Business Simulation 1 Report: Smart Tech Strategy and Analysis

This report provides a comprehensive analysis of Smart Tech's performance within a business simulation game. It begins with an overview of Smart Tech's vision, core values, and organizational culture, followed by an examination of its performance metrics over a nine-year period. The report delves into market share, internal capabilities, and industry trends, including the impact of Porter's Five Forces. It then presents the simulation results, highlighting the company's strategic choices, market penetration, and financial outcomes in various markets. Key findings include the company's cost leadership strategy, market positioning, and challenges related to inventory management and logistics. The report analyzes the company's marketing efforts, R&D investments, and human capital management. Finally, it offers recommendations for future strategies, including a focus on emerging markets, improved inventory management, and strategic investments in R&D and employee development. This report provides valuable insights into the challenges and opportunities faced by Smart Tech in a competitive business environment.

Business simulation
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Table of Contents
ABSTRACT....................................................................................................................................4
INTRODUCTION...........................................................................................................................4
PART A...........................................................................................................................................4
Vision and strategy over 9 years..................................................................................................4
Company performance.................................................................................................................4
Market share................................................................................................................................6
Internal capability........................................................................................................................6
Industry trends.............................................................................................................................6
Simulation performance results...................................................................................................7
Analyse performance...................................................................................................................8
Future plan and recommendations...............................................................................................9
REFERENCES..............................................................................................................................12
Appendix........................................................................................................................................13
PART B PERSONAL AND PROFESSIONAL DEVELOPMENT.............................................14
ABSTRACT..................................................................................................................................14
INTRODUCTION AND IDENTIFIED EVENTS........................................................................14
Application of theory related to leadership, group dynamics and culture.................................15
DISCUSSION................................................................................................................................19
Recommendations..........................................................................................................................19
REFERENCES..............................................................................................................................21
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ABSTRACT
In this report it has been described about entire business plan of Smart Tech, its vision,
culture, values, etc. besides that, it has been discussed about company performance with help of
porter five force model. In addition, market share, internal capability, industry trends, etc. is been
explained as well. Moreover, simulation results of game are discussed in it. At last it has been
discussed about future plans and recommendations that can be followed by Smart Tech.
INTRODUCTION
Business simulation is a real time business game that is played by students. It allows them to
analyse market situation and on basis of that developing strategies and taking decisions. Along
with it, overall environment is evaluated as well in it. With that it becomes easy to compete with
other business in the market. Similarly, Smart Tech is a smart phone company producing various
mobiles. They want to provide affordable mobile phone to all people.
PART A
Vision and strategy over 9 years
The company vision is to end up serious player of respectable size. There are 3 core
values of company that are connecting the world, 7 billion smart phones for 7 billion people and
affordable smart phone for everyone.
The culture of company is good and positive where all employee believes to work in
team and attain goals. Besides that, no discrimination policy is followed and diversified
employees are working. The HR of Smart Tech recruit and hire qualified and talented staff that
are capable to sell smart phones in market. HR provide regular training to them and motivate to
achieve goals. They closely work with management to create a strong network and making more
managers to be available. So, over 9 years 7 managers are developed within firm. An innovative
culture is applied and staff performance has enhanced (Andre, 2016).
Company performance
In order to evaluate company performance simulation game was played. This enabled in
analyzing its market share, competitive advantage, trends, etc. With that effective decisions were
taken and strategy was developed. It is analyzed as below
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Porter five force - The porter 5 force is a framework that is used to analyses competitive
environment. It considers 5 factors that derive business economies and attractiveness within
industry in terms of profitability. So, for Smart Tech its analysis is as below
Threat of substitutes- it refers to power in which it shows threat of substitutes available of
particular product in market. So, if there are a greater number of substitute available then power
of switching to other products is high and vice versa. Here, in smart phones there are no
substitute available. Hence, its power is very low.
Bargaining power of supplier- In this it refers to power of supplier for changing price of
products. It means if there are a greater number of suppliers then less power they possess as
company can easily switch from one supplier to another. But if supplier is less then they possess
more power to influence price. Smart Tech directly sell smart phones in market via its stores.
