Strategic Managerial Decision Simulations Essay

Pages: 11 (3198 words)  ·  Bibliography Sources: 2  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business  ·  Written: July 23, 2019

Although we initially performed more poorly than we had projected, our revenues grew steadily to the point where we were at least on par with competitors.

Porter’s Five Forces

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A fundamental concept in business generally and strategic management specifically, Porter’s Five Forces help us to conceptualize the external environment in a logical and systematic way conducive to sensible yet still team-driven decisions. Porter’s Five Forces refer to the competitive environment within our industry. The five forces include the threat of new entrants, buyer power, supplier power, threat of substitutes, and rivalry among competitors. Through the simulation, we learned how to recognize and address each of Porter’s Five Forces in turn, albeit some more obvious than others based on the limitation of the software. Threat of new entrants, buyer power, supplier power, threat of substitutes, and rivalry were all critical concerns for D Company. We made strategic managerial decisions knowing that each of these external threats could impact our company, but we remained committed to our long-term goal of gaining strategic advantage. One of the specific decisions we made was to position our product differently for the Asian market than for any other market, presenting D Company not as a value option but as one that would present more of a luxury allure. We also made sure that we adjusted the advertising budget, sales promotions, retailer support and warranties according to the externalities.

Essay on Strategic Managerial Decision Simulations Assignment

As Dess, McNamara, Eisner, et al. (2019) point out in the text, the Internet and digital marketing opportunities have created strategic advantages for younger and smaller firms like D Company. We quickly ascertained that we, not one of the members of the competition, was the new entry threat. “Because digital technologies often make it possible for young firms to provide services that are equivalent or superior to an incumbent, a new entrant may be able to serve a market more effectively, with more personalized services and greater attention to product details,” (Dess, McNamara, Eisner, et al., 2019, p. 57). This is exactly what D Company did: we leveraged our fresh brand and global presence by paying greater attention to product details our competitors lacked, both with regards to the design and functionality of the action capture and the UAV drone. By marketing our product online, and selling it through a bespoke website as well as major online retailers, we also offered more personalized services than our competitors could due to their more bureaucratic organizational structure—an internality that we will discuss later in this executive summary.

Capitalizing on digital methods of data collection, we were also able to anticipate trends in different geographic market segments. We were able to see which similarly positioned products were trending in South America versus Europe, for example, and adjust our marketing strategies accordingly in order to manage Porter’s Five Forces. Overall, I believe we succeeded in our goals within the realm of strategic management. Other buyers or suppliers already entrenched in a given geographic area may enjoy temporary or even long term advantage over D Company, but we have learned how to reduce the severity of such threats and simultaneously capitalize on what distinguishes us, and what gives D Company competitive advantage in other ways. The topics addressed in the course unit on external environment and Porter’s Five Forces were also covered in great depth in other classes including international business strategies. Operating within a global business environment, in which a nearly infinite array of variables can impact a company at any given moment, D Company serves as an apt model for most of the high-performing multinational firms in every industry sector.

The Internal Environment of D Company

Throughout my coursework in business school, one of the topics that surfaces and resurfaces is related to the nature of the internal environment. Many people’s job exclusively emphasizes the internal domains of an organization: issues like organizational structure and culture but also the measurable aspects of performance such as value chain and resource analysis. Working with D Company allowed me unprecedented insight into the problems and opportunities inherent in both the value-chain analysis and the resource-based view of the firm, covered well in the course text.

The SWOT analysis is always the starting point for students of business interested in learning how to analyze the variables at stake in order to make strategic managerial decisions. While the SWOT analysis provides a firm conceptual foundation for strategic management, it is hardly complex enough of a model to allow a multinational organization like D Company to thrive in the long run. Therefore, we used the simulation exercise to showcase the strengths and limitations inherent to the SWOT analysis, also building in additional models of internal assessment such as logistics, operations, procurement, and human resource management. We identified D Company’s tangible and intangible resources as well as its organizational capabilities. In accordance with my learning about financial ratios in other courses, we also computed market value, profitability, asset management, and both short-term and long-term solvency for D Company. In fact, one of the key features of the simulation was the emphasis on financial ratio analysis: D Company’s performance in relation to competitors determining our performance and valuation.

Without getting into too much detail related to ancillary services such as technology research and development (as critical as it is to the performance of a company that manufactures cameras and drones), the leaders of D Company took into account the types of primary activities involved in the value chain. Those primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service (Dess, McNamara, Eisner, et al., 2019, p. 72). If the simulation had allowed us to go further into depth with the value chain, we could have explained more about the location of manufacturing, warehousing, and distribution facilities in each of the continents in which we operated. As it stood, the leaders of D Company did collaborate on conceptual ideas related to the firm’s primary activities. For example, we took into account that plant layout and work layout would impact the speed of manufacture, which in turn would have a strong bearing on cost and pricing. Because we decided to limit distribution to just a few online retailers and stores, we could more easily envision methods of more efficient and cost-effective shipping within each market. We believe that one of the reasons why D Company’s performance improved between Years 6 and 11 was related to service. Customer service but also human resource management were to become key factors that would give us competitive advantage. We set employee wages only after careful assessment of factors like labor laws and interest rates, while also emphasizing a corporate culture that would retain top talent and engage employees.

Learning From Our Mistakes: The Essence of Strategic Management

In addition to preparing us for mastery of core competencies in strategic management, the simulation exercise introduced us to other areas of global strategic management that will invariably help us in our future careers. One of the issues that came up during the analysis of D Company was recognizing big picture issues like industry life cycle. We make products that are unfortunately placed into a mature market; it is not as if we are bringing to market a totally innovative, radical new type of camera or drone. Instead, we are dealing with a mature industry and factored that into our strategic managerial decisions. Based on material covered in the Dess, McNamara, Eisner et al. (2019) text, we engaged in generic strategies, functional areas, value-creating activities, and overall objectives to help us gain competitive advantage by Year 11 in spite of a rocky start. During the maturity stage, managers need to stress the control of production costs without sacrificing spending on research, development, innovation, or marketing (Dess, McNamara, Eisner, et al., 2019). The first six rounds proved particularly instructive because we did not heed the warnings offered by Dess, McNamara, Eisner, et al. (2019), who show how being too “focused on lowering costs” results often in “missing market trends or failing to incorporate important product or process designs,” (p. 161). Quickly recognizing our error, we made some changes in Year 9. In Year 9, we introduced a robotics upgrade for all active capture and UAV drone workstations. The move was risky and incurred initial costs of course, but resulted in steady growth and the development of a strategic advantage by Year 11. Were D Company a real world firm, I would be proud to be a part of its senior management team.


Ultimately, the simulation proved to be a priceless learning opportunity that permitted us the opportunity to make strategic managerial decisions without taking the actual financial risks such actions would have entailed in the real world. In a course on International Business, we encountered readings on organizational learning and the need for effective change management (Namada, 2018). We learned how to take action based on metrics and cogent… [END OF PREVIEW] . . . READ MORE

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Strategic Managerial Decision Simulations.  (2019, July 23).  Retrieved September 18, 2020, from

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"Strategic Managerial Decision Simulations."  July 23, 2019.  Accessed September 18, 2020.