Performance Analysis of D Eye of Da Beholder in a GLO-BUS Simulation Game
Introduction
The “Glo-Bus”, which is an abbreviation of Global Business Simulation Game, as a brainchild of McGraw-Hill that was developed in 2008 to serve as a system of educating students, especially those in the Business Strategy filed. Some of the major aspects of focus that the game has include marketing, production design, compensation and labor, assembly, corporate citizenship, discount bids, cash flow, and finance. It is very instrumental in gauging the abilities of a strategic management student, as well as in industries, as it helps to identify the most profitable player in an industry (Michael, 2012). Since its inception, the Glo-Bus has received much audience, given its unique capabilities and functionalities in the business field. The Digital Age Communications Act (DACA) project, as constituted in 2005, had a primary aim of making policies that would be adaptive to the rapidly changing landscape of communication (Yannopoulos, 2007). It wishes to establish a competition-based, market oriented communication policy that every company would find adaptable. This paper proceeds to analyze the performance of the D Eye of Da Beholder Company, which specializes in production of various camera-related products and lenses, and engaged in the simulation game with other 129 companies.
Team Performance Analysis
Competitive Strategies
In the Glo-Bus game, 129 companies were involved in a competition and the results of each team were published at the end of the game. This analysis presents strategies and data used in the team in which I belonged, from the 6th to 9th year. It must be noted that the team registered an impressive performance, considering its marked improvement from year 6 to year 9, as its revenue rose from $199245 to $298439. The team employed three out of the five basic strategies, which were proposed by Porter (1985), in order to come up with such performance. One of the competitive strategies included cost leadership. This involves engaging in a healthy competition by offering similar or even higher quality products at a lower cost. This strategy has been used by various companies, especially in those industries where competition is very stiff, and it usually culminates in price wars. Comparably, it can be noted from the results that this strategy, though, has some bearing on revenue, since other industry leaders such as Centric Solutions generated more revenue than our team. At the emergence of the digital age, D Eye of da Beholder embraced the change and took onto production of digital cameras with the swiftness that many other companies had not fathomed (Yannopoulos, 2007). Thus, in the simulation game, this proved to be a viable strategy in ensuring that the team, which was a perfect representative of the company’s strategic options, steered well ahead of others, thereby having a competitive advantage.
Additionally, product differentiation was also used by the team, which involved producing the same product, but in a slightly differentiated way, so as to gain public attention. Product differentiation can be done in various ways, including packaging, branding, additional functionalities, and general form of a final good. This ensures that a particular product is always in demand, despite heated competitions in the market. Lastly, the best cost strategy also proved worthy in offering a competitive advantage to the team, and with extension, to the entire digital camera company. It involved identification and development of a specific niche in the entire market, and then tailoring products offered at specific prices for that particular segment. Additionally, the product had to be made in such a manner that it could best fit the value/cost reserved for it (Yannopoulos, 2007). The above strategies were very instrumental in maintaining the team’s pace with that of other industry players, thus contributing to their overall success.
Offensive and Defensive Strategies
In every industry where strategic interaction exists among competitors, companies usually employ either offensive or defensive strategies in order to gain competitive advantage. In this particular game, D Eye of da Beholder used both strategies. Firstly, the company used a signaling mechanism to warn of impending defensive actions. This was done through press releases, newspapers, and trade journals. The primary aim of signaling was to deter or preempt competitors, or ward off threats or any sort of retaliation. This was followed by fortifying and defending the company’s market coverage. Usually, new firms enter an existing market because of the profits gained by other companies. This can form an intelligent defensive base, where D Eye of Da Beholder reduced the expectations of entrants with regard to prospective profits. As is made evident in its EPS and ROE registered in year 7 (13.9), the company made other industry players believe that it was making low profits, by varying the formula of its calculations; which helped keep prospective investors away. Besides, due to the large capital base of the company, other economic barriers to entry were also put in place; including product differentiation, economies of scale, switching costs, capital requirements, patents, proprietary technology, and assess to viable distribution channels (Yannopoulos, 2011). These significantly limited the entry of many potential competitors, thus reducing the threat of attack. Lastly, product proliferation, as a form of defensive strategy, was also applied by the company. In this respect, D Eye of Da Beholder introduced multiple product lines and versions so as to cover all bases of the market gaps. This was instrumental in obliterating the hopes of companies which wanted to gain access to the market through other patterns. Apart from the aforementioned strategies, several other minor defensive mechanisms were used by the company including position defense, counter offensive defense, mobile defense, continuous improvement, capacity expansion, engagement in cross-parry, and introduction of fighting brands (Yannopoulos, 2011). These strategies contributed to the evidenced increase in revenue and stock price from year 6-9.
