Strategic Analysis And Recommendations: Stakeholder Summary Essay.

Task

Your task is to write a report for the CEO setting out your analysis of the situation and making strategic recommendations.  In addition you have to create a Stakeholder Summary.

You have a choice for the Stakeholder Summary of either option 1 or option 2:

Option 1 – You should provide a Stakeholder summary that is based on the case study and forms an integrated part of your case study solution. It should summarise the impact of your recommended strategy on the key stakeholders.

Option 2 – You should analyse the power and influence of the stakeholders of ONE of the following companies and summarise your findings:

• Harley Davidson
• Toyoto
• Tata Motors
• Starbucks

With the exception of Venus Mobile all companies are profitable, with Mercury delivering the best performance over time as measured by cumulative total shareholder return, as shown in Table 1.

Table 1 – Key ratios at the End of round 6

Table 2 – Summary income statement at the End of round 6

During the last year forecasters have suggested that market growth rates will gradually decline over the next few years as the markets begin to mature. During round 6 Europe was expected to grow at a rate of roughly 15%, USA just under 20%, and Asia of over 30%. Also during the last year market research implied that particularly Europeans are highly appreciative of the highest technologies, along with the realization that Tech 3 has been badly received in the USA. Graph 3 shows the overall demand experienced by the manufacturers in each region in response to their marketing efforts.

Table 3 – Growth Rate by Region

Demand for each technology differs by Region.  In Annex 1 to Appendix A there is data showing the demand for technology by Region experienced by the companies. Analysts have observed that the manufacturers do not necessarily understand the regional market segments and are focused on selling standard products globally.

A recent report from market analysts highlighted that there were a number of unserved market segments but with no indication as to the likely size of the demand in each segment. The results are summarised in Table 4 and the source data is provided in Annex 1 to Appendix A .

Table 4 – Current Products and Pricing by Segment

Table 5 – Number of Production Plants in the USA and Asia.

In the Asia market place a number of Chinese hi-tech firms have been talking publically about entering the phone market using locally developed technology and manufacturing capacity.

The current situation in terms of the Production Capacity (excluding outsourcing) of the 7 firms and the demand that they are experiencing is shown in Graph 6.

Additional production capacity is available by outsourcing manufacturing to contract manufacturing firms with specialist capabilities and plants dedicated to mobile phone manufacture. Table 6 shows the use of outsourced manufacturing by each company during Round 6; the total volume equates to over 33 manufacturing plants.

Table 6 – Use of Outsourcing – Round 6

Table 7 – Venus Financial Performance

Table 8 – Market Share (%)

Manufacturing Plants

Venus has 15 plants in the USA and 9 in Asia but in Round 6 they produced nothing at all. It also has under construction 2 plants in the USA and 2 in Asia so in Round 8 will have 17 US plants and 11 Asia plants. This lack of plant utilisation is unsustainable and requires urgent action. Venus needs a strategy that makes effective use of these resources.

Table 9 – Production Report

Production costs for Venus’s competitors are shown for Round 6 in Table 11.  No recent data is available for Venus. Table 10 shows the cost of production of Tech 1 in the USA.

Table 10 – Tech 1 Production Costs in the USA

Table 11 – Round 6 Production costs

Venus Mobile is a part of manufacturing industry and it produces mobile phones which are distributed across the globe. Mobile phone industry is growing at huge rate because of the increased consumption and demand. Major factor behind enhanced consumption and the demand of the smartphones is increasing population. In this industry, customer bargaining power is at its peak due to huge number of manufacturers and distributors of mobile phones are available in this industry. Venus Mobile is one of those mobile manufacturers and under this report, current strategies used by the organization will be discussed. Along with the current strategies, recommendations in relevance with the strategies will be provided to enhance the organizational performance in the global market. Organization is struggling since last two years and for enhancing the organizational performance in the market, strategic advisor has been appointed for advising the Chief Executive Officer of the organization for adopting the appropriate and effective strategies for the organization so that organization could regain its lost position in the market. Under this report, external analysis of the organization and the whole mobile industry will be covered and along with this, internal analysis will also be covered for evaluating the factors through which organization could enhance its performance.

