human
Write a summary about dakktronics Inc.
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Dakktronics Inc. Internal and External Environment Case Study. Strategic Direction. Vision Statement. Dakktronics Incorporation intends to attain global market leadership with reference to entertaining and informing audiences through the development of modern audio-visual communication systems. Mission Statement. In its pursuit for global market leadership, Dakktronics Incorporation has based its operations on a number of guidelines. First, the company focuses on delivering optimal industry values to its clients.
human
Swap the first and the last sentence.
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First, the company focuses on delivering optimal industry values to its clients. Internal and External Environment Case Study. Strategic Direction. Vision Statement. Dakktronics Incorporation intends to attain global market leadership with reference to entertaining and informing audiences through the development of modern audio-visual communication systems. Mission Statement. In its pursuit for global market leadership, Dakktronics Incorporation has based its operations on a number of guidelines. Dakktronics Inc.
human
essay about dakktronics Inc. Provide an Strategies only.
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The company has adopted different categories of strategies in an effort to attain long-term business excellence. Some of the main strategies are evaluated herein.
Business Level Strategies
The firm has adopted cost-leadership as its business level strategy. This goal has been achieved by incorporating lean manufacturing programme and exporting some of the manufacturing activities to countries characterised by low cost of production such as China.
human
Delete the last sentence.
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The company has adopted different categories of strategies in an effort to attain long-term business excellence. Some of the main strategies are evaluated herein.
Business Level Strategies
The firm has adopted cost-leadership as its business level strategy.
human
Rivalry
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The electronic display industry has experienced considerable growth in the intensity of competition over the past decade. Thus, the degree of industry concentration has increased significantly. One of the aspects that illustrate the high degree of industry concentration entails the large number of industry players.
In the course of its operation, Daktronics faces intense competition from a number of local and international firms such as Barco, Capturion, Hibino Corporation, Hi-Tech LED Displays, ANC Sports, Adaptive Micro Systems, LLC, and Ledstar Incorporation, LG Electronics.
These firms have developed sufficient capabilities with reference to designing and manufacturing of electronic display systems such as digital signage. Furthermore, the firm’s competitors have diversified their product offering hence improving their capacity to serve different market segments.
For example, Barco has positioned itself as the global leader in the digital-out-of-home [DOOH]. Furthermore, most of the companies have attained sufficient cost advantage by developing economies of scale.
For example, Adaptive Micro Systems, LLC undertakes its manufacturing process indifferent countries such as Malaysia, US and Europe in an effort to minimise the cost of operation.
The intense competition has led to substantial reduction in the company’s level of profitability. By 2008, Daktronics’ market share was estimated to be 80%. However, the entry of Mitsubishi into the electronic display industry in late 2008 led to a 12% reduction in the company’s market share (Taylor, Coates, and Connely 139).
Threat of entry
The electronic display industry is characterised by a high threat of entry. One of the factors that have led to increment in the intensity of competition entails the high profitability potential. Additionally, the industry is characterised by lack of barriers to entry.
Different institutional customers such as hospitality companies such as restaurants, sports clubs and educational institutions are increasingly adopting emerging electronic display technologies in their effort to create optimal market awareness.
The high demand for electronic display products has attracted new entrants. Furthermore, the industry’s profitability potential has led to significant changes in the industry structure, which is evidenced by the emergence of different digital sub-segments.
Thus, the industry has become highly fragmented. Some of the seller segments that have entered the industry include system assemblers, manufacturers and resellers. The high level of industry fragmentation has made it difficult to describe the industry in which the entrants operate.
The entry of new entrants has also led to reduction in Daktronics competitiveness in the international market. For example, Samsung’s introduction of the 46-inch ultra-high definition electronic display panels led to reduction in Daktronics sales in its Japanese market.
Other new entrants into the industry include International Business Machine [IBM], Cisco, and Oracle.
human
Reverse the sentences.
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Other new entrants into the industry include International Business Machine [IBM], Cisco, and Oracle. For example, Samsung’s introduction of the 46-inch ultra-high definition electronic display panels led to reduction in Daktronics sales in its Japanese market.
The entry of new entrants has also led to reduction in Daktronics competitiveness in the international market. The high level of industry fragmentation has made it difficult to describe the industry in which the entrants operate. Some of the seller segments that have entered the industry include system assemblers, manufacturers and resellers.
Thus, the industry has become highly fragmented. Furthermore, the industry’s profitability potential has led to significant changes in the industry structure, which is evidenced by the emergence of different digital sub-segments.
The high demand for electronic display products has attracted new entrants.
Different institutional customers such as hospitality companies such as restaurants, sports clubs and educational institutions are increasingly adopting emerging electronic display technologies in their effort to create optimal market awareness. Additionally, the industry is characterised by lack of barriers to entry. One of the factors that have led to increment in the intensity of competition entails the high profitability potential.
Threat of entry
The electronic display industry is characterised by a high threat of entry. However, the entry of Mitsubishi into the electronic display industry in late 2008 led to a 12% reduction in the company’s market share (Taylor, Coates, and Connely 139). By 2008, Daktronics’ market share was estimated to be 80%.
The intense competition has led to substantial reduction in the company’s level of profitability.
For example, Adaptive Micro Systems, LLC undertakes its manufacturing process indifferent countries such as Malaysia, US and Europe in an effort to minimise the cost of operation. Furthermore, most of the companies have attained sufficient cost advantage by developing economies of scale.
For example, Barco has positioned itself as the global leader in the digital-out-of-home [DOOH]. Furthermore, the firm’s competitors have diversified their product offering hence improving their capacity to serve different market segments.
These firms have developed sufficient capabilities with reference to designing and manufacturing of electronic display systems such as digital signage.
In the course of its operation, Daktronics faces intense competition from a number of local and international firms such as Barco, Capturion, Hibino Corporation, Hi-Tech LED Displays, ANC Sports, Adaptive Micro Systems, LLC, and Ledstar Incorporation, LG Electronics. One of the aspects that illustrate the high degree of industry concentration entails the large number of industry players. Thus, the degree of industry concentration has increased significantly.The electronic display industry has experienced considerable growth in the intensity of competition over the past decade
human
How about a Central Issues/ Problems section. End with the words 'Thus, the firm will'.
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The case study shows that Daktronics was adversely affected by the 2008 recession. The company intended to become a $1 billion company by 2009. Some of the major projects that the firm intended to undertake in 2009 would have propelled the company to attain its financial goal.
However, the recession led to a substantial decline in the firm’s sales trajectory in the local and intercontinental market. Thus, the firm was not able to maximise its sales. Furthermore, the recession adversely affected the firm’s capacity to improve its debt status because of decline in the level of profitability.
By 1 st May 2010, the company’s total long-term debts were estimated to be $11.3 million, which represented 5.5% of the total shareholder equity. Thus, the firm faced huge financial constraints that dampened its projected future growth. The poor financial performance adversely affected the firm’s manufacturing capacity.
Strategic Recommendations
To spur the company’s growth, the firm’s management team should consider the following strategic aspects.
