University CESIM Simulation Game: Strategic Management Report

This report analyzes a CESIM simulation game conducted by a student group, focusing on strategic management principles within a simulated telephone company operating in Asia, Europe, and the USA. The report details the group's objectives, which included examining overall corporate strategy, conducting SWOT and PESTLE analyses across various functional areas (production, marketing, logistics, taxes, finance, and R&D), and formulating recommendations. The report highlights the company's strengths and weaknesses in each area, such as low production costs in Asia and Europe but inflexible production schedules. It also discusses opportunities like seizing market share and threats such as competitor strategies and complex regulations. Porter's generic strategies, specifically cost differentiation, were applied, and the report outlines the company's long-term and short-term objectives, including financial goals. The report concludes with recommendations for each functional area and reflections from individual students on their learning experience.

Running Head: CESIM SIMULATION GAME 1
CESIM SIMULATION GAME
STUDENT NAME
UNIVERSITY OF AFFILIATION
Introduction

CESIM SIMULATION GAME 2
Strategic management is the identification and strategies description that can be used by
managers’ in order to achieve a competitive advantage and better performance for their
organization. For an organization to be said to have a competitive advantage, its profitability
should be higher than average profitability of other companies in its industry ("Strategic
Management - Meaning and Important Concepts," 2017).In this report, a research was carried
out using the method of CESIM simulation game. There are different groups divided to carry out
same research expecting a different result. Working with group RED, the study was based on a
telephone company with markets for its products in Asia, Europe, and the USA.The objective of
the research carried out by group Red, was to look at the overall corporate strategy .what does
the company plan with a long-term focus. Strength, weakness, opportunity and technology
analysis is to be conducted in the various mixes such as production. Another objective is to look
at how the organization plans to develop and deploy its strategy through development of a policy
on each of its strategic units.
Production

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Strength
The company has employed a prosperous low
production cost in Asia and hoped to imitate
that success in the USA.
Weakness
With the little production cost in Asia and
Europe, this impact on the inflexible
production schedule. The success of low cost
of approach is dependent on the full utilization
of capacity to reduce cost. Across all rounds,
there is no production cost in Asia and Europe
Opportunities
The company opportunity comprises of seizing
the market share from Asia and Europe,
through the incorporation of cost yet efficient
trade strategy in Asia and Europe. The
implementation of its low production strategy
has brought about so much success in the USA.
Threats
With the small cost production in Asia and
Europe, the company poses a high risk in the
USA market share.
Marketing

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Strength
In round 1 in Asia, the company placed more
focus on marketing with a target of reaching a
broader audience for the product. In Europe in
round 1, the company also emphasized the
marketing of the product; the aim was to
achieve the targeted market segmentation
creating more awareness of the product.
Weakness
In round 1, there is the low purchase of the
product, the sales revenue globally was little,
this can be associated with the similar product
with our competitors, and lack of marketing
expertise.
Opportunity
With the increase in the money used for
marketing. Use of internet for digital marketing
is highly targeted. This will create more
awareness globally.
Threat
Superior channels used by a competitor for
distribution poses a significant threat.
Logistics and tariffs

CESIM SIMULATION GAME 5
Strength
Globally in round 1, the logistic and tariffs are
considered low but progress across the rounds
whereby, in round 5 it is considered very high.
These increases in expenses show the rapid
delivery of products across the countries to
potential buyers.
Weakness
In the USA the transport and costs are recorded
as zero across all the rounds. This shows the
stiff competition faced by the local producers
and the market share that is limited.
Opportunity
With the high presence across all rounds in the
global market, this provides the company with
a strong base to offer comprehensive services.
Threat
The complex law stricter of some parts of
business market poses a significant threat. The
company is likely to suffer from an
unpredictable increase in logistic cost with the
undetermined rise in fuel rates.
Tax

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Strengths
Across all rounds in the USA there is no income
tax experienced, this shows that the business
working overhead and expense lead to high-
profit margin.
Weakness
N round 5 globally the company suffered
high-income tax, its progress in round 1, with
the high season for business, this is regarded
as weakness. This is because the business
requires long working hours, but it has
limited working hours, however making the
business hard to retain skilled staff within the
short notice of tax season.
Opportunity
The business should embrace the telecommuting
opportunity for its staff to cut down the overhead
cost.
Threat
With the growth of technology, the software
has emerged to help solve the tax queries
without any fault.
Finance

