Strategic Management 2

A resource strength is a resource that a company possesses that can help the company exploit and develop sustainable competitive advantages (Thomas).During the last few years of the simulation I decided to invest in celebrity endorsements. In years 13 we started off investing small 60 and year 14 was 265, year 15 325 and year 16 went down to 130. As you can see from the chart below that as we started to use celebrity endorsements our profits increased, especially between years 14 and 15. As you can see the use of celebrity endorsements was a very effective way to market and sale more shoes.

B1) Analyze how competitively powerful that strength

To determine if the strength was competitively powerful we need to look at the four tests of a competitive power:

Is the resource valuable? When determining if the resource is valuable, the resource needs to contribute to the effectiveness of the company’s strategy. Once we started using celebrity endorsements the sales started to go up, while at the same time keeping the prices low. In year 14 cash receipts from sales were $447,124, year 15 $487,736 and year 16 476, 226. In the years 14 and 15 comfortable shoes invested the most out of anyone on celebrity endorsements, year 16 we decrease the amount that we spent so the sales started to decrease.

Is it something that rivals lack? During the simulation, yes this is something that the rivals lacked because although some competitors had celebrity endorsements, no other company invested as much as comfortable shoes until year 17.

Is the resource hard to copy? We did not pass this test because this is something that the other competitors could do, as long as the other shoe companies have the finances they could invest more money in celebrity endorsements.

Can the resource be trumped by different types of resources and capabilities—are there good substitutes available for the resource? This resource can’t be trumped by other resources because investing in celebrities that are affiliated with a specific market is way to get more customers and more sales.

C) Evaluate your approach to managing an organizational culture

An organizational culture defined as the values and beliefs that a company exhibits. There are four functions that an organizational culture needs to fulfill:

In order for Comfortable shoes to create an organizational identity (establishes who the company is and what is stands for) we felt that the employees made the company, so with this we made sure that the employees felt they were a part of the company. We made sure that we invested in our employees to make them feel motivated to be a part of the team, not only did we invest with salaries. Comfortable shoes also implemented an incentive pay program, for example in year 11 and 12 the incentive pay was 1.20 per non rejected shoe. We also continually invested in best practices training; in the North American market Comfortable shoes invested 1000 per worker in year 11. We also felt that by making sure our employees were in an environment where they were motivated, that this would increase the morale of the employees making them work better and smarter. Comfortable shoes knew that without the employees that the company could not be successful.

In order for Comfortable shoes to create a collective commitment (focusing on what is important), we felt in order to focus on what was important that both leadership and regular employees had to have knowledge of what was expected. Comfortable shoes created a creating a mission and vision statement that was communicated to everyone. Comfortable shoes mission is: To be top seller of shoes and understand and satisfy the needs of its customers.

In order for Comfortable shoes to create a sense making device; (decisions made by the company are consistent with the culture). Just as in determining the collective commitment we had to have a mission and vision statement that was followed by everyone in the organization. Comfortable shoes also needed to have policies and procedures in place; everyone in the organization would know the organizational hierarchy and their particular responsibilities.

In order for Comfortable shoes to create social system stability; (solving conflicts using a problem-focused approach rather than blame); we felt that providing an environment where employees felt comfortable communicating any conflicts that this would help better solve. The environment we created was positive and supportive so that we could have a way we could communicate effectively and solve conflicts without placing blame. We pride ourselves in our employees and want to make sure that they have all tools they need to work effectively.

C1) Compare your approach with proven management practices

· Staff the organization with managers and employees capable of executing the strategy well.

Comfortable shoes employ managers and employees who have qualifications and experience that is in line with the business of the company. Comfortable shoes made sure that training programs were readily available for new employees.

· Build the organizational capabilities required for successful strategy execution

In this case, Comfortable shoes should strive to fulfill the set objectives based on what it can possibly do. This means that we will not come up with overambitious ways of realizing the set objectives. Comfortable shoes felt that collaboration is the key, whether it is internally or externally.

· Create a strategy supportive organizational structure.

Comfortable shoes will come up with a structure of ensuring that the laid down objectives are realized using the said measures and techniques. This organizational structure can involve both the top management and employees. The structure should be able to show how far the company has gone in fulfilling its set ambitions and what is remaining with plans to execute what has remained (Mintzberg 2003).

· Institute policies and procedures that facilitate strategy execution.

Such policies and procedures should be left to the department within Comfortable shoes the issue of strategy execution. The team should be in a position to know what policies are viable and which ones would be effectively used to attain desired results.

· Adopt best practices and business processes that drive continuous improvement in strategy execution activities.

