Strategic Management in Action Appendix 2 – Sample Case Analysis Richard Alven, Paul Briseno, Jacqueline Henderson, Matthew Tawfiq -092

Executive Summary Sample Case: Big Loud Motor Cycles Inc. – able to maintain dominant 42.1% share US Market –Unable to push into International markets as effective as planned –“Face the brutal facts but never lose Faith.” – Collins

Executive BLM Includes: Company Vision/Mission –Company Goals Within the Hedgehog concept as described in Collins. –Company Policies/Values Corporate and Competitive Strategies being Used –Well established with dominant market share. –Described as a defender in a Red Ocean Market

External Analysis Industry/Competition Rivalry –Opportunity: Strong industry sales growth –Threat: High exit barrier Potential Entrants –Opportunity: Government regulation Bargaining Power of Buyer –Opportunity: Products purchased are differentiated and unique –Threat: Buyers have full information Bargaining Power of Supplier –Opportunity: Supplier does not have ability to do what buying industry does. –Threat: Suppliers’ products are an important input. Substitute Products –Threats: Several substitutes to satisfy transportation needs

Economic –Opportunity: High and increasing personal disposable income –Threats: Unemployment levels are currently rising and forecasted to continue rising. Demographic –Opportunity: Diverse US population –Threat: Cost of higher education is on the rise Sociocultural –Opportunity: More “gold-collar” employees in workforce & increasing popularity of “green” issues –Threat: Public image of motorcycle riders not always positive Political-Legal –Opportunity & Threat – State Helmet Laws Technological –Opportunity: Increased use of robotics in manufacturing & Online Purchasing External Analysis General External Environment

Internal Analysis Strategic Manager –Strength and Weakness: CEO is very hands on Corporate Structure –Strength: Different product divisions –Weakness: Not organized around geographic markets Corporate Culture –Strength: Employees believe in products, people oriented, emphasizes open communication. –People first, then what (right people on the bus) –Culture of Discipline

Internal Analysis (continued) Production Operations –Strength: Most production facilities less than 7 years old –Weakness: Company has a large number of suppliers Marketing –Strength: Company’s logo and repeat customers –Weakness: Target market is narrow and global marketing has not been effective R&D Strengths –Strength: Current expansion of R&D Facility –Weakness: No global R&D facility

Internal Analysis (continued) Human Resource Management –Strength: Educational benefits offered to employees –Weakness: Assembly work on custom-ordered motorcycles is precise and demanding Information Systems –Strength: Numerous forms of communication with employees and customers –Weakness: Website is only English

Financial Analysis (Appendix 1) Information Required- BLM information is not included. Thorough Financial Analysis –Results and/or outcomes of past and/or current strategies. –Examine and analyze all financial information Cover 4 Parts: –Ratio Analysis and comparison to industry/company trends (explain what is happening) –Graphs and charts outlining financial figures as well as comparisons to industry averages. –Listing and explanation of company's financial strengths and weaknesses –Statement of companies overall financial condition and written report.

Strategic Issue #1 Issue: Target market is very narrow –Reaching beyond existing demand (Blue Ocean) Why? –Must define why it is an issue: BLM missing significant opportunities – should market to females.

Strategic Alternative #1 What: Offer more bikes tailored to fit women. –Look across groups within the industry – “6 Paths” – Blue Ocean Strategy How: Survey, analysis, research, ideas, management Who: Marketing, R&D, top management When: Immediately. 18 month time frame. Where: In US.

Strategic Alternative #2 What: Promote current line of motorcycles to women. Strategic Alternative #3 What: Acquire an established motor scooter manufacturer. Typically more appealing to women. Red Ocean – entering an established market by buying established part of the market.

Recommendation: Alternative # 3 –Several established scooter companies –Attracts women and older demographic. –Access to R&D and Production. –Measure success by how sales revenue reacts. Reject Alternatives 1 & 2 –To many uncertainties with Alternative 1. –Marketing campaign does not consider female markets wants.

Implementation Changes in Organizational Structure –New employees –Additional marketing staff needed Changes in Organizational Culture –No major changes –Emphasis on female customer perspective Funding –Funds will be needed for actual acquisition Long Term Debt Cash reserves –Expected revenue increase will pay off long-term debt.