Cheers to a Successful Simulation!

When our professor mentioned the simulation portion of our project in the beginning of the spring semester, I thought to myself, “Great… how will my group and I ever survive this…” Well, fast forward 3 months later, my group came in 2^nd place, with an A- ! Miracle? No… Luck? No… Great strategic plan? Yes!

In the beginning of our simulation, the goal of our company was to build up its facilities and infrastructure so it will be able to produce at a higher capacity at lower costs than the competition. We also planned on expanding into product 2 before everyone else did. Lastly, we wanted to reward our shareholders with a dividend on their stock shares. We envisioned our main stakeholder groups for our company consisting of the shareholders, employees, suppliers, and the customers of our firm. To us, shareholders wanted the maximum return on their investments; we provided them with our company that was able to post solid profits quarter after quarter resulting in higher stock prices and shareholder satisfaction.

External Analysis:

· In order to conduct an external analysis, Porter’s 5 Forces can be used to see if the dinnerware industry is attractive or not.

Ø Threat of New Entrants: Low, because the amount of capital takes to start a manufacturing company is relatively high. Also, human capital such as knowledge/ skills is required to manufacture these products.

Ø Bargaining Power of Suppliers: Medium-High because although raw materials are easy to obtain from new sources, it would be a strain on the firm if suddenly a supplier increases their price dramatically without any prior notice.

Ø Bargaining power of customers: High, because since there are many similar firms producing similar goods, we needed to establish ourselves by having the best available quality by having very low return rates.

Ø Threat of Substitutes: Medium-high because there is intense competition from overseas firms that have extremely low labor costs and overhead costs.

Ø Rivalry Among Existing Competitors: High because every quarter, firms look to undercut each other in terms of pricing on their goods to ensure that their customers would continue business with them rather than with the competition.

Although, there is a lot of room for growth and continuous profit, it is not attractive to enter. There is only room for a handful of firms because it is a difficult industry to compete in due to the intense competition within the firms, but also due to the customers having so much bargaining power.

· There were some changes in the macro-environment of the industry that had a negative impact on our company. During some quarters, the economic index was not favorable in resulted in much lower than expected profits. Also, during the peak seasons, we saw our revenues increase many times over. We also saw our competitors have similar sales trends during those seasons.

Internal Analysis:

· The competitive advantage that our company had was that we had the most knowledgeable salespeople which allowed us to have higher revenues. We also were able to price our products at a moderate price for our customers but still maintain some profits at the end. In order to do this, our team had to analyze what the pricing trends for the upcoming quarters would be like. We had to decide whether we had to undercut our competition or price our products similar to every other firm in the market. Our strategies that we used helped build on our competencies because our sales people were always paid well. As a result, they stayed within our firm and helped us expand greatly whereas we saw many of our competitors had sales people leaving their jobs. This showed that our company not only produced the best quality products, but we also had the superior sales force to reinforce that idea. However, in trying to do so come barriers as well. We had to make sure that the existing sales people are happy and making money and that there is enough money in our budget to hire and train new salespeople to adequately sell effective and efficiently. Our company did not only experience happy times, but difficulties (pertaining to adapting to changing industry conditions) as well. At one point, our company decided to under price the market and as a result, we had a very high amount of backorders. Another result was that we lost out on a lot of profits by selling products at a much cheaper rate than the going rate.

Business & Corporate- Level Strategy:

· ­Our company made sure to have a strategy of having a high percentage of customer satisfaction by offering top quality products at very reasonable prices. We made sure that our employees were satisfied and our shareholders were even happier with the performance of our firm.

Performance Assessment:

· Due to our very insightful corporate strategy, our company benefited tremendously in the market. We were able to beat out firms in revenues and profits as well as in stock price at the end of the simulation. We would not make any changes due to the fact we were doing extremely well in the market. We only need to continue doing what was working well for the company and if some reason the environment changes, we will make sure we will be the first to respond to the business environment by implementing new strategies.

It's Sad to See Some Go...

During one summer night when I was walking on Bowery Street in lower Manhattan, I realized that the man walking right in front of me was Mike Myers! (Austin Powers, Dr. Evil, Fat B*stard, and among other characters) I quickly opened my purse, grabbed my digital camera and snapped a couple of paparazzi shots of him… well actually of his back. Living in the city, everyday is a possibility of running into celebrities, encountering once in a life time moments or just capturing priceless memories. Digital cameras have certainly made our lives much easier. In this era, companies are continuously improving their products and services to meet the technological demands of consumers. However, certain companies are not catching up …

“Shake it, shake it like a Polaroid Picture, shake it, shake it” – Outkast, “Hey Yall”

Polaroid is a company well known for manufacturing instant cameras that print out “Polaroid” shots right after you capture a picture. It was introduced in 1948 and became the first instant camera and film to the public. Polaroid became such a household name that it became part of the American culture (shaking the “Polaroid”). Although it had such a big influence in the photography industry, Polaroid was unable to keep up with the evolving technology. One of the symptoms that indicated they were experiencing a strategic problem is:

They are slow to introduce new products-

In this fast paced world, Polaroid needs to change and be in sync with their consumers. Socio-cultural changes have revolutionized the way people take pictures. Consumers are no longer lugging around cameras that run on film, but rather using digital cameras. As digital technology replaced instant photographs, their market for instant photographs was lost. Although Polaroid entered the digital camera industry around 2001, they are considered late entrants into this market. While other companies such as Canon were re-inventing their company by changing their strategic plan to move along with changing consumer demands, Polaroid were implementing poor management strategies.

Another symptom...
They have outmoded, depreciated technology and experienced debt-

According to an article in The Boston Globe, in February 2008, Polaroid shut down 2 of their remaining film manufacturing facilities in Massachusetts. Their instant photography products made them successful in the years after World War II. However, in the 1980’s the company was in debt to prevent a hostile takeover from another company. Rather than investing their financial and human capital in the digital camera market, they were wasting their money on products that failed. Because they were late entrants into the digital technology, they did not have the right manufacturing facilities to accommodate for the production of digital cameras. As a result, they were forced to close their instant film manufacturing facilities that made them successful. In 2001, Polaroid was forced to declare bankruptcy. In 2005, Petters Group Worldwide of Minnetonka bought Polaroid’s remaining assets. With the shut down of their two big facilities, 150 employees were laid off and they relocated 150 executive and administrative employees to their headquarters. By doing this, they hope to shift their focus from outdated print photography to more modern day technology such as digital camera printers, digital cameras, etc.

These symptoms have caused major strategic problems for Polaroid. This is pretty sad because they are considered a part of the American culture with their instant Polaroids. I also remember having a Polaroid i-Zone pocket film camera 9 years ago (boy, time flies by fast). It worked like a Polaroid camera, but the photos were stickers when you printed it out! How cool was that? (Well, at least back then it was cool) The bad thing about it was that the film was extremely expensive, around $20 for a pack of 10 sticker films. It is sad to see Polaroid struggling, some things are inevitable, but they should have implemented a better strategic plan in the beginning.