(PDF) External and Internal Environment Analysis of Professional

STRATEGY

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
PART 1............................................................................................................................................1
INTERNAL ANALYSIS ............................................................................................................1
Value chain analyses: -....................................................................................................................1
EXTERNAL ANALYSIS ...........................................................................................................3
Competitors:.................................................................................................................................3
Geography and technology..........................................................................................................3
Sub strategic group in the phone industry....................................................................................4
PESTLE Analysis........................................................................................................................6
Critical analysis of Investment in R&D.......................................................................................8
RECOMMENDATION.................................................................................................................10
PART 2..........................................................................................................................................12
Stakeholder analysis...................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
This current report will be analysing the data from Ceism simulation game by taking
Professional as leading company in mobile phone manufacturing industry (Jaligot and et.al.,
2016). There are many competitors of firm like blue, grey, innovators and many more that are
operating into same market that of USA, Asia and Europe.
The report will include external and internal environment analysis of Professional. The
report further will explain Porter five force and Pestle analysis which describe the firm’s current
and future situation as well. it will also discuss about stakeholder analysis and further
recommending firm with what should it do in future.
PART 1
INTERNAL ANALYSIS
Value chain analyses: -
It is a process in which various business activities are classified into primary and
secondary activities (El-Sayed, Dickson and El-Naggar, 2015). Further their contribution is
analysed towards the value creation. These activities are as follows: -
Primary activities: -
These activities are involved to convert input into output and distribute the products in
market with different distribution activities.
 Inbound logistics: - Professional is involve in different primary activities like inbound
logistics that includes activities like receiving the raw materials, storing them for further
use and also distributing it so that goods and services are available for different
operations of the business.
 Operations: - This activity in the company professional includes transfer of raw material
and completing it into a final product that is ready to be sold in market(Jaligot and et.al.,
2016). Professional is a manufacturing company that is the reason it includes activities
like machining, packaging etc.
 Out bound logistics: - This activity in the company professional helps in collection,
storing and delivering of the product to the respective customers.
 Marketing and sales: - There are activities like advertising, market research that helps
professional company to get there customers aware about products features.
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 Service: - Professional is maintaining the value of their products by providing after- sales
service to their customers.
Support activity:-
These activities usually assist all primary activities and give them support.
 Procurement: - This activity is serving professional as it supplies necessary material and
machinery so that primary activities can be run smoothly.
 Technology development: - This activity requires huge investment and professional is
manufacturing their products with help of good technology as it gives competitive
advantage to this firm.
 Human resource management: - In professional it is considered as the most important
activity as it helps the company in selection of good staff and make them retain for long
period.
 Infrastructure: - This activity includes planning, quality control, finance and
professional is managing these activities in an effective manner (El-Sayed, Dickson and
El-Naggar, 2015).
VRIO framework
It is an internal analysis tool that the company professional is using in order to categorize
their respective resources and identify competitive advantages of these resources (VRIO
framework, 2019). There are four dimensions by which this framework is being formed:-
 Valuable: - If resources of the business are valuable then they will be somehow
beneficial to the organisation. But to give competitive advantage it is necessary that this
resource fit all other dimension. Professional is having resources that are valuable but
can easily be imitated.
 Rare: - If a company is having uncommon resources then other organisation then they
are rare in nature. It can be beneficial to professional that they are having resources that
are both valuable and rare, this helps the company to have a competitive advantage over
other firms though for a limited time period (Knott, 2015).
 Inimitable: - There are resources that are very expensive for the firm to afford like these
resources may be protected by legal means. Professional can have such unique resources
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that other organisation cannot imitate. Having resources that are valuable, rare and
imitable can bring competitive adventure to the firm.
 Organized: - Professional can have resources that are organised if it is getting support of
process, structure and culture of the firm. Having resource that is valuable, rare, hard to
imitate and organised can give a long-term competitive advantage to professional.
EXTERNAL ANALYSIS
Competitors:
The competitors of cesim simulations in the global marketplace because there are many
companies used this platform for providing better quality of product and services to consumers.
It is mainly considered some competitors such as innovator, red, yellow, orange and many more.
These are different competitors targeting the group of consumers in global marketplace (Barišić
and Prović, 2014). The Professional firm can operate the mobile sector where it can implement
innovative idea for minimizing the cost and increasing the demand in global marketplace.
Geography and technology
In terms of geography and technology, ceism simulation is considered one of common
technique that can use different competitors in marketplace. Professional firm will expand their
business in different nations such as Asia, USA and Europe. As per analysis, it can be identified
that the preferences of people in Asia and Europe is different and use new technology for
attracting towards product and services. Professional firm requires to server the continent and
United state citizen in different ways. The organization is focused on the research for identifying
the position of item in global world.
