INTRODUCTION
Strategic direction is defined as the plan which needs to be implemented within the company so that the objectives and vision of the company can be attained. It is necessary for the reason that the competition in the market is very high and in case the overall development of the company will not be good then a competitive position will not be gained in the market. So for a company to grow and develop the effective type of strategic direction must be followed. The companies must comply with the necessary changes so that the overall working can be improved and all the latest changes can be implemented (Alqershi et al, 2022). When the company is not following the latest changes into practice then this will impact the overall efficiency of the company well. Thus, to meet the competition it is necessary that an effective type of direction is followed so that the overall development of the company can be done and the growth is measured.
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The current study is based on Aizen, which is a company dealing in the automotive sector. The present company aims at offering a wide range of car options to their consumers so that they can satisfy their needs. The company is offering the cars based on the tastes and preferences of the consumers and this provides a better base to grow and develop well. It is due to the reason that the company is following the latest trends and this helps the company in securing a better position among the other competitors. The company aims to increase the gross margin of the company in future and for this, a clear strategic direction must be present. In case the strategic direction of the company is not clear then it will impact the overall working of the company to a great extent. So for a company to become successful a clear direction must be present and within this human resources plays a crucial role.
The human resources of the company aims to manage the workplace environment and all the other related elements. Moreover, the strategic direction of the company must always be decided by the human resource only. It is the reason that the HR of the company is the intermediary among all the different departments of the company and also aims at developing the objectives of the company (Petti et al, 2021). It is the reason that HR is responsible for the growth and development of the company and in case the growth of the business is not met then it will be impacting the overall working of the company. Thus, some of the objectives of the company which need to be attained are as follows-
- To achieve a sales margin of at least 30% by the end of every financial year.
- To maintain an annual growth rate of at least 8%.
- To secure a strong market share and customer retention.
- To allocate at least 5% of wages to staff training each year.
- To invest at least 20% of profits in R&D annually.
- To maintain a single factory to contribute to environmental sustainability.
- To implement a robust automation system to boost innovation in manufacturing.
All these objectives are for providing a better strategic direction and are helpful to the company and other departments to work well. However, in case the strategic direction is not clear then it will impact the overall development of the company. Resultantly the performance of the company will not be improving and the competitive advantage will not be gained. So to be successful it is mandatory for the company they effectively try to manage and make the objectives in such a manner that they are resulting in the development of the whole of the business as a whole (Lukin, Krajnović and Bosna, 2022). The reason underlying the fact is that when the human resources will be taking care of the whole company and every employee and department. It is the responsibility of the human resources department that they will be effectively thinking of the development of the company. Resultantly the overall development of the company is improved and ultimately the competitive position is secured.
All these objectives are aligned with the overall corporate objectives as these objectives emphasise the complete growth of the business. When the strategies are formulated keeping in mind the overall goals of the business then it provides a better direction to the company to make the strategies. Thus, it is the responsibility of the company and the HR department they make the strategies and objectives well so that the overall growth and development can be managed well. Thus, while formulating the business strategy it is mandatory that the approach of the company is analysed and this assists in improving the working capability in the market (Clibborn et al, 2020). Also, the current study will analyse and evaluate the various types of models and approaches for deciding on the strategic direction. It is crucial for the company that the effective evaluation of the market and other secondary studies is implemented so that overall good strategies can be made. In case the strategies formulated do not include any of the current marketing trends then the objectives will not be good. Hence, for making the objectives accurate all the objectives of the company must be kept in mind so that the overall development of the business can be attained.
LITERATURE REVIEW
In the views of Sahoo, (2020) Company growth and earning profit are the most common objectives or the purpose for which the company operates. It is due to the reason that when the effective type of the motive is present then the working will be improved. Also, the competition in the market is very intense and in case the direction of operations of the company is not good then it will impact the overall working of the business. It is due to the reason that when the direction is clear then the employees will be working well and also the overall development of the company will take place. Hence, for this, it is the responsibility of the business and the managing committee must effectively research the market and then find a strategic direction.
According to Cole and Yakushiji, (2020), it is due to the reason that when the direction is clear then automatically the overall efficiency will be improved. The business operates in the external environment and to be successful company must operate according to the environment. Within the external environment, there are many different types of changes that take place and it is the responsibility of the company they comply with all the relevant changes so that overall efficiency can be improved (Lenort, Wicher and Zapletal, 2023). Moreover, it is mandatory for the automotive industry they continuously research the external environment so that the changes can be effectively managed and related changes can be implemented into operation. When the necessary changes will not be included in the manufacturing or the operational process then the actual working of the company will be affected. Thus, resultantly, an effective type of environment scanning must be done.
In the views of Liu et al, (2023) environment scanning is defined as a concept which emphasises the gathering and collecting of information relating to the changes taking place in the internal and external environment of the company. It is mandatory for the companies operating in the automotive sector they continuously scan both the internal and external operating environment so that the related changes can be implemented and similarly, the overall working can be improved (Orr, 2019). Thus, by conducting the environment scanning the companies in the automotive sector have two different methods which include PESTLE analysis for the external environment and SWOT for the internal environment. Both these methods are assistive to the company in managing the environmental changes and try to implement the best option which is suitable for the company in growing and adapting to the latest and related changes.
