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A strategic business analysis evaluates a companys position, internal strengths and weaknesses, and external threats and opportunities. As a Strategic Business Analyst (SBA) an individual is responsible for performing complex data analysis. SBA supports the success of business by providing data-driven strategic recommendations that guide decision makers in the decision making process.
Explaining strategy in simple words refers to the action/ method/ trick/ technique/ direction one would adopt in achieving a certain objective. For business purposes, objectives are usually more precisely defined using numerical values - 10% increase in sales in the next year could be an example of a business objective (sales). Objectives differ depending upon the conditions one may find himself in and therefore would result in the adoption of varied strategies. In a football field the formation of on-field players like 4-4-2 could be a part of the winning strategy, changing interest rates by the fed or the central bank could be a part of an economic strategy. (Kumar)
Strategies are long term directions of an organisation that define the way in which competitive advantage over competitors shall be achieved. One needs to fulfilment the stakeholders' expectations, keeping in mind the organization's strengths and weaknesses. The process of developing strategies is a tedious one and requires concrete analysis of many inter-related factors. It is extremely complex and has an inherent uncertainty about its conception. (Kumar)
Meaning and Introduction:
The definition of business strategy is a long term plan of action designed to achieve a particular goal or set of goals or objectives. Strategy is management's game plan for strengthening the performance of the enterprise. It states how business should be conduct to achieve the desired goals. Without a strategy management has no roadmap to guide them. (Steward)
Strategy is plan designed to achieve certain goals and objectives for a long term. It helps to strengthen the performance of an organisation by following a specific game plan. A strategy acts as a guide to management on how to run the business in order to achieve the desired results.
A strategy is a plan of action designed to achieve a particular goal. The word strategy has military connotations, because it derives from the Greek word for general. Strategy is distinct from tactics. In military terms, tactics is concerned with the conduct of an engagement while strategy is concerned with how different engagements are linked. In other words, how a battle is fought is a matter of tactics: the terms that it is fought on and whether it should be fought at all is a matter of strategy. Military strategy is the overarching, long-term plan of operations that will achieve the political objectives of the nation. It is part of the four levels of warfare: political goals, strategy, operations, and tactics.(Wiki)
Types of Business Strategies
There are several types of business strategies implemented in business environment.
The following types of strategies have been recommended by management experts:
1.Â Â Â Â Â Â Stability Strategy:
An organization that has a stable environment, limited number of products, customers, suppliers and competitors, minimum need for special skills and so on may follow what is called the 'Stability Strategy'. Such an organization is satisfied with its existing level of activities and wants the same to continue.
2.Â Â Â Â Â Â Growth Strategy:
An organization that wants to raise its level of performance may adopt what is called the 'Growth Strategy'. The following measures are usually adopted by such an organization:
Different Kinds of Business PoliciesÂ
(i)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Development of new products for the existing markets.
(ii)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Creation of new uses for the existing products, and
(iii)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Development of new products for new markets.
3.Â Â Â Â Â Â Vertical Integration Strategy:
A business enterprise itself may decide to produce the raw materials needed for production to ensure continuous supply. On the other hand, it may also decide to start its own sales outlets to serve its customers better. In either case, the strategy is known as the 'Vertical Integration Strategy'. (Kalaiselvan, 2009)
4.Â Â Â Â Â Â Merger Strategy:
It is also possible that identical business units may combine to rationalize production and sales and thereby derive the benefits of economics of large-scale operations. This is what is known as the 'Merger Strategy'.
5.Â Â Â Â Â Â Product Elimination Strategy:
A business unit may also eliminate products that have become unpopular with the buyers and bring only losses. Such unsuccessful products also damage the image of the business. Thus, the 'Product Elimination Strategy' may be adopted by a firm to avoid loss of profits as well as reputation. (Kalaiselvan, 2009)
Strategy at Different Levels of a Business
Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.
Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement". (Tutor 2u)
Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.
Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc. (Tutor 2u)
How Strategy is Managed - Strategic Management
In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above. (Tutor 2u)
In practice, a thorough strategic management process has three main components, shown in the figure below:
Strategic Analysis is the process of analysing the strength of businesses and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools like PEST, SWOT, etc.
This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.
Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action. (Tutor 2u)
â€¢ How strategy can be constructed and carried out effectively, even by small businesses
Strategy for Small Business
Business Strategy needs to be your strength, if it isn't your strength, your small business will not last very long. To get everything you need for your small business to attract and keep visitors and generate income, normally requires a great deal of effort, investigation and focus.
