Strategic Management in a Global Context - BSG

Strategic Management in a global
context

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1. Evaluation on major strategic management decisions which are made during BSG
simulation...............................................................................................................................1
2. Evaluation of key supporting strategic and management models, concepts and ideas which
are underpinned by global strategic approaches.....................................................................4
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management refers to a continuous planning, analysing and monitoring the
overall process of a business, to meet its specific goals and objectives. It helps managers of a
company in assessing the present situation and chalk out strategies for improving the same
(Knight and Liesch, 2016). For this process, to deploy proper strategies, they need to analyse
internal and external capabilities, weaknesses of business, so that proper plans can be formulated.
In this regard, a group has given a task to enrol themselves in managing the current situation of a
company, by providing justified decisions during the BSG Simulation (Liu and Liang, 2015). For
this purpose, Intercontinental Footwear has been chosen that offers high quality of sports shows
to athletes on reasonable rates. In order to create sustainable future for this company and achieve
its objectives, group members have taken a number of strategic and management models to
underpin a specific approach. After playing this Business Strategy Simulation Game (BSG), an
evaluation of overall decisions taken by team members are highlighted under this present
assignment.
TASK
1. Evaluation on major strategic management decisions which are made during BSG simulation
Strategic management plays a main role in undertaking the decision and actions which
are essential to reach long-term and short-term goals of a company (Engert, Rauter and
Baumgartner, 2016). Generally, a company use this concept as a business tool to plan for future,
by creating a vision and developing long term strategies accordingly. This would help in
identifying the necessary procedures need to allocate resources for achievement of goals. Along
with this, it also aid in strengthening the core competencies of business as well, so that higher
competitive advancement can be gained. In this regard, during Business Strategy Simulation
Game (BSG), a group has determined a strategy for improving the current performance of a
company. They have taken various management tools like market analysis, internal analysis,
Porter's Five Force Model and more, to make logical decisions and develop new objectives, in
order to keep pace with dynamics of changes in business environment (Bratton and Gold, 2017).
Intercontinental Footwear has been chosen organisation on which the group members have
worked. In this regard, they have undertaken the concept of strategic to help respective firm in
getting its competitive advancement and improve market-share as well (Frynas and Mellahi,

2015). Hereby, it has evaluated that team members act as managers to take any decision in
favour of company’s profitability. Therefore, to take any decision, they have concerned on
current mission statement of Intercontinental Footwear (Gillespie, 2015). Because it has been
analysed that strategic mission can only be established when any organisation has strong sense of
how to achieve specific goals, in ethical way. So, in context with given company, it includes -
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 To offer high quality sporting goods and services that valued for money to potential
customers.
 To improve on continuous manner, the quality of own product and services for
betterment of customers.
 To build an innovative as well as diverse team around the globe.
 To make the products more accessible worldwide via company’s web site, mail orders
and retail outlets.
 To develop more sustainable future for business.
In addition to the above statements, the short term and long term business objectives of
International Footwear, are based on attainment of near about 24% high return of equity of
stakeholders in 2019 (Song, Li and Zeng, 2015). In this regard, to achieve the company’s
mission, group members have done a lot of analysis like micro and macro factors that may
impact on decisions, threat created by presence of competitors and more. It has helped in taking
more effective decisions for approaching the best market for given company, that gives
opportunity to increase market share and profitability in higher manner. Hereby, team members
have identified four main areas where this footwear company can operate its business and gain
chance to attract more new customers towards the products and services (vom Brocke, Zelt and
Schmiedel, 2016). It includes North America, Latin America, Europe-Africa and Asia – Pacific,
where, to gain sustainability in these potential market, group members have suggested to
implement differentiation strategy as an approach.
In year 2011, it has been evaluated by group members that Intercontinental Footwear has
been encountered within an intense competitive rivalry from other competitors, that were highly
concerned on striving to position themselves as strongly as possible within shoe markets.
Therefore, to gain high competitive advantage over them and greater share of markets, this
company needs to opt the product differentiation strategy, in order to distinctive its presence
among other competitors and become a unique selling point as well (Ostrom and et. al., 2015).
