Business Management Laboratory (BML) Assessment Written Report

Business Management Laboratory (BML) Assessment Written Report

Our group for the simulation was Firm 1. Throughout, the simulated quarters we tried to deliver a higher quality product to our customers at a favorable price. We applied various strategies to control our cost so that we could complete against our competitors.

Mission Statement
Our mission was simple, deliver a better product at an attractive price to our customers. We thought we could control our cost and at the same time compete with our competitors on the profitability side while offering a durable and affordable product.
Stakeholder Identification

We felt that the importers were pure stakeholders and we tried to offer better quality products with the same price. When the imports shift their strategy we would look to do the same. In fact, when price of the imports changed we analyzed and looked whether we should do the same with our price and if the price needs to be changed, we would then look for ways to match the difference on the cost side of the business.

III. External Analysis: Identification of Industry Opportunities and Threats
If we applied porter's 5 forces we find that the industry is low attractive.

1. Bargain power of buyers is lowly attractive. When a customer is interested in the purchasing dishes, they have a list of many companies that they can buy. Because their aren't hand full of companies making dishes. Also, with cheaper labor over seas, the importer are able to match the quality of made in U.S.A dishes with cheaper price. Which in turn hurts the attractiveness of some of the domestically manufacturing companies. Since there is so much choice, the industry is lowly attractive.

2. Bargaining Power suppliers is highly attractive. The material used in the process of dish making is vastly available. Since there are a lot of supply of raw materials and many companies which sell it, a buyer of the raw material is not limited to buying from only few companies. Which makes this industry highly attractive.

3. Treat of new competition is Medially attractive. If someone wants to open up a factory to produce dishes, they are not have a difficult time in terms of equipment and material. However, they are going to need experienced workers and large working capital to get things rolling. The investment included a warehouse, various machinery's, and experienced work force is to name a few. Since there is large capital requirement, this the treat of competition is limited and makes the industry medially attractive. It is not highly attractive because of the number of existing competitors and the variety of similar products with in the market are numerous.

4. Treat of a substitute is highly attractive. There aren't any substitutes to dishes. People need to put their food in something when they eat and paper plates is possible but not a direct competitor. The reason people use dishes is that they are durable and can be reused many many times. On the contrary, paper plates don't need to be washed but they cost more because they cannot be reused. In fact, as going greener intuitive, many reform groups discourage the use of paper plates because they require the cutting of trees. Because there is no direct substitute, it makes the industry highly attractive.

We have two highs, one low, and one medium which makes this rivalry among the competitors medium.

In answering the question whether there were broad economical issues. Yes,there were macro-environmental changes that positive impact on our industry. Throughout the simulation we had an booming economy which positively impacted few companies within our industry. We think this impacted us negatively because we were focused on providing a superior product at the lowest cost. This lead us the sacrifice some advertising and engineering budget. Since, we did not invest enough out side of the our company and focused on lowest cost we missed the big picture. The big picture was that when the economy is doing great people have more discretionary spending and they tend to buy the products that they are familiar with and don't base their purchase decision on cost alone. So, our competitors which were selling the same product for a higher price and using that inflow of cash in advertising, won. They won because their product was better reckoned and since the economy was booming folks are willing to buy a higher end item.

IV. Internal Analysis: Resources, Capabilities, Competencies, and Competitive Advantage
I think we had a disadvantage due to our lowest price model. We tried to be profitable as we could buy controlling cost by buying futures, investing in maintenance, limiting salaries with higher commissions, and trying to sell everything we produce in the same quarter so that there are no extra cost of unused inventory. However, we soon realized that we needed to changed direction to a higher profitability model. This model called for increasing price and maintaing the same cost structure. There were no barriers to growing competencies with our firm but I really felt that we needed more time with the new direction of the firm. In the same quarter of the new strategy, we suffered by having a loss but the next quarter proved to be profitable proving that it was a good idea. And with changing market conditions the firms that adapt and innovate become the leaders of the respective industry.

V. Business, and Corporate-Level Strategy
Throughout the simulation we used various creative corporate level strategies we executed. Hiring was a focal issue among the group members. We tried not have too many sales people because it is really costly to train them and pay them. So, we monitored closely the performance of the sales force and decided the right decision relating to new hires, fires, salary and commission. In the quarter 2 of 2005, we noticed the economy the due for an expansion and we decided to hire and salesman to A1, after a careful analysis we notice that it affected majority of the salesmen and their performance decreased. After that experience, we were reluctant to hire or to increase the compensation of the sales force.

VI. Performance Assessment
Our firm focused on price. That strategy made us one of the top revenue generators with in our industry. We succeeded in living up to our mission statement by controlling cost and price. We shifted course at the end by analyzing the economy and the other sucessful firm which were making more profit than us.

VIII. Implementation of Strategic Change
If the simulation continued for additional periods, I would continue with the new strategic direction enforced last quarter and monitor closely the results of the firm. If the economy continued to expand, I think we would continue to perform better in terms of bottom line. But, if the economy showed signs of slowing then I would evaluate the different scenarios present at the moment and go with the one that makes the most sense.