New Instruction for Car Production
New Instruction for Car Production
This business simulation is for student to practice business. We use CESIM, An on-line simulation designed for strategy and international business studies. It develops students’ understanding of the complexity of global business operations in a dynamic, competitive environment.
For my assignment, my product for this case study is Mobile phone. We are set as a team consists of 3 members and will have to compete with other 3 teams in our classroom. There are 6 rounds and each round I will have different role. First and Fourth round I will act as head of marketing department which has to be responsibility for Production and R&D
But after 4th round is finished there will be a results and I have to write this Critical Appraisal Report 1
Read all contents!!!!
Table of Contents
TOC o “1-3” h z u 1. Instructions of my report PAGEREF _Toc263352737 h 1
2.Report requirement structures PAGEREF _Toc263352738 h 2
Example report note that content is different from my group PAGEREF _Toc263352739 h 5
Review theories and concept to your decision area2 PAGEREF _Toc263352740 h 8
1. Instructions of my report
Study market outlook / Result of round / Example report
Access to the CESIM.com / cesim handbooks
ID. [email protected]. 123456
Go to decision topic and study each topic from left to right Start from suggested steps – decision checklists
Study the result from the round available in attached file(result) there’ll be all group results in the the CESIM.com ID. [email protected] PW. 123456
For the result of each round click RESULTS on the top of the page and choose the latest round It will show result of each group, my group named: CRIT
Use the sources from the required reference lists files only (see attached file) There is an online libraly of my university
http://locate.coventry.ac.uk/primo_library/libweb/action/search.do?dscnt=1&fromLogin=true&vid=LON_VU1&fromLogin=truePlease log-in to read the textbook for research
ID. Paknikop
PW. P123456!
(a minimum list of 10 sources including 5 academic textbook and 5 academic journal in subject area under review presented in CU Harvard style)
Note: If there is additional sources you need to write, please make sure it is academic textbook and journal and it is available online for everyone to access.
2.Report requirement structures
Please cover all required elements
1.Background
1.1 Justification of your department role – minimum 100 words
my role is which response for Production and R&D director which is responsible for Investment of plants / capacity allocation/ investment in R&D please see CESIM handbook
explain what is this role / how this role is important in this business
Position analysis (environmental analysis) 150 words
covering three dimension which is Micro analysis Micro analysis and Internal firm analysis in position analysis- (study from market outlook below: and answer
Macro- whats market environment is like? ( from market outlook)
Micro- analysis of micro position such as details what competitor is like and needed / life cycle of stage /SWOT
Market outlooks
Demand
The war in Oilistan is over and oil exports have returned to normal levels. There are however other news impacting the demand of handsets: It has already become a standard that passengers can freely use mobile phones on airplanes. Now there has been a suspicious case regarding an airplane crash in southern China. The plane had crashed immediately after taking off, but luckily the amount of casualties was rather limited. Some of the survivors said that they had seen a mobile handset exploding while a passenger was using it intensely for video-conferencing. This event was widely published all over the world and it has tamed the markets for new handsets. In the USA the demand for handsets is expected to decrease by about 3% and in Asia by about 7%. European demand is expected to remain unchanged.
Costs
Transportation costs diminish by approximately 6% as the price of oil takes corrective downward action. Production costs are expected to remain constant. Outsourcing capacity continues to rise: expected capacity is 13% in USA and 19% in China. As a result, outsourcing costs have fallen 4-6%.
Finance
Once again the corporate tax-rate in Asia is raised. It is now up to 22%. Concerns about the competitiveness of the Chinese economy results in the Central Bank of China selling a large amount of Rmb into the FX market. Consequently Rmb falls nearly 10% against USD. The Euro rebounds. Interest rates are up half a percentage point in China, and up a quarter in the USA. European interest rates are down a quarter.
2. Critical review of academic literature (theories, concept and frameworks) appropriate and relevant to your department/decision area/operation focus. (minimum 1000 words)
Make sure you cover all these
how these stategies relate to this business
how it will effect on the business simulation decision
how these strategy/theories will apply to the business
( must include figures n tables graphs – see example page 5 for guideline you can use same flame work as example just analysis in you own words)
Minimum 3 theories
Required theories are!!!!!!!!!!!!
Ansoff’s matrix theory:
Product life cycle
References
(a minimum list of 10 sources including 5 academic textbook and 5 academic journal in subject area under review presented in Harvard style)
Use the sources from the required reference lists files only (see attached file) There is an online libraly of my university
http://locate.coventry.ac.uk/primo_library/libweb/action/search.do?dscnt=1&fromLogin=true&vid=LON_VU1&fromLogin=truePlease log-in to read the textbook for research
ID. Paknikop
PW. P123456!
(a minimum list of 10 sources including 5 academic textbook and 5 academic journal in subject area under review presented in CU Harvard style)
Note: If there is additional sources you need to write, please make sure it is academic textbook and journal and it is available online for everyone to access.
Example report note that content is different from my groupResource-Based Theory
This is the theory that related to achieve competitive advantage (Barney and Clark, 2007). There are five factors to strategy analysis as following:
Resources – identify and classify the organisation’s resources. Appraise strengths and weaknesses of the organisation.
Capabilities – identify the organisation’s capabilities: what can it do more effectively or efficiently than its competitors?
Competitive advantage – appraise the potential of resources and capabilities in terms of their potential to lead to sustainable competitive advantage and immediate return.
Strategy – Select strategy which best exploits organisation resources and capabilities relative to external opportunities.
Resources – Identify resource gaps which need to be filled. Invest in replenishing, augmenting and upgrading the resource base of the organisation.
This theory can identify the resources that the organisation focused on competitive advantage which make an organisation more successful than other in a competitive environment.
