3d Systems Final Strategic Plan

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Business: 3D SYTEMS FINAL STRATEGIC PLAN

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3D Systems Final Strategic Plan

Introduction

A strategic plan refers to a roadmap where an organization definesits strategies or directions, including decision making for resourceallocation in pursuance of organizational goals. Strategic planningmay extend to the control mechanisms meant to direct theimplementation of the organizational strategies. The concept ofstrategic planning gained prominence in the 1960s and has sinceremained a very important component of strategic management. Theconcept includes setting goals and initiating the actions aimed atachieving them. It also entails mobilizing of resources in order toexecute them (Bryson et al., 2011).The 3D Systems’ strategic plan is an essential process andtherefore needs inputs, outputs, activities, and outcomes. It is aplan like all the other processes that is aimed at providing a guideto the actual strategy formation. The objectives of theorganization’s strategic plan are to diagnose the environment andits competitive situation, as well as formulate a policy guide onwhat the company intends to achieve in the long run (Bryson et al.,2011).

Any organization that seeks to have a competitive edge needs to setup a credible strategic plan, whose implementation will help itachieve its goals. A strategy acts as a bridge between a firm’scurrent position and where it wants to be. This paper is aimed atformulating 3D Systems’ corporate strategic plan.

Tableof Contents

Introduction 2

Executive Summary 4

The background of the company 4

Mission Statement 5

The vision statement 6

Value Statement 6

How to create value &amp sustain competitive advantage 6

The company`s external environment 7

Evaluate the company`s general environment 8

Assess the structure of the organization &amp the influence this has on&nbspits performance 11

Recommend a strategy or combination of strategies the organization should implement, &amp include a rationale for that recommendation 13

Functional tactics 14

Recommend any organizational change management strategies that may enhance successful implementation 15

Create a risk management plan including contingency for the&nbspidentified risks 16

Reference 17

ExecutiveSummary

An organization’s strategic plandevelops a solid base for the business to pursue its mission, visionas well as the long-term goals. Through the analysis of the internaland the external business environment, a company can come up with astrategic plan that will enable it to have a competitive advantageover its competitors in the market. For the purpose of this paper,the 3D company will be conceptualized as an organization that seeksto provide more affordable 3D printers and other related gadgets atan affordable cost to the average consumer.

The 3D Systems Corporation hasestablished itself as a technology-oriented company over the yearsand seeks to re-establish itself in order to gain a sizeable share ofthe market. The dynamics of the market are presenting a formidableopportunity that the firm seeks to capitalize on to gain acompetitive edge. The strategic plan will outline the organization’sbusiness model, vision, mission, and goals. The plan will alsooutline the internal and external environment under which the companyoperates. The most important factors, will hereby, be established bycarrying out an analysis of the immediate environment in order todevelop strategies to gain a competitive edge over its competitors.3D’s strengths and weaknesses will be analyzed as well ascompetitor analysis, to ascertain the level of competition that thecompany faces. The top competitors in the industry will be identifiedand their competitive advantages mentioned. The strategic plan willalso set up the financial plan. The structure of the firm and theinfluence it has on its performance will also be assessed. Lastly,like any other strategic plan, the organization’s strategic plan isgoing to outline the implementation schedule. Recommendations aimedat enhancing successful implementation will be made. Risk managementplan will be created to include contingency strategies for theidentified risks.

Thebackground of the company

The3D Systems Corporation was formed by Chuck Hull, who is the patentholder in Valencia, California in the United States of America. Priorto the innovation, concept models needed a lot of time and money forits production. The innovation of Stereolithography (SLA) made iteasy to reduce the amount of resources and at the same timeincreasing the quality and accuracy of the output model. The 3DSystems provides a comprehensive three-dimensional products andservices that include 3Dprinters, digital design tools, printmaterials and printer parts. As part of the organization`s effort toconsolidate its 3D printing under one brand, its output includes 3Dprinters and other print products targeting prospective consumerswith the latest technology. The three types of printers offered bythis company include professional, personal and production printers.