There are no suppliers involved in it. so, bargaining power is low (Cosenz, and Noto, , 2018)
Bargaining power of buyer- In this it refers to power of buyer for changing price of products. It
means if there are a greater number of buyer then less power they possess as they can easily
switch from one company to another. But if buyer is less then they possess more power to
influence price. In Smart Tech there are lot of buyer so they can easily influence price of
products. The bargaining power of buyer is high.
Threat of new entrant –it means entry of new businesses in this industry. If entry and exit barriers
are strong then it becomes difficult for them to enter but if there are no barriers then new entrants
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can easily enter in it. In smart phone market threat of new entrant is moderate. New companies
can enter but it require long time to gain market share
Competitive rivalry – this means the level of competition which exists within industry. There is
stiff competition in industry. Hence, rivalry power is high.
Market share
It is found that Smart Tech is able to gain high market share since they entered in
industry. This can be evaluated that company has adopted cost leadership strategy in which they
are providing smart phones at lowest prices. This is done to focus on value of providing
affordable smart phone for everyone. Thus, it is stated that company net profit is 3 million and its
solvency rate is 88%. Along with that, in market it is ranked at 2nd position in terms of lowest
price. Moreover, Smart Tech is at 2nd place in market leader in price segment. Besides that,
average age of inventory is 20 days. Apart from it, there are several competitors as well of Smart
Tech such as Samsung, Oppo, Xiaomi etc. So, these are giving stiff competition to them in
affordable market segment (Gosenpud, 2018).
Internal capability
Smart Tech is having several internal capabilities by which they can gain market share
and competitive advantage. This means that they are having enough resources that can be
utilized in effective way. The organization is having diversified and qualified sales force that can
enable in attaining goals in effective way. Other than this, staff can also be useful in doing
personal selling to attract more customers. The HR of Smart Tech is qualified and experienced
that can results in motivating and training employees. In this way sales can be increased. The
company is having a lot of cash in bank thus it can be invested and utilized in many ways. The
cash be optimized in effective way by management of Smart Tech.
Industry trends
It has been analysed that there may occur certain industry trends I it that can affect on
overall growth and expansion of company. These trends may be related to market or change in
needs. Thus, various trends which has occurred are defined as
Rise in product value- this trend occurred in industry as people started focusing on product value
rather than it price. It is found that people stopped buying product whose rating was 1 and it does
not included value from it. hence, there was decline in buying of low price smart phones in that.
It lead to affect on overall industry trends in it (Lacruz, 2017).
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Invest in R&D- this trend occurred where in order to reduce purchasing cost company started
investing in R&D. due to that firm was not able to sell phone under price of 200 Euros. The main
purpose was to cut cost of phone and increase profit margin on it. Also, with more investment
there was change in product features, design, etc. and also its value increased. Besides that, new
technology was installed within phone to make it more advance.
Emerging of new markets- the small nations emerged as new market such as Africa, Nigeria and
Surinam. Hence, it entirely changed context of industry demand and led to shift in market from
developed to developing countries. It is because in those nations demand of smart phones
increased due to covid 19. Hence, all firms started focusing on small countries from where they
can easily generate revenue from it.
Focus on average inventory days- In this trend firms focused on reducing average age of
inventory days. This means by delivering stock to market within short time period. It
automatically enabled in improving efficiency of company. By reducing inventory days there
was chance of capturing of market quickly (Peng, and Abdullah, 2018).
Thus, these trends occurred in smart phone industry and shifted entire market. Due to that
company have to develop new strategy and plans. The goals were set and formed in new way.
Simulation performance results
By analyzing the simulation results it can be stated that Smart Tech is following cost
leadership strategy. They want to provide affordable phones to all people. Besides that, it is
found that growth strategy followed is market penetration. Also, by analyzing the market it is
interpreted that company exists in various markets such as Germany, Canada, Africa, UK, US,
etc. In all these markets there is sales of smart phones. But the prices and quality vary in it
because of market condition, needs, etc. In UK price is 1200 and quality is 1080. The customer
intimacy is 760. In US price is 1680 and quality is 2240 whereas CI is 1800. Similarly, in
Germany price is 1296 and quality is 1120 and CI is 1056.
