Business Simulation Report: Lexo Company Strategy and Analysis

This report presents a comprehensive analysis of a business simulation centered around Lexo Company, a smartphone manufacturer operating in the Asian market. The report is divided into two primary sections: Part A focuses on strategic aspects, including the company's vision, mission, core values, and competitive analysis using Porter's Five Forces model. It evaluates market share, product pricing, and competitor strategies. Part B shifts to a professional development reflection, examining identified events, relevant theories, industry practices, and their practical application within Lexo. The report provides recommendations for future strategic planning and professional development, aiming to enhance the company's performance, market position, and employee productivity. Key areas of focus include human resource management, organizational culture, and the importance of adapting to market dynamics. The report emphasizes the significance of innovation, customer focus, and building strong supplier relationships to mitigate threats and maintain a competitive edge. The ultimate goal is to understand and improve Lexo's strategic approach to the smartphone industry.

Business Simulation
with Professional
Development

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
PART A- Strategy............................................................................................................................1
1. Vision and Strategy..................................................................................................................1
2. Review each year’s progress...................................................................................................2
3. Future plan and recommendations...........................................................................................7
PART B: PROFESSIONAL DEVELOPMENT REFLECTION REPORT....................................8
Executive Summary.....................................................................................................................8
Introduction..................................................................................................................................9
Identified Events........................................................................................................................10
Review of Relevant Theories and Concepts..............................................................................11
Review of Industry Practices.....................................................................................................14
Application of Theories and Practices.......................................................................................15
Discussion..................................................................................................................................16
Recommendations......................................................................................................................16
REFERENCES..............................................................................................................................18

INTRODUCTION
Business simulation is a useful weapon for dynamic learning organisation. It allows the
people to match their employees with policy, develop their business strategies and expertise in
the management, and eventually increase the performance (Aithal, 2017). Company games are a
hands-on, immersive learning environment allowing audiences to better participate with the
content. Rather than focusing on abstract knowledge in a traditional classroom, learners are
learning from experts, developing practical understanding and at once getting a broad
understanding of the project. The use of business simulations within their company has many
advantages. Such as imitates reality, risk free environment, stimulates co-operations, learning by
doing practice, engage with learners etc.
This assessment based on Lexo which is Smartphone manufacturing company and distribute
around Asian market which is based on quality demanded and they develop features which
identified by the research and development department. This report based on two separate
sections where part A is about strategy which covers the vision, mission, competitive and
performance analysis. On the other side, part B covers the reflection report which includes the
topics such as some events which identified theories and concepts, and applications of such
theories in context of organization.
MAIN BODY
PART A- Strategy
1. Vision and Strategy
Vision: It is powerful statements which help the people to understand the future of
company which develop by the organization to achieve in long term (Ceschi, Dorofeeva and
Sartori, 2014). Vision of Lexo Company is to shape the future with use of technology, offering
premium class Smartphone and majorly focus on innovation.
Value: A Core value of the company is to serve the quality products to their customers
along with effective customer services after sales. It helps the Lexo Company to convert their
existing customers into loyal customers for organization which further maximise the overall
production as well as profitability.
Mission: This statement attracts the more people and mission statement of Lexo brand is to
become leading manufacturing company of Smartphone in the world.
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HR: In context of Lexo Company, managers should concentrate on its human resources as
they are crucial for them. Human capital needed to meet the company priorities & objectives by
delivering appropriate training to enhance their productivity (Grant, 2016). Lexo
Company provides their workers with the necessary professional preparation to ensure that
employees are prepared to carry out their mission. Furthermore, encourage their team to produce
something creative or innovative which will improve their efficiency. Ensure that they develop
and optimize their operations by delivering effective training sessions or practical sessions to
inspire them to maximize the performance and productivity of existing staff.
