Introduction
In today’s competitive market, businesses always seek ways to gain an edge over their rivals. The shoe industry is no exception, with numerous companies vying for a larger market share. Among these companies is “D Company,” a shoe manufacturer that recently competed against six other shoe companies in a business strategy game (BSG) simulation. The game’s objective was to increase the company’s performance by making strategic decisions, such as product design, pricing, marketing, and production, while considering the market trends and competitors’ moves. In this report, we will reflect on D Company’s performance in the simulation and analyze the strategies that helped the company to succeed or fall behind its competitors. We will also explore the challenges faced by the company and the lessons learned from the simulation that can be applied to real-world business situations.
Content
In the game, D Company, like the other six shoe companies, faced the challenge of developing an excellent strategy to gain a competitive edge. But what exactly makes a strategy “good” or “bad”? A good strategy is aligned with the company’s overall goals, considers the current market trends, and leverages its strengths while addressing its weaknesses (Felin, 2019).
One of the critical elements of a good strategy is market analysis. In the game, D Company needed to analyze the market to identify the customers’ needs, preferences, and the competitors’ moves. The company could make informed decisions about product design, pricing, and promotion by gathering and analyzing relevant data. In the game, D Company developed a strategy that focused on the quality and design of its shoes, making them stand out in the market. The company invested in product development and improved the quality of its products to meet the customers’ demands, which helped it to gain a competitive edge. Another element of a good strategy is innovation (Felin, 2019). The invention enables a company to differentiate itself from its competitors and create a unique selling proposition. In the game, D Company implemented an innovative strategy involving using sustainable materials in the production process. This helped the company stand out in the market and appealed to environmentally conscious consumers.
On the other hand, a bad strategy needs to be better aligned with the company’s overall goals or consider the current market trends (Felin, 2019). In the game, some companies adopted a “price war” strategy, competing on price rather than product quality or innovation. This strategy may initially attract customers but ultimately leads to a price-driven market with slim profit margins. In short, a good strategy is critical for a company to gain a competitive edge in the market. It requires market analysis, innovation, and alignment with the company’s goals. In the next section, we will reflect on D Company’s performance in the game and analyze the strategies that helped the company to succeed or fall behind its competitors.
Process: Important Skills for Strategic Planning in D Company
Based on the BSG simulation, there were also several critical skills for strategic planning that D Company needed to possess to gain a competitive edge in the market. These skills included identifying problems, financial analysis, leadership, decision making, and teamwork.
Identifying Problems
In the BSG simulation, D Company faced various challenges, including intense competition, changing market trends, and customer preferences. To address these challenges, the company needed to identify the problems and find solutions that align with its overall goals. This requires the ability to gather and analyze data, identify the root cause of the problems, and develop effective solutions to address them (Ahmad, 2019).
Financial Analysis
Financial analysis is critical in strategic planning as it helps a company to evaluate its financial health, profitability, and cash flow (George, 2019). In the BSG simulation, D Company needed to conduct financial analysis regularly to determine its performance, identify areas of improvement, and make informed decisions regarding pricing, production, and investments.
Leadership
In the BSG simulation, D Company’s success relied heavily on the leadership skills of its management team. Good leadership skills include the ability to inspire, motivate, and guide employees towards achieving the company’s overall goals (Ahmad, 2019). A good leader also has excellent communication skills, can build and maintain relationships with stakeholders, and is adaptable to changing situations.
Decision Making
Strategic planning involves making numerous decisions that can have a significant impact on the company’s success. In the BSG simulation, D Company needed to make decisions on product design, pricing, marketing, and production based on market trends and competitors’ moves. Good decision-making skills involve gathering and analyzing data, considering the company’s overall goals and objectives, and making informed decisions that align with those goals (George, 2019).
Teamwork
In the BSG simulation, D Company’s success also depended on the ability of its employees to work together as a team. Good teamwork skills include effective communication, collaboration, and a shared sense of purpose (Ahmad, 2019). By working together, employees can share ideas, expertise, and resources, which can lead to better decision-making and a more efficient use of resources.
In conclusion, the BSG simulation provided valuable insights into the skills needed for strategic planning in D Company. The company needs to develop skills in identifying problems, financial analysis, leadership, decision making, and teamwork. By developing these skills, D Company can make informed decisions, adapt to changing market trends, and gain a competitive edge in the market.
Strategic Tools
In the BSG simulation, D Company utilized several strategic tools to gain a competitive edge in the market. These tools included strategic mapping, five forces analysis, SWOT, PESTEL, and BCG matrix. This section will discuss how these tools were helpful to the company and their limitations.