Small businesses small because they are generally start-ups,. All big companies grow from small projects and business e.g. Hewlett-Packard or Apple Computer began as the proverbial two men in a garage. But the great majority of small companies, even if they survive, never grow beyond sapling size this is because one reason, their owners lack the professional abilities to manage much more than one shop or workshop. (Heller)
The difference between successful CEO of a big company and the proprietor of a single cafe and between large business and small is ambition. However ineptly a big company sets about the task, its managers expect to grow sales and profits. They often fail, sometimes miserably, but their motto is onwards and upwards. Small business owners may settle for staying put - a perfectly legitimate choice. . (Heller)
Strategic thinking is the driver of strategy process. Thinking deals with the initial concept or goal of 'Where the organisation wants to be? 'Every organisation either small or big, should clearly lay down its purpose i.e. the purpose of existence of the organisation. Strategic Thinking forms the core element of strategy making process. It combines the vision of the future with the intent to make that vision a reality. There are four steps for strategic thinking :
It is to identify the Goals. Is to be aware of the challenges and acknowledge their importance. the strategists have to think about what is a goals in our organisation?
To understand the goals and its underlying effects. Think about what is the nature of the goals? Second task is analysing reflecting on the goals.
To deal with strategic goal, strategists must come with a potential path. If paths are more than one then strategists must select the most promising solution. This activity is also part of path because in this activity strategists think about the way to achieve the goals.
A strategic goal is only really achieved once concrete actions are under taken. Strategists must therefore carry goals achieving activities and evaluate whether the consequences.
Strategic Assessment provides relevant knowledge about the strategic context. It deals with 'Where is the organization now?' The strategic assessment anchors future to the current realities. It addresses both external and internal aspects of the context so that the organization can identify the gaps and suitable strategies will be crafted to achieve the strategic intent. Henry Mintzberg (1976) discovered that "strategy formulation is not a typical a continuous processes". It is most often an irregular, discontinuous process, proceeding in fits and starts.
Strategic Choice is the link to action. It deals with 'Which options will organization choose for getting'? And 'Where organisation wants to be from where it is? In the ultimate analysis the strategic choice should resolve the strategic issues posed by the context. The process of choice could be divided to four steps- Identify options, evaluate the options against selected criteria, choose the best option and Take action. This process is more analytical and requires skills of different disciplines for obtaining the best option.
â€¢ The value of using key analytical tools to help in the strategy-making process
Analytical tools used for Strategic Analysis
The following are some of the tools used in Strategic Analysis:
Scenario Planning - A method which visualises various scenarios in future
Market Segmentation - An approach which classifies the Market into different segments or sectors depending on the similarities and /or differences in a group
P.E.S.T Analysis - Stands for Political, Economic, Social, and Technological factors that affect external macro environment of businesses.
Competitor Analysis - This is a effective tool which helps in analysing the competition in the market, who are the competitors what are they offering at what prices etc.
Critical Success Factor Analysis - highlights those areas which need more focus and attention in order to succeed in a competitive market. (Tutor 2u)
Successful companies cite analytic tools as a key element of their business strategy
Large companies and enterprises are increasingly investing in analytics technologies, such as customer relationship management, data warehousing and business intelligence software, and investments in these technologies are paying off, according to new market research. Successful companies believe analytics as a key element of their business strategy. These companies, compared to lower-performing ones, also have more sophisticated analytical tools and technologies, value analytical insights more and have better analytics than their competition. (Gohring)
In a survey conducted by Accenture, 55 percent of managers has some analytical capabilities and 19 percent had significant analytical capabilities that came from integrated enterprise system information. By 2009, 74 percent of the companies had some analytical capabilities and 33 percent had the more significant capabilities. The companies had also plan to implement more enterprise tools and techniques in the coming years. (Gohring)
Analytical tools give meaning to data:
Analytical tools give professionals the option of examining the data they collect so they can help top management make sound business decisions. A lot of business use software for analysis but software experts and HR practitioners agree that technology is no substitute for sound business expertise. While analytics are becoming an integral part of many companies, some industry observers wonder whether companies are ready to exploit the technology, because practitioners may be locked into the habit of simply collecting data. Those who break out of that mold can use the tools to determine whether the business fits the company's business strategy and vision
â€¢ How to apply such tools to the particular business context.
Strategies do not work on their own. Shank and other suggest that many management systems come up short because they focus too narrowly on measurements and results. Measurement is not management, as they put it. Instead, they argue in favour of the Booz-Allen system, Performance Management, that continuously analyzes decision-making and draws on intra-company relationships rather than delivering a bald account of good or bad results. Companies fail to achieve full potential. By managing the real drivers of performance they will gain better results and their decision-making will improve.
(Shank and all)
A small business will need to incorporate a number of effective tools and processes that focus on linking operating decisions to financial performance. The tools are upgraded as the business evolves - and its information communicated to all levels of management. Among its attributes are the capturing of knowledge across business which enables managers to emulate the successes of the best performers. In essence, therefore, a useof analytical tool goes directly to the heart of a company's behaviour.
(Shank and all )
All business leaders and managers use analytical tools and techniques. This helps them analyse complex data. Break them into reports and charts, these reports and charts helps them to consume the data. This has a tremendous impact on critical business decision making.