Culture: Working culture in an organization is very essential to improve because it helps
the employees to motivate and perform their task effectively. A culture of Lexo organization
should be very optimistic, welcoming or relaxed, which motivates people to come regularly to
the office and decreases the absenteeism. The Lexo business takes some assumptions that
inspiration is the key to achieving effective and efficient workplace. Furthermore, the
organizational culture of this Smartphone Company needs to continue to trying to fix the job
satisfaction so that it can operate equally and impartially. It facilitates the notion of justice and
diversity in the company's premise throughout all the occasions. The institution has developed a
culture that seeks to promote strategic development to meet international market specifications
and consumers' desires.
2. Review each year’s progress
Competitive Analysis:
Porter’s five force model: It is the framework which are used by the organization to
evaluate competitive performance of the company and how strong their competitors in terms
performance (Han, Hao and Huang, 2018). In context of Lexo Company, management of the
organization adopt this competitive analysis strategy to evaluate its actual performance and
power in the market. All are discussed below:
Bargaining power of buyers: They are the customers who purchase the product or
service of the respected organization such as Lexo and they are responsible for company's
success. In the initial periods when company establish, buyers has huge power for bargaining
because it has several other options and Lexo was new firm that time or people have other
options as well. It becomes threat for the organization because competitors follow low cost
strategy. The success of the company has been very good in sustaining its level of revenue
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across the years, which could be characterized as a successful commitment to pursuing a mixed
and blended commitment to their services (Marr, 2016). After evaluating their competitor’s
performance, Lexo Company follows the customer focused strategy to improve overall product
demand.
Bargaining power of suppliers: Initially suppliers have low bargaining power which
was positive aspect for the company, but now there are huge competitions in the Smartphone
market. Bargaining power of suppliers increases because they have multiple options to sell raw
material. So, Lexo Company needs to build good relation with them and also find the alternate
option for their business to minimise negotiation power of suppliers.
Threats of substitutes: Substitute products are the goods which can be used in
replacement of current client offers. From the pas years numerous cell phone replacements are
done, such as video messaging sites, other smart apps, and so on, keeping this risk high with
relation to the client. By focusing of customer’s needs and offer the low cost and high quality
products which played significant role in helping company and do their best with such
alternatives. Also identify that what keeps this threat strong, company should maintain little
variety, which is beneficial for the firm to reduce its danger.
Threats of new entrant: Every organization faces the threats from large or existing
businesses in the respected market. Innovative or differentiated products capture the market very
fast or attract the audience as well. In order to minimise the threats of new entrant, Lexo
Company should introduce their products & services as per the requirement of customers along
with some innovative features.
Competitive rivalry: There are different existing organizations in the global market
which are competing directly with Lexo. There have been mainly 2 companies that are the direct
competitor such as i-tune or Limitless Company, who develop new goals and tactics on
advancement to stay relevant in the competitive (Zheng, Bender and Nadershahi, 2017).
However, Lexo Company performance from many years and enabled to build up its position in
the market through offering quality products at lower price.
From the above discussion it has been observed that with the help of porter’s five force
model, organizations able to evaluate their competitive performance and what is the actual
position in the market in relation to buyers, suppliers, their competitors etc. It is one of the
important tool which helps in formulating strategies. This is helpful, as it will be able to change
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the approach accordingly when busienss consider the factors that can influence their
productivity. Manager of Lexo Company could take fair decision for strong position, for
example improve weak points, and avoid picking the wrong actions in long term.
Market share: It is the business's input from a particular organization where promoters
might be able to change demand forecasts by the appraisal of the company's stock, as this would
show how goals would be met by rivalry or the acquisition of rival stock. In order to carry out all
operations in a systematic manner, acquiring a large market share is very essential for
enterprises. Lexo Company is a modern Smartphone production or distribution firm that markets
sold mobile phones in many countries while Japan, UK and China etc. This is the best element
to compare company’s efficiency as well as effectiveness. In context of Lexo Company, market
share in relation to customer focus is discussed throughout the years. Total segment demand for
the year 2020 was 384000, in 2021 it was 276380, and in 2022 it was 276480 and 304128 total
demand in 2023 till 2027. In addition, in the year of 2028 the total market demand of customers
was 319334.4 which are similar in the 2029 period. It is observed that, demand of customers for
the product is fluctuated which further affect the overall profitability and market share of Lexo
Company.
