As the new General Manager of this company, I would like to see our organization grow and expand but also preserve the value and concept of ‘unique yet simple’.
I have been told that the previous manager was put off due to his inability to instill modern day management practices in this company, causing a lot of upsets among the employees and without making any profits. I had understood the wrong-doings of the previous manager, so through very deep thoughts and planning, a business management plan was a suggestion I would like to present to you.
In this business plan, I had list down the steps that I will take to bring our company to an efficient and effective organization.
Using the PESTLE analysis, we can see in which area we should focus and emphasis on so that as a team we can improve on what we are lacking behind.
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Political factors refer to the security of the political environment and the disposition of political gatherings or developments. This may show in government impact on assessment strategies, or government inclusion in exchanging understandings.
So far in our organization, there are no political regulations that we have not abide. As of our raw resources that we are get to produce our products, it is accessible in the countries of our factories that are being based at; India and Vietnam. As of our products such as sofas, cabinets, beds, tables, and other furniture, it is being regulated in America. Under the political factors, we need not worry so I shall not focus into too much detail.
Economic factorsspeak to the more extensive economy so may incorporate financial development rates, levels of business and unemployment, expenses of crude materials, for example, vitality, petrol and steel, investment rates and money related strategies, trade rates and expansion rates.
Previously, we have shortage of manpower working in the factories base in Vietnam and India, causing late productions and delivery to designated locations. What I will emphasis on is to get and hire enough employees working for us in the factories, so that our productions will be efficient and on time. The expenses we are spending on the materials, employees’ wages, investment rates are all still within the drawn budget of what I had calculated. I shall move on to the next factor which are more of a serious issue.
Legalfactors are those which have become law and regulations. This influences how an organization works, its expenses, and the interest for its items.
One serious issue that I had noticed is the welfare that the employees are getting, and the employees are complaining about the welfare that were given to them is insufficient. I had also noticed that the supervisor in the factories are ill-treating our employees, causing a huge number of them resigning. It is an offence to have the employees to work more than what they were given and some of the workers in the factories did not have sufficient break time during work. From now on, all workers in the factories will work 8 hours a day excluding a one hour break, and if they have to work overtime, we will pay them 1.5 times more per hour of what they exceeded.
Social factorsrepresent the culture of the society that an organization operates within. Theymay include demographics, age distribution, population growth rates, education level, distribution ofwealth and social classes, living conditions and lifestyle.
Base on the population, there are more and more young people that are stepping into the working environment and the demand for things are higher and preferences of furniture are different as young people likes things that are modern and simple. With that said, we as a furniture company should adapt to the population and change our strategies to better suit the people.
Technological factorsrefer to the rate of new inventions and development, changes in information andmobile technology, changes in internet and e-commerce or even mobile commerce, and governmentspending on research. There is often a tendency to focus Technological developments on digital and internet-related areas, but it should also include materials development and new methods of manufacture, distribution and logistics.
Always on Time
Marked to Standard
The younger generations are what we are shifting our markets to and the technology advancement are moving very quickly in the today world. What will be newly implemented is that we will create a website and also an application that can be downloaded through any smartphone, and customers, preferably the young working adults, will be able to surf through the applications and browse our products. In hope we can improve and increase our profits and selling power.
Environmental factorscan include issues such as limited natural resources, waste disposal and recyclingprocedures.
Our furniture requires natural resources such as wood and rubber. Previously after every production, the leftovers and wastes were being disposed. Through an intense investigation, there were cases whereby the previous manager was using illegal dumping method such as throwing the waste into the river nearby. This kind of act is intolerable in our company, and what changes will there be is that we will use the wastes and leftovers to recycle them. Through this procedure, we can create an image that we are an eco-friendly furniture company.
PORTER’S FIVE FORCES
Using the porter’s five forces, we can assess the potential for profitability and the balance of power in our situation that we are facing.
Supplier Power is the power of supplies to drive up the prices of inputs.