According to the PESTLE analysis, the evaluation of the external environment is very necessary. It is due to the reason that when the external environment will be soothing to the company then automatically growth will take place. Also, when the strategies are good and effective then the overall growth and development will take place. Moreover, with the help of the PESTLE analysis in-depth evaluation of the environment can be implemented and all these changes can be easily implemented into the business. Hence, according to Putri et al, (2023), the political environment is the one which includes all the changes taking place in government policies, political parties, foreign trade and many other different types of changes taking place in the political environment of the company.
With the analysis of the political environment, it is clear that currently, the political environment within Australia is very stable and good for the automotive industry. It is due to the reason that the tax rate is low and this is good for the company. However, it is because the company has to pay less of the taxes and this money can further be used in some other activities. Moreover, the government regulations and policies for the automotive sector are a little flexible and this makes it easier for the companies operating in the automotive sector to work freely. It is due to the reason that when too rigid policies are running then it will be affecting the overall efficiency of the business and resultantly the overall working capability of the automotive industry will be increasing.
Also, Kamble et al, (2023) stated that with the political environment, it is also mandatory for the automotive industry they effectively try to analyse the economic environment as well. This is due to the reason that the economic factors include a variety of elements like inflation, interest rates, employment, unemployment, GDP, disposable income, purchasing power and many other different types of factors. All these factors need to be considered by the automotive companies so that the economic environmental changes can be addressed well. Currently, the purchasing power of consumers has increased and this is an opportunity for the company as they can capture a large market share (Pavlínek, 2022). By providing high-end luxury cars, companies in the automotive sector can try to attract consumers and increase their sales greatly. Along with this, there is also a decline in interest rates and this is also an opportunity for the automotive companies to grow and develop. This is due to the reason that when the interest rates are lower people can take more of the loan and the interest payable will be less. Thus, it will assist the automotive sector to grow well and ultimately the overall efficiency can be improved.
Moreover, Shah et al (2022) also stated that considering the social changes and factors is also very necessary for the company to be successful. It is due to the reason that when the views and perspectives of the consumer will not be good and effective then the company will not be in a position to effectively manage the work. It is due to the reason that when the effective type of the consumer trends will be followed then it will be assisting the company to operate well (Sakuramoto, Serio and Bittar, 2019). Currently, the taste and preference of the consumer have shifted towards using luxury cars and having a comfortable life. Thus, this is an opportunity for different automotive companies can try to develop cars which are luxurious and comfortable. When companies comply with these types of social factors then there are more chances to increase the sales of the company. Thus, for this, it is mandatory for automotive companies they must effectively try to manage and implement all the latest social and cultural factors into practice so that the overall working can be improved.
Along with the social factor, it is also necessary for the company they effectively comply with the technological amendments as well. This is due to the reason that there are many different types of technological advancements and it is necessary for companies to effectively manage maintain and implement the latest techniques into practice. Currently, there is a trend for electric vehicles and it is necessary for the automotive industry they effectively try to implement the latest techniques into the business as well (Gohoungodji et al, 2020). Also, the technique of autonomous driving and implementation of AI is also increasing and it is needed for the companies to implement the same thing into the business. When the latest techniques are used and followed by the company then it will promote a better working into the business. Thus, it is beneficial for the company to secure a better position in the competitive market. Hence, complying with all the different types of the latest techniques will assist the company in managing and maintaining a better working environment. When companies use the latest technology then it will enhance their working capability and resultantly, the overall competitive working will increase.
In addition to the technological factor, it is also necessary for the automotive companies they comply with the legal structure and changes as well. It is due to the reason that when the legal guidance will not be followed well then the consumers will not have confidence in the company. Also, there are many different types of regulations which are listed by the government and the regulating bodies which need to be followed by the companies operating in the automotive sector (Chervenkova and Ivanov, 2023). This includes complying with different laws like safety standards, health and workplace safety, labour and employment laws, intellectual property rights and many other different types of laws and regulations. It is due to the reason that when effective type of laws are followed then the overall working will be improved and the trust of consumers towards the company will increase.
In addition to this, compliance and protection of the environmental factors are also necessary for the success of the company. The company operates in an external environment and takes the resources from it. So it is the responsibility of the company that they protect the environment as well. In case the environment is not protected well then it will affect the working efficiency to a great extent. There are many different types of environmental aspects as well which need to be considered (Hadian et al, 2020). This includes keeping in mind factors like climate change, resource management and waste management, managing air quality, sustainable working and many others. When the automotive companies take care of all these aspects then the consumer will be more attracted towards it. Thus, for this, it is the responsibility of the automotive companies they effectively manage environment protection by complying with CSR practices, sustainable working and many other different types of issues.
With this, external analysis it is clear that the external environment is very good for the automotive company. Along, with this, with the help of the VRIO model, it is clear that the internal capabilities of the automotive companies are also good. It is due to the reason that all the resources used by the automotive companies are very good and resultantly the overall efficiency and the internal capability increases. It includes facts like better financial resources, technical, good manufacturing process, better production fleet and capacity, a good set of employees, better cost structure, high brand popularity and many other different types of capabilities (Bartos et al, 2022). All these capabilities and better resources will assist the company in managing the working well and ultimately the overall efficiency of the company will be improved. All these competencies help the company in managing the work well and try to improve the working well and resultantly the overall and better strategic direction is planned for the company.
