Global Tech
March 12, 201
Executive Summary
Global Tech is a global computer manufacturing company headquartered in Boca Raton, Florida. Global Tech is devoted to the production of high quality computers that are competitive in cost, meet customers’ expectations for performance, and are delivered to our customers in a timely fashion while meeting shareholder needs. Global Tech’s customer-driven innovation leads to products and services that address real-world needs. Global Tech aims to achieve the appropriate balance among quality, cost, performance, and time to market to aggressively challenge our competitors in current and future markets. With Global Tech’s dedication to our customers and the communities we are located in, we will improve market presence and experience profitable growth that enhances shareholder value. Appendix A includes more information on each individual team member in a detailed executive summary.
Overall Corporate Strategy
Global Tech consists of five corporate executives with varied backgrounds in the business industry. The members of the globally-integrated enterprise consist of Rhonda Powell, Jason Kang, Lisa Rodriquez, Nicole Sherer and Amber O’Brien. Each executive is a dedicated member of the executive team bringing an expanse degree of performance and attributes to the company. Mission Statement and Culture
At Global Tech we strive to lead the industry in the development and
innovation of the most advanced computer systems. We translate these technologies into value for our customers through affordable professional solutions for businesses worldwide.
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Global Tech is a based on teamwork and providing quality products to customers. Global Tech’s cultural goals are to create exceptional shareholder value, promote cultural diversity, be a globally integrated enterprise, act with integrity and ethical practices at all times, win as a team, give back to the community, provide excellent customer service, and corporate responsibility. Corporate Problem and Objectives
Statement: How do we profitably serve our desired industries on a global scale? Global Tech’s solution is to develop quality products and market effectively to be successful. Focus of the firm are on the following corporate objectives to promote the following solutions: a) to make financially sound decisions to increase and maintain profits; b) to gain market share by building quality products and using effective marketing strategies; c) to increase shareholder value through ethical and responsible decision making practices; d) to remain liquid in our cash position to be able to grow and be a sustainable competitor in the market place.
Financial Resources
Global Tech has been financing from the executive team’s investment money and venture capitalist. The total equity funding available this quarter is $8,981,015. There is $6,332,580 total cash available with $13,471,523 unused short-term loan capacity available if needed for borrowing. The firm received $4M in quarter 4 from venture capitalists which has been utilized to provide funding for research and development. Competitive Advantage
Global Tech has taken a hybrid approach to the basis for competitive advantage. Global Tech’s focus is to provide the greatest value for the best price offering quality affordable products to its customers. In Q1 to Q3, the focus was on creating brand for the Workhorse segment with a secondary emphasis on the Traveler Segment. In Q4, Global Tech switched its primary focus to the Traveler segment with a secondary focus on the Workhorse
segment. Business Controls
Global Tech has used various methods of business controls as benchmarks for success and growth. These benchmarks were represented through percentage goals in each of the five primary sections of the company. One example in Human Resources was a goal of obtaining and maintaining 100% productivity from factory workers through the compensation package. Review Appendix B for the various methods of these controls relating to each individual business process. Organizational Structure
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Organizational structure defines the scope of acceptable behavior within an organization, its lines of authority and accountability and to some extent the organizations relationship with its external environment (Day, 2012).
Global Tech has taken the approach of dynamic executive team all contributing to their respective areas of expertise based on their experience. At Global Tech, there is a team leader, but each team member has a voice and company decisions are made as a group with majority vote. Appendix C is attached to demonstrate how authority and roles are delegated with Global Tech. Strategic Analysis
Market and Financial Performance
Global Tech’s marketing strategy consists of many steps in response to identifying problems and clarifying them while simultaneously planning new opportunities which stands-out to us. As a result, no amount of contribution was left unpaid as the company is financially fit to ensure our advantage is being built to financially outperform the lower two firms in the marketplace for the next two years. Global Tech has made great progress and learned that progress is something any business needs in order to guarantee profitability for the firm while deploying the maximum amount of impact in the market. Sure a number of marketing tactics are truly worthwhile to mention, but the ones deserving extra attention goes towards the plans of being most aggressive as opposed to competitive in price. Also, smart advertising of the product qualities with the matching factors in correlation to market research. Now, Global Tech stands number one in regards to market effectiveness and second in line for best market performance as a result of strong strategic approach.