Hereby, to gain greater market share, introducing business in e-commerce also helps in
implementing the deferential strategy more effectively (Cascio and Boudreau, 2016). But, this
may impact on revenue and profitability due to offer high quality of products on lower price.
In the next year i.e. year 12, it has been evaluated that Intercontinental Footwear has still
face the intensive rivalry from its competitors that are present in same market place (Reiche and
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et. al., 2016). But team-members still focused strongly on approaching the differentiation
strategy to gain high competitive factor and overcome from intense competitive rivalry. Along
with this, to get an edge over the competitors, making investment or financial capital into the
workforce for providing them training to equip with more talent, help in getting their support in
enhancing the quality of product and services (Noe and et. al., 2017). For this process, invested
near about £7,250 to boost the search engine advertising helps in running business more
successfully in online market, that results in enhancing sales performance from 504 to 566 in
year 11 and year 12 respectively. Furthermore, by focusing on branding the products and
services of respective company also increase its global presence as well.
After applying the differentiation strategy to distinct the products from other existing
rivalry companies, it has been evaluated that in year 13, this would have helped Intercontinental
Footwear in positioned itself more strategically in new market like Europe-Africa markets.
Furthermore, to gain high competitive advantage after encountered with major rivalries, focusing
still on product differentiation strategy, helps in offering more innovative products at new and
existing market area. In the wholesale segment, it has been evaluated that SQ rating has also
increased to 7.1% as compared with year 12 which was only 4.9. The wholesale retail price of
this company has also rocketed to near about £60.00 per pair, which was only £54.00 in year 12.
Therefore, it shows a great demand for the products and services of given organisation in new
market because of creating uniqueness and distinctiveness of brand loyalty.
In year 14, it has been evaluated by team members that Intercontinental footwear is more
concerned about the sustainability of environment, community and people among which it
operates. Company use renewable energy sources in order to fulfil its corporate social
responsibility. in year 2014 company invest its money in child care activities, to improve
ventilation and many more. during the game we decided to cut down the prices in all the markets
in which company deal and this company to increase its market share by 1.3%. From year 15 to
16 main focus of company was on differentiation of its products in order to attract large number
of customers and to increase the demand of its products in market. this helps in achieve the same
and this results in increase production level of enterprise. From year 11 to 16 company make
improvements in its distribution channel, quality of products and in every aspect in order to
compete with its rivals. all this increase profits and overall earning of company.
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Thus, through overall discussion, it has been evaluated that decisions taken by group
members i.e. implementation of differentiation strategy within business, give more support to
Intercontinental in driving business more effectively within footwear market.
2. Evaluation of key supporting strategic and management models, concepts and ideas which are
underpinned by global strategic approaches
For making any decision that underpin the global strategic approach, group members
have analysed a number of management models and concepts. Since Intercontinental Footwear
wants to thrive and compete successfully mainly on four chosen markets that are – North
America, Asia-Pacific, Latin America and Europe-Africa (Noe and et. al., 2017). In this regard,
under Year 10 within BSG Simulation, group members have undertaken the internal analysis, for
determining the capabilities of business, in terms of human resources, operations, finance,
marketing and sales etc. For this purpose, SWOT Analysis has been taken which helps in
analysing the competencies of respective organisation towards accomplishment of its long-term
and short-term goal in following way –
Strength: The global presence of Intercontinental Footwear Company is taken as main
key competency, where it offers high quality of sport shoes to athletes and sport-lovers on
reasonable prices (Reiche and et. al., 2016). Therefore, it remains the most valuable brand in
footwear market. Along with this, it has also a high expert team, who help in producing best
quality of products and services. This would help in attainment of its short-term goals i.e. to
increase earning per share by $4.00 till the end of this year.
Weakness: Over-dependent on UK market only limits the competitive advantage of this
company. This would impact directly on business strategies and also show weaknesses in
attainment of long-term goal, which is increased market share and gained highest position in
shoe market.
