Simulation Report on Value Champion.

STGY 5903 I

Individual Assignments 2

Aditya Bikram Dash

101251804

Prof. Abdel Hamou-Lhadj 

2 April 2022
Introduction

The objective of the case is to deliver bulk quantity of shoes within 9 weeks (1 week for

inventory and delivery, in total 10 weeks) to AllStar Sports retailer. As the project manager my

goal is to maximize profit SmartShoe will earn from this special order.

The strategy I have selected is focused differentiation. The product differentiation is a

commercial strategy used in the market to stand out of the competition. Organizations with

diverse product portfolio would use this strategy to distinguish between their products and have

an edge in the eyes of their clients/ customers.

Round 1

I have decided the volume of the order should be 3000 units and the quality should be

maintained at the highest level (100%). Although this results in higher cost of manufacturing but

at the same time higher price can be demanded from the buyers based on the quality and features

provided. With this step I made sure to ensure the satisfaction towards value of money for

customers. I strongly believe that “when a company produce superior products, it surely earns

profit.” Because as for my experience it falls out of cost based pricing strategy rather than uses

value based pricing.

I chose single shipment. As per the instructions the client will pay $2 for every order that arrive

before due date. So I trusted the efficiency of the company and went with this option rather than

choosing batches which will cost $1.3 extra and I feel it is unnecessary.

I have chosen all stations here, because without additional option of training and over time the

employees won’t be that effective to use a single station and the overhead time for number of

weeks also increases. I have also excluded one employ with maximum error rate because of the

risk as well as time he will consume can penalize on the performance.

Here the choices were logical and simple. I believe cost for shoelace protector compared to

benefit is significantly low. And the customized flag add-on will give a brand/team favoritism

touch to the shoes, which I believe is really high in the sports industry.
Round 2

Here in this round the volume of shoe units I am able to increase up to 500 units from last time

which is 3500. Because of additional factors complementing on the value chain performance.

I am joining a buying group to ensure 15% on raw materials. Honestly it was a tough call,

because I was inclined towards Just-in-time delivery because it removes the delay in delivery of

raw materials. But I was pretty confident on my decision which made profit at last.
I also took the risk of choosing delivery method as outsourced instead of In-house method,

because as per my calculation I have enough time for the products to be delivered within time

limit. And at the same time will help me earn extra profit.

Here I chose Add buffer for final delivery in order to make sure that shoes are delivered in time,

because of the previous decisions I have taken and there are possibility of accidents and delay in

delivery. So I made sure to choose this option and make extra $2 per shoe rather than pay 20%

fine because of late delivery.

I chose to give training to the employees because it will ensure the quality of work remains top

notch and also this will increase the efficiency of the staffs to complete the task in time. I have

selected all the employees this time because of the training they will be provided to decrease the

error rate. This will cost money but in return will give significant ROI.
This time I have included the upgraded performance insole additionally along with shoelace

protector and customized flag-on to attract more buyers and increase the profit margin.
Here I have chosen to give 1 month of warranty period to customers to check the response of the

market as well as to increase the brand value along with the return of profit on investment.
Round 3

This round was most crucial round for me, because based on the last round performance I have

made certain changes and tweaked the performance which resulted in increase of profit on sale.

I am able to increase the volume also significantly to 5000 units without compromising neither

on quality not on the delivery time.

This time I chose one station rather than all station like previous round and used the additional

feature of overtime. Using this strategy I have reduced the total time required to manufacture
5000 units of shoes from 15.6 weeks to 8.7 weeks significantly. And also the training helped in

efficiency on top of it.

I have removed the performance insole option this time because in the last round that option did

not generate significant amount of profit.

This time I have given 6 months of warranty based on the previous round response to gain trust

and confidence of the customers.

I also invested in the product launch event as it is the marketing effort needed to give the extra

boost to the net sales. Hence more profit can be gained.

The main strategies I kept in mind throughout the whole simulation rounds are:-

1. No compromise on quality of product, used value based pricing.

2. Maximizing profit without delaying the delivery.

3. Invested on marketing and manufacturing department to ensure significant ROI.

 4. Investing on features to attract buyers and increase profit.

5. Providing warranty to build brand value as well as profit, which has significant long term

ROI.

References

https://forio.com/app/harvard/value-champion/#/information

https://hbsp.harvard.edu/coursepacks/917937

Strategic Management. Blacksburg,

Kennedy, Reed. (2020)

VA: Virginia Tech Publishing.