Strategy and Goals of the Firm in Stratsim Game - Coursework Example

Table of Content Executive Summary 2. Introduction 3. Goals 4. Competitive Strategy 5. Product Introduction 6. Segmentation Targeting Positioning 7. Marketing Mix -Promotion 8. Marketing Mix- Price 9. Marketing Mix- Place 10. Marketing Mix- Product 11. Results 12. Conclusion and Recommendation 13. References 14. Graphs and Charts 1. Executive Summary The purpose of this paper is to talk about making decisions in Stratsim game which has 5 firms manufacturing automobiles. First taken decision was setting the strategy and goals of the firm. These have been set based on the firm general status in period one. Gradually, when we are moving through the periods, we could take more accurate decisions in the fields of Technology, Product Development, consumer Marketing and Financing. Moreover, our firm has three cars that each one has its special specifications and market competitors. We have tried our best to make them all as leader in term of vehicle class or targeted consumer. And for more innovation and after considering the status of the firm and market in general, our firm C decided to launch two cars one of them has entire different perception which enhanced the concept of sustainability in marketing. After having weekly meeting that spent discussing each period, our firm C got successful results in all vehicles either in developed vehicles or in the new launched ones. 2. Introduction For any successful organization, making the decisions is a very important task. Nevertheless, one of the key challenges faced by modern day managers is how they can effectively compete as well as generate competitive advantage via proper position of their companies in the best position by having a market share that is high. This is a big challenge because organizations are functioning in an environment that is complicated and influenced by globalization as well as fast technological changes. This impacts business in two ways such that opportunities are created for managers who are proactive, with those unable to cope disappearing. The position that a given company will occupy in the market place will be dependent on how good strategic choices were made together with their implementation. Stratism-which is in the dynamic automobile industry appointed us as managers. We coped well, inspite of the task being challenging as well as enjoyable. So as to arrive at good strategies as managers, we usually considered the environmental issues because they have close relationship with the strategies of our firm. We were able to create a strategic fit via aligning the strategies of the company with those of the business environment. In return, our firm became very efficient in production, sales; marketing decisions something that positioned our firm amongst the leaders. Competition in entering the market segments and developing new products is a technique of accomplishing competitive advantage at the Stratsim industry. Even though the industry is extremely competitive, it is also attractive because demand for vehicles is growing world over, hence promising huge returns in terms of profit and capital invested. Our firm C in industry 1 has 3 cars (Climax- Luxury Class), (Camini- Minivan Class) and (Cafav- Family Class).Our firm closest competitor was firm B in the luxury class .We used this clue to create key upgrades in addition to increasing our promotions. Relatively, because of our dominating the minivan, we managed to increase the prices so as to cater for the good quality. In parallel to these decisions, we upgraded the family class car Cafav to excel the cars with same class and launched two new cars with the features that consumers were looking for in the market. 3. Goals We began our campaign by coming up with our market strategy that is combined of two strategies that are Differentiation and Innovation strategies that. Besides the strategy, we worked on drawing our firm mission which is offering customer improved vehicles to match their preferences, as well as looking for placing the best position in the Stratsim game which we considered it as our firm vision. So as to compete effectively with others in the eight periods, as we focused on how to serve our target markets the best way via a total offering on product, marketing, services in addition to price that satisfy the consumers and in the same time giving them the sense of value when they drive our cars that carry a new sustainable product perception. 