Business Strategy: Individual Reflective Report

Student ID: 2018058

Module Code: MOD003337

Lecture Name: Benjamin Talwo

Assessment Code: 011

Date Of Submission: 14/12/2022

World Count: 2457

Introduction………………………………………………………………………………..3

Hot Shoeroom mission and vision statements……………………………………………4

The Experience of BSG…………………………………………………………………….4

Increasing the Revenue Of the Business……………………………………………………5

Increasing market shares on internet and wholesales marketing…………………………….6

EPS, ROE and share price improvement……………………………………………………..7

PESTEL Of Hot Shoeroom………………………………………………………………….8

Porter’s Five Forces…………………………………………………………………………..8

SWOT OF HOT SHOEROOM……………………………………………………………9

McKinsey 7S………………………………………………………………………………9

Critically evaluate the impact of ONE specific emerging technology on the future of your business and make useful recommendations to future managers…………………………..10

Conclusion………………………………………………………………………………….11

References…………………………………………………………………………………..12

Introduction

Hot Shoeroom mission and vision statements

Mission:

Bring passion and creativity in every pair of shoes we make that brings satisfaction, uniqueness, and comfort to everyone.

Vision:

The world’s No 1 athletic shoe brand that is wearable everywhere and anytime by everyone. The company tends to become the most popular and innovative footwear brand that delivers its customers high-quality shoes with unique design features. Besides, Hot Shoeroom produces athletic and more sustainable footwear that inspires every athlete worldwide. The company plans to increase the demand through thriving marketing campaigns, and celebrity endorsement contracts that make the product to be in the spotlight of every consumer’s mind.

Values

Hot Shoeroom core ethos:

Integrity: Everyone who represents the organisation is committed to acting in a way that is consistent with the company’s values.

Growth: Through enhancing our competencies with cutting-edge training, we grow professionally.

Passion: Being passionate about our work and the people surrounding allows everyone to be ambitious, inventive, and creative.

Customer commitment. Being sincere with our words and the connections we build is the first step in providing excellent customer service.

Inclusion and diversity. Hot Shoeroom prosper by integrating a variety of backgrounds and lived experiences into a setting where everyone has an equal prospect.

Quality. The highest standards must be upheld since how well a company crafts its goods and services determine how successful it is.

Corporate objectives

Hot Shoeroom is aiming to:

Grow its Earning Per Share (EPS) by Year 14 from $ 2.00 (in Year 10) to $ 8.00.

Grow its average return on equity (ROE) investment by Year 14 not less than 25 %.

Achieve Stock Price gains from $30 at year 10 to $ 110 at year 14.

Achieve a Credit Rating from B+ (in Year 10) to A+ in year 13 and maintain it at the highest level hereinafter.

Achieve an “Image Rating” of 80 and higher by Year 16.

The Experience of BSG

The creation of this company as a simulation automatically created a group of individuals who in the following years would have to learn to cooperate and make important decisions that would be for our good and for the good of the company. We followed a strategy from the first day of the company’s anniversary.

It played a very key role in making some specific decisions that we did not know exactly the result of these decisions but according to the data it helped us to increase the company’s income which was a very basic criterion and in turn the shares and the policies. Below we will analyze all the goals that we had set as a company because in order to achieve something you must have a vision so that you can follow some steps.

Increasing the Revenue Of the Business: In order to increase the net income of the business we will have to focus on improving our income and improving the expenses of labor materials delivery and warehouse space. Among these an important role is the balance between cutting excess expenses, increasing your market share and of getting the highest possible price for your products. The strong and weak points of the competitors prevailing in the market should be recognized and the exploitation of the weak points should be done in order to gain market share and to increase the profit margin.

Increasing market shares on internet and wholesales marketing: The answer in this area was the movement to increase the advertising expenses by doing a proper market research in order to have the best results. quality they offer to the consumer because there are two main factors: quality and advertising costs that directly affect the purchase of the product.A very important fact is that we will have to pay a lot of attention to the needs of consumers as well as to the capacity that the market requires. When it comes to internet marketing, offering a superior product at a lower price than the competitor charges for an inferior product ensures that your products will be purchased before the second-rate product, however, selling at a lower price is not always the best idea, for example, if North America needs 60,000 pairs of shoes, but the total distribution of your company, as well as your competitors, is only 55,000, then each pair will probably sell regardless of price.

