Marketing Plan For Firm C Marketing Essay

Stratsim automobile industry is currently generating 5.6 million units despite the fact the economic factor also do not favour the industry. High fuel price hinder the industry to obtain high profits but the industry is catching by coming up with well thought out products. As customer need quality vehicle the industry has no choice but to produce such. Our simulation consists of number of firms that have very identical position businesswise. Firm C had the same vehicles categories it’s competitive had.

2.0 Strategic Analysis

2.1 Mission

This is statement that generally states the firm purpose of existence in the industry. The statement usually comprises of measurable criteria. Having a clear mission can give the firm the direction of where its heading. http://www.businessplans.org/mission.html

Firm C mission statement could be “Offering customer improved vehicles to match their preferences”.

2.2 Vision

This statement can be said to be a picture of the firm in future or in other words it’s an inspiration of the firm. The vision statement helps the firm to clarify its actions and objective to reach their desired vision.

Firm C possible vision could be “Firm C vision is to be best firm in the stratsim industry that understands and satisfy customers’ needs”.

3.0 external Analysis

3.1 Pestel analysis

This tool is used to view and scan the firm or industry macro environment. It helps the firm understand the external factors that are contributing to firm success or failure to strategies accordingly. Pestel stand for following factors: (Johnson et al.2006: 68)

Politics

This factor has very big impact on firm success or failure, if not assessed properly organization can face a difficult to implement its objectives. Laws found in certain countries could inhibit organization such as firm C not to successful produce it’s good to required standard. Vehicle companies are suppose to have their product emit less emissions failure to do that the company can be face legal action. Trading policies could hinder or help firm C not to trade or to trade respectively.

Economic

Country’s economy structure can influence the result of any organization. Inflation rate can take the organization to the next level by providing a reasonable economy atmosphere. Firm C should monitor inflation rate, market and trade cycles and distribution trend if there is to be real achievement.

Social

There is need to understand the social arena of the customer for firms before offering the products. Firm C should also view the demographic of customer to know which can fit a specific vehicle. Another factor that firm C could look at is consumer buying patterns; this factor would help firm know how consumers are intending to purchase.

Technological

As customer needs to buy quality product firm a much investing in technology and getting more innovative. With this reason firms are investing on technology to come up with supreme vehicle that could compete in the simulation exercise. Firm C and other in the simulation exercise were given opportunity to put cash on R&D. Last but not the least firm C can view consumer buying mechanism/technology that could enhance performance.

Environment

Conducive environment is the hot topic currently, firm are suppose to maintain their environment for future generation to also have impact in it. So firm are required not to pollute the environment with their activities. There are legal implications that can be taken for firms that do not abide with environment laws that have been set. Firm C took great care for the environment by producing vehicles that do not impact the environment negatively.

Legal

Legal issues are key focus to any business as they present fairness to all firms to do business. Trading policies helps firm to follow a certain legal route to successful operate, the policies indicate who to trade and not trade with. Firm C can also take note these factors to achieve its set objectives.

3.2 SWOT – OT Analysis

This is another analytical tool that can also be used to assess external environment by looking at two external factors (opportunity and threats). This tool helps organization to maximize its opportunities and avoid threats fully.

Opportunities

Firm C has plenty of opportunities to look up to facilitate but the firm was restricted to take the opportunities. At the start of the simulation exercise we saw all the firms starting at the same level. The vehicle class were all the same, but there was a chance to come up with new vehicle category but the option could cost the firm really badly. As firms started at the same position means the market share was also at the same level, firm C viewed this as an opportunity to be able to raise the market share and be the market leader.

Threats

As mentioned before that the simulation started for company enjoying the business position. The restriction of the simulation exercise could have given more than two firms the same strategy to go with hence gaining a big portion of market share. Another threat that the entire industry was facing was the availability of information of firms. This presented a huge threat to firm C as the firm’s decision made, were wide open for everyone to view which is not good thing for business.

4.0 Competitive Analysis

This is analysis that help any firm to be able evaluate the industry that it’s operating on. The main aim is to track the attractiveness or profitability of industry particularly automobile industry in our scenario. The below model help a firm achieve that;

4.1 Porters five forces

Porter five forces were brought forward by Michael Porter to assess the industry profitability using five factors that can determine such assessment.

