Limitless Smartphone Company: Business Simulation and Strategy Report

This report provides a comprehensive analysis of Limitless Smartphone Company's business simulation over a five-year period, segmented into a strategy paper (Part A) and a professional development reflection report (Part B). Part A examines the company's vision, values, mission, human resources, and organizational culture. It then delves into a review of each year's progress, including Porter's Five Forces analysis, market share, product/price analysis across Australia, the UK, and Germany, and the competitive strategies employed. The report evaluates these strategies, analyzes performance, and concludes with future plans and recommendations. Part B focuses on a professional development reflection, including an executive summary, identified events, relevant theory, industry practices, application of theory, discussion, and recommendations. The report aims to provide insights into the company's performance, strategic decisions, and areas for improvement, offering a well-rounded perspective on the business simulation experience.

Business
Simulation with
Professional
Development
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Contents
INTRODUCTION...........................................................................................................................3
Part A: Strategy Paper......................................................................................................................3
Review of Each Year’s Progress............................................................................................5
Market share:..........................................................................................................................6
Product/Price analysis............................................................................................................6
Competitive strategies of company........................................................................................7
Evaluation of strategies and decisions....................................................................................8
Performance analysis............................................................................................................10
Future plans and recommendations......................................................................................11
PART B-Professional Development Reflection Report................................................................13
Executive summary..............................................................................................................13
INTRODUCTION................................................................................................................13
Identified events:..................................................................................................................13
Review of Relevant theory...................................................................................................14
Review of industry practises................................................................................................15
Application of theory or practise..........................................................................................15
Discussion.............................................................................................................................17
Recommendations................................................................................................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................20
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INTRODUCTION
Simulation is basically termed as the rough or approximate imitation of overall operational
procedure of company which simply shows expected by activities on the same area over the
period of time. It is determine as the useful method that supports individuals in analysing things
in better manner by communicating, verifying, and understanding things (Draijer, 2020). Along
with this, it also provides valuable solutions towards the expected business problems that might
occur in future while executing operational work or implementing any plan for future growth.
The present report is based on Limitless Smartphone Company which is mainly producing
smartphones in Asia under its own license. This project is mainly divided into two parts where
Part A of this project is strategy paper and Part B will Professional Development Reflection
Report. Here, Part A of the report will cover detailed information on business simulation activity
opted by the company from last 5 years. In this, strategy of the company would be deeply
reviewed by evaluating vision, mission, strategy, culture, competitors, industrial analysis
(Porter’s five forces) etc. and future plan. At last, it will provide recommendations to the for next
five year. Part B of this report is related to reflective report which would emphasise on overall
learning from experiences developed by the individual.
Part A: Strategy Paper
Vision: The vision statement of Limitless Smartphone Company is to enhance connectivity
with the world, provide support to local communities, sustainable future practices, shaping the
future of technology, transform human experiences with latest featured Smartphone that could
simply help company in accomplishing their organisational goals and objectives in quicker
manner.
Values: Limitless Smartphone Company provides higher value to its ethics as they perform each
and every activity related to business by adhering all the norms in appropriate manner. This
simply helps company out in attaining organisational goals and objectives in quicker and wise
manner (Zulfiqar and et. al., 2019). Also, the respective company values its each and every
customer thus it offers Smartphone for all types of its customers belongs to every range.
Mission: The mission statement of Limitless Smartphone Company to develop sustainable
future with higher support of local communities.
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Human resource: In order to execute all organisational activities effectively within Limitless
Smartphone Company, the respective manager prefers to bring highly skilled and qualified
employees within the company who could easily understand work and perform it in the same
manner (Bocciardi and et. al., 2017). Also, for improvising performance of the employees and
remaining competitive the respective manager of the company conducts training programs for
the employees. In these training programs employees get to know about the skills which can
enhance their performance rate. This simply supports the company in executing its work in
appropriate form. Apart from this, the respective manager also provides rewards to its employees
on the basis of their performance in order to motivate them at extensive level. Along with this, it
has also been seen that the respective manager of the company also emphasizes on making use of
bonuses and other remunerations in order to enhance loyalty among employees as they are
motivated with the supported which being provided to them by their superiors (Hughes and
Scholtz, 2015). This simply helps them out in serving its customers as they got appropriate
training related to handling customers which ultimately results in creation of better image at
marketplace.
