Evaluation of the Business Simulation Game - Example

Table of Contents Introduction 2 Competitive Strategy 2 Industry Overview 3 Company Overview 5 Decisions Made 6 Final Results 9 Reflection 9 Underlying Strategic Principles 10 Key Learning’s 11 Conclusion 12 Reference 14 Introduction This report looks to analyze the different strategies which different players adopt by creating a hypothetical situation which is similar to real life situation. The paper will look to present the overall strategy which was adopted by B Streemline Co in comparison to other player working in the market. Overall there were 7 players working in the market where they were provided similar market situation and opportunities. Based on the different model which the different players look to use changes were made based on real life situations and the impact it has on business was identified. The paper thereby looks to presents a complete description of the competitive strategy, the industry overview, company overview, the different decisions which were made, the final result and the overall implications it has. This will thereby help to understand the manner in which different factors have an influence on decision making and will help to understand the manner in which performance of one player gets shaped by others. It will also help to understand and analyze the manner in which one player has influence on other and will thereby help to present the different dimensions through which overall working dimensions will be understood and analyzed. Competitive Strategy The strategy which B Streemline Co. looked to pursue was one where they were looking to consolidate their market share and at the same time ensure high returns for the shareholders. The business concentrated and looked towards maximizing the returns for the shareholders and by ensuring continuous growth in the earnings. This was matched by continuous growth in revenues, better capacity utilization and reducing cost. The overall phenomenon was further matched by ensuring that the cost were clearly identified and the different areas where expenditure has to be made is correctly identified. The competitive strategy also highlighted that B Streemline Co. concentrated on providing quality products and didn’t look to compromise on quality as it could have a bearing on the growth and could impact their long term potential. B Streemline Co. competitive strategy also highlights that the business looked to spend heavily on marketing so that more and more people could be attracted and while doing so the business looked towards identifying the different areas through which more awareness can be created. The overall framework was thereby developed towards managing the different resources in a manner through which overall long term performance could be shaped and the investors were provided adequate returns on the investment that they made. Industry Overview The industry overview highlights that there were different players working in the same field and were looking to follow more or less similar strategies. The industry overview has been further analyzed through Porter Five Force Model which is as Degree of Competition: The degree of competition which the footwear industry is facing is high. Considering the situation there were 7 players who were working on the same business model and working in the same business arena. This has thereby increased the degree of competition as each player looks to control the market and looks towards determining the strategies that they will use (Frambach, Prabhu and Verhallen, 2003). Since, the degree of competition is high it has resulted in hardly any new player entering the market and thereby makes it imperative that the different players look to consolidate their position by better performance and functioning so that better results are achieved. Threat of Substitute: The threat from substitute products is high as different type of footwear is available as organization based on the different market conditions can develop and design the product which they think would be the most beneficial. While considering the fact it has to be further seen that footwear as a product cannot be replaced by anything else as people would require footwear irrespective of their position, type of job and other aspect. This thereby limits the number of opportunities that consumers have but increases the opportunities with regard to design and style which increases the number of options presents before the consumer. Thus the availability of substitute is high as people have an opportunity to choose from different options which are available in the market. Threat of New Entrant: The threat of new entrant is low as the initial cost of investment is high. The wide opportunities which the sector provides and growing awareness has increased people entering the field thereby increasing the risk of new players but since the industry is heavily competitive and requires huge investment it has thereby reduced the risk of new entrant (Robin & Susan, 2003). Considering the hypothetical situation of the game the chances of entry on new player is not available as the game has been designed in such a manner that it limits the entry of players and thereby reduces the threat from new players whereas in reality players do enter and leave the market. Bargaining power of suppliers: The bargaining power of suppliers is low due to the availability of many suppliers and lower switching cost from one supplier to another. Since, there are many players looking to supply similar products it has increased the overall opportunities and reduced the bargaining power of suppliers. The suppliers tend to me more rigid and look to carry out their business with similar or same business partners. This has thereby reduced the overall bargaining power of suppliers. Bargaining Power of Customers: The bargaining power for customers is high due to wide options available before them but in case the customer looks for superior quality. Since, the degree of competition is high it has provided customers with a lot of option as they can look to purchase footwear from different players in the market. Customers as a result are better placed as they can look towards ensuring that they purchase the products from different players working in the same field. This has thereby looked towards providing different options and opportunities which business needs to use. The business has opportunity of expanding their business by increasing their market size, having more and more products and providing customers with different options to choose from. Since, the market is huge so the opportunities present before the different players is also huge. While looking to use the different opportunities the business has to ensure that the different threats arising from changes in environmental factors, degree of competition and other areas which will impact the business performance has to be looked at. This will thereby require managing the threats and opportunities in a manner through which the overall performance will be shaped and the business would be able to