Media is an extremely popular way to influence almost every market segment today as opposed to just printed marketing. More so, product ads, branding, PR, and social media all work together for one purpose, to engage consumers to receive the company’s message (Clow & Donald, 2006).
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For starters, Global Tech as already begun improving the probability of customers making purchase through creating more appeal in websites, profiling user behavior for data mining, and ensuring consumers receive the message Global Tech strategically displays in its ads. By Q6, Global Tech had taken all pay-per-click options and partnered with every contractor with various search engines to optimize our visibility. Global Tech also partnered with satellite websites to increase web traffic and productivity. Marketing was an extreme importance and Global Tech spared no resources in this area to gain market share. Towards the end, Global Tech’s social media integration has significantly proven to be highly effective as the company’s web marketing expenses were only 11% of overall operating expenses. Global Tech ended up producing the largest net profit of $2.5 million by Q6, three and a half times more than the amount of the second best ranked performer. Business Expansion
Global Tech will continue to pursue an aggressive approach to its business expansion goals. Global Tech has successfully entered all four key markets with great success and continuing potential for growth. By focusing on the overall corporate strategy and its company objectives, Global Tech will continue to focus on growth and business expansion to other target segments and key markets. Attached in Appendix D is a chart of the corporate objectives and key points of how they will each contribute to business expansion.
Competitor Analysis
Competitors and their products.
Global Tech’s competitors are listed in the following order: 1)
1. Elite PC: Razor 2000, Elitebook 1000, Apex 5000
2. WGT (We Got This): WGT – Laptop, WGT – Desktop
3. SupraTech: Supra Xtreme XS, LaserBook, Chuck Norris XL
Competitor’s Strategy
Elite PC continues to perform well each quarter demonstrating they are a high level of threat and aggressive over all brands in each market overall. Despite the fact that Elite PC operates in only three of the four markets, they are still able to create demand due to the level of high personal touch in the markets they serve. SupraTech now operates in all four markets but has only managed to capture 19% of total market share. Although SupraTech has successfully produced a Mercedes product it has had little impact on gaining market share in the primary markets. WGT remains behind the trend of creating strong brands for their sales and service people to sell. WGT opened an additional office last quarter yet continues to remain a low level of threat due to the fact they do not have widespread distribution and a low personal touch in the markets they serve. The HR, Sales & Marketing Strategies for the competitors has yielded a high level of threat by only Elite PC. The compensation package for their sales representatives and factory workers is better than WGT and SupraTech.
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Elite PC is able to retain highly motivated sales people and moderately productive factory workers based on the compensation package. SupraTech and WGT have a low personal touch in sales offices and online as they only have offices open in Paris and New York with minimal coverage in those offices and online. Elite PC’s Manufacturing Strategy is high volume, low cost, where operating capacity equals fixed capacity so they are extremely efficient. In contrast, WGT and SupraTech cannot meet fixed capacity as they are 68– 69% of operating capacity. Elite PC’s Finance Strategy has consistently shown high financial leverage, strong asset management, and prudent cash management. On the other hand, WGT and SupraTech have consistently underperformed each quarter by demonstrating low financial leverage, asset management. SWOT Analysis
A SWOT analysis is commonly used when companies would like to evaluate their internal and external environments. After analyzing all the positive and negative factors influencing their company, they can formulate a strategy that will build on their strengths and address their weaknesses (Kotler & Keller, 2009).