It has also been found that India, China, Australia, Brazil, etc are market where customer
intimacy is low along with quality. So, Smart Tech is not able to properly capture or gain market
of these nations. Hence, they are identified as emerging markets. It is observed that in India price
is 5600 and quality is 336 whereas CI is just 88. Likewise, in Netherlands CI is 256, quality is
160 and price is 1200. The market of Surinam, Nigeria and South Africa is not even level to
Canada market (Protopop, 2016. ).
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By analyzing tactics of Smart Tech, it is stated that company did not invest in R&D in
order to reduce cost. Thus, it is difficult to sell phone at low price of 200 Euros. Thus, there is
decline in competition as more value is not offered by firm. Even when a news came where sales
prediction was made that there will be decrease in product of 1-star rating but sales team sold
products. The organization is constructing warehouse in order to fulfill demand. Also, to reduce
average age of inventory but it has been kept low. Due to that they the KPI are not being
attained by them. from simulation it is evaluated that company lost money by entering into
market where they already exist. so, instead they must focus on market where there is vast
opportunity for growth. it will be led to generating more profits from it. But management
assumed that expansion will result in generating profit but it only led to rise in cost. The
company hired a lot of external staff in order to finish work of headquarter. They were expensive
as well as less effective. So, it is evaluated that logistics of Smart Tech is not effective. It is
because they were not able to predict sales forecast properly in market like Belgium. Likewise,
in India where sales decline by 40% so company logistics was interrupted. Due to ineffective
inventory management firm is not able to forecast sales. However, they did not invest a lot of
amount in capital since its operation. Besides that, they did not invested in R&D, land and
properties as well. They are having a surplus of cash and bank. Moreover, investment made was
only in human capital. Furthermore, there was nothing invested in educating staff and motivating
them.
Analyse performance
Marketing- it is necessary for Smart Tech to market and promote products in such a way that it
attract a lot of customers. An effective marketing enables in creating awareness about products
and generating sales and revenue. As Smart Tech is smart phone manufacture firm thus it
requires to do attractive marketing. Therefore, it is analysed that company has done applied
digital marketing. they are doing it on various social media platforms such as Facebook, Twitter,
you tube, etc. So, it has led to generating more leads and attracting customers. Other than this,
offers and discounts are also being given to customer for buying mobile phones. So, Smart Tech
is investing a lot of amount on marketing. They are mainly focusing on personal selling so that is
why they have hired more staff. The company is doing PS rather than any other form of
promotion (Täuscher, and Abdelkafi, 2018).
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HR- It has been evaluated that in Smart Tech investing in education and motivating staff is
expensive task. Thus, it is not inclined with cost leadership strategy. The cost is rising due to
increase in staff in headquarter and in sales executive. So, due to this management of Smart Tech
is emphasizing on increasing network and developing more managers. This is done for getting
experienced managers. But company did not do this and rather stayed with same manager.
Hence, the goals formulated was not attained. The employees were not able to perform in
effective way.
Logistics- For smart phone firm there is need to have a strong network of supply chain. This is
because it enables in fulfilling market demand by delivering products in time. So, it is evaluated
that logistics of Smart Tech is not effective. It is because they were not able to predict sales
forecast properly in market like Belgium. Likewise, in India where sales decline by 40% so
company logistics was interrupted. Due to ineffective inventory management firm is not able to
forecast sales. Thus, it is impacting on logistics and result in loss of revenue.
Finance- this is most important component for every company. So, in Smart Tech it is analysed
company financial performance is good and stable. However, they did not invest a lot of amount
in capital since its operation. Besides that, they did not invested in R&D, land and properties as
well. They are having a surplus of cash and bank. Moreover, investment made was only in
human capital. Furthermore, there was nothing invested in educating staff and motivating them
(Yasin,. and Hafeez, 2018).
Product development – Smart Tech is basically dealing in mobile phone products. They are
developing affordable smart phones that consists of advance technology and features. However,
it is analysed that firm has not developed any other new product. they are only focusing on
mobile phones. The product developed is of low cost and then it is sold at low prices in market.
