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REPORT
RED TEAM ROUND 6
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Contents
Research and Development (R&D).................................................................................................4
Technologies...........................................................................................................................................4
Round 6 Report: The Read Team.................................................................................................................5
Introduction.............................................................................................................................................5
Market Conditions.......................................................................................................................................5
a)
Competition.....................................................................................................................................5
b)
Financing.........................................................................................................................................5
c)
Interest rate......................................................................................................................................7
d)
Capacity...........................................................................................................................................7
e)
Assets and prices.............................................................................................................................7
f)
Inventory.........................................................................................................................................8
g)
Consumer demand...........................................................................................................................8
h)
Business demand.............................................................................................................................9
i)
Employment....................................................................................................................................9
j)
Legal Tax and regulations................................................................................................................9
k)
Stability...........................................................................................................................................9
Business Plan/Strategy..............................................................................................................................10
Strategic Planning Process for Red team...............................................................................................10
Marketing Strategy....................................................................................................................................11
Marketing Strategies by Red team.........................................................................................................11
Manufacturing Strategy.............................................................................................................................13
Decisions Made in Manufacturing Strategy...........................................................................................13
Manufacturing strategy development.....................................................................................................14
Financial Strategy......................................................................................................................................14
Bank Loans............................................................................................................................................14
Credit Cards...........................................................................................................................................15
Investments for Growth.........................................................................................................................15
Assessment................................................................................................................................................15
Actions are taken compared to the business plan.......................................................................................19
Justification of departures..........................................................................................................................20
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Business Departure Strategy for Red team............................................................................................21
Significant events are affecting the company and the market....................................................................22
The results vs. performance goals based on key performance indicators...................................................23
The reason for achieving /Not achieving the goals....................................................................................24
References.................................................................................................................................................25
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Research and Development (R&D)
The Research and development unit in a company invest more resources
and time in innovation and product discovery process. To remain with
competitive advantages as a business, you need to capture what users
wants. For a business to be sustain in a technologically advanced
environment, the business invests a lot of resources in research and
development. The Research and development unit contributes a larger
percentage in the product production process hence it is important. The
department does new product research, that is product discovery process,
they then develop on the new product and research on optimized production
process, so as to maximize profit. The units develop updates on existing
products and develop a new version with improved features, quality control
checks and innovation are the top priorities in the unit. the Red team has
allocated a reasonable amount to R$D as compared to Green and Orange in
this case. Blue team is slightly ahead of Red. The team in research and
development includes a group of industrial scientist engineers and
researchers who carry out the scientific research
Technologies
The importance of technology in any business cannot be overstated, its
enabling tools in any business. Technology plays a role in research,
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accounting systems, procurements, audit and in marketing. It is a tool for
communication, improving customer relations and place a business in a
better position in terms of competition. Technology is used to improve on two
key things in organization, the general performance and the effectiveness of
its services, products and systems used in the company. In addition,
technology provides security to a business.
Round 6 Report: The Read Team
Introduction
Businesses operates in a given economic environment, they are exposed to negative and positive
forces in that environment. Businesses compete amongst each other and only the one with best
strategies will remain operating.Net profit margin is the main objective of any given business;
poor or low profits cost a business and can cause closure if the trend persist.
Market Conditions
This is the overall characteristics or situation of a given market, that is the features of the
business environment, the environment is where the business operates daily, it is economic
environment of a business. Indicators can include the economic growth and market demand.
The economic growth dictates value of output in a given economy. The following are examples
of the market conditions and how the Red Team has reflected the same.
a) Competition
This is brought about by the products prices, the business location, product variety and the
product quality improvement over time. The business can have and defend a competitive
advantage by producing a wide variety of products with low pricing, also by relocating to a new
environment where there is less business in operations, a business can also achieve competitive
advantages by advancing technologically and investing in research and development.
