Strategic management analysis of Eastcompeace in the smart card industry

Eastcompeace: Strategic Management

Data Presentation, Findings & Analysis

Recommendations & Management Implication

The smart card industry is one of the most lucrative industrial sectors in the world. This is because the lack of competitiveness and margin of innovation existing in this particular industry. From a sim card in a cellular phone to high tech and sophisticated security systems, the smart card industry covers it allThis makes it a highly price inelastic industry, which in turn means, that smart card producers have an edge to play with the prices the way they want to. On the other hand, the critical and sensitive nature of product that the smart card industry deals with demands immense level of continuous research and development so that the smart cards can be kept up-to-date with the changing needs of time. Moreover, the smart card industry requires as highly specialized, skilled and trained staff with relevant expertise. This makes the smart card industry a highly capital intensive one.

Eastcompeace is one of the oldest names in the smart card industry and is known for its continuous growth due to constant research and development. It is known for its strong presence in the market related to technology sector goods. The product line of Eastcompeace covers various smart card products and solution providing services pertaining to mainly B2B sectors such as health, security, credit cards etc.

Over the years, the smart card industry has become extremely competitive. One primary reason behind this has been an increase in academic researches and technological advances. This has made the smart card industry surrounded with active internal and external influences.

The paper discusses and evaluates internal and external influences that have had an impact on Eastcompeace over the years on both micro and macro level. The five force analysis shows that external competition and threats of counterfeit is increasing. Eastcompeace has handles the issue of counterfeiting and well through extensive research and development. On the other hand Eastcompeace has failed to adopt a strong marketing strategy that can enable it to position the firm as a brand and as a result smaller competitors are having an edge on the marketing side.

The fitness landscape analysis shows that Eastcompeace is very rigid and inflexible as far as organization's internal culture is concerned. Decision making is accumulated with the to management only and the skilled workers have little participation in the company. Eastcompeace, thus will need to be more flexible with the changing management practices in the external corporate world.

Eastcompeace's sustainability framework shows that the company has a comprehensive structure in place for waste management. It has comprehensive and detailed Environmental, technology and safety program that aims at ensuring that minimum chemical inputs and by products are involved in the research and production process and the waste is properly recycled before disposal.

On the operational side, Eastcompeace is consistent with the sustainability needs of smart card industry. However, as far as management practice is concerned, Eastcompeace will need to be more flexible with its human resource management policies and will have to revisit the marketing policies.

1. INTRODUCTION

With the advent of information technology, the ways different aspects of life work and operate have changed a great deal. Media has always had a great influence in moulding the culture of a society. There was a point of time when television and radio were invented and when computer was invented and there was little connection between the two. Time then travelled fast then through the age of cassettes, records, VCDs, DVDs, flashes drive and then the internet. Media also started to go satellite on a massive scale and there came a point of time when media and digital communication systems became closely integrated with one another, opening the dimensions to digital media. Digital media not only played immense role in supporting the entertainment industry, but also added a whole new dimension to and redefined how education system was imparted and businesses were operated. It also opens doors for new methods of employment. Digital Media is also now becoming an aggressive tool for marketing.

1.1 Background of Study

In the era of technological advancements where technology is all about getting speedier and portable the smart card technology has been a revolution in itself. The seemingly small plastic chips have massive applications in real life such as tracking systems, credit cards, security systems etc., and life without smart cards seem virtually impossible nowadays.

Eastcompeace is one of the world's leading names in the smart card industry. With a range of successful and well endorsed smart card products, Eastcompeace is known for its advanced Research and Development culture. It ensures that it keeps its products up-to-date with the needs pertaining to the technology sector in the current era.

This paper aims at discussing Eastcompeace's strategies towards sustainable development. It also evaluates the company's strengths and weaknesses that supports and hinders the company's aspirations to achieve its targets pertaining to the achievement of its sustainable development goals.

1.2 Problem Statement

As mentioned earlier, Eastcompeace is surrounded by active external and internal influences that have a key role to play in determining the company's strengths, weaknesses, opportunities and threats. Eastcompeace's main stake holders tend to be its employees, competitors, customers government and employees. Potential competition in the market require Eastcompeace to ensure that it keeps itself up-to-date with the latest researches and technological standards in order to survive in the market. Moreover, it also needs to take active measures to combat the increasing threat of counterfeiting, which again call for high investments. Increased technology consciousness among consumers rapid influx of competitors require Eastcompeace to invest more into the marketing aspect. Since skilled, trained, and motivated employees are one of the fundamental requirements for the success of a smart card business, Eastcompeace ensures that it recruits and retains the best teams of workforce.

Eastcompeace's adheres to academic and normative cultural practices as far as its business practices are concerned. It believes in the philosophy of giving importance to people, be it employees or customers. As mentioned earlier, the smart card industry is a highly capital intensive one around the world. Most company's focus on a limited few segments of the technology care needs, primarily because they cannot afford to satisfy it completely. Eastcompeace has managed to diversify on a large scale, thus diversifying its risk factor. By expansions, mergers and acquisitions, Eastcompeace now has a product line dealing with eleven different therapeutic segments of technology sectors in both human and animal related smart cards and smart cards.

