Strategic Decision Making in Business: Alpha Sports Footwear Report

This report provides a comprehensive analysis of the Business Strategy Game (BSG) and its implications for strategic decision-making, using Alpha Sports Footwear as a case study. The report begins with an introduction to strategic business decision-making and its alignment with long-term goals, emphasizing the importance of various strategic models. Task 1 delves into the BSG simulation, highlighting key decisions in marketing, production, finance, R&D, expansion, contraction, human resources, inventory, and employment. Task 2 examines the challenges faced by businesses in the 21st century, emphasizing the need for corporate strategies and competitive advantages. The report analyzes Alpha Sports Footwear, a UK-based company, and its strategic objectives, including cost leadership and differentiation strategies. The report also explores the company's mission and its approach to achieving its strategic goals in the competitive footwear market.

Strategy Game

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................4
.........................................................................................................................................................8

INTRODUCTION
Strategic business decision making is a process which involve decisions related to
company's short term and long term plan. This is a course through which company project its
future plans and take effective decisions to achieve those goal with in the specific time (Xi and
Fu-ling, 2013). These strategic decisions makes align with the long term goals and the mission of
the company which show the big picture of the company. Before making these strategic
decisions companies take into picture company's vision and mission statement, short term goals
along with the long term goals. To understand the importance of various strategic models which
are required to support the company's strategy, Alpha Sports Footware company located
in London. This report contains the detailed information about the company which they require
during decision making process. This report also explains the necessary group decisions which
are required by the companies while playing Business Strategy Simulation Game. It also explains
the various strategic and management models which are used to support the company's strategic
approach.
TASK 1
Business strategy game is an online exercise in which member are divided into teams and
various are allotted to those members to run a company in a head to head competition against
different companies which are managed by other team members (Zhao and et. al., 2016). While
implementing this simulation program various decision are highlighted which are considered as
an important decision. Following are some of the important decisions which are made during the
business strategy game simulation.
 Marketing: During the simulation of the Business Strategy Game the important area is
discovered which requires strategic decision. In this the mangers highlight the company's
marketing techniques which company is currently using to gain the market share and hold
their presence. This is an important decision which is to be addressed as early as possible
in order to take the competitive advantage over its competitors (Zhu, Wang and Tian,
2014). From the business strategy game it has been evaluated that companies need to take
new measures and apply new marketing techniques in order to capture the large market
area. With this simulation company identify the need for these various new marketing
3

techniques. It also benefits the company by identifying the problems in companies
current marketing techniques and use respective measure to over come those barriers and
improve its market stability and financial position.
 Production: This is also considered as an important decision which are highlighted
through BSG simulation. Company take necessary decisions which are required in order
to improve the efficiency of the company’s manufacturing process and reduce the cost of
production related to the production of the product. In this company uses various tricks
and techniques which can be helpful for the companies to achieve their organisation goal
and increase their efficiency (Von Wangenheim, Savi and Borgatto, 2013). Various
problems related to the production process are highlighted and plan are developed to over
come those problem and improve company position. Business strategy game simulation
give access to identify the area where the company needs to work in order to reduce the
cost of production and increase their profit margin.
 Finance: Finance is the most important part for any organisation as it is required at every
step of business. In business strategy game simulation company identifies the need of
funds and the various sources through which they can raise its funds. During the
simulation process company find out the estimated requirement of the funds for its
business operations (Alferov, Malafeyev and Maltseva, 2015). Company can need funds
for various operations which include the expansion plan, acquiring new assets, improving
its efficiency and many other things. With the help of these simulation programs
company can estimate the requirement of the funds, which help mangers to make
strategic decision to achieve it sustainability.
 R&D: With the help of Business Strategy Game simulation it is analysed by the
companies that whether they should invest their resources in the Research and
Development program for the company in order to increase it market share, reduce its
cost, improve the quality of the goods which are provided by the company (Blumberg
and et. al., 2013). This is considered as an important part for the company as they can
invest in the Research and development for various aspects which can help it grow it
current market position and help them to take competitive advantages over its
competitors.
4

