A. Analyze how successful you were at strengthening or compensating for resource

weaknesses at a key point during the first years of the simulation.

A weakness for a company may mean something a firm lacks, does poorly, or a condition

placing it at a disadvantage. Resource Weakness may be due to,

x Deficiencies in know-how or expertise or competencies.

x Lack of important physical, organizational, or intangible assets.

x Missing capabilities in key areas.

Company Ds weakness in the first few years was the number of models offered. Looking at the

Market Snapshot from Year 12, shows that Company D had only 102 models offered in the

Internet Segment and 151 models in the Wholesale segment. This trend continued in the year 13,

where they offered only 100 modes in the internet Segment and 150 again in the Wholesale

Segment. Comparing Company D to its competitors, most of the competitors had more models

offered in each segment in each geographic region.

Analysis of this resource weakness made company D realize that they are missing out on

competitive value of a broader product line. Less number of models than the competitors meant

that the company D was unable to participate in end use segments (jogging shoes, walking shoes,

aerobics shoes, tennis shoes etc.) and give wider selection of shoe types and styles to choose

from. Company D also realized, if all the competitive factors are equal, companies with wider

models/styles selection would outsell the companies offering fewer models. To overcome this

resource weakness, Company D increased the number of models in the Internet and Wholesale

segment to stay competitive in this footwear industry. Below is the Market Analysis Snapshot

from year 14 for the North America Region. Company D maintained the number of models

offered throughout years 14-18 to stay competitive in the footwear industry.

B & B. 1. Analyze the actions you took to develop resource strength at a key point during

the last four years of the simulation. Analyze how competitively powerful that strength

was.

The major resource strength that was developed by Company D during the last four years of

simulation was effective use of TQM and Six-Sigma Program. TQM is a system for a customer-

focused organization that involves all employees in continual improvement. It uses strategy,

data, effective communications and involvement of every employee to integrate quality into the

culture and activities of the organization (Srb, T., 2014). Six Sigma seeks to improve the

quality of process outputs by identifying and removing the causes of defects (errors) and

minimizing variability in manufacturing and business processes (Srb, T., 2014).

This table shows that Company D spent $929,000 on TQM/Six Sigma Program in North

America and $1,776,000 in the Asia-Pacific region. Company D spent $0.54/per pair for TQM

and Six-Sigma Quality Program in the North America Region and $0.60/per pair in the Asia

Pacific Region with the average of $0.58/pair.

For Enhanced Styling/Features Company D spent $1.92 per pair in the North America Region

and only 0.75/pair in the Asia Pacific Region with the average of $1.18/pair. This was not

making our product attractive for the customers in the market when compared to its competitors.

Company D invested in these programs over the years to improve the quality of the footwear

produced to provide customers with good quality and best price more in line with our strategy of

Best Cost Provider. As can be seen in the Footwear Industry Overview of year 12, the overall

reject rate was 5.7% and the costs incurred due to rejected pairs were $1.04 per pair.

By year 18, Company D got a good grip on Total Quality Management Program. They invested

and to build a good process for the company. By the year 18, they were spending on an average

of $2.68/pair, making it a good quality product in the market thats desirable by the customer, on

the TQM/6-sigma quality program and the costs due to rejected pairs also went down to

$0.61/pair saving money for Company D.

The below table, footwear industry overview shows that the overall reject rate was 4.3

These improvements made our products more desirable by the customers and the reject rate also

added to the increase in Net Profits for the company. As can be seen in the income statement

comparison from year 12 and year 18, there is a huge difference in the operating profit of the

company.

The operating profit was $41,607,000 for the year 12, i.e. $8.14/pair. The operating profit for

Year 18 was $11.95/pair.

Analysis of the resources competitive power,

Competitively Valuable Decision to invest in TQM and Six Sigma program is directly in line

with the company strategy of a broad cost leader. Under this strategy providing a quality product

to the customer is of high importance. This had made the company a more effective competitor.

This is evident from the scoreboard comparisons from year 13 and year 18 below.

Company D moved from 10th spot in year 13 to 5th spot in the Year 18.

Rare Resource Investing in TQM and Six-Sigma program produced quality goods for Asia-

Pacific and Latin America regions, where a quality product is not a widely available as it does in

North America and Europe Asia. So this became a source of competitive Advantage in the

Asian and Latin American market for Company D. Comparison of Operating Profit for years 17

and 18 in these regions for Company D shows that there has been a drastic increase within one-

year period.