Overall Eastcompeace adheres to sustainable business policies as far as research and development and production processes are concerned. On the other hand Eastcompeace is too inflexible when it comes to human resource management which might lead to losing out skilled employees to competitors in long-term. Eastcompeace's sustainable production programs ensure that the company minimizes emission of green house gases and increase recycling. Adherence to various waste management techniques and the policy of reusing by products and recycled products makes the firm more cost efficient as compared to its competitors and enables it to enjoy the economies of scale. This reduces the firms average cost and gives the company a higher competitive edge.

1.3 Purpose and Significance of Study

The purpose of this study is to evaluate the sustainable framework of Eastcompeace and to evaluate the global strategy that the firm currently adheres to in order to achieve its strategic growth.

Eastcompeace aspires to be one of the world's most valued companies to consumers, investors' employees and the community and the society at large. It believes in adherence to ethical business practices, highest professional standards and total quality management which ensures continued growth and innovation.

At Eastcompeace special focus is ensured on research and development, innovation and quality management. Unlike many major mainstream smart card giants, Eastcompeace has managed to stay free of corporate scandals. Over the years, it had managed to keep itself up-to-date with the changing needs and evolutions in the corporate management.

Eastcompeace adheres to the most sustainable business practices in the smart card industry. If the company becomes more flexible in terms of management and more innovative in terms of its marketing strategies and brand management, it is inevitable that it captures and maintains the greatest market share in the smart card industry.

The significance of this study primarily lies in the fact that strengths and weaknesses of the company performance and overall strategy are pointed out. Recommendations are made on grounds of information analyzed, in order to bring in further improvement and propose a stronger sustainable management system.

1.5 Research Aims & Objectives

The aims and objectives of this research are given as follows:

To evaluate the long-term strategies of Eastcompeace and to evaluate the degree to which the strategies are sustainable.

To assess the firm's strategic growth and expansion.

To assess the global strategy of the firm in parts of the world that it is already operating and in parts where it plans to operate.

To evaluate overall strategic and sustainable management practice in human resource, environmental management, social responsibility, brand management, product development and other key areas.

To evaluate weak areas of the current strategy and propose solutions for improvement.

2.0 LITERATURE REVIEW

2.2 Theoretical Framework

Researches suggest that in the contemporary world employees are an integral backbone of a firm's strategic management. Moreover, the attitude of workers towards the work environment is a key issue of concern (Alas, 2008). The management therefore has to see that the overall corporate culture of the firm is well aligned with the firm's overall long-term strategy. This is necessary because if value that an employee places to his work environment and his or her approach towards his management and the strategies is not institutionalized, sustainable growth can be hindered to a great deal as it would be a highly demotivating factor for the employees and in turn will affect their work productivity and efficiency.

With a drastic increase in globalization international competition is now inevitable and therefore firms that have little consideration for innovation are likely to suffer loss of market share and monetary sources (Fuller, 2009). Therefore issues such as brand positioning and product differentiation should be of prime importance for the company. Investments must made in research and development and aggressive marketing campaigns must be devised to stay in business and maintain the market share.

3. METHODOLOGY

3.1 Research Method

Research was mainly carried out using qualitative research methods. Information was primarily acquired from the company's annual reports, past SEC filings, official website and published case studies and research journals. The documents were thoroughly analyzed in context of the firm and it was analyzed how the firm has strategized its strategic growth and expansion over a period of time.

In order to get a deeper insight into the company, opinions of the company's workforce were evaluated. Representatives of different departments were made to fill a questionnaire that was focus on questions regarding the decision making in the company, the firm's strategic philosophy and global strategy.

3.2 Research Design and Data Collection

The overall research was primarily qualitative and was an amalgamation of primary and secondary research methods. For the secondary research, as stated earlier, dependence was made on articles from various management, marketing and corporate strategy journals, the SEC filings of the company and the annual report.

Apart from that, a questionnaire targeting the human resource approach and alignment towards the firm's strategy was designed and was given out to employees working in various departments. The questionnaire mainly had open ended questionnaires that required qualitative answers. Towards the end, the responses that were acquired from the respondents of the questionnaire and the findings of the secondary research were merged and the result was broken into many areas and was represented diagrammatically in order to reach an analysis. The questions that were asked in the questionnaire are given as follows:

Exactly, how many years have you worked in ECP?

In which sector or Department of the company do you work?

What are the different product portfolios of the company?

In which countries, ECP has business presence?

What kind of Global Strategy, ECP usually follows in each country?

Who in ECP is responsible for key strategic decisions affecting the foreign offices?

What are the three most important goals of ECP Global strategy?

Please identify some of the obstacles or challenges, which ECP, faced during the implementation of the Global strategy?

Please mention three risk issues that concern ECP, at the moment of incurred a foreign market?

What kind of strategies uses ECP to manage the global risk?

How do you differentiate ECP in foreign markets from the competition?

How does ECP manage to maximize business development potential in foreign markets?

Do you think that present or anticipated economic conditions will change ECP strategy regarding development of foreign operations?