THE
INNOV
ATOR'S Red Blue
Leade
rs Grey
Och
re
Globa
l
leader
s
Profession
al
Yello
w
Sales
revenue
from
markets 2,709,916
3,722
,508
2,798
,969
1,420,
866
1,172,
717
43,8
13
731,6
21 924,027
1,172,
473
from
internal
0 0 285,6
43
194,0
47
0 0 0 0 0
3

transfer
s
Sales
revenue
total 2,709,916
3,722
,508
3,084
,612
1,614,
913
1,172,
717
43,8
13
731,6
21 924,027
1,172,
473
from
markets 2,709,916
3,722
,508
2,798
,969
1,420,
866
1,172,
717
43,8
13
731,6
21 924,027
1,172,
473
Table: 1
Figure 1 Sales Revenue
As per figure, it can be determined the overall sales revenue of professional in global
marketplace. It helps for company to compare with the strongest competitors through innovators,
blue, grey and yellow.
Sub strategic group in the phone industry
It is an essential for professional firm to maintain the positioning of product and services
in marketplace. In this way, it will use the specific strategic planning to maintain the brand image
of organization in front of consumers (Heričko and et.al., 2017). Professional firm always
motivate the people to select the product because employee encourage the people by using online
platform. It provides the accurate information regarding the features, quality etc.
Buyer preferences and market segmentation
The preferences of buyer should different across the world and having multiple reason to
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choose particular product and services. In this way, it will require for professional firm to
segment the market through different products. The company was investing lot of money in the
innovation technology that support to provide product on the basis of demand (Kikot and et.al.,
2013). Some companies are taking right decision that increase the demand in global world.
Professional firm will segment the market according to the technology for improving the
efficiency and offer the product on time. In this way, the level of consumer satisfaction increases
and maintained in proper manner.
Table: 2
According to the table, it can be identified that the advanced technology used in the
business that help for providing the better quality of services and products. It also identifies that
competitors of professional try to change their technique for establishing positioning in global
world. In this table, Innovator is a leading organization that always try to use new technology for
maintaining their positioning in market.
Market share
THE
INNOVATO
R'S Red Blue
Leade
rs Grey Ochre
Global
leaders Professional Yellow
25.63
22.0
2
17.1
3 11.28 7.15 0.22 4.91 5.05 6.62
37.19 0.00 0.00 0.00
18.7
5 0.57 12.87 13.25 17.36
0.00
76.8
5 0.00 23.15 0.00 0.00 0.00 0.00 0.00
0.00
42.6
1
51.7
3 5.66 0.00 0.00 0.00 0.00 0.00
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Table :3
According to this table, it can be identified the market share of professional firm through global
marketplace. As per analysis, innovator is the strongest competitors of professional that has
maintained their position in market.
Figure 2 Market Share
PESTLE Analysis
 Political Factors: It is one of the most important factor that affect an organization in
various ways (Rastogi and Trivedi, 2016). This factor includes all the ways through
which government can influence a business both positively and negatively. It has been
observed that from past few years their has been a continuous political tension going on
between USA and few countries of Asia such as China. The political tension between
USA and china is affecting their overall productivity.
 Economic Factors: It is one of those factors that affect the overall economic
performance of a company. These factors have both direct and indirect impact on
companies overall performance. These factors also affect the overall profitability of a
company because if there is any kind of change in inflation rate or tariff rate etc. then
mobile manufactures cannot directly pass on these pressure on customers due to which
the overall profitability of the organizations is affected. It has also been observed that
sales of professions in USA, Asia and Europe is quite low as compared to their other
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competitors Due to which their overall market share is comparatively lower than others
which is affecting them economically.
 Social factors: These factors also affect the product demand and customers of an
organization. For any organization it is extremely important to analyse this factor before
entering into any new market as there are many sub factors which affect the overall
demand of the product such as: income distribution, growth rate, age distribution etc.
Mobile manufacturers need to analyse this factor as their overall demand for the product
can get affected due to these factors. The highest demand for professional product has
been seen in Asia and has higher market share in Asia as compared to USA and Europe.
 Technological Factors: it is one of those factors that affects the overall operations of any
organization. It is one of the major factors that affects mobile manufacturers and their
overall business operations. Due to advancement in technology competition for the
mobile manufacturers is also increasing year by year. It has been observed that
competitors of professions is quite advanced in terms of technology, and they are laid
back due to which their overall market share and sales are getting affected. It has also
been observed that professionals are quite laid back in terms of innovation as compared
to teams like red, blue, the innovators.