4. Competitive Strategy 5. Product introduction Passing through 8 periods, let us discover numerous opportunities through environmental analysis mentioned below: In Period 1: We identified a new customer through market research (4m).In addition; we had the monopoly of the minivan car. Our customers for the minivan class car(Camini) are (2M)and lack much disposable income compared to other segments and are thus much sensitive to price. This made us think of launching a new car (Cobra) for the new customer (4M) that satisfies their needs. We used tools technique to be able to determine the features of the new idea and came up with rational price. We managed to launch Cobra in Period 6 with an advertising budget of $90 million. In Period 3: Market research managed to get another new customer (5A).Thus, AEV being a new segment car (was not available in the industry).Our idea was to launch a new car (Cooper) for the new customer (5A) that satisfies their requirements. We again referred to tools technique so as to establish the features of the new idea and set up a practical price. We successfully launched Cooper in period 6 with an advertising budget of $90m million. 6. Segmentation Targeting Positioning First and foremost identify what kinds of customers are in existence. Secondly choose the ones that are best off trying serving and finally employ our segmentation via capitalizing on our products/services for that specific segment and passing on what we have settled on to distinguish ourselves in that way as explained below(Perner). First we recognized 5 existing consumer segments and 2 new consumer segmentations in Stratsim game: a. Existing Customers 1. Value seekers This category has primary transportation needs and makes use of their vehicle for travelling to work or perhaps as a basic all-purpose car. Nonetheless, they lack much income to dispose as compared to other categories and are, therefore, price sensitive. Safety and quality are of great significance to this class of consumers. The other types of vehicles that may be of interest to these consumers are truck and economy. 2. Families The transportation needs for this class are primary and flexible. They need a combination of people and cargo-carrying abilities with possibly a section of family fun fitted. However, they lack much income to dispose when compared to other segments and are therefore price sensitive. These consumers are particularly concerned with prices and quality. Some of the vehicle categories that are of interest to this segment comprise economy, family and minivan. Our firm realized that families are interested in family class (Cafav) (2F) as well as minivan and (Camini) (2M). 3. Singles This market is youthful and has a lot of income to dispose on transportation in addition to a wide range of transportation needs. Styling and performance are of key importance to this class. This class is keenly interested in such vehicles as sports and trucks. 4. High Income This comprises of high income persons with extremely sophisticated transportation needs. This category is made up of professionals, families and retirees. They see their car as a symbol of their achievement in life. Due to their available income that they can use on transportation, they are most possibly to purchase vehicles that have extra features coupled with excellent performance. This group is keenly interested in such vehicles as family and luxury. For our firm, the high income class is the one interested in Luxury class (Climax) (4L). 5. Enterprisers This class views their cars as an expansion of their personal and business ambitions. They utilize their cars for not only business transportation but also in impressing possible customers. Their vehicles may be owned by their companies or by themselves (privately owned).Careers such as sales, real estate and investments are most likely to be included in this class. This group is keenly interested in such categories of vehicles such as sports/luxury together with other high-end vehicles dependent on their business needs. For our firm, enterprisers are clients who are attracted to Luxury class (Climax) (5L) (The StratSim Case, pg 23-25). b. New Customers: We manufactured two new cars which are: 1. High income who are interested in minivan class, so we Launched a new car(Cobra) (4M) 2. Enterprisers who are interested in AEV class, so we Launched a new car (Cooper) ( 5A) Secondly we can employ the segmentation technique by maximizing our products/services for that specific segment and passing on what we have decided on to differentiate our firm as discussed below; a. Products: The automobile industry is in the stage of growth where opportunities usually reduce. With this in mind, the firm consistently continues