See Appendix E for SWOT analysis. This is a summary of Global Tech’s current strengths, weaknesses, opportunities, and threats as of quarter four in the areas of marketing, HR, manufacturing, and finance. Additionally, please see Appendix F for a summary of expansions on the problems, opportunities, and corrective actions to be taken based on the SWOT analysis. Generational Differences
According to The American Management Association (2007), there are several generations who may be working together in the workplace and these generations will have different motives and attitudes towards work. Successful companies will recognize the differences to create a strong business culture and healthy and productive working environment (AMA, 2007).
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Global Tech recognizes the different generations and tries to appeal to their wants and needs. For example, The Silents are very loyal and dedicated but need security and stability (AMA, 2007).
Global Tech addresses this by growing steadily and compensating employees on a level which will reduce management turnover (Murphy, 2007).
Another example is addressing the Baby Boomers’ motivation for big rewards (Mocke, N.d.) by giving quarterly raises to keep and improve productivity (Cadotte & Bruce, 2003).
The Generations Xers enjoy taking risks (AMA, 2007), and one of the major corporate strategies of Global Tech is taking an aggressive approach to the market, which some may view as risky (Cadotte & Bruce, 2003).
Additionally, Global Tech addresses the Generation Y’s needs for technology, integrity, and diversity (Mocke, N.d.) by submerging them into a company surrounded by the latest and greatest new technological products made possible with a high research and development department and strong company values (Cadotte & Bruce, 2003).
Next Year in Business
Marketing Strategy
Global Tech’s ability to appeal to both target segments reached a record high in value, being the most receptive to market needs every quarter where other firms have dropped significantly. These areas will change next year for the better with new R&D investments closing to keep competitively appealing with contents to the target segments. In short, here’s the marketing strategy designed for next year in the following order; 1) Effectively engaging new target R&D projects for the following year; 2) Integrating newly developed technologies into product; 3) Advertising and branding effectively corresponding to target population.
Transforming undecided and non-customers into a target segments will serve Global Tech to fulfill a corporate objective of promoting and improving processes to reach company goals. If Global Tech decides to research non-customer tiers and appeal to multiple market segments to capture consumers in between cluster overlaps1 , they must act fast. Profitability can be maximized by devaluing competitor products early through ad campaigns heavily researched with market trends/brand judgment. Next year the marketing strategy will help Global Tech thrive in their commitment of delivering the industry’s most innovative and highly advanced systems worldwide. Manufacturing Strategy
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The goal of Global Tech’s manufacturing strategy is to continuously meet customer demands by maximizing worker productivity. At the end of Q6, Global Tech scheduled to produce 125 out of a fixed capacity of 125 units daily for new brands Workhorse 4000 and TravelR 3000, and current brand TravelR 2000. The number of workers increased to 405. The inventory of the TravelR 1000 increased to prevent the stock outs from Q3. Global Tech led the competitive market in worker productivity of 100%. These results enabled Global Tech to lead its competition to the #1 spot in total market demands.
To continue to surpass the competition, Global Tech will 1) maintain worker productivity at 100% by continuously re-evaluating and optimizing worker compensation packages, 2) reduce and/or eliminate stock outs of Workhorse and TravelR brands by increasing production plant capacities based on evaluation of customer demands and market trends, and 3) increase plant capacity from 125 to 225 units daily in Q7 to account for Research & Development efforts for improved product performances in subsequent quarters. Q6 results show per unit costs decreased by 1%, but will strive to reduce per unit production costs by greater than 2% in subsequent quarters, which may allow the introduction of the Mercedes brand to show future expansion capabilities of Global Tech. Sales Channel Strategy
Global Tech will continue to concentrate Workhorse and TravelR sales in each existing market as well as new offices scheduled to open and the web store. Additionally, Global Tech will aggressively hire more sales representatives for existing offices, new offices and the web store. The results of the aggressive strategy will yield greater potential for high personal touch to service customers which will ultimately increase demand and strengthen the brand. Human Resources Strategy
HR is a critical part of a firm’s success and salary and benefits are directly related to productivity (Cadotte & Bruce, 2003).
