Maximizing Sales and Profitability through Strategic Planning

The assignment aims to accomplish the vision and mission of Company A by providing training and compensation to employees to maximize capabilities and revenues. Decisions are taken based on competitor prices, celebrity endorsements, and warehouse operations capacity. The company's profitability has been maximized in the past four years, demonstrating successful strategy execution. The business simulation game helped learn strategies for achieving sustainable competitive edge and understanding stakeholder impact.

Running Head: MANAGING STRATEGY
SIMULATION REPORT
INDIVIDUAL REFLECTIVE REPORT ON BSG

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Contents
1. Introduction..............................................................................................................................2
2. Competitive strategy.................................................................................................................2
3. Industry overview.....................................................................................................................3
3.1 PESTEL analysis.............................................................................................................4
3.2 Five forces model.............................................................................................................6
4. Company overview...................................................................................................................8
5. Decisions made.......................................................................................................................10
5.1 The beginning phase.....................................................................................................10
5.2 The mid-game phase.....................................................................................................11
5.3 The end-game phase......................................................................................................11
6. Final results............................................................................................................................12
7. Reflection...............................................................................................................................13
8. Underlying strategic principles..............................................................................................13
9. Learning points about strategy...............................................................................................14
10. Conclusion..........................................................................................................................14
REFERENCES..............................................................................................................................16
APPENDICES...............................................................................................................................18

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1. Introduction
In this report, we will be discussing the overall performance of the Company A as compare to the
other companies in the footwear industry. The Company A operates in the market of four regions
i.e. Europe-Africa, North America, Latin America and Asia Pacific and the segments of the
market are the internet, private label, and the wholesale. Also, it has been observed that the level
competition is high among the companies which rely on various factors like endorsements, time
of delivery, quality, promotion, etc. Further, the competitive strategy will be described along
with the overview of the company and the industry. Moreover, the section of decisions made will
discuss the phases i.e. beginning, mid-game and the end-game. Then, the final results will be
discussed along with the reflection and the strategies of the principles which are underlying for
the Company A in order to attain sustainability in the industry of footwear. Then, the essential
strategic points of learning will be discussed. Furthermore, this report basically demonstrates the
reflective report of the Company A in order to analyze its overall performance in the industry of
footwear.
2. Competitive strategy
By analyzing the complete industry of footwear, we have understood that the Company A has to
change the way of working according to the change in time and technology in order to attain the
sustainability and the profitability to a great extent. The Company A believed in diversification
by using the technology of renewable and the green technology in order to become
environmentally friendly. The Company A also decided to further diversify the workforce to
maximize the production along with the variations in the lines of the product. The Company A

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took the decisions to expand the operations in the various regions. Further, the decisions of
strategy for the Company A relied on the improvement of the lines of production, availability,
standards of quality, styling, etc. Moreover, the Company A has used the combination of the
generic competitive strategy of cost leadership in order to minimize the cost of operations along
with the maximization of the revenues (Slack, N., 2015). The Company A wants to exploit the
production scale to a great extent. Further, the strategy of differentiation is being used by the
Company A in order to generate unique and the innovative products along with the services for
the targeted segment of the customers (Brenes, E.R., Montoya, D. and Ciravegna, L., 2014). The
aim of the Company A is to create a strong market presence and further attract the customers to a
great extent to attain sustainability. Also, the strategy of focus is being used by the Company A
in order to provide the best quality products and the services to the customers of to further attain
a competitive edge in the niche market. Further, the vision of the Company A is to become the
leader of the footwear industry be developing a landmark.
3. Industry overview
It has been observed that the footwear industry is dynamic and further the industry works in the
various diverse locations of the market. The regions where this industry offers products and
services are an example of astute for the internationalization and the globalization. Moreover, the
PESTEL analysis and the value chain analysis will help in understanding the overall industry of
footwear to a great extent.

