The Diamond-E strategic planning template is a high-level road map for strategic analysis which identifies the key variables that need to be considered in strategic planning and structures the critical relationships among the variables. In the Diamond-E template, all the variables are either directly or indirectly correlated. However, the strategy is the most vital linking variable of all. It, strategy, defines the opportunities the business is pursuing. In which environment and, the resources, organizational capabilities, and management preferences required for effective execution. Any of the variables in the Diamond-E model can drive strategy. For example, a change in the environment can force a change in strategy, or a new approach can be used to exploit a unique resource.

The Strategy and Business Policy simulation is an activity that is used to teach strategic management to students pursuing management courses. The simulation emphasizes formal strategic planning, by using a strategic planning template, interwoven with the tactical decisions made throughout the simulation. The strategic planning template follows the objective-strategy-tactics (OST) format, which ensures that strategic analysis, strategy specification, tactical execution, and real-time control are explicitly performed. Using the strategic planning template for every decision round during the simulation exercise helps a student to see how their plans build from one quarter to the next, helping them to understand the concepts and the methods of strategic planning. In this simulation, students work within a virtual multifunctional business setting where they start up a new business venture and manage all the functional areas of the investment. These functional areas include; marketing, sales and distribution, human resource management, manufacturing, accounting and finance, and, strategic planning. The knowledge the student acquires by undertaking this simulation activity makes it a momentous event that should be incorporated in future strategic management courses.

For this simulation activity, I aimed at providing simple, environmentally friendly means of transport for the working urban dwellers to use to and from their work stations, to reduce the traffic congestion in cities. At the same time, reduce the environmental degradation resulting from the use of fossil energy. For this, I was to start a bicycle manufacturing factory that would fabricate and assemble bicycles to suit the different needs of the consumers. I employed the Diamond-E strategy to help me to begin and manage this new venture. The main variables that I have focused on in this paper are; environment, strategy and resources.

ENVIRONMENT

The environment informs the type of business one can establish in a specific locale. City dwellers demand products that are different from those that are preferred by countryside dwellers. Studying the environment of operation is vital in identifying what product to introduce in that market. In my case, I targeted an urban environment, outlined the problems I wanted to offer solutions for and went ahead to strategize on how I’ll provide these solutions. My chosen environment was congested with vehicular traffic, and the air was polluted by exhaust fumes produced by these vehicles. Studying the consumer environment involves gathering information on how the customers intend to use the product being introduced, the price they are willing to pay for this product, what the market potential and media preferences for this product are.

STRATEGY

The strategy is the driving variable of the Diamond-E strategic model. It outlines the opportunities the business is pursuing and how the business intends to compete and win in its marketplace. Strategy can, therefore, be described as the definitive tool for building, communicating, and maintaining the direction of a business. A plan aims at taking the basic ideas of business and expressing them in operational terms which are useful for analysis and action.

In this simulation activity, I aimed at performing strategic analysis, specifying my strategy, turn this strategy into specific tactical decisions, and monitoring my venture’s progress toward my strategic goals. I started by outlining the mission statement and deciding on the company’s culture, values and beliefs. I then defined the problems I faced while starting up a new venture and outlined the solutions to address them.

I outlined the venture’s corporate objectives that were to guide me in curving the direction the business was to take. These decisions influenced how I allocated resources among all the functional areas within the company. Throughout the simulation activity, I continually set specific performance goals and monitored how the company was achieving these goals. Where the company failed to meet specific goals, I took a corrective action to remedy that by analyzing what the competitor was doing and undertaking a SWOT (Strength, Weaknesses, Opportunities, Threats) analysis for each functional area and the whole company.

RESOURCES

Resources define how well a venture is doing compared to competitors. An investment that manages its resources appropriately is bound to succeed. Support can be in the form of staff and monetary support. The human resource manager manages the staff resource while a finance manager is responsible for all the monetary resources. To correctly manage financial resources, the finance manager needs to prepare pro forma statements. These statements provide a projection on all the business dealings of the company, including the expenses and projected revenue.

Accounting statements are produced after each decision period, which can be quarterly, semi-annually, or annually. These statements outline the cash flow, income statements and balance sheets, and they allow the management to watch the company’s cash position, profits, inventory, debt and assets. Throughout the exercise, I continually analyzed the results that were being generated, and this helped me to improve my strategy and tactics. The template allowed me to see how consumers reacted to the marketing activities I employed as well as those used by my competitors. I was also able to see how the decisions I made affected the business financially.