4.0 DATA PRESENTATION, FINDINGS AND ANALYSIS

4.1 Data Presentation & Findings

Enterprise Level Strategy

Eastcompeace aspires to become the world's most valued company to customers, colleagues, investors, business partners, and the communities where they work and live. Eastcompeace believes in continuous endeavors that aim at making human lives, better and easier, and work practices more efficient and secured. The company believes in adhering to sustainable and ethical business practices such that it is competitive in the international markets around the world (Schermerhorn, 2005).

Culture Type

Nowadays, more and more multinational companies are beginning to localize their employees in the labor market. Therefore, Eastcompeace will also depend on local employees to overcome cultural barriers when dealing with the market.

As a company, Eastcompeace follows a Normative and Academic culture. Eastcompeace ensures adherence to highest levels of business ethics. Eastcompeace also ensures that it employees are highly skilled and trained to suit the requirement of the job. State-of -- the art Research and Development operations are in place at Eastcompeace that ensure constant development, innovation and progression.

Detailed Value Chain Analysis: Internal Environment

Customized Value Chain of Activities

Business Process

Your Organization

Competitor 1

Competitor 2

Management

Responsibilities & Authority

Bureaucratic Management

Bureaucratic Management

R&D

Excellent R&D

Competitive R&D

Competitive R&D

HR

Normal HR

Excellent HR

Normal HR

Procurement

Special purchasing programme-Community Trade

Expensive Cost effective way

Sustainable trading relationship

Inbound Logistics

Low Cost of Inbound logistics

Competitors don't have strength over Inbound logistics

Competitors don't have strength over Inbound logistics

Outbound Logistics

Indirect distributors

Competitors don't have strength over Inbound logistics

Competitors don't have strength over Inbound logistics

Sales

Alternate distribution channel

Fig. 1 (Porter 1998)

The management function of Eastcompeace corresponds with activities, which usually results within the responsibilities, power of authority, and an organization of effort. Within these activities, management of Eastcompeace deals with the current workforce, instructs personnel, obtains resources, and motivates the workforce into a prolific team. Organizing also can be contributed to the tasks sets, which organize persons and groups into accomplishing a goal. Physical assets, monetary, human resources, knowledge and technology are prime examples of resources that assisting in developing the establishment of the Eastcompeace (Vaidyanathan, 2005). Eastcompeace management design has allowed it to effectively and efficiently utilize its resources through the management paradigm. Thus, this is the chief way of producing the most favorable performance from its organization. It effectively lies on the concept that instead of just increasing its resources (i.e. labor and machines), then it can lay emphasis on enhanced operation of already engaged resources.

Another key component of the value chain of the Eastcompeace was masterful R&D through selected media which is not in the conventional way. Competition in cosmetics retailing is intense, heavy input in Research and development is crucial to maintain the prominence of established brand names (Fleisher, 2008). The Eastcompeace has used the R&D masterfully as a major tool to promote their business. And strategic promoting its ethical and social stance also helps build brand image to great advantage.

One of the uniqueness of the HR in the Eastcompeace is that it integrates social and environmental principles into HR management system. Such as the inclusion of environmental responsibilities in job descriptions, day cares with children and even paid hours of work for local charities and community projects etc. (Vaidyanathan, 2005). The Eastcompeace considers employees as company's most critical asset, and employee not only performs the daily retailing work, but also fulfils the social and environmental responsibilities. And the shop also established the reward system through financial incentives to motivate the employees to improve the retailing performance as well as promoting social and environmental changes through campaigning and volunteering. Therefore, the general management views and culture are responsive to the needs of employees.

Procurement

"As for the Procurement in support activities, the Eastcompeace has developed long-term sustainable trading relationships with key suppliers and created a special purchasing programme-Community Trade" (Fleisher, 2008). This programme trades with communities in needs around the world and receives ingredients and accessories directly from the developing countries. In addition, the Eastcompeace sets up guidelines to ensure its supplier to be compliance with ethical policies in purchasing decisions. The unique ethical consideration builds a very good image to its publics. Comparing with other competitor, the sustainable trading relationships with suppliers is the crucially important competence of the Eastcompeace and becomes a source of competitive advantage.

Inbound Logistics

Eastcompeace cost of inbound logistics average is 2% of sales, one half the industry averages. 20% of inbound merchandise is shipped directly to the place of product from vendors. The remaining amount passes through the two-step hub and spoke distribution network. Eastcompeace has 400 plus tractor- trailers that deliver merchandise to the distribution channel and pick up new vendor shipments on return trips with 60% full capacity on backhauls. In 1985, Eastcompeace operated 3.9 million square feet of distribution space in five locations and have plans to open three more over the next few years (Vaidyanathan, 2005).

Outbound logistics

For the outbound logistics, the Eastcompeace distributed its products through indirect distributors. So an important part of the Eastcompeace value chain is a large network of distributors all over the world. Abroad distributors use the Eastcompeace's brand name and sell high quality smart card products to the valued customer. It is a successful model in spreading its business quickly in the market. But distributors also get the Eastcompeace into problems. The distribution through indirect distributors has little bit slow distribution and lacked of strategic communications with the company head (Hill & Jones, 2009). Though the social and environment issues are conveyed effectively but the equally important sales volume and marketing tactics fail in reaching the expected objectives these years. The most challenging thing for the Eastcompeace is how to balance its ethical principles and reasonable revenues for its distribution.