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In our data results, the Red team has implemented the highest promotion budget, this adds to
their competitive environment, in contrary the same business has a small market share globally,
this indicates the businesses is in a very competitive environment and has no competitive
advantages.
b) Financing
Business environment for sourcing finance, as the economy undergoes periods and cycles of
investments, at some point, there is low defaults and high liquidity these leads to banks leading
money with less strict measures. The Red Team is sourcing for funds in terms of long-term loans
and short-term unplanned loans to boost their finance, in addition it sources their finance from
the shares and profits generated from revenue sales. From the graph below we can easily
identify the financial status of the Red team
FINANCIAL STATEMENT (WORLDWIDE)
Also, from income and cost structure graph we can identify key feature of Red team finances.
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c) Interest rate
This is one of the main market conditions that affect general returns of a given business
investments. Low interest can enable businesses to expand its profitability.
Red team has considered short-term low interest to increase profitability while maintaining long
term viability.
d) Capacity
At a point the Red team can go through period where demand of goods exceeds than what it
produced, the business will have to add its production capacity and its supply rises. This situation
will lead to large supply . Example, when demand of Samsung brand increases, other business
like Orange and Red will rush to stock a number of Samsung brand, other investors will come in
and increase the supply of Samsung brand and this leads to large supply against decreasing
demands. The oversupply will arise and this leads to decline in profitability due to high supply
against decreasing demand.
e) Assets and prices
These are the prices of business assets and investments; their prices sometimes shoot up and at a
point it declines drastically.
The Red team assets and prices are as follows; fixed assets USD 771354
The following shows the balance sheet, identified is for the Red Team.
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f) Inventory
The increased capacity due to rush in manufacturing and production process as a result of a
short-term high demand of a given brand, this leads to increase in inventory. The increase in
inventory will take large warehouse storage and this leads to a high cost in storage. Currently the
Red team has no inventory in store, this will save them storage space. The records show that the
global inventory is zero.
g) Consumer demand
This relates with customer requirements, brand variety and how they perceive a certain product.
Example a Red team specializing on a given brand Globally to grow rapidly.
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The market report for USA, Red team has specialized in Tech2, Tech4, this improves brand
specialization
h) Business demand
Rush in investment in new technological advancement can lead to market decline due to failure
to adapt to a given economic environment. Red business can tend to rush to investments in a new
business opportunity which fires back.
i) Employment
Sourcing of workers for operation in a given business to aid in production process. As
employment levels rises, jobs are readily available while recruitment is difficult. The wages for
workers rise, this is also experienced at a certain skill set.
j) Legal Tax and regulations
An environment where Red team operates in legal environment, the government influences
market aspects like trade and taxes compliance and regulations. Red has allocated and pays
business tax to bodies concerned.
The following shows tax compliance by the Red team
k) Stability
External factors affecting the business operation. Political stability of a given region create a
conducive business operation and investments.
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Business Plan/Strategy
In response to opportunities and challenges existing in this competitive market place, the Red
Team has made a comprehensive plan to see them through in a competitive market place. This is
evident in the, training budget, cost of variable manufacturing and specialization in production of
a specialized and unique brand.
The following details key components of a Red team’s strategic plan. Understanding the Red
team business is the start of defining a strategic plan, the workings, position in relation to
competitors in an economic environment
The strategic plan for Red team was built under the following foundation
The current positioning of the Red team business internal operations and what motivates ir\its
profitability, comparing the business with other competitors identified many differences which
can add to competitive advantages.
Further detailing on what goal does the business has on manufacturing environment.
Determining the main objectives, like delivering high quality products at an affordable price.
Modelling to predict future of the business.
Roadmap to achieve a goal, the changes on structure, financing of Red team, that will enable the
business get to its goal. Deciding on ways to implement the changes the business and the
timelines.
Strategic Planning Process for Red team
This included the following,
Analyzing the internal drivers, opportunities, the strengths and weakness of Red team, analysis
of external drivers e.g. market structure, the customer demand and the cost competition in an
economic environment.
Clearly indicating the vision statement, that defines where the business should be at a given time.
The objectives, the major goals and customers, products and services definitions.Implementation
strategy of the plan and resources documentation for business plan implementation.
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Marketing Strategy.
Market strategy development is one of the key activities for a business without its customer
attraction will be inefficient and unachievable.