 Legal Factors: Government of various countries has set some rules, regulations and
legislations for the organizations so that they can do business within their country. These
legislations directly/indirectly affect the overall business of the organization. Violation of
any rules or legislation can affect the business of these mobile manufacturers. If this
factor is not paid attention on then it can affect sales and profit of all the mobile
manufacturers.
 Environmental Factors: This factor has recently come into picture (few years ago). It is
important for mobile manufacturers to focus on this factor as well because it can affect
their sales and demand of product. This factor focuses on sustainability, CSR,
environmental offsets etc. if laws related to these factors is not adhered by the mobile
manufacturers then they can face strict actions from government which can affect their
sales, brand image, demand etc.
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Porter five forces analysis-
Currently, it is the model that aids to analyse the tools to identify the external conditions.
Thus, dynamics for the each two group are identified in the following manner as are-
Threat of new entrants- The threat of new entrants is relatively high, as market share of
professional is quite low. On the other hand, the other enterprise as Red, grey etc. are having
hood market share. Due to this, there can be presence of high competition within the market.
Therefore, other entities are having good marketing strategies, technical advancement, brand
recognition etc. Threat to new entrant for professionals is quite high as market share of
professions as compared to other teams such as the innovators is quite low and a new entrant can
easily give tough competition to the professionals.
Rivalry among exiting markets- The number of the rivalries are increases and the there is rise in
competitive capability. Henceforth, the rivalries in the existing market is quite high as this leads
to different acquisition and strategic alliance of the different suppliers. In addition to this, the
competition within the market has the huge impact on the working of the enterprise as this
affects the marketing share of the existing firms. It has also been observed that professionals
have a tough competition with grey, global leaders and yellow and are far behind the innovators
and red in terms of market share.
Threats of substitutes- There is presence of high threat of substitutes as the innovator is the entity
that works as to bringing up the huge innovation that leads up to have high competition within
the market. Due to this, this can be stated that the sales of the substitutes are high at the time of
seasonality. Thus, innovations aids to attract the customers. Professionals have a high probability
of substitute products as there are more numbers of competitors in the market who can compete
with them and increase threat of substitute as well.
Bargaining power of buyers- The bargaining power of the buyers of this firm is quite low as
there market share price is low. Henceforth, this is impacting over the brand image of the
enterprise.
Bargaining power of the suppliers- Due to the strategic alliances within the market the
bargaining power is quite low. Thus, there are number of the enterprise that are operating the
same function. Henceforth, this has huge impact over the bargaining power of the suppliers.
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Critical analysis of Investment in R&D
As per the view of Lai, Lin and Lin (2015) research and development in the which is
commonly used in order to describe the activities which is undertaken by the firm in order to
create the new or improved project/ process. It is the part of company's operations which may
seeks knowledge to develop, design and the biggest advantages of investing in the research and
development department is such that it helps to increases productivity or a new product lines. In
the same way, Professional Team also also invest 52,700 for Cesim game and gain profit which
clearly shows that investing in the research and development department will not require higher
amount which other firm actually does. Therefore, it is also evaluated that R&D also consist of
investigate activities which an owner chooses in order to get desired results. That is why, the
business almost uses Research and development for continuous benefit.
Apart from this, there is another attribute of Research and development which also
emphasises in the modern economic growth literature that is Cumulative Nature. As per the view
of Carboni, (2017) cumulative nature in investing in research and development department leads
to increase the returns. Thus, it is the idea that is created by doing Research and development is
such that it helps to make one more productive for acquiring some additional knowledge. The
Professional team also invested least amount that helps a firm to deal with the inter temporal
nature of Research and development which is invested by treating in the same way that is
ordinary investment in tangible assets. Further it also adding up the expenditure in order to
create the Research and development stock. On the other side, it has been critically evaluated
that variation in the effect of R&D investment on a productivity for different types of firms and
for that the important dimension in technological opportunities (Gu, 2016).
For that, different company uses innovation in their working area and that is why, they
invest in research and development because company already know that they get good amount of
return. In the same way, Professional team also invest in Cesim game because through this,
company have its unique selling point and even the income of the company also increases
because it gets profit. Apart from this, the biggest benefit of investing in research and
development is such that company gain high advantages over its competitors and even
development of new intellectual property also provides benefit to the firm in the term of
financially (Gang, 2016). Lastly, by investing in the company's research and development,
Professional team may sustain the brand image and reputation as well. It is so because if the
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quoted firm is collaborating reputed partner, then it may benefited to the brand image of the
firm. That is why, it is good for the team to invest in the Research and development so that it will
help to attain the desired outcomes as well.