to frequently make small upgrades on every attribute at various times so as to differentiate our products and be more modern, so as to maximise and transform the existing attributes which have become old with the passage of time. We also increased technological capabilities so as to enhance products to satisfy our customer requirements. Incomes-High incomes need vehicles with good performance and additional features. The high income category is interested in high income (4L)(4F)(4M) comprising of luxury and family. We therefore upgraded Cafav and Climax. In addition we did launch a new product for new clients (Cobra minivan for 4M). Families –these are in need of a combination of vehicles that can transport people as well as cargo with probably a small family run fitted. Classes of vehicles that families may be keenly interested in include economy, minivan and family. Because this category is very much interested in quality and safety, we made a decision to advance our minivan car Camini.s Enterprisers-this class views their vehicle as an extension of their individual and personal ambitions. They utilise their vehicles for not only business transportation but also in impressing their customers. These people are interested in luxury, sports utility together with other high-end vehicles in accordance to their business requirements. This made us to upgrade Climax. Moreover, when we discovered that there is a new customer looking for the new class of AEV, we decided to launch Cooper AEV for 5A. In general, we focused on the features that were required by clients, for instance interior and style for high income and families’ safety. This assisted in acquiring reputation and developing a customer base that is loyal. b. Price: High income (4L) (4F) (4M): this class views their cars as a symbol of achievement in life. Due to their high disposable income, they spend heavily for their transportation needs. They definitely need to purchase vehicles with extra features as well as good performance. We strategized on pricing that was stable because our prices were higher than our competitors, nevertheless increased after enhancements on the product. Due to the fact that our product was focusing on nigh income families (4F), hence we did not reduce the prices of our family class (Cafav).We also did a small price hike after the upgrading of the product was done. In addition we used tools techniques in determining prices of the new product (Cobra). Families (2M): The categories of vehicles that this group is interested in include economy, minivan and family. Nonetheless, they do not have much income to dispose in relation to other segments and are quite sensitive to prices. Because our product Camini was focusing (2M) we decided not to hike the price, though we did a small hike in price after we upgraded the product. Enterprisers (5L) (5A)-As mentioned earlier on, this category take their vehicles as an extension of both their business and personal ambitions. Thus, they make use of their cars for both business transportation as well as impressing their potential clients. We settled on tools technique (concept research) in determining the price of the new product (Cooper). Promotion: So as to sustain our leading edge in the minivan and luxury categories and enlarge the shares of other categories we were forced to adjust the marketing technique. We Increase advertisement budget to increase awareness percentage, increased promotion budget to attract & retain our customers as well as attracting new customers such as 2F, 1AEV. Increase direct mail budget to reach our targeted customers. Increase public relation budget to enhance our company identity brand. Advertising campaign for launching new products. c. Place We increased dealerships and the training budget in order to establish supporting services. We increased dealers in different distribution regions to widen our coverage areas and increase the coverage percentage and market share. Market Mix: Marketing mix comprises of Product, Place, Price and Promotion. Nevertheless, the marketing mix presently includes other numerous Ps like Positioning, Packaging, Politics and People as important mix components. To build the correct marketing mix, businesses have to fulfill the following; The product must have the correct attributes, for instance it must look good and function well. It must have the right price. This is because consumers will have to purchase in big quantities to make a healthy profit. The products must be in the precise place and at the precise time. Ensuring that goods arrive when and where they should when they are required is a significant operation. The targeted group should be made aware of the availability and existence of the product via promotion.Effective promotion assists a firm in spreading costs over a bigger output.