identify the different dimensions through which growth can be ensured in the future. Company Overview B Streemline Co. is an organization performing in the footwear industry where it faces competition from 6 other players making the total number of players to be 7. All the organizations performing in the industry were provided with similar market information and knowledge and based on the organization vision and mission adopted strategies which would help them to achieve their goals. The vision which B Streemline Co. has is to look towards maximizing the returns for the shareholders and ensuring that the business grows tear after year by providing quality product to its customers so that a base of loyal customers can be created. To achieve the vision B Streemline Co. has identified its mission which is to look towards providing customers with all information about the product, offer quality products in different designs and style and look towards creating awareness about the product so that more and more people look towards purchasing the same. B Streemline Co. to ensure smooth business operates nearly all around the globe and included areas like North America, Asia Pacific, Europe, Africa and Latin America. B Streemline Co. based on the different dimensions has looked towards ensuring that all the different products which are offered are of the finest quality and looks towards ensuring that the mechanism helps them to improve their credit rating and overall performance. Decisions Made The decision summary will highlight the different strategies which was adopted in each round and the impact it had on the performance when compared with other competitors in the market. It is as follows Base Year: This is the initial round where all the 7 teams which were competing against each other were given a similar ground, market share, and total other details. This was done with the perspective of ensuring that the different teams developed their strategies on what they felt was better and would be analyzed in the next round. Year 10: At the end of the first round it was seen that B Streemline Co. which is my group was able to improve their credit rating substantially. This was contributed by strong revenues and lower cost of production. In the first round we tried and worked on creating awareness and ensuring better and higher returns for the shareholders. Further the business looked to work in all the segment i.e. internet sale, wholesale and private label. The cost report showed that B Streemline Co. sold huge number of products in Asia, Europe and America and looked towards strong marketing. This stage thereby witnessed one where the unit concentrated on improving its market share and looking to consolidate its position by creating awareness about the products and services being offered. Year 11: Similar to year 10 it was seen that B Streemline Co. which is my group was able to ensure the highest credit rating. This was contributed by strong revenues and lower cost of production. The overall profits had increased but the business was not growing as expected in Latin America and was an area of consideration. Further the plant was operating at 85% capacity and was able to ensure that it sold all the products that it was producing showing good conversion rates. The cost report showed that B Streemline Co. sold huge number of products in Asia, Europe and North America but lack of business in Latin America was an area of consideration. This stage thereby witnessed one where the unit concentrated on improving the EPS, had lower cost and looked towards improving their credit rating which would help to further create awareness among the people. Year 12: This was a round where B Streemline Co. made good profits because cost of producing the footwear was continuously decreasing. This helped them to further improve their credit rating and ensured better returns or equity and a high EPS. This was aided by increased sales improvement in the business which was carried out in Latin America along with other regions where they were performing. This stage thereby highlighted one where the team focused on credit rating, lower cost of production and improvement in market share. Year 13: This was a round where B Streemline Co. started to lose profits and the values had come down considerably. It was because other players had started to use work on similar strategies, market requirements and reduced the cost further. Not moving towards developing new products which matched customer needs and having a high cost of marketing resulted in the market share to fall drastically. This was aided by reduced sales and increased cost as all the regions where they were performing were impacted resulted in a decrease in credit rating, EPS and return on equity. This stage thereby highlighted one where the team focused on the same products, lower profits and market share. Year 14: This was a round where B Streemline Co. started to make profits and the values had increased considerable. It was because of strong marketing activities and working on the core essentials which consolidated their position. Moving towards improved products and having a low cost of product resulted in the market share to rise drastically especially in Latin America where the business was doing better in comparison to other areas. This was aided by increased sales and improvement in the overall credit rating. This stage thereby highlighted one where the team focused on the improved marketing activities, increase profits and market share and required to make a decision through which B Streemline Co. looks at moving towards better customer satisfaction to ensure better profits Year 15: This stage market one where the profits increased further and the group was improving on its daily operations. The market share had also increased and the product was accepted by more and more people. The team persisted with the same strategy which resulted in overall improvement in the market share. The overall business fundamentals highlighted overall improvement in the goals and ensuring better returns for the shareholders and increase in credit rating. This along with proper use of technology and resources ensured that the overall business was developed and shaped in a manner through which better business performance could be achieved in the future. Final Results The final result of the simulation game was as desired and helped B Streemline Co. to achieve its goals. The business on the whole was the market leader and was able to clearly lead compared to other players in the market. The overall credit rating has increased considerable. The business was also able to ensure better returns on equity and continuous growth in the shareholders return. The EPS has increased and the business was able to ensure better awareness in the market. The overall result also highlighted efficiency and using the different resources in such a manner that it highlighted better achievement of the gaols and delivering smooth performance as per the desired requirements. This helped B Streemline Co. to ensure bets result and was able to ensure