INDIVIDUAL HOME ASSIGNMENT – REFLECTIVE WRITING

Business Strategy Module

Oxford Brookes University – International
Business School - Budapest

Module Leader: Eva Radvany

Word Count: 1972
Contents
1. Strategy of the company .................................................................................................................... 3
2. Strategy from marketing point of view ............................................................................................... 6
3. Group Dynamics .................................................................................................................................. 7

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1. Strategy of the company – THEORY APPLICATION IS MISSING
What was “Day and Night” strategy from beginning of the game is to make a premium
product with premium price. Well planned strategy was more then necessary to gain that goal
and results as well. It was a long-term planning and lot of effort was needed to match all the
criteria’s. We wanted to have a product with highest number of stars, quality, design, retail
support, marketing and all the things connected to meet the best suppliers’ needs, which will
motivate them to carry our brand in their shops.
We did that strategy from the first year. In the Year 11 and 12 we were very good in our
industry with the highest S/Q ratings and marketing costs. It became very successful in our
industry and we kept the strategy for the next year. However our good results made us too
much confident and with highest price in our industry we lost our way. Everyone keep the
price at minimum level and they still had some investments in quality of the product, even the
company which was the first in the Year 13 had the same number of S/Q ratings, but their
price was for 20 dollars lower. Moreover, our prices were too high and our quality wasn’t on
that level compared to the competitors.
Our main problem was that we didn’t develop our quality strategy on the level, which our
prices required. However, we didn’t even succeed to bit for any celebrity, which was
unexpected, regarding that we bid for some, but with lower price then our competitors. It
made retailer outlets less interested for our products in Year 12th and then 13th. Because it was
unexpected, we put the price we wanted to achieve. The numbers of ROE, EPS, image rating,
everything seems much better then previous years. However the Year 13 showed us the return
on the overall scores and we fall down from the second place to the last, the table below is
showing our significant drop in year 13 in NA same happened in all regions.

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In my opinion that was the moment when we had to decide which strategy we want to follow.
Is it the one which we already had or it was better to go in the same way like others did? Then
we tried how it would affect our earnings per share, return on equity, etc. We come to the
conclusion that if we decrease prices to the average industry level and if we lessen
investments in marketing and S/Q ratings, we would loose the game. That would happen
because we would enter in price war, with lower quality. They had already made plants and
their production capacity increased and costs went down, which would have made them better
even in market share. Then we decided to keep our previous strategy and to look for the best
quality, but to decrease prices as well. We put the price very close to the average price,
because we needed recovery and not risky job.
In the Year13 we also had bought our shares, because the price per share was very low,
because the year wasn’t successful. So, we planned that if all went well next year, their price
double at least, what actually happened in the Year 14. As we wanted to build new plant
capacity in Asian market, we sold our shares and got lot of ending cash. We had chosen that
market, because the exchange rate was the lower and then it least affected cost per pair
produced.
From the Year 14, we moved one step ahead by the actions I mentioned above. Before this
year we wanted to satisfy retailer needs for branded and as well for private label in all
markets, which should increase our image rating. However, we realized that, at that moment
privet label wasn’t that profitable enough and didn’t affect image rating. So, we used all
capacities only for producing branded shoes. In contrary, our image rating was high, because
we invested some money in CSR, S/Q and celebrities, which all boost company’s image
rating.

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In the following years 15th and 16th we tried to increase all our results by doing only branded
shoes, which made better profit. All numbers increased, which is represented in the table
below. We tried to put the price a bit higher for 1 or 2 dollars, so that we still differentiate, but
this time with best quality and increased number of models, more celebrities and also we win
the golden award in CSR, which mean that we invested lot in it. Internet market share was the
highest with average price, we had a strategy to keep best S/Q rating and it worked great from
beginning. So, we didn’t want to change it a lot until the end.

In the last two years, we still focused on branded shoes, but also we put some small part of
production in private label. We risked to put the highest price possible in all regions and to get
some of them, because not many competitors sold shoes in private label, so the retailer
demand stayed unsatisfied in previous years. We managed it in even three markets in last
year. Beside, we bough more shares, and took a loan, but it only increased our ROE and EPS.
Furthermore, we invested much more in marketing, celebrities, retailer support and compared
to that fact we increased price a bit as well. All that was needed to become the number one in
our industry for the first time in the last year.