 1. Lean Manufacturing: Considering the adverse effects of the recession on the consumers’ purchasing power, it is imperative for the firm to improve its lean manufacturing capacity. Focusing on lean manufacturing will improve the firm’s ability to offer high quality electronic display products at competitive prices by streamlining operations and reducing waste. Subsequently, the firm will be able to attract and retain customers.
 2. System approach: The company should consider streamlining its operations by restructuring the business units. This approach will enable the firm to eliminate possible duplication of activities across the various business units. Thus, the firm will be able to minimise the cost of operation.
human
Competition section.
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The long run success of the electronic display industry is dependent on the intensity of competition. Owing to the intense competition being experienced in the global electronic display industry, different and more innovative products have been developed.
Additionally, the high rate of technology transfer will stimulate the intensity of competition. Therefore, the extent to which an organisation develops a strong competitive edge will determine its long-term survival.
Internal Environment
In its pursuit for a high level of profitability, Daktronics has focused on exploiting its internal resources over the years. The chart below illustrates the extent to which the firm has succeeded in leveraging on some of the internal resources.
Functional Area/Internal Factor Strengths                                                                                                                                                                                       Weaknesses                                                                                                                
                 -Daktronics marketing activities are based on an extensive marketing philosophy, which underscores the importance of satisfying the customers’ needs.                                                                                                                                                                                                                                      
Marketing            – The firm has established a complex marketing and sales network that is comprised of a direct sales force and resellers. The direct sales force plays a fundamental role in influencing the purchase decision of large customers such as institutions. Conversely, the resellers specialise in marketing smaller commercial application.                       Despite the company’s commitment to market its products to different locations, the firm has mainly concentrated its marketing operations in North America and Canada.                                  
                 -Daktronics has established its marketing activities in different geographical locations.                                                                                                                                               -Using resellers might limit the company’s capacity to generate sales revenue because the resellers might also carry the competitors’ products.                                             
                 -The company has also incorporated the concept of market segmentation by targeting the business, government and sports segments. The market segmentation strategy has significantly improved the firm’s capacity to meet the customers’ needs.                                                                                                                                                                                         
Technology/R&D          The company has been committed to improvement of its manufacturing capacity over the years. Subsequently, the company has continuously upgraded its manufacturing technology. Thus, the firm has been able to respond to increase in sales demand.                                                                   -The company outsources some of its technologies from the international market and from other local suppliers. This shows that the firm has not optimally developed optimal capacity with reference to technology.            
Operations            Daktronics has adopted an effective structure by organising its operations into two main segments, which include the domestic and international segment. The domestic segment, which was comprised of the transportation, commercial, schools, theatre and live events focused on the local market. Conversely, the international segment focused on the international market demand. -Adopting business units as profit centres might lead to loss of top management’s control of the business units because of extensive delegation of decision-making capability to the divisional managers.                
                 -Each of the business units served as a profit centre. The adoption of profit centres has enabled Daktronics to maximise its profitability.                                                                                                                                                                                                                                           
Culture/Ethics          -The company has succeeded in establishing a positive organisational culture. This has been achieved by focusing on the principles of providing employees with challenging and interesting work, employee motivation, teamwork and effective problem solving.                                                             -The company has adopted a policy that allows employment of family members. However, this might affect the company’s operational efficiency because of nepotism.                                     
                 –                                                                                                                                                                                           -Lack of employee union within the organisation implies that employee rights might not be addressed optimally.                                                              
Finance             Daktronics has managed to develop a strong financial base, which is evidenced by the growth in the level of its profitability. For example, the company’s profits grew from $ 15.66 million in 2005 to $26.213 million in 2009.                                                                            The company has not been able to develop adequate financial resilience to economic changes. In 2010, the company recorded a substantial loss of $(6.989) million because of the economic recession.                   
                                                                                                                                                                                                            The company’s inability to sustain a growth in its financial performance might adversely affect its research and development capabilities and hence the capacity to undertake continuous and new product improvement.          
                 -Daktronics has adopted effective strategic human resource management practices. For example, the company has integrated a personnel programme, which ensures continuous growth amongst its staff. The company has increased its human resource base. For example, the company’s human resource base grew from 100 employees in 1979 to 3000 in 2008.                 -Despite its commitment in establishing a strong human resource base, Daktronics has integrated a downsizing strategy. For example, the firm laid-off 500 employees. This strategy might adversely affect the employees’ morale.     
Human Resources         -The firm has adopted an effective student hiring and internship programme, which has enabled the firm to improve the productivity of its workforce.                                                                                                                  -The company’s decision to hire employees temporarily because of economic recession might affect the employees’ productivity.                                                      
                                                                                                                                                                                                            -The company has not developed an effective employee competition policy. The current policy has only taken into account salary increment to employees within the senior leadership positions.                      
Organisational Structure     -The company has adopted a flat organisation structure by integrating the concept of departmentalisation. This has been achieved through adoption of two main basis of departmentalisation, namely customers and the geographical regions. Thus, different business units are responsible for the firm’s domestic and international markets.                      -The company may experience resource under-utilisation in some departments. Furthermore, incorporating business units in the company’s operations might lead to duplication some activities, both in its local and international markets.
                 -The concept of departmentalisation has enabled the company to exploit the advantages associated with specialisation.                                                                                                                                                                                                                                                      
Core Competencies
Daktronics has developed a number of core competencies, which have improved its success over the years. Considering the intensity of competition in the global electronic display industry, Daktronics has appreciated the importance of adopting lean manufacturing approach.
The company outsourced external consultants in order to develop a comprehensive understanding of the concept of lean manufacturing. Due to its commitment towards attaining a high competitive advantage, the company has developed sufficient competencies with reference to lean manufacturing.
One of the strategies that the firm has adopted in its lean manufacturing processes includes reducing the machine setup time. This goal has been attained by through standardisation of tools and ensuring that the raw materials used are of high quality.
Furthermore, the firm ensures minimal retention of inventories and short lead-time. The lean manufacturing strategy has considerably accelerated the company’s cash flow.
Competitive Advantage
The company has developed sufficient competitive advantage with regard to research and development, which is evidenced by the firm’s success in introducing new products in the market. The firm’s commitment in research and development has significantly contributed to development of high quality products.
Furthermore, the firm has been able to diversify its product portfolio hence meeting the needs of different customer groups. Subsequently, the firm has been able to enhance the rate of its global market penetration.
Key Weaknesses
Despite its past success in the global electronic display industry, Daktronics is characterised by a number of weaknesses. First, the firm has not been able to improve its manufacturing capacity. Subsequently, Daktronics is forced to augment its production by seeking external suppliers.
However, the suppliers have a relatively high bargaining power because of their production capacity and ability to customise the firm’s products in accordance with the customers’ needs.
In addition to its production capacity, the company is also characterised by a major weakness with reference to its reward management and employee compensation schemes. The firm has only targeted senior leaders in its salary increment policy.
This strategy might adversely affect the level of motivation amongst the lower level employees and hence their productivity.
human
Substitutes section.
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The entry of new firms into the electronic display industry coupled with the high degree of industry fragmentation has led to increment in the number of substitutes. Despite the high rate at which electronic display companies are investing in research and development, most of the companies have not been able to differentiate their products.