Marketing Strategies by Red team
The Red team introduces a product in a region and work on modifying to achieve a unique brand,
innovation will further customer attraction rate to the business, pricing is one of the tools the
business has use to penetrate the global. In addition; advertising, global delivery or delocalized
distribution and promotions are among other tactics of winning the customers and increasing
market share
Red Team’s Plan
The Product
The Red team introduces a variety of product in round 6, Tech2, Tech4 in USA market and Tech
1 and Tech 3 in Asia market, Tech2 and Tech4 in Europe market. The products are designed in
such a way to target consumers in European, USA and Asia. The business produces a brand not
to a specific age and sex.
Price
The brand from Red team will retail tech2 goes at USD 310 while Tech4 goes for 550 USD, in
USA market this is due to its quality and the features of the products hence it might be slightly
high. The prices policy implement with added optimized productions process will contribute in
winning the market share not only in USA but also in Asia and Europe.
Distribution
Products distribution will be delocalized to USA, Asia and Europe countries, it will increase
market share globally. A specific brand sells in selected region for some years first and will
create new investment in other remaining regions of the world. This will aid in monitoring
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possible market shares, trying to invest in a place that is less competitive. The strong distribution
channels of Red team will maximize on products delivery and winning more customers.
Promotion
Promotion budget for Red team if at 85,000 USD, this clearly indicates a high promotion rate for
pulling in more customers, also for hiring more promoters to market the products. The promoters
will be assigned to specific distribution segments. Sales trainer is included in the strategy,
training budget for workers is allocated by Red team in round 6, the training improves marketing
skills and increases marketing morale of the salesperson.
The promotion budget also captures advertising cost, the budget is enough to have a high level of
advertisement and hence large market share. Advertising creates the Red team products or brands
awareness.
The following shows how Red team assign a highest priority to promotion as compared to other
competitors.
The promotion price for Red team
The table above shows promotion index by Red team,an increase in the market share is expected
by spending a $ 85,000 on promotion.
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In conclusion, Red team investing much on promotion so as to achieve market share and
increased sale objectives.
Manufacturing Strategy
The manufacturing capabilities and operational efficiency of a business in production process
determines the output of a business which turn into sales and hence profitability.
Different business implements different manufacturing strategy and processes. The Red team has
invested $ 267,023 in contract manufacturing costs. This shows the value of manufacturing
process it undergoes.
Decisions Made in Manufacturing Strategy
The following decisions are made in the manufacturing strategy
Capacity decisions
This will determine if customers’ needs in terms of quantity is met, if not met a capacity
decision is made to increase the supply so as to satisfy the quantity.
Process decisions
This is the decision on the system to be used in production, the Red team looks at the optimizing
process that will achieve a gal without compromising quality. Hybrid system can be best used.
Facility decisions
This is the physical layout and stage and points allocation, determining what and where will
something occur.
Make or buy decisions
This is a situation where a production company decides what to manufacture and what not to
and consider buying instead. This influence the above decisions like process decision and the
capacity decision.
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Manufacturing strategy development
The operations of a business need a manufacturing strategy and capacity targets plan. The
strategy should consider the impacts it has on products quality, reliability and requirements. The
Red team considers the following manufacturing techniques
Flexible Manufacturing techniques
These techniques will allow customization of manufacturing process so as to fit changing
market, be able to make modification to products to meet current requirements in the market like
change in design and capacity needed. A strategy that will make the business remain competitive
is chosen. The business also will adapt to changing needs at a faster rate unlike other
competitors.
Lean Manufacturing techniques.
This type of techniques eliminates streamlining of the manufacturing process, this helps in
elimination of wasting of resources. This techniques needs multiskilled worker. Business using
this type maximizes on efficiency and thus reduced cost of production and hence becoming
competitive.
Financial Strategy
This takes a larger part of the business plan, it includes the income statement, balance sheet and
the cashflow statements.
The financial strategy of a business might be in form of.