PART B

INTRODUCTION AND BASE CASE ANALYSIS

In 2014, Francis wrote in his journal article that the Diamond-E strategic model was developed as a framework for checking and communicating a firm’s strategy. This model can be used systematically to examine a company’s strategy logic and strategy execution. The model suggests that right strategies answer a series of related questions spanning target markets, growth vehicles, speed and path of strategic change, and financial deliverables (Francis, 2014). According to (Hitt et al., 2007), a strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. In this case, I shall define a strategy as the definitive tool for building, communicating, and maintaining the direction of the skill I desire to learn. When choosing a strategy, firms make choices among competing alternatives (Hitt et al., 2007). In my case, I am supposed to indicate what skill I intend to learn from the listed set of skills, and outline the actions I shall take so i can achieve the set goal.

According to (Francis, 2014), there are five critical elements of the Diamond-E model. These are arenas, vehicles, differentiators, staging, and economic logic.

Arenas indicate the environment in which the business will operate, and the emphasis that will be placed on each area. It encompasses the choices made about the environment in which to compete: the external environment such as the service or product markets, geographic markets or channels. Arenas also identify value chain activities that are either in-sourced or outsourced (Francis, 2014).

Differentiators are the factors that are employed to allow the firm to “win” in its targeted areas, especially external arenas. They, differentiators, refer to attributes that help a company to set itself apart from its rivals and gain market share (Francis, 2014). They can include image, reliability, price, and other vital inputs. Differentiators require strategists to make up-front, conscious decisions about the strategic assets to be assembled, refined, and deployed to wade off competitors in the fight for customers, revenues, and profits. Creating differentiators is an essential task top management should undertake because, without them, a company can lose its market position (Francis, 2014).

Francis (2014) defines vehicles as the means for a firm to enter the chosen arenas. A firm can decide to grow on its self, form a joint venture or acquire the business of already existing player in the targeted field. A firm can use one or combine these vehicles to penetrate arenas. Vehicles are the means for achieving the needed presence in a particular product category, geographic area, market segment, or value creation stage (Francis, 2014). They result from a deliberate strategic choice.

Francis (2014) defines staging and pacing as the sequence and speed of strategic moves. This element identifies decision points since strategic moves lack a single possible pathway. Staging process is dependent on many factors such as resources required to carry out the task. Sometimes, businesses need to respond quickly to grab available opportunities. In such situations, urgency in taking actions is critical, achieving credibility is extremely important to attract resources and stakeholders and finally wining early in the strategy implementation phase is vital (Francis, 2014).

Economic logic, according to Francis (2014), refers to how the firm generates profits above its capital investment. A business strategy must clearly state how the firm will make profits. The most successful business strategies have a centralized “economic logic” which acts as the pivot for profit creation. In some cases, the economic key may be to acquire premium prices by offering a difficult-to-match product to the consumer. Economic logic for profit-oriented firms can take the form of scope economies, scale economies, premium pricing or a combination of these. For non-profit organizations, economic reasoning is reflected in how well the organization is achieving its mission and vision and serving its focal stakeholders (Francis, 2014).

STRATEGY FORMULATION AND TESTING

Strategy Formulation is one of the steps of the strategic management process. It is an analytical process of selection of the best suitable course of action to achieve the organizational objectives and vision. The strategic plan allows a firm to examine its resources, provides a financial plan and establishes the most appropriate method of action for increasing profits (“What is Strategy Formulation? definition, process, levels – Business Jargons”, 2020).

Being a food enthusiast, I chose to learn how to bake a cake. According to the website article, “Baking Lessons: How To Bake and Baking Principles – The Culinary Cook”, 2012, baking is an entirely new world that encompasses a whole set of new principles, techniques, and methods. Learning how to bake can take a long time. In the culinary industry, baking is so vast that it is usually practised as a specialization. Opening a bakery requires one to invest in the vastly different equipment needed, ingredients, and kitchen make up (“Baking Lessons: How To Bake and Baking Principles – The Culinary Cook”, 2012). This makes it almost impossible to combine a bakery business with any other type of business.

