Wiki contents

Journals

2019 Learning journals
2018 Learning journals
2015 Learning journals
2014 Learning journals
2013 Learning journals

Smartsims Support Centre

Blog updates

Recently Updated

Recent updates

Recently Updated

All updates

Skip to end of metadata
Go to start of metadata

This week was the first week that my team properly looked at all decisions in a cohesive way- by this I mean this week we literally made a spreadsheet of all our costs and how these can be managed and compared to last week. This I feel was really good as we are now starting to deliver on our goal of high quality yet we actually made a loss this year. In the broadest possible sense our sales were too low (the lowest in our world) we tried last year to cut our costs by slightly tightening budgets, rather than austere decreases, which we somewhat accomplished and yet our sales dipped also. 

As Peter ominously mentioned, soon markets will stop growing- this I feel from looking at the Market Summary report is what has happened. This explains our drop in sales, the market is now saturated for our current product offerings. This essentially leaves us with two options for growth: 1. Gain market share, essentially by taking it from competitors. 2. Mergers and acquisitions (Baghai, Smit & Viguerie,2009). Realistically we aren't going to takeover another firm and to be honest I don't think an injection of cash or merger is what our firm needs. We have the products out there which are selling- we just need to sell more of them! I feel this leaves option 1- how do we increase our market share? I feel the point regarding 'granularity' (Baghai et al., 2009) is particularly relevant in reference to the perceptual map- there do exist segments within each segment. This means we could re-design a bike so that it is slightly differentiated from competitors and more in line with our overall strategy- i.e. high quality but not the highest price. Or another option is to exploit multiple 'microsegments' by introducing say a second slightly different Kids bike.We currently only have one bike in each market whilst some competitors have more which likely results in a better bottom line profit for the firm; each individual bike might do reasonably but add those profits together= SHV. Whilst this seems somewhat like copying competitors production strategies- I'm sure we can do it uniquely enough and why not copy a successful strategy?

The dangers of these options to me is the likely cost of R&D, whilst we do have the cash currently, its nice to have enough money for production and for advertising as these are all critical functions of the business. If we spent $1 million on an unpopular new bike, I feel that would have a disastrous effect on our SHV. Even if the launch was relatively successful, do we have enough rollovers left for us to to take advantage of this? I feel that each rollover can make a huge difference, especially as the last 2 rollovers are conjoined, if we had a successful launch then we could enjoy the fruits of the labour. The question then is how to make this redesign/ second bike a profitable one. Given that market growth has about plateau'd, it is quite hard to see which competitors sales can be stolen and how to do it- perhaps undercut on price or beat on quality? 'How' questions like this can be most effective for analysing a hypothesis (Daudelin, 1996). But then again, we must be wary of competitors second guessing us and dropping prices, or markedly increasing advertising, or see a sudden launch of new bikes in the 'microsegments' we have identified.

 

 

References

Baghai, M., Smit, S., & Viguerie, P. (2009). Is your growth strategy flying blind? Harvard Business Review, 87(5), 86—96.

Daudelin, M. W. (1996). Learning from experience through reflectionOrganizational Dynamics, 24(3), 36--48

2 Comments

  1. In week four, Peter commented on my comment for you journal that I did not provide you something you could action. Forgive me just following what Peter suggested in week four to give you feedback this time.

    I felt really interesting knowing how your team managed the cost budget which was very different from our team. You journal was clearly focusing on on the first option of for growth - Gain market share. The way you analysed the problem and addressed the solution was clearly well structured. I think this was a great improvement from what Peter said "more about labeling rather than using their ideas/logic to explain things."

    For the last paragraph which I observed as a "testing possible hypothesis", I thought it was great that you came up with lots of questions and possible surmise but some actual result to support your ideas would be excellent. For example, you came up with a solution of undercutting price or beat on quality, I believed that you could discover the effectiveness of these action by looking back your team's past marketing reports (sometimes you can find out some interesting fact from studying your competitors' report, I am sure their actions will surprise you sometimes).

    There are lots of variables in the market which we cannot possibly predict, however, based on my observation in the past few weeks, I found out that  once we stopped worrying and focused on our team's strategy, the variables out there became less destructive.

  2. Hi Matthew,

    I notice last time I commented on your journal my main comments were around expanding on your discussion and deepening your use of theory. It seems to me, in this journal, you've gone too much into a discussion and not utilised the rest of Daudelin's structure (though you referenced it). I think you need to articulate your 'problem' more clearly, even if that looks like "my problem is...". The same could be said for your 'tentative hypothesis' and 'action'. 

    I still find your use of theory a bit superficial. You are really only using your theory to label your points. You show a hint of application with your point about there being sub-segments. You could have gone into more depth with your point about granularity, perhaps incorporating this week's other reading about the power of analysis. Finally, your writing style is pretty good, though this journal felt lazy, you could have phrased certain statements better. As a side not, be careful with your use of dashes, it's almost always better to use a comma.