Discussion of Changes in Business and Economy

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Introduction:

Changes are inevitable reality which is extreme essential too, to enable the life to flow ahead. This has been true for our economical system too. The vigour which backs the changes is well controlled and constant too. As have the changes occurred, the growth and progression took place in every section of life in which the utmost economical also includes. When changes take place in drastic form it calls transformation and each of these transformations in economy is known as eras which have been recognized with different names.

The very first economic trisection started in agricultural era when the very basic level of business transaction with the notion of profit and loss started. Before agricultural era, the transactions were taking place in form of exchange of goods according to individual' necessities. There is a long journey of economic transformation in which the world had passed through various eras like Industrial era, Technological era and the present Knowledge era. In present time, knowledge and information are considered as utmost significant aspect in business world.

After changes in economy, now we will talk about the significance of changes in business. If the changes did not take place in business operations according to the requirements the economical transformation never had take place. Now we will discuss the present economic scenario which has created a situation in which every business organization has to exercise to implement the changes, to avert from its impacts. For that we will take the Super market industry as a background.

LO 1.1:

Supermarkets have been very significant portion of not only U.K.'s economy but most of the entire developed nation's economy. Talking about U.K.'s economy, they generate more than 8% income of the total revenue of the economy which is the enough justifiable reason that why the supermarkets, their systems, their trends, influence the life of the people. All these aspects of the supermarkets get affected by the internal and external business environment changing factors. External changes apparently leave more impacts particularly the types of environmental, of fashions, political, technological, economical etc..

Among all of these, some may prove beneficial such as the instability of the environment, changing fashions and positive economical trends boost the gains while some negative economical impacts such as the recently ongoing recession which has diminished the businesses of the supermarkets drastically. Most of all are facing the deteriorating profit state and some have compelled to shutting down the shutters. Woolworth is the biggest collapse in recent supermarket history while Waitrose's new "Essential Line" suggests that supermarket industry is striving for cutting down the cost.

LO 1.2:

Bureaucratic organization:

The most significant feature of the bureaucratic system is line of command, authority and responsibilities. As per this feature there is a different section from top to bottom and on each section there is a clear distribution of the responsibilities which remains same as decided and the command gets higher on each up to the top.

The strengths:

The employees are abiding to follow the organizational guidelines in which there is a clear description of the responsibilities and authorizations which they have to follow while doing their jobs. In this context there is no space of confusion for work and the responsibilities which is the considerable strength of the bureaucratic system. The structure divided into divisions is another influential strength as by using it the comprehensive task can be converted into smaller and less complex jobs.

Weakness:

There is enough background for no development of the sense of accountabilities in employees as with this design of system they strictly remained concerned with their own works and responsibilities and never incline to think further beyond that. In any case if any of them think so, there is no space for him or her to do so due to the restricted power and bit orthodox system structure.

On the whole, the same characteristics of the bureaucratic organizations which provide the platform for strengthening the business, provides the platform for weakening it as well. The system could prove ideal if it is implemented with its heart, by right people and with right intention. Though it is a very ancient form of business system, in many giant business houses it exists and produces tremendous outcomes.

LO 1.3:

There are various models applied to make the alteration in business management among which Kaizen is basically Japanese approach but has been accepted wide in the world. The Kaizen model refers to the continuous modification in management which has been adapted in various business organizations worldwide with the suitable alterations according to their cultural and geographical surroundings. In simpler language it can be said that the Kaizen is one of reorganizing and re-systemizing all the segments in the system in order to bring the maximum effectiveness in it. It emphasizes on identify the problem and endeavor on to find out the best option to improvise those areas.

In this case as well, with the help of Kaizen model, the issue for Lidl can be identified that, in its usual terms supermarket is the saturated market. Subsequent to the problem identification is the plan out the problem solution process which has been discussed as under.

Options for modification in management strategies:

All the external changes affect the supermarkets in one or another way but the type of changes which can affect the most are the economical which has been proved by the ongoing recession. Economies of many developed countries saw a drastic fall and then have been stagnant due to the recession. Supermarkets of U.K. also are not an exception in that. Though these effects cannot be removed thoroughly but can be diminished if some sensible and committed endeavors are introduced. They can be benefitted to an extent if some modifications on different levels are introduced. Until now it has seen that the supermarkets attract the consumers by involving various offers on different items such as buy 1 get 2or three and so on. I suggest them that they must involve the innovative way in such offers such as they can collaborate with the holiday Makers Company or clubs and introduce the type of scheme that on the purchase of specific amount within specific periods the buyer will be gifted a holiday stay for specific period at any of the collaborator club's venues. Supermarkets can make some renovation in infrastructure and products ranges of some specific divisions such as children zone or the old age people zone. The product ranges should be more specified for different markets in terms of customers groups. By doing this, they can bring some variation in the ways of market positioning and get publicity, more footfalls and eventually increase in sales.