Increased investment in research and development and the projected industry growth indicate that Daktronics will experience a major challenge in coping with substitute products.
Buyer bargaining power
Diverse customer groups dominate the industry. They include the national accounts, aviation companies, schools and entertainment theatres, modular and mobile installation segments, and large sports venues.
To meet the electronic display needs of these customer groups, the industry players specialise in providing two main product categories, which include digital signage and live entertainment.
The digital signage segment is mainly comprised of the advertising and billboard industry while the live entertainment segment focuses on the sports industry. However, most of the industry players have diversified their product portfolio by offering the two product categories.
In an effort to attain a high competitive edge, most of the industry players have diversified their product portfolio. For example, Daktronics has diversified its product portfolio into five main product lines, which include automated rigging and hoists, video, sports, commercial, and transportation.
The product diversification strategy has provided customers with a wide range of products. Subsequently, the cost of switching has been reduced substantially. Additionally, the buyers’ bargaining power within the industry has increased considerably over the past few decades.
One of the factors that have stimulated growth in buyer bargaining power involves increased investment in research and development by the industry players. Moreover, the entry of consultants has also reduced the sellers bargaining power.
Supplier bargaining power
The industry is characterised by a moderate supplier bargaining power. The industry players mainly depend on raw materials from suppliers located in different parts of the world.
The decision to outsource raw materials from different suppliers is motivated by the need to lower the cost of production considering the adverse economic changes such as the recession. The suppliers are selected through a comprehensive bidding process.
The local suppliers have a relatively high bidding advantage because of their price competitiveness compared to foreign suppliers. However, most electronic display technology manufacturers consider outsourcing raw materials from local suppliers to be most suited for small projects.
On the contrary, supplies for large projects are outsourced from foreign suppliers. Daktronics receives most of its supplies from China.
Industry Key Success factors
The success of firms in the electronic display industry is dependent on a number of factors as evaluated herein.
Product attribute
The intensity of competition in the electronic display industry has made the industry to be highly fragmented. Different companies have entered the industry in an effort to maximise profitability. However, the industry players have focused on a limited market size, which include the live entertainment and the digital signage markets.
Thus, the capacity of the industry players to maximise their level of profitability depends on the extent to which their products successfully meet the target customers’ needs. Therefore, it is imperative for the industry players to ensure that their products are adequately differentiated, which can be attained by incorporating unique product features.
In an effort to attain an optimal market position in the electronics display industry, Daktronics has continuously improved its product attributes, which has remarkably enhanced its capacity to offer customers high quality outdoor signs.
For example, during the 1990s, Daktronics improved its product attributes by focusing on a number of attributes, which include product reliability, energy efficiency, brightness and colour.
human
Reverse the sentences.
assistant
For example, during the 1990s, Daktronics improved its product attributes by focusing on a number of attributes, which include product reliability, energy efficiency, brightness and colour.
In an effort to attain an optimal market position in the electronics display industry, Daktronics has continuously improved its product attributes, which has remarkably enhanced its capacity to offer customers high quality outdoor signs. Therefore, it is imperative for the industry players to ensure that their products are adequately differentiated, which can be attained by incorporating unique product features.
Thus, the capacity of the industry players to maximise their level of profitability depends on the extent to which their products successfully meet the target customers’ needs. However, the industry players have focused on a limited market size, which include the live entertainment and the digital signage markets. Different companies have entered the industry in an effort to maximise profitability.
Product attribute
The intensity of competition in the electronic display industry has made the industry to be highly fragmented.
Industry Key Success factors
The success of firms in the electronic display industry is dependent on a number of factors as evaluated herein. Daktronics receives most of its supplies from China.
On the contrary, supplies for large projects are outsourced from foreign suppliers. However, most electronic display technology manufacturers consider outsourcing raw materials from local suppliers to be most suited for small projects.
The local suppliers have a relatively high bidding advantage because of their price competitiveness compared to foreign suppliers. The suppliers are selected through a comprehensive bidding process.
The decision to outsource raw materials from different suppliers is motivated by the need to lower the cost of production considering the adverse economic changes such as the recession. The industry players mainly depend on raw materials from suppliers located in different parts of the world.
Supplier bargaining power
The industry is characterised by a moderate supplier bargaining power. Moreover, the entry of consultants has also reduced the sellers bargaining power.
One of the factors that have stimulated growth in buyer bargaining power involves increased investment in research and development by the industry players. Additionally, the buyers’ bargaining power within the industry has increased considerably over the past few decades. Subsequently, the cost of switching has been reduced substantially.
The product diversification strategy has provided customers with a wide range of products. For example, Daktronics has diversified its product portfolio into five main product lines, which include automated rigging and hoists, video, sports, commercial, and transportation.
In an effort to attain a high competitive edge, most of the industry players have diversified their product portfolio. However, most of the industry players have diversified their product portfolio by offering the two product categories.
The digital signage segment is mainly comprised of the advertising and billboard industry while the live entertainment segment focuses on the sports industry.
To meet the electronic display needs of these customer groups, the industry players specialise in providing two main product categories, which include digital signage and live entertainment. They include the national accounts, aviation companies, schools and entertainment theatres, modular and mobile installation segments, and large sports venues.
Buyer bargaining power
Diverse customer groups dominate the industry.
Increased investment in research and development and the projected industry growth indicate that Daktronics will experience a major challenge in coping with substitute products. Despite the high rate at which electronic display companies are investing in research and development, most of the companies have not been able to differentiate their products.The entry of new firms into the electronic display industry coupled with the high degree of industry fragmentation has led to increment in the number of substitutes
human
Daktronics Inc. Internal and External Environment Case Study section.
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Strategic Direction
Vision Statement
Daktronics Incorporation intends to attain global market leadership with reference to entertaining and informing audiences through the development of modern audio-visual communication systems.
Mission Statement
In its pursuit for global market leadership, Daktronics Incorporation has based its operations on a number of guidelines. First, the company focuses on delivering optimal industry values to its clients.
One of the approaches that Daktronics has adopted in its pursuit for competitiveness entails developing a high level of engagement amongst its employees. Subsequently, the firm provides its employees with rewarding and challenging opportunities.
The company intends to foster long-term relationship with its suppliers. Additionally, Daktronics Incorporation is committed to leveraging on its capabilities with reference to innovation, manufacturing, and service delivery.
In addition to the above aspects, Daktronics Incorporation is also committed to maximising the shareholder value while at the same time establishing a strong and positive relationship with the society.
human
Objectives section.
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The firm’s operations are guided by the following objectives:
 1. To achieve a high level of financial stability
 2. To provide clients with high quality electronic display products
 3. To attain market leadership within the global electronic display industry
Strategic Philosophy
Since its inception, Daktronics has been committed to providing clients with high quality electronic display systems and digital billboards. Daktronics’ success can be attributed to the management team’s focus on the company’s corporate philosophy, which involves providing more local services by developing an extensive understanding of the customer needs.
Furthermore, the company’s strategic philosophy also underscores the importance of new and continuous product improvement to attain and sustain industry leadership.
