to be considered when entering new markets Conclusions Based on the above analysis, it is evident that there is need to ensure that a company should apply various strategies depending on the objectives and prevailing circumstances. In most cases, markets are different and thus application of same strategies may not be work. Further, the company should have invested in research and development (R&D) of the market, in order to understand its dynamism. This would have helped to assert its competitive advantage. References BALDISSIN, N., AINSAR, H., & NONINO, F. (2013). Business game-based learning in management education: [theory, design and successful implementation of the MEET project]. 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(2014). Frontiers in Gaming Simulation 44th International Simulation and Gaming Association Conference, ISAGA 2013 and 17th IFIP WG 5.7 Workshop on Experimental Interactive Learning in Industrial Management, Stockholm, Sweden, June 24-28, 2013. Revised SEKHAR, (2010) G. V. S. (n.d.). Business policy and strategic management. [S.l.], I K International Publishing. Read More