Strategy Formulation and Initial Implementation Essay Sample
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Strategy Formulation and Initial Implementation Essay Sample
Our company wanted to appeal to as many consumers as possible and gain market share through value and competitive cost. We realized that not every person would need an extremely high end camera to capture life’s simple moments, but consumers would still appreciate a high value product without the intimidating features of some highend cameras. We chose to implement a BestCost strategy, which allows our company to deliver a quality camera at a fair price and offer more in terms of value than the lower PQ rated cameras.
We believed this strategy would allow us to gain market share through a value based offer, in turn garnering a brand that was associated with value at a fair price. We initially implemented this plan by offering a 3 star PQ rated entry level camera at a price point that would hopefully undercut competition of similar rated cameras and still offer a camera that could compete with the high end cameras. We believed this strategy would entice customers that normally would purchase a lower end camera based on price, and also customers who usually bought cameras for the high end specs. This strategy allowed us to meet our consumers in the middle ground on price and value in order to create a brand that was associated with the most value for dollars spent.
Adjustments to Strategy
For Year 6, we aimed to compete with a bestcost strategy. Initially we started off with three star entry level and multifeature cameras and an aggressive marketing strategy. We increased our prices from Year 5 across the board and put a lot of money into marketing. We invested $570 in North America, $500 in Latin America, $400 in EuropeAfrica and $350 in AsiaPacific. In regards to the prices of the entry level cameras, they were $175 in North America, $163 in Latin America, $165 in EuropeAfrica and $240 in AsiaPacific. Our goal was to increase our market share in all four regions through an aggressive marketing campaign, therefore increasing brand exposure and equity. Unfortunately, this strategy put us in last place in the industry for the first year that we took over the company. Year 7
For Year 7, we cut back our prices in a couple of regions in hope that it would increase our sales and market share. Specifically, we lowered our entry level camera price in North America by $7, in EuropeAfrica by $15 and in AsiaPacific by $80. In AsiaPacific we also lowered our multifeature camera price by $210. In order to remain competitive with a bestcost strategy in the industry, it was imperative that we lower our prices. Our competition, particularly those selling similar quality products (3 star cameras), was charging far less than we were and corrective measures had to be taken. By charging such high prices in regions such as AsiaPacific, we could be losing customers. This did help improve our revenues and image rating, but our EPS, ROE and SP were at one of our lowest. Year 8
In year 8, we decided that in order to reduce our costs we would need to cut back on our advertising and R&D costs. Although it was part of our initial strategic plan to have an emphasis on marketing, our company needed to adjust its costs in order to compete with the success of our competitors. We also noticed that our entry level cameras were one of the higher quality cameras in our industry, so we raised the prices on our entry level cameras in three of the regions as an attempt to increase our revenue. We decided to make no changes to North America because unlike in the other regions, the demand was not as high there. This same year we also chose to maintain our multifeature camera prices the same as the year before. We made no improvements to the product itself and for a bestcost strategy it was competing well in the industry. Year 9
In year 9 we continued to gradually increase our prices. This year we increased both the entry level and multifeature prices, except for our multifeature in EuropeAfrica and AsiaPacific. Although our competitors began to improve their product quality, we kept ours constant. We wanted to compete with a bestcost strategy by providing an average value at a reasonable price. Our entrylevel cameras did very well this year, but our end results showed that we needed to pay attention to our multifeature cameras for next year. Year 10
For year 10 we decided that it was time to slightly improve the quality of our multifeature camera in order to remain competitive. We improved some of the core components in our multifeature camera so that it would be at a 3½ star quality. In order to compensate for the higher costs that came with making a higher quality camera we increased its price. We based our price increases off what our competitors were charging for a similar quality camera, while at the same time trying to stick with our bestcost strategy. This year we also decided to cut back significantly on R&D costs. We chose to spend nothing for our entrylevel cameras and only about $1000 for our multifeatured. We thought that cutting costs would help increase profits for our next year.
Year 11 was a good year financially, so we decided to not make any major changes in terms of changing the price or quality of our products. We kept the prices the same as year 10 for the most part, with only changing the price of our multifeature in AsiaPacific. We increased the price of that one single product and region because we had been selling out, and by increasing the price we could potentially decrease demand. For this year we also decided to use some of our cash at hand to pay back some of our debt.
For year 12, we again chose to improve the quality of our multifeature camera. Our stats were looking very well from the year before, so we decided to increase the quality of our multifeature camera by half a star in order to remain competitive. With half a star increase we were now at a 4 star quality camera, which was average against our industry competitors. We also increased our prices for our multifeature this year. Since our entrylevel cameras seemed to remain competitive as they were, we decided to make no changes to either the quality or the prices for this year.
On our last year we decided to maintain our prices and quality very close to those of year 12. In year 12 we made changes to our multifeature model, so we didn’t think that changing our prices or model right away in the next year would be good for our sales. Throughout all eight years we maintained our corporate sponsorship contributions pretty constant. We maintained our contribution of $500 towards energy efficiency programs as well as participated in “Green” Initiatives to Promote Environmental Sustainability.