External Environment
Daktronics’ operation is subject to macro-environmental changes, which underscore the importance of developing a broad understanding of the prevailing business environment. Different frameworks have been formulated in an effort to assist organisations to understand the factors that might affect their operations.
Some of the most common industry analysis frameworks include the PESTLE and the SWOT analysis. The chart below illustrates a summary of the factors that might affect Daktronics’ operations.
External Environment Factors                                                                                                                                                                      Opportunity                                                                                                                                                                        Threat                                                                                                                                                              
Economic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
-The electronic display industry in the US is experiencing significant growth.                                                                                                                                             -Daktronics can improve its profitability by tapping on the high demand for electronic display industry, especially in developing economies.                                                                                                       -Despite the projected future growth, occurrence of another economic downturn such as the 2007/2008 recession might diminish the industry’s economic profits and hence the growth in Daktronics’ level of profitability.                                                     
-Occurrence of the 2007 global economic recession adversely affected the global electronic display industry. The total industry revenues declined from $14.1 billion in 2007 to $ 10.8 billion in 2009.                                                                                -Daktronics can consider expanding its operations into the developing economies.                                                                                                                                     -Economic changes might adversely affect purchasing power of potential customers such as restaurants, gasoline retailers, and hotels because of the high cost of electronic displays.                                                                       
-The industry is expected to benefit from the high economic growth being experienced in some Asian economies such as China.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Technological                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
-The display industry in the US is experiencing radical technological changes due to increased investment in research and development.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
– Different industry players are investing substantial amount of resources in developing high quality scoreboard technologies. A study conducted in 2008 showed that firms in the digital signage display segment spent approximately $ 2.4 4billion in research and development.                                           -Investment in research and development has led to emergence of diverse display technologies. Therefore, Daktronics should consider investing in extensive R&D.                                                                                              -Extensive investment in research and development on display technology presents a major challenge to Daktronics’ long-term competitiveness. Subsequently, the company must continuously invest in new product development and improvement. Failure to adopt this approach might make the company’s display technologies obsolete.
-The new technologies have significantly improved the quality of the product. Some of the common display technologies that have emerged include digital signage, holographic displays, and organic light – emitting diodes and touch screens.                                                             -The high rate of technology transfer within the display industry presents an opportunity for the firm to dominate the global display industry through adoption of strategic control of technology.                                                                                                                                                                                                                                             
– The industry players are motivated to invest in research and development in order to attain a high competitive advantage by improving their display technology. Furthermore, investment in R&D has significantly improved the rate of technology transfer, which is evidenced by the high rate at which secondary users are adopting emerging display technologies.                                                                                                                                                                                                                                                                                                                                               
– The live entertainment segment has also undergone significant transformation because of intensive renovation activities, especially in the education, sports and entertainment venues.                                                                                                                                                                                                                                                                                                                                                                                                                                      
Legal/Political/Regulatory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
– The local, federal, and state governments regulate the electronic display industry in the US. One of the major factors that have stimulated the need for effective regulations entails the need to protect the society from light pollution.                                                             -Integration of effective regulatory environment such as environment protection laws may positively contribute to Daktronics’ attainment of environmental sustainability by ensuring a high level of compliance. For example, the company will be able to invest in research and development hence developing a high quality digital display technology. -Adoption of strict policies on various market aspects such as price regulation might affect the company’s ability to maximise its profitability. For example, integration of additional tax on digital display companies may affect Daktronics’ manufacturing cost and hence its profitability.                 
-The entry of consultants in the digital in the industry might adversely affect the company’s marketing policies for example by pressurising electronic display technology company to lower their price.                                                                                                                                                                                                                                                                                                                                                                                                                              
Socio-cultural/Demographic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
The industry’s success depends on the prevailing socio-cultural and demographic environments. The industry has experienced strict regulation because of increased social concerns that touch on light pollution, especially by residents in areas where multi-screen digital signage were installed.                                  -The high rate at which stakeholders within the sports, entertainment, retail and education sectors are undertaking renovation activities on their display technologies such as improvement of their scoreboards presents an opportunity that Daktronics can exploit hence maximising its profitability.                         -Change in consumer perception towards digital signage. For example, association of some digital display technologies such as large digital display screens with light pollution may affect the demand of Daktronics’ products.                                                  
-The digital signage and display market segments have experienced remarkable growth over the past decades because adoption of digital signage by institutions in their market communication processes.                                                                                                                                                                                                                                                                                                                                                                                                                               
-Sports clubs and entertainment companies are adopting digital display technology in an effort to offer their clients unique experience.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Industry Environment
Developing sustainable competitive advantage comprises one of the critical aspects in an organisation that wishes to attain a long-term business excellence.
However, this goal can only be achieved if organisational managers understand the prevailing industry trend, which is fundamental in improving an organisation’s capacity to develop and exploit reliable market intelligence.
Furthermore, understanding the industry dynamics enables managers to gain insight on the available market opportunities and threats. Thus, an organisation can successfully optimally manage market changes and to project the likelihood of attaining the predetermined business objective.
The Porter’s five forces is one of the most effective models that organisational managers can adopt in evaluating the industry environment. The prevailing environment in the digital display industry affects Daktronics Incorporation’s operations herein as illustrated herein.
human
Corporate Level Strategy section.
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One of the firm’s goals is to attain a high rate of growth within the electronic display industry. In order to achieve this goal, the firm has incorporated both organic and inorganic growth strategies. In its organic growth, the firm is committed to establishing wholly owned manufacturing facilities in the local and international market.
Conversely, the firm has also adopted the concept of acquisition in an effort to improve its market dominance. The firm undertook its first acquisition in 1987 in which it acquired Star Circuits. Between 2000 and 2007, the firm undertook six mergers and acquisitions. The acquisitions have considerably contributed to improvement in the company’s competitiveness in the local and international market.
Functional Strategies
The company is committed to ensuring that its internal resources are optimally utilised in implementing the business strategy. Subsequently, the firm has adopted different strategies in an effort to attain operational efficiency.
For example, the lean manufacturing strategy enable the firm to minimise the cost of production hence improving the firm’s operational efficiency and price of its products. Conversely, investment in research and development has played a fundamental role in improving the quality of Daktronics’ products.
Furthermore, the aggressive marketing strategy adopted in the domestic and international market has enabled the firm to maximise its sales revenue.
human
Add another sentence about acquired, Hoffend, SportsLink, KeyFrame.
assistant
One of the firm’s goals is to attain a high rate of growth within the electronic display industry. In order to achieve this goal, the firm has incorporated both organic and inorganic growth strategies. In its organic growth, the firm is committed to establishing wholly owned manufacturing facilities in the local and international market. 
Conversely, the firm has also adopted the concept of acquisition in an effort to improve its market dominance. The firm undertook its first acquisition in 1987 in which it acquired Star Circuits. Between 2000 and 2007, the firm undertook six mergers and acquisitions. 
Other companies that the firm has acquired include Hoffend and Sons, SportsLink, KeyFrame, Outcast Media International, LLC, and FibreLite. The acquisitions have considerably contributed to improvement in the company’s competitiveness in the local and international market. 