Sales

On the other hand, besides the effectiveness of sales advertising the Eastcompeace has actively extended alternate distribution channel through its at home party-plan scheme to face up to the stiff competition. It proves to be an effective distribution channel for the company and attracts a large number of customers (Society for Human Resource Management, 2006). Moreover, in today's shrinking global community, it is essential to make innovation in sales to meet customer needs. The Eastcompeace has started direct selling in U.S. By more importantly using Internet. Selling by internet not only increase its reach to larger consumer base but also provides new opportunities to improve its financial underperformance in recent years. Because online shop operates at low store overheads, particularly rental costs. But online selling also sends mixed signals to current and potential franchisees. People have started realizing the power of direct selling through Internet in recent years and it may pose a threat to sales through franchise. (Hill & Jones, 2008)

Company Skills / Capabilities

First of all, the suggestion to company, Eastcompeace is a very aggressive smart card company. Their strong Resources & Development department focusing the need of the smart card industry and creating up-to-date products for today's market. Every topest entrepreneur is willing to use Eastcompeace's product as it represents they are the leader in the smart card industry but on the other hand, the price is quite expensive.

4.2 Data Analysis

Detailed SWOT Analysis

Strengths

Essential market share in smart card business.

High quality product.

"The wind of changes"- refreshed political and economic environment.

Substantial investments in R&D programs.

Weaknesses

Non-ethical Smart card environment.

Delay in structure changes.

A limited marketing budget to develop brand awareness.

Opportunities

High potential market.

New economic strategy.

Promises and hopes for investments.

Threats

Tough external competition.

New players and expansion of cheap Asian products.

Cheap local generics

SWOT Factor Matrix

SO Strategies

Use low cost advantage to produce low priced smart cards as economy slump increased more cost conscious consumers. Utilize strong branding, new fleets and multiple hubs to lure the large customer based from potential markets (Ansari, 2002). Branding & advertising to potential market to promote their smart cards.

ST Strategies

Optimize cost leadership's advantage based on fast turnaround and lean distribution. Example -- No extra charges on products. Using strong branding & cost leadership advantage to offer customers good quality and low cost products. It will further enhance Eastcompeace as a reliable brand & increase customer confidence.

WO Strategies

Attract more intermediaries innovatively during marketing campaign with improved products (Hitt, Ireland & Hoskisson, 2009). Excellent marketing message better than any customer retention program or loyalty program.

WT Strategies

Improve on Customer Relationship Management (CRM) -- regular email to client's updates on the latest promotion & news from Eastcompeace. Basically Eastcompeace should maintain core deliberate strategy focus on innovation or research and development in line with low-cost & continue in cost leadership.

SCOT Factor Matrix

SO Strategies

Eastcompeace biggest SO strategies are its long history in the smart card business, presences in all over the world, Eastcompeace should use its legacy created in the smart card good industry in advertising campaigns (Grant, 2005). Eastcompeace's greater understanding of European culture should give it an advantage in terms of marketing in Europe.

ST Strategies

Eastcompeace's overhead is 13% higher in terms of percentage of revenues than competitors (Schermerhorn, 2005). This increased overhead is not a result of an excessive advertising budget, since only 6% of Eastcompeace sales go toward advertising. The biggest strength that Eastcompeace has is to reduce overhead by reorganizing its management structure and reducing the price that Eastcompeace pays. Eastcompeace marketing department has become complacent over the years. Their promotional style of advertising does not work.

CO Strategies

Eastcompeace has plans of going head-to-head with its competitors for the lead in the smart card products market segment. Eastcompeace has capability to steal competitor's market share in the smart card industry. Eastcompeace has the opportunity, while competitors battle over the limited consumer market segment (Grant, 2005). Eastcompeace currently has a large percentage of sales in smart card products.

CT Strategies

Though external competition is a biggest threat for Eastcompeace. As a result, Eastcompeace is more likely to export goods than to sale in local market. This would include its smart cards and favor Eastcompeace in terms of maintaining share lead in the market. The threat always exists for this scenario to change. Perhaps the capabilities to Eastcompeace in terms of innovation are the only thing supporting its lead in the competitive markets (Hitt, Ireland & Hoskisson, 2009). Eastcompeace does contain the market share lead in sales of smart card products.

The Alignment checklist for Eastcompeace is given as follows:

Yes No

People

Our people have the necessary skills to make the strategy work

They Support the strategy

Their attitudes are aligned with the strategy

They have the resources they need to be successful

Incentives

Our reward system is in line with our strategy

Everyone has performance goals aligned with the strategy.

Supportive Strategy

The many things we do around here, pricing, fulfill orders etc. -- support the strategy.

Structures

Units are optimally organized to support the strategy,

Culture

Our culture and strategy are well matched.

Fig. 2 (Grant 2005)

The Unit Goals, Metrics and Action Plan for Eastcompeace are given as follows:

Fig. 3 (Secord 2003)

Analyzing the Company Strategy Moves

The analysis of the company strategy moves is discussed under the following sections.

Relevant Strategy Moves

As mentioned earlier, the environment that Eastcompeace is operating in is a highly competitive one. This increases the need of an aggressive marketing strategy. It is highly important to have an aggressive marketing strategy as the awareness regarding technology sector is increasing among the consumers at a rapid rate and consumers are now more concerned and conscious about what smart cards they are consuming.