As per the views of Baumann and Kritikos, (2016) forms the important part of the organisation
and functions of R&D can not be ignored as it plays an important part in the success and
development of products and services in the organisation. There are various strategic decisions
taken by Professional. If the company does not put their investment in R&D can not remain
ahead of its competitors for this it is important for professional to make an high investment in
R&D project as compared to its rivals. So, it can be said that if the company does not make
amount of investment in R&D project can not with stand rivalry form its competitors. It can be
analysed that Professional is not making high investment in R&D project but its rivals are
making a good amount of investment in R&D project. On the other hand it can be said that
Professional has been making a regular amount of investment in R&D projects which shows that
management is willing make more investment in R&D as they have been regularly involved in
making investments. Also, if company will improve its investments in R&D project this will
result in less access to market information that will result less development in products and
service development that will in failure of products and services for the organisation.
RECOMMENDATION
 In order to improve investment decisions over three years Professional company where a
company should follow a top to down strategy as well as bottom-up technology
opportunities. Top to down approach is essentially breaking down of the system to gain
insight into their compositional sub systems.
 Company's R&D investment should depend on the range of broad external and internal
factors. The various external and internal factors which will be outlined which help in
shaping the investment for three years for the organisation. Due to the proper analysis it
will help in improving the decision making process related to investment in R&D.
Appropriate Analysis will support to gather detailed information about internal and
external factors and help to take better decision for further business growth and success.
 R&D investment decisions should not be made independently of the company but should
be integrated with number of factors and should flow from broader business strategy.
Here a company should refer to broader business environment which supports a company
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that will help in improving the R&D investment of the organisation. This will help the
company in understanding the different aspect of the investment which was not clear
before.
 It is recommended that company should balance it R&D investment against its
expenditures for example its production, marketing activities, daily expenses, etc which
are essential for the organisation. Also, company should try to intervene various areas or
departments if the organisation with R&D. For example company's customer engagement
and marketing information can lead to product development which can result in the huge
profits for the organisation. This will help in improving the performance of the
organisation.
 Company should be able to understand the future market trends effectively for this it
needs have proper strategic as well as direction which can lead towards proper
investment decisions that can improve the performance of the company for the future.
 Also, company can take feedback from various technological groups on various emerging
technical threats and opportunities which can help R&D in providing directions.
 Organization can conduct the different type of the survey which will help the
organization in getting the best information available before making investment in the
Research and development program of the company.
 Organization can take the step toward increasing the quality of the data which has been
collected through the different sources. It can be done by increasing the number of
mandatory question in the survey as compare to the Voluntary question which will help
the company in getting more relevant data of the research so that on the basis of that
development program can be performed in an organization.
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PART 2
Stakeholder analysis
Stakeholders refers to an individual, organisation or whole society that has interest in the
operations of the company. Stakeholders are of two types internal and external stakeholders.
They affect the performance of the business as well as they also get affected by the operations of
the organisation (Omeje, 2017). The project of an organisation requires approval, guidance of
various people that are related with organization and the key stakeholder are employees,
government, managers, suppliers, owner and HOD
Stakeholders analysis means the process of determining who are the stakeholders before
initiating the project and then forming groups on the basis of their involvement, interest and
impact on the project. Then determining the way in which company will involve and effectively
communicate with them. It is very important to analyse the stakeholders of professional firm due
to various reasons. Firstly, enlisting various stakeholders will help the firm to achieve the
objectives of the new project. It also ensures the support of these players for successful
completion of the project.
Stakeholders analysis helps the organisation to determine type of people to be involved in
various stages of the activities that are involved in the project. This will ensure that project has
started with proper understanding of every aspect of the project.
Product Manager of professional company should conduct the analysis of stakeholders of
the business because it will increase the chances of success of the project. There are various
stages involved in stakeholder’s analysis such as determining various types of stakeholders then
grouping the stakeholders in various categories, communicating with each stakeholder etc
(Afridi, 2018).
Stakeholder Mapping:
Keep satisfied Manage most thoroughly
 Directors
 HR
 Suppliers
 Employees
 Customers
Regular Contact Least Important
 Owners  Government
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 Manager
 HOD
From the stakeholder analysis, it has been identified that there are different stakeholders
within a business and there should be good communication between each other such that:
 Primary stakeholder: they are employee who are most affected and through their action,
organization have their positive and negative impact. For the company, it is quite
necessary to keep them satisfied.
