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Strategic thinking is the most important ability that managers of every organization whether the big or small needs to possess (Goldmanand Scott, 2016). Because of the various kinds of difficulties that are experienced by the company, it is a very serious matter and needs a manager to be capable of strategic thinking (Betz, 2016). The report has been conducted to recognize the dimensions of strategic thinking in a start-up company and the report have also considered the case company Nicycle a start-up company looking to launch in the UK market. In this regard, the managers of the company need to have their own opinions on strategic thinking and the views which are analyzed by the report. The main purpose of this report is to analyze the result which further suggests having the vision, having classification philosophy, the capability to analyze, the ability to question, the aptitude to create, to make synergy and creativity and innovation which provides advantage which are the main elements of strategic thinking process for successful managers of the case company. In addition, the report also discusses the strategic simulation and its importance in the start-up business Nicycle. The report highlights the strategic thinking process involved in simulation and also the importance of value created by strategy is been explained.
1. An analysis of the strategic thinking process involved during the simulation
Strategy analysis
Strategic analysis is procedures that involve researching the external business environment of an association in which it operate which is possible through the PESTEL analyses as shown in figure 1.
Figure 1 PESTEL Analyses
Strategic analysis is very significant to originate strategic planning for decision making and effective working in the organization. With the help of strategic planning, the goals and objectives are fulfilled efficiently which is only possible through SWOT analyses which also analyse the possibilities and threats to re-evaluate the business strategies.
Figure 2 SWOT Analyses
Some important features of strategic analysis are:
The strategic analysis permit the company to look into positive attributes which have a huge impact and are in control of the company. By getting information about these characteristic an association can spotlight on the issue that direct to constructive performance and also imitate the strategy (Aakerand Moorman, 2017).
Strategic analysis helps in identifying the force of internal as well as outside possessions which further helps in increasing the competitive advantages of the company.
This analysis offers the internal components which help in adding value to the business.
Strategic simulation
Strategy simulation is a very strong method in the development of strategy and also in teaching strategic analysis. A strategic simulation is an under used tool in an organization it is a method for understanding the effects and causes of relationships in a complex world (Loonet. al. 2015) It represents a complex system in the virtual world it observes the behaviour of the system in a single frame and concludes about the cause-effect pattern in the system.
Strategic choice and formulation
Strategy formulation means the procedure of selecting the most suitable action for realizing the goals and objectives of the organization to achieve the target made by the administration. The procedure of strategy formulation is made of basically six steps. These steps are not into following a rigid order but are in a very rational form that can be easily followed. The steps of strategy formulation are as follows:
Setting Organizations’ objectives –the main constituent of every approach assertion is setting the enduring objectives of an association. It is very well recognized that strategies are usually intermediation in the realization of organizational objectives. This strategy involves both the medium of realization and fixing the objectives of the company.
Evaluating the environment of the organization – the subsequently step is to value the cost-effective and also business background in which the organization operates. This step includes looking into the organization's competitive position (Engert and Baumgartner, 2016). It is very important to carry out a qualitative and quantitative analysis of the alive invention line. This review helps to create certain factors that are essential for economical accomplishment in the marketplace could help discover the company’s strengths and weaknesses of the company and its competitors.
Selecting and setting quantitative targets – a business have to focus on setting the quantitative goal for the organization's objectives. The main thought behind this is to evaluate the loyalty of enduring clients which helps them to evaluate the contribution that may make various operating departments and product zones.
Aiming in regarding the divisional strategy - In this, the donations made by every individual, product partition, and department in the business are determined and identified consequently strategic preparation is conducted for every sub-unit.
Performance Analysis –it comprises developing and evaluating the space between the desired and planned performance (Dayan et. al. 2017). A critical analysis of the company's previous performance, current condition, and future desired conditions is conducted. This evaluation recognizes the gap that continues between the reality and long-term ambitions of the organization.
Choice of Strategy - This is the last move in the Strategy Formulation process. The main route of achievement is certain after analyzing managerial goal strengths, capabilities, weakness, and also external opportunities.