In quarter six, Global Tech factory workers are 100% productive. This is the most productive compared to their competitors (92.6%, 82.6%, and 76.1%).
Similarly, the sales force is also the most productive at 86.0%, compared to 80.9%, 80.2%, and 71.5% (Please see Appendix G).
In order to stay ahead, Global Tech’s strategy is to continue to invest heavily in HR by offering generous compensation packages to increase worker motivation and productivity above and beyond their competitors.
Financial Strategy
Global Tech will continue to focus on its decided financial strategic thrusts. Global Tech will be willing to take financial risks and will continue to maximize liquidity as much as possible. Global Tech will make choices based on the numerical indicators such as ROI and profit analysis as well as based on recommendations from the experience of the team members. Global Tech has vowed to invest in decisions that have a high probability of success as well as a high impact. Global Tech will focus on remaining open to ideas on ownership possibilities in the future and will maintain a close eye on their competitive advantage within the market place making financial decisions accordingly. Appendix H, I, and J show Global Tech’s financials through its Statement of Cash Flows, Income Statement, and Balance Sheet as well as Appendix K shows the firms Tactical Plan in Quarters 1 – 6. Assessment of Current Situation and the Market
After review of Q6 results in Q7, Global Tech successfully led its competition in the industry by capturing 41% of the total market share among three other companies in all four markets of Paris, New York, Tokyo and Toronto. Global Tech concentrated on selling its Workhorse 4000, TravelR 2000, and TravelR 3000 brands, and was successful at garnering 41% of total customer demand market for Workhorse, and 60% of total customer demand market for TravelR. An unexpected but pleasant surprise was in capturing 4% of the total customer demand for Mercedes using our Workhorse and TravelR brands, without creating a Mercedes brand. Looking at the company’s Balanced Scorecard, Global Tech excelled in every category of Financial Performance, Market Performance, Marketing Effectiveness, Investment in Future, Wealth, Human Resource Management, Asset Management, and Financial Risk.
Its Total Performance accumulated an outstanding Total Performance of 36.99. Global Tech’s goal in reaching its current level of success was achieved by constantly analyzing its strengths and weaknesses each quarter in each division of its business, and implementing the best strategies to improve and correct, where necessary. In Marketing, the company’s strength was its ability to adapt and make quick changes in response to market research and forecast estimates, while its weakness was being ranked lowest in the marketplace. In Sales Channel, the company’s strength was the increase in the demand for its products, and offerings in their respective markets in the sales offices and the web store. Web store and sales offices grew to staff for increase in productivity and R&D projects created new products to promote in Q6. The company’s weakness was too much demand was created with not enough supply. Sales reps and factory workers too efficient and satisfied. In Human Resources, Global Tech had the highest, ranking sales and work compensation packages amidst its competition. In Manufacturing, Global Tech’s strengths were that daily schedule of production units increased from 75 to 125 of the maximum fixed capacity of 125 units daily in the factory.
Worker productivity remained at 100% as a result of increased worker compensation packages, which Global Tech led among its competitors. There were no inventory stock outs present with our Workhorse 4000 and TravelR 3000 brands. Although Global Tech discontinued their Workhorse 2000 and TravelR 1000 brands to eliminate current stock, and customer demand for both discontinued products yielded high stock outs (1667 units for Workhorse 2000 and 1051 units for TravelR 1000) after Q5, there were no stock outs for the discontinued brands after Q6. The company’s weaknesses were that daily scheduled number of production units was not increased high enough in Q5 for realization in Q6 to 225, to compensate for possible higher stock outs in future quarters due to enhanced product features and increased sales presence in all four markets. Stock outs of 2208 units for the TravelR 2000 occurred. In Finance, Global Tech’s strengths were that it ended Q6 with a $6,332,580 cash balance, and was willing to take risks to gain rewards. The weakness was that there were no investments.
