Trading over four weeks in a Stratsim online simulation game, our group which consisted of three members were managing firm G, we made proper decisions in order to make sure our company performs well, the organization had four vehicles in several classes such as Get in Current economic climate, Gas in Family, Gone in Truck and Goofy in Minivan.
This report go through the performance of organization G alongside tactical goals inside the auto industry by trading in a Stratsim simulation game, company G used market information to notify strategy and keep an eye on performance of the firm. This statement is concluding, more information in decision making process which helped to ensure performance and its own success of the company. Strategy essentially consists of a general planning procedure for setting objectives (or goals), identifying and implementing appropriate training of action and monitoring successes contrary to the goals originally placed. (Boddy 2000)
The game exhibited the sensible use of business theories in the auto market. At the end there are a lot more to learn than accomplishments in this game for the those who have been involved.
2. 0 Last SIMULATION RESULTS
Final Simulation Results were:
Sales ($) 25. 5 Return on sales 12. 0
Sales (units) 1. 4 Go back on property 23. 0
Market share ($)18. 7 Firm choice 18. 8%
Market talk about (units) 17. 6 Supplier Rating 61
Net income $ 3. 0 Coas 84. 5%
Cumulative income $ 7. 1 Capacity utilization 75. 7%
Stock price $ 10. 0 Credit debt $ 16. 8
Stock granted +5. 6%
Firm G was leading in overall value market share with 18%. All vehicle classes i. e. Market, Family Gas, Pick up truck Gone and Goofy the minivan added to the firm's sales and Goofy being the first choice with 100% market show in vehicle class. (See Appendix 1)
3. 0 STRATEGIC THINKING
Johnson et al (2009) define strategy the following strategy is the route and scope of the organisation above the permanent which achieves advantages for the company through its construction of resources within the challenging environment, to meet up with the needs of market segments and also to fulfil stakeholder objectives.
Decisions made during the a month trading period targeted Company G made a permanent strategy by making the most of herb capacity and adding more budget in marketing, which will allow more development and generate income hence the progress of the company.
Firm G's financial goals were to control cash flow and generate profits as to create positive goals to our show holders.
The main target of firm G was to execute better against the seven competitors in the stratsim automobile Industry, to be able to achieve this the strategy here was to truly have a "first mover benefits; generally this timing of market entry is an important decision. (see appendix 2)
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3. 1 STRATEGIC ANALYSIS
The business environment can be described as concentric of layers each of these circles layers has different conditions Firm G gathered data which helped in predicting the future environmental changes in both internal and interior environment.
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The process of strategic analysis Organization G used some tools to help measure and gauge the changing in both internal and exterior situation at each level: the includes PESTEL construction, SWOT, Porters Five forces
Mission
A strategic planning should focus on a clear described company objective.
Mintzberg identifies a mission the following:
" A mission identifies the organization's basic functions basic function in culture, in conditions of the merchandise and services it products because of its customers. " Objective Assertion should contain each one of the following elements:
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Firm G's Quest Statement:
To exceed our customers and constant improvement and customer relationship.
Vision
In order to succeed in a long term businesses need a vision of how they will change and improve in the future
The components of a n effective. business vision; David recognizes six requirements for success
It provides future direction
It expresses a consumer benefit
Is realistic
It motivates
Firm G's Perspective statement is;
Be the world's best car manufacturing company; through our products, services and romantic relationships, we will increase life's enjoyment
3. 1. 2 EXTERNAL ENVIRONMENT
The external environment includes Macro-environment this is first level which includes nationwide and international level beyond your industry.
MACRO ENVIRONMENT
In the simulation game Firm G found some information which was highly relevant to this level in the Monetary perspective (See Appendix 3) which helped to detect changes which allows company G to plan for any environmental changes.
PESTEL framework
PESTEL framework will determine the effect of the auto industry external makes which has an impact on business operations. The framework includes:-
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Political:
Political factors impacts the auto Industry import tariffs and trade arrangement, charges in Political leaders (new federal government), regulatory frameworks such as taxes and responsibilities of materials or done product issues pertaining to pollution.
Economic:
Factors like changes in FDI and GDP can affect the auto industry, an infection, price index exchange rate each one of these factors make a difference the automobile industry.
Social cultural:
Customers capability of choosing matching decision making when it comes to buying a car, these are likes and desire.
Technological:
The progress in Technology has increased effective and creation of automobiles. Through interest people can order and purchase, with the help computer stock and sales can be handled.
Environmental:
Concerns about air pollution from the smoke made by car engines has improved future manufacturing of automobiles.
Legal:
Laws and legislation concern health insurance and safety of employee is becoming main issues in vehicle industry.
INDUSTRY SECTOR AND COMPETITORS
The level next to macro environment is the Industry which in this case is Auto mobile production and last covering after the industry is rivals.
To access the positioning of Firm G in the auto sector and Identifying any opportunities and also to learn about the functions of the firm's competition and the number of market segments, product sales and circulation.
