COMPANY B ELEMENTS OF STRATEGY MANUAL
Bus 691 Company B Elements of Strategy Manual
Sean, Kranyak, Amanda Deal, Kulpreet Gill, & Morgan Parola
California State University of the Monterey Bay
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Executive Summary
Company B seeks to become the premier manufacturer for customers looking for an
affordable and trustworthy vehicle. This Strategy Manual communicates our core values, and
identifies our strategy for periods one through eight. Company B agrees to utilize this manual as
a guide for future decisions. The manual employs Carpenter and Sanders’ Strategy Diamond
(2008), and evaluates the five core tenets of strategy, economic logic, staging, arenas, vehicles,
and differentiation. Our economic logic is characterized by ridding ourselves of debt in the early
periods of our firm, and build our infrastructure as time progresses. This is characterized by
steady staging, focused arenas, organic vehicles, and highlighting our differentiators of price and
quality.
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Company B
Company B is focused on creating high-quality vehicles targeted towards customers
seeking a safe and affordable vehicle. We seek to become the premier manufacturer for
customers looking for an affordable and trustworthy vehicle. Our mission and vision statements
below reflect these goals:
Mission Statement
To inspire every Company B driver to go the extra mile – safe, secure, and empowered.
Vision Statement
Company B’s vision is to become the most trusted manufacturer of high-quality and affordable
vehicles.
The Strategy Diamond Analysis of Company B
The strategic diamond is made up of different choices that managers should consider
when coming up with a strategy for their companies. These elements include the economic logic,
staging, arenas, vehicles and differentiators (Carpenter & Sanders, 2008).
Company B’s Economic Logic
Economic logic is the core element in a firm’s strategy to generate profits. The economic
logic must take into account costs and revenues, and must delineate a plan in which to maximize
returns. In hopes of creating a sustainable and successful business, Company B has determined
their economic logic to have a progressive path. The initial focus will be to reduce operational
costs and rid unnecessary debt. Once the business is lean, stable, and operating profitably,
Company B will strategically invest in infrastructure in hopes of equipping vehicles with up to
date technology, with an emphasis on quality and safety. The idea is to ‘cut out some fat’ within
the operations and later ‘pack on some muscle’.
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To accurately structure our business strategy and staging, our company will specifically
focus on boosting the economic standing of the company in the first few periods, as the company
gains a better understanding of the target audiences. This will allow the firm time to assess the
cost of marketing and production. We will be able to better assess our economic logic after we
have better researched and analyzed credible insights into the state of the background research.
Company B will focus on expansion of locations and products in later phases, depending on our
simulation performance throughout the early phases. We want to grow between various regions
in a close proximity to our current facilities within the first four years and expand further after
we test our local economic markets.
The arenas in which we position Company B, including our product categories, channels,
market segments, geographic areas, and core-technologies, will have a synergistic relationship
with our economic logic. Our decision to pursue these arenas is based on our commitment to
manufacture high quality vehicles at a reasonable cost while minimizing company debt. We see
the value in allocating capital to our marketing efforts, including Social Media, Advertising, and
Promotions. From an economic standpoint, our logic focuses on efficiency, cost-effectiveness,
and strategy. Company B recognizes the importance of research and testing, and we will use
these results to support our economic decisions.
To capitalize on our differentiation, we will invest heavily in marketing. This will
increase our market share, draw new customer to our brands, and, therefore, increase sales. Our
marketing will be tailored to attract our target segments of families, value seekers and singles
who seek an affordable car or truck. As discussed more fully in the differentiation section of this
strategy manual, we will appeal to our target segments by creating an affordable car that is both
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safe and of high quality. To target particular interests, we will add low cost features, such as
cargo space, cup-holders, and safety features.
Staging
Staging is an element that is used to determine the time it will take the company to
achieve the objectives they have set (Ireland, et al., 2007). Staging is an element of strategy,
which we define as the goals or objectives that our firm will put into place to help us achieve our
goals and give us a competitive advantage over other competing firms. Staging is an important
component within a firm's economic logic, which impacts everything from the firm's return on
investment, the speed of the initiatives and expansions, the premium price resulting from
unmatchable services, and proprietary product features.