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3.1 PESTEL analysis
The macro environmental analysis is being used to analyze the environment externally for the
Company A in order to identify the opportunities for the company in order to accomplish the
vision along with the maximized profitability (Ethiraj, S.K., Gambardella, A., and Helfat, C.E.,
2016).
Political factors-
It has been observed that the footwear industry views distinct policies of the government in
various locations and the taxes, tariffs and duties vary according to the locations. Further, the
policy of trade in North America is liberal to some extent in comparison to the various areas of
the locations like Europe and Latin America. There is stability in the political environment which
helps the companies to explore the opportunities.
Economic factors-
It has been observed that the economic factors like rate of exchange among the different
countries, the stock market, interest rates of the banks, etc. impact the overall functioning and the
performance of the industry. It is necessary to take these factors into consideration for the
companies otherwise, they will not be able to take the decisions related to the finances. Further,
the industry is contributing greatly towards the growth of the country.
Socio-cultural factors
It has been observed that the footwear cannot be manufactured in order to cater a wider group. It
is important to consider the products along the targeted age group in order to provide high-
quality products in order to satisfy them according to their needs and the demands. Further, the

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athletic industry of footwear has maximized the awareness among the people in order to be
conscious about health by initiating various programs of awareness.
Technological factors
It has been observed that the various companies in the footwear industry are utilizing the
innovative and the advance technology to manufacture the products of footwear to attract the
customers and further retain them for a longer period of time. Also, the companies are able to
attain the sustainability along with the competitive edge by focusing on the factors of technology
and changing the way of working accordingly.
Environmental factors
It has been observed that some companies in the footwear industry are using the environmentally
friendly process of production in order to attain the sustainability and protect the environment.
The companies are also using the technology of re-cycling in order to re-use the products
completely without causing any wastage of the resources. Further, companies have to take the
environmental factors seriously in order to hold the strong market presence and maximize the
sales along with the revenues.
Legal factors
It has been observed that the footwear industry has to follow the legal rules and the regulations
according to the regions in which they are offering products and services, for example, the law of
employment, consumer and taxation law, regulations of safety and health. It is also being
observed from the analysis that the environment of the footwear industry is overall satisfactory.

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3.2 Five forces model
Buyer’s bargaining power
It has been observed that there are various companies in the footwear industry like Lifeful, Kung
Hei, HK Hunter, etc. along with the Company A. So, the buyers get enough options in order to
purchase the desirable product. Also, it is observed that some companies have retained the
customers from a longer period of time and this helped them in making strong market presence
along with the maximization of profitability. The buyer's power of bargaining is high, and
further the sales of the companies rely on the acceptance only. Therefore, the companies of the
footwear industry have to keep the requirements of the buyers in mind while manufacturing a
unique product.
Supplier’s bargaining power
It has been observed that there is a high demand for the footwear of athletics, the suppliers have
the opportunity in order to switch to other company or the brand which are already ruling the
industry. Further, it is being observed that the supplier’s power of bargaining is quite limited
because the companies of the footwear industry are mainly operating in various locations and
don't rely on the particular supplier. But, the cost of switching is extremely high, and the
companies prefer to switch the suppliers timely in order to ensure that the monopoly of the
suppliers should not take place.
Threat of substitute products
It has been observed that the substitute products in this industry of footwear can be manufactured
by the local suppliers and can be provided at cheaper prices but, mostly users are conscious

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about the brand which helps the companies of the footwear industry in order to attract them and
further retain them to attain sustainability (Zott, C. and Amit, R., 2013). Furthermore, it has been
observed that the threat of the substitute products is comparatively high because the various
companies are offering unique and innovative products by using the advance technology at
higher prices but are offering better quality which are influencing the customers to switch.
Threat of new entrants
It has been observed that the initial cost of investment are high which are becoming the barrier
for the entrants in order to enter the market and due to this the threat of entrants is low. The
industry of footwear is led by few companies only. Further, the new entrants require huge capital
in order to enter the industry of footwear, and it is quite risky to enter the market because the
industry is being ruled by the various companies which have a strong market presence along with
the sustainability for a longer period of time.
Competitive rivalry
It has been observed that the spirit of competitiveness in the industry of footwear is high.
Further, the companies are looking forward to having the highest share in the market along with
the maximization of the profitability. Also, there are various companies in the industry which are
offering similar products in the market globally (Barney, J.B., and Hesterly, W., 2015).
Furthermore, the manufacturing of products changes according to the change in technology and
the preference of the consumers.

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4. Company overview
The Company A has a great variety of footwear products which is being offered in four different
regions i.e. Europe-Africa, North America, Latin America and Asia Pacific and the segments of
the market are the internet, private label, and the wholesale. Further, the Company A offers the
shoes of athletics for the people of all age group. The Company A believes in diversification by
using the technology of renewable and the green technology in order to become environmental
friendly in order to be competitive enough and attain the sustainability for a longer period of time
(Kor, Y.Y. and Mesko, A., 2013). Moreover, the Company A is using the combination of generic
competitive strategy which includes the combination of the strategy of cost leadership,
differentiation and the niche (focus) in order to attract the customers and attain the sustainability
for a longer period of time along with the strong market presence. The below are the vision and
the mission statement of the Company A:
Vision-
The Vision of the Company A is to be the leader in the footwear industry and develop a new
landmark for the industry of footwear.
Mission-
The mission of the Company A is to provide a diverse range of the footwear products to the
customers with the best quality by attaining the sustainability and further maintaining it.
Further, the SWOT analysis will help in understanding the operations and the overall
functionality of Company A in a better way.

