Four year strategic plan for Erie Capsim Company Essay
Four year strategic plan for Erie Capsim Company
The four year strategic plan will focus on key drivers of the industry, factors determining future of the company, industry attractiveness, and its competitive environment. Each section contains detailed subsections which clearly defines the strategic plan. The plan uses 2009 data and our four year plan runs up to 2013.
1.1 Driving Forces
In this industry there are many driving forces. Our top management uses the concept of driving forces to reach consensus on what strategic area represents the industries current driving force.
1.1.1 Research and Development:
Our company will be introducing a new High End product every year. In addition we will reposition our performance and size segment products into our initial targeted sections. This will enable a stream or products lined up along the High End, traditional, and Low end sections. In addition we will allow present traditional section products to become a Low End section product so as to create room for segment drift. The company will later introduce a new product to the High End and will finally have four products each in the Low, Traditional, and High end sections during those four years. This way the company will present to clients products in line with their perfect procedure for age, reliability, and positioning. Also the company endeavors to sustain its existing product line, ensure presence in each section, and strive to sustain its products in the next four years in spite high levels of automation.
Marketing is another main driving force. At first our company will attempt to keep pace with the accessibility and awareness of immediate competitor’s products. Ideally we will be revisiting our status every year for the next four years to determine whether promotion and sales budgets should be sized or if the company will continue matching that of competitors. Generally our company will offer products at reduced prices. Also for these four years our company is planning to spend aggressively in sales and promotion in targeted sections; Low, Traditional, and High sections. In this light every client will have known our superb designs for the next four years. Basically, we are planning simplify logistics involved in identifying products by customers. After defining the company’s cost leadership position, we will reconsider the company’s situation to explore alternatives to enhance accessibility and awareness.
Significantly our company will significantly increase automation levels on all products in the next four years. Since automation limits the company’s ability to reposition its products in line with R&D, we will edge our automation process in the Low and Traditional sections in the next two years and then High end section during the last two years. Our company will ensure capacity building to meet the generated demand. In the first half we will reposition our brands. However, in the last half we will evaluate ways of increasing in automation levels to enhance margins as well as repositioning products and sustaining sections as they traverse the perceptual map.
The nature of our industry allows it to draw funds from a wide source. During the first half the company will finance its investments mainly through bond issues supplementing with stock offers following an as needed basis. For last half, the company will develop a divided policy and start to retire stock. The company is not adverse to leverage and expectation is that we will sustain debt/equity ratio at 2.0-3.0.
1.2 Future key success factors
Factors for success in our company include;
Our company will concentrate on Low, Traditional, and High end sections. This will keep production costs, raw material costs, and R&D costs to a minimum. Also company product lifecycle concentration will enable us to reap sales for the next four years on each of the four new products to be introduced into High end section.
1.2.2 Brand recognition and awareness
The company will maintain presence in every section. We will endeavor to ensure a competitive edge by differentiating our products. This will be done through excellent design, easy accessibility, and high awareness during first half. In the other half, the company will initiate a competent R&D that ensures fresh and exciting designs. Products will be in line with the market needs, presenting enhanced performance and size.
1.3 Attractiveness of industry and competitive environment
1.3.1 Factors making the industry attractive
Several factors make our company to be attractive. These are factors that will determine how far our company can remain still. These include;
· Reliable products: will ensure products which are reliable to mainstream clients and brands that offer value.
· Premium products: our company offers good products and brands that will stand the test of time.
· Low price: the company offers products at reduced prices. Its brands offer solid value.
· Easy technology: our products are reliable even to low technology customers
1.3.2 factors making the industry unattractive
· Funding: the market is unpredictable and there getting enough financial support is a problem
· Extensive research: product sustainability requires an extensive research. This adds to cost by way of experts and professionals.
1.3.3 special industry issues/problems
· Product presence: our company plans to maintain a competitive advantage by ensuring presence in every section.
· Unrelenting focus: concentration ensures brand recognition which leads to unique opportunity over competitors.
· Substitutes: the company is likely to suffer incase substitutes flood market, particularly during last half.
· New entrants: during the first two years the company will enjoy monopoly but in last two years entrants are likely to enter the market.
1.3.4 Profit outlook
The company currently is enjoying a profit margin of 20%. This strategic plan aims to grow the profit by additional 10% for first two years and another 15% in the last two years.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 25 September 2016
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