Opportunities: Launching business in other countries like Europe, Asia, America and
more, gives opportunity to Intercontinental Footwear in increasing its high sales performance
(Cascio and Boudreau, 2016). Now, people becomes more health conscious and going to adopt
healthier lifestyle therefore, offering them such sports shoes that they can use during exercise
and morning walk, provides a chance to respective footwear company in attainment of both long-
term and short-term goals.
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Threat: For dealing in international market, the biggest threat that faced by
Intercontinental Footwear is foreign exchange currency fluctuations. This may impact on its
revenue and sustainability in global market, in both positive and negative manner. Another major
threat that this company currently face is competition with other footwear companies, which
includes brand names of G- Sport, Jaden, Ego-Joy, Cosmos and more (Ostrom and et. al., 2015).
This would have reflected the presence of high competition in given market that highly affects
the profitability of respective organisation.
Thus, it has been evaluated by group members that present company needs to work on
increasing its competencies to gain higher opportunities in enhancing its business market. For
analysing the potential of new market, where Intercontinental Footwear can offer its products,
group members have monitored the macro-environmental factors, which may create an effect on
the performance of this organisation (vom Brocke, Zelt and Schmiedel, 2016). It has also helped
in analysing if there is a high market potential in Europe – Africa, North America, Asia-Pacific,
Latin America and more, for given company to open its business. In this regard, macro analysis
has been done in following way-
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Political: As per the market analysis of different countries, it was found that the political
environment of all the focused countries (like countries of North America, Europe, Africa, Asia
pacific and some of Latin America) is quite stable and suitable for expanding business of
Intercontinental Footwear. Despite of trade war raised by president Trump, North America is
considered as most potential and best suited market for athletic shoes.
Economical: the growth rate and per capita GDP of North America, Europe, Africa. Asia
pacific and Latin America is good and continuously increasing, hence providing a good a chance
and opportunity to intercontinental Footwear (Frynas and Mellahi, 2015). People of these
countries are having a good purchasing power so it will be beneficial to launch and expand its
business in these countries as it will definitely result in high sales and profit.
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Illustration 1: PESTLE Analysis

Social: People of these countries are having a rich taste and always demand for high
quality products. Society is now getting more attentive towards its health thus, this is the best
time for Intercontinental Footwear to expand its business in these countries by providing a high
quality sports footwear ensuring comfort to its customers.
Technical: To ensure better promotion of its products, Intercontinental Footwear can
make effective use of social media and other online modes (Song, Li and Zeng, 2015). As the
market it wants to attract is very advance in technology thus Intercontinental can make effective
use of this advancement and innovation to get an upper hand on its competitors.
Environmental: as per the study conducted, it was observed that the people of North
America and Africa are very conscious about environment, thus Intercontinental can make use of
eco friendly material to manufacture its shoes to attract more customers.
Legal: the legal structure of these countries are quiet lenient and flexible, hence
requirement of documentation and other formalities are also less. Thus Intercontinental can plan
to expand its business in these areas.
It has been evaluated from above market analysis that to gain high competitive factors,
there is a high potential in other countries for Intercontinental Footwear. By launching its
business over here, it can attract more new customers that helps in increasing its profitability in
efficient way. The good economical situation of market of given four countries that are Asia-
Pacific, Europe – Africa and Latin America and North America, reflects that there is a high
purchasing power of buyers. Along with this, people of these countries also concerned on buying
those shoes that prove beneficial for their health. So, focusing on demand and health fitness
criteria, will help International Footwear in producing more innovative products to them, which
would further help in retaining loyal customers for longer period as well.
Therefore, after analysing both internal and external environment, group member during
BSG simulation have discovered that North America consists high potential markets for
Intercontinental Footwear, in offering its product and services (Gillespie, 2015). They have
suggested to focus more strongly on market area of North America to position itself. Along with
this, the other areas which include Asia-Pacific, Europe – Africa and Latin America also have
potential markets, that gives opportunity to respective company in competing with its major
footwear competitors like Jaden, G- Sport, Cosmos, Ego-Joy and more. Moreover, for analysing
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the intensity of competition within footwear industry and attractiveness of profit potential, Porter
Five Force model has also been used, in following way –
Porter’s Five Force Model –
This model shows the threats posed by new entrants, suppliers’ power, buyers’s power,
product substitutes as well as intensity of rivalry within competitors. Therefore, to assess the
intensity of industry competition or attractiveness of the profit potential, this method can be used
more beneficially.