 Secondary stakeholder: They are the person who are indirectly affected by the
company's any action and for the firm, it is quite essential to keep them manage and
monitor. Owners, HOD and Manager fall under this category.
 Tertiary Stakeholder: These stakeholders impact the least and for company it is very
least important such that government.
 Key stakeholder: They have significant influence upon the organization such that
Employees, suppliers and customers are fall under this category. Therefore, there should
be proper communication with each stakeholder so that new strategies are developed that
helps to lead a business towards success.
Stakeholder analysis is the process of identifying those individuals who perform same work and
have same amount of interest in the business. The main stakeholders of the company are
employees. Employees can be divided into subordinates and managers. Planning is done by
managers and stakeholders sees that the proper implementation of plans is achieved.
Stakeholder management are related to stakeholders who help in designing and implementation
of actions. Some actions that need to be implemented are:
 Research & Development: Professional should invest in research & development of the
firm because the company is investing huge funds in production. Current information
says that the cost of production is very high and it needs to be resolved.
 Cost Control: The cost of production of good is high in professional but with that revenue
is also high. So if the company reduces the cost then profits of the company will also
reduce and so total quality management technique should be used. This technique will
find the process which is costing the business maximum and investment will be done so
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that the process cost less to business.
 Management: The company uses both source of management in the business i.e. the
current employees and employees on contractual basis. The employees on contractual
basis charge more and are the reason for high cost of production. The dependency of
company on these employees should be reduced and this will reduce the cost of
production.
 Building of plants in Asia: Cost of production is the major problem faced by professional.
It can outsource all its production activities to Asian countries like China & India where
labour is very cheap and this way the company can increase its market share as more
goods will be sold due to less price.
CONCLUSION
After going through above report it has been summarized that the market analysis shows
that there are many competitor of the Professional such as Blue, Leaders, grey, Ochre, Pink,
Navy and Yellow. Also it has been summarized that in both USA and Asia market preference of
the customer is different so the company has to take the step to satisfy both the market. After that
it has been summarized there is a Threat of Buyer power, substitution and Supplier power for
the organization. After that it has been summarized that an organization is having the good place
in micro environment. After that it has been summarized that there are many economic factor
which used to have a great affect on the functioning of business in real.
After that it has been summarized that Distinctive competencies, Resource capability and
capability are the three element which used to help the organization in getting the competitive
advantage in the market. After that it has been summarized that the Investment in R&D always
help the company but it requires the proper understanding of the situation and the trend which
are in the market and also the company has to understand the need of the investment. In the end
it has been summarized that by adopting some of the changes which are recommend company
can improve the investment in the research and development program.
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REFERENCES
Books and Journals
Lai, Y. L., Lin, F. J. and Lin, Y. H., 2015. Factors affecting firm's R&D investment
decisions. Journal of Business Research.68(4). pp.840-844.
Carboni, O. A., 2017. The effect of public support on investment and R&D: An empirical
evaluation on European manufacturing firms. Technological Forecasting and Social
Change. 117. pp.282-295.
Gang, W. E. I., 2016. Financial Constraints and R&D Investment Efficiency in Chinese
Companies. Science and Technology Management Research. 2016(21). p.28.
Gu, L., 2016. Product market competition, R&D investment, and stock returns. Journal of
Financial Economics.119(2). pp.441-455.
Baumann, J. and Kritikos, A. S., 2016. The link between R&D, innovation and productivity: Are
Barišić, A.F. and Prović, M., 2014. Business simulation as a tool for entrepreneurial learning
The role of business simulation in entrepreneurship education. 4(2). pp.97-107.
Heričko, M. and et.al., 2017, August. Using a simulation game approach to introduce ERP
concepts–a case study. In International Conference on Knowledge Management in
Organizations (pp. 119-132). Springer, Cham.
Kikot, T. and et.al., 2013. Simulation games as tools for integrative dynamic learning: The case
of the management course at the University of Algarve. Procedia Technology. 9. pp.11-21.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
El-Sayed, A.F.M., Dickson, M.W. and El-Naggar, G.O., 2015. Value chain analysis of the
aquaculture feed sector in Egypt. Aquaculture. 437. pp.92-101.
Jaligot, R. and et.al., 2016. Applying value chain analysis to informal sector recycling: A case
study of the Zabaleen. Resources, Conservation and Recycling. 114. pp.80-91.
Knott, P.J., 2015. Does VRIO help managers evaluate a firm’s resources?. Management
Decision. 53(8). pp.1806-1822.
Online
VRIO framework. 2019. [ONLINE]. Available.
Through<https://www.clearpointstrategy.com/vrio-framework/>
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