Bank Loans
This is one of the main sources of finance, banks offer loans at a small rate to small and large
business. Red team can secure loans in to boost and grow business productions. It can be in form
of direct loans or credit.
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Credit Cards
This is s situation where a business cannot secure a loan from bank. This strategy helps a
business secure a credit. The rates are higher compared to the normal loans
Investments for Growth
This dictates percentage of money invested in sensitive services and goods that are of high value.
Considers the approval policies for such investments on such goods and services.
Assessment
This is a process of analyzing a business and doing a report on (KPIs), the key performance
indicators that indicates the current business situation, possible opportunities and the gaps in
business that needs adjustment and urgent attentions. It is general checkups on business. The Red
Team undergoes the same to point out several issues in its operations.
Please note, I don’t mean the “quick check your pulse and temperature” kind of check-up either.
To be effective this has to be the kind of check-up that involves needles, gloves, and
uncomfortable questions. The kind of appointment where you have to wait a few days for results.
Main Types of Assessments
To explore the Red Team business situation, we carry out major assessment’s types, this will lead
us to major changes in business structure. From the results we can assess the Red team to
identify its condition in market place.
The main business techniques we can apply includes but not limited to;
1. SWOTT
This is the SWOTT Analysis.
This analysis explores the Red Team’s strengths, weakness, opportunities, threats and the trends
and to report on a very comprehensive current state of business in the marketplace.
This will move around the structure of the Red Team business identifying all the above SWOTT
elements.
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The Strengths
This checks on what Red Team business is good at, their capabilities, its market share, its
employees, the cash in hands, the administrative strength and energy, is the communication
channels effective and efficient as compared to those of competitors,
From the data results, the Red Team has a relatively good amount cash in hand as compared to
other competitors, the only competitor ahead is The Green Team, but on contrary the Green has
the highest costs and expenses.
The Red has a least cost and expenses as compared to other two, this gives a small competition
with the Orange which spend the most least cost.
The Red has the highest retained earnings which can be factored in to boost business.
Weaknesses
The negative aspect of the business, not limited to the aspects like poor quality of products, less
fund, terrible positioning of business in market place, debts, the operational depts.
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From the data, the Red has unplanned short-term loans, this is a weakness on the Red team since
all the competitors do not take unplanned short-term loans.
Low sales revenue from the market and from internal transfer as compared to other businesses in
the market place, this means the team have a bad image outside and need fixing.
Opportunities
These are chances of the business to grow over the next financial year, e.g. in one to two years.
It includes possible product rebranding and updating the version to bring in diversification of the
business product, making partnerships with new investors can also add to opportunities a
business can have.
Searching for new investments, setting up new distribution channels and increasing the number
of new managers and workers, reducing the operational cost of a certain area in business.
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From HR report, the Red team has a high Recruitment index, hence that indicates a positive
opportunity in increasing the number of sales and hence profit generated. In addition the training
is provided by Red team at a good scale, this results in skilled workers and thus quality products
and services.
Threats
These are the dangers that can cause business breakdown immediately, they drastically affect the
business and hence urgent and immediate attention should be given. They include entry of new
competitors into the market, possible reduction of market or the market shrinking due to natural
effects and influence, also poor performance of the current business operations.
In our data results, the market share for Red is small and reducing, considering the market share
in Europe, very small as compared to other investors.
SWOT of Red Team
Strengths
Weakness
Respond quickly to the market.
Unplanned short terms loans
No high overheads compared to Red’s
competitors
Large money generator base.
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Opportunities
Threats
Unsaturated market.
Technology change is high
New market opportunities in USA
Actions are taken compared to the business plan.
Reviewing business plan to adjust business to current market trends, this is to ensure that
business continues meeting its needs.
Identification of strategies to boost and fasten the growth rate is captured to counter competitive
environment challenges.
The following are the actions that are taken as compared to what is business plan, this will
improve business impact in the economic environment.
1. Capture important of ongoing business plan activities.
The main business activities in the business, that contribute positively to Red team is recaptured
and prioritized as action one, this will gear and push for more changes, they act as initial inputs
to the business structure, these activities as the business plan items in the original plan. The
action taken here is introducing the current ongoing activities as inputs in the proposed plan.