("Marketing theory," ) 7. Marketing Mix-Promotion (Regional corp.adv.public relation,direct mail,Adv., Pro.) Promotion basically refers to communicating with consumers. It offers information that assists in making decisions to buy a service or a product. Thus the pace,razzmatazz and creativity of some promotional activities are strange to usual business operations. The cost related with advertising products frequently represents a big proportion of the entire cost of item production.Nevertheless, effective promotion leads to an increase in sales such that promotion and other costs are spread over a big output. Whereas increased promotion is usually an indication of a reaction to an issue such as competitive activity, it makes an organization to build and develop up a sequence of messages and can be highly cost-effective. ("Marketing theory," ) In our firm, our promotion strategy that is derived from the main strategy was to increase the promotions for the products that we had competitors in similar category. 2) Increase the promotion once we launch new cars 3) Reduce the advertisement and raise the promotion after making sure that there is adequate awareness amongst consumers. 4) Increase the promotion for those products that had low demand. 8. Marketing Mix-Price Of all the other aspects of the marketing mix, price is the one that generates sales revenue. The rest are all expenses. The price of an item is clearly an important factor of the value of sales that a firm generates. Theoretically, determination of price is done by identifying what consumers view as the value of the item being sold. Carrying out a research on the views of consumers in regard to pricing is important as it demonstrates the worth they attach to what they are searching for in relation to what they are willing to pay. Nevertheless, an organization’s pricing policy differs because of time and circumstances. Thus, for example, Lake District’s water value will be considerably different form that of the desert (“Marketing theory”). In our firm, having prices that are stable to prevent loss of customers. Nevertheless, prices were raised only after product upgrade (Cafav, Camini and Climax).Before the new products(Cobra and Copper) were priced, concept study was made. Relatively the above derived strategy, we sold the luxury class begging with high price comparing with competitor B. however, we sold our family class car with high price comparing with the rest of firs (The prices are shown in the table below). Moreover, we can’t ignore the importance of using the game tools which is specialized in analyzing methods that assist in understanding the customer needs well including the pricing. It was used in the following periods; In period 1, we used the tools (Concept tests) to determine the attributes of our new concept (Cobra) minivan car. In period 1, we used the tools (Concept tests) to determine the attributes of our new concept (Cooper) AEV car. In period 3, we used the tools (Consumer Customer) to expect the price range of our customers 4F and 5L. In period 4, we used the tools (Consumer Customer) to expect the price range of our customers 2M and 4M. In period 5, we used the tools (Consumer Customer) to expect the price range of our customers 2L and 5L. Price 1 2 3 4 5 6 7 Cafav $31,361 $31,361 $31,361 $31,999 Due to minor upgrading $31,999 $31,999 $31,999 Camini $24,144 $24,144 $24,144 $24,144 $24,1444 $24,744 Due to minor upgrading $24,744 Climax $45,997 $45,997 $45,997 45,999$ Due to minor upgrading $45,999 $45,999 $45,999 Cobra - $36,997 $36,997 $36,997 $36,997 $36,997 $36,997 Cooper - - - - $25,999 $25,999 $25,999 9. Marketing Mix-Place Even though figures vary broadly from one product to another, roughly one fifth of the product’s cost goes on taking it to the consumer. Usually, ‘Place’ is interested in different methods of storage and transportation of goods, together with availing them to the consumer. The distribution system includes providing the precise product to the precise place and at the precise time. Deciding on a distribution system method is dependent on a number of situations. On the whole, it is quite suitable for some manufacturers to sell to wholesalers who in turn sell to respective retailers. There are those who will prefer selling directly to customers or retailers. ("Marketing theory”). Our strategy in the marketing mix-place is raising the number of dealers to raise the