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Strategic Management in Action

Richard Alven, Paul Briseno, Jacqueline Henderson, Matthew Tawfiq -092. Strategic Management in Action. Appendix 2 – Sample Case Analysis. Executive Summary. Sample Case: Big Loud Motor Cycles Inc. 2006-2009 able to maintain dominant 42.1% share US Market

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Strategic Management in Action

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  1. Richard Alven, PaulBriseno, Jacqueline Henderson, Matthew Tawfiq -092 Strategic Management in Action Appendix 2 – Sample Case Analysis

  2. 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

  3. 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

  4. 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 Five Forces

  5. External Analysis General External Environment • 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

  6. Internal Analysis • Strategic Manager • Strength andWeakness: 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

  7. 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

  8. 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

  9. 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.

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. 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.

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