Along with the help of VRIO analysis, compliance with the use of the Ansoff model is also made. It is particularly used by the automotive industries as this method provides a clear direction to the company in making decisions. The Ansoff model is a good model which assists in providing a better strategic direction and consequently, it will help the company to have a better base to grow and develop. It includes four different methods or techniques which can be used for the better working and development of the company. It is due to the reason that when an effective method for growth is used then it will help the business in managing the work well. Also, it includes methods like market penetration, market development, product development and diversification. Thus, resultantly automotive industry will be motivated to work in a better and more effective way.
For instance, the automotive company say, Aizen thinks of market penetration then for this it is the responsibility of the company they try to increase the sales of products within the existing market only. Thus it will assist the company in trying to manage and make the strategies which will assist the company in developing the working well. Also, according to the latest trends and their evaluation, it is clear that automotive industries must be focusing on the strategic direction of market and product development more. It is due to the reason that when the companies focus on capturing more of the new market then it will be assistive to the company in growing well. Also, when the company will emphasis on product development then they will be making innovations and will focus on developing new products. Thus, resultantly more new markets will be captured and ultimately the growth will take place. Also, a better strategic direction will be provided to the company and resultantly, the overall development and growth of the company will take place.
Thus, with this, it can be stated that for the better working of the automotive industry, effective types of decisions must be taken by considering the internal and external environment. Also, when the external and internal environment are not evaluated well then it will impact the overall efficiency of the company to a great extent. So with the help of the external environment analysis, it was clear that it is an opportunity for automotive companies to grow and develop. Thus, it will help the company in securing a better position and the internal capability is also good and this is assistive to the company in managing the work well.
METHODOLOGY
Research Type
Research type refers to any structure or organised inquiry which is carried out for resolving issues and problems. The three major type of research types are qualitative research, quantitative research and the mixed research type. Qualitative research type includes data that does not include any type of ordinal values. Quantitative research is method that includes testing theories by establishing a relationship among the variables. Mixed research is the type of research that mixed both quantitative and qualitative method in the same study (Ahmad et al, 2019). For determining the viability of the car manufacturing company, Qualitative research type has been chosen for this study. This method has been selected as it assist in gaining in-depth and rich understanding of the all the phenomena and concept. Qualitative research supports in exploring behaviour and attitude aspect which help in collecting more accurate information regarding the research issue. This research method also provides flexibility that assists in gaining more reliable and accurate data regarding the research topic. Qualitative research method is often focused, relatable and scientific that assists in better understanding the research issue.
Research approach
Research approach refers to the detailed outline of all the procedure and steps that are executed for gathering, analysing and interpreting the data. The two most effective method of research approach are deductive research and the inductive research approach. Inductive research approach is the bottom to up approach which includes developing hypotheses, concept and theories after evaluating the collected data (Alharahsheh and Pius, 2020). Deductive approach refers to up to bottom method which includes testing of existing theories by collected data and observations. For identifying the viability of the decision made through simulation, inductive research approach has bens chosen by the researcher. This method has been sleeted as it helps in exploring new theories that aids in enhancing overall understanding regarding the research issues. Inductive research provides freedom to researcher to make large number of assumptions by determining new theme and pattern in the data.
Research philosophy implies the system of assumptions and beliefs that are used for the development of the knowledge. Interpretivism philosophy and positivism philosophy are two distinct research philosophies. Interpretivism philosophy implies the research method that evaluates events based on the specific value system and cultures. Positive philosophy believes that all the measurable data and information are crucial and other aspect should be ignored (Bauer et al, 2021). In determining the viability of the car manufacturing company, Interpretivism philosophy has been selected by the research. This method helps in understanding the social situation and motivation while collecting data that results in obtaining most accurate results. Further, this method aims at in-depth understanding of the all social phenomena by managing emotions that leads to gaining reliable information. Further, the current study has been undertaken by using qualitative method and inductive approach which could be effectively carried out through Interpretivism philosophy. Additionally, this method is based on the idealism approach which focuses over gaining diverse approach together for better understanding the research problem.
Data collection
Data collection is the process of analysing and collecting all the relevant information as to respond to the research question, assess results and for testing hypothesis. Two distinct methods of gathering data are primary and secondary data collection method. Primary data collection method refers to the process of gaining data directly from the first hand sources (Bloomfield and Fisher, 2019). This method implies gaining original information by collecting data from the individual that had faced the issue. Secondary data collection implies the method of gathering information from the research that has been conducted in past. In the context of identifying the viability of the car manufacture’s decisions, secondary data collection method has been used by the researcher. This method has been selected as it support in exploring large number of information and provide access to huge amount of data within the given time period. In this context, Google scholar has been used that helps in gaining access to large number of books, journals and scholarly articles. Further various governments’s published and unpublished articles will also be evaluated for better understanding the research issue.
