Strategic Management and Competitive Advantage: Global Cars Report

This report provides a comprehensive analysis of Global Cars' performance across four rounds of a business game simulation. It examines the strategic decisions made regarding production, marketing, finance, and human resources. The report details the company's financial performance, including sales revenue, profit margins, and cash flow, while also evaluating market share and customer satisfaction. Each round's decisions and outcomes are presented, along with trend analysis and key learnings. The report highlights the challenges faced, such as unsold stock, strike days, and the need for improved return on investment. The conclusion summarizes the key findings and offers insights into the company's strategic management and competitive advantage. The report utilizes tables to summarize key performance indicators and strategic objectives, including the status of company objectives.

Strategic Management for Competitive
Advantage B

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
COMPANY PERFORMANCE.......................................................................................................3
A. Round 1...................................................................................................................................3
B. Round 2...................................................................................................................................5
C. Round 3...................................................................................................................................6
D. Round 4...................................................................................................................................9
TREND ANALYSIS.....................................................................................................................12
Production..................................................................................................................................12
Total sales..................................................................................................................................13
Sales revenue, breakeven point and safety margin....................................................................14
Unsold stock..............................................................................................................................15
Net cash position vs post profit after tax...................................................................................16
Net cash position........................................................................................................................17
Current ratio...............................................................................................................................17
Gross profit margin....................................................................................................................18
Return on investment.................................................................................................................19
Warranty claim..........................................................................................................................20
Strike days with wages..............................................................................................................20
LEARNING...................................................................................................................................21
Strategy......................................................................................................................................21
Financial decisions.....................................................................................................................21
Marketing decisions...................................................................................................................22
Operating decisions...................................................................................................................23
Human resource decisions.........................................................................................................24
Team performance.....................................................................................................................24
Reflection...................................................................................................................................25
CONCLUSION..............................................................................................................................25
REFERENCES..............................................................................................................................26
APPENDIX....................................................................................................................................29

INTRODUCTION
Business industries have been planning to make appropriate analysis over the business
which in turn will be useful for governing the operations. Global cars have been planning to
launch the new cars models in a new market with a motive to retain the adequate gains and
profitability through improving operational perspective. In the present report there will be
discussion based on the business game simulation round have been played by the firm in all 4
rounds. Thus, there will be consideration over various units and departments which are being
operated by the business such as financial, operational, human resources etc. Thus, the analysis
of the business performance will be judged and determined to have effective observation on the
operational activities.
Aspects Objectives Status
Company sales revenue  Improve GP ratio (70-60%)
 Return on assets (10%)
 Post-tax profit (15%)
 Done
 Undone
 Approached
Market share  Improving the market share of these
cars in the upcoming period (6-15%).
 Undone
Production  Strike are needed to be less than 5
days
 Production of models are to be 110
million pounds.
 Done
 Approached
Sustainable growth  Internal development needed to be
done based on worker efficiency,
requirements and talent
 Proper training and developmnte
program will help in raising their
level of potential efforts into
operations.
 Done
 Approached
Customer satisfaction  Cars have been designed in the
manner that will fit into their
budgets and will be convenient to
 Done
1

them accordingly
 Global cars have designed various
models such as city, large,
medium and luxury.
 Prices charges on Sports 19 and
Breeza have to be cost efficient
and best in quality which will has
to be profitable.
 Decision should be based on
making appropriate dividend
policies which will help in
governing financial aspects as
well as meet the desired
profitability through investment.
 Undone
 Approached
 Done
Research and development  Required to be more attentive and
conscious towards reducing the CO2
emissions in every model.
 Need to reduce the costs of
production in manufacturing the cars.
 Approached
 Done
Human resource
management
 Worker’s wages.
 Reduction in expenses of business
 Improve consumer satisfaction.
 Better product designs.
 Done
 Undone
 Approached
 Done
Table 1: Objectives of Global Cars
Summary of the performance
Rounds Total
sales
Total
unsold
Shareholder
funds
Closing
bank
balance
Outstanding
loan
Round 1 2378.95 0 573.92 247.45 0
Round 2 3913.45 0 1,004.84 818.74 20.85
2