 Expansion: With the help of the business strategy game simulation companies evaluate
the various possible ways of expansions which companies can adopt in order to expand
its business in the international market (Burgun, 2015). This simulation helps mangers to
check out various option which it can avail in order to expand its operations and improve
the efficiency of its production units. In this process companies try various ideas and plan
an find out the most suitable option for it. While implementing the ideas of expansion in
the simulation companies check the efficiency and return which they can earn from these
expansion an critically evaluate the plans and take necessary decisions for expansion.
 Contraction: The business strategy game simulation helps the companies to identify the
project which are beneficial for them and they can make strategic decisions in order to
find out the profitability of the project and decide whether to expand that project or
contract it (Drachen and Schubert, 2013). In this process company find the value of the
expansion in order utilize its resources and achieve the market position. During the
simulation company check the benefits which they can draw from the project, if that
project is not profitable company make meaning full decisions to improve or to contract
that project.
 Human resources: While running the Business Strategy Game Simulation companies
find out the important factors which affects the companies work force. As human
resources are considered as one of the most important and valuable assets of the company
it is necessary for the companies to manage their work force and take necessary decision
for the development of their human resources (Elvik, 2014). With the help of these
simulations company identify the needs of the human resources and try to meet the need
of them. These simulations gives the clear picture of the human resources and the
problems which are faced or can be faced by them in the near future, it help mangers to
prepare in advance for the upcoming problems. The BSG simulation also help mangers to
check the decisions which they want to apply for the development and training for their
human resources, as they are considered as the backbone of an organisation.
 Inventory: The Business Strategy Game simulation help mangers to identify the need of
the procurement of their inventory. Inventory of the company includes the raw material,
finished goods and the work in progress goods. It is important for a company to keep a
5

track on the company’s inventory to find out the inventory turnover ratio and to
implement new strategies to improve the turnover of the company (Homburg and et. al.,
2013). With the help of BSG simulation company identifies the need for the new
strategies which should be applied in the company in order to improve the company's
market position and increase its market share. It also help companies to develop new
strategies in order to increase the inventory turnover ratio and company's efficiency to
move their inventory out for the premises.
 Employment: During the business strategy game simulation process companies find out
the various new opportunities which can help them to increase the employment rate in the
company. With the help of this simulation program companies also find out the problems
which are faced by the employees within the organisation (Lã, Chew and Soong, 2016).
This gives a complete overview and the trial of the new strategies which companies want
to execute within the organisation to improve the efficiency of their employee and help
them to achieve the organisational goal along with their individual goal. This also helps
the mangers to motivate their employees by identifying the problems faced by their
employees, they can also improve their employment rates and employee retention rate.
Company can use these data generated through various simulation process to increase
efficiency level of the company by meeting the requirements of the companies.
The above given are the various strategics which companies highlight during the business
strategy game simulations (Lancaster, 2014). With the help of this simulation company uses this
data to take necessary and meaningful decision in order to achieve the stability in the market and
improve their financial position.
TASK 2
Today in the 21st century, companies operate whether operate at domestic or international
level, are facing dynamic and exciting challenges. It includes changing preferences of customers,
emergence of new entrants, fluctuations of economy and more (Tian, Govindan and Zhu, 2014).
To overcome and handle such challenges, organisations require strategic thinking, that can only
be evolved by good corporate strategies. This would also enable a firm to become strategically
competitive. Here, a sustainable competitive advantage can only occur when a company
implements a value. Such value creates strategy that other companies in the same market, seems
6

unable to imitate or find it too expensive to initiate (McCain, 2014). Here, corporate strategy of a
business includes the decisions, commitment as well as actions required to achieve strategic
competitiveness of a business and earn high returns on investment. In this regard, corporate
strategic goals are challenging for both large firms and small local companies to achieve. In
context with footwear industry, where competition is rising continuously and demand of
customers to get trendy, comfortable and stylish footwear is also raised. Therefore, this would
arise complexities and high competition among companies.
Alpha Sports is one of the famous brand of UK that open its first store in 1984. It offers
most comfortable and a range of sports footwear to runners. In collaboration with professional
guides, this company has recently launched a unique mountain boot for mountain hikers. This
footwear not only includes technically advanced features but also provide a unique and even
better experience (Moore, 2016). Another main feature offer by this company is gait analysis
which is free to customers at the time of purchasing. Here, runners can assess the way in which
they can walk and run. But apart from these innovative techniques to influence customers, Alpha
Stores still faces various challenges to run business smoothly. It includes innovative strategies
made by other footwear companies to attract the potential customers. For getting competitive
advantages, such strategies focuses mostly on marketing techniques, bringing innovations in
sport shoes, technology at stores and more.
For analysing the current competencies of business and new trends at marketplace,
management of Alpha Stores conducts business strategy simulation. Here, this process also helps
in analysing the functioning of real-world athletic footwear market (Moulin, 2014). It would
allowing employers to think rationally as well as logically in determining what to do. It also
allows in implementing valuable practice for making various decisions under different
circumstances which mirror real-world competitive conditions. With this assistance, key strategic
objective of Alpha Stores is mainly based on keeping pace with changing environment. Its also
focuses on – To make the best use of strategic management that helps in exploring possible
opportunities and achieving an optimum level of efficiency.
Mission of Alpha Sports: “To bring innovation and inspiration to every runner in the world”.
Strategic Objective:
 Cost Leadership strategy
7