EPS, ROE and share price improvement: Perhaps the most reliable way for a company to improve its financial performance over time is to recognize that a balanced scorecard approach to measuring company performance has much to offer because pursuing and achieving strategic outcomes that enhance a company’s competitiveness and strength in the marketplace puts it in a better position to improve its future financial performance. Revenue and net profit growth will fuel tremendous growth in EPS and Share Price. A shareholder buyback strategy drives the company to increase its share price and EPS, and that’s where growth comes in. This growth has the effect of minimizing the need to pay dividends but even as growth begins to slow, consistent dividend payments as well as consistent dividend growth of $0.05 year over year.

PESTEL Of Hot Shoeroom.

A PESTEL analysis of NIKE: learn how the brand’s business is affected by the industry’s macro-environmental factors.

Political: The political factors help the entrepreneur appraise the degree to which a government intervenes in the economy or a certain industry and how its decisions affect the present and the future of the company. The political situation for the manufacture of sports shoes is favorable. The governments of South Africa and Asian countries do not restrict this activity by political decisions or economic pressure. In terms of the economic policy of the governments, manufacturing is seen as a contribution to national welfare, as taxes and wages are paid. The social policy practiced by the governments of these countries promotes the successful development of this business, moreover, it is considered by the government as the governments of these states as a solution to many problems, such as unemployment, poverty and lack of investment.

Economic: Economic factors are metrics that measure the health of any economic area. Considering the economic environment of this business unit, it is a key criterion to mention that it is variable and depends on the general economic situation in the global ranking. Sports shoes are in high demand as they are the universal footwear used in everyday life. People continue to buy sneakers and other footwear for everyday use.

Sociological: The sociological environment argues that the social situation in the manufacturing concentration countries is the most favorable for this type of manufacturing. In Asian countries the citizens agree to work more hours than the normal schedule because it is the only chance for them with these hours to get a corresponding reward so that they can survive. Taking into account the need to increase the industrial forces, the social situation in the Asian States are the most suitable for this.

Technological: The technological part of this industry is one of the most advanced. The fact is that the overall computerization of manufacturing substantially simplifies this process. The technological background of shoe manufacturing promotes further development. This helps to reduce the number of workers and pay more attention to improving the qualifications of technical workers. However, this technology requires the appropriate infrastructure.

Legal: This criterion is the least favorable, as companies that choose to locate industrial forces in third world countries face difficulties with labor law and legal issues related to working hours, minimum wages and working conditions in general. Although workers are mostly satisfied as this is the rare opportunity to earn a living, global organizations are unhappy with the actual situation. An example is the scandal related to the manufacturer Nike: workers were forced to work 12- to 16-hour shifts, and newspapers around the world accused a well-known shoe company of slavery, yet the workers did not complain.

Environmental : The environmental situation in the world as the years went by is getting worse, however, the technical side of the construction helps to improve the ecological conditions. The materials and technology used aim to reduce environmental pollution. In addition, taking into account the requirements of the Kyoto Protocol, industrial waste is substantially reduced all over the world, except for several countries, as a result of which the situation is stabilizing and steadily improving. (Lee, 2005).

Porter’s Five Forces: The Five Competitive Forces model was developed by Michael E. Porter in the book “Competitive Strategy: Industry Analysis Techniques and Competitors” Since it was published in 1980, it can be established as a reliable method of analysis for leading companies and organizations around the world. but the method can be applied everywhere. According to Porter himself, the 5 forces of competition govern heterogeneous market sectors and are always the same in every corner of this planet where commercial activities are conducted. Where one would say there is differentiation is the depth of analysis of the 5 forces of competition required for each business. Understandably, a multinational company targeting the global market has different analysis requirements and a Greek small or medium-sized business operating locally has different requirements. For the latter, even a simple record like the one proposed below, could help a lot in understanding the competitive context in which the entrepreneur is called upon to act.

Competitive rivalry: Examining this power can show the management of a business how easy (or difficult) it is to penetrate a new market, what obstacles can be encountered, which of these obstacles are manageable, which need special attention.