Advisable changes in current scenario:

They can opt for introducing the Online Selling and home delivering facilities for the buyers which will reduce lots of problems for consumers as in hectic life routine it is getting more and more hectic. In fact, though all the other changes are rationale enough, this one is the best option considering its long term and extensive positive effects. The reasons are simple enough to understand that as at first place the online selling system is easy to set-up and not much expensive for the organization and at second it is far more convenient and time saving for the consumers. Hence the supermarkets must ponder in this direction in order to bring some momentum in their sales activities.

LO 2.1:

Introduction of Lidl:

Lidl is the European supermarket chain having its considerable business in U.K. and in number of other countries as well. In 1930, it originated in Germany as a grocery wholesale business unit which now has expanded into more than 380 stores in all over Europe. Although Lidl has organized its business to be able to have steady progress, still until now there has not been seen the aggressive competitiveness in their approach. It's steady but very slow progress there must be some improvements in their strategies and operations and they must think about getting position in the top list of supermarkets.

At first place we will discuss the changes that Lidl should introduce in its system and how they will be segregated. The market development process will be divided into two parts in which the first part will be the development of Online Selling System and in other part there will be development of other uncultivated markets.

Modification Plan:

There would be two types of changes implemented in Lidl; Online Selling System, Modification in product ranges according to demands of the unexplored markets. Hence there would be two plans to serve two major changes.

Plan 1(On- line selling system):

According to plan, in its first part, there would be introduction of the most significant change is on line shopping. Along with online shopping there would be facility of home delivery for online buyers and both this will be served on minimal charges of £3 on each delivery. These services will be provided on the bills above 60 pounds.

According to plan 2, to develop other uncultivated markets, the plan is divided into three segments.

Plan 2 (Modification in product range according to demands of potential market):

The second plan will be divided into four phases which are detailed under.

Information accumulation:

In second part which will be divided into four parts, the first part will be to build the grounds on the bases of information. The information is required to have an idea about the uncultivated markets and will be collected by demographic study. The tool of demographic study will be used to know the requirements of the people for which they have to do adjustments or they have to choose option other than the supermarkets. The research will be hand over to the external professionals who will carry out it in vicinities of all the outlets of the Lidl.

Analysis of data:

In second part, the collected information will be analyzed. Firstly the aim of the analysis will be to find the common requirements of the people which are uncultivated by the supermarkets and which are higher in numbers or in other words which can prove profitable for supermarkets.

Concentrate On More Potential Markets (Customers' Group):

One market has substantial potential but still has been unnoticed which is the people above the 50. In recent time it had became clear that the most powerful age groups in numbers is this group. So first target for Lidl is this market segment. The second step will be to modify the product range on the bases of the information collected. The new product range will be developed with core concentration on the specific demands of the people of various origins.

Stakeholders of the changes & their role:

Before involving any crucial change, the crucial stakeholders for any organizations must be considered.

Employees:

Employees are the key aspect in any operation of the organization, particularly for introducing changes hence without their shrewdness, dedication, and intense efforts any plan could not achieve anything.

Knowing the significance of the employees' role in deciding success of these going to be introducing changes they will be groomed to accommodate with comfort and confidence in these changes by providing them systemic guidance. They will be provided the sole knowledge of the online selling system, other fresh products and customers' requirements.

Consumers:

All these exercises have done to attract customers only, as they are the most crucial stakeholder.

Market positioning process will be handling in a way that customers' perceptions will be full of the products and services of Lidl. The promotion process will be held aggressively with the considerable use of smart and reliable advertising sources. Launching process for all the new products will be aided by introductory offers. Advertisements on Tele-vision, net, newspapers and broachers will be designed in a special way to enable it to leave excellent image on people's perception.

Suppliers:

Suppliers have significant influence on business as they can create problem if they do not send the quality items or do not provide desired goods on desired terms.

The existing suppliers' chain and new suppliers in the market will be explored to have compatibility in quality standards, price, delivery timings and terms for all these. For some products the organization might have to choose import option.

Competitors:

Competitors always have great impact on business with their strategies, their product, their credibility product's price etc. Even their operations standards also can influence and if they imitate the policy with better performance, it could be big issues for Lidl hence Lidl have to be careful after introducing these changes.

This situation can be handled with good operational standards and having the initiative of brining uniqueness in supermarkets' operations.

Task 2.2:

Evaluation:

Plan 1:

To move from the stagnant position, the proposed changes will be the great move and provide an organization a chance of moving with comparatively low expense. The most aspirative change online shopping system will enhance its customers circle at considerably low expenses. At initial stage, there would be some investment, though this is a comparatively cheaper and effective way of enhancing market than opening too many outlets.

