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

2020
Back Bay Battery, Inc.
Simulation
MMBA8050 STRATEGIC FRAMEWORKS
SHREYA GUPTA

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

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

3
regulatory requirements and increase
production of electric vehicles in
future.