As mentioned earlier, so far, Eastcompeace has failed to adhere to Product differentiation and even its most successful brands are known nd recognized independent of the company's name. Considering the constant increment in the competition, Eastcompeace will have to reconsider its marketing strategy. It will have to ensure strong product positioning and product differentiation strategy and will have to make sure that its brands are developed, marketed and recognized in Eastcompeace's corporate name. This can be done by acquiring patents in the name of Eastcompeace and not in the name of the brand itself. Eastcompeace will have to ensure that all its major brands promote Eastcompeace as a company such that Eastcompeace's name become strong enough to market any new products in future.

Along with that, Eastcompeace must continue its diversification and growth strategy. It must continue to expand and diversify. Along with take over, Eastcompeace should also consider going for joint ventures with smaller corporate houses which are known to specialize in certain areas. This would help increasing Eastcompeace's market share and will give the company an access to newer potential markets, thus further expanding the business..

Since Eastcompeace is a very large scale business, there is a tendency for the company to go senile if workforce is not managed properly. In order to avoid diseconomies of scale Eastcompeace must ensure regional and functional decentralization and employment and organizational structure must be developed suiting the regional cultures that the company is operating in.

Eastcompeace's competitors have an aggressive marketing strategy which is pursued parallel to the diversification strategy. Although Eastcompeace is known for its research and development, its name is still alien to many consumers that consume its major products. On the other hand, Eastcompeace's major competitors, despite of a relatively lower research portfolio, have managed to keep an aggressive marketing strategy, which has resulted in getting them a strong well differentiated brand image. The current state of awareness that comes from electronic and print media and the internet calls for an aggressive marketing strategy regardless of how progressive the company's research and development is. If Eastcompeace fails to do so, in future it might face difficulties especially when either launching products or when entering newer markets.

Alignment and Goals Analysis

Action Plan Analysis

In general, the alignment checklist gives a very positive reflection of Eastcompeace's alignment with the strategy. The company employees best workforce, who support company strategy and have high satisfaction. However, there is some level of inconsistency. The company has a well defined organizational structure. Having said that, at times the decision making power is too much centralized within the hierarchy and the necessary power which is not delegated may delay decision making. This calls for some degree of regional and functional decentralization.

Eastcompeace's aspire to increase its market share. Its integration strategy through mergers and acquisitions is in line with the strategic goals. However, it has failed to develop a marketing strategy that can differentiate its products from the competing products in the market.

Fitness Landscape Analysis

Kauffman gave a Fitness Landscape Analysis that aimed at evaluating complexities involved in natural sciences. Organizational theorists later applied this theory of complex sciences in the organizational setting in order to explain how an organization's internal and external connections create an impact on the organization's short-term and long-term strategies, and in turn, its functionality and survival.

Over the years the Smart card industry has become a very competitive one. While there are few smart card giants that offer a broad range of product lines, the recent influx of smaller corporate houses that deal in targeting particular and specialized market segment has resulted in a significant change in the dynamics of smart card industry. Economic crisis and increasing inflation and unemployment has little effect on the industry in terms of profit margin considering the nature of the product. On the contrary, a rapid technological change calls for firms to increase their respective budgets for Research and Development in order to ensure their survival. Since consumers in general are more aware now than they were ever before, smart card firms have to ensure keeping up-to-date with the latest researches and technologies in order to prevent losing their customers to rival firms (Grant, 2005).

Employees and internal organizational structure and corporate culture are an important contributor to an organization's success and survival. In case of smart card industry, this becomes even more significant as this nature of business requires highly skilled and qualified workforce. Although Eastcompeace has ensured that it recruits the best workforce available as far as skills and qualification is concerned, it is important for the business to make sure that employees are kept well motivated and satisfied with their jobs in order to avoid losing employees to rival companies. Increasing employee turnover and that too of skilled workforce can pose a potential threat to the firm's survival and sustainability in the long-term. Taking the organization's internal complexities into consideration, it is important that Eastcompeace must make simple rules that are easy to adapt to organization's long-term strategy (Grant, 2005). Too much centralization in terms of decision making must be avoided so that employees can be allowed more room for innovation, which in turn will need to more progression for organization as a whole. Organizational structure and internal management must be more flexible in order to adapt to rapid changes in the external environment of the industry (Grant, 2005).

Boids Analysis

Eastcompeace is a large multinational company with a huge workforce. Each of the employees is skilled in his own way and works according to his or her own mental capacity. Eastcompeace makes sure that it recruits the best workforce available. This gives an edge to the company from its rival firm. The model of flocking birds also known as the model of Boids suggests that a flock of birds or a school of fish maneuvers on three basic rules. These rules include maintaining distance from other environmental obstacles, matching velocities with other Boids in the surrounding and move towards a central focal point with the rest of the flock (Marshall, 1995).