C. Evaluate your approach to managing an organizational culture that supports strategic

plan execution.

An organizational culture is the culture of the organization in simple words. Having a culture

lets an organization define employee expectations. It is important for an organization because it

consists of beliefs, ideologies, principles and values of the organization. The culture of the

workplace controls the way employees behave amongst themselves as well as with people

outside the organization.

Company Ds decisions and strategy were more closely aligned to a Market Culture.

Organizations with this culture are driven by competition and a strong desire to deliver results

and accomplish goals (Kreitner, R., 2009).

This culture, on which company Ds decisions were based on, has external focus. The goal is to

drive towards productivity, profits and customer satisfaction. The employees are expected to

react fast, work hard and deliver quality work on time. People who deliver results are rewarded

in this culture.

This culture best suited for our strategy of best cost provider. The companys main focus is to

target customers who are value conscious and to provide better goods at attractive prices and also

aggressive marketing and providing matching prices that of rivals with better features in the

product.

Company Ds organizational culture was a source of competitive advantage. As an organization

it functioned to deliver quality footwear that was above the industry average as can be seen in the

Year 18 distribution and warehouse report.

Company D also kept the costs lower by incorporating an organizational culture that enables

cutting down costs and keep the warehouse operations cost to a minimum.

Companies with market cultures tend to have more positive organizational outcomes. Managers

are encouraged to consider how they might make their cultures more market oriented. Customer

satisfaction is most strongly related to market cultures in line with the Broad Cost Leader

Strategy. This can be seen in the marketing report. Company D constantly invested average of

$4.00/pair in marketing efforts in all regions. This shows that they have achieved a good

organizational culture that supports the strategic plan of customer service, attractive prices and

low cost.

C. 1. Compare your approach with proven management practices.

Staff the organization with managers and employees capable of executing the strategy well.

Company D spent $500K each year in the workforce diversity program for testing screening and

hiring employees. This enabled company D to staff the organization with employees that are

motivated and capable of performing their roles for the company to execute their strategy.

Adopt best practices and business processes that drive continuous improvement in strategy

execution activities.

Company D spent $250K each year in the Ethics training and Enforcement not only for

Managers in the organization but for all employees. This strengthened the organization by

empowering Managers and leaders to have high ethical principles and standards. This in turn

helped company D to have a good repute and achieve the objectives of Company Ds strategy.

Install information and operating systems that enable company personnel to carry out their

strategic roles proficiently.

Having the right technology for the employees makes communication, implementation of

decisions and carrying out day-to-day activities much efficiently. Company D realizes that and

has financed in this section consistently to improve and keep it updated. This is evident in the

other corporate overhead costs, which was $1.22/pair sold in all geographic regions. This cost

was very consistently in this range as company D invested continually in keeping up to date with

the technology to smoothen the internal business processes for company personnel.

Tie rewards and incentives directly to the achievement of strategic and financial targets.

Company D increased the incentive pay based on the production target, as can be seen in the

North America and Asia Europe plants for year 14 and 15. Company D increased the incentive

per non-rejected pair from $0.70 to $1.00 in North America and from $0.50 in Asia Pacific

region to motivate employees to produce a quality product to achieve financial targets.

Instill a corporate culture that promotes good strategy execution.

Company Ds corporate culture is Market Culture. This culture gives market D to get approach

thats needed to be Broad Cost Leader in the market place. The organizational culture and the

strategy go hand in hand as the internal process and focus is important for any organization for

executing the strategy.

D. Evaluate your promotion of creativity and innovation during the simulation.

Creativity is the process of generating new and useful ideas. Innovation, on the other hand, is

taking a new idea and putting it to use.

Creating the environment for Creativity The right organizational culture, resources available

for experimentation, collaboration in work groups and interesting work help create the ideal

context for employee creativity.

Organizational culture Culture is the set of shared norms, values and beliefs in an

organization. Company D has market culture, which has external focus. Customer Satisfaction

being the utmost important thing, Company D focused on creating Green Footwear. They

started using Green Footwear Materials creatively and used Recycled Packaging for the

footwear. Company D showed value of creativity by providing rewards and recognition in

incentives to the employees. But such a climate can get corrupted by political game-playing and

interpersonal competition, which will restrain creativity, Company D spent consistently towards

its Ethics Program for all employees throughout the years 11 18 not only for managers but for

all employees of the company.