The 3D Systems can be termed as acompany that highly relies on internal innovations for thedevelopment and improvement as well as a protective legal shield withthe use of patents in order to have an advantage over itscompetitors. The company’s model of innovation has, however,received much criticism for slowing down the development andinnovation of 3D printing (“3D Systems: Empowering our customers tomanufacture the future,” 2014). The proponents of the system,however, agree that the right to patent motivates and inspires peoplein the organization to create high-quality innovations that will leadto more competitive products and services. The 3D Systems hasoverseas branches in 80 countries and employing over 2,100 employeesin 25 locations spread across those nations. The company owns over359 patents in the United States and other foreign countries (“3DSystems: Empowering our customers to manufacture the future,”2014).

MissionStatement

The 3D mission statement statesthat “The Company seeks to innovate and develop three-dimensionalprinters that are low cost to the average consumer anywhere in theworld. With a keen concentration on innovation and cost controls, theorganization seeks to develop a user-friendly experience that canappeal to consumers from all walks of life”. The statement laysmuch emphasis on technological innovations and therefore needssignificant capital to enable the development of the initial designof the product. The strategic plan will, therefore, be tailored tomake use of the available resources so that they cannot be strained.There are risks associated with pursuing innovation, but 3D believesthat the mission statement will guide to a successful implementationof the plan.

Thevision statement

The vision of 3D Systems is to havea world where each and every business, school and household isenjoying the benefits of having a 3D printer. Being one of thepioneers in the industry, the company intends to establish customerloyalty that will increase sales for a long time to come. In the sameway that Apple Inc. is doing in the innovation of computer products,3D aims to imitate similar achievements in the three dimensionprinting industry. As technological advancements are taking place,there is a high likelihood that more opportunities will emerge. The3D Systems will use all its available resources to develop a verticalsupply chain that will control the software, hardware and theintellectual property of 3D printers.

ValueStatement

3D Systems aims to become a globalleader in the production of products and services at a low cost. Thecompany’s value statement is meant to help in the identificationand connection with the prospective customers as well as remindingthe organization’s employees about its goals and priorities.

Howto create value &amp sustain competitive advantage&nbsp

Demonstration of product value to the consumers is one of the keyareas for 3D systems. The buyers will definitely be looking for aproduct that can have a positive impact on their lives as well astheir businesses. The organization will find time to time seekfeedback from the consumers in order to create a product or a servicethat is not only low cost but also meets the specifications of thecustomers (Brown, 1990). This objective can be achieved through themaintenance of a constant focus on technological improvements as wellas product designs. This is informed by the fact that customersshould always be eagerly waiting for the development of an improvedversion of the 3D printers that will further improve their utility.The release of new and improved products to the market will improvecustomer loyalty as they strive to purchase the latest productmodels.Usingthe environmental scanning strategy

An environmental scanning strategy involves the systems survey andinterpretation of relevant information to identify opportunities andthreats in the external environment. The organization will gatherdata from the external world, its competitors and itself. It willthen respond to the data collected by altering its strategies and theplans as long as the need arises.

Thecompany`s external environment

3D external environment encompassesa number of entities and factors that the company does not directlycontrol but have an immense influence on its operations. The externalenvironment includes the competitors, the government, the suppliers,the consumers and the service providers (Lapin, 2004).The external environment is a crucial factor since it has a directimpact on organizational profitability. The 3D Systems aims to carryout an analysis of the external environment in order to developstrategies aimed at giving it a competitive edge in the 3D printingindustry.

Evaluatethe company`s general environment

The company’s general environment has a substantial impact on thelevel of success. 3D must, therefore, track the trends as well as theevents as they unfold and trying to anticipate the effects that thesetrends and events will have on the company. PESTEL analysis is onevery important tool of analysis in the external business environment(Contributor, 2015). The analysis tool can be used by theorganization to identify the factors that influence the industries aswell as the firms within them. PESTEL is a composition of six words:political, economic, social, technological, environmental and thelegal environment. 3D managers will carefully examine the majorthreats and opportunities and adjust their strategiesaccordingly.Evaluatingthe organization`s industry operating environment