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Strengths
 The Company A has a strong market presence globally.
 The Company A has a strong base of customer loyalty.
 The Company A provides products with high quality at an affordable price.
 The Company A has expertise in the section of research and development in order to
become a pioneer in the industry of footwear.
Weaknesses
 The Company A doesn't have any retailers as they are highly sensitive to the prices and
further affects the overall margin of the profit.
 The Company A relies on the industry’s market share which as a result makes the
company vulnerable and facing various challenges and the problems.
Opportunities
 The market of the footwear is emerging and further contributing to the growth of the
countries which will help the company to have a strong market presence along with the
expected and the maximized profitability.
 The company A has an opportunity to explore various new technologies apart from
renewable and green technology in order to offer more innovative and unique products to
the targeted customers.

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Threats
 There is tough competition among the existing companies of the footwear industry in
order to attain the highest share in the market along with the sustainability for a longer
period of time. If they attract the customers to a great extent, then it might impact the
functionality of the Company A.
 The Company A might face high risk due to the currency fluctuations while entering the
new regions.
5. Decisions made
This section will provide a complete description of the decisions which are being made by the
Company A at the three phases of the business simulation game. The below given are the three
phases which help in understanding the overall functionality of the Company A.
5.1 The beginning phase
 The company A decided to finance the operations from the collection of the debt and the
funds which are being borrowed from the debtors. Furthermore, the equity and debts are
being utilized for the operations in order to barrel with the risks (Wilden, R. and
Gudergan, S.P., 2015). It is expected to offer the enough funds in order to run the
operations smoothly.
 The Company A decided to generate footwear with the private labels in order to develop
the image of the brand and change the perception of the customers accordingly. It is

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expected to create the recognition of the brand in order to ensure the competitive edge
along with the sustainability for the company.
 The Company A decided to come up with the program of health awareness globally in
order to fulfill the social responsibility, and it further impacted the revenues of the
company. It is expected to create the awareness which will help in targeting the great
number of customers.
 The decision of sales forecasting is being taken by relying on the previous performance
of the company. Further, it is expected to maintain the overall expenditure according to
the sales forecast in a respective time.
5.2 The mid-game phase
 The decision to increase the capacity of the plant is taken depending on the demand of the
forecasting. Further, it is expected to maximize the volume of the sales along with the
profitability to attain the sustainability to accomplish the vision and the mission.
 The decision to provide training and compensation to the employees is taken to maximize
the capabilities of the personnel to further maximize the revenues and the overall sales
within a particular framework (D. Banker, R., Mashruwala, R. and Tripathy, A., 2014).
Moreover, it is expected to attain the sustainability to further expand the operations in
future.
5.3 The end-game phase
 The decision of marketing and pricing is being taken depending on the prices which are
being offered by the competitors. It is expected to control the production cost and provide
high-quality products and services to the targeted customers.

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 The decision of endorsement is being taken by ensuring that the celebrity’s personality is
being matched with the products which the company is offering in order to promote them
and attract the larger segment of the customers. Furthermore, it is expected to maximize
the sales to a great extent and further holding a strong market presence along with the
expected share in the market which will help the company to attract more customers and
retain them for a longer period of time (Ortega, A.G., Jalón, M.L.D., and Menéndez,
J.Á.R., 2014).
 The decision of operations of the warehouse is being taken relying on the capacity of
operations. Further, it is being expected to increase the volume of sales within a particular
framework of time.
Therefore, the investors are expecting to increase the profitability of the Company A as this will
help them get the high returns on the investments. The overall profitability of the Company A is
maximized in the past four years that demonstrates the expectations are completely met. Further,
the rating of credit is A+ that shows the overall growth of the company A. The company is
ranked on the 5th position. The overall score is 92, and 69 is the industry score of the Company
A.
6. Final results
As the company A is operating in the three segments i.e. wholesale, internet and the private
label, the score of the company A in the segment of the internet is 69 along with the share of the
market i.e. 6.6 percent which demonstrates that Company A is having a great share in the market
of the footwear industry. Furthermore, in the segment of wholesale, the performance of the