Bargaining power of the buyer-medium

In our simulation exercise, we can say buyer have a medium bargaining power the reason being there are other means or substitute that they can use for transportation e.g. buses, train flying or any other local mean of transportation e.g. Boda-Boda. Buyers are also experiencing very low switching cost from one means to another.

Bargaining power of suppliers-medium

In our simulation exercise, suppliers have had a medium level of power because firm C and others are trying to produce good quality vehicles, so to achieve that they have to be supplied with the same level of quality raw material hence firm will only choose such suppliers. Again the switching cost can affect the industry profitability if firms decide to go for other supplier.

Threat of new entrants-low

We have seen in the simulation exercise that new entrants have very limited chance to bulge in. To come up with a totally new brand in the simulation exercise or in a real world of automobile industry is hard as the starting up costs are very unimaginably high. Firm C and rivals had already set the standard for any firm to come and match in very short period. In general the simulation exercise poses many barriers to entry to new entrants.

Threat of substitute-high

In terms of substitution the simulation exercise could experience very high threat from other alternatives such as walking, cycling etc. In case the industry (simulation exercise) generally increase the product price customer would have no choice but look for other alternatives. Customer are also experiencing low switching cost when they substitute a product so they will not think twice if the situation does not work in their favour.

Rivalry- very high

There is a considerably high rivalry between firms due to the fact that firms started operating on the same identical position. The three vehicle classes were the main source of rivalry as firms had the same vehicle with no exceptional. So the only solution for firm C to neutralize the intense rivalry was through price reduction but also other firms adopted this strategies hence still making intense rivalry.

5.0 Industry Groupings

Industry group is a group of firms e.g. stratsim industry firms that produce identical products which are very substitute to one another (Johnson et al 2005; 77). Most of these firms have a similar way of operation and follow almost identical strategic characteristics. This concept can help Firm C to know its direct competitors and realize the gaps that have not been filled in the market.

6.0 Internal Analysis

After doing external assessment of the business a firm should not forget to look itself internally as there are also many factors that can influence the success or failure of the firm from within, one way to analyses the firm internally is by using the below analytical tool.

6.1 VRIO

This is an internal analytical tool that looks at resources and capability of the organization and it’s an acronym that stands for the four questions: http://en.wikipedia.org/wiki/VRIO

Value- at the beginning of the simulation exercise firm C had its resources and capabilities covered to meet customer requirements. But as the period progresses the company was losing touch with its resources and capabilities but not to an alarming rate. Still the firm found a way to bring value to its resource and capabilities by doing heavy marketing.

Rareness- As mentioned earlier that firms in the stratsim started on the same identical position. Therefore rareness was not observed during the initial periods but firm C had could have introduced rareness to its resources and capabilities by introducing new vehicle class.

Imitability- the simulation exercise had very high Imitability of products. The industry information were made public for every to see. The risk of firms imitating the actions taken by other firms was very high as firm had started on the same position.

Organization- The firm had done reasonably well by looking closely on the resources and capabilities of the firm and able to distribute them properly. Failure to do these customers would be able easily to substitute firm C with other firms’ product offering.

7.0 Decision/Results

The firm did not at increase its firm capacity that is why the firm experienced shortage and significant shortages in cafav and crash respectively. But the impact of this decision could have been realized in the early periods but as the simulation progresses (see appendix 9.1).

The firm saw no need to upgrade its vehicle but to only focus on minor upgrades to boost its market share this was realised later to be true as the result indicated the rise of market share (see appendix 9.2).

Period three did not present a good scenario to the firm as the market share went dropping, this meant the firm’s resources and capabilities were not employed accordingly. This was because the economy class was poorly strategized as the market share went crashing down (see appendix 9.3).

The firm gave the market what it was expecting by serving the customer well and contributing a good fortune to the industry. The industry was stagnant and all the firms had the same level financial. But as the period progresses the firm saw the rise of firm value market share and a slightly drop of firm preference (see appendix 9.4)

7.1 Conclusion

The firm was not doing well in all the vehicles classes; it was sometimes depending on only one class to boost its overall performance. Financially the firm was not also doing exceptionally well and the management was unable to determine the cause of the problem, as a result the management was able to maintain its performance in some periods of the simulation exercise.

The management later realized there was a need to involve shareholder boost the financial position yet the firm C management was hesitant. Had the management use resource-based view strategy the persistent problem could have been curbed.

This simulation individual report contains 1,944 words excluding reference page and appendix.