Major Strategic Decisions and Supporting Models in Business Strategy - Desklib

This document discusses the major strategic decisions made during the BSG simulation, including product selection, market analysis, and launch strategies. It also evaluates and applies six supporting strategic and management models, such as Porter's Five Forces and Porter's Generic Strategies, to underpin the strategic approach. Gain valuable insights into business strategy at Desklib.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Evaluate major strategic decisions made during BSG simulation..............................................1
Evaluation and application of six supporting strategic and management models, concepts and
ideas that underpin strategic approach........................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is the combination of different actions that business take in order to
reach their business goals and to bring competitive advantage to the business for long
period(Akter and et.al., 2016). Report will include strategic decision that were made by the team
during the BSG simulation. Report will also include Six supporting strategic management
models that can underpin strategic approach of the business.
Evaluate major strategic decisions made during BSG simulation
YEAR 10
During the BSG simulation there were different strategic decisions that were taken by my
team in order to run the team in an effective manner and also to have huge business profitability.
During the year 10, we launched our three products that were NA, EA, AP and LA. It is very
important for the business to figure out the right products and we applied the same strategies in
order to find out the products with the help of which C Company can generate huge profits. We
decided to work on two products that were NA and AP. And the labor cost for NA. Was $8.98
per pair of the products. For the brand AP, the associated cost of labour was about $4.89.
Another business strategy that me and my team implemented was to purchase the products EA
and LA from different market and produce the same in our brand name as it will help in reducing
our labour cost. For both the brands EA and LA, the there was no production cost in the year 10.
However, production cost for NA was high as compared with that of EA due to high labour and
material cost in it. Before launching the four brands, our team worked effectively in analysing
the whole market and with the help of which different assumptions were made. \
After this we prepared our plans and decided to launch our products. We analysed and
targeted the audience with an effective launch strategy where we defined the audience to be
targeted and accordingly point out their pain in order to make them care about our given
services. In order to make the brands recognisable in market, our team decided to sale these
products with the help of internet and also with the help of wholesalers. It was observed in the
year 10 that the pair sold with the help of wholesalers were more than compared with that of
internet as our marketing strategies were some how lacking behind due to tough competition on
websites. However, the operating profits were more with the help of internet than compared with
wholesalers. In this year all the brands were having same S/Q rating. However, the brand NA
was having the maximum operating profit than compared with other brand as the productivity
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and labour cost also high for NA only. Finally, we acquired a market share of about 8.3% for all
our production.
YEAR 11
During the year 11, with the help of different strategies me and my team worked
effectively and increased our productivity with the increase in labor cost and production cost for
the brand NA and AP. However, the products EA and LA was again purchased from different
market in order to sale them in our brad name. This helped us in having zero labour and
production cost. We updated our business processes and maximized capacity of out existing
equipments so that the can work effectively to their full potential. We also acquired new
equipments and encouraged the team to work overtime. This resulted in increase in labour cost
but worked effectively for increasing the business productivity. In this year the pairs sold with
the help of internet raised as compared with that of year 10 for all the three products as we
invested for having an effective web design in order to make the customers attracted towards our
offerings. We also initiated email marketing and started building an effective relationship with
all our potential customers. We promoted with the help of online platforms and took help of
social media marketing so that our products can become recognisable in market. With the help of
these business strategies, C company was able to increase its market share for our different
products that were 11.5% for NA, 11.8% for EA, 11.8% for AP and 11.1% for LA. It was be
analysed that the market share was grabbed by our NA and EA brand more effectively that
compared with that of NA although the labour and production cost for NA was more that
compared with that of EA. Another strategy implemented was to produce the products with the
help of internet only for the product LA. That resulted in less productivity of the brand LA.
YEAR 12
The business again increased the labour cost and also its production cost for both its
products NA and AP. Now me and my team decided to produce the product EA and LA with our
own manufacturing process. This raised the labour cost and production cost of the business in
order to produce EA and LA with own business practices. Here, the labours were given an
excellent training so that it can help the business to increase their productivity and also to help
out to reduce rework of our labour force. Overtime of the labours were reduced in this year and
in order to make the workers satisfied, C company started enhancing safety of the employees and
provided them right resources and equipments so that they can work effectively. However, it was
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analysed that for the brand NA and EA the productivity declined with increase in labour cost and
also production cost. When it comes to operations, it has been analysed that with the help of
internet operating profit was increasing for all the brands and the company started operating with
both internet and wholesalers. As a result operating profit of LA raised as compared with year
11. S/Q rating also raised as brands got recognition in market and market share also raised as
compared with that of previous year. Here, NA grabbed the maximum market share as compared
with other products as the associated labor cost was high and the marketing of the product NA
with the help of internet and wholesalers was more effective.
YEAR 13
In the year 13, me and my team decided to reduce the labour cost as we already had
trained our labour and they were working very effectively. On the other side the production cost
was increased for all the years. However, this business strategy did not work effectively for
brand NA as productivity was declined. For other brands it worked effectively as the
productivity raised. For the product NA, the operating profit also got declined of both internet
and wholesalers brand operation as the business was not advertising the products in an effective
manner.