Round 3 2378.95 74500 936.82 -1419.1 121.54
Round 4 5390.86 49401 827.28 -819.73 0
Table 2: Summary performance of the organisation
COMPANY PERFORMANCE
A. Round 1
Decisions:
Observing the activities, costs and gains retained by Global cars in business game
simulation. In the first round there have been analysis over the car models of Sports 19 and
Breeza which are being manufactured and sold to create the identity among buyers (Rosa &
et.al., 2017). They have been targeting the audience which is around the age group of 25 to 40.
However, there have been various estimations and analysis over the data base which will be
helpful to determine the consumers requirement and growth of the business till the next round
(Morita & et.al., 2017).
Forecast and Results:
As per ascertaining the growth and operational activities of Global cars on which it can
be said that they have estimated the sales of business which have brought the appropriate gains
and revenue generation to the firm. However, they have forecasted that the business will have
growth in the sales volume and gains which will be retain them adequate success and bring
positive outcomes (Koltai & et.al., 2017). However, the outcomes are not reflecting the favorable
results which are negatively affecting the operations of the firm.
Both brands of Global cars are capable of bringing them the adequate GP margin which
will help them in retaining the higher success (Li & Wang, 2018). Along with this, it can be said
that there is requirement of increasing the marketability of models such as promoting the brands,
inviting consumers as well as reducing costs implied in the activity (Wellington, Hutchinson &
Faria, 2017).
Round 1
Forecast Results
Model Small petrol Large petrol Small petrol Large petrol
3

engine engine engine engine
Car name Sports 19 Breeza Sports 19 Breeza
Target Under 25 Between 25-40 Under 25 Between 25-40
Workforce 36.04% 63.96% 36.04% 63.96%
Automation
allocation
50% 50% 50% 50%
Effective workforce 652 1157 652 1157
Productivity 75.92 73.47 75.92 73.47
Production 50 30 50 30
Unsold stock 0 0 0 0
Selling price 8191.63 12363.77 8191.63 12363.77
Market price 11999 21000 11999 21000
Market share 0.95% 1.45% 0.95% 1.45%
salary 41.45 41.45
Strike days 3 4
Gross margin 22.30% 26.82% 22.30% 26.82%
Sale income 2378.95 2378.95
Net cash position 247.45 247.45
Fixed overheads 171.87 171.87
Promotion 40 40
R&D 143.85 143.85
Training cost 0.81 0.81
Automation
investment
15368.53 15368.53 15368.53 15368.53
Warranty cost per
car
180.43 301.13 180.43 301.13
depreciation 85.00 85.00
Operating profit 115.05 115.05
Post tax profit 73.92 73.92
Loan 300 300
4

Table 3: Results of Round 1
B. Round 2
Decisions
Global cars have newly launched a Diesel Engine care Brew which respect to attract the
more consumers as well as generating higher revenue. It has been aimed by industry to have
higher market share which will lead them in attaining the appropriate targets and retaining
profitable gains (Greasley, 2017). The rise in brand value as well as revenue generation of firm
with respect to manage the capital structure of the organisation. Managing the cost of sales,
productivity as well as automation allocation will help industries in managing the firm’s
operations as well as making drastic changes in the operational control (Wu & et.al., 2017).
Forecast and Results
To analysing the outcomes of the 2nd Round which have been played by professionals on
the basis of playing business simulation for revenue generation and capital management. Thus, in
Analysing the outcomes on which it can be said that there have been use of various activities
which will be useful in respect with meeting the profitability. In the following results it has been
determined that there has been appropriate revenue retained by selling these three models of
global cars such as Sport 19, Breeza and Brew (Hishiyama and Nakajima, 2015). However, there
have been appointment of proportionate rate of employees in several brand of the cars. The
allocation of the capital in each brand have been determined by the professionals as per the
requirement of costs in each model.
Round 2
Forecast Results
Model
Small
petrol
engine
Large
petrol
engine
Diesel
engine
Small
petrol
engine
Large
petrol
engine
Diesel
engine
Car name Sports 19 Breeza Brew Sports
19 Breeza Brew
Target Under 25 Between
25-40
Between
41-55
Under
25
Between
25-40
Between
41-55
5

Workforce 21.53% 38.20% 40.28% 21.53% 38.20% 40.28%
Automation allocation 25% 50% 25% 25% 50% 25%
Effective workforce 652 1157 1220 652 1157 1220
Productivity 75.92 73.47 40.57 75.92 73.47 40.57
Production 49500 85000 49500 49500 85000 49500
Unsold stock 0 0 0 0 0 0
Selling price 8441.24 12740.50 16253.32 8441.24 12740.5
0 16253.32
Market price 11999 21000 31000 11999 21000 31000
Market share 0.95% 1.45% 1.60% 0.95% 1.45% 1.60%
salary 60.58 60.58
Strike days 2 2
Gross margin 22.30% 34.57% 32.40% 22.30% 34.57% 32.40%
Sale income 3913.45 3913.45
Net cash position 818.74 818.74
Fixed overheads 244.73 244.73
Promotion 102 102
R&D 146.96 146.96
Training cost 1.36 1.36
Automation
investment 9265.92 13740.7 20954.5 9265.92 13740.7 20954.5
Warranty cost per car 161.82 420.89 617.19 161.82 420.89 617.19
depreciation 96.5 96.5
Operating profit 563.43 563.43
Post tax profit 430.91 430.91
Loan 100 100
Table 4: Results of Round 2
C. Round 3
Decisions:
6