2. Assessment of some of the most important strategic thinking processes during the simulation
Strategic thinking includes planning of attainment of goals by evaluating several factors which affect the planning of success. Thinking strategically also includes being able to involve the potential capabilities and impact of the company's action (Brysonet. al. 2018). It also comprises the capabilities of reviewing and optimizing the plans to fit the altering realities of the external and internal environment. Generally thinking strategically is applicable for long-term goals attainments. As an outcome, the ability to strategic thinking is very important for the manager of the company. the process of strategic thinking for a start-up company during the simulation is as follows:
Strategic thinking
Strategic philosophy is one of the most significant characteristics of a manager in today's organization. While the tools and techniques of planning and implementing a strategy in the organization had a growing trend nowadays, research and findings which are related to abstract and subjective concepts like strategic thinking are still limited and have a very narrow scope (Buckingham and Goodall, 2015). The significance of strategic thinking is very essential for an organization, an organization needs a manager who can promote and think strategically in all individuals working in the organization (Hickmanand Silva, 2018). Strategic thinking is not so clear concept, but this concept is used quite frequently in an organization. Strategic thinking plays very important startup businesses like the case company Nicycle which needs good strategic thinking to develop in the market and work on the achievement of its goals and objectives. There strategic thinking helps in the improvement of the planning process of the company, the broader perspective of strategic thinking involves the following essential points:
Gather information – a critical aspect of strategic thinking is gained by gathering as much information and knowledge about the problem as possible for the manager of the company. With all the knowledge a company and its manager can develop a detailed understanding of the requirements of the situation and find an effective solution to the challenges (Bayliset. al. 2022). Gathering information includes collecting secondary information and deeply reviewing it, by doing so it will become easy to understand end goals and find the solution to the problem which will guide to success.
Considering future challenges – strategic thinking refers to preparing for future challenges by organizing a proper plan for facing them. This strategic thinking step helps to anticipate plan and manage all the problems smoothly and effectively which will be very helpful for the Nicycle to reach success through adversity. For facing future challenges company can reflect on previous situations which are similar to the current problem and can take necessary steps to solve it.
Seek guidance – collaboration, feedback, and guidance are the greatest tools for strategic thinking. It is a most valuable point to seek guidance and advice by analyzing others' situations and the problem can help the company to compare and take guidance from their situation and be aware.
Using creativity – strategic thinking required a great amount of creativity to assign all new techniques to include in theory strategic planning and work. The company needs to work on new ideas which are creative and innovative which makes the company different from its competitors. Strategic thinking requires logic and innovation which means the company can logically integrate comprehensive solutions and creative ideas (Goldmanet. al. 2015)
Consider opposing methods – critically evaluating the thinking and approaches of the company could have profound results in strategic thinking. By considering an opposing viewpoint or method of executing the step in any kind of disturbing step in the strategy.
Assessment on choosing to go through country A rather than country B and the consequences of that decision
The case company Nicycle is a start-up company which looking forward to operating in the UK market. A growing company like Nicycle which is running a start-up in UK market is the best option because it is the greatest location as the country is a business-friendly destination and also attracts several start-ups and customers from all over the world. The main reason for which the company has chosen the UK for doing business is as follows:
The UK is a very dynamic marketplace, currently, there are around 5.6 million private sectors business operating. This is a positive as well as a negative point for the company. Positive point is that the market offers various opportunities and the negative point is that it offers huge competition. The country has four major regions which are popular for business which are England, Wales, Scotland, and Northern lands.
The country offers ease of doing business; it is the easiest country for starting up a business. The government offers various facilities for start-ups as they support the economy of the country.
The company has various options for finance and investment; there are so many big companies that offer investment opportunities to start-ups.
Why did company invest in a particular function (such as Marketing and R&D)
The company has focused on investing more in marketing and research and development because these two factors are most helpful for every start-up company.
Marketing – it is very important for every business to focus on marketing because it offers several benefits especially to start-ups business like Nicycle.
Helps in spreading company names all over the market
Helps in boosting sales for the start-up
The main focus is on gaining and retaining customers.
Marketing enhanced the company's reputation
Helps in attracting new customers.
Research and development – R&D is very helpful for start-ups as it helps in improving the processes and creates better and new products and services and increases profit for the company (Renet. al. 2015) benefits of conducting R&D are
It offers a unique selling point for the company
It encourages an increase in income and profits for the company
With help of R&D company can attract more investors and raise funding
The company gains competitive advantages
3. Analyse how the choices and strategy created value
Some of the team's choices may have failed to add value (i.e. in terms of key performance indicators)
Strategic management provides the company with a normal direction and makes clear goals of the organization; it also helps in developing plans and policies which are made for the achievement of particular goals. Allocating business functions for implementing the strategies for supportable growth of the organization (Grover et. al. 2018). Company plan on making value-creation strategy that are base on knowledge and also focus on jointly reviewing the following important aspects with the team members in the company and the stakeholders:
Present strengths, weakness, and opportunity to produce shared value (utilizing our 'Go beyond the label' methodology)
Voice of the consumer
Economical Environment,
Industry Strategy,
Merchandise modernism,
Operation,
Social Responsibility,
Process,
Practice
System
As a result of the company's strategic planning, some of the team choices failed because of improper planning. The management team of the company did not focus on preparing a plan they just used the secondary data and copied the planning of other companies. The second most important reason for failure is that R&D did not focus on understanding the environment and also did not consider the previous results (Tantalo and Priem, 2016). The planning team is required to pay attention to bring change in the business environment ad required to set meaningful priorities by developing the needs of the company and pursuing results. The next important aspect behind failure is that team has the partial commitment, the team needs to be fully understood the strategic planning and work on improving their enterprise. The major reason for failure is the ignoring of the marketplace reality by the team members. The team has fully neglected the market reality and problems which were arising from earlier plans. It is very important to focus on facts and assumptions before planning any kind of strategy and making any kind of decision.