YEAR 14
As we generated profit for other brands, same business strategy was implemented in this
year also where the labour cost was reduced for all the respective brands. By analysing from the
previous year, this time production cost of NA was raised from 34.85 to 35.58 and for all the
other brands the production cost was reduced. However, there was no impact on the business
productivity but for the brand NA, the productivity raised from 4,995 to 5,018 as previously it
got dropped as compared with the year 12. With respect to the branded operations, we applied
strategy to promote its offerings only with the help of wholesalers and reduced the cost of
promotion with the help of internet. The strategies were implemented as there was a huge
competition on social media platforms. However, this strategy do not worked for our production,
as the market share of all the brands got reduced. Whereas, the operating profit was raised for all
the respective brands of C company.
YEAR 15
No new strategy was implemented for this year as the team and company was having
belief that overall operating profit was rising for the business productivity. The labour cost was
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again decreased by me and the team of C company. In this year another strategy to decrease the
over production cost was also been implemented and that directly impacted the productivity of
the year 15. For all the respective brands the productivity got declined and that resulted in huge
loss of the business. Another strategies that was implemented was that the business stopped
investing that huge amount in the advertisements with the help of internet. As a result it was seen
that the market share of NA and LA declined. However, EA and AP managed to have their
position in market. Its has been analysed that the operating profit for this year raised as business
was somehow having an effective image. It has been analysed that the strategies were not in right
direction as S/Q rating got declined from 8.5 to 7.0 and that was not a good sign for C company
and all its brand.
Year 16
As the performance was not appropriate for the year 14 and 15, me and my team decided
to increase the labour cost again and worked effectively to train the workers and have
innovations strategies for more production. We also decided to increase our production cost as
compared with that of previous year and that resulted in having better productivity in hand. Me
and my team decided to work apply different marketing strategies and worked effectively with
respect to the web design, online shopping and attracting the customers with the help of social
media platforms. We also build an effective relationship with our wholesalers and as a result the
operating profit for this year gradually raised. However, it got declined for NA with respect to
internet and raised with wholesalers. For EA and AP, there was a decline as the conditions went
out of the control. For the brand LA, the operating cost raised with the help of this strategies with
respect to both internet and wholesalers. It was also been seen due to implementation of poor
business strategies in previous year, market share declined or this year only.
Evaluation and application of six supporting strategic and management models, concepts and
ideas that underpin strategic approach
In order to underpin the strategic approach, there are different strategic and management
models that C company and team can implement in order to have an effective business strategies
in hand. The different models are as following:-
Porter's five forces:-
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It is an analytical tool that business can adopt in order to determine the level of
competition with in the industry and also in its level of profitability. The five different
competitive forces are as following:- Threat of new entrant:- This factor generally determines that how easy is it for new
entrants to enter the industry. Generally threats are high when the low amount of capital
is been required by other firms to enter the market. It is also high when the business is not
having patent of its products. For C company the threat of new entrant is low as it is
having customer loyalty. However, if the switching cost is low with high quality, then
this force become high(Mathooko and Ogutu, 2015). Bargaining power of suppliers:- If the suppliers are having high bargaining power, they
will sell high price and low quality of raw materials. However, there are many substitutes
of these suppliers in market that are available for C company and that is the reason
bargaining power of suppliers is low. Bargaining power of buyers:- The customers are having power to demand low price and
high quality of products. The bargaining power is high of the buyers of C company as
there are many substitutes available with respect to its offerings. Threats of substitutes:- If the products that company offers is having different substitutes,
the threats of substitutes is high. As there are many substitutes available in market with
respect to offerings on C company, the threats of substitutes is quite high.
 Rivalry among existing competitors:- The rivalry among the existing competitors is quite
low as C company is having loyal customers and it is also having differentiable brands in
market(Takata, 2016).
VRIO framework:-
It is a strategic tool that is used by the business in order to protect the resources in order
to have long term competitive advantage. The three approaches are as following:- Value:- It is very important for the business to analyse whether the resources add value to
its respective customers. As the C company adds value for its customers with respect to
the resources it gives competitive advantage to the firm(Miethlich and Oldenburg, 2019). Rare:- Business is required to find something that can create demand and that is the
reason business is able to compete in its market place.
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 Imitable:- It is very important for the business to have offerings that is not having any
substitute and other company can not copy the same. C company is lacking behind in its
Imitability as not having patent and creates a temporary competitive advantage.
 Organised:- Another important approach is to have organised management support and
not having the same, may create unused competitive advantage to the firm. C company is
somehow lacking in its organisation management systems and that is the reason they lack
in its ultimate goal of having sustained competitive advantage(Indartono and Wibowo,
2017).
Porters generic strategies:-
It is a framework that helps the business to analyse whether they are able to pursue
competitive advantage or not. The different strategies are as following:- Cost leadership:- Here, the firm become low cost producers within the industry in order
to gain competitive advantage. C Company can implement the same strategy in order to
bring competitive advantage and it also leads to substantial investment and efficient
logistics(Bertozzi, Ali and Gul, 2017). Differentiation:- Here, the business target broad market with unique features in its
offerings in order to make the products attractive in eyes of the customers. C company
can work effectively on its innovation and R&D in order to produce differentiable
product in broader market. Cost focus:- Here, company can target a niche market with the low price of its offerings
and C company can target a niche market by understanding the market dynamics.