The 3D Systems needs to collect information about the industry itoperates under. The data relate to the market, macro environment, andthe trends in the industry. The company will achieve this bycarrying out customer and employee surveys, seeking information aboutthe competitors through the use of secret shoppers, use of tradeshows and the utilization of reports about the industry. The datacollected will then be subjected to a SWOT analysis that will be usedin making the strategic decisions.Assessingthe organization`s internal environment

The objective of carrying out an analysis of the company’s internalenvironment is to collect information that gives it a descriptionregarding the strengths and weaknesses, the resources at itsdisposal, its strategies and practices and organizationalperformance. 3D will want to know what it does that has an influenceon the company’s successes and failures. The data being soughtconcerns the resources the firm has, the activities it does, and howwell it performs its day to day activities.Themost important strengths &amp weaknesses of 3D Systems including anassessment of the organization`s resources

The identification of the company’s strengths and weaknesses isessential since some of the characteristics that appear as having animpact on the organization might actually have little or nosignificance in its competitiveness. The strengths and weaknesses ofthe company’s operations that are identified through the use ofconventional means are usually an initial impression of what theorganization does well and needs improvement and what it doesn’t dowell and needs to be developed. The list is however very crucial instarting a strategic process and focus the attention on those areasof operation that needs improvement and the ones they have to do awaywith. The technique requires a study on the technology being used bythe company, the human resources, procurement processes, logistics interms of carriage inwards and carriage outwards, sales and marketingand service delivery. To accomplish this survey, one will only needto have a look at 3D Systems books of accounts, the informationstandard, surveys on the staff and consumers, organizational chartsas well as the recruitment standards. The findings will then becompared with the standards in the market as well as past events, anda judgment is passed on. It is finally established that the firmshould run its operations in a more competitive way.

Competitoranalysis

Acomprehensive study and analysis of competitors is a crucial part ofanalyzing the market that the company operates in. Competitoranalysis gives the firm an opportunity to establish the competitor’sstrengths and weaknesses in the marketplace and using the informationgathered to gain a competitive edge in the market. The analysisinvolves a process where the competitors are identified, the weightof their attributes is determined, their strengths and weaknessesassessed and uncovering their strategies and objectives in the marketsegment. The competitor analysis process involves,conducting a survey on the competitors, gathering of the competitiveinformation, analyzing the competition’s information and lastly,determining the company’s own competitive strategy. The table belowshows Davidson’s checklist that the organization can use to gain acompetitive edge.

Recorded Data Observable Data Opportunistic Data
Annual Report a&amp Accounts Newspaper articles Press releases Analyst reports Government reports Presentations and Speeches Regulatory reports Pricing and price list Promotions Tenders Patent applications Advertising campaigns Trade Shows Meetings with suppliers Salesforce meetings Recruitment ex-employees Seminar and conferences Discussion with distributors Contact with competitors

Figure1. Davidson categorization (Brown, 1990)&nbsp

3Dsystems and Stratasys are the largest players, holding 26.6% and30.4% market share respectively. Hence, they are the top competitorsthat rival in this 3D printing industry. Other players that make upthe remaining 43% include, Materialise, the ExOne Company, andHewlett-Packard (HP). The two top players, 3D systems and Stratasys,have diversified portfolios of products and offerings that satisfythe market to a great extent. ExOne is introducing new technologies.Hence they pose a potential threat to the current top players. Theirinvolvement in the medical field and aerospace industry is givingthem an edge over the other companies. With the entry of newinnovative competitors, the existing top companies are motivated toimprove their product and service quality. Both 3D Systems andStratasys have acquired integrated solution technologies.&nbspStratasysnow focuses on the production of grade printers, adding to theirproduction ‘pool’ which progressively includes a softwarecomponent. Similar to 3D Systems, Stratasys’ current strategyaddresses multiple segments across industries. However, Stratasys’focus on low-volume production for manufacturing stands out against3D Systems’ desire to develop cost-effective and faster industrialproduction solutions. A long-term strategy of Stratasys includes thecontinued addition of new products to the ‘pool’ of the currentlyproduced products.

The following table is a Competitive Grid that provides a means ofevaluating the 3D Systems offering against that of key competitors inthe industry. The Evaluation is done on a scale of 1-5 as shown.

