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The SWOT stands for Strength, Weakness, Opportunities, and Threats to an enterprise. The SWOT analysis is a very instructive approach to review the running situation of an enterprise.
"SWOT analysis is a method for assessing a business, its resources, and its environment."
"It is often completed as part of business and marketing plans to understand a business and its markets."
Based on the analysis, the enterprise is able to logically rethink about its organisational structure, and then enhance its strength, overcome its weakness, explore more opportunities and reduce the potential threats through three site specialised in makes certain product. So that the enterprise would become more profitable in the marketing competition.
The first quality of Premium Bedroom Furniture is as described as its name, "Premium". PBF is contributing to production of high quality bedroom furniture. The devoted specialisation of PBF is exactly one of the important factors to establish its premium brand in the market competition. From the perspective of organisational structure, the premier specialisation of PBF also has the advantage of its distinct departments.
"Strengths help to build up competitive advantage and serve as a cornerstone of strategy."
PBF's qualified specialisation is presenting the goal of its business, of providing excellent bedroom furnishings. For realising this goal, distinct departments could be simplified. For instance, the production management, personnel management and marketing management under the general management could be arranged. In this way, the economic performance of the marketing process, the optimal allocation of resources in the planning process and the specific skills of workers in the production process could be enhanced efficiently for their specific roles and objectives in whole organisation.
Apart from PBF's established good reputation and its high quality traditions, the manufacture system to provide range of products is also a good point for PBF to position competently in the market. As introduced in earlier, the PBF has three manufacturing sites, which are all located within a 30 miles radius. The average ratio of number between production staff and office staff in the three sites is 2:1 in site A, 3.5:1 in site B, and 3:1 in site C. (Site A includes the head office, so the number of office staff is higher than other two sites) The proportion of staff numbers between production and management is relatively rational and efficient, so that the production and office could maintain an effective basis for good teamwork. Furthermore, the various multiple products of PBF come from its specialised in manufacturing at the three different sites. Site A is producing wardrobes, chests of drawers and blanket boxes; Site B is producing wooden bed frames and bedside cabinets, and site C is manufacturing desks, dressing tables and stools. As for the product type in organisational structure, the specialisation of PBF based on its three manufacturing sites is able to maintain efficiently the division of work, and produce efficiently the specific products for the diverse and new marketing needs.
If PBF develop production is based on the three sites specialised in makes certain products that the organisational structure and the three locations also having cost in terms of transportation, the maintenance of manufacturing equipment, and the up-to-date skill training for staff to get used to the application of new manufacturing technology. The great amount of cost in the renewal of manufacturing equipment, technology and in the necessary work training is likely to heighten the overall cost of production. In turn the price of products would have to be raised. In this way, the higher price of product would reduce PBF's marketing competency and decrease its market share.
"Management should seek ways to reduce or eliminate weaknesses before they are exploited further by the competition."
The above weaknesses are also mentioned in the brief. Training staff for greater efficiency in production is necessary. Furthermore, all three production sites are quite old and need a great amount of investment to upgrade them to the level is required by health and safety laws. Consequently, PBF's products have become expensive over its competitors. The trade union is also in conflict between staff and the management; this has a serious impact on the company's teamwork and internal environment.
PBF has its weaknesses in its organisational structure, but it also exploring its markets and creating new opportunities. PBF has signed contracts with hotel groups to provide wooden bed frames and bedside cabinets for all of their hotels. The contracts are highly profitable to PBF. The provided products have become the company's best selling items. The sales to these hotel groups represent 8% of the total company revenue. In addition, other three hotel groups are talked to PBF, and showing their interest in PBF's products. This will be a greater opportunity to explore PBF's market and further enhance its brand in the successful sales results.
"An opportunity is any feature of the external environment which creates positive potential for the organization to achieve its objectives."