Ansoff’s matrix theory
Figure 9: Ansoff’s Matrix
Source: Aburto, t. (2010)
Ansoff’s matrix theory can define about the market growth strategy in term of product and market (Ansoff, 1965). There are four criteria to identify in this theory such as market penetration, product development, market development and diversification (Figure 9). In this round, I expected to use the market penetration criteria to analyse the business focuses on selling existing products in the existing markets. There are many solutions to maintain and increase more market share of current products. First, I can use the competitive pricing strategy to set and dumb the selling price to beat and gain more sales revenue. Advertising and sales promotion can help the organisation to attract the customer for purchasing more on our products due to the interested in features and image of organisation. Moreover, restructure a mature market by driving out competitor can be the difference strategy that will drive the organisation look difference from the other. I can use the promotional campaign and supported by pricing strategy to gain more attractiveness. I can use this theory to analyse R&D department to develop more features and make attractive to the customer.
Product Life Cycle
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Figure 9: Product Life Kotler and Keller (2012)
According to Zolfani et al. (2012), they pointed out the concept of Sakai et al. (2003) and Chen et al. (2006) that Product Life Cycle (PLC) could describe the possible product policies in different stages of PLC as well as helps the enterprise to compare its product with the former similar product to estimate the performance of the products that would be introduced to the market. Kotler and Keller (2012) divided the PLC into four main stages included introduction, growth, maturity and decline. The PLC was appropriated approach to help me define the stage of product in the overall market. As illustrated in figure 9, there was no sale for introduction and decline stages. Tech 3 and 4 were decided to place into growth stage and tech 1 and 2 were placed into maturity stage by based on the analysis of last round.
BCG matrix
The Boston Consulting Group or BCG matrix was useful tool to determine the attractiveness and balance of business portfolio under market share and market growth criteria (Johnson et al. 2012). It was relevance to estimate the growth demand of each product in order to expand capacity properly. As described in figure 10, tech 4 was in stars stage, which had a highest market share (94.75%) in a growing market from last round. The company needs heavy investment to sustain or raise the market share of product in this stage. Tech 2 and tech 3 had high market growth but did not have high market share yet. Tech 1 had a high market share in a mature market that less investment needed.
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Figure 10: The Portfolio Analysis (BCG matrix) during round 6 adapted from Johnson et al. (2011)
Review theories and concept to your decision area2As Roth et al have indicated that significant of competitive advantage of the manufacturing function as the cost, delivery, flexibility, and the quality and the significant relation of the function and the company’s business strategy which the function will support business successfully (Roth et al, 1989). This contributes to the developmental strategy of company according to the situation analysis.
Initially, the simple way to generate the strategic direction of the company from the four aspects is Ansoff Matrix strategy (Johnson et al, 2011). The company developed strategy as market penetration to the exiting market with existing product as the product with low growth according to the situation analysis and product development as adding feature to the growth product. The based situation analysis of the company conduct the cooperate strategy of the company according to the product category and geographic (See figure5).
Figure 5: Anoff Matix
In additional, the market share and market growth of the company are determined the business portfolio of BCG matrix (Johnson et al, 2011). As the main four aspects in BCG matrix, as the star defined as the tech 4 of company in both Europe and USA due to the continually high growth of this product as well as high market share. Importantly, the tech 1, especially in Asia, is cash cow as the first position in the market of the company and it is the highest profitably product of the company (See figure6).
Figure 6: BCG Matix
As well as, the Product lifecycle demonstrate the stage of the product in the market from the introduction, which product is high and rapidly grow to the market to the decline stage (Kotler et al, 2009). Due to the situation analysis, there are an obvious product stages which emphasized to the developmental strategy of the product such as the promotion to ensure the increased of demand of customers towards the company.
Figure 7: Product lifecycle
Although the above framework are supporting the business strategy in perspective of demand and production in this round, the law of demand and supply are examined. Basically, there is an increased of price due to demand higher that supply, meanwhile, there is a decreased of price, if supply over than demand as its call surplus (Peterson, 1986). There is also the essential of equilibrium point, which encourage the company to balancing the demand and supply (See figure8). As Fisher mentioned that the company has first step of demand consideration before contrive the supply of the company (Fisher, 1997).
Figure 8: Demand and supply graph
Despite of the underlying of demand, the “just in time” model are applied to emphasized effectiveness of manufacturing of the company as leads to zero wasted, and zero inventory which impact the cost (Proctor, 2012). Meanwhile, the economic of scale, which there is a dominant of relation of the average cost and produced units, contribute the to cheaper unit cost (Spencer, 1974)
– References)
Aburto, T. (2010) Ansoff’s Matrix For Marketing Objectives [online] available from http://taydeaburto.com/ansoff-matrix-for-marketing-objective/ [4 June 2013]
Ansoff, I. (1965) Corporate Strategy. New York: McGraw-Hill
Avadhani, V. (2010) Investment management. Mumbai: Himalaya Pub. House.
Barney, J. and Clark, D. (2007) Resource-based theory. Oxford: Oxford University Press.
Brooks, R. and Barnett, S. (2006) IMF Working Papers : What’s Driving Investment in China? Washington: International Monetary Fund (IMF)
Cesim (2013) Ratio and key financial indicators [online] available from http://sim.cesim.com/results/gc/AreaReportGlobalPage?51 [16 June 2013]
Grant, R.M., “The resource-based theory of competitive advantage: implications for strategy formulation”, California Management Review, Vol. 33 No. 3, Spring 1991, pp. 114-35.
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Kotler et al, (2012) Marketing Management, 2ed edition, 2009, Pearson Education Limited, Essex, England
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