Data analysis
Data analysis implies the process of gleaning information by applying various statistical and non statistical tools based on which informed decision could be taken. The two most common methods for analysing the data are thematic data analysis method and the SPSS data analysis method (Chandra et al, 2019). Thematic data analysing implies the method of evaluating qualitative data that include determining, evaluating and reporting themes and patterns within the data. SPSS is the software program which is utilised for analysing complex quantitative data. In the course of depicting the viability of the car manufacture, thematic research analysis method has been used by the research. This method has been selected as the current study is carried out through qualitative method which could be best analysed through thematic method. Under this method, the themes will be drafted while considered the research objective and various scholarly articles and journals have been referred to identifying accurate outcome. Further this method aids in simplifying the interpretation process as the results obtain in thematic analysis will be represented in the form of graphs and pie chart.
Ethical consideration
Ethical consideration refers to the various values and principles that are followed while effectively and accurately carried out the research process (Duckett, 2021). In the context of carried out current study, all the university guidelines has been accurately followed. In the context of utilising secondary data, all the information is accurately cited as to ensure reliability and accuracy of provided data. Further the reference list has been provided at last to acknowledge the effort of original researcher.
Research limitation
Research limitation denotes various issues impacting the fluent working of the research process (Fischer, Boone and Neumann, 2023). In the current study, ineffective time and cost are the major factors restricting the research. For overcoming the same, secondary method has been used as to access to large amount of data in less time and cost. For overcoming the time constraint, focus has been paid over using thematic data analysis techniques that helps in easily interpreting the collected data and support in successful completion of the research. Further, goggle scholar been used to get access to all the required information as it support in identifying in-depth information quickly result in saving time. Moreover, due to lack of efficient funds firm will not be ble to use software for the data analysis but firm has formulated various graphs that will aids in effective analysis.
Reliability and validity:
The reliability refers to the identifying the accuracy of the collected data whereas validity defines the suitability of data in the current situation (Bartos et al, 2022). For maintaining suitability and accuracy of all the data the date of publishing of information will be identified. All the information before year 2021 will be ignored and data after the same year will be gathered. Researcher will also emphasis over the identifying the major objective before taking data which help in ensuring accuracy. Further the economic situation will also be identifying that will aids in determining the reliability of the information support in gaining most effective outcome from the research.
BUSINESS GAME DISCUSSION
Being a human resource executive there must be effective analysis and evaluation of the result of the simulation well. In case the results are not analysed and evaluated well then it will affect the working environment to a great extent. This is particularly because of the reason that when the effective type of the decisions will be taken then automatically the overall development of the company will take place. With the findings from round 1, it was clear that the sales of the car are divided by the team. It is due to the reason that when the effective type of the team is divided then it will be assistive to the company in managing the work well. It is due to the reason that when the appropriate type of team is formulated then automatically the overall efficiency will be improved. This is because of the reason that when the effective type of the team will be working then the output will be good. However, in case the team will not be working well then the position of the company will not be good. According to the result of sales distribution, it was analysed that Aizen was ranked at 5 position and this was good for the company. Moreover, it is also the responsibility of the company they effectively try to manage and improve the working and resultantly the company came to know that there is a requirement to improve the market position and try to become the market leader.
Further, it was also analysed that the different types of design and features are also available which can be effectively used to make the product distinct from others. It is due to the reason that when effective type of design and features are not be provided to the consumers then they will not be happy working with the company. Thus, the different features of design available for the models of Aizen Thanos and Atom include SUV (4 x 4), petrol engine, diesel engine, battery electric engine and many other different types of services and design features which are necessary for the successful working of the company. It is due to the reason that when the effective features are provided to the consumers then they will be happy to buy the product well. It is due to the reason that when the effective type of the design and features will be used then it will be providing comfort to the consumers. Thus, resultantly more of the consumers will be purchasing the cars and ultimately the sales of the business will also increase.
Further, the round 1 production report outlined that Thanos and Atom are the two brands of Aizen that the company is operating in the market. During the production, it was analysed that there was no stock left of any of the two. For Thanos, 50000 was produced and the same was sold and for Atom, 70000 was produced and sold. Thus, this signifies that the product and services of the company were good and this was assistive to the company in managing the work well. Also, the production faced a single strike day and all the employees within the team were working very well. Thus, with this, it can be stated that the workforce is actively working and because of this the overall efficiency is improved and also the employees are happy. In case the employees will not be happy working in the business then the targets will not be attained well and ultimately it will affect the working of the company to a great extent.
With further analysis of the total market, it is clear that for luxury cars, the market size is very low which is 0.61. This simply means that there is more potential for an increase in the market of luxury cars. Also, according to the PESTLE analysis, it was seen that the social factor outlined that the taste and preference of the consumer are shifting towards the use of luxury cars. It is due to the reason that the purchasing power of the consumer is increasing and resultantly the consumers are switching over to using more comfortable and luxurious cars. So, now according to the result of round 1, it is clear that Aizen needs to develop luxury cars as well. In case the current trend will not be evaluated well and implemented then it will affect the working of the whole country and its success to a great extent. Furthermore, with the profit and loss statement, it is clear that the profit for the year 1 was 559.38 which is good and also the closing balance of the cash flow statement was good. It is due to the reason that this signifies that the company has having good amount of cash flow which helps the company in managing the performance well and consequently the overall efficiency will also be increased.