Threat of new entrance: New entrants within sportswear industry has posed a great
impact as they consist more production capacity in offering more innovative products. This
would have shown the highest threaten factor that affect the market share of existing companies.
In context with Intercontinental footwear, it gives more priority to create innovation in products
and services as per new trends of marketplace (Bratton and Gold, 2017). So, this would have
lower the treat of new entrance, including the deterrent factors that are economies of scale,
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Illustration 2: Porter Five Force Model

barriers to entry, access to distribution channels and more. But potential of new entrants has also
suggested to identify the new market opportunities by taking new approaches of distribution
channels like social media.
Bargaining power of suppliers: There is a high bargaining power of suppliers that
directly affects the production cost of footwear products (Liu and Liang, 2015). But here,
Intercontinental Footwear has an edge for switching to those suppliers that offer raw material on
less cost price. So, it reduces the threat of this factor relatively, much low.
Bargaining power of buyers: It is relatively created a high threat on companies that
deal in footwear industry, due to presence of number of retailers that offer same products on
different price rates, in same market place (Engert, Rauter and Baumgartner, 2016). In this
regard, in year 11, given company i.e. Intercontinental Footwear has lost the greater revenue, as
it has sold its higher quality sportswear shoes on much lower price to its customer to remain in
competition.
Threat of substitutes: Being service oriented rather than focusing on product orientation
has created an opportunity for other companies to offer substitute products in footwear market.
Therefore, focusing on product differentiation can lead to help in reducing this threat more
efficiently for Intercontinental Footwear in given industry (Knight and Liesch, 2016).
Rivalry among existing competitors: Since there is an intense competition present,
therefore, it is better for respective company to concern on building the sustainable strategies like
product differentiation to gain sustainability in given market.
Thus, after taking all above methods to analyse market situation and intensity of
competition, group members have chosen to apply product differentiation strategy within
Intercontinental Footwear Company. This would have helped in achievement of its both long-
term and short-term goals more effectively, in given period of time.
CONCLUSION
It has been concluded from this assignment that to make strategical decisions for running
business profitably, a company concerns on number of factors. It includes mission and vision
statements that helps in setting objectives which can be achieved in a fixed period of time. This
would entail associated members of an organisation what they have to accomplish. Along with
this, for adopting the concept of strategical management, a firm also need to concern on
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analysing both micro and macro-environment so that, proper strategies can be made to run
business effectively.
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REFERENCES
Books and Journals
Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Reiche, B. S. and et. al., 2016. Readings and cases in international human resource
management. Taylor & Francis.
Cascio, W. F. and Boudreau, J. W., 2016. The search for global competence: From international
HR to talent management. Journal of World Business. 51(1). pp.103-114.
Ostrom, A. L., and et. al., 2015. Service research priorities in a rapidly changing context. Journal
of Service Research. 18(2). pp.127-159.
vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
management. International Journal of Information Management. 36(3). pp.486-495.
Frynas, J. G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Song, Q., Li, J. and Zeng, X., 2015. Minimizing the increasing solid waste through zero waste
strategy. Journal of Cleaner Production. 104. pp.199-210.
Gillespie, K., 2015. Global marketing. Routledge.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Engert, S., Rauter, R. and Baumgartner, R. J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production. 112. pp.2833-2850.
Liu, Y. and Liang, L., 2015. Evaluating and developing resource-based operations strategy for
competitive advantage: an exploratory study of Finnish high-tech manufacturing
industries. International Journal of Production Research. 53(4). pp.1019-1037.
Knight, G. A. and Liesch, P. W., 2016. Internationalization: From incremental to born
global. Journal of World Business. 51(1). pp.93-102.
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