Culture: Organisational culture is basically determined as the personality of the company which
simply states the environment of workplace where employees performs their work. Culture of
company includes many elements such as vision, mission, goals, working environment, ethical
values, and expectation of the company. With reference to Limitless Smartphone Company, it
has been seen that respective manager of the company focuses on developing positive working
environment within the company where employees can work freely and give their best in the
assigned work (Hernández-Lara, Perera-Lluna and Serradell-López, 2019). Apart from this, it
has been analysed that manager of this company provides complete liberty to their employees
that means that employees are allowed to perform their work according to their own knowledge.
Also employees are free to share any sort of innovative idea with the company that could
contribute in improvising functioning of the company in appropriate manner (Bocciardi and et.
al., 2017). The respective organisational culture of this company is very corporative and working
friendly as employees are highly free to express that whether they are able to execute their work
in their own pattern or not. This aware the management in knowing problems faced by
employees which ultimately helps them out in taking required initiatives to resolve the same
problem.
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Review of Each Year’s Progress
It is important for a company to take into account the progress of each year in order to
determine the growth and development prospects of the corporation. In this relation, an in depth
analysis of performance of Limitless is provided beneath with the assistance of effective tools.
Porter’s Five Forces Analysis:
This is a model which provides assistance in determining the extent of competitive
rivalry within the confines of any industry. In relation to the performance of Limitless, the
management of this organisation is applying this model to gain knowledge of the comparative
position of the entity as against the industry within which it operates. This model consists of 5
forces which are discussed below:-
 Customer’s Bargaining Power: The extent of this force was low within the initial years
of operations of Limitless as, there were lesser numbers of market players. With the
passage of time, new companies gained access into smart phone industry which inflated
the bargaining power held by the customers for Limitless (Levant, Coulmont and Sandu,
2016). Yet the effective performance shown by the concerned organisation during the last
5 years has provided assistance in countering the high customer bargaining power. Supplier’s Bargaining Power: In the initial phase, there were less numbers of vendors in
the market due to which the extent of this force in context of smart phone industry was
high. The passage of time introduced several new suppliers diluting the magnitude of this
force for Limitless. Thus, the entity is now able to build networking with vendors and
negotiate the prices of materials provided by them.
 Threat of Substitutes: The threat of substitutes in context of smart phone industry has
always been high. This is so because even though the quantum of rivals in the initial
phase of Limitless was low, such entities were still coming up with new features at rapid
intervals to captivate the audience (Draijer, 2020). Threat of New Entrants: The extent of threat of new entrants has constantly increased in
context of smart phone industry for Limitless. Even though substantial capital investment
is required to gain access into this market, the constantly growing prospect of this sector
has gained the attention of new companies, thus enhancing risk for Limitless. Competitive Rivalry: The magnitude of this force has increased with the efflux of time,
being low in the initial phase of Limitless to being at peak in the present time. At present,
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there are some top market players which pose threat to the sustainability of Limitless in
the market place. However, the entity strives to leverage focus on fulfilment of customer
needs to sustain in market in the long run.
Market share:
Market share is the percentage of the market (defined in terms of any unit or revenue) accounted
for by a specific entity. Percentage of sales volume of products of a specific company among the
total sales volume of specific products in a competitive market (market). Market occupancy rate,
market occupation rate, which is also an indicator of market power. It is roughly proportional to
the concentration of production in terms of production volume, but in the case of goods with
high dependence on imports, market occupation rates may be lower even if the concentration of
production is high.
The simulation results shows that currently; smart phone company has grabbed around 45%
market share in Australia; 48% in UK and more than 55% in Germany. Which indicates that
maximum scope for product development and gaining more market share is in Germany itself.
After 10 years; this results varies with improving the market share in Australia by 2%; UK also
shown improvement by more than 8%; and the leading company Germany has maximum
improvement which is more than 15% over 10 years of life span.
Product/Price analysis
This is the percentage difference between your product's average product price and the
participative product price. For product groups, the price difference is measured based on the
traffic potential of your product. More popular products will be given more importance than less
popular products. If the price of a commodity is kept low for the poor class due to price
discrimination and high price is kept for the rich class, then price differentiation is beneficial for
the society. Report says 81% of customers who think about various store offers locate a superior
arrangement. Affiliates who can gather and dissect showcase information, map their position
contrasted with contenders and offer the best costs, are the organizations that initially pull in the
consideration of those purchasers.
Serious valuing is a methodology that assists organizations with drawing in more clients by
streamlining costs utilizing serious creation and evaluating information. An effective valuing
methodology can fundamentally expand deals, lead to better coordinated effort with providers
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and produce income. Below is the product/price analysis of different countries; Australia, UK
and Germany based on current year 2020 and over the next 10 years:
 Australia: In Australia; taking year 2020 as a base; total segmented market on the basis
of price is 6 million; on the basis of quality it is 72,000 and over 1.14 million customers
focused on current smart phone company. After 10 years; the resulted data shows not
much difference; as segmented market based on price is increased by 300K; based on
quality increased by 3,600 and focused customer base increased by 57,000.
