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Understanding Management banking firm case study

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Understanding Management banking firm case study Sample

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Introduction - Understanding Management banking firm case study

Effective corporate decision-making can be performed in an organisation by analysing its consumer segments, demands in the market, financial status and strengths and weaknesses of the products. This report is going to discuss the changes among consumers’ demands in a simulation. Furthermore, competitors of Juliet R at the beginning of the simulation and at the ending will be highlighted in this report. 

Discussion

Question 1: Customers of the company

Customers are considered as the individuals who buy the product and services of any company. The consumer segments of Rock, Role, and Rose are identified as professors, savers, high earners, explorers and shoppers. As per the views of Khan and Jayaweera (2018), customers demand is changing with time with the rise of incomes, development of new technologies and next-generation Millenials as the main potential consumers. During period one, there were respectively 58% and 71% awareness among explorers for Rock and Roll. Besides that, respectively, 67% and 58% of shoppers were aware of the brands Rock and Roll.

Brand awareness among customers segments

Online shopping habits have been found to be the most among professors during period 1. However, savers were at the lowest number to shop over online stores. In period 2, the online shopping habits of shoppers increased, whereas the online shopping habits of the professors decreased in this period. The main consumers of Rock at the beginning level of the simulation were savers, which is about 19.6%. On the other hand, Roll had most of the consumers from the high earners' category. Nevertheless, at the end of the simulation, the customers buying behaviours of Rock remains the same (highest in savers). The buying behaviours of Roll changed to highest in professors and that for Rose in shoppers. Features and benefits of the products play a significant role in changing buying behaviours among consumers from period 1 to period 8. Savers can be the targeted market segments among all the segments, which include explorers, high earners, professors, and shoppers. It has been found that at the end of the simulation, the consumer segments size of savers were 45%, whereas, for explorers, it was only 6%.

Customer segments size

According to Marodin et al. (2018), it is important for any organisation to upgrade its products and services according to the requirements of consumers to become successful and generate the highest profit. Shopping habits of explorers from online stores were found at 17% during period 3. On the other hand, this changes to 23% during period 8. During period 1, Rock had 18 features; in the context of design index, it had design number 3 (from 3 to 10), the battery of this system was 75hr, display 25 inches and power 12 GFlops. Roll had 13 features, 8 design index, 40-hour battery, 40-inch display and power 75 GFlops. However, to match customers' needs and attract more savers customer segments toward the company, firm Romeo needs to adapt more features in its products Rock, Roll, and Rose. They can offer more features on their systems, the highest hours of battery and large display. It could generate more buying intentions about the products and services offered by the company among consumers from different market segments.

Question 2: Competitors of the company

Brands that are the main competitors of the brand Rock, Roll and Rose (firm Romeo) include Lock, Loop (firm L), Most, Move, Mood (firm M), Soft, Solo (firm SAS), Tone, Tops, Tode (firm Titan). The competition was on commercial team size, a number of consumer segments, online or speciality stores and features of products. It has been found that at the beginning of the simulation, Lock had 1470, whereas, for Roll, it was 2550 (Stratxsimulations, 2021). On the other hand, online stores of firm L were respectively 10 and 10. In Rock and Roll, it was 5 and 5. At the end of the simulation, the online stores of Rock and Roll increased to 20 and 15. The online stores of Rose at this end period have been found at 10, which was similar to firm L, firm SAS, and brand Mood.

Total advertising expenditure of different firms (in a million dollars)

Figure 3 shows the expenditure of different firms, which are competitors of firm Romeo. It can be said from the figure that firm T spends more on advertising than other firms, and firm M is in the second position for spending over advertising. Firm R has been found at the third position in spending over advertising, which is more than firm S and firm L. Yu, and Natori (2020) mentioned that advertising is one of the significant ways to gain competitive advantages in business as good marketing drives consumers' awareness about the brand. Changes in competitors, lower investment on them in advertising and providing poor services to consumers can help in gaining an advantage in firm R. It has been found at the period 8 that the message quality of firm M ranges between poor to average (Stratxsimulations, 2021). On the other hand, the message quality of firm R is between averages to excellent. Therefore, it can be assumed that better messaging quality from the competitors would attract more consumers toward firm R and eventually raise its competitive advantages.

Communication dimension and messaging quality of different firms

Competitive commercial team size has been found to be the highest for firm T in period two and similar for all the other firms in that period. However, at the end of period 8, the commercial team size of firm R has become second highest and for firm L and S as lowest. Customers of firm R were aware of the product differences from competitors based on the message quality provided by the company. Communication dimensions used by firm R as their brand communication are based on performance, convenience, and economy. Furthermore, the distribution channels offered by firm R were at the second position compared to its competitors, which generally increases its competitive advantages.