Key Competitors

Primary Reasons for Customers to Purchase Products in this Industry

Reputation

Location

Variety

Customer Service

Uniqueness

3D Systems

4.0

4.5

5.0

5.0

4.5

Stratasys

4.5

4.5

5.0

5.0

4.5

Materialise

2.5

2.5

2.0

4.5

3.5

ExOne

3.0

3.0

2.5

4.0

4.5

HP

3.5

23.0

3.5

4.5

3.5

KeyScale

0-1Awful

1-2Bad

2-3Okay

3-4Good

4-5Excellent

Assessthe structure of the organization &amp the influence this has on&nbspitsperformance

An organizational structure defines how roles are shared, categorizedand coordinated within a company. 3D, like any other firm, has astructure stipulating the tasks that its members are expected toperform so that each of them clearly understands the roles they play.It is important to assess the organizational structure because it hasan impact on decision-making which has a direct impact on theperformance of the company.Determinethe organization`s competitive position &amp the possibilities&nbspthisprovides

When looking at the firm’s competitive position and thepossibilities it presents, one needs to evaluatepotential business level strategies for the organization to domore than wishful thinking. A credible assessment means that one hasto look at some aspects of the company in order to find ways ofstanding out and staying ahead of the pack. The table below can beused to assess the 3D organization’s competitive position.

Competitive drivers

State of technology

State of the market

Capital base

Mature

Decline

Strong

True

False

True

True

False

Medium

False

True

False

False

True

Weak

False

False

False

False

False

The assessment is an exercise you need to do on paper and latertranslate it into projects and initiatives that the company’semployees will implement for improved performance of theorganization.Assesspotential corporate level strategies for the organization

Corporate level strategies affect the strategy of the entireorganization. This broader picture looks at the company and involvesa decision on which products and services market they compete in aswell as the geographical regions that it needs to venture into. For3D Systems, the process of allocating resources in terms of finances,human resources and equipment are typically organized at thecorporate level. It is at this level that market segmentation is doneand the competition strategies determined. Assessing the corporatelevel strategies will help the organization to strengthen thosestrategies which positively impact it and doing away with those thatdo not.Assesspotential global strategies for the organization

Globalization was an ignored topicin strategic management in the 1990’s and in the current century,there is no evidence that it is going to diminish. The earlier themanagers of the organization realize this, the easier it becomes forthem to understand that the global strategy impacts on their ownstrategies. The management must be conscious that the market, thesuppliers, locations, investors, partners, and the competitors cannow more than ever, be anywhere in the world. A successfulorganization will take advantage of the opportunities from any partof the world they are. The firm needs to understand theseenvironments by establishing the differences and the similaritiesthat exist across the geographical boundaries of countries to seizeopportunities and deal with the potential shortcomings.

Recommenda strategy or combination of strategies the organizationshouldimplement, &amp include a rationale for that recommendation

The selection of an optimumstrategy is a crucial decision that the 3D organization needs to makefor its long-term prosperity and growth. The 3D printing industry isvery competitive and is subject to the purchasing patterns of theglobal users. The company needs to analyze these trends closely andmake a strategic choice that will end up producing value to theorganization. It should select a value discipline and designed toform part of the corporate culture. A marketing structure will beformulated based on the long-term and sustainable goals of thecompany. Together, these strategies will ensure that 3D Systemsremain a leader in the 3D printing industry for many yearsahead.Createan implementation plan including Objectives

  1. To improve the quality of 3D printers

  2. To produce low-cost 3D printers

  3. To enhance customer loyalty

  4. To gain a competitive advantage over its competitors

Functionaltactics

This is where the 3D organizational departments will be called uponto formulate strategies aimed at proper implementation of thestrategic plan.

Actionitems

The action items are the discretetasks that must be accomplished by an individual or by a group ofindividuals. The action items arise out of meetings and past reportsthat need the attention of the management.Milestones&amp deadlines

A good plan should have a schedule concerning the milestones it needsto achieve as well as the deadlines for its implementation. For 3Dsystems, the strategic plan will focus on a three-year plan.Tasks&amp task ownership

The organizational structure makes it possible for the firm to shareroles. The functions under which the specific tasks fall under willtake responsibility for its implementation and thereby regarded asthe owners of the tasks.Resourceallocation

The company will embrace an optimal resource allocation strategy toensure proper implementation. The allocation will be based on therequirements of the specific tasks.

