Senior Sim Essay, Research Paper
Before start playing the game and building up my corporation I have developed a strategic plan and I have set specific and attainable goals. My target was the maximization of profits in the long run and at the same time the satisfaction of customer needs. My target groups would be the entire market, including all the market customers even of different age, genre, sex, status, income, preferences because I am going to sell products which are consumed every day. After defining the name, the goals and the mission statement of my corporation, my first move was to find a good location for building up my department stores. Therefore I chose a city with a maximum number of potential customers (large population), with low or no competition, as well as with a close path to the ports so as to have minimal transportation costs.
Therefore, before I started setting up the buildings I had to make a market research in order to find the profitability and the competitiveness of the target market and accordingly create a business strategy. Therefore, it was important to find a target market with low or no competition and with many potential customers as I stated before. So, after doing the market research I decided that the best market to enter was that in London, first, because it was large enough, and second because no competition existed there at that time, meaning many potential customers. Then, I had to decide where exactly to locate my department store in London. A store in the heart of downtown malls implied a large number of customers but at the same time, very high
land and building up costs. I wanted to be an aggressive businessman so I decided to build my store in the heart of the town despite the high costs. I wanted to be the first corporation who would penetrate the market of London and I wanted to be successful and build a strong base.
My next step after building my first department store was to have my port in order to bring the products to my store, and to set up the functional units in order for my store to operate. These included a purchasing unit linked with a sales and an advertising unit. The purchasing unit was responsible for buying the products from the suppliers and bringing them to the department store. Linking the purchasing with the sales unit enabled the products to move onward to the sales unit for sale. Additionally, the sales and the purchasing units were linked with an advertising unit. The advertising unit was an essential part of my business strategy. These is, because the advertising unit was responsible for making the products known to the potential customers, and therefore maximize sales as well as create brand awareness and brand loyalty. Brand loyalty was very important and could be increased only by advertising over time.
After setting up the functional units, I had to decide on which
product I would purchase and sell. At that point, my strategy was to build a factory to
purchase raw materials and to make them products in order to sell them through my department store. Therefore, I decided to make and sell Milk, Tv Dinner, Strawberry, and apple Crisp. When the department store started operating, as a manager I had to plan and act even more carefully than before. As my new firm entered into the market I had to offer my products in lower prices considering of course the short run cost, in order to “push” the demand for these products up and increase sales as well as profits and brand name in the long run. By time, and as the demand and brand were increasing I started to increase the prices respectively. I had to advertise my products heavily because they were new and I was aiming for brand awareness.
Besides, I was looking upon the fluctuations (if any) of the market demand, upon current and new competitors and their strategies as well as for new markets and even new products and suppliers if they could offer better prices and/or better quality.
When the supply of the products exceeded the demand the profitability of the products wasn’t yet fully exploited. Thus, there was more capacity to meet demand and generate revenue therefore I had to lower the prices. On the other hand, if the demand exceeded the supply, the firm could not supply enough goods to meet the customers’ needs. In this situation, I would increase the supply of product as soon as possible to increase sales.
Additionally, if the competitors were offering the same products with me and in lower prices I was reducing my prices in order to attract more potential customers and stay in the competition. If I loose my customers then it will be difficult to catch them again so I had to be very careful. My strategy was based on purchasing high quality products so that I did not have to improve their quality. If my products were not so high quality I would have to build an R&D, which could improve the quality, but it would cost too much and the result would be a loss in the long run. When the cash and the annual profit were rising rapidly, I decided that it was time to expand in another city. By following again the same perspectives as before and after conducting a market research, I decided that Sheffield was the best place to build a new department store. Once more, I followed the same procedures in selecting the location
as well as in setting up the functional units and managing the purchase-sales and advertising teams. In Sheffield I sell Chocolate Milk, Peanut Butter, Frozen Beef, and Lettuce.
In addition to these strategies, when investing, I was also keeping an eye on the stock market. Profits could also be gained there, especially when buying another corporation’s stocks, because buying a large stake in rival was probably a prelude to a takeover. This could benefit me not only from the rising stock price as the takeover would move along, but also when it would complete and the two merge, I would own stock in the parent. My principle always was that a frequent self-performance
analysis would be essential for obtaining a profitable corporation. This implied looking upon the profitability, sales, shareholder value, customer satisfaction, product quality, brand associations, relative cost, employee attitude and performance and portfolio analysis. Depending on the results of the analysis I was planning my new strategies and of course expanding my department stores to other cities.