 Differentiation strategy
This mission statement of Alpha Sports Footwear shows its strategic goals to reach out to
global leisure as well as sports footwear market (Nwulu and Xia, 2015). While strategic
objectives viz. cost leadership focuses on growing company's competitive strategies and financial
goal based on differentiation strategy. Therefore, for achievement of cost leadership objectives, it
will implement new technologies for reducing production cost. Along with this, concerning on
differentiation generic strategy, it can maximise the profit margins as well. In this regard, some
important strategic management model are of achieving both objectives are mentioned as below:
Balanced Scorecard- This management tool refers to an effective and proven way for
influencing a team towards main objectives (Tanimoto, 2015). It mainly takes objectives that are
based on high-level of organisational goals and measures which accomplish the same
strategically. Along with this, it also includes key actions programs or initiatives that help in
achievement of strategic objectives. Therefore, for improving financial performance Alpha
Sports need to concern on increasing shareholder value. While for exceeding customer
satisfaction, present company has already taken a move by giving gait analysis technique. Here,
trained strategic analyse the way in which foot of customer strikes the floor, then they determine
whether foot rolls inward or not. This would help in identifying an appropriate shoe for
customers on individual basis. Thus, all these procedures help respective firm in attracting the
customers and generate high revenues for achievement of strategic objectives.
Strategy Map- It refers to a visual tool which is designed to clear communicate the
business strategic plan as well as achieve high-level of goals (Tian, Govindan and Zhu, 2014).
This management model offers an excellent way for communicating the information about
business objectives in a simple digestive format. It offers a variety of benefits to a company like
– identification of key goals, unified all goals into a single strategy, represent map that shows
how business strategies will affect others, it gives every worker a clear goal for completing the
main objectives. Therefore, using this management model, Alpha Sports its managers can follow
the following strategy map for enhancing performance of business and accomplish its strategic
objectives:-
8

Thus, concerning on financial, internal, learning and growth perspective, management of
Alpha Sports Footwear can combine its cost leadership as well as differentiation generic
strategies (Von Wangenheim, Savi and Borgatto, 2013). This would help in boosting the
performance of respective company in footwear industry.
Gap Planning- It is also known as Strategic-planning gap or Need Assessment tool in
strategic management model. Generally, it is applied for comparing where business of a
company exists in a particular market and where it want to be expected (Tanimoto, 2015). This
gap between expected and actual position assist organisations to develop plans for reducing the
same. In planning such activities, management of Alpha Sports Footwear can apply 'change
agenda' technique. This would help in analysing how to reduce or eliminate the gap between
expected and actual position of business in footwear industry.
9

Red-Blue Ocean Strategy- This strategic management model is based on the concept of
uncontested market space (Xi and Fu-ling, 2013). Here, by building a red ocean or blue ocean
strategic objectives, Alpha Sports can develop a gigantic value enhancement for business and its
customers. It mainly concern on following concept-
Red Ocean Strategy Blue Ocean Strategy
Compete with existing market space Develop uncontested market space
Able to exploit the existing demand of
marketplace
Develop as well as capture new demand of
marketplace
Beat the rivalries and competition in
systematic manner
Make the competition present at same
marketplace irrelevant
Make value-cost trade-off in business Break value-cost trade off instead to make
Align entire system of operational activities
with strategic choice of low cost or
differentiation
Align whole activities in pursuit with both cost
leadership and differentiation strategies.
Hoshin Planning- This approach aligns strategic goals of business with project to ensure
that efforts of all departments are coordinated, for achievement of same. It mainly focuses on
goals and initiatives rather than on measures (Zhao and et. al., 2016). It includes four main steps
as- Identify key goals, share goals with top to bottom organisation, track the execution of
activities for achievement of same and take feedback of audience for modifications. All these
processes aid Alpha Sports Footwear in framing activities for achievement of strategic objectives
and track performance of each activity for systematically execution. For framing the activities
plan, its management can consider the following matrix template. It states four main directions
that are- Top level improvement priorities, target to improve, annual objectives and 3 to 5 years
Breakthrough objectives.
10

