Strategic Management for Competitive Advantage

Strategic Management for
Competitive Advantage

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
COMPANY PERFORMANCE.......................................................................................................3
CRITICAL REFLECTION..............................................................................................................8
CONCLUSION..............................................................................................................................13
TEAM PERFORMANCE..............................................................................................................13
REFERENCES..............................................................................................................................16

INTRODUCTION
The objectives of the company includes the securing maximum market share, attaining
the at least 60% of the productivity with 0 strike days, investing minimum £85 mn in the
research and innovation. Along with this, it aims at maintaining 30% gross profit margin and the
8% net profit margin and achieving 30% return on assets. The performance of the company is
provided in the table and along with this the company has been able to accomplish it GP margin
and net profit margin objectives along with the return on assets financial indicator. The company
has invested £72.24 mn in research which is below the set objective. But the company failed to
achieve the 0 strike days but accomplished the productivity percentage.
Particulars Amount (£m)
Total sales 10553.96
Total unsold stock 115.21
Shareholder's funds 4807.47
Closing bank balance 2952.55
Outstanding loan 50
COMPANY PERFORMANCE
The strategies of the business play an important role in determining the future growth and
success of the organisation. The four rounds have been conducted to achieve the key
performance measures of the car company. These rounds will provide the simulations about the
company regarding the operations and achievement of key performance Indicators. The Stuart
corporation has been manufacturing cars. The simulations from the 4 rounds are derived to
assesses the performance and results of carrying out the business for the year. It is hard to
achieve the performance measures at once (Narkunienė and Ulbinaitė, 2018). The performance
of company would be evaluated through the 4 rounds on how it will achieve the targeted
performance objectives.
Round 1

In round 1 it could be evaluated that the business has produced two models S11 and L13.
In quantity they are 75000 & 60000 respectively and sold all the cars produced. Model S11 was
produced with workforce of 1800 and L13 with 1500. The total workforce for producing the two
models was 3300. The productivity measure in round 1 show that each worker has produced
40.91 cars in a year.
Round 1
Outstanding Debt 100
Return on assets % 20.16%
Current Ratio 1.363
Gross Margin % 26.60%
Quick Ratio 1.363
Post Tax profit / Sales % 7.09%
Liquidity Ratio 0.084
Profit / Employee 63636.36
Return on Shareholders Funds % 29.64%
Evaluation of Round 1 Profit and loss using ratio analysis it has been identified that
Stuart Corporation had debt of 100 million where the shareholders funds were 710.61 million.
The share of debt against shareholder's fund is considerably low which shows the capital
structure is not adequate and cost of capital due to this would be higher. Return on assets that is
used to measure the management efficiency to generate returns using the assets of company
effectively. It could be seen that company had ROA of 20.16% in round 1 which is adequate at
the initial stage of the business (Anghel and Calotă, 2016). Return has to be increased by more
effectively using the existing resources and also by reducing the unproductive assets. Current
ratio was 1.36 where the standard ratio is 2:1. The existing current assets are not adequate to
meet the short term obligations of company. Weak current ratio imposes threat to suppliers that
there due may not be paid on time and may cause them to stop supplies. It has to managed
through effective management of cash cycle. Gross margin has been achieved as 26.60% which