 Differentiation focus:- Here, Business can target the niche market with the help of unique
features in its offerings. C company is required to work on its unique offerings in order to
create brand loyalty(Wicker and et.al., 2015).
Strategic Gap analysis:-
It is a strategic tool that business can adopt in analyse the gap between target and
anticipated results. C company can take help of this strategy in order to analyse the variance that
is taking place between actual performance and desired one. The four different types of gap are
as following:-
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 Performance gap:- Here, the difference is seen by the business in its expected
performance and in its actual performance. C company is required to analyse why the
respective gap is seen and have to work effectively in order to overcome the same.
 Market gap:- Here, the gap is between the budgeted sales and actual sales of the
business and C company is required to work to match its budgeted sales with its actual
sales(Sarfraz, 2017).
 Profit gap:- It is the difference that takes place between targeted and actual profit of the
business. As C company is having profit gap, business is required to apply different
strategies in order to overcome the respective gap.
 Manpower gap:- Here, the gap arise between required quality of workforce to the actual
strength of the business. As the C Company also faced the same gap, business is required
to work effectively in order have quality of its labours(Morden, 2016).
Balance scorecard:-
It is a framework that is used by the business in order to manage its strategy and its helps
the business to take an effective performance measures in order to compete in market. It
identifies financial and non-financial measure for the business and then analyse different
measures in order to set targets for these measures(Fooladvand, Yarmohammadian and
Shahtalebi, 2015). This finally helps the business to take appropriate initiatives. C company can
take help of these strategies where the business can work to measure the objectives. This strategy
is having its concern for time, quality, performance and also the cost of the business. It can help
C Company to have better strategic planning and improved strategic communication.
Hoshin planning:-
It is a strategic planning method that business can adopt in order to manage their key
strategic initiatives. It is having four steps and are as following:- Identify key goals:- It is very important for the business to have discussion with the leader
and establish the strategic plan in an effective manner. C Company is required to create
strategic plan for improving business performance(Burtseva and Chausow, 2016). Play catch:- It is also important to throw the idea back and align the same in an effective
manner. CV Company is required to discuss the goals with all the lower level managers
so that they work accordingly.
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 Get your gemba on:- It is also important for C company to have unique planning and
track the execution of its goals(Boisvert, 2016).
 Make the adjustments you need:- Business finally is need of making adjustments with
respect to the feedbacks received and track them accordingly.
CONCLUSION
From the above study it is been analysed that there were different business strategies that
the team members implemented during the BSG simulation and their were many strategies that
went wrong and resulted in lower productivity over the years and also decline in market share
was there. Report also concluded that in order to improve the business productivity, C company
is required to implement different strategic management models in order to underpin their
strategic approach.
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REFERENCES
Books and Journals
Akter, S. and et.al., 2016. How to improve firm performance using big data analytics capability
and business strategy alignment?. International Journal of Production Economics. 182.
pp.113-131.
Bertozzi, F., Ali, C.M. and Gul, F.A., 2017. Porter’s five generic strategies; A case study from
the hospitality industry. International Journal For Research In Mechanical & Civil
Engineering (ISSN: 2208-2727). 3(2). pp.09-23.
Boisvert, L., 2016. Reflections on Hoshin Planning: Guidance for Leaders and Practitioners.
Productivity Press.
Burtseva, T.A. and Chausow, N.Y., 2016. Measurement of Scorecard Balance. International
Electronic Journal of Mathematics Education. 11(9). pp.3361-3370.
Fooladvand, M., Yarmohammadian, M.H. and Shahtalebi, S., 2015. The application strategic
planning and balance scorecard modelling in enhance of higher education. Procedia-Social
and Behavioral Sciences. 186. pp.950-954.
Indartono, S. and Wibowo, F.W., 2017. VRIO and THES based development of university
competitive advantage model in formulating university strategic plan. International
Information Institute (Tokyo). Information. 20(10A). pp.7275-7283.
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management. 29(3). pp.334-354.
Miethlich, B. and Oldenburg, A.G., 2019. The Employment of Persons with Disabilities as a
Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-Organization
(VRIO) Framework.
Morden, T., 2016. Principles of strategic management. Routledge.
Sarfraz, M., 2017. Pakistan-US Alliance: Towards a Framework for Strategic Gap Analysis of
Foreign Policy Interests (2001-2014) (Doctoral dissertation).
Takata, H., 2016. Effects of industry forces, market orientation, and marketing capabilities on
business performance: An empirical analysis of Japanese manufacturers from 2009 to
2011. Journal of Business Research. 69(12). pp.5611-5619.
Wicker, P. and et.al., 2015. The effect of Porter’s generic strategies on organisational problems
of non-profit sports clubs. European Journal for Sport and Society. 12(3). pp.281-307.
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