Product and price analysis: With the help of this analysis, organization able to evaluate
the demand of their products and in what price customers is ready to buy Lexo’s Mobile Phone
(Perotti, 2014). Product will be evaluated on the basis of its quality and how company able to
satisfy their clients through offering at what level of product quality. Total segment demand of
Lexo products according to price was 1800000 and according to product quality was 240000 in
2020. In 2021, demand of price was 1377000 and as per the quality it was 172800 which were
similar with year 2022. In the year of 2023, market share according to price was 1514700 and on
the basis of mobile phone quality it was 190080 and the total segment demand was same till
2027. In 2028, total segment demand on the basis of price was 1590435 and as per the quality it
was 199584 and these values were repeated in the 2029 duration. It is also observed that price of
products increases throughout the period but the demand of quality also increases which means
Lexo company increase their product price but reduces its quality which negatively impact the
Competitors: While making business strategy in context of the organization, competitors
are the crucial aspect which required evaluating in order to identify the threats in the global
market. In relation to Smartphone industry, Lexo Company also has some major competitors
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such as G-Mobile, V-Connect, Limitless, Yell etc. Managers of above discussed company need
to evaluate their competitor’s strategy to know about how they get the success in the Mobile
phone sector. After evaluating their competitor’s strategy, Lexo Company should formulate their
strategy and implement such effective approaches which help in executing the plan with
successful results.
Competencies and capabilities: Capability driven approaches are built on the
presumption that inner capital and key competencies drawn from distinguishable skills include
the competitive foundation that undergirds long term competitiveness of a company (Aoyama,
2016). The assessment of these skills continues with a business skill profile, which identifies the
strengths and limitations of an organization in four main fields such as strategic, marketing,
technological or financial. In order to evaluate their capabilities, Lexo Company should adopt
SWOT analysis to identify the strengths of the company which are beneficial for them and
suggest the suitable strategy for the business which helps in maximising profitability as well as
entire performance. Corporate planning is not about goods or sales but about company
operations. Major strategic procedures are required in order to continuously give the superior
value to the customers. Lexo Company should invest in improving capabilities, not operations or
SBUs and CEO must highlight the strategy which is based on ability.
Core competencies may be characterized as the powerful mix of a specific company's
resources and perspectives. Creating those key competencies takes some time because they are
hard to replicate. Such as durability, in-transparency and immobility are crucial to maintaining
these core competencies.
 Durability: Their life span is greater than the lifespan of particular goods or
technologies, but so are the life expectancies of the materials used to produce them, like
humans.
 In-transparency: Rivals find it impossible to mimic these capabilities easily.
 Immobility: It is impossible to move certain skills and capital.
In context of Lexo Company, they should create such core competencies which help them to
make organizations different from their competitors. They need to focus on improving their
research and development skills which support them to identify the opportunities and according
to this, company should trained their employees or staff to perform that particular task.
Performance Results:
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In this section of performance results, the performance review and analysis will be done.
In this section strategies and decisions developed and made by Lexo will be analysed by
comparing them with the strategies of their competitors (Xiang-chao, 2012).
Financial
Lexo is a large international company which has decided to not procure any loans as this
company does not wanted to be in a debt position. This strategy of Lexo is different from its
competitors as its competitors have acquired multiple loans from financial institution. This
strategy was appropriate for Lexo for first few years as this company was gaining reliable profits
but in long run, Lexo started to earn heavy losses which were the results of inadequate funds in
company. So, it can be said that this strategy of Lexo of not acquiring loans was not successful.
In order to analyse the financial position of a company, it is important to access their financial
statements which are income statement and balance sheet (Pande, 2019).