Similarly, offensive mechanisms also played a major role in maintaining the competitive advantage of the company. The main aim of adopting these strategies was to improve the company’s own competitive position, through gaining of more market share from other industry rivals which were ahead of it, and increasing its image rating over the 4-year period. The least advised strategy, but which performed impressively for D Eye of Da Beholder was the modified frontal attack. This involved facing the competitors head-on, by producing similar products, with similar prices, distribution, and promotion. After a while, this strategy was focused on the weakest points of competitors, also referred to as the center of gravity; and then applying challenging products and resources to gain the attention of the market. After the exploitation of the frontal attack, the company decided to focus its attention on flanking attack, which centered on the competitors’ major points of weakness, but intelligently avoiding the risks associated with the first head-on attack (Yannopoulos, 2007). Such points of weakness must have been where competitors were totally incapacitated to offer an immediate retaliation. Examples include offering better terms of service, especially in a case where the competitor offers inflexible and poor services; producing less expensive and customer-focused products and services in a case where the latter offers expensive products, such as the case of Centric Solutions. Just as D Eye of da Beholder managed to convince the market at its point of entry, that it dealt with a different line of products, so should every company which wishes to employ such an offensive strategy.
Another offensive strategy that was used is strategic encirclement; which involves surrounding a competitor so as to completely defeat it. This is almost similar to product proliferation, but is different in a manner that the offending company produces a range of products at the same time, thereby making the latter to compete on multiple grounds. This means that the defender’s resources will have to be spread over a number of products, giving no particular attention to any of them, hence producing inferior goods and services (Yergin & Stanislaw, 2008). This strategy might probably lead to the strategic withdrawal of a number of weak and upcoming companies.
Think Global, Act Global
Globalization process has brought numerous opportunities and improvements, not only in the social sector, but also in the economic facet of life. There is increased instability, interdependencies, and inequalities that every business has to address in order to capture the global market efficiently. The truth is, radical occurrences in a small part of the northern hemisphere can spread all across the southern hemisphere, and to the entire world (Michael, 2012). Thus, the globe is interconnected, and market targeting and segmentation has become increasingly difficult. The “Think Global, act Global” phrase is very popular with companies operating in a global scale, and targeting different geographic regions of the consumer market (Yergin & Stanislaw, 2008). D Eye of da Beholder, being a global figure, targeting four huge geographic locations, is faced with a real challenge of identifying a strategic approach with which to compete successfully against other international and local players in the market. In order to gain this competitive advantage, the company decided to adopt the ‘think global, act global’ strategy, by identifying key factors affecting the global market; carrying out market research on the varying needs of consumers in every one of the four geographic locations (Europe-Africa, Latin-America, Asia-Pacific, and North America); and tailoring products and prices that would best meet their demands (Michael, 2012). The company gave particular attention to world issues, including environmental pollution, and decided to direct its corporate social responsibilities to addressing such matters as global warming, poverty in vulnerable states, and international events.
Market liberalization, which came as a result of globalization, has both negative and positive impact on businesses. One particular negative impact is inducing a sense of fragility to a business, especially when there are existing local companies (Yannopoulos, 2007). To address this, D Eye of da Beholder adopted a strategy to create an influential network of chain suppliers and franchises, so as to ensure complete coverage of the global markets. In addition, products were produced with specific interest of the target market. This ensured successful entry of the company into the markets. In addition, the company fought formidably to acquire a global face, through its numerous corporate responsibilities and product promotion strategies.
Shifting Resources to other Areas
The global initiative was flanked by the company’s key management decisions to shift resources from one area to another in order to bolster execution of strategy efforts. For instance, D Eye of Da Beholder , which was initially primarily focused in North America, decided to move shift most of its resources to the Europe-Africa, so as to compete actively with Other companies such as Alpha Inc., and E Shutterbugs. This instance was very successful as it enabled the company to focus its attention on how to gain more market share from the existing company, and to identify more weaknesses to be exploited. At this moment, the company was using offensive strategies, as it aimed to throw the incumbent companies out of the market. Shifting of resources from North America where it had instituted a solid and stable base was therefore very prudent, as it helped the company to effectively compete with its main rival in the other geographic locations where it was not performing well.
On another instance, D Eye of Da Beholder announced that would take a bold step to shift resources from Latin-America to Asia-Pacific, being a new target market with overarching potential. This was a very viable move that would ensure increased production and market dispensation in that competitive location. It also helped the company to take decisive structural modifications, as well as trained personnel transfer, so as to ensure that the Asia-Pacific branch received maximum attention, offered by the best expertise in the industry. Group synergies were sufficiently bolstered by such a move, which significantly improved service delivery and customer relations in the new branches. D Eye of Da Beholder annual report shows that market share increased from 20% to 25% as a result of increased focus on the Asia-Pacific segment of the company.
