ADMG4055 Seminar in Business Policy

ADMG4055 Seminar in Business Policy

1. What is the relationship between corporate governance and social responsibility? Does a corporation have to act selflessly to be considered socially responsible? Use a specific example to explain your answer

Corporate governance is the root of the overall success of, and success does not only mean making a profit. Success entails taking care of the working environment in which an organization operates. Social responsibility is the ability of firms acting and incorporating ethics to its customers, staff, and general ecological care. Corporate governance is the pioneer of social responsibility as they define what needs to be done and allow supporting platforms like finance allocation authorization to allow social responsibility.

Social responsibility can be divided into two subgroups:

1. Obligation social responsibility- in this scenario, an organization doesn’t have to act selflessly to be considered socially responsible. The act responsibly because it is an obligation to act that way in the environment. The organization has to work within the set rules like preservation of the environment.
2. Organization’s willingness to help the stakeholders. In this scenario, an organization extends a helping hand to the community. In this situation, social responsibility will be considered selfless. An organization may decide to build a school for the children living in the area to help the struggling family. The organization will make the schools not as an obligation but as a way to support the society.

In both scenarios, corporate governance plays a significant role in ensuring that social responsibility acts happen.

2. The hierarchy of strategy indicates that a company should build a relationship between functional, business, and corporate-level strategy. Using your Capsim company, explain how you did or did not effectively make use of the hierarchy of strategies. Be specific in your answer.

The three hierarchy structures designs in an organization stem for overall organizational success.

1. Corporate strategy

Corporate governance ranks highest in an organization and helps other strategies to actualize. The corporate level aims at achieving all overall organizational goals. A combination of functional and business strategies leads to corporate strategy. In capsim throughout the rounds, the corporate strategy aimed at ensuring continuity profitability, research, and development to trigger growth, reduce costs, and serve the customers.

1. Functional strategy

The functional divisions in the capsim entailed a combination of finance, R&D, marketing, production, and human resources. The cycle objectives start from sourcing of raw materials until the goods are offered to the market, and customers pay for the goods. The marketing division in Ferris ensured that the customers get products on a timely basis. The R&D helped in the sourcing of cheaper raw materials and necessitated automation, which supported the production department to produce enough goods to satisfy demand.

1. Business strategy

In our capsim company, we would have liked our long-term policy to acquire others to increase its competitive edge. Through the acquisition of other businesses, helps cement a larger market share in the fields.

Nesting of the three provides internal organization synergy, which helps the organization to compete, make profits, and satisfy customer needs. The success of the organization as a result of the efficiency of the business and functional strategies, which helps the corporate strategy. On the other hand, corporate strategy enables other strategic areas to function.

3. Explain the impact of environmental uncertainty on the strategic management process. Give an example from your case company or your Capsim company that shows how ecological uncertainty impacted the strategic management process.

For proper management and planning, managers require specific information. Getting certain information, however, is hard due to unpredictable market conditions. The market is characterized by different factors that hinder planning. For example, competition levels change due to the adoption of technological development and changes, which ensure competitors, develop goods that surpass the quality of their past goods. Consumers prefer goods that offer the highest utility and may find it easy to switch to rival products if the organizations of their choice do not provide the goods they admire to have.

Also, environmental uncertainty as a result of government interference ensures that the strategic plans, programs, and budget are altered to fit in the new regulations. An example in the capsim organization, the demand kept changing because of goods offered by rival companies. For example, customer changing buying habits made it hard to predict future demand because it kept changing. Fast round one demands were different in all rounds.

4. What kind of internal factors help managers determine whether a firm should emphasize the production and sales of a large number of low-priced products or a small number of high-priced products? Be specific in your answer and use your Capsim experience as supportive evidence.

The choice of either strategy depends mostly on internal factors, and in our capsim, the choice of low priced goods relies mainly on our strategy. Even in the business world, the factors that influence the choice between producing high priced and small priced goods is universal and includes;

1. Production capacity

Organizations with large sizes can provide a large number of low priced products because facilities available can support huge production. If the production capacity is low, the firm chooses a small number of high priced items because it can help it easily.

1. The market in operation and consumer needs

Consumers display demand patterns demographics factors like population and incomes determine which goods to produce. In areas with a high population with low incomes, the ideal strategy is the production of a large number of low priced items. For the area with majority having high incomes, the production of a small number of high priced goods is feasible because the target market customers can afford the products.

1. R&D

The division determines how an organization adapts to new technology. In a large number of low priced goods, an organization needs to sell in bulk to stay in profit, and in most situations, you will find such companies having quality issues. After R&D finds a new way of production, goods developed will have high quality and will fetch high sales; thus, the new organization can adapt small production number of high priced items. For example, the research and development costs increased in our capsim organization, which facilitated automation and plant utilization maximization.

5. Using your experiences with Capsim, explain several of your functional strategies and their implementation throughout the competition rounds.
6. Production strategies

The production strategies were incorporated to ensure the production roles were maximized. Through automation, mass production ensured the satisfaction of market demand.