smooth operations and was able to carry out different activities in the best possible manner. Reflection The entire process of dealing with the different rounds was a learning experience and highlighted the need to be innovative and develop strategies which the competitors didn’t dream off. Further, it was also seen that it was important to be ahead of competition and take strategies which are aimed towards better products and services so that the needs and requirements of different customers can be easily satisfied. It is imperative that the business looks at being innovative makes continuous changes so that better decisions can be taken. This has to be aided by being adaptable and taking risk so that the business is able to find out a mechanism through which better rewards can be achieved. The simulation exercise helped to understand the manner in which different factors have a role in decision making and the manner in which different decisions have to be taken at different time intervals to ensure better productivity. The exercise helped to understand the importance of proper planning and looking into different dimensions through which the overall performance can be consolidated and better results can be achieved. It was understood that to be competitive and to be leader and to sustain that position it is important to be innovative and considering all the factors together will help to understand the different dimensions through which overall performance will be shaped up. This exercise will thereby help immensely in the future as it will help to analyze and understand different perspectives and thereby take decisions so that the overall importance and value of decision making is improved. This would ensure that better performance will be delivered in the near future and will help to work on different fundamentals through which overall working fundamentals will be determined. Underlying Strategic Principles The underlying strategic principle which was used during the entire exercise was that the business looked towards achieving its vision and while doing so looked to formulate strategies time and again which matched with the business needs. The overall focus was towards identifying and understanding what the competitors could do and based on it looking towards identifying the strategies which needs to be developed so that business performance could improve. The strategic principle was developed on the simple fundamental that the business has to look towards maximizing the returns for the shareholders and while looking to do so the business has to look towards offering quality products to its customers so that they don’t feel cheated. In addition to it the underlying strategic principle was such that it looked towards improving the overall credit rating so that business could look at different dimensions and fundamentals through which they would be able to gain and improve their overall performance in all areas. Working on the core issues and looking towards improving the performance based on different parameters and taking important decisions helps to improve performance. Key Learning’s The overall learning improved from the exercise as it helped to analyze and reflect on different areas. Some of the key learning are Firstly, it helped to understand the importance of understanding the macro environment and the manner in which it impacts business performance. The ability to understand the macro environment and developing steps which will help to reduce the magnitude and impact on the performance is important as it will help to develop the required fundamentals through which the decision making process will improve. Secondly, understanding the industry and the competitors is important as the performance will be carried out within them. Understanding the strategy and using them while developing our strategy helps to ensure that we stay ahead of competition and helps to formulate the required dimensions through which business would be consolidated and performance would be better Thirdly, it helped to analyze the different issues and complexities which a business faces while carrying out operations. It helped to analyze the role and importance of all the function and the manner in which culmination of the effort of all people helps to deliver the required performance. Managing the complexities and being able to deal with the different issues which the business is the key through which success can be achieved Fourthly, it helped to understand the role of having clear goals and focus as it determines the direction in which the business will be carried out. Having clear goals ensures that the strategies are pursued based on the goals and the different resources which the business has is used accordingly. Fifthly, having strategic decisions and process which helps to maintain the competitive edge so that business will be developed on areas through which overall gains will be maximized. This will look towards having proper information and knowledge about the entire business so that the overall framework is developed and shaped in a manner through which long term performance will be better Lastly, the different problems and issues which the business faces while looking to meet the different expectations of the different stakeholders. It is important that the business looks towards meeting the different expectations and to do so proper planning and execution is required so that the business can look towards determining the pace and dimensions through which overall performance will be shaped. Conclusion This report analyzes the different strategies which different players adopt by creating a hypothetical situation which is similar to real life situation. The paper presents the overall strategy which was adopted by B Streemline Co in comparison to other player working in the market. Overall there were 7 players working in the market where they were provided similar market situation and opportunities. Based on the different model which the different players look to use changes were made based on real life situations and the impact it has on business was identified. The paper presents a complete description of the competitive strategy, the industry overview, company overview, the different decisions which were made, the final result and the overall implications it has. This helped to understand the manner in which different factors have an influence on decision making and will help to understand the manner in which performance of one player gets shaped by others. It also helped to understand and analyze the manner in which one player has influence on other and will thereby help to present the different dimensions through which overall working dimensions will be understood and analyzed. Reference Frambach, R., Prabhu, J. and Verhallen, T. 2003. The influence of business strategy on new product development: the role of market orientation. International Journal of Research in Marketing, Vol. 20, no. 4, pp. 235-246 Robin & Susan, 2003. In search of Strategic Management Accounting. Social Science Research Network, Vol. 14, No. 3, 29-37 Read More