Pursuing Continuous Improvement
In the face of rapidly changing technology, D Eye of Da Beholder has not relaxed on its course to gain lead in the market, and to continually improve the quality of its products. One noticeable effort is research on new and emerging technologies. As earlier stated, the company supports various technological stations and projects to ensure that it keeps pace with the most current innovations in the market as part of its CSR program. In addition, it frequently adjusts its database containing supplier and customer information, so as to expedite process of producing and selling inventories. Specifically, the company has embraced the technology of cloud computing, which allows for internet marketing, in order to widen its customer base, and make the process of carrying out transactions simple and customer-oriented. In addition, the company has introduced and further enhanced the Customer Benefits Package, to include more customer-oriented products, and allow for consultations, generation of ideas, and launching of claims. The CBP has been instrumental in creating perfect customer relations in the company, which helps a lot when making products that could exceed their expectations (Yergin & Stanislaw, 2008). Lastly, an effective product recall system has been developed to ensure that any defects reported either by the client or by a segment of the employees is immediately recalled aback, and the customer given the opportunity to choose another one of appropriate quality (Yannopoulos, 2007). Central to these efforts is intensive market research, and constant interaction with all industry stakeholders that is paramount to constant development and improvement of every company.
Corporate Social Responsibility
D Eye of Da Beholder’s approach to corporate social responsibility is geared towards maintaining sustainable development in the society, through strengthening its corporate philosophy, and by achieving its business objectives through fairness and regard to human and environmental welfare. It has committed itself to fulfilling its economic and legal responsibilities, and contributing to the societal development by sponsoring technological advancements, cultural preservation, and environmental awareness. In addition, it has heavily invested in green technology to minimize effects on environmental health. Recent report indicates that the company has reached the 2% mark in CSR spending. This means that out of the current assets that the company is using as the operating capital for public trust, 2% of that goes to the society. This is a very high figure, considering the huge amount of capital under which the company is operating.
The management of the company would have a hard time rationalizing the reason for allocating such a percentage to CSR, especially to the shareholders. This is because comparably, the EPS and ROE of the company appear lower than that of other players, translating into lower earnings for the shareholders. However, it is clear that through CSR, D Eye of da Beholder has managed to gain a lot of public trust, which contributes positively to increasing its market share and image rating. For instance, the image rating of the team was 72 in year 6, emerging as the best among the competitors. Indeed, economists say that the current promotional tool in major companies is Corporate Social Responsibility (Jianwei, Dong & Hao, 2011). However, in year 7, this rating fell below that of the competitors, due to other defensive and offensive strategies the company was employing to gain a competitive advantage. Such strategies included reduction of unit prices, which ultimately affected revenue, ROE, EPS, and its stock price. It would thus, be important for the management to point out to shareholders the numerous benefits of CSR in the current marketing environment, so that the value allocated to it can be rationalized.
Company Internal Operations
D Eye of Da Beholder is one among very few international companies that have the best organizational culture, and perfect employee relations. All employees are arranged in teams, headed by a team member, who sets targets in collaboration with the team members. Here, each staff member has the liberty to contribute any sort of suggestion that could be significant to the performance of the company. Thus, decision-making process is purely consultative, as every employee is engaged in a meeting to coin the way forward, in case of major changes. Because of this, employees feel highly motivated and enthusiastic in their areas of work (Michael, 2012). In addition, teamwork provides a unique but highly significant synergy at the place of work, which drives the achievement of specific objectives to a successful path.
On the other hand, this form of decision-making is not altogether appreciable, and has contributed to a number of setbacks in the company. For instance, since every employee is engaged in the consultative process, reaching a final conclusion is very hard, thus dragging the process. In case a decision was reached, there were always a percentage of discontented members, whose grumblings affected the morale at work afterwards. In addition, keeping of company secrets is very challenging, especially in the event of employee turnover (Michael, 2012); but the company has been able to survive amid these challenges, and, instead thrive to international levels. Thus, to a greater extent, this form of decision-making is still beneficial to the company, as it enables generation of a diverse base of ideas, which are applicable in the event of product improvement and development.
Conclusion
The operations of D Eye of Da Beholder as a digital camera company, as presented within this paper, are exemplary, and have contributed to the company’s robustness and rapid growth. It is particularly noticeable that the strategies employed to gain competitive advantage were very effective, and helped maintain the company’s pace with that of its competitors, as well as gain a considerable market share even in foreign geographical regions. Thus, it suffices to conclude that effective market research, maintaining good customer relations, and continuous innovations for improvement are among the leading strategic options that company will find extremely beneficial in the second segment of the competition.
References
Jianwei, Z., Dong, W., & Hao, S. (2011). Green Entrepreneurship, Corporate Social Responsibility, and Competitive Advantage: An Interactive Perspective. Energy Procedia, 13(2011 International Conference on Energy Systems and Electrical Power (ESEP 2011), 10109-10114.
Michael R., P. (2012). Profiles of Selected Photographic Film and Digital Companies. The Focal Encyclopedia Of Photography, 301-320.
Yannopoulos, P. (2007). Marketing Strategy, Toronto: Nelson Education.
Yannopoulos, P. (2011). Defensive and Offensive Strategies for Market Success. International Journal Of Business & Social Science, 2(13), 1-12.
Yergin, D. and J. Stanislaw (2008), The Commanding Heights: The Battle for The World Economy, Free Press, New York.
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