Strategic Report

Strategic Report

Introduction

ABC is a mobile phone manufacturing company whose headquarters are in China but markets its products in several countries. The vision of the company is to secure personal data and promote cross-cultural communication. The board of management is made of three members, Hi Tin Wong, the Production-Distribution, international manager, Menggi Zhang marketing manager, and Yuxin Chai, the General Manager. My main role in decision making is to provide information to other members and persuade them to adopt strategies that are in the best interest of the company. Also, I can make sound decisions to increase profits and the overall efficiency of the organization.

As the General Manager, I have to make tactical decisions for various departments such as marketing, distribution, production, human resource, and finance. However, it is necessary to have synergy in all the decisions to ensure that the organization achieves its objectives. One of the decisions is to build a motivated, skilled, and committed workforce. This decision was informed by the Key Performance Indicator, which is to be a global market leader. By being a global leader, the company will have the largest market share, high sales volumes, and high return on investments. However, it is impossible to achieve all that without a productive workforce (Zehira et al., 2016). The ability of a company to achieve its objectives and become a global market leader entirely relies on the capacity of its workforce. The company should make good use of human resources to develop a brand and achieve a competitive advantage (Hassan, 2016). The management has to develop and implement policies that ensure that employees contribute to the attainment of the company’s goals.

According to Jetho (2018), human resources is an asset that, when used strategically, helps a company to gain competitive advantage. Therefore, the board of management should view employees as strategic partners and as a source of wealth. The human resource management department should ensure that the workforce is capable of implementing the organizations’ strategies (Mitsakis, 2014). One of the roles of the General Manager is to make strategic decisions for the human resource department. I should ensure that company select, recruit, train, develop, and retain competent, innovative, and dedicated people that can execute its strategies (Gamage, 2016). Whenever employees are happy, their job satisfaction, productivity, and commitment to the company increase. Therefore, developing strategic human resource management practices and offering adequate funding is a strategy of building a workforce with the capacity to perform (Çalişkan, 2015). Investment in human resource development failed. The group over-invested in the human capital, forgetting other vital areas such as research and development. Allocating a huge chunk of the budget on employee development led to an increase in operation cost, thereby reducing profits. Also, the global promotion strategy failed since the group committed to expensive but ineffective promotional programs such as for example, pay per click.

The key performance indicator is a global market leader. The management should make decisions to become the global leader in the Smartphone industry. Apart from strategic human resource management, there is a need to develop an effective marketing and distribution plan. The success of any marketing program depends on the budget (Pike & Page, 2014). The higher the budget, the more effective the campaign will be, and verse versa. The more diverse the marketing, the more effective it becomes. Therefore, it is strategic to invest huge amounts of money in different global marketing and promotion programs. Marketing will inform customers of future products and where to get them (Todorova, 2015). Even though marketing help increase brand awareness, it cannot increase sales if the quality of products is lower than that of the competitors. Therefore, the company should invest in research and development. ABC has adopted a product leadership strategy, and this would enable it to produce unique products that set it apart from the competitors (Santosa, 2014). Building a capable workforce and investing in research development will enable the company to develop the best and most exclusive Smartphone in the market.

The General Manager also decides the structure of the company. There would be two managers whose duty will be to implement decisions and strategies that the board members make. They will also be in charge of daily operations and ensure that the company runs smoothly even in the absence of the General Manager. ABC Company cannot be successful without partnerships in different countries. The production takes place in China, but the products are distributed all over the world. It is not a must that the company should set offices in each country. Instead, it can partner with foreign companies to manage local distribution outlets (Tulung, 2017). By doing so, the company would save a lot of money. Finally, the decision to take loans is informed by the need of the company to develop and grow. Implementing product leadership strategy and achieving global leadership in the Smartphone industry requires the funding of many activities such as research, production, marketing, and distribution. The borrowed money will be used to acquire advanced technology, train employees, fund research projects, and expand distribution networks.

            Organizations react to the changing business environments by exiting or entering a market or by changing strategies. It is not easy for companies to enter and operate in new markets. Even stable companies like Samsung have to exercise strategic discipline while selecting new markets. The group did not just enter or exit any market without a strategy or reason. Instead, it carefully weighed the threats and opportunities in the potential markets (Sui & Baum, 2015). As the General Manager, I should make decisions that do not expose the company to risks. I seek to increase the profitability of the company by making strategic expansion decisions. Therefore, strategically selecting which country to either enter or exit as a target falls in my roles.