Applying this theory on the internal and external dynamics of Eastcompeace, the company works in the dynamics that have quite a few obstacles. As far as the firm's avoidance strategy is concerned, Eastcompeace does not believe in launching products that are already there in the market from competing firms. On the contrary Eastcompeace invests extensively in research and development so that new and innovative products can be introduced. However, so far the firm has not been successful in positioning the company's name as a brand. The huge workforce at Eastcompeace means that there is a great room for conflict among the workforce. Eastcompeace ensures that each employee work towards a single goal of keeping in line with the firm's strategy. This ensures that employees are at the same mental wavelength with each other and each of them is contributing equally to firm's productivity. The company has a clear and well defined organizational structure with clearly defined hierarchal positions. Responsibilities and authorities are also well defined throughout the organizational structure. The financial, strategic and operational decision making for the company is done by the top management and then the decision travels to the lower hierarchal levels. This shows the centralized decision making prevails. The company has nine diverse business units, with each unit producing its own range of products (Eastcompeace, 2011). Having said that, all the units work single mindedly towards achieving the strategic goals of the company at large.

Industry Evolution Modeling

The Ray's computer model and the Fishing Experiment Findings of Allen suggests that in order to be efficient and organization's internal and external environment must be competitive. The more competition there is, the more room for innovation there will be. When Eastcompeace stepped into the smart card industry the field was much raw then what it is now. Over a period of time new competitors began to enter the market. As globalization increased and influx of foreign smart card firms increased, the competition led to firms investing more heavily in research and development in order to ensure their survival and continuous innovation. Moreover, the increasing competition also resulted in minimizing the retail price of the medicine.

Innovation also comes from the competition and cooperation that exists in the firm's internal environment. Unfortunately, this is something where Eastcompeace lacks as all the operational and strategic decisions are taken by the top management only.

Life Cycle Assessment

The above mentioned value chain analysis for Eastcompeace shows that the company operates in a way that is cost efficient and ensures highest levels of waste management. As far as inbound logistics are concerned, raw material stocking is done in a manner that over stocking and warehouse costs is reduced. Highest levels of quality management are ensured at the time of manufacturing. Quality checks are carried out from the time the inputs are added and are continued to be carried out at each process level so that chances of rejection due to faults and defects can be reduced. This ensures not only maximum quality management but also minimized waste. All the waste is recycled before being disposed off. Eastcompeace's product stewardship program aims at minimizing chemical input and by products that results during the process of manufacturing (Eastcompeace, 2011). Eastcompeace uses a large number of indirect distributors to distribute its product. This helps reducing the warehouse costs for the finished goods. Apart from selling through conventional retail systems, Eastcompeace also sale through internet. Products are generally sold through the company's official website. The company also provides customer support through its official website. The life cycle assessment model for Eastcompeace's products is given as follows:

Fig. 5 (Harrison, Wheeler & Whitehead 2003)

Compliance to Innovation

The rate at which academic researches in the discipline of medicine are increasing and the rate at which technology is being upgraded and globalization is increasing, survival in the smart card industry has become tougher than ever before. The bigger giants who have diversified in a number of different operations are facing stiff competition to smaller producers who focus on developing one particular type of product. This means that the smaller firms have the capacity to invest all their resources on one type of segment while the larger firms have to allocate their resources to all the segments. This is a critical situation because in the current era, continuous innovation is essential in order to ensure survival in the smart card market. Unlike other fast moving consumer goods, it is not easy to grab away the market share of someone who has been the first one to introduce a product by merely coming up with a substitute. Smart card consumers go for pioneers and not for substitutes. This means Eastcompeace has to make sure that its products are upgraded and improved continuously and new and innovative products are brought about from time to time. This means that the company has to ensure continued research and experimentation.

As mentioned earlier, innovation calls for experimentation and when it comes to experimentation and research and development, in many cases it might question the firm's compliance to ethical and legal standards. Over a period of time more and more corporate houses have been accused of using unethical research methods such as carrying out experiments on living animals in order to test new smart cards and smart cards. Non-compliance to these laws may result in negative publicity and even expensive penalties while strict adherence to the laws may hinder the process of innovation. Since as a corporate house, Eastcompeace can afford to compromise neither on compliance nor on innovation, it adopts to a strategy that leads to sustainable innovation. Eastcompeace's product stewardship program ensures minimum chemical input in process of research and smart card development (Eastcompeace, 2011). Eastcompeace works with non-government organizations and scientific societies in order to learn about the impact of emission of smart card waste into the environment and ways to prevent it. It ensures adherence to research and production methods that minimizes emission of greenhouse gases and increase recycling.

In order ensure that Eastcompeace's compliance to ethical, moral and legal standards of corporate governance do not hinder its continuous process of innovation, Eastcompeace allocates substantial budget to its research and development, so that research can be carried out without violating the ethical and legal standards. Eastcompeace's enjoys a high market share due to the company's image of producing best quality products and total quality management policy. As far as production is concerned Eastcompeace has so far been successful in creating a balance between compliance and innovation. However, it has failed to be innovative as far as the company's marketing strategy is concerned. An intelligent and aggressive marketing strategy can offset the low degree of innovation in terms of research, which may be the outcome of compliance issue. Failure to position its brand strongly may result in losing the market share to competing firms in long-term. This is because smaller firms, especially those who do not spend much on research and development, make their footing in the market through aggressive marketing campaign.

