Words can't explain the disappointment I felt when checking this week's rollover results. For a third week in a row we had seen a decline in our shareholder value. As a team we have come together numerous times in the last couple of weeks and tried to figure out what we are doing wrong that is resulting in this, and each time a rollover has come we have thought that we would definitely see an improvement...and each time we haven't. It is really starting to become a worry considering the mark for this aspect of the course is done purely on SHV.
Our main issue that we have identified is that we are experiencing a huge loss in profits. However we are stumped as to why this is happening when we are the team with the second highest sales in our world. After much discussion we decided that maybe we had got so focused on trying to sell as many bikes as we could that we hadn't really taken into consideration the impact that the large amount of spending we were doing and how we might be experiencing diminishing marginal returns. By pumping so much money in each week and not really thinking about the realistic impact ( however unrealistic this game may be ) was where we decided we were lacking. As Baghai and Viguerie state in their reading, your company's best growth opportunities may get lost in the big picture, and this is exactly what we begun to see was happening. We were trying to keep so many different bikes in different segments alive by just pumping more and more money into them we were not actively pursuing the areas that would provide us with the best growth and value for money.
To grow our business and to see an improvement in our profits in the remaining two weeks of the game, we are best to follow somewhat the structure that the reading sets out. To identify markets with the strongest market momentum, invest resources in those areas and reduce resources in other areas and restructure your organisation to focus on the expanded number of priorities (Baghai & Viguerie, 2009). In respect of our Mikes Bikes business, I can see how if we analyse the markets better we might be able to withdraw or minimise production and costs in certain areas which are letting us down and really focus on the segments that we believe are the strongest. However, to pretty much make that whole paragraph irrelevant, I kind of think that that is what we have been doing this whole time. Obviously we have been trying to make strategic decisions related to where we think the market is strongest and put our resources there. So while it seems like a good idea on paper, I think this shows that clearly it is not easy to put into reality.
Moving forward however, we do somehow need to focus in on where all our costs are going and why with the number of sales we have we are not smashing out good profit. I think we need to take a look back at previous rollovers and compare the injections of cash with the increase or decrease we have seen with results and analyse where money isn't actually being utilised.
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 reflection. Organizational Dynamics, 24(3), 36–48