2. Business plan items that should be included.
Introducing new items that will be beneficial to the Red team, this include but not limited to new
strategies, new business processes and assessments on the current performance as compared to
initial roadmap, objectives and goals of the business. A list of business plan items is developed
and the items compared with initial items in the original plan.
3. Drawing up a new improved business plan for the business
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The list made earlier is made into a comprehensive list of new business plan items, this are the
main plan’s items for business activities. The plan items roles out the business activities, the
goals, roadmap and implementation of the business plan. The plan is documented for use after
making sure all items for modification of old plan has been captured
4. Planning a and allocation of resources
The plan has requirements to be implemented, the plan has to be allocated resources and
implemented so as to achieve what was meant for. Resource allocation index is created, the first
items of the plan that initiates the rolling out of the plan are allocated resources.
The resources are allocated in the index created till all plan items are implemented
5. Using business targets and goals to implement your business plan
The business plan items whose activities or implementation leads to achievement of the business
goals are implemented, the activities contributes more on achieving the business goals. The Red
team reviews what items in business plan can be taken with a priority index so s to make
achievement of goals faster.
6. Business plan review and revision of the items.
The business plans items are examining and revised to filter all the items that might be redundant
and cyclic, this is to revise on business items to eliminate repetition.
Justification of departures
Business departure is strategic paln to sell its properties or ownership to a new investor or other
companies. The exit strategy will enable a business to reduce or liquidate its staje in a businesss
and should it become a success the company or business can make enough profit and limit
losses.Also it can enable cashing out
Business departure Strategy
Departure strategy is normally included in an initial business plan, this is before starting the
business. The departure strategy chosen at the start of business will always affect decision
making in business development, by the investors. The following are examples of the common
departure common strategies
1. Initial public offerings (IPO),
2. Strategic acquisitions
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3. Management buyouts (MBO).
What a business person choses depend on what he or she will like to control after exit. These
includes, the involvement he or she wants in business, the rules governing business,if he wants
the same company to run the way it was or changes in a certain way.
Also, an acquisition strategy, this will relieve owner or the founder from his or her functions in
business and thus giving up control.
Main key aspect in business departure is the business evaluation and this leads to specialists who
helps business and buyers to determine the company’s financials’ so as to agree on the fair price
value and also managers who assist sellers on business departure strategy.
Business Departure Strategy for Red team
There exist varied business departure strategies for Red team, these strategies offer Red team a
varied level of liquidity. The option of strategic acquisition will offer great amount of liquidity
within a very shortest time schedule, this will depend on the structure of the Red team
acquisition. The strategy to be used will depend on the market conditions.
Business Exit Strategy: Which Is Best?
The best type of exit strategy also depends on business type and size. A partner in a medical
office might benefit by selling to one of the other existing partners, while a sole proprietor’s ideal
exit strategy might simply be to make as much money as possible, then close down the business.
If the company has multiple founders, or if there are substantial shareholders in addition to the
founders, these other parties’ interests must be factored into the choice of exit strategy as well.
As per the Red team business plan, in marketing, the business needed to expand the brand variety
to reach all the locations, like products not in Asia and USA and Europe’s market. The Red team
brands varies, some brands are only sold in one location and not others. Also the brand price was
to be reconsidered, the higher margin segment is needed also for the marketing.
In a period of operation, the Red team has only four brands, that is the tech1, tech2, tech3 and
tech4. Some of the products are only distributed to a certain location and limited there. Th Red
team needs to have a distribution plan to reach the global delivery. As per the Asia market share
report, the Red team has a relatively small market share as compared to others
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The market share in Asia
.
The sales cannot be expanded dues to small market share as seen in the Asia Market share index.
The number of plants for the Red team ahs remain constant since first round to the last round,
there is no increase in sales due to constant market size share.
Significant events are affecting the company and the market.