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Company A is great along with the share of the market i.e. 3.3 percent. Then, in the segment of
private label, the price of the bid is 34.8 for the Company A.
7. Reflection
I am satisfied with my performance as I did really well and I considered all the factors along with
the reports of the game in order to come up with the desirable results for the Company A. Also, I
have learnt various strategies and the methods which should be used by the companies in order to
attain sustainable competitive edge by having a strong market presence and the maximized
profitability. Further, the business simulation game was interesting for me as it helped in
understanding that how to analyze the overall performance of the companies by considering the
historical reports as well. I have also learned that it very important to change the way of working
according to the change in time and technology in order to attain sustainability and provide
satisfactory products and services to the customers according to their needs and the requirements
and this will also help the company to retain them for a longer period of time.
8. Underlying strategic principles
It has been observed that the principles of strategy are oriented towards action which further
helps in responding quickly and offers guidance to attain the vision and the mission along with
the long term goals. Furthermore, it helps in determining the action of the strategy which is
supposed to be taken to manage and formulate the strategies in an effective way. The Vision of
the Company A is to be the leader in the footwear industry and develop a new landmark for the
industry of footwear (Shapiro, C. and Varian, H.R., 2013). Moreover, it is being observed that
the companies are effectively managing the strategies in an effective and efficient way possible

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which can be analyzed from the index of the profitability and share in the market. Therefore, the
Company A included all the factors which affected the volume of the sales positively. The
company’s operating profit shows that the strategies and the operations of the company are
effective to a great extent.
9. Learning points about strategy
The learning points about the strategy are as follows (Hill, C.W., Jones, G.R. and Schilling,
M.A., 2014):
 The analysis of the strategy helps in identifying the external and the internal
environment which helps the company to attain sustainability and maximize the
revenues and the sales accordingly.
 It also helps in managing the overall profitability of the organization according to the
change in technologies and change in the framework of time.
 It helps in analyzing the performance of the competitors as well in order to
manufacture and provide the products and services accordingly.
 It helps in analyzing the risks which are being associated with the overall
functionality of the company.
 It helps in understanding the requirements and the demands of the internal and
external stakeholders which impacts the overall functioning.
10. Conclusion
The game of business simulation helped in understanding and learning the significance of the
strategy in order to run the business efficiently and effectively. Further, the stakeholders are

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impacted directly and indirectly by the overall functioning of the company, so it is essential to
think strategically and further implement it. Further, it can be stated that the Company A has the
satisfactory overall performance. The Company A believed in diversification by using the
technology of renewable and the green technology in order to become environmentally friendly.
Moreover, the Company A has used the combination of the generic competitive strategy of cost
leadership, niche (focus) and differentiation to attain the sustainable competitive edge to
accomplish the vision. The section of decisions made helped in understanding the performance
and the functionality of the Company A in three phases which helped in analyzing the
effectiveness of the decisions which were taken in every phase.

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REFERENCES
Barney, J.B., and Hesterly, W., 2015. Strategic management and competitive advantage
concepts and cases. Pearson.
Brenes, E.R., Montoya, D., and Ciravegna, L., 2014. Differentiation strategies in emerging
markets: The case of Latin American agribusinesses. Journal of Business Research, 67(5),
pp.847-855.
D. Banker, R., Mashruwala, R., and Tripathy, A., 2014. Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic
management. Strategic Management Journal, 37(11), pp.2191-2192.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Kor, Y.Y. and Mesko, A., 2013. Dynamic managerial capabilities: Configuration and
orchestration of top executives' capabilities and the firm's dominant logic. Strategic Management
Journal, 34(2), pp.233-244.
Ortega, A.G., Jalón, M.L.D. and Menéndez, J.Á.R., 2014. A strategic analysis of collective urban
transport in Spain using the Five Forces Model. Investigaciones Europeas de Dirección y
Economía de la Empresa, 20(1), pp.5-15.

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Shapiro, C. and Varian, H.R., 2013. Information rules: a strategic guide to the network economy.
Harvard Business Press.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Wilden, R. and Gudergan, S.P., 2015. The impact of dynamic capabilities on operational
marketing and technological capabilities: investigating the role of environmental
turbulence. Journal of the Academy of Marketing Science, 43(2), pp.181-199.
Zott, C. and Amit, R., 2013. The business model: A theoretically anchored robust construct for
strategic analysis. Strategic Organization, 11(4), pp.403-411.

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APPENDICES

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