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2. Strategy from marketing point of view
As Marketing was one of the most important parts in our strategy, I have already explained
some marketing tools we used for better results. I have learned a lot about marketing, but I
realized in the game how much it can influence profitability. The strategy of Day and Night
was to differentiate in our industry. From beginning we wanted to achieve the first place in
industry by having the highest price with maximum marketing investments and retailer
support. Beside the best quality which we had all the time, it was important to do good
marketing. In that way we did better job then those companies, which went for average
quality and much lower price. Even though we invested a lot in marketing and retailer support
from beginning, it didn’t pay off because we didn’t understand the part about bidding for
celebrities. We put some money but two years passed by and we didn’t have any celebrity.
That showed us that we should invest a lot in celebrities and to try to put the highest price to
get them. After two years of losing retailer outlets in huge numbers, the new ratings from
celebrities influenced a lot that retailer outlet increased every year more and more. All that
increased market share and profitability.
In our online sales were very well from beginning until the end. We kept the prices lower then
in branded sales, because we wanted to promote through online marketing. The prices were
not too low, so not to had bed impact on the company’s image. However we satisfied more
then quarter of the market share by strategy of highest S/Q ratings and largest investment in

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online marketing. The number of models was half then in branded sales, because we wanted
people to buy more in branded as it is more profitable.
Our company invested a lot in CSR and it made us in two years the best in industry. We
wanted to have an image of CSR which concentrates mostly on charity and environmental
friendly packaging and some other things. However those two CSR activities are the most
visible to the customers, so that increased our image rating the most. Especially because we
invested from the beginning, it paid off after 5-6 years in 15 to 20 image rating.
We focused in the first two years in both private label and branded sales. It brought good
results. Even thought it was less in the numbers of profitability to sell private label, we were
thinking that selling in private label in all markets will bring better image rating. However,
after some crises period we decided to quit selling in private for some time. Anyway, when
we recover from bed the Year 13, we decided to put a bit again in private label. If we have
continued game we would invest more in building new capacity. We would put much more
shoes in private label with the highest prices, as we did in last two years. We didn’t have
enough capacity to satisfy retailers demand, because just a few competitors sold in private
label with much lower S/Q ratings, number of models, marketing, etc. In that way we could
earn a lot and have great market share if game was continued.
All in all Marketing helped the most to differentiate and to keep our strategy going. It was the
only way which we found the best. It took some time, until we got back, but it was worth.

3. Group Dynamics

As the result shows we were great team. We could agree about most of the things. One of the
most important things was that we all were very much interested in the game and we were
very well prepared before the game started. Moreover, while we played the game, we have all
checked the market snapshot and competitive intelligence report. It helped a lot for better
understand about the industry changes. Everyone could tell its opinion and we all tried how
some things result. We could feel that we becoming addicted to the game, because every year
was different. Furthermore, we had to do many things each year to become better every year.
The result didn’t come by itself, but we all invested a lot of hours and energy to be efficient
and successful in the game. We have even waited together that results came out after the
finished year. We were very excited and enthusiastic to be the first. I think that motivation of
being the best and also to get the certificate keep we succeed. It doesn’t mean that we didn’t
have other obligations in mean time, in contrary some of us even worked, travelled, studied.

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Even though Vuk and I went to Belgrade once, we talked to Judith and we all managed to
play the game by chatting on BSG-online. This was great experience to find out how it looks
like to work in virtual world. As well it helped me to learn some new things. That was also
one of the crucial thing for motivation that we could learn from the game and also from each
other. In the beginning of the game Vuk was the most dominant, because he was mostly
familiar with finance. However, Judith and I involved from the first part, just we could learn a
bit more from Vuk then he could learn from us. However, Judith and I also made good ideas
and changes. Vuk was kind of leader which organize the things in beginning, but after one,
two years we all participated equally. In my point of view, that was also important to have
someone in team who was a bit more experienced and who could coordinate especially when
the game started.
To sum up, we are very satisfied with achieved results, we enjoyed the game and we learn a
lot of new things. We saw how the company functions from all aspects and how to manage it
in competitive industry.