1. Finance and Credit
Limited loans offer to Red team for business growth, for a business to grow their must be some
form of boosting elements to help increase business capital. The limited loans offer has high
rates which affect business operations during repaying them. Also, the available credits advanced
to the Red team have large interest attached to them, business are forced to take as there is no
option but to agree to terms and pay the high interest.
2. Market forces
These are forces that can affect the supply, demand price of a given products, such comes in my
forms.
They can be analyzed as per the following scenarios;
i.
ii.
iii.
A situation where the customer has not been satisfied by the company’s product, the
customer requirements have not been captured in the product, such can be one of the
opportunities for business to step in and provide a product that meets customer needs.
Emergence of new competitors, new investors who enters the market with a variety of
unique products and with a large capital base as compared to Red team
Joining of two companies and the acquisitions may strengthen Red team competitor and
cause the Red team to lose customers and suppliers
3. Technological forces
The forces of technology affects how a brand is produced and how customer will view it and use
it, technology also my affect how a brand is produced in a company, this includes issues like
what product is developed and how will customers and users will view the product. How ill sales
be tracked, how marketing will be done and how the promotion will be carried out. Also the
tracking of shipping and delivery of products will made through technology.
4. Economic forces
The economic factors like a poor economy my reduce the customer purchasing power and this
will reduce the sales and hence profitably is reduced drastically.
5. A changing customer bases
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A shift in customer base may change in time, this is evident during migration, customers
increases sales and thus profitability, should customer base change the business sales reduces and
hence loss is recorded. A change in makeup of a population will lead to change in needs and
requirements and this will require the business to adjust accordingly to meet the change
Culture also affects shopping habits; the business should be flexible to meet the requirements of
a certain culture.
6. Natural calamities.
Impacts from impacts from severe weather like the storms and others such as storms, tornadoes,
hurricanes and wildfires can have adverse effects on business operations, business can be
destroyed physically the natural calamities of can lead to poor economy which affects the
business negatively.
7. Improvements on infrastructure.
Infrastructures is a form of development which can bring in more investors, more investors in a
given business means more competitions, this will force young investors out of the market. Good
infrastructures can facilitate a cheaper production process and hence more profit from increased
sales.
8. Changes to Laws
When a state outlaw manufacturing and sale of a certain product, all businesses dealing in such
businesses will close indefinitely. Products that are highly regulated discourages investors fro
investing in such businesses
The results vs. performance goals based on key performance indicators
Key Performance Indicators (KPIs) these are the elements of a given plan that indicates what
should be achieved at what time or in a given duration.
The following table shows a list of key performance indicators versus what Red team achieved
Revenue
The Net
profit
Cash flow
Inventory
The net sales
Time
conversion
New
Results
Performance Goals KPIs
Low revenue recorded
Low net profit recorded
There is growth in revenue
There is a large net profit margin
Low cash flow recorded
Constant inventory record
Constant sales record
Large time conversion
There is operational cash Flow
Inventory turnover
Large Net Sales in dollar or percentage growth
Average Time for Conversion
No new investments
There is a reasonable number of investments
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investments
signed
The reason for achieving /Not achieving the goals.
1. Financing Hurdles
Funding boost and increase the capital share in any business. Working capital is important in a
given business. The main challenges of not achieving a goal is because sometimes financial
problems hinder them and. Running daily business activities require money which sometimes is
not there.
2. Single customer base,
The business concentrate on one customer segment, the market share is too small such that the
sales is too low and profit generated is very small and considered not enough to facilitate day to
day running of the business
3. No planning.
A plan is an important tool when undertaking some task. Failing to plan may lead very poor
results.
Goals sometimes are not achieved because of lack of a plan which serves as a guide. Most
business fails because the activities in business are done in random manner.
Anything that is not planned results in poor results. There is no tracking of progress in such
work. Performance contract also cannot be recorded.
4. Business overexpansion.
Business owners tend to expand business without considering the effects of such expansion, the
business owners can over expand business to a state where business activities cannot be carried
out effectively. Management issues comes in and a business entity experiences problems and
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declines in productions. Business entity should be examined first and expanded slowly and with
detail plan to avoid such problems.
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CESIM GLOBAL CHALLENGE
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