Production

Production department of Venus Mobile is following the general techniques while they required to adopt advanced techniques for making their products unique and advanced from its competitors’. In this term, organization could implement the product differentiation strategy for enhancing the performance of the organization. Product differentiation is the process which is used to highlight the unique features added in the product and with this, organization could easily segregate its products from its competitors and this will help them to attain competitive advantage and the demand for the product would also be increased.

Marketing

Marketing department is responsible for enhancing the demand of the organizational products and services through spreading awareness amongst the target audience through various mediums. Advertisement and promotion are the two basic components of marketing which plays crucial role in terms of spreading awareness amongst the target audience in relevance with the product. Newspaper, magazines, pamphlets are certain sources of print medium advertisement and digital media platforms, social media, email marketing, etc. are certain digital marketing tools.

Human Resource Management

This department is responsible for meeting with the employees’ needs. Fulfilment of employees’ needs, identification of requirement of the people in the organization, motivating them towards the work, developing bonus and other policies, etc. are crucial activities of HRM department. HRM is also responsible for maintaining the decorum of the organization which can influence the employees towards attaining the goals set up by the management of the organization.goals and the objectives.

Stakeholder Summary

Venus mobile is a customer electronic goods manufacturing organization majorly known for producing innovative and advanced mobile phones with innovative and unique features. Since last two years, organization’s products were not approaching to the customer’s expectations. Lifecycle of industry and product includes various stages. Introduction, growth, maturity and decline are certain crucial stages for an industry. In introduction stage of mobile industry, black and white phones were introduced at high prices. Further, mobile industry expands and demand of the mobile phones was increased and at that time, these were used as a wireless communication system along. In the growth stage, number of mobile phone companies was increased. After the growth stage, mobile industry is currently enjoying maturity stage (Piekkari, Welch & Welch, 2014).

Toyota Motor Corporation is a multinational Japanese company engaged in manufacturing of automotive vehicles and its engines. Across the globe, organization has approximately 4 lac employees which are serving for the organization in order to enhance their performance in the global market.  Toyota Motor Corporation is on the peak position in terms of producing automotive vehicles. The company was founded in 1937 by Kiichiro Toyoda and it produces vehicles under five brands including Toyota i.e. Hino, Lexus, Ranz, and Daihatsu. The first passenger car was introduced in 1936, the Toyota AA. Toyota Motor Corporation has huge share holdings amongst the global automotive sector and with this, organization stands on the second position in terms of revenues in the global automotive sector.

Toyota was on the third position in 2005 in terms of automotive manufacturer. American General Motors and Ford were on the first and second position respectively. While in 2011, Toyota ranked on the first position as the largest automotive manufacturer. In 2011, Japan faced several natural disasters through which Toyota Motor Corporation needs to face huge losses. Due to tsunami, organization faced 150,000 units loss while 240,000 units were damaged during flood. Apart from fuel based automotive vehicles, organization invented the idea of producing hybrid electric vehicles in terms of enhancing the performance of the organization in the global market. 

Identification of Key stakeholders   

From the above table, stakeholders for the Toyota Motor Corporation could be identified. Internal stakeholders for the organization are shareholders, customers, employees, directors, etc. while all other are included in the external stakeholders for the organization. Internal and External stakeholders create impact over the performance of the organization in with their functionalities. Internal stakeholders’ needs and demands should be fulfilled in an appropriate manner with the view to attain its goals and the objectives. Customers’ demand in relevance with the product needs to be fulfilled for maintaining the appropriate position in the dynamic business environment. Interest and return over the investment by the shareholders should be provided in an appropriate manner with the view to retain the existing shareholders as well as to attract more number of shareholders for raising the funds. Apart from this, organization should also need to consider the policies and the rules described by the external stakeholders as these are capable enough to raise the funds for the organization.

Company Financial Performance

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