4. Demonstrate critical use to assess the international strategy simulation’s competitiveness
The strategy simulation process forces the company to reflect critically and focuses on making strategic decisions, even if the start-up company has never worked with strategies before. Strategy simulations are made around chosen Strategy Tools, the tools and the software into one experience, linking the boards (Punt et. al. 2016). International strategy's main target is an online business simulation in which all the team members all allowed to be part of the decision-making process which applies to international strategies made by companies in the dynamic competitive environment. This case Nicycle Company belonging to the UK and the main target behind developing the simulation with the scope to be adaptable for a company belonging to any country, The strategic simulation is a managerially oriented simulation that further provides a theoretical as the well practical application of international strategy. A business simulation is a very powerful tool for development and learning in an organization. Business simulation permits people to be aligned on basis of strategy, improvement of their business insight, and also financial skills. The main focus is on the improvement of the overall organization working especially in the case of a start-up company like Nicole's.
Strategy simulations that focus on strategy
ACS strategy simulators depend on the principles of competition, not generalized trend lines or accounting rules, it is not technicality detail. It is the difference in the effects and cause and also the willing-ness to think. It is the difference between a truthful view of business and a viewpoint on how the business spreadsheet goes wrong.
Strategy analysis (porter 5 forces model)
Figure 3 Porter 5 forces
For analysing the competitive advantage, the case company can consider the porter’s five force model which helps in analysing and evaluating various factors by which company can attain competitive advantage and also their ability to attain maximum profitability. The porter’s five force model states the five forces which are related to attainment of competitive advantage for the company the forces are competitive rivalry, threats of entry, bargaining power of suppliers, bargaining power of buyers, and threats of substitutes. The detailed description of forces is as follows:
Competitive rivalry
The business simulation reflects the competition faced by the company against all its rivalry companies, without any kind of strategy it is very difficult or nearly impossible to maximize profits and gain share in market. The industry will try to enter market by offering several prices and different and better products which will drop as the business grow. When the competitive rivalry is high the company is permitted to offer lower prices to retain their position in the market. If the competition is low then company can charge the price according to its perspective. The company is allowed to charge low prices to achieve more sales, retain its business position and also to maintain its market share.
Threats of entry
A business market share is impacted by the threats of new entrants. The company’s position in the market is threatened by usage of fewer resources to enter the industry. The less time and money cost for a competitor in entering market is an effective option for competitors then establishing a whole new position in the market. The industry with the well-built barriers to entry is ideal for existing company within the industry since the corporation will be able negotiate on term and also able to allege high prices.
Power of suppliers
The next important factors in the model are the power of suppliers which addresses how easily supplier has control up the price of input. This is pretentious by the number of supplier of main inputs needed for the goods and services. The importance of suppliers depends on the how unique the materials are they providing and how much it will cost for company to switch to other supplier. Because switching to whole new supplier cist huge cost for the company, if there are less supplier in the industry it will more costly for the company to switch. As the outcome of this supplier enjoys the power and drives the input cost and attains other advantage in trade.
Power of customers
The ability which customer has to affect the prices is one of the most important factors of the five force model. It depends in the number of customers or buyer a company have and also on the significance of each customers, that how much it will cost the company to find new customer base or a totally different market for its output. Smaller client base reflects more powerful customer’s power over company.
Threats of substitute
The last factor of the force model is the threats to substitute product, every company have a substitute product or service to it, and in this the case company Nicycle have many different substitute which deals in the same market which poses threats to the company. Companies which produces goods and services which do not have any substitute enjoys more power in the market and also have control over the price. But in case of the close substitute here the customer enjoys the power of controlling the power of prices and demand.
Conclusion
The report highlights the aptitude to reflect strategically which often originates from experience. One good way of improving the company’s capability of thinking strategically could be submerging in the sentiments of people working in the company, strategic planning focuses on providing opportunities to all those with creative and innovative opinions. The report key features include importance of strategic planning and thinking. It discusses the strategic thinking process used in the simulation of a case company Nicycle which is a start-up company. The report states the importance of the strategic planning and its importance in a start-up company, the company's manager and its team need to focus on proper strategic planning before implementing any kind of decision or plan and also before planning on goals or objectives.
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