COMPONENT 1: Executive Summary
Company Progress
Andrews Co. applies a broad cost leader strategy by introducing low-cot products in the industry. A cost leader strategy is a wide approach to conducting business in which the main focus of the business’ strategy is to be the lowest-cost company in an industry ( Magretta, 2012 ). In its first year of operation, since its inception, the company performed well in profits and market shares. However, from year four, the company’s market share and profits have been on the decline, and in year eight of operation, Andrews 0% growth in both low-end and high-end market shares. Profits have also failed over the years, and this can be attributed to some bad decisions made, such as taking loans without considering the company’s inventory in order to handle competition in the industry as well as failure to introduce new products in the initial stages. Therefore, the company’s performance in the market/industry can be said to be on a major decline.
SWOT Analysis
Strengths
The use of a broad cost leadership strategy is a major strength for the company. A broad cost leadership strategy provides high profits and an increase in market share. By selling products at a lower cost and offering competitive prices, a company can increase its profit margins because more products are sold ( Magretta, 2012 ). The strategy also allows a firm to attract more customers, especially those who are conscious of their budgets. This strategy also helps ensure sustainability, especially in situations such as during tough economic periods, among others. A cost leadership strategy also provides more capital resources that can be used to grow an investment ( Magretta, 2012 ). Through applying this strategy, Andrews was able to make profits quickly and, at the same time, grow its market share.
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Weaknesses
Andrews’s performance has been below that of most other firms in the industry in terms of profits and market shares for both low-end and high-end products and the overall market share.
Opportunities
An opportunity to introduce new products into the market has been in existence for Andrews. However, after the company failed to grow in its market share and profits, it should have taken advantage of the opportunity to get back to the market by introducing new and unique products to meet consumer needs and compete in the market.
Threats
The threat faced by Andrews was competition. The firm did not diversify its products and only introduced one product in the market. As a result, it did not have any other products to offer to clients. Andrews failed to introduce new products into the market in its initial stages of operation and did not react to the strategies of its industry competitors.
Future of Andrews Company
Based on its performance, the future of Andrews is not promising/good. There is no growth in market share and profits are not generated. In addition, the company has many debts that ought to be serviced hence further affecting its financial performance. There are many bad decisions made related to product marketing too. In order to get back to the market and make profits, Andrews will introduce more products into the market at competitive prices in order to compete with other industry players effectively. It is hoped that by doing so, the company’s sustainability will be ensured while at the same time profits made and losses incurred in the past recovered. A cots leadership strategy will contribute to the company’s sustainability ( Magretta, 2012 ).
Ethical, Legal, and Social Challenges
Andrews has not had ethical challenges. Its strategy ensures that it offers fair market prices to consumers and does not exploit them. However, the company has been facing the possibility of going bankrupt, and this is a legal challenge for Andrews. Bankruptcy is a legal activity against organizations or individuals who are unable to pay back debts owed to creditors ( Levitin, 2018 ). Andrews has many debts and has been making efforts to avoid being declared bankrupt, leading to no profits for the company. In addition, the company finally brought new products into the market, but the products were not able to meet competition in the industry. Andrews has not experienced any social issues so far. Through effective product pricing of the new products, proper control of the inventory, and increased bonds, Andrews can improve its performance.
Global Considerations
Based on its current situation, the idea of going global is not good. Andrews should focus on addressing its current challenges and getting back into the market before thinking of going global. It should remedy its profitability first before making any considerations of going international. When going international, it is important to consider factors such as the culture of the host country, consumer needs, economic environment, and legal environment, among other factors.
COMPONENT 2: Personal Reflection
My experience was a challenging one, and numerous mistakes regarding the company were made, and this resulted in the current state of the company. However, it was also an enlightening one because a lot has been learned through the mistakes made. The experience has made me see the challenges associated with doing business and how they can be addressed in order to prevent a business from dissolving/failing. The capstone offers essential business skills and knowledge to learners who desire to venture into the business world in the future or those who are already in the business world. The capstone connects with the business aspect of my academic program. The knowledge gained from the capstone will be applied in business management, whether as an entrepreneur or as an employed business executive in the corporate world. Business communication was demonstrated by communicating with my team and instructor on the various aspect of the business. The skills will be applied when conducting communication with peers in future projects as well as passing business-related information to colleagues as well as investors among other stakeholders. More communication should have been conducted with peers and the leader, and professional business etiquette was essential in ensuring that conflicts in ideas were appropriately handled and business conducted with respect and dignity towards one another.
References
Levitin, A. J. (2018). Business bankruptcy: Financial restructuring and modern commercial markets . Aspen Publishers.
Magretta, J. (2012). Understanding Michael porter: The essential guide to competition and strategy . Harvard Business Press.