Further, with the help of round 2, it was clear that the production report outlined the 2 same models of cars only which were sold to the fullest production capacity. The production was done at 70000 and 112000 for both Thanos and Atom respectively. The whole produced cars were sold and this signifies that the performance of the company is going well. Also, the strike day was 1 in this round as well and the productivity of the employees was 418.39 which was good. This simply means that the company is performing well and resultantly the overall efficiency of the company is increased and helps face the competition as well. Moreover, with the help of the report on data relating to competition, the company was still at number 5 only and this was good as at least the company is not degrading., the week 2 result highlighted that there are many different designs and features available for the product and this included features like 3/5 door hatchback, petrol and diesel engine, extended warranty, park assist, surround camera, tech safety and many other different types of the features. Also, with the help of the research and development projects, it is clear that the company is also providing the facility of smart driving controls, virtual/digital mirrors, ultra-low emission and many other different types of better features keeping in mind the latest trends.
With the help of the external analysis, it was clear that environmental protection is also very necessary to be included in the working of the company. It is due to the reason that when the effective type of working is improved then it will help the company to make better decisions and secure a good market position. According to the latest trend, the company is using the concept of driverless cars, frost-free windows, driver sensors, fuel-efficient engines and many other different latest trends. Thus, complying with all these latest trends will assist the company in managing a good competitive position and as a result, it will be helpful to the company in earning a good range of profits. Along with this, the financial indicators of the company state that the gross margin was 34 % which is good and also the company is earning a good amount of profit. Along with this, the current ratio was 4.41 which is too high as the ideal ratio is 2:1. But this is not good as according to the ideal ratio the company must have twice a current asset to pay off a particular current liability. Thus, for this, it is mandatory for the company they try to control the working well.
With further evaluation of week 3, it is clear that again according to the market report, the company was positioned at 5 number only. But the company has also increased a new brand of car within the manufacturing. According to the report it was seen that other than Thanos and Atom there was also Sigma which is a new brand in the company. It also had different design options which made the work more effective. All the previous features and latest trends were also used in the current new brand as well. It is due to the reason that when the effective type of the latest trends will be included in the new brand. Thus, resultantly, the overall work will be improved. Further, according to the market research report, it is clear that Aizen has announced 220 job openings within the company. This is good for the company as when a better job opening is taking place then it implies that the company is performing well. In case the company will not be performing well then the company will not be in a position to manage the work well. Also, it was seen that Aizen has announced a new investment of £492 million in automation and this is good for the company.
According to the literature review, it was analysed there are many different types of advancement taking place in the technological factor as well. There is the development of many new techniques and methods and it is necessary for Aizen they effectively use the latest techniques so that the efficiency of the cars increases. Also with the market research report it was analysed that the company has also increased its investment in research and development as well (Hossain, 2021). It is good because when the market research will not be good then the company will not be able to learn about the latest trends and will not be capable of implementing these new and innovative changes into the business. Further, in year 3 there was also an announcement which stated that there will be a new model forthcoming and there was the announcement of increasing the price of the Atom by 10 %. With the analysis of round 3, it was analysed that the company is operating well and the business must manage and improve the work well.
After this round 4 assisted in analysing that a new brand named Blaze has been added to the portfolio of Aizen. So there are a total of 4 different brands which is present in the car portfolio which is offered by Aizen. Also, it was analysed that there was only 1 strike day and the productivity of the worker was 415. This implies that as compared to the first year the productivity of the employees has reduced (Hopkins, 2021). This simply means that when the variety of the product increases it can impact the working of the company and the employees to a great extent. Hence, in case the employees are not effectively managing the work then the overall operational efficiency of the company will be impacted and consequently, the overall profitability will be impacted.
With the analysis of the round 4 profit and loss account it is clear that the profit for the year was 2104.90 which is good. It is due to the reason that when the profit of the company is too good then it will be creating a good impact on the working efficiency of the company. It is due to the reason that this amount of profit is available to be reused in the company. Hence, it can increase the overall working of the company to a great extent. Also, when the retained profit is utilised appropriately then a better environment will be created and consequently the overall efficiency will be increased (Hindam, 2020). Further, the round 4 results also highlighted that the company is still operating at the 5 positions within the competitive market. Also, the company is emphasising adding new features and designs to their vehicles according to the changes in the market and consumer trends. It is due to the reason that when the effective type of the latest trend is followed then it will be promoting better services to the consumers. Also, the consumer will be happier with the services of Aizen and consequently, the sales of the company will be increasing.
As supported by LR it is analysed that the company is taking care of the environmental factor to a great extent. It is due to the reason that according to the latest methods of environment protection, the company is providing the facility of hydrogen fuel cells, biometric vehicle access, lightweight roof, smart noise insulation, ultra-low emission, infra-red night vision, improved build quality and many other different types of the elements (Purwanto et al, 2023). All these facilities provided by Aizen include the protection of the environment and also the implementation of new techniques. Thus, resultantly, it is clear that the company is trying to develop its working and resultantly, the working is improved. Moreover, complying with all the latest methods of working and the current trends helps the company enhance its performance of the company and resultantly the overall efficiency is increased and Aizen is in a position to develop a better and more effective competitive position.