Commercial team size

Question3: Financial status of the company

Boston Consulting Group (BCG) Matrix is one of the most influential business consulting groups based in Boston, which work on different areas such as the development of corporate, globalisation, pricing, communications, strategies etc. (Hensmans, 2019). The revenue of Romeo has been found at $95390 thousand in period 7 and $ 95943 thousand in period 8. Furthermore, it has been found that Roll generated more revenue compared to Rock during period 8. Revenue of Roll was 56.5%, whereas the revenue of Rock was 43.5% for the last period of simulation (Stratxsimulations, 2021). The cost of goods sold for Romeo during period 7 was -36,660 and for period 8 was -38,350. The commercial cost of the company has been found to decrease with time. During period 4, the commercial cost was discovered at -2,755, which was -5,447 during period 8. Among Rock, Roll, and Rose, most of the revenue has driven from Roll, which is $48,142 thousand. Therefore, it can be assumed that the brand Roll provides the financial strength to Romeo compared to other brands.

Revenue of brands in the market

BCG Matrix

Contribution to the company before marketing has been found to be increased over periods. In period 4, it was found at $37,566 thousand. On the other hand, in period 8, it increased to $57,228 thousand. The value market share of Roll has been found to be the highest, which is 10%. Market share of Rock and Rose are respectively 7.5% and 2.2%. Therefore, it can be said that the highest level of cash generated by Roll followed by Rock and Rose. According to Fairfield (2021), cash generation allows a company to grow fast according to trends and show positive performance in business. Cash generation can allow Romeo to invest more in developing features of Rock, Roll, and Rose, which could increase the competitive advantages of the company. It has been found that 39% of the speciality stores, 46% online stores and 52% Mass Merch are distributing Rocks. Roll is distributed by 49% speciality stores, 39% online stores and 35% Mass Merch. Similarly, 29% of online stores, 28% Mass Merch and 40% speciality stores have distributed Rose (Stratxsimulations, 2021). The retail prices in which the products can be retailed and sold have been mentioned in the financial report of the company.

Brand prices

Figure 8 shows the recommended retail price, which is decided in the marketing mix. The recommended retail price for Rock, Roll, and Rose are respectively $245, $492, and $295. Average retail price refers to the price at which the retailers got the product after the discount offered by the distributors, and selling price is considered as that price at which the product will be sold. The financial report of firm Romeo has disclosed the average retail price for Rock, Rose, and Roll, which are respectively $228, $282, and $472. Relation between revenue and EBT of firm Romeo has been shown in figure 9. It can be assumed by the graph that the revenue of firm Romeo was highest during period 8, while EBT was the lowest.

Revenue and earnings before tax (EBT)

Question 4: Products status of the company

Product sales, production and inventory

As shown in figure 10, the Production level and sales of the product is highest for Rock. Production of Rock is 239 and sold units are the same. In the case of Roll, the production level is 160, and the sold unit is 156. Production and sold unit level for Rose is the lowest and are respectively 40 and 58. However, the inventory level of Rose is the highest, which are 26.

Product

Strength

Weakness

Rock

? Highest production plan

? Lower unit transfer cost

? Highest unit sold

? No inventory at the beginning as well as in the end

? Lower Cost of Goods Sold (COGS)

Roll

? Production plan higher than Rose

? Highest COGS

? Unit transfer cost higher than Rose

? Lower inventory

Rose

? Highest inventory

? Lower COGS

? Lowest production

? Lowest unit sold

Table 1: Strength and weakness of the products

Ansoff Matrix

According to Loredana (2017), this matrix provides four different strategies that an organisation can follow to grow its business. The strategies mentioned in this matrix also describe the risks that the organisation can go through while implementing the strategies. Market penetration strategy has been used in firm Romeo to expand the sales of the existing product in the existing local market. It has been found that using this strategy; the product Roll has generated higher revenue in firm Romeo. However, market development strategy can be used for product Rose, as it did not show expected growth and revenue in the existing market. Therefore, adding more features and benefits with this product and introducing it in a new market can help firm Romeo to increase its financial performance. In order to increase the sale of Rock, firm Romeo can focus on the savers' customer segment, as they were the most relevant customer segment who contributed to increase market sales of Rock. Besides that, Roll has been sold to most of the professors; therefore, firm Romeo would be recommended to create awareness about this product among this customer segment rather than focusing on different customer segments. Shoppers have been found as the most important customer segment to grow the sales of Rose; therefore, Romeo would be suggested to focus on this customer segment.

Market sales of different brands

The products of firm T can be competing directly with firm R as they are also providing services, which are in the category of average to excellent. Furthermore, it has been found that brand Toad has 35 stores, which are more than brand Rock. Therefore, firm R should pay attention to its competitors' activities and develop its product and services as per the requirements of consumers. Tone is found to have 42 speciality stores, which are more than Roll and Rose. Besides that, it has 35 operating stores, which is higher than both Rock, Roll and Rose. 