percentage of coverage, hence assuring the rise in dealers ranking. This is illustrated in both the table and the graph. For example, In Period 2, we increased the number of dealers so as to raise our percentage of coverage. We also raised the planned openings to 10 in south region and 5 in every other region as displayed below: Established Dealers N S E W Total Period 1 80 95 85 90 350 Period 2 80 95 85 90 350 Period 3 85 105 90 95 375 Period 4 88 108 90 95 381 Period 5 103 118 90 100 411 Period 6 103 118 90 100 411 Period 7 110 137 95 110 452 Period 8 110 137 95 110 452 Coverage N S E W Total Period 1 40% 38% 57% 45% 44% Period 2 40% 38% 57% 45% 44% Period 3 43% 42% 60% 47% 47% Period 4 44% 43% 60% 47% 48% Period 5 51% 47% 60% 50% 51% Period 6 51% 47% 60% 50% 51% Period 7 55% 55% 53% 55% 56% Period 8 55% 55% 63% 55% 56% Dealer Rating N S E W Total Period 1 61 61 65 61 62 Period 2 62 61 64 62 62 Period 3 64 63 67 64 64 Period 4 67 65 70 67 67 Period 5 68 67 73 70 69 Period 6 68 67 74 73 70 Period 7 70 68 76 77 72 Period 8 73 71 80 83 76 10. Market Mix-Product The concept of marketing mix began in the 1950s.However, the US corporate marketing world as well as the marketing practice has clearly grown tremendously from the time the term was invented. Forinstance, nowadays there are several more services currently that are available like those found online.Inaddition, thevariationbetween service and product has turned out to be more obscure (for example, aservice, product or a web-base software application?).Nonetheless, the term product here implies services or products. Thus, the service or product offered is supposed to fulfill particular,existing market demand.Otherwise you should build a market niche via creation of a strong brand(Noles & Jones). In our firm, Starting with three cars (Cafav-Family Class)+(Camini-Minivan Class) + (Climax-Luxury Class).We have monopoly in the manufacture Minivan Class car. In Period 3, Cobra (Minivan Class) was initiated so as to endear high income consumers searching for a family car. Manufacturing a car from a class that is available is cheaper than manufacturing a car with a class that is new. We differentiated this vehicle from Camini by reducing the size and increasing the styling and interior to satisfy the customer requirements. Cooper (AEV Class) was launched in period 6,to satisfy the Customers in Enterprisers category. Again, our firm had the monopoly of launching a car in this category. Cafav (Family Class) All the competitors have similar class (5 firms in the industry).We attempted to lead in this category. Due to that, we decided to; 1. Increase promotion and advertisement in Period 2.Sales rose from 191 to 218. 2. Do minor upgrade in the technological abilities that families are searching for in Period 4, leading to a sales increase of 66. 3) Do another minute upgrade to the car technology abilities made in period 5 in all technological abilities and price MSRP is raised by $638. Even though our intentional decisions in this type of category could not make us leaders, it nevertheless facilitated us to raise the share from 4.5% to 7.4% in addition to increasing our market share of this category from 13.3% to 21.7%.Eventually we managed to lead the 4F customer. (Shown below the Cafav performance among the competitors and within periods) Family Class Vehicles in Industry 1 Period 8 Vehicle Unit Share MSRP Size Eng.(HP) Int. Styl. Safe Qual. Alfa 7.3% $26,499 30 170 3 2 4 3 Boffo 2.5% $35,500 51 200 6 3 6 4 Cafav 7.4% $24,744 82 205 3 2 3 2 Defy 9.8% $25,925 43 165 2 1 3 2 Efizz 7.0% $21,567 35 140 1 1 2 1 Climax (Luxury Class) This category had a single competitor from firm B as it is shown in the table below.Even though we were leaders in this category, this did not stop us to upgrading the technology abilities in period 3,4,as well as 5 to maintain the lead. Therewas an also sales increase in the first 2 upgrades and a reduction after the last upgrade. There was also an increase of the market share from 40.8% to 71.7%. Camini (Minivan Class) Being the single manufacturer of this type of car(100% market share),we maximized our advertisement and promotion slowly starting fromPeriod 2 together with having a single upgrade in Period 6 that comprises of upgrading the interior ,style, safe and quality ( table below showed the achieved performance). Cobra (Minivan Class) So as to attract more new customers, we launched a new car, though in the minivan category that our manufacturer has which would cost cheaper than initiating a new car from unavailable category. The new customer was none other than 4M9High income).In addition, the technological abilities has been carefully chosen so as to fulfill their requirements. There was no upgrade that has been initiated except some small changes in promotion and advertisement which were adequate to raise the sales slowly from 106 to 154 as displayed in the table below. Cooper (AEV Class) There was a new customer 5A who was waiting our launching of a new car, AEV. Even though this was expensive, nevertheless our company adopted for this car a concept study, initiated a center as well as budgeted so as to produce this type of vehicle. Thus, this car was launched in Period 7 and from first period the sale rose from 275 to 430 as shown in the table below. 