Till now it can be stated that the company is in a better position to manage the work well and is growing and managing the work by the strategic direction. For the business to be successful the effective type of strategic direction must be followed. In case the direction of the company is not clear then it will impact the overall efficiency of the business. Hence, it is very necessary for the company they try to manage the work according the external changes and trends which are changing (Purwanto et al, 2021). When the latest trends are merged into the production then it will attract more of the consumers. Thus, it will be assistive to the company in managing the work well and facing the competition in a great manner. It is due to the reason that when the effective type of work is done then it will improve the overall efficiency of the company. Hence, when the company is in a position to manage the work well then automatically the overall efficiency of the company will increase and as a result, it might be possible that the market position of the company can also increase.
After evaluating the financial position of the company, it has identified that firm has not involved in issuing any new share or undertaking any investment. Firm is not having effective amount of cash inflow which indicate less availability of fund for initiating any investment (Gohoungodji et al, 2020). It has been identified that firm decision of not issuing new share is optimum as it will results in dilution of control and increases overall risk for the business entity. Further, firm is not involved towards R&D sessions due to lack of funds that will restrict organization in creating competitive edge in the industry. After analysing firm’s financial position, it has concluded that the decision of not investing in R&D is effective but hampers overall growth and development of the business entity.
Further, with the analysis and evaluation of round 6, it is clear that the company has initiated a new brand which is named Yami. With the gradual development in the external market and by following the trends the company started with the new brand as well. Also, the new model has a wide range of features and designs which improves the working well. In case the overall features will be good in the market then the overall working will be improved and ultimately the overall efficiency will be increased. By keeping in mind the strategic direction of product development the company is aiming at developing the different types of the product so the more market can be captured. It is due to the reason that when the effective type of direction is followed then it will improve the growth and development of the company. When an effective decision is made then it will help the company in capturing a large market share.
Thus, according to the KR finding, compliance with the product development of the Ansoff matrix is followed. It is due to the reason that already the competition is very intense and for this, the company must try to improve the working. When the work will not be analysed well then it will be improving the working of the company well. Thus, resultantly, the overall development of the company took place and resultantly the market position improved. In case a company is working well then it will be assisting them in improving the overall efficiency and resultantly the working will be improved. Moreover, by complying with the model of strategic direction the company can easily manage and maintain the working well. It is due to the reason that when a better market opportunity is grabbed then automatically the overall efficiency will be improved and the company will be in a position to manage and maintain a better working environment. This certainly helps the company in managing the work well and tries to improve the overall efficiency of the company and profitability will also increase.
Further with the evaluation of round 6, it was clear that the total strike days were 2 and the productivity of the employees reduced to a great extent. This is not good for the company and there is a need to improve the working well. For this, the company can try to attract and motivate employees by providing them with financial and non-financial motivators. This is not good and to be successful it is necessary for the Aizen they try to motivate the workforce so that the overall development of the company and its services can be made well.
From the analysis of the round 10, it has identified that Aizen is having growth potential in the near future. It has depicted that return on shareholder’s funds is effective which indicate the higher returns for the investors. The industry ratio for the return on capital employed should be around 25% which indicates that firm is able to attain the ratio depicting effective position of the business entity. Masoumi, Kazemi and Abdul-Rashid, (2019) stated that for the successful working of the organisation there is excessive need of adequate profit and by analysing the gross profit of Aizen it has identified that firm will able to cover all the cost of production. The high rate of profit denotes that firm is able to manage it overall cost and will assist in attracting large number of customer. The sales margins of the product are 50% which will help in covering all the expenses and support in generating adequate amount of profits.
Moreover the net profit ratio and the profit of the organization is optimum which will help in maintaining stability industry and assist in paying off all the expenses. Based on firm’s profitability the decision of undertaking investment is optimum as it will help in optimum utilization of firm’s funds. Further by analysing liquidity position of the company it has depicted that firm is having very high liquidity ratio which is not a good indicator. Firm has invested very high amount towards the current assets and inventory which is results in underutilisation of firm’s funds. High liquidity ratio has resulted in reducing returns in future that leads to enhancing overall risk for the business entity.
In this context Lenort, Wicher and Zapletal (2023) stated that for decreasing the liquidity position, organization needs to focus over adopting an effective inventory management system. Aizen should also focuses over purchasing fixed asset and increase investment which help in gaining more returns. Further, by analysing the investment ratio it has identified that firm is having effective earning per share but the price to earnings ratio is very low which reduces shareholder’s dissatisfaction. Such a low ratio indicates that stock are undervalued which will results in low growth rate for the business entity. However, the dividend per share is also zero that indicates the adverse financial condition of the business entity. As it has determined that firm has invested very huge amount towards the current asset which denotes firm’s efficiency in facing uncertainness and resulted in negative net debt ratio. While comparing organization’s position with other competitors, there is effective amount of revenue and net profit which will help in growth and expansion of the business entity.