From the income statement of this company, it can be seen that the net profit of this
company in its initial years was quite reliable. In 2020, this company acquired 16 million euros
profit as the company continued to operate, it started facing losses. In 2029, the company is
observed to be facing 448 million euros loss. There are two targets of Lexo Company which are
related to the income statement and that are profit margin and net profit. The company had a
target of gaining 15% but in none of the years, this target was completed. Another target of Lexo
was to earn profit of 5.4 million euros and this target was even achieved in 2020 and 2021 but
with the passing years, this company started to face losses. So, as none of the targets related to
income statement were fulfilled, it can be said that company financial strategies were failed
(Tiwari, Nafees and Krishnan, 2014).
The balance sheet is the statement of financial position of a company (Pellas and
Boumpa, 2016) and from this statement of Lexo, it can be seen that there is low liquidity even
after aiming for high liquidity. There are two targets which were set by Lexo related to balance
sheet and these targets were 5% return on equity and 75% solvency. None of these targets were
fulfilled by this company in every year due to their financial strategies.
Marketing
The Lexo Company adopted for extensive marketing strategies according to which they
invested 3.4 million euros for sponsorship. This company decided to consider behaviour
intention as the intended campaign effect. Along with this, company decided to spend at their
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maximum level for electronic marketing. All these strategies and decisions taken by Lexo are
observed to be effective than their competitors as the market share of this company is maximum
in United Kingdom than their competitors. So, it can be said that marketing strategies of this
company resulted to be successful as they helped this company to capture high market share.
Human resource
Lexo Company adopts the HR strategy in which they decided to provide adequate
bonuses to employees but spend low on educating the employees. This strategy of this company
resulted in high employee retention of this company as every year, numerous employees of this
company left Lexo. This strategy of this company is different from its competitors and is resulted
as a failure as spending low on the educating employees will result in low satisfaction and skills
of personnel.
3. Future plan and recommendations
Key decisions
Lexo is a large scale smartphone manufacturing company which has taken various
decisions that has not resulted profitable for the company. There are few decisions which are
suggested for this company that can enhance performance of this company in future. Such
decisions are:
 This company should decide ways to acquire additional capital so that operations of this
company can be innovative which can result into profits and higher revenues.
 Another suggested key decision for this company is to select or decide appropriate
distributors that can make the supply chain management of this company effective.
Observing the current scenario of this company, million euros are spend on distributing
the goods but with an effective logistics management, these expenses can be reduced.
Changes to current strategy
 Competitive strategy of Lexo is the combination of three strategies which are cost
leadership, product leadership and customer focus. It is complex for an organisation to
follow all these strategies in one organisation. So, it is suggested to this company to
change their strategy from a combination of three strategies to cost leadership. The major
market share captured by Lexo will be satisfied if this company will be able to provide
least expensive products with high quality.
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 Another change recommendation for Lexo is for the growth strategy of this company.
The current growth strategy of this company is market penetration in which this company
aims to grow by penetrating in same market with same offered products due to which the
appropriate profits of this company in its initial years turn into heavy losses. This
company should change their strategy to diversification as it will enforce innovation and
will satisfy customer requirements.
Recommendations
There are various recommendations for Lexo which are devised to ensure growth of this
company. These recommendations are:
 Lexo should increase their budget of training and development in order to educate their
personnel so that they can contribute towards the innovation of this company.
 Another suggestion for this company is to increase their capital investment by acquiring a
low interest loan.
 Lexo should diverse their products by manufacturing different smartphones having
different features as by this market share having different types of consumers can also be
captured.
Potential growth
There are multiple growth options available to Lexo but by considering current situation
of this company, the most appropriate growth option for Lexo is diversification. This option will
allow Lexo to diverse into various nations such as Australia and New Zealand with diverse
variety of smartphones.