Sustainable Value Framework Analysis

The concept of sustainable value framework arises from the fact that companies strive to maintain a balance between their external and internal forces in accordance with their vision and mission. The sustainable value framework varies from industry to industry. The recent trends in green peace and focus of non- government organizations towards cleaner environment has set up a trend in every industry to go through a sustainable value framework.

Eastcompeace aspires to maintain its sustainable growth strategy not only in terms of profitability, but also in terms of market share. It is for this reason that Eastcompeace makes a significantly high investment in research and development. Eastcompeace's consistent policy of 'doing things first', while competitors follow the suit has raised the company's stature much above many of its competitors (Loyb & Ghishal, 2000).

During the recent economic crunch, where inflation was high and unemployment rates were steadily increasing, Eastcompeace continued to maintain a high profitability mark where most of the corporate world was experiencing a slashed profitability. While the sales turnover of the company remained relatively low within United States of America, Eastcompeace's sales in other parts of the world has provided a great support not only the Eastcompeace's own economy, but also to the U.S. economy in form of direct and indirect employment and sales revenue (Wang, 2008).

Despite of maintaining an internal economic sustainability during the extreme external economic pressures, Eastcompeace fears of experiencing a decline in its profit levels and fears uncertainties pertaining to company's financial strength in the near future. The company's sales within United States of America have been consistently down throughout the economic downturn and Eastcompeace was looking up to sales turnover from its international markets in order to sustain its financial strength. However, in its recent filings to Securities and Exchange Commission (SEC), Eastcompeace has expressed fears of uncertainties in its markets in other geographical regions due to political instability, deteriorating law and order situation, and a massive economic slump (Eastcompeace Investor Relations, 2011).

Eastcompeace has a strong supply chain management system, where a large part of the supplies come from suppliers that are located in diversified geographical regions. While Eastcompeace follows an extremely high secrecy policy regarding disclosure of information about its suppliers, after the recent earthquake and tsunami in Japan, Eastcompeace expressed fears of facing economic pressures. In a recent filing to Securities and Exchange Commission, the company admitted that a large part of its supplies come from Japan, and the power crisis in Japan after the recent explosions in the country's nuclear power station may increase the company's cost of sales in the future. However, Eastcompeace has also ruled out any possibilities of immediate material effect that the situation in Japan might have on the current financial strength of the company (Alas, 2008).

While Eastcompeace is known to maintain a strict secrecy policy as far as the company's suppliers are concerned, the increasing reports of violation of labor laws at the company's supplying partners have resulted immense criticism for the company. Eastcompeace's switch in suppliers or steps to ensure that employee rights are maintained by the suppliers may result in the increase in costs for Eastcompeace itself as the supplier costs tend to increase if employee conditions are addressed and labor laws are followed.

5.0 RECOMMENDATIONS & Management IMPLICATIONS

The proposed action plan for the company should be an adherence to an extensive marketing strategy where the product can be developed and positioned to promote Eastcompeace's name. This can be done by acquiring patents for products that are most successful in the market so that competition can be restricted. This will not only allow development of successful brand image as a patent will give a unique identity and will protect the uniqueness of the product, but will also open more doors of growth and diversification for the company.

In order to completely adhere to its strategic goals the company will have to take practical steps towards removing inconsistencies. The company's research and development and integration strategies are well in line with the company goals. On employ level, more functional and regional decentralization is required. The marketing strategy is also needed to be redesigned and a more aggressive marketing strategy is required in order to maintain the market share. Brand positioning strategy must also be taken in to account.

Implication of Fitness Landscape Analysis

The Fitness Landscape Analysis for the smart card industry implies that internal and external influences of the industry are greatly interwoven with each other. The internal influences involve the organization's internal corporate culture organizational structure and the workforce as a whole, while the external environment includes competitors, economy, the rapid technological change, government and consumers. Given the nature of the business, the economic crunch does not have much impact on the organizations internal strategy. On the contrary, the rapid change in technology and the increasing technology consciousness among the consumers demand an increased investment in research and development from the bigger giants of the industry. Having said that, the competition from small scale smart card companies that specialize in satisfying specialized segments of smart card market is still a threat for a giant such as Eastcompeace. This is primarily because although Eastcompeace is known for its research and development, its marketing strategy is still too weak to position the company as a brand name and to create a brand loyalty. Another problem that Eastcompeace faces is too much centralization as far as decision making is concerned, which leaves little room for innovation despite of the fact that the company employees skilled, highly qualified and capable workforce. This will make way for job dissatisfaction and the company might lose its skilled workforce to other rival firms. With the increase in globalization, it is most likely that new small scale smart card firms will enter the market and competition from foreign companies will also increase. In order to ensure long-term success, Eastcompeace must ensure that it its marketing strategy aims at creating a strong brand image that consumer loyalty. Secondly, the management will have to revisit the way it has designed its organizational structure. Since the Fitness Landscape suggests that the industries cannot be certain of what might happen in the long-term, it is essential that the firm makes sure that its systems and rules are simple and flexible to adapt to any forthcoming changes in the external environment. This is because although the company can take control of its internal dynamics, there is little it can do to control the external uncertainties.

