You are required to choose TWO companies, as case studies, and conduct some analysis on their macro-environment. These companies must be multinational companies and the focus of your analysis should be how these businesses develop their international operations. The analysis should focus on the following.
- Conducting a PESTLE analysis for both companies.
- Business challenges relating to innovation, business ethics and marketing
- Risks they faced with international expansion
Type of assignment: Research paper
Prepare a Consumer Report (aka SWOT analysis) CAPSTONE PROJECT
The business simulation is the engagement of managerial teams in working on business problems to come up with the solution that can be of benefit to the company. It involves calculated thoughts, decision making, and skills on how to solve given problems, fiscal scrutiny, investigating the market situation, business operations, collaboration, and leadership. Simulation is necessary for every business as it gives the administration a chance to come up with better ideas that can help improve the business and enhance the revenues.
The company appears to be successful during the year’s campaigns. The company’s pretax profits are likely to increase thus the share net will pass last year’s mark of 0.50 cents. Further the firm the sales will remain high since there is an increase in the demand for the goods all these became possible as a result of the advertising and the promotional activities held during the past year.
The equity has risen from $40 mark to $56 thus indicating an explosive growth potential for projected future, and it also maintains many solid qualities. The shares offer accounts worthwhile safe return and a dividend yield above the present Value Line median. These are some of the issues that lead to the SWOT analysis by evaluating the company’s Strengths, Weaknesses, Opportunities, and Threats.
The company has been in operation for over a decade selling electronics to its consumers.
Several companies offer the same products, and so the firm needs to come up with strategies that
will help it have a competitive edge over its competitors. Several companies have come up selling the same products as the firm thus it has to do everything possible to stay at the top in business. By learning its strengths, weaknesses, opportunities, and Threats, the company will be in a position to emerge successful in its business.
The company deals in products that are in high demand in the market. The products are required in almost all activities since they need them in their supply chain links. The distribution network is also robust thus the individuals who need the products can easily get them whenever they need. The company has distributors in various areas thus enabling it to manage costs, introduce products into the market quickly and supply different locations. The network also gives it the opportunity of expanding as it reaches more customers from other areas. The company also offers products to the customers at a fair price thus increasing the number of their clients.
The company has lost some of its best employees to their competitors who are offering better wages than the enterprise. Some of the competitors have managed to duplicate the products thus making it impossible for the company to maximize its revenues due to the competition. The company is also losing its loyal customers to their competitors due to their prices which are higher than that of the competitors.
The company can open its market in other areas where other firms have not penetrated. New markets will help it achieve greater functional advantages over competing platforms. It can also add other products on its line as this will provide an excellent opportunity to increase its bottom line and increase brand awareness. The increase of brand awareness will help the company gain fame among the consumers and thus increase its customers.
The market is competitive since several companies have come up to sell products like those sold by the enterprise. The competitors also offer lower prices than the company thus forcing our firm also to reduce the costs. Reduction of the prices has led to the company to spend more in production and get lower profits in return. The company is also affected by the international economic crisis which has affected all businesses globally.
Cost Leader with a Product Life Cycle
The company will adopt a Cost Leader with Product Life Focus strategy by concentrating on the High and Low Tech segments. This approach will help the firm gain a competitive advantage by reducing the Research and Development costs, the cost of production will also go down, and that of the raw materials will also reduce to enable it to contend with cost. The product life cycle focus will allow the company to get high sales for several years on the new goods introduced into the High Tech segment (Petkovic, 2016). These items will start their lives in the high tech market and mature into low tech before retiring, and the company reaps their assets.
Each strategy has its advantages that the business can influence to improve their success and disadvantages that can lead to failure. One advantage is that the company can charge high
prices for its products; the firm often prices their products wares far above what is charged by
companies following differentiation strategy. The company can also develop excellent knowledge on the products that they offer by employing a focus strategy (Petkovic, 2016). The focus strategy can help the firm to have a competitive edge compared to their competitors since the product knowledge is essential as the rivals and new entrants will find it difficult to compete with the company.
This strategy also has its disadvantages, the few demand available within a slot can cause problems. The company may find its growth ambitions stagnated; this can be because after serving their target market they may need to expand to other areas which require new skills (Petkovic, 2016). The firm can also lose its position with this strategy, or the larger competitors may take over their slot. The firm may get competition from both smaller and larger companies that adopt narrower focus.
Pros and Cons of implementing the strategy
For a company to successfully apply the cost leader with a product life plan, they should
have skills and knowledge in the same area. This requirement may force the business to spend on
the training of the employees to help implement the proposed strategy. The expenses will go
higher than expected and this may affect the company’s revenues (Petkovic, 2016).
The company may also lag behind in its functions as it tries to implement the strategy. The
approach may take much of the firms time which may result in some of its activities brought to a
standstill, and this may give their competitors a chance to make use of the situation and to take
over their competitive advantage.
The strategy implementation also has its pros which may include; the company can
realize their weaknesses and strengths as it tries to implement the new tactic. Through this, it can
come up with better ways of improving their work to help them gain competitive advantage. The
knowledge of their strength will also assist them to capitalize on that to improve their profits. By
knowing their weaknesses, the company will also be in a position to work towards improving in
the areas of weakness.
Lessons learned from practice rounds
When the team’s stock price goes up, the company is likely to have an advantage over its
competitors. Thus it can move on to the next round, but if the stock price goes down, then it
means the company is losing and should think of another strategy which can help it defeat its
rivals. The credit rating of the company is higher thus it shows that the firm is gaining and thus
has an advantage over the competitors and thus the strategy can be implemented.
The products’ prices are lower than that of the competitors thus giving the company an
advantage over the other companies (Petkovic, 2016). The fair prices will increase the sales since
consumers prefer cheaper commodities than those of high prices. The promotions led to
increasing of consumers hence a boost in the revenue. Success in the launching of a new product
depends on the time it will be introduced into the market. The right time will make the firm gain
customers than when they present the products at the wrong time.
If a strategy proves to cause loss to the company, it should b dropped, and a new
approach tried. The procedures used determine the success of the firm thus the teams should be
careful when taking the round practice to ensure that nothing is left out (Petkovic, 2016). By
carrying through rounds, the team will be in a position to rule out what does not work for the
company and employ those that work to enable the company to operate successfully.
Petkovic, D. (2016). Using Learning Analytics to Assess Capstone Project Teams. Computer,
49(1), 80-83. http://dx.doi.org/10.1109/mc.2016.3