Supplier Power: Examining this power can reveal to the management of a company the degree of its dependence on its suppliers. Logically, the more suppliers there are in a market, the less dependent a business is on those suppliers.On the contrary, when there are few suppliers (e.g. for the supply of e.g. raw materials or specialized services), the greater is the risk that these suppliers will proceed with unpredictable moves (e.g. an increase in the cost of raw materials) which in turn they will upset the status quo & put your business in a difficult position in the future.

Buyer Power: Examining this power can reveal to the management of a company the degree of its dependence on its own customers. Understandably, businesses that rely on a small number of customers face greater risks than other businesses with a wide customer base.

Threat of New Entry: Examining this power can show the management of a business how easy (or difficult) it is to penetrate a new market, what obstacles can be encountered, which of these obstacles are manageable, which need special attention.

Substitution Threat: The examination of this power can reveal to the management of a company which of its products or services face the risk of being replaced by other products or services of the competition (e.g. due to lower prices, due to low production costs, etc.)

SWOT OF HOT SHOEROOM

Hot Shoeroom Strength:

Strong Brand Awareness and Brand Value

Huge Customer base

Aimed For Sustainability

Side Brands

Low Manufacturing Cost

High Market Share

Hot Shoeroom Weaknesses

Dependency on US Market

Lawsuits

Contradicting Strategies

Poor Labor Conditions in Foreign Countries

Hot Shoeroom Opportunities

Emerging Markets

Cutting ties with big retailers

Innovative Products

Hot Shoeroom Threats

External Strategic Factors

Marketing Budget Pressure

Patent Disputes

Currency Foreign Exchange Risks

Trade Tensions

McKinsey 7S

Shared Vision

System

Structure

Strategy

Skills

Style

Staff

Critically evaluate the impact of ONE specific emerging technology on the future of your business and make useful recommendations to future managers.

New technologies or Emerging technologies are technologies that are considered capable of changing the state of affairs. These are generally new technologies with older technologies included that remain controversial and underutilized, such as preimplantation genetic diagnosis and gene therapy dating from 1989 and 1990 respectively. New technologies are characterized by complete innovations, relatively rapid development, continuity, visible impact, but also uncertainty and ambiguity. In other words, a new technology is “a completely innovative and relatively rapidly developing technology characterized by some degree of temporal continuity and the potential to effect significant changes in the socio-economic area of its sphere of influence such as in the composition of agencies, organizations and patterns of interactions among them, along with relevant knowledge of production processes. The greatest impact, however, lies in the future where the present remains uncertain and unclear. New technological fields can be the result of the technological convergence of different systems developed with similar aims. Convergence means bringing previously separate technologies such as voice (fixed and mobile), data (and derivative applications), and video together so that they leverage common resources and work synergistically toward new achievements. They are technical innovations that represent progressive developments within a field and are a competitive advantage. Converging technologies represent previously distinct fields that appear to be set in motion to enhance interconnection and collaboration. Regardless of the impact intensity, influence and economic viability of new and converging technologies.

Conclusion

Hot SHoe Room Company’s strategic actions led the company to the first position of the leader board (market), however the position placed by the company was among the most stable. Initially, the rating remained at the same level, which is a rather significant achievement in the conditions of the growing market and the strengthening of competitors, therefore, there are no reasons to stop competing in the market. However, the indicators achieved the rates they expected, as alongside the increase in internals, investments and upgrades, the company managed to build the financial reserve for the future growth of the production forces. The stated strategic positioning is rather fair and accurate, so there is no need to be inconsistent with it.

This simulation helped me to practice the knowledge gained on strategic development and competition in developing and developing market conditions.

References

Dess, Lumpkin and Eisner (2006). “Strategic Management: International Edition” McGraw Hill Publishing.

Buckley, P. J., & Casson, M. C. (2006). Models of the Multinational Enterprise. Journal of International Business Studies, 29(1), 21.

Thompson, A & Stappenbeck, G (2008). “The Business strategy Game On line” McGraw Hill Publishing.

G. (1998). The Essence of Corporate Strategy. Australian Journal of Management, 23(2), 237.

See Eichenwald, K. (2005) Conspiracy of Fools: A True Story, New York, Broadway Books.