Assignment 1_Back Bay Battery Simulation_Shreya Gupta (Final).pdf - 2020 Back Bay Battery Inc Simulation MMBA8050 STRATEGIC FRAMEWORKS SHREYA GUPTA 1

Assignment 1_Back Bay Battery Simulation_Shreya Gupta (Final).pdf

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2020 Back Bay Battery, Inc. Simulation MMBA8050 STRATEGIC FRAMEWORKS SHREYA GUPTA
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1 Contents Topic Page number Introduction and background Business overview 2 Current performance evaluation 2 Why new R&D strategy? 2 External and internal analysis PESTEL framework 2 3 Industry value chain analysis 4 Internal resources and capability analysis 4 Appraising resources and capabilities for sustainable growth VRIO framework analysis 5 BCG Matrix 5 Identified business strategy through the simulation 6 7 Results based on strategic run 7 8 Appendix (year over year simulation run results and lessons learned) 9 References 10
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2 Introduction and background Business overview Back Bay started out as a specialist in AGM batteries earning a good market share and 80% revenue, and 20% revenue from Supercapacitors. They focussed on industrial application of AGM batteries’ high energy density that made them more attractive than Li-on batteries. Back Bay currently focuses on three main market segments: Storage for solar power systems; Warehouse equipment; Uninterruptible power systems (UPS). Evaluation of given performance: Sales growth in solar and UPS market segments with total unit sales increase by 21% at the end of second year Revenue increased by 20% and gross profit by 23% at the end of second year Total market size increased by 6% over two years as solar and UPS demand in industry increases, thanks to AGM battery’s low price compared to other battery types Need for a fresh R&D investment strategy Although Back Bay is doing well in the market, there needs to be an established sustainable strategy to induce growth with the changes in market dynamics and environment. Also, there is an increased interest in enhanced battery technology for electric vehicles. This would require large competitive R&D investments that Back Bay does not currently have. Therefore, establishing a growth strategy is imperative for Back Bay to have sustainable competitive growth in the market. External and internal analysis Macro-environmental factors analysis through PESTEL I considered two industries for this analysis electrical energy storage industry 1 and electric vehicle/automotive industry 2 . Legends: Challenging Strengthening Analysis tactic Electrical energy storage industry Electric vehicle/automotive industry Political There can be a lack of national community energy strategy based on current political scenarios. Unknown if the government / change in government in future will ask or enforce automotive industry to follow 0 50000000 100000000 150000000 200000000 250000000 Solar Warehouse equipment UPS Total market size Market Size from Year 0 to Year 2 Year 2 Year 1 Year 0 0 0.5 1 1.5 2 0 200000000 400000000 600000000 800000000 1E+09 Year 0 Year 1 Year 2 Income Statement from Year 0 to Year 2 Revenue from AGM Revenue from Supercapacitor Total Revenue Gross Profit Operating Profit
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3 regulatory requirements and increase production of electric vehicles in future.
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