Implication of Boids Analysis

In an organizational perspective, adherence to Boid's model has a two way implication. It is important that all business units and all members of the workforce keep in line with the company's strategic goals at large and focus single mindedly towards achieving those goals so that threat of long-term uncertainties can be minimized. It also ensures that cohesiveness exists within the organization and organizational units.

On the other hand, the above analysis implies that Eastcompeace adheres way too much to the Boids model. The decision making authority is too much centralized and decisions are only taken by the top management and are then delegated to the lower hierarchal levels in the form of responsibilities. In a business like Eastcompeace, it is important that employees, especially those who are capable, are given are margin of innovation on their own. This will be beneficial for the company in the long-term as the employee productivity will increase as level of job satisfaction will increase. Moreover, the company will have an edge to introduce more unique products which will help increase the profit levels. It is important the Eastcompeace consider allowing regional and functional decentralization among business units so that each function, unit and region can take decisions suiting its own environment, culture and demographics (Eastcompeace, 2008). In a case otherwise, although internal cohesiveness in the organization will be maintained, but it will be overshadowed by the threat of external obstacles in the long-term.

Implication of Evolution Modeling Analysis

Ever since the number of new entrants in the smart card industry has increased, the market has become more competitive. Consequently, firms started to investing more in research and development and as a result new and improved products at lower prices are more readily available to the consumers. On the other hand, Eastcompeace's internal lack of innovation has resulted in a weak marketing strategy adopted by the company. If the present trend continues, it is likely that the smart card industry will see even more innovation which might lead to price wars. Only those firms will succeed that will equally focus on internal competitiveness among employees and will encourage employee participation.

Implications of Life Cycle Analysis

Eastcompeace has adopted strong strategies when it comes to waste management. This is not only in line with the business ethics, but also proves that the company strongly believes in corporate social responsibility. The fact that Eastcompeace is popular for using sustainable waste management and environmental friendly research and production methods helps in building up the company's goodwill in the corporate world.

Implication of Compliance to Innovation Analysis

As far as research and development and product development is concerned, Eastcompeace has balanced well between compliance and innovation. It had ensured sustainable innovation by being high on both compliance as well as innovation. However, Eastcompeace's lacks of strong marketing strategies have overshadowed the company on the innovation side and as a result the weight is more tilted towards compliance as compared to innovation. Eastcompeace can use aggressive marketing strategies overshadow the lack of innovation in terms of product development that has been the outcome of compliance. In this way the company can avoid losing its market share to rival firm. Eastcompeace can also increase its sales revenue by marketing its existing in those countries where there is not much innovation and advancement in the smart card market.

Implication of Sustainable Value FrameworkAnalysis

Eastcompeace's Environmental, Technology and Safety policy and standards show that Eastcompeace is a very strong player in the industry as far as sustainable value framework is concerned. The firm's corporate policies provide a comprehensive road to how the firm is going to achieve its goals of producing innovative and best quality products without compromising on compliance to environmental and human safety. Eastcompeace ensures that it complies with legal and ethical standards of experimentation as far as testing of smart cards and smart cards on. The firm's Product Stewardship program ensures that minimum chemical input is used during the process of product development. Apart from that Eastcompeace has extensive programs in order to reduce emissions of greenhouse gases and to increase recycling and reusing wastes and by products during both research experimentation and production processes. Sustainable operations is part of the firm's corporate governance all the employees and business units work in alignment with this strategy (Joo, n.d).

6.0 CONCLUSION

Eastcompeace is a smart card giant that enjoys economies of scale which enables the company to enjoy high profit levels despite of its significant expenditure in research and development. The firm has managed to do significantly well in many areas of sustainable operations. The firm shows strict compliance to corporate ethics and legal standards along with ensuring constant innovation and growth. Having said that, the firm is still weak on some areas which can pose serious threats in the long-term. The paper concludes that since the time it had been established, Eastcompeace is known for its constant research and development and provision of best quality products and this is something which has enabled the company to capture a large market share. While it has expanded and upgraded to the best levels in terms of technology, it has failed, on the other hand, to adapt to changing dynamics of corporate governance in many business areas, typically marketing and human resource. Despite of having a capable and qualified workforce, Eastcompeace strictly follows a normative culture where too much centralization in terms of decision making exists. This results in lesser room of innovation. As mentioned earlier, Eastcompeace is already tilted more on compliance on the compliance to innovation scale. Tilting too much away from innovation might result in loss of market share in the long-term. Apart from that Eastcompeace also lacks in efficient marketing strategies. Despite of being comparatively backward in terms of research and development, the brand names of Eastcompeace's competitors is much better positioned because of the aggressive marketing strategy. In order to prevent falling prey to long-term uncertainities, Eastcompeace will have to change its management style and will have to be more flexible in order to adapt to the rapidly changing dynamics of corporate governance. In a case otherwise, it will be difficult for the company to maintain its market share in the long-term.

Eastcompeace is known for its comprehensive Environmental, Technology and Safety standards. This has helped in building up the company's goodwill over a period of time. The fact that it uses clean technology and ensures minimum chemical input during the process of smart card development implies that besides being environmental friendly, the company is also particularly concerned about quality management. The overall sustainability frame work analysis shows that the firm has been able to maintain a balance between maintaining quality and costs. Primarily, the company's volume-based productions have helped the company in earning economies of scale.