Issue based strategic planning: This strategic model is oriented for identification of major
challenges that a company is currently facing. Through this strategic model, Alpha Sports
Footwear can start its functions with determining problems for iron out issues before developing
or making changes in existing strategy (Zhu, Wang and Tian, 2014). In general, this method is
typically focused on internal process or on short-term goals. Through this management model,
stakeholders or respective company’s leader can identify the major issues which arise barriers in
achievement of business goals. After identification of problem, they can create action plans for
addressing the issues and can track progress for achievement of business objectives.
To understand dynamics of strategic decision there is a Game to date scoreboard of
twelve years taken form Footwear Industry Report defined in the below table. The table defined
that how the behavior of stakeholders of company analyzed through strategic game.
11

Rank
Company
Name
Expectation
Score
Industry
Score
Average
Score
Bonus
Points G-T-D
Score
1
FIRST
CHOICE 116 99 108 0 108
2 Elaine 114 94 104 0 104
3 Dogue 111 86 99 1 100
4 Journey 108 88 98 0 98
5 B Company 107 79 93 0 93
6 Gaia 98 71 85 1 86
7 Alpha sport 94 68 81 0 81
8 C Company 89 65 77 1 78
9 I Company 67 51 59 0 59
9 K Company 67 51 59 0 59
9 L Company 67 51 59 0 59
12 Hash 54 44 49 2 51
From the above table it is evaluated that the investors’ expectations remain towards
achieving high targets and the expected information form the results and preparations. Best in
industry score indicates towards fluctuations among the score ranges of 0 to 100. The weighted
average score is counted as 50%-50% in which detailed expiation of scoring also conducted.
12

REFERENCES
Books and Journals
Alferov, G. V., Malafeyev, O. A. and Maltseva, A. S., 2015, March. Game-theoretic model of
inspection by anti-corruption group. In AIP Conference Proceedings (Vol. 1648, No. 1,
p. 450009). AIP Publishing.
Blumberg, F. C. and et.al., 2013. The impact of recreational video game play on children's and
adolescents' cognition. New directions for child and adolescent development.
2013(139). pp.41-50.
Burgun, K., 2015. Clockwork game design. Focal Press.
Drachen, A. and Schubert, M., 2013. Spatial game analytics. In Game Analytics (pp. 365-402).
Springer, London.
Elvik, R., 2014. A review of game-theoretic models of road user behaviour. Accident Analysis &
Prevention. 62. pp.388-396.
Homburg, C. and et. al., 2013. Incumbents’ defense strategies: a comparison of deterrence and
shakeout strategy based on evolutionary game theory. Journal of the Academy of
Marketing Science. 41(2). pp.185-205.
Lã, Q. D., Chew, Y. H. and Soong, B.H., 2016. Potential Game Theory. Switzerland: Springer
International.
Lancaster, R. J., 2014. Serious game simulation as a teaching strategy in pharmacology. Clinical
Simulation in Nursing. 10(3). pp.e129-e137.
McCain, R. A., 2014. Game Theory: A Nontechnical Introduction to the Analysis of Strategy
Third Edition. World Scientific Publishing Company.
Moore, M., 2016. Basics of game design. AK Peters/CRC Press.
Moulin, H., 2014. The strategy of social choice (Vol. 18). Elsevier.
Nwulu, N.I. and Xia, X., 2015. Implementing a model predictive control strategy on the dynamic
economic emission dispatch problem with game theory based demand response
programs. Energy. 91. pp.404-419.
Tanimoto, J., 2015. Fundamentals of evolutionary game theory and its applications. Springer
Japan.
Tian, Y., Govindan, K. and Zhu, Q., 2014. A system dynamics model based on evolutionary
game theory for green supply chain management diffusion among Chinese
manufacturers. Journal of Cleaner Production. 80. pp.96-105.
Von Wangenheim, C. G., Savi, R. and Borgatto, A. F., 2013. SCRUMIA—An educational game
for teaching SCRUM in computing courses. Journal of Systems and Software. 86(10).
pp.2675-2687.
Xi, W. and Fu-ling, Z. H. U., 2013. Research of charge strategy for urban municipal utility tunnel
based on game theory analysis. chinese Journal of Underground space and
Engineering, 9(01), pp.197-203.
Zhao, R. and et.al., 2016. For the sustainable performance of the carbon reduction labeling
policies under an evolutionary game simulation. Technological Forecasting and Social
Change. 112. pp.262-274.
Zhu, Q. H., Wang, Y. L. and Tian, Y .H., 2014. Analysis of an evolutionary game between local
governments and manufacturing enterprises under carbon reduction policies based on
system dynamics. Oper. Res. Manag. Sci. 23. pp.71-82.
13

14