The suppliers that we are working with are still able to continue their business with us. As we are working our way to creating our products into unique and simple furniture, there are no significant increase of prices. Currently we have 7 suppliers providing us, this is a large number and we don’t have to worry about supplier’s power. Also we have been working with them for more than 10 years, the loyalty are what hold us and them together.
Buyer Power refers to the power of buyers to drive down the prices.
I understand that our products prices are higher compared to the competitors that we are facing. Through thorough observations, customers were evaluating different alternatives even though our furniture designs are unique. We can see that our buyer powers are few, so what changes we can do is that we will reset and plan the prices of our furniture again base on the cost price, in order to prevent ability of dictating terms.
Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.
Competitive Rivalry refers to the strength of the rivalries that an organization is facing.
We have currently 5 different competitors that are in the same market as us. In terms of prices and design, we are better in design because of the unique yet modern and simple furniture we produce. However the prices are the only thing that we have to work on to get a hold of regular customers and consistent profits. We have to work ourselves towards a ‘one and only’ position, so that we can achieve tremendous strength among our competitors.
Threat of Substitution refers to the extent to which different products and services can be used in place of your own.
As we are selling furniture, it is very easy for customers to find a substitution in our place. For example, if a customer is looking for a sofa, he or she can come to us or choose an alternative such as our competitors as they are also selling the similar products as us. We are weak in this area because substitution is viable.
Threat of New Entry is the ease with which new competitors can enter the market and if possible, drive our prices down.
In this area, we are stronger because of the qualities of furniture and the year and experience we have over the years. Currently there are huge economies of scale and our organization has strong and lasting barriers to entry. It is not easy for an organization to get into the market with supplies to produce furniture that provides qualities as what we do. We can preserve a strong position here and take fair advantage of it.
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Making the best possible use of people, money, physical plant, technology, and meeting goals which sustain a competitive advantage of our company is what I want to move towards to, an efficient and effective organization.
Planning involves setting future objectives and mapping out the necessary activities to achieve objectives.
I am aware that in America we are facing with a lot of competitors that are in the market selling the same product as what we are doing. However the competitors are producing products that are predictable and old fashioned. What I’ve planned is that we can stand out from the market. I am setting an objective that our designs are unique and at the same time keeping it modern and simple. Also, we have to keep ourselves flexible and adaptable so that we can keep up with trends and changes among the populations.
Organizing specifies on how a organization’s financial, informational, physical, human, and technical resources are to be arranged and coordinated.
As what I had said above about creating design that are unique yet simple, I would like to have the creative department to brainstorm and research on the designs that we can achieve. Also the marketing department can get information on our competitors, analyze on what we can do better to stand out of the market. While the finance department can keep track on our expenses, and maintaining it on our drawn budget.
Leading motivates people to contribute their best individually and in cooperation with other people.
I had come up with the monthly and yearly target that are of desire. If our retailers are able to hit the monthly target given, they are entitled to get a shared commission of 2% of the profits. Whereas if they hit over 10% of what was the target, they will get another 1% on top of the profit that they had already achieved. Through this method, I hope we can motivate the employees to work harder to achieve what we had set and to further expand our market to worldwide.
Controlling is to measure performance, comparing it to the objectives, implementing necessary changes and monitoring progress.
So far, our stores are not hitting the desired monthly target however they are close. With the new implementation of the commission that I had mentioned above, I am confident that the stores will be able to hit or even top it off the target by exceeding 10 to 20%. Another issue I had come across is the number of customer’s complaint we are receiving. As a high end furniture company, we should provide tip-top customer services. Customers deserve a service of what they are paying for. Store manager can provide a more serious supervision of the staffs in the shop floor, and maybe brief the staffs again about the target and improve ways of serving customers.
In conclusion of my business management plan, through the different analysis that I had made, predictions and decisions, I am very confident that our company can improve on our profits and making our way into a very efficient and effective organization. With the new commission reward that I had implemented, I believe our retailers and store managers can better sell our products, providing an excellent customer service so as to preserve customer loyalty. In addition, I hope with everyone’s efforts, we can work our ways towards the goals and see our company grow in profits, welfare, and benefits.