PART B: PROFESSIONAL DEVELOPMENT REFLECTION REPORT
Executive Summary
Professional development is a process that defines particular steps which an organisation
and individual takes in light of ensuring and moving towards betterment and improvisation in the
skills and capabilities for enhancing the personal and professional prosperity. The section of the
report is covering a detailed reflection on the above activity that took place with the help and
support of various practices and application of relevant theories throughout the business
simulations (Draijer, 2020).
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The purpose and objective of the report presented underneath is to reflect upon the
experiences the team had while carrying out various activities related to business simulation.
Therefore for the same purpose there are certain events that are identified and analysed with the
help of above work performed in the part of the report.
Along with it another purpose of developing the report is to review and identify the
relevant theories and context which are adopted by teams and implemented within the business
simulation activities. So in regards to this, team building, decision making and leadership
theories and concepts are been identified reviewed and reflected upon within the report (Gresch
and Rawls, 2017).
Moreover, the report below also provide reflection upon the review of industry practices
for which numerous practices from other companies within the simulation by evaluated to
identify and determined how they have use the theories in order to accomplish and attain all of
their agendas. Furthermore, the reflection report also include and undertake applications of
different theories and practices which are discussed and focused on detailed discussion and
respective recommendation for improvement and improvisation in future practices of the
business simulation.
Introduction
Reflection is an imperative activity and practice which is conducted by a person that
allows them to reflect on their own about their past experiences and evaluate it for better future
actions and improvisations in there competencies by taking appropriate and effective steps
towards betterment and growth. Thus, in respect to this concept of reflection underneath is a
comprehensive reflection which is a focused and concentrates on investigating the business
recreation actions that are performed in the previous part of the report.
The current section of the report incorporates recognisable and important proofs of
certain events which recently took place and are associated with the activities of the business
simulation that are very crucial incidence to be identified and analysed. Moreover different
theories in regards to team building, decision making and leadership are prominently analysed an
examined with proper discussions. Moving further in the report it also includes thorough analysis
of the industrial practices which are been taken by other companies and are applied on the
simulation as well. At the end of reflection report, discussion is conducted that is ended with
appropriate recommendation that are given in respect to the company as well as for different
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teams of it ensuring that future performances and productivity of all the team members and
subordinates can effectively improvise that will lead to two improvement in organisational
performances and its productivity standards (Syring, 2015).
Identified Events
In the business simulation There are several events which took place and work experience
by me as the part of the business simulation project, also my team members have also so when
part of those experiences where all the events happened in a very detailed and evaluative manner.
There are few events which took place and which were very critical that contributed towards the
path of improvement and enhancement of learning experiences which each of us as a team and as
an individual have realised. In addition to it the critical incidents and events which took place
actually shape the performance of the company in initial and in coming years. Few of these
critical and very beneficial events are discussed and elaborated underneath:
Event 1- Low Expenses for employee training.
The first major event that took place during the simulation activities was that the Human
resource Department or Lexo Company adopted a HR strategy of spending more on providing
bonuses to the Employees rather than on educating them and providing them appropriate
industrial trainings and education. This human resource strategy of the organisation resulted in
increasing reduction in the performance standards of the employees (Lainema, Islam and
Lainema, 2018). The Human resource Department adopted such strategy for reducing the
employee turnover ratios and improving their retention power. Therefore the company provide
more bonuses to personnel’s but the major failure of the strategy happened because the
employees are retained in the company for the longer period but their performance standards
reduced as they were not appropriately trained and educated about the upcoming changes that are
taking place in the industry. The less training and education in strategy of Human resource
Department resulted in a negative manner for the company as the skills and competencies of
individual reduced rather than increasing and talent management of HR in Lexo Company
resulted in downfall in the coming years.
Event 3- Promoting Brand by sponsoring World cup and Global Television shows.
The second major event or incident that took place in Lexo company and which is
identified from the other activities and decision made by the organisation is in relation with the
marketing strategy it adopted. Lexo Company’s Marketing department adopted a strategy and
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