 UK: As compare with Australia; in 2020, market segment based on price is only 1.8
million; based on quality shows more product preference by people and shows positive
attitude towards quality of UK people which is 1.62 million and customer focus doesn’t
create much difference; as it is only 1.14 million.
 Germany: This country is leading all other two countries from every point of perspective.
In 2020; smart company is able to attract over 1.94 million people based on price; 1.68
million based on quality and 1.58 million customers are product centric based on both
price and quality.
Competitive strategies of company
There are a number of generic competitive strategies which this company purse you in
order to gain competitive advantage in the market. The company has chosen from four generic
strategies in order to do so. Below mentioned is the strategies which can be followed by a
number of companies to attain competitive advantage:
Cost leadership: Cost leadership can be attained by a company in the market by providing their
products at a lower price than their competitors. Company here uses cost leadership or
operational excellence strategy by offering high-quality smartphones in the market. Company
here focuses on cutting the cost wherever possible only keeping the necessities which are
essential.
Product leadership: Product leadership is achieved by a company when they provide best
possible product to their customers which have no substitute in market. Company here
differentiates their product from others in market by providing high quality smartphones in
market. They have all the new innovations required by a firm to do good in market. Innovation is
the main focus on company through which they provide best product to their customers.
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Customer focus: In this company focus on building the brand image in the market. This is done
through focusing on establishment of a long lasting relationship with their customers. It helps in
establishing a strong brand identity and also working for innovations will make the clients as
ambassadors for the business.
Combination of all of above: Company here does not focus on a single aspect but look for all the
aspects altogether. They sit in the middle when taking into account price, quality as well as
strong brand image. This is also a good competitive strategy which can be followed by company.
When talking about company Limitless they focus on gaining competitive advantage in
the market. There are a number of ways through which company can successfully do this. But
Limitless follows combination of cost leadership, product leadership and customer focus. The
prices at which company provides their product in market are neither too low nor too high.
However, they take care of fact that their products are provided at competitive prices as per their
competitors in the market. When taking quality and product into consideration Limitless have a
number of innovations in their product which makes it better then their competitors. But the
amount spent on research and development is not much as company do not want its cost to rise
too much. Company have paid a lot of attention towards their customers. They do it through
taking regular feedbacks from their customers and meeting the required wants and needs of
customers. They have also focused on after sales service to make it possible. Following all these
steps Limitless faces competition in market and attains competitive advantage.
Evaluation of strategies and decisions
Company have to take decisions regarding a number of matters. These decisions of
companies are related to countries they work for, management of company along with different
departments which are human resource, product, distribution, marketing and finance. Below
mentioned is an analysis of performance and evaluation of company’s strategies and decisions
regarding all these points.
Countries: Limitless deals in a number of countries as it has gone international to carry on its
business. Some of the major countries it deals in and various strategies it uses in those different
countries are mentioned below:
 United Kingdom: It is a great option for Limitless as it represents economic power in
Europe. Country is known for long and successful history including its financial history
as well. This is reason how company is successfully positioned in this country.
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 Australia: Company have used market penetration to enter in Australian market.
 Germany: This company has 4th largest economy when comparing nominal GDP. The
country has high standard of living and sustained development making it a great
opportunity for Limitless to work in this country.
Management: The management of company is divided into functional, geographic and
international division structure. The company is divided into various departments as per their
functions which are operations, finance, human resource, marketing and so on.
Human Resource: Limitless have successfully developed a strong Human resource department
by dividing it into various sectors. They have some important policies followed by them which
include set standards for maximum workload on per employee, the number of full time
employees required, developing a human capital management support system, specific
remuneration, rewards as well as bonuses.
Product: Limitless designs their product keeping in mind customer preferences so that it is
accepted in market by targeted customers. They invest enough in their research and
development. There is a particular budget allotted for research and development and regular
check is made by company on its research and development to make sure that everything goes
according to plan.
Distribution: Company have set standards for their distribution as well. The cost and time
required for their distribution is clearly mentioned by the firm. The smartphones are produced in
their factories which are situated in Asia and the delivery starts from their itself. The products
move to the warehouses of specific countries from factory. Company is linked with LSP for their
delivery who provide them on time delivery although it is a bit expensive.