On the path to success, Global Tech learned lessons that taking risks yielded very profitable results; however, the company’s low investment activities can still impact the success of a company if it is an area of the business that is not improved upon. Additionally, the company has learned the importance of increasing fixed daily capacity production at a greater rate in Manufacturing than previously done in order to reduce product stock outs as a result of increased satisfaction from salespeople and workers, due to increase compensation packages. Another lesson learned is to continue to gage the competition and ensure strategies of the company continue to align with its values and mission. The roles and responsibilities at Global Tech were assigned per the individual strengths and preferences of each team member. Insights profile strengths and weaknesses were discussed as a team and a consensus reached on which area of the business each person would focus on.
The team came to the conclusion to assign areas of expertise based on each person’s background and insight profile strengths. Based on this information, the team members were respectively assigned the primary and secondary roles and responsibilities in the marketplace simulation of VP-Human Resources, President, VP-Marketing Research, VP-Manufacturing, VP-Sales Management, VP-Accounting and Finance, and VP-Marketing. As Global Tech successfully progressed through its quarters of creating, producing and selling its Workhorse and TravelR products, the team continued to discuss, re-analyze, and re-calculate decisions using scanning and multivariate thinking to stay in line with, and ahead of, the competition. Constant communication between the team members and continuous encouragement to one another kept the team enthusiastic on the tasks and ultimate goal of the company. Changes were made to better utilize time by reducing the length of meeting times from 4 hours to 2 hours. Additionally, each team reviewed each quarter results, researched competitor activities, and made preliminary decisions in their business areas prior to the next team meetings. These changes and actions ensured that the team continued to operate in a highly effective fashion. These changes increased our overall productivity as a team and allowed the team to make more, well informed decisions based on researched information. As a result, the team was highly successful in leading the computer industry.
Although Global Tech has realized, gained and maintained lead over its competition in the computer industry for several quarters, the company cannot afford to be relaxed in taking risks and being aggressive in investing in new product features, creating new products, and continuously upgrading employee compensation packages. Customer demand in the market can change at any time. New competitors can enter the market with new products and technology that set new standards of computer styles and surpass Global Tech. Additionally, the economic situations in the markets can take a downturn, which will slow customer demand, and subsequently affect sales and profits for Global Tech.
Actions Taken for Future Growth
In order to compete in the future and secure Global Tech’s growth, continuous and progressive changes to all areas of the business strategy must be made quarterly. Looking forward to Q7 and beyond, Global Tech is making: investments in research and development, product and brand improvements for the new features to be added on, continuous improvements on advertising to appeal to loyal and new customers, plans to expand the plant to meet growing demand, and staffing and compensating competitively. Additionally, new markets will be continuously assessed for growth opportunities.
To ensure the next steps in growth are easily achieved, possible changes to organizational structure may need addressed. Investing heavily in market research, product research and development, and staffing competitively will remain a priority. Global Tech will continuously seek out opportunities to expand markets and stay aligned with core company values and ethics. As a global leader, Global Tech persists on offering their customers the most technological advanced products at affordable prices. Focusing on their stakeholders, Global Tech will plan on opening new markets around the globe and not only with their priority products, but also finding opportunities to challenge their competitors in new product segments. Global Tech would like to give their customers a variety of product offerings in every segment to ensure company growth and long term customer relationships. Conclusion
Global Tech is devoted to producing high quality computers at a competitive cost to meet their customer’s wants and needs and to create long term relationships on a global scale. With a strong management team, Global Tech constantly changes the corporate strategy according to the needs of financial resources, gaining competitive advantage, business controls, organizational structure, and market performance, including their competition and expanding the business. They also often address generational issues, e-commerce, and popular media advancements to ensure they are competitive. Currently ranked number one, Global Tech has a positive outlook for the next years in business with their plans to surpass the competition by continuously and strategically revamping their strategy in the areas of marketing, manufacturing, sales, HR, and finances. Global Tech is confident they will remain number one in all of these areas, including market share due to their dedication to providing their affordable high quality products to their consumers.
References
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