Functional Strategies
The company is committed to ensuring that its internal resources are optimally utilised in implementing the business strategy. Subsequently, the firm has adopted different strategies in an effort to attain operational efficiency. 
For example, the lean manufacturing strategy enable the firm to minimise the cost of production hence improving the firm’s operational efficiency and price of its products. Conversely, investment in research and development has played a fundamental role in improving the quality of Daktronics’ products. 
Furthermore, the aggressive marketing strategy adopted in the domestic and international market has enabled the firm to maximise its sales revenue.
human
Resources section.
assistant
One of the major sources of threats to electronic display companies is the high rate of technological change. Therefore, it is imperative for an organisation to develop sufficient resource capabilities.
The various resource categories that electronic display companies should consider include human resource, financial resource, and technological resources.
The quality of human resource will influence the organisation’s capacity to formulate effective strategies. Additionally, the quality of human capital will also influence the organisations’ ability to undertake product research and development and hence the quality of the products developed.
Thus, it is vital for electronic display manufacturing companies to consider investing in improving the skills and expertise of their workforce.
In addition to human capital, a sufficient amount of financial capital is necessary in order to be successful in new and continuous product development. Conversely, organisations should ensure that effective technology systems have been implemented in their manufacturing plants.
This will not only improve the company’s production efficiency but also the quality of the final product. To succeed in exploiting the internal resources, it is imperative for organisational managers to ensure a high level of resource interconnectedness.
Resource interconnectedness can be achieved by establishing a high level of synergy in the firm’s operation.
Driving forces
The industry’s growth over the past decades can be attributed to a number of driving forces as explained herein.
Product innovation
In order to succeed in the electronic display industry, it is imperative for an organisation to be highly responsive to market demand. One of the approaches that an organisation can attain in order to succeed in responding to market demand entails intensive investment in research and development.
However, a firm must first develop a comprehensive understanding of the target customers’ needs. Gaining such understanding will enable a firm to be effective in directing its research and development efforts.
The case study cites increased investment in research and development as one of the factors that have contributed to the current growth of the electronic display industry.
Cost and efficiency
One of the most notable changes that have been witnessed in the industry entails the increase in the number of new entrants. Subsequently, the intensity of competition has increased substantially. To succeed in such an industry, it is imperative for the industry players to develop sufficient cost advantage and operational efficiency.
One of the most effective strategies that the industry players should consider incorporating involves cost leadership. Some of the industry players such as Daktronics have adopted cost leadership strategy by relocating some of their manufacturing facilities to countries characterised by comparative low cost of production such as China.
Furthermore, the company has also integrated the concept of lean manufacturing in an effort to attain operational efficiency. Focusing on cost and operational efficiency will improve the industry players’ capacity to maximise their level of profitability.
human
Delete the first sentence.
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Therefore, it is imperative for an organisation to develop sufficient resource capabilities.
The various resource categories that electronic display companies should consider include human resource, financial resource, and technological resources.
The quality of human resource will influence the organisation’s capacity to formulate effective strategies. Additionally, the quality of human capital will also influence the organisations’ ability to undertake product research and development and hence the quality of the products developed.
Thus, it is vital for electronic display manufacturing companies to consider investing in improving the skills and expertise of their workforce.
In addition to human capital, a sufficient amount of financial capital is necessary in order to be successful in new and continuous product development. Conversely, organisations should ensure that effective technology systems have been implemented in their manufacturing plants.
This will not only improve the company’s production efficiency but also the quality of the final product. To succeed in exploiting the internal resources, it is imperative for organisational managers to ensure a high level of resource interconnectedness.
Resource interconnectedness can be achieved by establishing a high level of synergy in the firm’s operation.
Driving forces
The industry’s growth over the past decades can be attributed to a number of driving forces as explained herein.
Product innovation
In order to succeed in the electronic display industry, it is imperative for an organisation to be highly responsive to market demand. One of the approaches that an organisation can attain in order to succeed in responding to market demand entails intensive investment in research and development.
However, a firm must first develop a comprehensive understanding of the target customers’ needs. Gaining such understanding will enable a firm to be effective in directing its research and development efforts.
The case study cites increased investment in research and development as one of the factors that have contributed to the current growth of the electronic display industry.
Cost and efficiency
One of the most notable changes that have been witnessed in the industry entails the increase in the number of new entrants. Subsequently, the intensity of competition has increased substantially. To succeed in such an industry, it is imperative for the industry players to develop sufficient cost advantage and operational efficiency.
One of the most effective strategies that the industry players should consider incorporating involves cost leadership. Some of the industry players such as Daktronics have adopted cost leadership strategy by relocating some of their manufacturing facilities to countries characterised by comparative low cost of production such as China.
Furthermore, the company has also integrated the concept of lean manufacturing in an effort to attain operational efficiency. Focusing on cost and operational efficiency will improve the industry players’ capacity to maximise their level of profitability.
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The complete essay please. End with the sentence 'Thus, the firm will be able to minimise the cost of operation.'
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##Daktronics Inc. Internal and External Environment Case Study
Strategic Direction
Vision Statement
Daktronics Incorporation intends to attain global market leadership with reference to entertaining and informing audiences through the development of modern audio-visual communication systems.
Mission Statement
In its pursuit for global market leadership, Daktronics Incorporation has based its operations on a number of guidelines. First, the company focuses on delivering optimal industry values to its clients.
One of the approaches that Daktronics has adopted in its pursuit for competitiveness entails developing a high level of engagement amongst its employees. Subsequently, the firm provides its employees with rewarding and challenging opportunities.
The company intends to foster long-term relationship with its suppliers. Additionally, Daktronics Incorporation is committed to leveraging on its capabilities with reference to innovation, manufacturing, and service delivery.
In addition to the above aspects, Daktronics Incorporation is also committed to maximising the shareholder value while at the same time establishing a strong and positive relationship with the society.
##Objectives
The firm’s operations are guided by the following objectives:
 1. To achieve a high level of financial stability
 2. To provide clients with high quality electronic display products
 3. To attain market leadership within the global electronic display industry
Strategic Philosophy
Since its inception, Daktronics has been committed to providing clients with high quality electronic display systems and digital billboards. Daktronics’ success can be attributed to the management team’s focus on the company’s corporate philosophy, which involves providing more local services by developing an extensive understanding of the customer needs.
Furthermore, the company’s strategic philosophy also underscores the importance of new and continuous product improvement to attain and sustain industry leadership.
External Environment
Daktronics’ operation is subject to macro-environmental changes, which underscore the importance of developing a broad understanding of the prevailing business environment. Different frameworks have been formulated in an effort to assist organisations to understand the factors that might affect their operations.
Some of the most common industry analysis frameworks include the PESTLE and the SWOT analysis. The chart below illustrates a summary of the factors that might affect Daktronics’ operations.