The group also decided to enter certain countries as target markets due to favorable, political, economic conditions as well as the size of the market and level competition. The group determined the country to enter based on the size of the market, the ability of people to buy smartphones, and the level of competition (Elfenbein & Knott, 2015). The general manager should ensure that the company makes viable investments to avoid losses. The group only entered a market that is large enough to generate much revenue and profit. Also, they entered markets that were growing rapidly (Sui & Baum, 2015). For example, the group decided to enter India because of its large population that requires smartphones. Also, the middle-class population in the country is growing rapidly, thereby making it attractive.

The General Manager also has a duty of managing various types of risks such as political, economical, or legal. Countries have different political, economic, and legal conditions that might negatively or positively affect business. The General Manager has to ensure that the company avoids such risks by deciding which markets to enter or exit. The level of competition in India is low. Therefore, ABC Company would easily stand out in the market. The country is also accessible since the government encourages imports of smartphones and does not impose heavy taxes. Moreover, the government of India has lax laws for foreign companies creating a conducive business environment. The country also enjoys political stability that promotes business activities. Furthermore, the economy of the country is stable and continues to grow; therefore, a large number of people can afford a Smartphone. The group also examined the ICT infrastructure in a country before entering its market. ABC only entered countries that have elaborate network infrastructure and electricity to facilitate the use of a Smartphone.

The group did not stick to the same strategy because countries have different market conditions. At first, the group adopted product leadership, but it failed in many countries where buyers are price-conscious. A Strategy offers a consistent overall strategic direction to the company’s management and gives direction to production, marketing, pricing, and human resource strategy (Ajagbe et al., 2016).  The changing of strategies enabled the group to adapt to various market conditions. I convinced the group that maintaining the product strategy would deny the company flexibility to customizing its production and marketing of products in different countries. Even through product leadership strategy would allow the companies to develop high quality Smartphone that distinguishes it from competitors, such products are expensive, and only a few people can afford them. A company that adopts a product leadership strategy achieves premium prices due to the event that they create for the buyers. Customers identify them for producing the best Smartphone but expensive in the market (Rahi, 2016). India is a developing country, and most of its population is poor. Therefore, even if they need Smartphones to keep up with technology, they would go for cheaper ones. As a result, the high quality and expensive ABC phones would not be affordable to many. However, companies that adopt a cost leadership strategy would do better in developing countries and other markets.  The company is performing well when it comes to human resource management, innovation, production of quality products, and sales. It is generating profits and continues to expand to new markets. Therefore, in the future, it will record an increase in market share, revenue, and profits. A potential investor should buy shares in the company because it has the potential for high returns. Moreover, the company has excellent financial performance.

The group consists of three people, and each had a role to play. I played the role of the General Manager; Hi Tin Wong played the Production-Distribution, international manager while Menggi Zhang, marketing manager. It was an exciting experience working in the group, and I learned a lot. However, there were several challenges, but we managed to overcome them. One of the challenges that we faced was disagreement over the best strategy to adopt. Each person had his position on the best way forward, making it difficult to find common ground. There was a deadlock for sometimes, and we delayed in making decisions on time. For example, there was a dispute on how much to invest in the development and motivation of employees. Also, some opposed the sharing of profits with the employees as well as offering bonuses. Moreover, there was a dispute regarding the budget for global promotion and marketing. We resolved the problem by giving each person a chance to defend their position using reliable sources logically.

I managed to convince members that the more the budget for marketing, the more effective it becomes. I developed skills of formulation and implementation of strategies. I learned that organizational strategy should be aligned to mission and vision (Harrison & Bazzy, 2017). I also developed strategic human resource management skills. I have learned how to treat human resources as a strategic partner of an organization. The performance of employees determines the overall success of organizations (Bin, 2015). Therefore, for any organization to succeed, they must adopt strategic human resource management. Moreover, I have learned how to make strategic decisions, for example, marketing and promotion. Furthermore, I have developed budgeting skills for various activities such as marketing and development of human resources.

The game has enabled me to learn two important things about international business. First, I have learned that international business is driven by strategy. Local markets are different from foreign markets. Also, economic, political, legal, cultural, and technological factors differ from one country to another (Knight & Liesch, 2016). Therefore, companies must have an effective international strategy before entering other countries as potential target markets. An internationalization strategy enables an organization to decide which market to enter, mode of entry, marketing, and organizational structure. Second, I have learned that international business offers companies opportunities to grow and tap into new markets (Jung, Noh & Chung, 2016). Companies expand their operations to foreign markets to exploit new opportunities and grow. By tapping into new markets, organizations expand their customer base, market share, revenue, and profits.

The simulation has enabled me to acquire several skills regarding the development and implementation of strategies. As the General Manager, I have learned to influence board members to make decisions that aim at facilitating the company to gain and sustain competitive advantage. I have also learned to adopt strategic human resource management and change internationalization strategy depending on the economic, political, technological, and cultural factors in the target market.

REFERENCES

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