If staff failure to improve working practices could lead to rises in production costs and a decrease of market share and is likely to bring about a conflict between the trade union and the management. This is a serious threat to the company prospectively. We have to be aware that proposed structure change to overcome the current difficulties. In such a case, the conflict between management board and staff, between capital and profit would have a very negative impact on the goals of PBF's business. In addition, due to the management lake of accurate management information to help them made decisions that they cannot make useful decisions to operation and planning activities.
"A threat is any external development that may hinder the organization in achieving its objectives."
The conclusions of the SWOT analysis
Through the SWOT analysis of the current PBF Company, we have understood the strength of PBF is its high quality products, as well as its specialised range of productions. Its new opportunities lie with its contracts agreed already with the two hotel groups, and possibly from the further contracts to be negotiated with other hotel. As for its weaknesses, here are the challenges to upgrade skills of the production staff and renew the production equipment, because of the conflict between the trade union and management board and the need for a great amount of investment. Finally, the threat to PBF comes from the same weaknesses. The lack of poor internal morale would lead to loss of production and hamper the company's success.
For constructive organisational changes to the current situation of PBF, a number of changes should be covered by a general point; that is, to enhance the current strengths, to fill the weaknesses, to realize the opportunities, and to overcome the threats.
With the purpose of enhancing the current strengths, the high yield products and services must be maintained.
"You have to offer a new product or a service after every interval. It will not only help you to maintain the existing customers, but to attract new customers also."
"Actions to improve the quality of service should become part of the marketing action plan"
The management board should invest as much as possible in the renewal of manufacturing sites. Trainings should be undertaken so that production efficiency would be maximised. The production efficiency would be heightened through investment in upgrading manufacturing standards and work training becomes a tool to enhance production and quality of output. In other words, each of PBF's workers, costing time same as the working time before renewal, could become more productive. In this way, the actual output per product decreases, and profit is raised.
As for filling the weaknesses, my plan is to relate the geographic location of production of certain successful and high yield products to the type of wholesale customer. From this perspective, the relation of location could be type of customers; especially the geographic location of production could be changed for the profitable contracts with hotel groups. The best selling items for hotel groups, the wooden bed frames, and bedside cabinets, are also the most profitable products amongst all PBF's range. In this case, the organisational changes should attach importance to the wood and staff deployed optimally for the contracts. That is to say, the site B manufacturing the wooden bed frames and bedside cabinets should be upgraded with best production tools and management support. Compared to site B, the revenue of products from site C is the least in the overall revenue of PBF. Therefore, the production of site C could be downsized and transfer a number of production and management staff to site B in order to optimise the production of site B. 15 production staff and 5 office staff at site C could be reduced to 10 production staff and 3 office staff. The 3 office staff could be organised as a delegate of head office in charge of the specific production of site C. In addition, a number of staff at site A should be also transferred to site B. The current number of staff at site A could be reduced as 30 production staff and 15 office staff, including the staff in head office.
Through the organizational changes, the opportunities of the company could be realized. The number of new staff deployed in the three sites become 30 production staff and 15 office staff at site A, 50 production staff and 17 office staff at site B, and 10 production staff and 3 office staff at site C. Just like site C, the office staff at other two sites could be also arranged as three types: production management, personnel management, and marketing management. The production manager is responsible for the specific production at each site and the necessary upgrade of production equipments. The personnel manager is responsible for the training of staff, and taking care of the rights and interests of staff, especially in reconciling the conflict between the management board and the trade union. The marketing manager is responsible for exploring the sale of products from his or her manufacturing site, and feedback from customers. For example, the marketing manager at site B is in charge of the sales of wooden bed frames and bedside cabinets to hotel groups, and the feedback from the hotels. Apart from the delegate of management board at the three sites, the managing director at head office is responsible for the general situation of PBF's production, personnel and marketing.
The organisational changes to deal with the threats to PBF could be talked in two ways. The first way is to reconcile the conflict between trade union and management board by means of rewards. For example, extra vacation, or free vouchers and gift would be given to those who work hard and participate in retraining. The second way is to set up a computer-based network for the company.
