Strategic Management in Action

Appendix 2 – Sample Case Analysis

Richard Alven, Paul Briseno, Jacqueline Henderson, Matthew Tawfiq -092

Executive Summary• Sample Case: Big Loud Motor Cycles Inc.

– 2006-2009 able to maintain dominant 42.1% share US Market

– Unable to push into International markets as effective as planned

– “Face the brutal facts but never lose Faith.” – Collins

Executive BLM Includes:

• Company Vision/Mission

– Company Goals

• Within the Hedgehog concept as described in Collins.

– Company Policies/Values

• Corporate and Competitive Strategies being Used

– Well established with dominant market share.

– Described as a defender in a Red Ocean Market

External Analysis Industry/Competition

• Rivalry

– Opportunity: Strong industry sales growth

– Threat: High exit barrier

• Potential Entrants

– Opportunity: Government regulation

• Bargaining Power of Buyer

– Opportunity: Products purchased are differentiated and unique

– Threat: Buyers have full information

• Bargaining Power of Supplier

– Opportunity: Supplier does not have ability to do what buying industry does.

– Threat: Suppliers’ products are an important input.

• Substitute Products

– Threats: Several substitutes to satisfy transportation needs

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• Economic– Opportunity: High and increasing personal

disposable income– Threats: Unemployment levels are currently rising

and forecasted to continue rising.• Demographic

– Opportunity: Diverse US population– Threat: Cost of higher education is on the rise

• Sociocultural– Opportunity: More “gold-collar” employees in

workforce & increasing popularity of “green” issues

– Threat: Public image of motorcycle riders not always positive

• Political-Legal– Opportunity & Threat – State Helmet Laws

• Technological– Opportunity: Increased use of robotics in

manufacturing & Online Purchasing

External Analysis General External Environment

Internal Analysis

• Strategic Manager

– Strength and Weakness: CEO is very hands on

• Corporate Structure

– Strength: Different product divisions

– Weakness: Not organized around geographic markets

• Corporate Culture

– Strength: Employees believe in products, people oriented, emphasizes open communication.

– People first, then what (right people on the bus)

– Culture of Discipline

Internal Analysis (continued)

• Production Operations

– Strength: Most production facilities less than 7 years old

– Weakness: Company has a large number of suppliers

• Marketing

– Strength: Company’s logo and repeat customers

– Weakness: Target market is narrow and global marketing has not been effective

• R&D Strengths

– Strength: Current expansion of R&D Facility

– Weakness: No global R&D facility

Internal Analysis (continued)

• Human Resource Management

– Strength: Educational benefits offered to employees

– Weakness: Assembly work on custom-ordered motorcycles is precise and demanding

• Information Systems

– Strength: Numerous forms of communication with employees and customers

– Weakness: Website is only English

•

Financial Analysis (Appendix 1)Information Required- BLM information is not included.

• Thorough Financial Analysis

– Results and/or outcomes of past and/or current strategies.

– Examine and analyze all financial information

• Cover 4 Parts:

– Ratio Analysis and comparison to industry/company trends (explain what is happening)

– Graphs and charts outlining financial figures as well as comparisons to industry averages.

– Listing and explanation of company's financial strengths and weaknesses

– Statement of companies overall financial condition and written report.

Strategic Issue #1

• Issue: Target market is very narrow

– Reaching beyond existing demand (Blue Ocean)

• Why?

– Must define why it is an issue:BLM missing significant opportunities – should market to females.

Strategic Alternative #1

• What: Offer more bikes tailored to fit women.

– Look across groups within the industry

– “6 Paths” – Blue Ocean Strategy

• How: Survey, analysis, research, ideas, management

• Who: Marketing, R&D, top management

• When: Immediately. 18 month time frame.

• Where: In US.

Strategic Alternative #2

• What: Promote current line of motorcycles to women.

Strategic Alternative #3

• What: Acquire an established motor scooter manufacturer.

• Typically more appealing to women.

• Red Ocean – entering an established market by buying established part of the market.

Recommendation:

• Alternative # 3

– Several established scooter companies

– Attracts women and older demographic.

– Access to R&D and Production.

– Measure success by how sales revenue reacts.

• Reject Alternatives 1 & 2

– To many uncertainties with Alternative 1.

– Marketing campaign does not consider female markets wants.

Implementation

• Changes in Organizational Structure

– New employees

– Additional marketing staff needed

• Changes in Organizational Culture

– No major changes

– Emphasis on female customer perspective

• Funding

– Funds will be needed for actual acquisition

• Long Term Debt

• Cash reserves

– Expected revenue increase will pay off long-term debt.