Strategic Mapping
Strategic mapping is a tool that helps a company to visualize its strategy, goals, and objectives. It enables a company to see the relationship between different elements of its strategy and how they contribute to achieving its goals (Mio, 2020). In the BSG simulation, D Company used strategic mapping to identify its strengths, weaknesses, opportunities, and threats, and develop a strategy that aligned with its overall goals. This tool helped the company to understand its position in the market and develop a strategy that leveraged its strengths while addressing its weaknesses. However, one limitation of strategic mapping is that it can be time-consuming and may not always provide a clear direction for the company.
Five Forces Analysis
Five forces analysis is a tool that helps a company to understand the competitive forces in the market. It enables a company to identify the key players in the market, their strengths, weaknesses, and the threats they pose to the company (Mio, 2020). In the BSG simulation, D Company used five forces analysis to identify the key players in the market, their pricing strategies, and the level of competition. This tool helped the company to develop a pricing strategy that was competitive and profitable. However, one limitation of five forces analysis is that it may not take into account the dynamic nature of the market, and the analysis may become quickly outdated.
SWOT Analysis
SWOT analysis is a tool that helps a company to identify its internal strengths and weaknesses, as well as external opportunities and threats. It enables a company to develop a strategy that leverages its strengths, addresses its weaknesses, and takes advantage of the opportunities while mitigating the threats (Kim, 2019). In the BSG simulation, D Company used SWOT analysis to identify its strengths, such as the quality and design of its shoes, and its weaknesses, such as limited resources. This tool helped the company to develop a strategy that focused on product development, innovation, and sustainability. However, one limitation of SWOT analysis is that it may not provide a comprehensive view of the market and the company’s competitive position.
PESTEL Analysis
PESTEL analysis is a tool that helps a company to understand the external macro-environmental factors that may impact its business. It enables a company to identify the political, economic, social, technological, environmental, and legal factors that may affect its operations (Kim, 2019). In the BSG simulation, D Company used PESTEL analysis to identify the trends in the market, such as the increasing demand for sustainable products. This tool helped the company to develop an innovative strategy that involved the use of sustainable materials in the production process. However, one limitation of PESTEL analysis is that it may not take into account the company’s internal factors, such as its strengths and weaknesses.
BCG Matrix
BCG matrix is a tool that helps a company to evaluate its product portfolio and determine which products to invest in, maintain, or divest. It enables a company to understand the market growth rate and the relative market share of each product (Mio, 2020). In the BSG simulation, D Company used BCG matrix to evaluate its product portfolio and determine which products to invest in, maintain, or divest. This tool helped the company to focus its resources on products with high growth potential and a strong market position. However, one limitation of BCG matrix is that it may not take into account the dynamic nature of the market, and the analysis may become quickly outdated. In conclusion, the strategic tools used in the BSG simulation were helpful to D Company in developing a strategy that aligned with its overall
Importance of Formal Written 3-Year Strategic Plan
In conclusion, a formal written 3-year strategic plan would be very helpful to D Company. There are several reasons for this. Firstly, a strategic plan would help to provide direction and focus for the company. It outlines the company’s goals, objectives, and priorities for the next three years, which would help to ensure that everyone is working towards the same vision (Kim, 2019). This can help to avoid confusion and ensure that resources are allocated efficiently. Secondly, a strategic plan can help D Company to identify potential opportunities and threats. By conducting a SWOT analysis, the company can identify its strengths, weaknesses, opportunities, and threats. This can help to inform decision-making and ensure that the company is prepared to adapt to changing circumstances.
Thirdly, a strategic plan could help to align the D Company’s resources with its goals. By setting clear targets and milestones, D Company can ensure that its resources are being used effectively. This can help to avoid wasting time and money on activities that are not aligned with the company’s strategic objectives. Overall, a formal written 3-year strategic plan can be very helpful to D Company. It would provide direction, identify opportunities and threats, and ensures that resources are being used effectively. However, it is important to note that the plan should not be set in stone and should be regularly reviewed and updated as circumstances change. The BSG simulation exercise therefore helped me to understand the importance of strategic planning and analysis to any business.
References
Ahmad, I., & Ahmad, S. B. (2019). The mediation effect of strategic planning on the relationship between business skills and firm’s performance: Evidence from medium enterprises in Punjab, Pakistan. Opción: Revista de Ciencias Humanas y Sociales, (24), 746-778.
Felin, T., Gambardella, A., Stern, S., & Zenger, T. (2019). Lean startup and the business model: Experimentation revisited. Forthcoming in Long Range Planning (Open Access).
George, B., Walker, R. M., & Monster, J. (2019). Does strategic planning improve organizational performance? A meta‐analysis. Public Administration Review, 79(6), 810-819.
Kim, Y. S., Rim, H. C., & Lee, D. G. (2019). Business environmental analysis for textual data using data mining and sentence-level classification. Industrial Management & Data Systems, 119(1), 69-88.
Mio, C., Panfilo, S., & Blundo, B. (2020). Sustainable development goals and the strategic role of business: A systematic literature review. Business Strategy and the Environment, 29(8), 3220-3245.
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