Additionally, after analysing the cash flow position of the organization, it had estimated that firm’s cash balance will increase but still firm is not having high cash return (Alqershi et al, 2022). This is due to reason that organization has invested more towards liquid asset then others investment. By the analysis, it has clear that firm’ profitability position is effective but necessary actions needs to be taken for maintaining effective liquidity and solvency position. It has further determined that number of strikes has increased in round 10 that indicate the potential risk of employee’s dissatisfaction could rise. This also determined that there is excessive need to change the human resources policy as increases in strike days that will results in negatively impacting on overall working of the business entity.
|
Year 2 |
Year 4 |
Year 10 |
|
|
Gross margin |
34.9 |
39.11 |
67.12 |
|
Current ratio |
4.41 |
4.93 |
14.13 |
|
Quick ratio |
4.41 |
4.93 |
14.08 |
|
Return on shareholder fund |
35.49 |
44.53 |
24.24 |
|
Return on capital employed |
35.67 |
51.3 |
23.65 |
With the analysis of the table and graphs, it is clear that the gross margin is maximum for the year 10 and resultantly the overall efficiency of the company is improved. With the results of year 10, it is clear that the majority of the work is better and the company is trying to control the expenses and focusing on increasing the profits. Along with this, the current ratio is too high which is not good for the company. Thus, resultantly, the overall liquidity of the company is too high. This can create a negative impact on the working of the company and resultantly, the overall efficiency of the company is not good. In addition to this, the return on shareholder funds has reduced in the year 10 and this is not good (Čirjevskis, 2021). Moreover, with this, it can be stated that the return on capital has also reduced. This is not good as the profits have been increased but the return on capital and shareholder fund has reduced. This simply means that the company is not capable of managing the net profit and might have reduced the working of the company. It is due to the reason that when the effective type of the indirect expenses are not managed then it will be impacting the overall efficiency of the business. Thus, it is necessary for the company they effectively try to manage the expenses of the company and try to increase the profit.
profit.
|
|
Year 1 |
Year 2 |
Year 4 |
Year 6 |
Year 10 |
|
Workforce |
261 |
435 |
889 |
722 |
750 |
|
Strike day |
1 |
1 |
1 |
2 |
3 |
With the analysis of the above chart, it is clear that the employees of the company are increasing and in year 4 it was maximum which is 889. Also, the strike days were less but as the number of employees tended to reduce the strike day increased after year 4. In year 5 the strike day was 2 and in year 3 strike day was 3. This simply means that overall employee performance is hampered when the work is more. It is due to the reason that after year 4 three new ranges of cars were also increased and this increased the pressure on the existing employees. Thus, resultantly, the overall development of the company is not good (León and Aoyama, 2022). Thus, it is recommended to Aizen that they try to manage and improve the overall working. It is because when the effective type of motivation and a good environment are provided to the employees then they will be happy and safe while working in the company. So it is necessary for the Aizen as well that they must try to manage the overall work and provide time-to-time financial and non-financial motivators.
Recommendation and reflection
Recommendation
Following are various measures and strategies that should be initiated by the Aizen for improving overall working and financial position of the business entity.
- Organization should focus over increasing investment towards fixed asset and reduces current assets investment as it is increasing overall risk for the business entity. By investing in fixed assets, firm is able to effectively utilize organization’s funds. This will also assist in reducing risk for the investors and support in attracting them towards the firm.
- Further, business entity is not investing adequate amount towards R&D session which restrict firm from creating competitive edge in the industry. organization should invest in R&D session which will help in identify new and innovative ideas based on which effective decisions could be taken by the business entity
- Aizen should also emphasis over implementing lean manufacturing principle in the firm’s working that will help in reducing operational cost, production time and minimize overall wastages.
- Moreover, the Aizen should emphasis over installing new and updated technology in the Car which will help in attracting large number of customer and support in attaining a situation of economies of scale (Chervenkova and Ivanov, 2023). It will help organization in reducing overall cost of production which eventually results in enhancing overall profitability.
- It has also depicted that firm is not providing any dividend to the investors that will results in creating dissatisfaction within investors. The decision of investment and expansion is effective but firm should review their dividend policy as to maximize stakeholder’s satisfaction and improving organization reputation.
- Aizen also need to modify their marketing strategy that will help in reaching out to target market easily. Firm needs to focuses over utilising digital marketing techniques with traditional techniques that assists in attracting the targeted customer and support in enhancing overall profitability of the business entity
- Firm should emphasis over enhancing the staffing process within the firm which will help in hiring most skilled and competent employees within the business entity. It is estimated that production is increasing every month that requires firm to hire effective employees that could work effectively and support in achieving firm’s goals.
- It has also identified that the rate of strike for workers has also increased in round 10 which indicate the inefficiency of the firm in managing staffs. In this sense firm should involved in establishing an communitarian session that will allow worker to freely share their issues based on which necessary actions could be initiated by the business entity.
- Manager should also initiated survey that will help in determining the issues that employees are facing (Petti et al, 2021). This survey will denotes firm’s responsibility towards its employees that will help in increasing moral of the workers and support in reducing scope of strikes.