Recommendany organizational change management strategies thatmayenhance successful implementation

For the successful implementationof any strategic organizational change, the management should payattention to the methods of communication, training and monitoring ofstaff, as well as counseling them. This is informed by the fact thatthey are bound to much resistance to change, and they need to beprepared for.

Developkey success factors, budget, &amp forecasted Financials,&nbspincludinga break-even chart

The company’s success includesits established brand name as well as the production of qualityproducts. It also has a strong capital base that enables it to fundits operations. The patenting strategy also has given the firm asuccess story, including its in-house innovation strategies. Thefollowing table shows the 3D Systems expected cash outlay.

&nbsp

2017

2018

2019

Earnings Per Share

5.68

3.96

3.64

Net Income

$880,000

$232,000

$123,002

Net Revenue

$4,335,000

$4,725,000

$6,203,337

Total Expenses

$4,305,000

$4,123,000

$ 3,447,890

Riskmanagement plan, including contingency for the&nbspidentified risks

The organization needs to makedecisions on the best course of action to respond to the particularrisks. The 3D company is going to carry out a risk analysis andshould take into account the benefits and the cost of the existingrisks response mechanism in relation to the probability of occurrenceof the risks. More consideration will be placed on the possibilitiesthat have a higher probability of occurrence.

Conclusion

A good strategic plan needs to haveachievable objectives that can propel a positive organizationalperformance. The plan involves setting the goals and settingout the roadmap aimed at achieving them. It also entails mobilizingof resources to carry out the plan. A strategic plan is a crucialprocess and therefore needs inputs, outputs, activities, andoutcomes. A 3D Systems strategic plan like all the other processesprovides a guide to the actual strategy formation.

A proper implementation of the business plan will be done in theconsideration and analysis of the environment under which the companyoperates under. Consideration also has to assess the risks that theimplementation plan faces and the mitigating plans put in place atthe earliest opportunity.

Reference

3D systems to acquire 3D software specialist (2015).&nbspMetalPowder Report,&nbsp70(2), 93. doi:10.1016/j.mprp.2015.01.009

3D Systems: Empowering, our customers, to manufacture the future(2014).&nbsp3D Printing and Additive Manufacturing,&nbsp1(1),55–59. doi:10.1089/3dp.2013.1500

Bliss, Z., &amp Cozatl, R. (n.d.). Risk management and contingencyplanning – an AHDS information paper. Retrieved fromhttp://www.ahds.ac.uk/__print__/creating/information-papers/risk-management/index.htm

Brown, D. (1990). Innovate! How to gain and sustain competitiveadvantage.&nbspTechnovation,&nbsp10(4), 281–282.doi:10.1016/0166-4972(90)90059-s

Bryson, J. M., Anderson, S. R., &amp Alston, F. K.(2011).&nbspImplementing and sustaining your strategic plan: AWorkbook for public and nonprofit organizations. San Francisco, CA:Jossey-Bass.

Contributor, Pe. (2015). What is environmental analysis?&nbspPESTAnalysis. Retrieved fromhttp://pestleanalysis.com/what-is-environmental-analysis/

External environment (2008).&nbspRussian Economic Trends,&nbsp10(2),34–35. doi:10.1111/1467-9426.t01-1-00182

Lapin, J. D. (2004). Using external environmental scanning andforecasting to improve strategic planning. ,&nbsp11(2),. Retrievedfromhttp://www.kvcc.me.edu/CMSContent/Departments/Institutional_Assessment/2004%20Env%20Scanning%20and%20Forcasting%20to%20improve%20strategic%20planning%20-%20Lapin.pdf

Systems, 3 D. (2016, August 26).&nbspRapid Prototyping, advanceddigital manufacturing, 3D printing, 3-D CAD. Retrieved August 24,2016, from http://www.3dsystems.com/

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