Stratsim car industry happens to be creating 5. 6 million devices despite the fact the financial factor also do not favour the industry. High gas price hinder the industry to obtain high profits but the industry is finding by coming up with well-planned products. As customer need quality vehicle the industry has no choice but to produce such. Our simulation includes number of companies which may have very indistinguishable position businesswise. Organization C got the same vehicles categories it's competitive had.
2. 0 Strategic Analysis
2. 1 Mission
This is declaration that generally suggests the firm reason for existence in the industry. The affirmation usually comprises of measurable criteria. Possessing a clear mission can provide the company the path of where its proceeding. http://www. businessplans. org/mission. html
Firm C objective statement could be "Offering customer upgraded vehicles to complement their preferences".
2. 2 Vision
This affirmation can be reported to be an image of the company in future or quite simply it's an enthusiasm of the organization. The vision affirmation helps the company to clarify its actions and objective to reach their desired eyesight.
Firm C possible perspective could be "Company C vision is usually to be best organization in the stratsim industry that understands and gratify customers' needs".
3. 0 external Analysis
3. 1 Pestel analysis
This tool is employed to view and check out the company or industry macro environment. It can help the company understand the external factors that are adding to company success or failure to strategies accordingly. Pestel stand for pursuing factors: (Johnson et al. 2006: 68)
Politics
This factor has very big effect on organization success or failure, if not assessed properly organization can face a hard to put into practice its objectives. Regulations found in certain countries could inhibit corporation such as company C not to successful produce it's good to required standard. Vehicle companies are suppose to get their product emit less emissions failing to achieve that the company can be face legal action. Trading procedures could hinder or help firm C never to trade or even to operate respectively.
Economic
Country's economy structure can influence the consequence of any organization. Inflation rate can take the organization to another level by providing a reasonable current economic climate atmosphere. Company C should monitor inflation rate, market and trade cycles and circulation trend when there is to be real achievement.
Social
There is need to comprehend the social area of the client for firms before offering the products. Firm C also needs to view the demographic of customer to learn which can fit a particular vehicle. Another factor that organization C could look at is consumer buying patterns; this factor would help stable know how consumers are intending to purchase.
Technological
As customer needs to buy quality product organization a much buying technology and getting ultimately more innovative. With this reason companies are spending on technology to create supreme vehicle that could compete in the simulation exercise. Organization C and other in the simulation exercise were given opportunity to put cash on R&D. Previous but not minimal firm C can view consumer buying device/technology that can enhance performance.
Environment
Conducive environment is the hot matter currently, firm are suppose to keep up their environment for future technology to also have impact in it. So company are required not to pollute the surroundings with their activities. You will find legal implications that can be taken for businesses that do not abide with environment laws and regulations which may have been set. Firm C needed great care for the environment by producing vehicles that not impact the environment negatively.
Legal
Legal issues are fundamental target to any business as they present fairness to all or any firms to do business. Trading insurance policies helps firm to follow a certain legal path to successful operate, the plans point out who to operate and not trade with. Organization C can also take notice these factors to accomplish its set targets.
3. 2 SWOT - OT Analysis
This is another analytical tool that can also be used to assess external environment by looking at two exterior factors (opportunity and threats). This tool helps corporation to increase its opportunities and steer clear of threats completely.
Opportunities
Firm C has good deal of of opportunities to research to facilitate but the firm was limited to take the opportunities. At the start of the simulation exercise we noticed all the firms starting at the same level. The automobile class were yet, but there is a chance to come up with new vehicle category but the option may cost the company really badly. As firms started at the same position means the marketplace share was also at the same level, firm C viewed this as an possibility to have the ability to raise the market share and be the market leader.
Threats
As discussed earlier that the simulation began for company enjoying the business position. The restriction of the simulation exercise would have given more than two businesses the same technique to select hence gaining a large part of market talk about. Another menace that the entire industry was facing was the option of information of firms. This presented a huge threat to stable C as the firm's decision made, were widely open for everyone to view which is not good thing for business.
4. 0 Competitive Analysis
This is analysis that help any company to be able measure the industry that it is operating on. The main goal is to monitor the appeal or profitability of industry especially automobile industry in our circumstance. The below model help a company make that happen;
4. 1 Porters five forces
Porter five makes were brought ahead by Michael Porter to examine the industry success using five factors that can determine such assessment.
