Markstrat Final Report Andrew Auces Justin Barker Christine Chang Ashley Cohen Julia Economy December 1st, 2010 I. Markstrat Summary In our Markstrat simulation, our goal was to maximize shareholders wealth by increasing market share by targeting specific segments with specific brands. We started out by targeting multiple segments for each brand, unfortunately we had to change our focus to just one or two segments per brand because our products we underperforming. We chose our targeted segments based on consumer preferences, perceptual, maps and the ideal characteristics. All teams started out on an even playing field, unfortunately the decisions our team made in the first two periods started to decline our company’s wealth. Which eventually lead to a decline in our stock price.
The company really needs a complete overhaul so that it can gain a sustainable, comparative advantage in the marine anchor market. Question 1 Based on the information presented in the scenario/case study discuss Albatross Anchor’s competitiveness in relation to (please address all items in the below list and provide support for your conclusions): 1. Cost a) Cost or Production: Operational inefficiencies have caused production costs at Albatross Anchors to be a lot more than they should be. This means they have a smaller profit margin, inefficiencies eating up their potential profits. They could be making more money per unit if they would tighten up their processes.
However, as it grew larger, they were mainly responsible for the management of operations. As a result, cross-functional coordination became less important for functional managers. Development and marketing people, for example, often started pointing fingers at each other when customers’ demands evolved faster than the speed of product development. The last root cause is company’s compensation model where people were being majored by cost centers, and no one had accountability for the delay or failure of the new product. This compensation model was incongruent with the company’s business objective to increase its market share by launching advanced new products faster than any other competitors.
It influences the extent to which the value created by an industry will be dispersed through direct competition. There were several signs of industry growth at the time as was USA’s economy; this led to a number of newly emerging discount stores trying to exploit the potential of high profit. This led to intense competition at the time and increasing rivalry for market share. Due to this industry concentration was low at the time. There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry.
Mission: To maintain a dominant position within the Russian market c. Vision: Ice cream from Ice-Fili on every kiosk and dinner table Currently there is no clear target, but a target should be set in order to know where you want to go. A 2% market share increase is a good starting point. They should maintain their dominant position and expand upon it by pursuing their vision. Now let’s take a look at Ice Fili’s current business model. Business model canvas (Osterwalder) Ice Fili’s business model is typical of a product manufacturing company as seen in detail on the following page.
They both were diverse in their management style; Fisher trying to instill a new culture into the newly created division of Sales and Marketing whereas Greenhill leading the investment banking division in his old and conservative style, (b) The company was expanding rapidly and was split into ten divisions with each division focusing only on the divisional goals and profit rather than unified goals and profit motives for the entire organization, (c) Rapid growth and globalization of the company with lack of adequate managerial personnel placed unavoidable stress on the existing managers., (d) changes in working culture especially in the top level management was very tough. To change the company motto of “each on his own” to the newly adopted motto of “one-firm firm” by believing in a common good was not an easy task to achieve, (e) There were long delay in making decisions due to the in fight between Fisher and Greenhill, and (f) Instill a new attitude of interacting with different divisions within the company and even giving up profit of one division for the betterment of entity as a whole. 2. Assess John Mack’s vision for Morgan Stanley. What are the key elements?
The veterans were taking the better clients giving themselves a better commission. This also left the territories under worked and not producing as many sales as possible. The final problem that Dave Thomas encountered was enforcing the strategy and policy with the older sales people. While the younger sales people are driven and respectful to new changes, the veteran sales reps are used to the old way and the enforcement of new changes is difficult. As far as strategy, there is consistently a discrepancy between selling high volume or selling only high margin items.
They will show deep interest in becoming part of the Big Brother Party, to find out their next move and plans. Then, they will relay their findings to the Brotherhood Party at another meeting later in the summer. They know that their lives are in danger and that as new members, they will be closely watched by the Big Brother. Special task brotherhood forces will be close by in case they need help. The message will reach the masses when chocolate cupcakes with sprinkles are given to them.
As industry becomes larger, businesses are forced to modernize to keep up with the competition. The extent to which a company modernizes is purely up to them, as each is forced to weigh the economic benefits and costs of industrialization. Often, when big companies take steps to become more efficient they lose the original culture of the business and/or people who have helped build it up. It is an unfortunate side effect that shouldn't be taken lightly. I believe, and there is evidence to suggest, that moral tradition is important in having a successful business, especially when a business revolves largely around the culture of the people.
Threats: variation in raw material prices, raise labor costs, raise in substitutes, change in customer tastes, lower market growth and strong pricing pressure from competitors. Porter five forces: Supplier Power: More supplier are there in this industry, so less supplier power. Campbell can get raw material at low cost from suppliers. Buyer Power: Campbell is a big company, they buy large amount of raw material from buyers so buyer power is strong. They can bargain for low cost.