It has decided by the professionals of Glovbal cars with respect to introduce a diesel
engine car Speed 25 in this year. Therefore, the motive is for retaining higher revenue, market
share as well as bringing capital stability in the organisation (Cannon, Cannon and Schwaiger,
2014). Thus, management of operations through implicating use of various techniques will be
helpful in managing the operations at the right stage. There have been changes in the policies,
cost allocation in various activities as well as uses of techniques in improving the business
activities through implicating strategies for the operations.
Forecast and Results
In analysing the outcomes of Global cars in this respecting 3rd Round on which there have
been various changes have been increased in the capital allocation as well as the level of cost
implied in each brand production. By adding Speed 25 as the new car brand in the business on
which there have been use of various techniques which were making adequate ascertainment of
the data base (Khan and Pearce, 2015).
It is basically due to remining stock in the business as there has been no sales of the
vehicle for this brand in this period. It has been analysed there that they are utilising higher funds
on fixed overheads as well as in the promotional activities of the brands. In terms of ascertaining
the automation investment of these brand in this respective period which have been analysed on
the basis of material costs (Glomnes, 2014). Designing costs and labour expenses in the
production of such models. Therefore, in respect with looking through the data base of this round
on which it can be said there were comparatively higher operating costs which have lead the
organisation to losses (Dickinson, 2014).
Round 3
Forecast Results
Model
Small
petrol
engine
Large
petrol
engine
Diesel
engine
Diesel
engine
Small
petrol
engine
Large
petrol
engine
Diesel
engine
Diesel
engine
Car name Sports
19 Breeza Brew Speed
25
Sports
19 Breeza Brew Speed
25
Target Under
25
Betwee
n 25-40
Betwee
n 41-55 over 55 Under
25
Betwee
n 25-40
Betwee
n 41-55 over 55
7

Workforce 14.09% 24.99% 26.36% 34.56% 14.09% 24.99% 26.36% 34.56%
Automation
allocation 25% 25% 25% 25% 25% 25%
25% 25%
Effective
workforce 652 1157 1220 1600 652 1157
1220
1600
Productivit
y 75.92 73.47 40.57 15.63 75.92 73.47 40.57 15.63
Production 49500 85000 49500 25000 49500 85000 49500 25000
Unsold
stock 0 0 49500 25000 0 0 49500 25000
Selling
price
8803.4
6 13287.2 16950.8 45931.
1
8803.4
6 13287.2 16950.8 45931.
1
Market
price 11999 21000 310000 56000 11999 21000 310000 56000
Market
share 0.95% 1.45% 0.00% 0.00% 0.95% 1.45% 0.00% 0.00%
salary 92.85 92.85
Strike days 2 2
Gross
margin 20.02% 32.04% 92.96% 78.8% 20.02% 32.04% 92.96% 78.8%
Sale
income 2378.95 2378.95
Net cash
position -1419.13 -1419.13
Fixed
overheads 311.01 311.01
Promotion 117 117
R&D 136.77 136.77
8

Training
cost 2.2 2.2
Automation
investment
9596.6
3 14272.2
21834.8
11874.
2
9596.6
3 14272.2
21834.8
11874.
2
Warranty
cost per car 146.38 376.05
514.02 321
146.38 376.05
514.02 321
depreciatio
n 175.01 175.01
Operating
profit -106.14 -106.14
Post tax
profit -68.02 -68.02
Loan 100 100
Table 5: Results of Round 3
D. Round 4
Decisions:
In this present round there have been introduction to the new model by Global cars as
Max. Therefore, in the present round the professionals of this industry have been planned to
make policies and strategies which will present effective terms to overcome with the deficits
incurred in the last round (Boyle and et.al., 2016). However, the main focus is payable on selling
of each vehicle, less number of unsold stock, improved market share as well as effective control
over the operating expenses.
Forecast and Results
In ascertaining the outcomes of Global cars in this respective year where they have added
one more brand in the operation named as Max. Thus, there are comparatively large number of
employees have been engaged in the production unit of the Speed 25 car. There has been
introduction to the new models and the firm will deal in 5 models such as Sports 19, Breeza,
Brew, Speed 25 and Max.
9