The automotive industry refers to a wide array of industries that are involved in the
manufacture and sale of motor vehicles. The different plants in the automotive industry have
proven to be quite competitive through the years. Every plant creates a new brand, Cowhich is
often better than the previous design with new features. In order to maintain the competitive
advantage that an industry has, it is important that the management comes up with a strategy.
Staging involves time it will take our company to achieve the goals we’ve set for
ourselves. When making decisions on staging, it is important that that we consider the resources
we have at our disposal. The urgency of the situation should also be considered, for instance, if
the opportunity to dominate the market is likely to vanish, it is important that the company sets a
shorter time limit so that they can be able to benefit from the opportunity. The pursuit of early
wins and the achievement of credibility should also be considered when coming up with a time
frame. In the automotive industry, the industry should consider the existing plants dominating
the current market. For example, if Company X intends to take up a certain arena, research
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should be done to find out what firms hold the market. This will also be beneficial, as it will give
the plant an insight on what it is up against.
Team B plans on slowly expanding our business based on market research and assessing
our organization. After assessing our first report on our decisions, we have gained a more
complete idea as to where our company stands and the appropriate decisions to make for a
starting business. We understand that the first few years of business are critical, and we hope to
move strategically and cautiously at first. Our strategic staging plan is to test our market strength
and invest in research before we launch a new project and product. We will analyze our reports
and determine which vehicles and features will provide the highest return, and what will have a
positive impact on investors and shareholder sentiments. We know expanding is critical to
remain competitive, and we plan to strategize and build capital for a few years before expanding
in years 4 and 5. We plan on staying within our home locations and slowly expanding out within
those areas.
Based on our internal research, stage one and two will be characterized by focusing on
family cars and trucks (SSM, 2016). In our next phases, we will take time to learn consumer
preferences and market demand. We will also carry out advertisements to ensure that the target
market understands our presence. After getting valid and reliable information and data
concerning our competitors, stage three and four will see us introducing other automobiles such
as an AEV model.
Arenas
A key element of our company’s success depends upon our strategy to identify the arenas
in which we will compete. The areas we will focus on include product categories, channels,
market-segments, geographic areas, and core technologies.
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Product Categories
As a company, we have strategically decided to pursue three different product categories. The
following vehicles make up the product line for Company B:
Boffo (F - Family): The Boffo is a mid- sized car focused on safety and reliability.
Boss (T - Truck): The Boss is a durable truck designed for work as well as being a second
vehicle option for consumers. The Boss is our highest priced product.
Buzzy (E - Economy): The Buzzy is our more basic and inexpensive model.
Our decision to be active in these three product categories is in line with our mission and vision.
As stated within our analysis of differentiation, our vision is to become the most trusted
manufacturer of high-quality and affordable vehicles. Our product line of cars and trucks
displays our company’s diversification technique and ability to manufacture and sell affordable,
high-quality products to different market-segments. We hope this will prove to be a competitive
advantage for Company B.
Channels
As the manufacturer and seller of these products, our channels to reach our marketsegments and consumers include promotion, advertising, and various dealerships.
Market-Segments
We have developed a strategic marketing plan based on our market-segments. Based on
research and market studies, we are aware of consumer preferences; therefore, one of our main
strategies is to align our products with consumer needs and strategically compete in various
market-segments. Company B has decided to target the following market-segments: (1) Value
Seekers, (2) Families, and (3) Singles. Our three product categories appeal to at least one or more
of the aforementioned market-segments. Based on current market research, these three market-
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segments make up the top three percent of sales across the industry. Value seekers are interested
in vehicles that meet their basic transportation needs. Coming in third, value-seekers make up
18.5% of market sales. Families are concerned about safety, quality, and flexibility. This marketsegment currently makes up 38.9% of market sales. Lastly, singles are a typically a younger
market willing to spend more money. They are looking for a vehicle with style and high
performance. Singles are the second leading market-segment in sales at 19.9%. Table A defines
which products we are marketing to which market-segments.
Table A.
Market-Segment
Product Name
(1) Value Seekers
Buzzy (E), Boss (T)
(2) Family
(3) Singles
Boffo (F), Buzzy (E)
Boss (T)
Geographic Areas
Based on past performance, research, and consumer reports, we have decided to invest
equally in each of the four regions: North, South, East and West. We are currently spending 10M
dollars in corporate advertising per region. Each of the targeted market-segments exist in each
region, therefore, we find it necessary to actively sell in each of these geographic areas. We are,
however, aware that there are certain areas with dominant consumer preferences. For example,
we are marketing the Boss product in the South region due to consumer demand for working
vehicles and trucks.