Marketing: The marketing of Limitless is done through various mediums. It is done globally as
well as locally. Different marketing strategies are made for local as well as global markets.
Company mostly uses online promotion activities for their global promotion. The major focus of
their campaigns is on brand awareness, brand knowledge, behaviour intention, behaviour
facilitation as well as satisfaction of their customers.
Financial: It is clear that Limitless needs to invest a lot as they need to continuously innovate
new features in their products. It is to be kept in mind that only investment will bring in profits
for company. Company usually goes for loans in order to attain investment for their business.
They have certain long term as well as current loans through which they get investments for
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company. Once they started earning profits, they can easily manage regular cash flows for
business and will not require huge borrowings from market.
Performance analysis
It analysis the performance of the Smart phone company with the help of merit called key
performance indicators. Below are some measures for comparison:
Comparison of actual performance based on targets:
Profit Margin Ratio:
Net profit margin ratio is a profitability ratio. Basically, after deducting preferred share dividends
from business operating expenses, interest expenses, taxes and revenue, it is a percentage of
profit from operating the business. Common stock dividends are the only major debit item left
out of the equation. The reason for this is that, technically, ordinary shares are not a dividend
expense; they are distributing profits to shareholders. Furthermore, they are not mandatory debits
- a company's board has declared a dividend and the same board can reduce or suspend the
dividend at any time.
Net Income = Gross Income - Expenditure. In many instances gross income is similar to sales
revenue, however, they may vary if certain exclusions are allowed - for example, stock options
granted to company executives but here we will assume the original position Where gross
income and sales revenue are the same thing. To arrive at net income for a specific time period,
often a quarter or a year, you subtract from gross income all business expenses for the same time
period. This includes all operating costs, interest, tax payments and preferred share dividends if
any. The profit margin ratio of the company shows huge losses over 10 years. According to
simulation software; Smartphone Company has profit margin of -67.97% which is much from
year 2020 -48.69%.
Lowest price:
The lowest price which can be offered by company is 3 pounds in 2029; below this rate will
make Smartphone developer to shut down its business because; it will not able to cover its fixed
cost of the business below this rate.
Return of equity:
The return of equity is determined as the amount of profit the company makes from the
shareholder's investment or is a measure of how effectively the company invests in a dollar
amount and derives better profit from it. Return on equity is more important than return on
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investment to shareholders because it defines the way your money is reinvested in the company.
A company has a higher return on equity that may be able to generate more cash internally.
Therefore it is always better to invest in companies with high and consistent returns in equity. It
is not always advisable to invest in high ROE companies to create better returns. There are some
standards on which a company compares its return on equity with its industry average. Generally
the higher this ratio, the better the company invests in it.
Return on equity can be calculated based on the formula specified below:
Equity ratio = Net income / Return on equity of average shareholders
If we may be able to solve the return on equity problem, which is a part of the complex problem
then there are various other situations where we can apply the return on equity ratio equation.
The result of simulation shows that return on equity will not be received by Smartphone
Company after year 2027; before this year firm is facing negative return on equity due to huge
loss make by the company. And also it is much far from its target which is to earn 15% return on
equity.
Return on total Assets:
The return on assets determines how much profit a company makes for every dollar of its assets.
Assets can be anything like cash in the bank, accounts receivable, property, equipment, inventory
and furniture. Return on asset defines the investment that a company is generating from invested
capital (assets). Returns on assets vary greatly for public companies that rely heavily on industry.
If we compare ROA, it is a best practice to compare with ROA of the same company or against
the previous ROA number of a company. As we know that total assets of a company is the sum
of total liabilities and shareholder's equity. And the company's assets are funded either by debt or
equity. More debt will result in zero if we add net income and borrowing costs to average assets
over a given period. A formula for calculating the return on an asset is defined.
According to simulator; the targeted return on total assets set by Smartphone Company is 10%;
but actual performance is -0.11% showing poor performance by the company. After 10 years; it
will be -108.41% due to huge loss occur by the company.
Future plans and recommendations
Based on current analysis of target and performance of the Smartphone company over next 10
years; it is recommended that company required lots of changes in its operations and marketing
activities. These loses are very huge and can’t bear by firm over 10 years. Also sales growth
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study analysis indicates negative growth which is bad indication for Smartphone owner to
continue its business for long period of time.
The future plan of the firm should be to focus on niche market; so that it can cover atleast its
variable cost. Profit margin also required by the company for the growth of its business. Hence,
it is suggested and strongly recommended that Smartphone Business Company should focus to
increase its profit margin and return on its equity and total assets for continuation of its
operations.
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