Resources for experimentation Creativity and innovation is result of experimentation which is

resource intensive. To promote creativity, Company D permitted funds, materials, facilities, and

the time needed for experimenting with new ideas by investing in the Green Recycled footwear

materials.

Collaboration History's great innovations have often been the result of collaboration. Work

groups that have diversely skilled members, an openness to new ideas, high levels of trust,

commitment to their work, and good communication foster creativity. Company D invests in a

Workforce Diversity program to help with this collaboration aspect of creativity to they have

better culture which as diverse employees working in harmony. This also gives them a variety of

creative ideas, suggestions that the management can take up on and make it a mainstream

product or strategy focus towards company D objectives.

E. Analyze the effectiveness of the balanced scorecard employed in the simulation in terms

of how its use affected individual performance.

Balanced Scorecard helps an organization to increase focus on strategy and results, focus on the

drivers of future performance, prioritize their initiatives and projects, and improves

communications of organizations vision and strategy.

Balanced Scorecard helped Company D to increase focus on their strategy and results. The

company strived to improve its EPS every year to meet the investor expectations. For the years

11-17 EPS was below Investor Expectations, but consistent effort by Company D gave them an

EPS of $52.18 for year 18 which was above the investor expectation of $48.75 per share.

Company D and its competitors image rating is based on their branded S/Q ratings in each

geographic region and market share for their products as well as their efforts to demonstrate

good corporate citizenship and their ability to conduct business in a socially responsible manner.

How well Company D does in sales and profits depends greatly on their image rating and credit

rating. To monitor this was critical for Companys Success. The Scorecard of Image Rating

helped them achieve just this. Company D always kept image rating above the Investor

Expectations aligning their vision and strategy with the help of the Image rating scorecard.

E.1. Explain how you would develop a balanced scorecard that ensures appropriate

emphasis on both leading and lagging indicators.

Balanced Scorecard A performance metric used in strategic management to identify and

improve various internal functions and their resulting external outcomes. The balanced

scorecard attempts to measure and provide feedback to organizations in order to assist in

implementing strategies and objectives (Investopedia, 2014).

Leading Indicators These signal future events and also called performance drivers. An

example is, Satisfied/Motivated employees are a leading indicator of Customer Satisfaction.

Lagging Indicators They do not predict but confirm a long-term trend which is an important

ability of this indicator to confirm that a pattern is occurring or about to occur. These are also

called outcome measures.

When developing a Balanced Scorecard (or any other performance management system), it is

recommended to use a combination of Leading and Lagging Indicator because there is cause and

effect chain of objectives and strategies and there is corresponding chain of leading and lagging

indicators.

Leading indicators without lagging indicators may enable a company to focus on short term

performance but they will not be able to confirm broader organizational outcomes have been

achieved. Leading indicators enable a company to take pre-emptive actions to improve chances

of achieving strategic goals. Lagging indicators without the leading indicators tell nothing about

how the outcomes will be achieved, nor do they have any early warnings signs about being on

track to achieve strategic goals.

Company Ds Balanced Scorecard identified cost efficiency can be improved by investing in high

performance process like TQM and Six Sigma Program. These processes are leading indicator of

cost efficiency. So Company D invested heavily on Six Sigma program to reduce costs as can be

seen in the table below.

Company D was investing highest in the industry of $2.50/pair of capacity for year 17 and 18 than

the industry average of only $0.68 and 0.79/pair of capacity for years 17 and 18 respectively.

Though the total manufacturing costs per pair produced were higher than the industry average,

Company D is on the right track of cost efficiency in the future years as high performance

process like Six Sigma is a leading indicator of cost efficiency.

References

Srb, Thomas (2014) Retrieved from https://www.xeneta.com/blog/how-to-implement-total-

quality-management-and-six-sigma/

Kreitner, R. (2009). Organizational Behavior [VitalSouce bookshelf version]. Retrieved from

http://online.vitalsource.com/books/0077771788/id/B3-15

Balanced Scorecard (2014) Retrieved from http://www.investopedia.com/terms/b/balanced

scorecard.asp