External Environment Factors                                                                                                                                                                      Opportunity                                                                                                                                                                        Threat                                                                                                                                                              
Economic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
-The electronic display industry in the US is experiencing significant growth.                                                                                                                                             -Daktronics can improve its profitability by tapping on the high demand for electronic display industry, especially in developing economies.                                                                                                       -Despite the projected future growth, occurrence of another economic downturn such as the 2007/2008 recession might diminish the industry’s economic profits and hence the growth in Daktronics’ level of profitability.                                                     
-Occurrence of the 2007 global economic recession adversely affected the global electronic display industry. The total industry revenues declined from $14.1 billion in 2007 to $ 10.8 billion in 2009.                                                                                -Daktronics can consider expanding its operations into the developing economies.                                                                                                                                     -Economic changes might adversely affect purchasing power of potential customers such as restaurants, gasoline retailers, and hotels because of the high cost of electronic displays.                                                                       
-The industry is expected to benefit from the high economic growth being experienced in some Asian economies such as China.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Technological                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
-The display industry in the US is experiencing radical technological changes due to increased investment in research and development.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
– Different industry players are investing substantial amount of resources in developing high quality scoreboard technologies. A study conducted in 2008 showed that firms in the digital signage display segment spent approximately $ 2.4 4billion in research and development.                                           -Investment in research and development has led to emergence of diverse display technologies. Therefore, Daktronics should consider investing in extensive R&D.                                                                                              -Extensive investment in research and development on display technology presents a major challenge to Daktronics’ long-term competitiveness. Subsequently, the company must continuously invest in new product development and improvement. Failure to adopt this approach might make the company’s display technologies obsolete.
-The new technologies have significantly improved the quality of the product. Some of the common display technologies that have emerged include digital signage, holographic displays, and organic light – emitting diodes and touch screens.                                                             -The high rate of technology transfer within the display industry presents an opportunity for the firm to dominate the global display industry through adoption of strategic control of technology.                                                                                                                                                                                                                                             
– The industry players are motivated to invest in research and development in order to attain a high competitive advantage by improving their display technology. Furthermore, investment in R&D has significantly improved the rate of technology transfer, which is evidenced by the high rate at which secondary users are adopting emerging display technologies.                                                                                                                                                                                                                                                                                                                                               
– The live entertainment segment has also undergone significant transformation because of intensive renovation activities, especially in the education, sports and entertainment venues.                                                                                                                                                                                                                                                                                                                                                                                                                                      
Legal/Political/Regulatory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
– The local, federal, and state governments regulate the electronic display industry in the US. One of the major factors that have stimulated the need for effective regulations entails the need to protect the society from light pollution.                                                             -Integration of effective regulatory environment such as environment protection laws may positively contribute to Daktronics’ attainment of environmental sustainability by ensuring a high level of compliance. For example, the company will be able to invest in research and development hence developing a high quality digital display technology. -Adoption of strict policies on various market aspects such as price regulation might affect the company’s ability to maximise its profitability. For example, integration of additional tax on digital display companies may affect Daktronics’ manufacturing cost and hence its profitability.                 
-The entry of consultants in the digital in the industry might adversely affect the company’s marketing policies for example by pressurising electronic display technology company to lower their price.                                                                                                                                                                                                                                                                                                                                                                                                                              
Socio-cultural/Demographic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
The industry’s success depends on the prevailing socio-cultural and demographic environments. The industry has experienced strict regulation because of increased social concerns that touch on light pollution, especially by residents in areas where multi-screen digital signage were installed.                                  -The high rate at which stakeholders within the sports, entertainment, retail and education sectors are undertaking renovation activities on their display technologies such as improvement of their scoreboards presents an opportunity that Daktronics can exploit hence maximising its profitability.                         -Change in consumer perception towards digital signage. For example, association of some digital display technologies such as large digital display screens with light pollution may affect the demand of Daktronics’ products.                                                  
-The digital signage and display market segments have experienced remarkable growth over the past decades because adoption of digital signage by institutions in their market communication processes.                                                                                                                                                                                                                                                                                                                                                                                                                               
-Sports clubs and entertainment companies are adopting digital display technology in an effort to offer their clients unique experience.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Industry Environment
Developing sustainable competitive advantage comprises one of the critical aspects in an organisation that wishes to attain a long-term business excellence.
However, this goal can only be achieved if organisational managers understand the prevailing industry trend, which is fundamental in improving an organisation’s capacity to develop and exploit reliable market intelligence.
Furthermore, understanding the industry dynamics enables managers to gain insight on the available market opportunities and threats. Thus, an organisation can successfully optimally manage market changes and to project the likelihood of attaining the predetermined business objective.
The Porter’s five forces is one of the most effective models that organisational managers can adopt in evaluating the industry environment. The prevailing environment in the digital display industry affects Daktronics Incorporation’s operations herein as illustrated herein.
##Rivalry
The electronic display industry has experienced considerable growth in the intensity of competition over the past decade. Thus, the degree of industry concentration has increased significantly. One of the aspects that illustrate the high degree of industry concentration entails the large number of industry players.
In the course of its operation, Daktronics faces intense competition from a number of local and international firms such as Barco, Capturion, Hibino Corporation, Hi-Tech LED Displays, ANC Sports, Adaptive Micro Systems, LLC, and Ledstar Incorporation, LG Electronics.
These firms have developed sufficient capabilities with reference to designing and manufacturing of electronic display systems such as digital signage. Furthermore, the firm’s competitors have diversified their product offering hence improving their capacity to serve different market segments.
For example, Barco has positioned itself as the global leader in the digital-out-of-home [DOOH]. Furthermore, most of the companies have attained sufficient cost advantage by developing economies of scale.
For example, Adaptive Micro Systems, LLC undertakes its manufacturing process indifferent countries such as Malaysia, US and Europe in an effort to minimise the cost of operation.
The intense competition has led to substantial reduction in the company’s level of profitability. By 2008, Daktronics’ market share was estimated to be 80%. However, the entry of Mitsubishi into the electronic display industry in late 2008 led to a 12% reduction in the company’s market share (Taylor, Coates, and Connely 139).
Threat of entry
The electronic display industry is characterised by a high threat of entry. One of the factors that have led to increment in the intensity of competition entails the high profitability potential. Additionally, the industry is characterised by lack of barriers to entry.
Different institutional customers such as hospitality companies such as restaurants, sports clubs and educational institutions are increasingly adopting emerging electronic display technologies in their effort to create optimal market awareness.
The high demand for electronic display products has attracted new entrants. Furthermore, the industry’s profitability potential has led to significant changes in the industry structure, which is evidenced by the emergence of different digital sub-segments.
Thus, the industry has become highly fragmented. Some of the seller segments that have entered the industry include system assemblers, manufacturers and resellers. The high level of industry fragmentation has made it difficult to describe the industry in which the entrants operate.
The entry of new entrants has also led to reduction in Daktronics competitiveness in the international market. For example, Samsung’s introduction of the 46-inch ultra-high definition electronic display panels led to reduction in Daktronics sales in its Japanese market.
Other new entrants into the industry include International Business Machine [IBM], Cisco, and Oracle.
##Substitutes
The entry of new firms into the electronic display industry coupled with the high degree of industry fragmentation has led to increment in the number of substitutes. Despite the high rate at which electronic display companies are investing in research and development, most of the companies have not been able to differentiate their products.