In order to evaluate the elegance and the sources of competition on the market. The five causes construction is a perfect tool in inspecting this situation. Michael porter's five forces framework was developed a means of evaluating the attractiveness (profit potential ) of different sectors (Johnson et al (2009).
Porter's five causes framework
Threat of New Entrants
in automobile industry the menace is low anticipated to high capital costs it is difficult to attain the economics of range it's a hurdle to admittance.
Power of suppliers.
The supplier rely upon a few variety of manufacturers, this situation made the energy of suppliers to be low as the dealer subjected to the needs of the maker.
Power of Potential buyers:
In automobile industry power of buyers is high as customers acquired a wide range of choice according with their preference.
Threat of swap:
Besides the high costs of acquiring and keeping a reliable, still people cannot find another alternative to automobile method of travel as it is better to have this means of move hence the hazard is low.
Competitive Rivalry:
In car industry the competition is high. All of the seven companies are working in a same market. These will lead to price wars and reduce prices to attract the clients, Hence to help make the rivalry high.
In this simulation game the marketplace became so competitive. In the first two period other companies increased their creation Company G market share decreased through the second period of the overall game.
The external part SWOT research can be used to identify the opportunities and information regarding products of other Businesses.
SWOT Analysis (External Part)
Opportunities (O):
There is also opportunity of opening more dealership and investing in technology which Company may spend money on long conditions.
Threats (T):
These are general financial concerns like information of other rivals products and new technology which will improve the production capacity of challengers.
3. 1. 3 INTERNAL ENVIRONMENT
This part concerns about organisation's resources. Although there is a volume of models to analyse the situation however in this report the inner part of SWOT research and VRIO may be used to analyse the problem.
SWOT Analysis (Internal Part)
Strength (S)
Our strategy of starting the new car advertising and new dealerships will improve the revenue and continue steadily to lead on the marketplace share.
Weakness (W)
Being new in the automobile Industry makes Firm G to possess less experience, which lead the organization to weak financial position (see appendix 1)
VRIO
Value:
Firm G had resources and capacities which responds to the changing economic situation.
Rarity:
The re-concept of introducing a minivan Goofy made firm G to get an initial mover advantage to make it to be same and only firm to produce that class vehicle.
Imitation:
This new theory might lead Organization G to the possibility to keep a head to any firm who any eventually imitate. Organization G it's still the first ever to establish a minivan.
Organization:
Firm G's management ought to be the capacity work us along to attain the targeted goals.
3. 2 STRATEGIC DECISIONS
As a team of management taking proper responsibilities and turn out with a bottom line in order to accomplish our objectives.
At the start of the trading durations all the organizations were only available in the same situation. Our permanent strategy was to build knowing of our firm and products; so decision designed to Heavy marketing attention and spending received to the all our three vehicles Go, Gas and Gone (Appendix 3).
As our products are now familiar on the market we came of the strategy of increasing sales by cutting down the MSRP as we expected the demand to be high the development capacity was increased Appendix (Appendix (3). We went through the Industry news and economic outlook and being spot the situation in the Business environment we granted bonds to fund our companies.
We developed a long-term strategy Decision modest update for Gas, which resulted to lead in market show by class, (Appendix 2) and the new concept of producing Goofy the minivan which made Company G to earn the "first-mover" benefits and business lead in market show by category 100% (Appendix 3). Due to the spending in marketing activities and technology; our income was reading negative (see Appendix 1).
Our last tactical decision which we imagine will benefit our company we launched minivan with a significant price and we given companies, no dividends were paid until our income gain the balance.
4. 0 DECISION MAKING
Firm G members were employed in making decisions it was an individual task most of us moving through information provided in the game every, member arrived with a suggestion but after discussing it as a team we arrived with one decision which will make the exercise to be easier and funny.
We made decisions to produce awareness by adding initiatives in marketing and price adjustments to increase sales.
This was beneficial to most of us as most of us participate full in making decision which lead our Company to lead in market show.
9. 1 PERSONAL LEARNING
This simulation game was a good experience if you ask me as a supervisor I learned how to think strategically before making any decisions, it was good to discover that all the ideas which we discovered academically emerged to a real practice.
Also I discovered that every decision in a firm should be linked to the targets of the firm and that the team are interacting for example: when you market a product you have to make certain there is enough capacity of producing as to meet up with the demand and making certain of your financial resources can cover the expenses incurred hence success of the organization.
5. 0 CONCLUSION
It is very important to organization to truly have a long term direction. This is to say that, for a firm to attain it objectives it's important the strategies to be formulated. The game was about formulating strategies and by depending to one another as these were implemented
Firm being carrying out badly in its income really is endless our long-term strategies will create income therefore our shareholder will enjoy the fruits soon.
Our firm thinks that by using the tools and theories will be able to identify the makes outside and inside the firm in order to defeat the changes.