Bargaining power of the buyer-medium
In our simulation exercise, we can say buyer have a medium bargaining vitality for the reason that there are other means or swap they can use for vehicles e. g. buses, train flying or any other local mean of travel e. g. Boda-Boda. Customers are also experiencing suprisingly low switching cost from one methods to another.
Bargaining electric power of suppliers-medium
In our simulation exercise, suppliers have had a medium degree of power because solid C as well as others are trying to produce good quality vehicles, so for doing that they have to be supplied with the same level of quality raw material hence firm is only going to choose such suppliers. Again the switching cost can affect the industry profitability if firms opt to go for other dealer.
Threat of new entrants-low
We have seen in the simulation exercise that new entrants have not a lot of chance to bulge in. To create a completely new brand in the simulation exercise or in a genuine world of automobile industry is hard as the starting up costs are very unimaginably high. Firm C and rivals had already place the standard for just about any company to come and match in very short period. In general the simulation exercise poses many obstacles to entry to new entrants.
Threat of substitute-high
In conditions of substitution the simulation exercise could experience high menace from other alternatives such as walking, bicycling etc. In case the industry (simulation exercise) generally boost the product price customer could have no choice but look for other alternatives. Customer are also experiencing low switching cost when they substitute a product so they'll not think twice if the situation does not work in their favour.
Rivalry- very high
There is a substantially high rivalry between firms due to the fact that firms started operating on the same identical position. The three vehicle classes were the primary source of rivalry as businesses had the same vehicle with no exceptional. So the only solution for organization C to neutralize the strong rivalry was through price reduction but also other firms used this strategies hence still making powerful rivalry.
5. 0 Industry Groupings
Industry group is several businesses e. g. stratsim industry companies that produce indistinguishable products which are very substitute to one another (Johnson et al 2005; 77). Many of these firms have an identical way of operation and follow almost equivalent strategic characteristics. This concept can help Organization C to know its direct rivals and realize the spaces which have not been stuffed on the market.
6. 0 Internal Analysis
After doing exterior assessment of the business enterprise a firm should not ignore to look itself internally as there's also many factors that can affect the success or failing of the organization from within, one method to analyses the organization internally is by using the below analytical tool.
6. 1 VRIO
This can be an inside analytical tool that looks at resources and capacity for the organization and it's really an acronym that means the four questions: http://en. wikipedia. org/wiki/VRIO
Value- at the start of the simulation exercise organization C had its resources and features protected to meet customer requirements. But as the time progresses the company was getting rid of touch using its resources and capabilities but not to the alarming rate. Still the company found ways to bring value to its source of information and capabilities by doing heavy marketing.
Rareness- As stated earlier that businesses in the stratsim started on a single indistinguishable position. Therefore rareness had not been observed during the initial cycles but stable C had could have launched rareness to its resources and functions by introducing new vehicle class.
Imitability- the simulation exercise possessed high Imitability of products. The industry information were made general public for each to see. The risk of companies imitating the actions used by other companies was very high as firm possessed started on a single position.
Organization- The organization had done moderately well by looking tightly on the resources and features of the firm and in a position to spread them properly. Failing to do these customers would be able easily to substitute stable C with other organizations' product offering.
7. 0 Decision/Results
The firm did not at increase its firm capacity that is why the company experienced lack and significant shortages in cafav and crash respectively. But the impact of this decision could have been realized in the early periods but as the simulation progresses (see appendix 9. 1).
The firm saw you don't need to up grade its vehicle but to only concentrate on minor upgrades to improve its market show this is realised later to be true as the effect indicated the go up of market talk about (see appendix 9. 2).
Period three didn't present a good circumstance to the firm as the marketplace share went shedding, this recommended the firm's resources and functions were not hired accordingly. This was because the economy class was poorly strategized as the market share travelled crashing down (see appendix 9. 3).
The firm offered the marketplace what it was expecting by serving the client well and contributing a fortune to the industry. The industry was stagnant and everything the firms experienced the same level financial. But as the period progresses the firm saw the climb of stable value market talk about and a somewhat drop of strong preference (see appendix 9. 4)
7. 1 Conclusion
The firm was not doing well in every the vehicles classes; it was sometimes depending on only 1 class to boost its overall performance. Financially the company was not also doing remarkably well and the management was struggling to determine the cause of the problem, because of this the management was able to maintain steadily its performance in a few intervals of the simulation exercise.
The management later realized there was a need to involve shareholder raise the financial position the organization C management was hesitant. Acquired the management use resource-based view strategy the continual problem could have been curbed.