- Further, manager should emphasis over arranging an adequate training and development session for the employees. T&D sessions support in developing skills and enhancing knowledge of the workers that result in improving their overall efficiency.
- Organization should also emphasis over providing an adequate amount of compensation to all the employees that will help in promoting equality within the business entity. This will help in enhancing overall motivation and satisfaction of the worker results in improving overall employee’s morale that will create positive image in the industry.
- Moreover, firm should always focuses over effectively communicating organization’s performance to the stakeholders that will help in enhancing overall goodwill and reputation within the industry. Organization should also emphasis over aligning financial statement with the laws and regulations which will help in effective financial reporting.
Reflection
With the help of the current study I was able to evaluate that business simulation is very helpful for the successful working of the business. The business simulation assists in evaluating the current situation by applying it to a similar kind of situation. It helps the business in making better decisions by portraying the actual working well. With the help of the study, I evaluated that having a critical thinking skill is very necessary for the success of the business (Yaacob et al, 2020). In case, effective critical thinking skills will not be present then the overall business will not be managed well. It is due to the reason that when the appropriate situation is not critically evaluated then the person is not able to take the decisions properly. Hence, to manage the business successfully and appropriately a critical evaluation of every situation must be done. In case the whole situation will not be critically evaluated then the working will not be improved and the business will not be able to make better decisions.
For making the business successful the appropriate decisions must be taken. Thus, for making the decisions effective critical thinking skills must be present. In case being a manager or decision maker, I am not able to evaluate the situation critically then the overall work will be impacted (Botelho and Bhuyan, 2021). Hence, it is very necessary for me to effectively comply with good critical thinking skills. In case the skill is not present then automatically the working capability will reduce and I will not be in a position to manage the business well. To take the decision appropriately all the situation must be critically evaluated so that the proper decision can be taken.
Further, the study also assisted me in analysing the fact that having good teamwork skills is also very essential for the success of the company. It is the reason that the company operates in a team and in case the teamwork is not good then the objectives of the project will not be attained. So, being the Human Resource Executive, I must ensure that the proper and effective type of team management is done (Alam, 2022). To make the team appropriate the team must be formulated well. In case team formulation is not good then the group objectives will not be attained well. Hence, for this, I followed the Tuckman team development and accordingly made an effective team. It was selected by me as this method effectively guides me to formulate a good team which will focus on the development of the whole team.
Also, the successfully manage the working of team Aizen I also need to work a little on improving my communication skills. It is very necessary for me as when there is a requirement to work in a team then clear communication is needed. For this, I need to develop knowledge relating to the 5 C principle of effective communication (Viberg, Khalil and Baars, 2020). This principle will guide me to effectively communicate with others. It includes the principle starting with clear, complete, cohesive, concrete and concise. When these principles are applied then automatically the overall communication is improved and resultantly better working is planned.
CONCLUSION
The above study inferred that for the company to be successful an effective strategic direction must be provided to the company. In case there is no proper direction provided to the company then the production and operation of the company will not be good. Thus, for getting success it is necessary that the overall working is improved and the latest market analysis and trends are followed. The above study also stated that conducting internal and external analysis is very helpful for businesses to make the appropriate decisions. It is due to the reason that when the effective type of evaluation is done then the person or the decision-maker is in a better position to take the decision. It is due to the reason that when the trends and other working patterns are evaluated from the internal and external environment then the effective decision will be taken. Further, it was also concluded that selecting the best method or choice of decision from the Ansoff matrix is also needed. It is due to the reason that when the effective type of method of development is selected then it will be improving the overall efficiency of the company to a great extent. Hence, after the evaluation of the internal and external environment, it was seen that for Kaizen compliance with the product development is beneficial. It is due to the reason that when an effective product is developed considering the latest market trends then it will improve the overall efficiency to a great extent.
With the evaluation of the further study, it was analysed that compliance with the qualitative study was assistive in managing the work well and trying to improve the working well. Moreover, when the effective type of method is selected then the result of the work is well and also good for the development of the company. Furthermore, with the analysis of the different rounds of the simulation, it was clear that initially, the company had only two types of cars which were offered to the consumers. But till round 10, the company was selling five different types of cars. This implies that by considering the competition and other changes in the trends among consumers the company used the strategic direction of product and market development. It is due to the reason that when effective market research is done then all the latest changes in the consumer trend are highlighted well and accordingly are implemented while developing the three new models which have been developed after 2 years.
Also, it was concluded that round 10 highlighted that the profitability of the company is good and resultantly the overall efficiency of the company is improved well. Round 10 highlighted that the gross margin was 67 % and this is good for the company. This simply implies that the company is in a better position to manage all its expenses and resultantly the overall efficiency is improved well. But the current and quick ratio of the company was very high and this is not at all good for the company. It is due to the reason that in case there is too much liquidity present then the company will not be in a better position to develop. Thus, by complying with all the latest internal and external environmental changes Aizen aims to implement a better strategic direction which will assist the company in managing the work in future as well.
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Automobile Industry PESTEL Analysis, Australia, 2023 Online. Available through https://www.edrawmax.com/article/automobile-industry-pestel-analysis.html
10 Years | PhD