The organizational chart:
TASK 5 (PowerPoint)
Any reform means to breaking up the conventional patterns, organisations or rules. It has its inherent risk. The risk is likely to bring about failure because the reform to change the conventional norms or organizations can lead to a rather negative result. In addition, what the reform is struggling for may be much less than what it costs. Therefore, as for those who are satisfied with the current situation, the reformative organisation seems rather risky. It is likely to change their currently satisfactory situation or lifestyle. In this case, a number of the staff of PBF would be neutral to the organisational changes. Furthermore, the organisational changes need a number of staff to be transferred from site A and site C to site B. This change will have an impact on the staff's current living pattern. For example, for the staff at site C who live around the factory for the convenience to working, the transfer of staff at site C would bring about conceivable inconvenience to their life. For dealing with this inconvenient situation, the company could arrange a number of free commuter buses to transport staff. In this way, the free internal transportation system would facilitate the movement of staff amongst three manufacturing sites.
"Although many employees are eager to sign up for commuter benefits, marketing commuter benefits to employee is a necessary element of a successful program."
(United Stated Environmental Protection Agency Office of Air and Radiation, 2005)
The work trainings of production staff will need them to work extra time. This will decrease their rest time, and impact on their leisure. In this case, dissatisfaction of the production staff with the organizational changes would be forthcoming. After all, the struggle for increasing profits as well as raising the market share should be the first two things to be considered by the management board. As for the majority of employees, what they firstly care about are their benefits, such as wages, rest time, vacation and promotion, rather than how to worry about the company's market share in their rest time. In order to deal with the contradiction between necessary work training and realistic rest time, we propose a comprehensive regulation to reward those who participate in the working practices. The rewards include not only the additional salary but the extra holiday time to hard-working workers. In addition, the rewards could be shopping vouchers or gifts. For example, the shopping vouchers could proffer free chances for production staff to consume in supermarkets; the gifts could be just the free furniture of PBF.
The reason why the staff is likely to resist the organizational changes is a basic contradiction in business culture. What enterprises or their business activities are concerned about is always profits. However, for enterprises to seek profits does not mean that they seldom care about their social responsibilities. In the business activities, the profits are indeed the basis but the employees and employers could also care about each other. From this perspective, the social responsibility and seeking profits can be mutually beneficial. The conflict between the management and the trade union can be reconciled as well. For realising the reconciliation, the first way is to build a business cultural matrix in order to persuade staff mentally, and enable them to treat the company as their own property, associating their mundane material life with the company. Through this way, the staff would rather regard them as the host of the company, and participate in the organizational changes voluntarily and actively. The company's development is intimately bound up with the promotion of the staff. The second possible way is an attempt to establish a welfare system for retirement and unemployment. This is also a useful way to reconcile the conflict between trade union and management board.
Significant costs are required to institute the computer-based knowledge system and operational system. The computer network to bridge the three manufacturing sites together should build for share information.
Management training for office staff should be carried out to enhance management efficiency
A full review of marketing should be implemented by the managers to summarise and conclude the market report, in order to provide up-to-date marketing information to decision-making process.
The production managers at every manufacturing site should carefully supervise the production process, and input every production error, equipment problems and inventory stock to the database of computer-based system.
The personnel managers should carefully supervise the behaviour of staff, including attendence, and how many staff will participate in work training. The result should be also recorded in the database.
All the managers at the three sites should be keep in instant touch with each other and the managing director at head office.
The head office should instantly process the information gathered from the three manufacturing sites to analyse the marketing data, compare the sales figures between one week and the next, and produce revenue figures based on assumption of the best selling items. Through these processes, a new way of planning control and operational cost and of exploring the potential market would be discovered.
Once a new plan is carried out, the managers at the three manufacturing sites should monitor the process all at times, and report instantly all relevant matters to the head office of the company.