By investing in best practices training, Comfortable shoes will enforce through having an innovative and skilful workforce who will have the knowledge on continuous improvement in strategy execution activities. In addition, having top managers with a vast experience concerning strategy execution activities could create a positive impact in the overall process.

· Install information and operating systems that enable company personnel to carry out their strategic roles proficiently.

These IT devices will help the employees to interlink and share resourceful information regarding the execution of set activities. Comfortable Shoes plans to stay up to date on hardware and software. All personnel will be assigned their own personal user ID and password for security purposes.

· Tie rewards and incentives directly to the achievement of strategic and financial targets.

Comfortable Shoes has come up with a way of rewarding the best performing employees as a way of instilling motivation towards the realization of the set objectives. This will also keep the rest of the workers on toes, as they would expect to be rewarded should their hard work be recognized as outstanding. Rewarding should be done through promotion, salary increment, and organization of parties just for appreciation (Carl 2012). Some of these rewards will include:

· Free shoes

· Bonuses

· Gift cards

· Merit raises

· Instill a corporate culture that promotes good strategy execution.

Comfortable shoes lay down a working and performing culture so that the entire organizational fraternity can follow suit. The corporate culture should be such that all employees understand the need to perform outstandingly in the company. This will ensure that the process of strategy execution is implemented successfully. The culture that Comfortable shoes want is to make sure the employees know that are a part of a valuable team.

D) Evaluate your promotion of creativity and innovation during the simulation

Forces that drive change are a major element that all companies in the footwear industry must examine. For the footwear industry, product innovation is a key driving force. Customers’ preferences change and footwear companies must adapt and offer a variety instead of just beyond plain shoes to compete in the market. To keep things fresh and interesting to customers, footwear companies must pay attention to the wants in needs of the customers in their market segment, they must be willing to add new styles, features, and materials to their offerings to entice new customers and keep existing customers. Innovation is the creation of something new that makes money; it finds a pathway to the consumer.

Comfortable Shoes was able to surpass many of its competitors in the earlier rounds of the simulation because of its research into innovative products based on customer demand. Comfortable Shoes test marketed new shoe designs every year in different regions and, based on the response from the region, either expanded the product to other regions or scrapped the product completely. The fluctuation in models offered over the eight years of the simulation was due, in part, to regional response to models. One region’s sales would reflect a positive reaction to the shoe, but when expanded into the other markets, the overall reaction was negative – so the shoe was taken out of the models offered

Comfortable shoes was very innovative in working with employees, we decided to incorporate a plan that allowed employees to be a part of the decision making. Brainstorming sessions, suggestion box and allowing for a better organizational culture that fosters an environment of creativity and innovation.

E) Analyze the effectiveness of the balanced scorecard employed in the simulation in terms of how its use affected individual performance

The balance scorecard provides a single number that can be compared between companies to identify its position in the market. Balance scorecard is considered as the main indicator for evaluating your performance in the market. The balanced scorecard is used extensively in the industry for measuring the performance. Its popularity encourages and evaluates the executives to manage properly and to consider the performance criteria even at the same time.

Most important the financial performance needs to be evaluated effectively because all other decisions are depended upon it and decision. The net profit and the income statement can be evaluated for measuring the financial performance and on its basis the decision should be taken. With the help of the financial performance of the company and measuring the performance of overall activities the market effectiveness of the company, the financial risk, and the market productivity can be evaluated in an effective and efficient manner.

Comfortable shoes did not very well in utilizing the balance scorecard. If we had paid more attention to the balance scorecard we could have put into place a continuous improvement program. We could have utilized the information to determine how we were doing financially, for example had we utilized this tool we could have foreseen a dramatic drop in net profit from $92,252 to $55, 490 from year 16 to 17. Another example of how we could have utilized the balanced scorecard, we could have determined how good we were at satisfying our customers, delivery time was something that changed a couple of times throughout the simulation. The scorecard could have let us know if the customer was satisfied with the time that they were getting their shoes.

E1) How would develop a balanced scorecard that ensures appropriate emphasis on both leading and lagging indicators.

If I were given the opportunity to develop and create my own balanced scorecard, the first thing I would do would be to provide data that focuses on a company’s short-term and long-term goals and objectives. In order for a BSC to reflect the actual position of a company it would need to consider performance drivers and outcome measures (leading and lagging indicators). For this purpose we would have to include both indicators in the BSC. A leading indicator is defined as a measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. A lagging indicator is defined as a measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend. This would allow for the company and/or team members to see a more comprehensive picture of the company’s current standings as compared to their goals. Lagging indicators need long-term based information in order to validate trends predicted. Leading indicators need short-term based information to identify patterns and predict long-term trends. In order for the BSC to correctly indicate the status of a company it needs to reflect both leading and lagging indicators.