Core Technologies
As a company, our focus is on safety and quality; therefore, our core technologies focus
on designing and implementing innovative and high-performing safety features. In developing
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our technologies, we are focused on creating quality products that meet the needs of our
consumers. We have made the decision to invest more dollars in technology to ensure we are
strategically and effectively developing high-quality technological features that meet the safety
and quality standards of our market-segments. Our technologies support our mission to inspire
our consumers to go the extra mile – safe, secure, and empowered.
Vehicles
In the aforementioned Arena section, it has been conveyed that Company B wants to be
active in multiple product categories, market segments, and focus on core technologies.
Furthermore, a value creation strategy has been identified. It is important to understand how we
at Company B plan to achieve our goals that we have identified in our economic logic, and later
in our arenas. As our economic logic supports, we will strive to first take measures to rid
unnecessary costs and debt, and to create a stable, profitable economic engine. In doing so, we
will hope to save money and to strategically invest to improve our products and operations when
possible. With this economic logic, Company B is best suited to grow organically, and to
internally develop through investments in R&D. In addition to our pursuit to grow organically,
we hope to strategically align with alliances in the future in what we hope will be a mutually
beneficial relationship. Company B will entertain the concepts of growing acquisitively as well,
once the firm is established and well-versed in growing organically.
Organic growth has been defined as the “growth rate a company can achieve by
increasing output and enhancing sales internally” (Investopedia.com, n.d., n.p.). Growing
organically makes the most sense for Company B as it is in alignment with our economic logic.
Doing so has a unique set of challenges in that we must put together everything we need in order
to fuel our growth. In growing organically it is imperative to focus on operational efficiency,
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which we believe to be a healthy pursuit for our company and its future. As we have conveyed,
we are not ruling out the possibility of growing acquisitively sometime in the future. Firms who
want to grow acquisitively must have the ability to generate growth organically, “…To make
acquisitions successful, acquirers must be able to stimulate organic growth in the business they
buy” (Favaro, et al., 2012, n.p.).
Ultimately, having a “hybrid” approach to growth is desirable to Company B. “A
combination of both organic and inorganic growth is ideal as it diversifies the revenue base
without relying solely on current operations to grow market share” (Investopedia.com, n.d., n.p.).
Organic growth requires firms to only bite of what they can chew, and to allow each move to
digest before expanding further (Kuntz, 2014). Transforming the company’s internal growth
engine from organic to acquisitive (if that route is later pursued) will be possible once equipped
with a solid foundation built on organic growth. Ultimately, in hopes of implementing our
strategy effectively, Company B must constantly strive to spot opportunities, while never losing
sight of the big picture.
Differentiators
Company B plans on differentiating from competitors by focusing on our quality and safety
features. To do this, we will cultivate an image of trustworthiness, safety and a focus on families.
One factor to separate Company B from the pack will be to create a brand image that emphasizes
our focus on quality and safety. A brand’s image has been proven to have a strong effect on the
customer’s perception of the vehicle and the manufacturer, including quality, performance, and
expectations (Weidmann, et. al, 2011). Our image will rely on marketing that instills Company B
as a brand based on longevity, track record, safety, and performance. We will focus on attributes
of the car that are utilitarian and tied to care for the family through emotional and practical
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marketing channels, as “…specific car manufacturers try to position themselves as the best
choice for the hedonic or utilitarian-minded driver” (Marketing Schools, 2012, para. 24).
To create our brand image, Company B will identify our target audience, define our
firm’s persona, and develop on-target messaging (Walker Sands, 2016). We will accomplish the
first by targeting families, value seekers and singles, as discussed in the arena section of this
strategy manual. Company B will also use training and communication to target internal groups,
like employees and critical partners. To create a persona that our audience will be drawn to and
trust, we will market heavily to the aforementioned segments, and utilize these platforms to
promote our differentiators of price and quality. These messages will prominent feature the ideas
of trust, safety and quality.
