Impact of Company Strategy on R&D, Marketing, Production, and Finance

This presentation explores the impact of company strategy on various aspects such as R&D, marketing, production, and finance. It discusses the cost leadership strategy, market segmentation, SWOT analysis, future decisions, and more.

Mba Capston
Students Name
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Author’s Note

 The company chose to undertake the cost leadership strategy of market competition. This is a
competition strategy through which a business entity decides to lower unit price of the goods and
services offered on the market. Under this particular strategy, an entity creates a low cost of
operation within the market. By applying such a pricing strategy, chester positioned itself in an
advantageous position as compared to its competitors in the market
 The second type of strategy that is undertaken by the company is competition in all the five
segments of the market. A market segment refers to the process of sub-dividing potential buyers
and customers into groups or categories depending on particular aspects.
 There are majorly five categories. These include the geographic, demographic, firmographic,
behavioral and psychographic segmentation (qualtrics, 2019).
COMPANY STRATEGY

 Because the chester company is aiming at minim sing costs as much as possible
through the cost leadership strategy, research costs will likewise be minimized.
Having high research expenditure would be a violation of the market strategy (Guo
and Wang,2018).
Impact of company strategy on R&D

The cost leadership strategy would be maintained In relations to r&d. this is because ,maintaining low costs would have positive impact s
in the long run.
The decision to cover all the five market segments would be changed. This implies that market segments would be phased out. This would
reduce on the costs involved.
Decisions that would change

Swot analysis is an evaluation tool used to identify strengths, weaknesses, opportunities and threats. under research and
development the strengths include effective time saving, innovation and effective resource utilization.
Weaknesses include managerial changes, inadequate training requirements, among others.
Opportunities include market control and quick product launch
Threats are high financial costs, and delayed product design and development.
R&D SWOT analysis

Future research decisions that would be made include decisions on new product line developments. Such decisions would
be aimed at finding new products for the market.
The other future research and development decisions would primarily concerned with aspects such as finding new
markets for the existing products and services for the company. this would call for market expansion of the company.
Future research decisions

 The strategy of cost leadership results into customer loyalty and increased market demand. The reduced prices attracts more consumers to the
product thereby leading to more sales revenue In the market.
 It would further facilitate product different ion in the market through the reduced product prices for the products. ultimaktdely this would result
into customer loyalty of the product hence leading to increased demand.
Impact of the strategy on marketing

 The increased promotional sales would imply more customer awareness in the market. This would provide a more competitive advantage and
increased product market share.
 Forecasts on returns during the first round would be aimed higher. This would control under valuation of the firm.
Changes in the marketing decisions

 Strengths: business location, specialized marketing team
 Weaknesses: sub-standard products
 Opportunities: existing and developing markets
 Threats: new and existing competitors, price wars among others (parsons,2018).
Marketing swot analysis

 These may include volume discounts, price decimations, early payment discounts (Buleen, 2019)
 increased distribution channels among others
Future marketing decisions

 Cost leadership strategy will result into operational and production efficiency. As the low costs would be incurred be incurred,
capacity of production will likewise be improved. the cost per unit output will as well be very low as compared to the other
producers in the market.
Impact of strategy on production

 Changes in the methods of production ;would be maintained because of the increased
capacity and demand.
 Low end products need to be phased out because they would simply increase the cost of
production and yet the returns are very low.
Reflections on the decisions

 The decisions taken on products will mainly focus on product branding. Branding
involves packaging, pricing, brand development among others. for instance new
product brands on the market would be introduced to meet new customer wants
an needs.
Product decisions

 Strengths: motivated production personnel, effective and efficient machinery and equipment
 Weakness: limited safety measures, unskilled human labor, limited capacity of production
 Opportunities: high market demand, customer loyalty, low levels product substitution
 Threats: changes in customer preferences, high raw material costs and threats from new entrants in
the market.
Production swot analysis

 During the first and early rounds, chester had a poor general
performance in terms of return. For example, chester performed
relatively badly as compared to its competitors such as Digby.
 If we take the a look at the three aspects of ROA, ROE AND PROFIT,
Chester is below average. For instance during the early rounds, Chester
recorded a -1.1% on ROA, ROE was at-2.3 % and profits for there was a
net loss of $1,413,347. when such statistics are compared to those of
Digby which had a ROA of 5.5%, ROE of 10.8%, and profits of
$5,894,047, there is a high degree of under performance
Impact of company strategy on finance

 Because investment requires huge sums of capital, net incomes in form
of retained earnings were significantly drained.
 Additional revenues were directed towards the research and
development. It is all such activities that resulted into low and or perhaps
negative profits for the company.
The impact of strategy on finance

 Because there was little liquidity within the company, this means that the
ability to meet short term obligations was reduced. It is such reasons that
called for an emergence loan.
 Such loans that are attract interest payments which increases the level of
leverage. Therefore to correct the high leverage, there is need to devise
alternative ways of increasing liquidity.
The decisions that would be changed

 By assessing the the company’s swot analysis, it is evident that chester has strengths
in the following areas.
 Strengths: the current assets level. The company has a relatively high amount of
current assets as compared to its other competitors especially during the second
round. The company has a total net amount of $77,993. this value is far more than
that of Digby which is recorded at $48,786. such a figure implies that chester can
easily have access to working capital rather its competitors.
 The weaknesses however are identified in the company’s high tendencies of
leverage. Chester has the highest amount obligations and it is recorded at $ 76,604
which is the highest during the second round. This poses a great risk to the company
as failure to meet the obligations could result into liquidation an collapse of the
company (Dooley,2016).
Finance swot analysis

 For the purpose of recommending future decisions, it is advisable for chester should undertake more
sustainable forms of financing. For example, instead of obtaining emergency loans that are highly
costly, management should opt to obtain long term loans. These loans attract low interest rates and yet
they reduce on the pressure that would be imposed by the emergency loans (Wins, 2018).
Recommended future decisions

 Dooley. P. (2016). The three must know financial tools for effective decision making. Retrieved from
https://www.thinkhdi.com/library/supportworld/2016/three-must-know-financial-tools-effective-decision-making.
aspx
 Wins. M. (2018). understanding the role of finance to ensure effective strategic planning. Retrieved from
https://www.procurement-academy.com/understanding-the-role-of-finance-to-ensure-effective-strategic-planning/
\
 Kenton. W. (2019). Strategic financial management. Retrieved from https://
www.investopedia.com/terms/s/strategic-financial-management.asp
 Qualtrics. (2019). What Is Market Segmentation? Different Types Explained. Retrieved from
https://www.qualtrics.com/experience-management/brand/what-is-market-segmentation/
 Buleen. C. (2019). What Are The Key Marketing Decision? Retrieved from
https://smallbusiness.chron.com/key-marketing-decisions-25575.html
 Parsons. N. (2018). What Is A Swot Analysis And How To Do It Right (With Examples).retrieved
from https://www.liveplan.com/blog/what-is-a-swot-analysis-and-how-to-do-it-right-with-examples/
 Wang. J., Guo.,B. Wei.X.S, (2018). R&D Spending , Strategic Position And Firm Performance.
Retrieved from https://link.springer.com/article/10.1186/s11782-018-0037-7
References