For the people who really struggle in managing their time for various activities this will be the best gift. For the purchase of some house hold commodities for daily requirement, people will welcome it more than happiness, as for those things they will have to spend more than 60 £. They need to plan out their requirements in return of which they will reduce great burden of going personally to the supermarket.

Plan 2:

New market as well as new product range developments in terms of the specific customers' groups who have same demands in an innovative way with better performance will definitely benefit the organization.

We know, that still there are many commodities, for which either people have to find other sources or they have to do adjustments without those things. The aim of this plan is to identify those items and the specific markets in terms of group of people having similar demands. As with these identifications even if Lidl concentrates on the highly demanded items, of those groups there would be drastic growth in its profit and competitive edge.

Although, all the suggested changes are innovative and reliable, if not implemented with required efficiency can turn in fiasco. The management must understand that employees and consumers are the two decisive factors which will decide the future of these changes and must be treated with due respect.

LO 3.1:

In business world, there has been constant research in the direction of finding the preferable models of organizational changes. They mainly concentrate on the mode of changes and on the phases of changes. In most times organizations choose the model which suits to their background and requirements. According to Dunphy and Stace the organization should opt the model which can be varied according to the situation and bring maximum results as the requirements for different organization used to be different hence not a single method can be applicable to every organization. In other words it can be said that they emphasize on constant monitoring on implemented change and the surrounding situation to examine the effectiveness of their overall applicability.

Considering their significance in managing changing process, it becomes necessary to discuss here. There are various models which have been developed to provide the framework for the process of organizational changes such as Judson, Kotter, Cumings and Huse, Bullock and Batten and so on. Though the significance of the Lewin's model is still untouched as many of other models too depend upon it, hence in this task it has been adopted for introducing new changes in organization.

Lewins' model for managing changes in the organization emphasize on three different situational phases;

Unfreezing: This situation can be achieved by adopting psychological approach or in other words adopting various motivational approaches or leadership approaches for new operations or changed organizational operations' framework.

Moving: In this phase the focus used to be on the changed organizational behaviors or culture which includes the change in departmental framework or operational frameworks too. Apart from that it emphasizes on modifying the structure by with modification in processes along with introducing new behaviors, principles.

Refreezing: In this phase, in emphasize used to be on stability of the performance with modified organizational model with above described means.

LO 3.2:

Strategy for execution:

Now as the plan for changes is ready, it is time to lay out the execution process which will be divided into various phases.

Plan 1: (4 weeks)

The foremost target will be collecting data to know the numbers of people, which region they belong to, numbers of people belong to which regions, their habits, their requirements which are unavoidable and they have to go elsewhere than supermarket. All these data will be accumulated for the people living nearby areas of the Lidl outlets. To accomplish this task the professional research company will be consulted.

Analysis of Data: Analyzing work will done by Lidl administration team itself though the analysis provided by Research Company will also be considered. Number of Old age people and their problems while shopping and their requirements, difference of requirement due to difference of origins, prime requirements affected by regional habits etc. will be the key areas of interests for precise analysis.

Budgeting: Along with data collection, this budgeting is the must be done activity which will be done by finance department. It will decide the cost for each activity such as from system development to support online shopping, cost of shortlisted articles and promotions.

Exercise for Ideal Suppliers: Existing supplier chain and other preferable suppliers will be approached to know their standards for quality, and terms and compared by tenders.

Recruitments:

There will be the requirement of the skilled employees for setting and executing On Line is Selling System, the skilled employees will be recruited by the HR department.

PLAN: 2 (6 weeks)

Pre-requirement:

Due to the enhancement plan of product range, it becomes essential to eliminate the less significant products from product range which will be the responsibility of Stock department.

Segment 1: (2 weeks)

Placement of Purchase Orders:

As all the background preparations have been done, the purchase manager will place the orders for required numbers of quantity and desirable quality to preferred suppliers.

Training and coaching:

This stage is very crucial to determine the success for this proposed changing plan. Employees resulted from new recruitments and the existing staff will be provided the complete knowledge of the changes in products and system

Segment 2: (2 week)

Advertisement Campaign:

From this point the work of marketing department will start and on initial stage it will aim to make aware the people regarding the proposed changes which are going to be introduced by Lidl and in later it will be aggressive for emerging impressive image of Lid.

Segment 3: (2 week)

Evaluation of first three weeks performance:

The management will assess the performance standards and the responses on different branches with the help of various assessment tools like customers feedback through net and on spot distributed and collected forms. Customers' suggestions will be taken seriously and if possible will be involved in changes.

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