In order to learn how to bake, I am required to have an excellent foundational understanding of all cooking methods and theories regarding how food reacts under certain situations and the various common combinations that produce superb results, such as thickening, coagulation, proteins, and starches (“Baking Lessons: How To Bake and Baking Principles – The Culinary Cook”, 2012).

DECISION AND IMPLEMENTATION

The strategy to learn baking as a skill involves outlining the goals that I expect to achieve. In this case, my goal is to learn how to bake a cake with an aim to acquire an important skill to complement my other already acquired culinary skills. For a business, the product market focus involves identifying the products or services a business venture aims at providing, and to what market. However, in the case of skills acquisition, I am the market. The product being supplied to me is the skill I aim to gain. In this case, I intend to acquire a cake baking skill. The ability represents the product, while I serve the product market.

For a business venture, the value proposition defines how the business intends to attract customers. In my context, the value proposition is the benefits I shall reap by learning this new skill. New skill in cake baking shall improve my competitiveness in the culinary market as I shall have an extra ability that will assist me in edging out competitors in the same field. The core activities are the primary value-adding activities that I tend to achieve by learning the new skill and how I intend to acquire the power.

To understand baking, one is required to have the base knowledge which involves understanding the base skills and techniques so when one indulges in the baking lessons they know the terms, processes, relationships, and critical ingredients involved (“Baking Lessons: How To Bake and Baking Principles – The Culinary Cook”, 2012).

Developing a strategy involves formal strategic planning. Strategic planning is the process of creating and managing a strategy. This consists in performing strategic analysis, specifying the approach, turning the strategy into specific tactical decisions, and monitoring the progress made towards accomplishing the strategic goals. The objective is to acquire a cake baking skill. To do this, I can attend physical culinary lessons offered in a culinary school, do an online course or utilize video sites such as YouTube for baking tutorials. On the evaluation of the options, video tutorials were the best-suited option to achieve my objective, since it didn’t require much monetary investment and the step by step explanations were equivalent to attending a physical class.

The other step towards accomplishing my objective would be to purchase the required baking equipment such as a mixer, cake pans, spatulas, mixing bowls, among others. These are the equipment that I shall use to implement what I have learnt practically and to sharpen my skills. The final step is to purchase different cake-making ingredients. These include a cake or pastry flour, eggs and leavening agents such as yeast (“Baking Lessons: How To Bake and Baking Principles – The Culinary Cook”, 2012).

For the above three strategic approaches, revenue allocation is paramount. For instance, investing in acquiring online video tutorials is paramount since it is the first step towards achieving my set objective. However, it is also equally important to invest in purchasing the baking equipment and the ingredients, since, without these, I would not be able to practice what I learn.

CONCLUSION

The Diamond-E model is strategy driven. Strategy defines the opportunities the business is pursuing and formulates the means of achieving these opportunities. This essay has assisted me in understanding the Diamond-E strategy template in that;

Setting the objectives one aims to make is vital in establishing a method to achieve them. The purpose outlined in this essay is to acquire cake baking skills, a new skill.
Outlining the methods of achieving these objectives is essential. These methods act as a guide to direct the individual towards the set goals. To complete my intention to acquire the cake baking skill, I identified online video tutorials as the best method to accomplish this.
It is essential to allocate resources according to the importance of the strategic approach. The number of funds spent on finding the video tutorials should be equivalent to the impact the tutorials will have in achieving the overall objective.

BIBLIOGRAPHY

Baking Lessons: How To Bake and Baking Principles – The Culinary Cook. The Culinary Cook. (2012). Retrieved 6 August 2020, from https://theculinarycook.com/how-to-bake-baking-principles/.

Francis, A. (2014). Strategy Diamond – The Five Elements of Strategy. Journal Of Business And Management Studies – Articles, Research And Case Studies. Retrieved 6 August 2020, from https://www.mbaknol.com/strategic-management/strategy-diamond/.

Hitt, M., Ireland, D., & Hoskisson, R. (2007). Strategic Management: Competitiveness and Globalization (Concepts and Cases) (7th ed., p. 4). Thomson South-Western.

What is Strategy Formulation? Definition, process, levels – Business Jargons. Business Jargons. (2020). Retrieved 6 August 2020, from https://businessjargons.com/strategy-formulation.html.

Organizational Strategy (Mgmt 4780)

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PART A

THE STRATEGY AND BUSINESS POLICY SIMULATION