11. Results In this case we were again single makers of Minivan Car and we led in this car this time. As the game was ending, we became leaders of 2 more categories which are AEV and Luxury. Most Effective Decisions Launching AEV car “Cooper” was one of the most effective decisionsthat we made. Others include; Launching of the Minivan Vehicle “cobra” for M4 customers. Raising technology from the start Enhancing our products when required to restore confidence that we have the top quality products in the industry in accordance to customer requirements. Least successful decisions Disregarding the rising capability in the first period. Manufacturing less than demand in some periods that could empower us to raise our market share and sales. Disregarding use of the tools features at the start that could facilitate us to be more knowledgeable regarding the group that we have centered on and sales by customers and so forth. 12. Conclusion and Recommendation Being competent in the present day’s business atmosphere needs managers to think strategically as well as act in a proactive manner so as to not only survive but also grow. Scanning environment carefully is important to succeed since it offers useful information from the environment in which the firm is functioning in. Normally any environmental change has a tremendous impact on the effectiveness of the strategies of any given firm. Thus, the managers’ ears and eyes should be wide open so as to know what is taking place around their environment. Creativity and innovation are the only techniques that an organization and industries can carry on whereby an organization can initiate a culture devoted to learning. It is also crucial to manage roles as we experienced in the StratSim. Firm C through the strategy of differentiation had managed to build values to its customers by providing quality products more efficiently and expediently. By having unique resources such as competent management team with an adaptive capability, which the rivals cannot match or are rare and hard to copy. Good customer relations,innovation, creativity as well as other capabilities are faced with the danger of imitation and substitution because of technological advancement. References Stratsim Case. Perner, L. (n.d.). Segmentation, targeting, and positioning . Retrieved from http://www.consumerpsychologist.com/cb_Segmentation.html Marketing theory. (n.d.). Retrieved from http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html Noles, B., & Jones, J. (n.d.). Definition of marketing mix – product, price, place & promotion. Retrieved from http://virtualaccuracy.com/2007/10/definition-of-marketing-mix-product-price-place-promotion/ Firm C Performance Charts & Graphs Period 1 2 3 4 5 6 7 8 Sales $13,677.40 $15,693.10 $21,056.30 $24,518.50 $29,099.90 $29,099.90 $36,310.10 $41,965.90 Sales(units) 491 566 744 855 995 1,034 1,314 1,547 Market Share $ 15.80% 17.20% 21.10% 21.80% 24.50% 26.50% 30.60% 33.30% Market Share (Units) 11.50% 12.70% 15.70% 16.00% 18.80% 21.10% 24.80% 27.60% Net Income $1,723.20 $2,058.30 $1,574.90 $2,971.10 $3,877.30 $2,746.10 $4,179.90 $4,511.10 Cum.Net Income $1,723.20 $3,781.50 $5,356.50 $8,327.50 $12,204.80 $14,950.90 $19,130.80 $23,641.90 Stock Price $50.67 $51.78 $61.24 $72.28 $91.75 $85.83 $103.02 $119.46 Market Value $17,227.10 $18,554.30 $21,929.00 $27,361.50 $34,729.40 $32,489.60 $38,994.70 $45,220.50 Return on Sales 12.60% 13.10% 7.50% 12.10% 13.30% 9.50% 11.50% 10.70% Return on Assets 29.40% 34.90% 15.00% 24.20% 23.80% 14.40% 17.70% 15.90% Firm Preference 19.40% 19.10% 19.90% 19.50% 20.90% 22.10% 24.30% 24.40% Dealer Rating 62 62 64 67 69 70 72 76 COGS 65.00% 65.80% 65.60% 66.30% 66.20% 72.40% 72.40% 74.40% Capacity Utilization 94.90% 104.20% 149.00% 89.40% 117.60% 89.70% 93.00% 109.80% Debt $2,815.00 $0.00 $2,854.00 $0.00 $0.00 0.0$ $0.00 $0.00 Stock Issue/Purch.% 0.00% 501% 5.10% 10.20% 10.20% 10.20% 10.20% 10.20% Graphs )Firm C × Competitors ( Read More