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Strength
In the USA the business incurs low production
cost; this has a positive impact on the
financials of the company.
Weakness
In Round 1 globally, there is a small sale of
products this shows that the financial of the
business are low.
Opportunity
The company should consider reducing on the
interest loans from the corporations that it
borrows from loans.
Threat
Products from the competitor of low prices
pose a threat to the business.
R$D

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Strength
Globally, there is an increase in R$D amount,
in Round 2 there is the experience of lowest
and round 5 highest cost in R$D.This can be
linked to the strong market growth and
expertise and technical efficiency.
Weakness
In Asia and Europe, there is no cost incurred in
R&D; this shows lack of emerging competitors
and rapid advancement of technology in niche
markets.
Opportunity
Globally, in round 5, there is an opportunity
for new development in communication
technologies.
Threat
Conflict of interest posed a great threat to the
business. Importance interest in the financial
that affect the design.
Porter’s generic strategy
Porter’s generic strategy is a model of five forces that try to define policy as taking the act that
creates high position in business to outperform competitors.
Cost leadership. It implies having a low per unit cost of a product than the competitors. In this
case, the returns will be low, but the business will stay ahead of competitors.
Differentiation. It implies that the business comes up with a product that is different from those
of the competitors. This can be achieved through the brand image that is unique, the various
designs that create a uniqueness of the product in the industry.

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Recommendation
While carrying out the study, the porter's generic strategy that was used by group red was cost
differentiation. In round 2, the company had the least price across its business units, product
demand was high, and sales were also high. In round 3 the company had the highest price than
competitors. The company recorded least sales. In round 5, the company had the least cost than
the competitors; many units were sold as demand was relatively high. The group chose cost
differentiation strategy as its objective was to stay ahead in competition although attracting low
returns.
Business strategy objectives
Long term objectives. The business long-term objectives are to grow annual revenue and
increase the marketing and strategy for public relations.
Short term objectives. The global market share has increased; from 5.07 in round 1 to 12.59 in
round 5.this is with the increase in sales revenue.
Short-term financial objective. The short term purposes of the business are to purchase financial
resources at a low price hence incrementing the shareholder's returns regarding earning. This can
be achieved through reduction of money borrowed from the lenders. This is observed in the
shares equity increase in round 5 from round 1 globally.
Long-term financial objectives. The long-term objectives of the businesses to increase the
shareholder's equity. In round 1 the shareholder equity was low, and upon round 5 the
shareholder equity was raised.

CESIM SIMULATION GAME 10
Selection the right strategy was significant for the business. The approach selected for use was
cost leadership and niche strategy. The market in Europe was given a cost leadership, and it
experienced high sales of products this is because consumers will purchase products of the low
price but satisfy their needs. The niche strategy was used into segment different market share.
Globally we experience the increase in market share from 5.03% in round 1 to 21.29% in round
5
Recommendation
Recommendation for production. The market in Asia and Europe should not have any production
cost, but minimum as this will cause an inflexible production schedule. The market in the USA
should have the strategy to counter the risk posed by low production cost in Asia and Europe.
Recommendation for marketing. The company should find a suitable way for distribution of
products to overcome the significant risk posed by competitors. The brand image and
differentiation of product from competitors should well state during marketing.
Recommendation for finance. The business should embrace low price but cost leadership for the
products
Recommendation for R&D. The company should embrace technology and new research
development. The technology will improve the operation of the business and bring about the
competitive advantage for the industry

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Recommendation for logistics and tariffs. The company in the USA should search for foreign
markets and produce products that satisfy customers and increase the need for the product.
Recommendation for tax. The company should embrace technology software used to auto
compute tax during business operations; this will cut down on some overhead cost and improve
the returns.
Conclusion
Student 1: Through this learning, I have been able to learn more about business strategy for a
successful business operation. The game is more fun to be used as a learning technique.
Student 2: The game has expanded my research skills and broadened my knowledge about
different products in different markets, the factors inhibiting sales of various products in some
markets.
Student 3: The activity has enabled me to learn more about the short term and long term
objectives of the business. I can now clearly differentiate the short term from the long term of the
objectives. And the factors to consider.
Student 4: This learning experience has expanded my knowledge on the use of technology
software in calculating the tax .the integration of technology in the business process has enabled
the reduction of overhead cost. As opposed to the manual calculation of accounting part of
business operations, the automated version of accounting is accurate.

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References
Strategic Management - Meaning and Important Concepts. (2017). Managementstudyguide.com.
Retrieved 4 November 2017, from http://managementstudyguide.com/strategic-
management.htm