BUSINESS ANALYSIS

Strategic Decisions for Business Progression (Task 2)

Strategic Decisions for Business Progression (Task 2)

Introduction

The brand design decision was an important part of my company's strategic goals and directions. Initially, I conducted a market research which gave me a fair idea on the needs and wants of the customers in the computer industry. After getting an idea, I developed my mission statement to use as a tool for aiding my strategic decisions.

I wanted my company to be a market leader in the computer industry by providing highly competitive technology. I wanted to target all three segments which included the Mercedes, and the Traveller. I also aimed to compete in the most highly competitive market. Keeping all these factors in mind, I had to come up with a suitable and effective brand design.

Upon viewing my market research, I found out that Mercedes prefer fast and powerful computers while the travellers preferred portability. Both of these class groups preferred the ability of computers to link with another computer; hence my computers would cater to these criteria to attract the greatest possible number of customers. There were various other features which these 2 groups preferred. These features included such as office applications, after sales service etc...

I also needed to understand the price each segment was willing to pay for computers. In my research, the Mercedes was willing to pay up to $4000 while the Traveller was willing to pay up to $3200. I had to keep these considerations in mind when developing my product. I had to ensure that the features most in demand by these groups were able to be produced significantly below the target price. For example if I created a super high quality product but not one willing to purchase it at that given price, then that product would be considered a failure. I also had to look at the market's size to ensure that enough sales would incur covering at least my fixed costs.

Analysis of the Company's Situation

After looking at all the generated reports, I would stop catering to the Mercedes market. The reason I won't switch to the Workhorse market is that my cost of production for a single computer averages to around $2700. The highest price the workhorses are willing to pay is $2500. As a result, catering to the workhorse would not be financially feasible.

If I were to focus on developing product that caters to the needs of the workhorse, I would need to further spend capital for additional production facilities. Since my cash expenses are already in an unfavourable position, further loans would deteriorate my cash position, damaging the company's financial health even further. In case I use my existing production facilities, which are already working at 100% capacity utilization, I would have to stop production of computers sold in a more lucrative market.

Further evidence also reveals that the traveller group prefers my computer's brand over all other brands. This fact supports my decision to focus primarily on the traveller ...