Increased investment in research and development and the projected industry growth indicate that Daktronics will experience a major challenge in coping with substitute products.
Buyer bargaining power
Diverse customer groups dominate the industry. They include the national accounts, aviation companies, schools and entertainment theatres, modular and mobile installation segments, and large sports venues.
To meet the electronic display needs of these customer groups, the industry players specialise in providing two main product categories, which include digital signage and live entertainment.
The digital signage segment is mainly comprised of the advertising and billboard industry while the live entertainment segment focuses on the sports industry. However, most of the industry players have diversified their product portfolio by offering the two product categories.
In an effort to attain a high competitive edge, most of the industry players have diversified their product portfolio. For example, Daktronics has diversified its product portfolio into five main product lines, which include automated rigging and hoists, video, sports, commercial, and transportation.
The product diversification strategy has provided customers with a wide range of products. Subsequently, the cost of switching has been reduced substantially. Additionally, the buyers’ bargaining power within the industry has increased considerably over the past few decades.
One of the factors that have stimulated growth in buyer bargaining power involves increased investment in research and development by the industry players. Moreover, the entry of consultants has also reduced the sellers bargaining power.
Supplier bargaining power
The industry is characterised by a moderate supplier bargaining power. The industry players mainly depend on raw materials from suppliers located in different parts of the world.
The decision to outsource raw materials from different suppliers is motivated by the need to lower the cost of production considering the adverse economic changes such as the recession. The suppliers are selected through a comprehensive bidding process.
The local suppliers have a relatively high bidding advantage because of their price competitiveness compared to foreign suppliers. However, most electronic display technology manufacturers consider outsourcing raw materials from local suppliers to be most suited for small projects.
On the contrary, supplies for large projects are outsourced from foreign suppliers. Daktronics receives most of its supplies from China.
Industry Key Success factors
The success of firms in the electronic display industry is dependent on a number of factors as evaluated herein.
Product attribute
The intensity of competition in the electronic display industry has made the industry to be highly fragmented. Different companies have entered the industry in an effort to maximise profitability. However, the industry players have focused on a limited market size, which include the live entertainment and the digital signage markets.
Thus, the capacity of the industry players to maximise their level of profitability depends on the extent to which their products successfully meet the target customers’ needs. Therefore, it is imperative for the industry players to ensure that their products are adequately differentiated, which can be attained by incorporating unique product features.
In an effort to attain an optimal market position in the electronics display industry, Daktronics has continuously improved its product attributes, which has remarkably enhanced its capacity to offer customers high quality outdoor signs.
For example, during the 1990s, Daktronics improved its product attributes by focusing on a number of attributes, which include product reliability, energy efficiency, brightness and colour.
##Resources
One of the major sources of threats to electronic display companies is the high rate of technological change. Therefore, it is imperative for an organisation to develop sufficient resource capabilities.
The various resource categories that electronic display companies should consider include human resource, financial resource, and technological resources.
The quality of human resource will influence the organisation’s capacity to formulate effective strategies. Additionally, the quality of human capital will also influence the organisations’ ability to undertake product research and development and hence the quality of the products developed.
Thus, it is vital for electronic display manufacturing companies to consider investing in improving the skills and expertise of their workforce.
In addition to human capital, a sufficient amount of financial capital is necessary in order to be successful in new and continuous product development. Conversely, organisations should ensure that effective technology systems have been implemented in their manufacturing plants.
This will not only improve the company’s production efficiency but also the quality of the final product. To succeed in exploiting the internal resources, it is imperative for organisational managers to ensure a high level of resource interconnectedness.
Resource interconnectedness can be achieved by establishing a high level of synergy in the firm’s operation.
Driving forces
The industry’s growth over the past decades can be attributed to a number of driving forces as explained herein.
Product innovation
In order to succeed in the electronic display industry, it is imperative for an organisation to be highly responsive to market demand. One of the approaches that an organisation can attain in order to succeed in responding to market demand entails intensive investment in research and development.
However, a firm must first develop a comprehensive understanding of the target customers’ needs. Gaining such understanding will enable a firm to be effective in directing its research and development efforts.
The case study cites increased investment in research and development as one of the factors that have contributed to the current growth of the electronic display industry.
Cost and efficiency
One of the most notable changes that have been witnessed in the industry entails the increase in the number of new entrants. Subsequently, the intensity of competition has increased substantially. To succeed in such an industry, it is imperative for the industry players to develop sufficient cost advantage and operational efficiency.
One of the most effective strategies that the industry players should consider incorporating involves cost leadership. Some of the industry players such as Daktronics have adopted cost leadership strategy by relocating some of their manufacturing facilities to countries characterised by comparative low cost of production such as China.
Furthermore, the company has also integrated the concept of lean manufacturing in an effort to attain operational efficiency. Focusing on cost and operational efficiency will improve the industry players’ capacity to maximise their level of profitability.
##Competition
The long run success of the electronic display industry is dependent on the intensity of competition. Owing to the intense competition being experienced in the global electronic display industry, different and more innovative products have been developed.
Additionally, the high rate of technology transfer will stimulate the intensity of competition. Therefore, the extent to which an organisation develops a strong competitive edge will determine its long-term survival.
Internal Environment
In its pursuit for a high level of profitability, Daktronics has focused on exploiting its internal resources over the years. The chart below illustrates the extent to which the firm has succeeded in leveraging on some of the internal resources.
Functional Area/Internal Factor Strengths                                                                                                                                                                                       Weaknesses                                                                                                                
                 -Daktronics marketing activities are based on an extensive marketing philosophy, which underscores the importance of satisfying the customers’ needs.                                                                                                                                                                                                                                      
Marketing            – The firm has established a complex marketing and sales network that is comprised of a direct sales force and resellers. The direct sales force plays a fundamental role in influencing the purchase decision of large customers such as institutions. Conversely, the resellers specialise in marketing smaller commercial application.                       Despite the company’s commitment to market its products to different locations, the firm has mainly concentrated its marketing operations in North America and Canada.                                  
                 -Daktronics has established its marketing activities in different geographical locations.                                                                                                                                               -Using resellers might limit the company’s capacity to generate sales revenue because the resellers might also carry the competitors’ products.                                             
                 -The company has also incorporated the concept of market segmentation by targeting the business, government and sports segments. The market segmentation strategy has significantly improved the firm’s capacity to meet the customers’ needs.                                                                                                                                                                                         
Technology/R&D          The company has been committed to improvement of its manufacturing capacity over the years. Subsequently, the company has continuously upgraded its manufacturing technology. Thus, the firm has been able to respond to increase in sales demand.                                                                   -The company outsources some of its technologies from the international market and from other local suppliers. This shows that the firm has not optimally developed optimal capacity with reference to technology.            
Operations            Daktronics has adopted an effective structure by organising its operations into two main segments, which include the domestic and international segment. The domestic segment, which was comprised of the transportation, commercial, schools, theatre and live events focused on the local market. Conversely, the international segment focused on the international market demand. -Adopting business units as profit centres might lead to loss of top management’s control of the business units because of extensive delegation of decision-making capability to the divisional managers.                