Future plan and recommendations
It is required for Smart Tech to develop future plans along with long term goals. This will
enable in taking effective long term decisions. In future there will be change in current strategy
based on performance of firm. Also, it requires company to expand in different market so that
more revenue is generated. For future plan Ansoff matrix can be applied by them. It consists of
different strategies that can be adopted by firm in their growth. It is discussed as
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Market penetration here, organization focus on existing business sector with their current
products. This implies they attempt to increase sales of products in current market. The goal is to
increase revenue and increment income from it.
Market development - in this organization expand in different business sectors with their current
products. For that they recognize potential new market where development opportunity exists. It
is a risky strategy as target new market can lead to failure (Yasin,. and Hafeez, 2018).
Product development - this strategy is followed when business grow new products in existing
business sectors. This is done to attract in more clients and satisfy their requirements. Generally,
development is done in product or new features are added into it.
diversification – it is a methodology wherein business enter into new market with new products.
The target market is distinguished and afterward product is created. This contains high risk as
organization go into those market where they don't have any insight about trends, needs, etc.
Alongside, there is potential market growth that lies in front of Smart Tech in this
industry. Here, company can opt for growth opportunities that is internationalization,
diversification and acquisition. They are explained as
Internationalization- This is a strategy in which Smart Tech can expand at global level. They can
identify target market and emerging economies such as India, China, Brazil, Mexico, where all
large number of people can be attracted for affordable smart phones. Hence, they can gain
market share easily by expanding at global level.
Diversification- this growth strategy is one Smart Tech can diversify in various markets. They
can provide new products in new market. In this way they will be able to attract more people and
increase sales and profits. However, the strategy is highly risky as it firm need to identify market
trends, competitors, needs, etc. therefore, they are high chances of occurring of failure in it. the
main ways are related to what changes are done in it.
Acquisition- It is also a useful strategy that can be followed by Smart Tech. In this they can
acquire small firms who are already engaged in mobile phone industry. Furthermore, in order to
enter into new market Smart Tech can do this by acquiring it with other businesses. This is more
effective strategy as compared to above ones. Here, firm can gain market insight by doing
acquisition and is also easy to compete with other companies in effective way (Yasin,. and
Hafeez, 2018).
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Thus, these are some strategic recommendations that can be developed by Smart Tech in
future. They can follow market development strategy to enter in new market and also follow
internationalization strategy. This can enable company to expand at global level and develop new
products as well. With that firm presence will be increased as well.
It can be summarized that Smart Tech manufacture mobile and sell it at low cost in
market. The value of firm is to provide affordable mobile to all. The competition is highly stiff in
market and firm is having capability to invest more in R&D. Besides that, there are several
trends that has occurred such as new market, average age of inventory, etc. the organization can
develop growth strategy of market development and acquisition. Also, they can do product
development to attract more customer and compete in market for long term.
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REFERENCES
Books and journals
Andre, R.S., 2016. The factors required for winning the business simulation game: A regression
analysis (Doctoral dissertation, Capella University).
Cosenz, F. and Noto, G., 2018. A dynamic business modelling approach to design and
experiment new business venture strategies. Long Range Planning, 51(1), pp.127-140.
Gosenpud, J.J., 2018, March. Some recommendations for researching learning from playing a
simulation. In Developments in Business Simulation and Experiential Learning:
Proceedings of the Annual ABSEL conference (Vol. 45).
Lacruz, A.J., 2017. Simulation and learning dynamics in business games. RAM. Revista de
Administração Mackenzie, 18(2), pp.49-79.
Peng, J. and Abdullah, I., 2018. Building a market simulation to teach business process analysis:
Effects of realism on engaged learning. Accounting Education, 27(2), pp.208-222.
Protopop, I., 2016. The impact of the timing of the intergenerational farm transfer initiation on
the terminal wealth in the business: Simulation model.
Täuscher, K. and Abdelkafi, N., 2018. Scalability and robustness of business models for
sustainability: A simulation experiment. Journal of Cleaner Production, 170, pp.654-664.
Yasin, N. and Hafeez, K., 2018. Enterprise simulation gaming: effective practices for assessing
student learning with SimVenture Classic and VentureBlocks. In Experiential learning
for entrepreneurship (pp. 51-69). Palgrave Macmillan, Cham
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