Question 5: Changes in market

Share price index over simulation

Figure 13 shows that the share price index (SPI) of the company has increased over periods. Marketing strategies used by the company include advertising in order to create brand awareness among the consumer segments. As per the opinion of Morgan et al. (2019), effective marketing strategy helps an organisation to promote its products and services and grow the business. The main objective behind advertising the products was to create awareness among consumers and improve competitive advantages in the company. It is important to align the marketing strategy with business objectives to get better outcomes. In this context, firm Romeo has adapted its marketing strategy with business objectives while managing changes in the market. The SPI of the company has shown a hygge rate of change over the periods. The difference between period 6 and period 7 is 210, whereas the difference between period 7 and 8 is 26.

Market size and customer segments of firm Romeo

Figure 14 shows the market share of firm Romeo in the current period, in the next period and in five periods. It can be seen from the figure that the savers' customer segment has increased in the company over five periods. However, the number of explorers has decreased with time.

Product life cycle (PLC)

The products of firm Romeo and products of competitors have been located in the PLC. The above section of this report has revealed that the; products of Romeo have shown higher growth compared to products of the competitors. Therefore, it has been placed at the growth to maturity level. On the other hand, the products of competitors have been positioned at the introduction stage.

Porter’s generic strategies

Firm Romeo in its Roll, Rock, and Rose products has followed the cost leadership strategy. By following this strategy, it manages the profit of the company by reducing the costs of the products. Furthermore, this strategy has helped the company to increase market share while reducing the price of the products.

Key events that influence Markstrat journey include positioning, brand portfolio management and segmentation strategies. It has helped in analysing plans for introducing products in the market. Furthermore, effective segmentation among the consumers based on different aspects has been done by using Marstrat. Marstrand has helped to examine the overall expenditure of all the budgets at the beginning periods. Furthermore, it becomes possible to reach an ideal point as well as advertising to the best-suited segments.

Conclusion

This report has concluded the corporate decision-making journey based on a simulation that consists of 8 periods. It has been found that segmenting consumers based on several characteristics help an organisation to better develop its product advertising strategies. Furthermore, the competitions of firm R, such as firm L, firm T have been identified in this report. The strengths and weaknesses that Rose, Roll, and Rock consist of have been exposed in this report. 

References

Journals

Fairfield, A., 2021. A Study of CFO and CEO Attributes: Cash and Operating Cycles as Determinant Measures of Success. Journal of Accounting & Finance (2158-3625)21(4).

Hensmans, M., 2019. A new matrix for building platform portfolios: how companies can sustain their leadership. Journal of Business Strategy.

Khan, Z.A. and Jayaweera, D., 2018, April. Approach for forecasting smart customer demand with significant energy demand variability. In 2018 1st International Conference on Power, Energy and Smart Grid (ICPESG) (pp. 1-5). IEEE.

Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy Series2, pp.141-149.

Marodin, G., Frank, A.G., Tortorella, G.L. and Netland, T., 2018. Lean product development and lean manufacturing: Testing moderation effects. International Journal of Production Economics203, pp.301-310.

Morgan, N.A., Whitler, K.A., Feng, H. and Chari, S., 2019. Research in marketing strategy. Journal of the Academy of Marketing Science47(1), pp.4-29.

Yu, X. and Natori, T., 2020. Reconsider the Importance of Advertising to Business Model Innovation. In ISPIM Conference Proceedings (pp. 1-28). The International Society for Professional Innovation Management (ISPIM). 

Websites

Mindtools., (2021). The Ansoff Matrix. Viewed on 08/11/2021 from <https://www.mindtools.com/pages/article/newTMC_90.htm>

Stratxsimulations., (2021). COMPETITIVE INTELLIGENCE. Viewed on 08/11/2021 from <http://markstrat7.stratxsimulations.com/Analyze/CompetitiveIntelligence>

Stratxsimulations., (2021). CONSUMER SURVEY. Viewed on 08/11/2021 from <http://markstrat7.stratxsimulations.com/Analyze/ConsumerSurveyPanel>

Stratxsimulations., (2021). FinancialReport. Viewed on 08/11/2021 from <http://markstrat7.stratxsimulations.com/Analyze/FinancialReport>

Stratxsimulations., (2021). MarketingPlan. Viewed on 08/11/2021 from <http://markstrat7.stratxsimulations.com/Decide/MarketingPlan>

Stratxsimulations., (2021). Production report. Viewed on 08/11/2021 from <http://markstrat7.stratxsimulations.com/Analyze/ProductionReport>

Thousandinsights., (2021). Porter’s Generic Strategies. Viewed on 08/11/2021 from <https://thousandinsights.wordpress.com/articles/on-strategy-planning/porters-generic-strategies/>

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