                 -Each of the business units served as a profit centre. The adoption of profit centres has enabled Daktronics to maximise its profitability.                                                                                                                                                                                                                                           
Culture/Ethics          -The company has succeeded in establishing a positive organisational culture. This has been achieved by focusing on the principles of providing employees with challenging and interesting work, employee motivation, teamwork and effective problem solving.                                                             -The company has adopted a policy that allows employment of family members. However, this might affect the company’s operational efficiency because of nepotism.                                     
                 –                                                                                                                                                                                           -Lack of employee union within the organisation implies that employee rights might not be addressed optimally.                                                              
Finance             Daktronics has managed to develop a strong financial base, which is evidenced by the growth in the level of its profitability. For example, the company’s profits grew from $ 15.66 million in 2005 to $26.213 million in 2009.                                                                            The company has not been able to develop adequate financial resilience to economic changes. In 2010, the company recorded a substantial loss of $(6.989) million because of the economic recession.                   
                                                                                                                                                                                                            The company’s inability to sustain a growth in its financial performance might adversely affect its research and development capabilities and hence the capacity to undertake continuous and new product improvement.          
                 -Daktronics has adopted effective strategic human resource management practices. For example, the company has integrated a personnel programme, which ensures continuous growth amongst its staff. The company has increased its human resource base. For example, the company’s human resource base grew from 100 employees in 1979 to 3000 in 2008.                 -Despite its commitment in establishing a strong human resource base, Daktronics has integrated a downsizing strategy. For example, the firm laid-off 500 employees. This strategy might adversely affect the employees’ morale.     
Human Resources         -The firm has adopted an effective student hiring and internship programme, which has enabled the firm to improve the productivity of its workforce.                                                                                                                  -The company’s decision to hire employees temporarily because of economic recession might affect the employees’ productivity.                                                      
                                                                                                                                                                                                            -The company has not developed an effective employee competition policy. The current policy has only taken into account salary increment to employees within the senior leadership positions.                      
Organisational Structure     -The company has adopted a flat organisation structure by integrating the concept of departmentalisation. This has been achieved through adoption of two main basis of departmentalisation, namely customers and the geographical regions. Thus, different business units are responsible for the firm’s domestic and international markets.                      -The company may experience resource under-utilisation in some departments. Furthermore, incorporating business units in the company’s operations might lead to duplication some activities, both in its local and international markets.
                 -The concept of departmentalisation has enabled the company to exploit the advantages associated with specialisation.                                                                                                                                                                                                                                                      
Core Competencies
Daktronics has developed a number of core competencies, which have improved its success over the years. Considering the intensity of competition in the global electronic display industry, Daktronics has appreciated the importance of adopting lean manufacturing approach.
The company outsourced external consultants in order to develop a comprehensive understanding of the concept of lean manufacturing. Due to its commitment towards attaining a high competitive advantage, the company has developed sufficient competencies with reference to lean manufacturing.
One of the strategies that the firm has adopted in its lean manufacturing processes includes reducing the machine setup time. This goal has been attained by through standardisation of tools and ensuring that the raw materials used are of high quality.
Furthermore, the firm ensures minimal retention of inventories and short lead-time. The lean manufacturing strategy has considerably accelerated the company’s cash flow.
Competitive Advantage
The company has developed sufficient competitive advantage with regard to research and development, which is evidenced by the firm’s success in introducing new products in the market. The firm’s commitment in research and development has significantly contributed to development of high quality products.
Furthermore, the firm has been able to diversify its product portfolio hence meeting the needs of different customer groups. Subsequently, the firm has been able to enhance the rate of its global market penetration.
Key Weaknesses
Despite its past success in the global electronic display industry, Daktronics is characterised by a number of weaknesses. First, the firm has not been able to improve its manufacturing capacity. Subsequently, Daktronics is forced to augment its production by seeking external suppliers.
However, the suppliers have a relatively high bargaining power because of their production capacity and ability to customise the firm’s products in accordance with the customers’ needs.
In addition to its production capacity, the company is also characterised by a major weakness with reference to its reward management and employee compensation schemes. The firm has only targeted senior leaders in its salary increment policy.
This strategy might adversely affect the level of motivation amongst the lower level employees and hence their productivity.
##Strategies
The company has adopted different categories of strategies in an effort to attain long-term business excellence. Some of the main strategies are evaluated herein.
Business Level Strategies
The firm has adopted cost-leadership as its business level strategy. This goal has been achieved by incorporating lean manufacturing programme and exporting some of the manufacturing activities to countries characterised by low cost of production such as China.
##Corporate Level Strategy
One of the firm’s goals is to attain a high rate of growth within the electronic display industry. In order to achieve this goal, the firm has incorporated both organic and inorganic growth strategies. In its organic growth, the firm is committed to establishing wholly owned manufacturing facilities in the local and international market.
Conversely, the firm has also adopted the concept of acquisition in an effort to improve its market dominance. The firm undertook its first acquisition in 1987 in which it acquired Star Circuits. Between 2000 and 2007, the firm undertook six mergers and acquisitions.
Other companies that the firm has acquired include Hoffend and Sons, SportsLink, KeyFrame, Outcast Media International, LLC, and FibreLite. The acquisitions have considerably contributed to improvement in the company’s competitiveness in the local and international market.
Functional Strategies
The company is committed to ensuring that its internal resources are optimally utilised in implementing the business strategy. Subsequently, the firm has adopted different strategies in an effort to attain operational efficiency.
For example, the lean manufacturing strategy enable the firm to minimise the cost of production hence improving the firm’s operational efficiency and price of its products. Conversely, investment in research and development has played a fundamental role in improving the quality of Daktronics’ products.
Furthermore, the aggressive marketing strategy adopted in the domestic and international market has enabled the firm to maximise its sales revenue.
##Central Issues/ Problems
The case study shows that Daktronics was adversely affected by the 2008 recession. The company intended to become a $1 billion company by 2009. Some of the major projects that the firm intended to undertake in 2009 would have propelled the company to attain its financial goal.
However, the recession led to a substantial decline in the firm’s sales trajectory in the local and intercontinental market. Thus, the firm was not able to maximise its sales. Furthermore, the recession adversely affected the firm’s capacity to improve its debt status because of decline in the level of profitability.
By 1 st May 2010, the company’s total long-term debts were estimated to be $11.3 million, which represented 5.5% of the total shareholder equity. Thus, the firm faced huge financial constraints that dampened its projected future growth. The poor financial performance adversely affected the firm’s manufacturing capacity.
Strategic Recommendations
To spur the company’s growth, the firm’s management team should consider the following strategic aspects.
 1. Lean Manufacturing: Considering the adverse effects of the recession on the consumers’ purchasing power, it is imperative for the firm to improve its lean manufacturing capacity. Focusing on lean manufacturing will improve the firm’s ability to offer high quality electronic display products at competitive prices by streamlining operations and reducing waste. Subsequently, the firm will be able to attract and retain customers.
 2. System approach: The company should consider streamlining its operations by restructuring the business units. This approach will enable the firm to eliminate possible duplication of activities across the various business units. Thus, the firm will be able to minimise the cost of operation.