As discussed briefly above, another factor of differentiation Company B will pursue is
that of low price. We seek to provide a wide range of customers with the perfect vehicle for their
needs at a reasonable price. This does not mean being cheaper than the competition, as this could
be a losing proposition. Basing your differentiation on underbidding competitors can cut into
profits, and may undermine customer confidence. This occurs as,” …consistently underbidding
the competition undercuts the value of what you do, both in your own estimation and, eventually,
in the eyes of your prospects” (Witt, 2013, para. 7).
To appeal to our family and value seeking markets, we will differentiate ourselves by
manufacturing vehicles with high safety features, reliability, and styling that suits family needs.
Company B has begun this process by increasing the attractiveness of our vehicles with
increasing safety and quality features. Some affordable features that can be added to appeal to
families include space for car seats, cupholders in the back seat, extra pockets, power ports for
back seat games and devices, and of course, cargo capacity. To market Boss, we will tie these
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values into the preferences of truck drivers, who view themselves as working people who need a
tough vehicle. These consumers, largely male, “…take pride in their blue-collar necessity,” and,
“…want to feel independent and self-reliant” (Marketing Schools, 2012, para. 7).
Stockburger, Director of Operations at Consumer Reports’ Auto Test Center,
summarizes, “The safety and functional aspects are most important…But the niceties make
travel enjoyable” (Consumer Reports, 2014, para. 21).
In using these differentiators, Company B will attract customers and fulfill our mission to
become the premier manufacturer for customers seeking an affordable vehicle they trust.
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References
Consumer Report. (2014). Best Pickup Truck Buying Guide. Retrieved on October 23, 2016
from http://www.consumerreports.org/cro/cars/pickup-trucks/buying-guide.htm
Consumer Report. (2014). Kid-Friendly Vehicles: How to Choose the Best Car for Your Family.
Retrieved on October 23, 2016 from http://www.consumerreports.org/cro/2012/04/kidfriendly-vehicles/index.htm.
Favaro, K., Meer, D., Sharma, S. (2012). Creating an Organic Growth Machine. Retrieved
October 21, 2016, from https://hbr.org/2012/05/creating-an-organic-growth-machine
Investopedia. (N.d.). Organic Growth. Retrieved October 21, 2016, from
http://www.investopedia.com/terms/o/organicgrowth.asp
Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2007). Understanding business strategy:
Concepts and cases. Mason, OH: Thomson South-Western.
Kuntz, B. (2014). Organic vs. Inorganic: Which Way To Grow? Retrieved October 21, 2016,
from http://www.forbes.com/sites/ey/2014/01/14/organic-vs-inorganic-which-way-togrow/#6d2e15b42ac0
Marketing Schools. (2012). Marketing Cars. Retrieved on October 22, 2016 from
http://www.marketing-schools.org/consumer-psychology/marketing-cars.html.
Marketing Schools. (2012). Marketing Trucks. Retrieved on October 23, 2016 from
http://www.marketing-schools.org/consumer-psychology/marketing-trucks.html.
Strat Sim Management (SSM). (2016). Market Reports. Accessed October 24, 2016 from,
http://schools.interpretive.com/fsui2/index.php?token=0
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SSM. (2016). StratSim Student Manual – Even Start. Accessed October 24, 2016 from,
http://schools.interpretive.com/fsui2/index.php?token=0
Walker Sands Communications (2016). How to Build Strong Brand Image. Retrieved on October
22, 2016 http://www.walkersands.com/How-To-Build-A-Strong-Brand-Image.
Weidmann, K., Hennigs, N., Schmidt, S., and Wuestfold, T. (2012). Drivers and Outcomes of
Brand Heritage: Consumers’ Perceptions of Heritage Brands in the Automotive Industry.
Journal of Marketing Theory and Practice. 19(2)
Witt, C. (2013). Compete on Differentiators: Not on Price or Quality. Witt: Communication
Matters. Retrieved on October 21, 2016 from http://christopherwitt.com/compete-ondifferentiators-not-on-price-or-quality/.
COMPANY B ELEMENTS OF STRATEGY MANUAL
Appendix
Table A.
Market-Segment
Product Name
(1) Value Seekers Buzzy (E), Boss (T)
(2) Family
Boffo (F), Buzzy (E)
(3) Singles
Boss (T)
*Data from StratSim Student Manual
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