1. Financial strategies

The automation process required significant capital, and the organization needs for financial strength needed proper planning. The financial strategies were investment growth aiming at adding value. We invested in shares, and at the commencement, we had 2million shared, and in the fifth round they had accumulated to 2.7 million.

1. human resource management strategies

the quality of staff and motivation determine the quality of products produced. We geared our efforts by allocating $5 million to the department, which necessitated the recruitment of new crews and training the existing team.

1. Marketing strategy

We ensured that the demands of the customers ranked highest, and all necessary changes were required for customer satisfaction. We increased the marketing budget to allow the department to reach more customers and improve the existing segments.

1. R&D

Automation and plant operation maximization was the department’s duty. The automation process ensured goods produced were of high quality as per the preferences of the customers.

6. Is it possible for a company or business unit to follow a cost leadership strategy and a differentiation strategy simultaneously? Why or why not? Use an example from Capsim or your case company as the basis for your answer.

It requires a unique business plan to combine cost leadership and differentiation strategies. Proper market analysis and research can trigger the combination. An organization can combine the two but on rare occurrences. To achieve cost leadership, the organization needs to invest in unique technology through research and development to come up with a system that supports efficient production with plant utilization maximization. The organizations will also source the raw materials on the lowest cost possible.

For differentiation strategy, customer loyalty will play the part because if the organization offers goods of high quality, consumers will not shy away from paying premium prices as long as they gain maximum utility. The combination of the two is impossible for an organization that has been on the market for a short duration because economies of scale are a requirement to achieve the above. In our capsim organization, we could not achieve a combination of the strategies. We managed a cost leadership strategy, but the premium price was impossible.

7. Using your Capsim results, create a BCG Matrix that is representative of the Sensor industry and your company’s products.

Round 4 Results

Product Market Share Rival market share Relative Market share Growth units sold

fast 26% 27% 0.96 9.20% 2689

feat 14% 24% 0.58 11.70% 2015

fist 18% 32% 0.56 11.70% 817

foam 20% 38% 0.53 16.20% 787

fume 20% 38% 0.53 18.00% 778

8. Use Porter’s 6 Forces Model to analyze the breakfast cereal industry. This should be your own analysis – you may research primary sources but DO NOT use someone else’s analysis.

1. The threat of new entrants is moderate. In almost all business fields, new entrants are attracted and have hope of utilizing the available opportunities. However, a new area requires conforming to all set rules, which is hard to comply. An economy of scale scares away new entrants. Customers also worry about brands that they are less informed about, hindering a high number of new entrants.
2. Rivalry among existing firms is high. Each firm wants to dominate the market. After locking out new entrants, the existing organizations compete highly through research and development of new products. Key rivals in the industry include Kellogg’s, Mondelez International, Kraft Heinz, J M Smucker, ngredion, Quaker Oats Company, and Nestle.
3. The bargaining power of consumers is high. The industry has numerous competing firms, and each firm has several products. Customers in the industry dictate the buying procedures because the consumers incur low costs in switching to rivals.
4. The threat of substitutes is moderate. The reason why I say it is moderate even if several substitute products exist is that the breakfast cereals industry is growing. Standard substitute products include scrambled eggs and sandwiches.
5. The power of suppliers is low. Competition for supplies is high for cereals products giving organizations the power to dictate the pricing. Many companies can source raw materials locally and internationally, considering that in most countries, food items like cereals are tax exempt.

9. Using your Capsim company as the basis for this question, explain how your short term strategies lead to the successful (or unsuccessful) realization of your long term strategies.

Short-term strategies help the implementation of long-term plans. One of our short-term strategy is maintaining a trained staff and reduces employee turnover rate. High turnover ensures that organizations incur an additional cost of recruiting employees and training them. The need for hiring new employees was to maintain the required levels of employees. Another short-term strategy was customer focus by providing quality goods. Most short term plans play a part in a long-term strategy. The overall goals for our organization were market dominance through quality goods production, attaining production efficiency, production cost reduction. In the long run, employee training helped to improve staff productivity. The costs allocated to research helped automation in the long term that helped in plant utilization maximization.

10. Strategy implementation focuses on programs, budgets, and procedures. Using a company with which you are familiar, evaluate their strategy implementation (from your personal perspective) in terms of the program(s) they have chosen to implement.

There is a high possibility that every day a person uses a Microsoft product. They dominated the market by offering computer hardware and software but faced stiff competition from Oracle, Google, IBM, and Apple. The emergence of other organizations in the technological field posed a risk to the organization’s long term survival. To ensure its cement its survival, the company developed a new strategy by entering the cloud-computing area. In 2019, the company spent over $107 billion in cloud computing infrastructure services. The organization is an investment in infrastructure-as-a-service (IaaS) and cloud servers incorporation to maintain market dominance and entice customers to stay loyal. The company introduced the Microsoft Azure program through market analysis of potential markets. Currently, Microsoft is among the best organization, and direct rivals include Amazon Web Services and Google Cloud.