These Tools and systems that provide managers with the systems and data needed to manage the performance of an organization are referred to as Corporate Performance Management (CPM) or as Business IntelligenceÂ (BI). These systems aim to collect all relevant business data, track key performance indicators, provide data analysis in the form of charts and track data through real-time dashboards.( Industry Canada)
CPM takes a practical approach to the implementation and monitoring of business strategy. It combines business methodologies such as scorecards, economic value added (EVA) and activity based management; metrics that are the specific measures used within those methodologies; processes, which are the procedures that an organization follows to implement and monitor corporate performance; and systems, which are the technology solutions that combine the methodologies, metrics, and processes into a single enterprise-wide management system. (Coveney)
Â Â Â Â Â Â Â Â Â Â Besides consisting of a single application, CPM differs from other approaches to performance management. In Performance management it leverages both technology and best business practices to help executives answer the key questions around the formulation and implementation of strategy. CPM enables a closed-loop process that starts with understanding where the organisation is today, where it wants to go to, what targets should be set, and how resources should be allocated to meet those targets. After planning id done, CPM then monitors the performance of those plans, highlights exceptions, and provides insight as to why they occurred. CPM supports the evaluation of alternatives from which decisions can be made -- which then closes the loop by leading back to deciding on where the organisation wants to go. (Coveney)
Â Â Â Â Â Â Â Â The formulation and implementation of strategy, is done by application of CPM, which begins by integrating enterprise-wide planning, budgeting, forecasting, consolidation, reporting, and analysis. CPM supports methodologies for linking strategy to the allocation of resources (financial and non-financial) so that strategies can be transformed into action. A CPM application enables executives to communicate and drive strategy down throughout the entire organization in a way that helps people act and make decisions that support the strategic goals. Finally, it helps members of the organization focus on key issues and critical data, rather than on all the data and events that are possible. It delivers the right information to the right people at the right time in the right context.(Coveney)
The important goal of Tools and Techniques is to integrate business intelligence data into a single system for the purpose of providing improved insight to senior management who can use this system to manage business strategy on an ongoing basis.Tools can have a tremendously positive effect on a business as managers become empowered to make decisions on real-time data. However, data must be used carefully. ( Industry Canada)
Meaning and Definition:
SWOT analysis is a basic technique that is often used in strategic planning, improving company success, organizational development and identifying competitive advantage. This article explains the SWOT (Strengths, Weaknesses, Opportunities, and Threats in a straight-forward way everyone can understand (Swinton)
As with most management models, the clue is in the name
S = Strengths
W = Weaknesses
O = Opportunities
T = Threats
The SWOT Matrix Explained
All the best management models have four quadrants, and the SWOT matrix is no exception. You use each of the four quadrants in turn to analyze where you are now, where you want to be, and then make an action plan to get there.
Regardless of future planning for specific products, work, personal or any other area, the SWOT analysis process is the same.
Step 1 - In the here and nowâ€¦
List all strengths that exist now. Then in turn, list all weaknesses that exist now. Be realistic but avoid modesty!
Step 2 - What might be
List all opportunities that exist in the future. Opportunities are potential future strengths. Then in turn, list all threats that exist in the future. Threats are potential future weaknesses.
Step 3 - Plan of action
Review your SWOT matrix with a view to creating an action plan to address each of the four areas. (Swinton)
Strengths need to be maintained, built upon or leveraged.
Weaknesses need to be remedied or stopped.
Opportunities need to be prioritised and optimised.
Threats need to be countered or minimised.
If SWOT is used in a business context, it helps you carve a sustainable niche in your market. and in a personal context, it helps you develop your career in a way that takes best advantage of your talents, abilities and opportunities
The Key Distinction - Internal and External Issues
Strengths and weaknesses are Internal factors. For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product.
Opportunities and threats are external factors. For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a company's products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete.
it is worth pointing out that SWOT analysis can be very subjective - two people rarely come-up with the same version of a SWOT analysis even when given the same information about the same business and its environment. Accordingly, SWOT analysis is best used as a guide and not a prescription. Adding and weighting criteria to each factor increases the validity of the analysis. (Tutor2u)
Your specialist marketing expertise.
A new, innovative product or service.
Location of your business.
Quality processes and procedures.
Any other aspect of your business that adds value to your product or service. (Marketing Teacher Ltd)
Lack of marketing expertise.
Undifferentiated products or services (i.e. in relation to your competitors).
Location of your business.
Poor quality goods or services.
Damaged reputation. (Marketing Teacher Ltd)
A developing market such as the Internet.
Mergers, joint ventures or strategic alliances.
Moving into new market segments that offer improved profits.
A new international market.
A market vacated by an ineffective competitor. (Marketing Teacher Ltd)
A new competitor in your home market.
Price wars with competitors.
A competitor has a new, innovative product or service.
Competitors have superior access to channels of distribution.
Taxation is introduced on your product or service. (Marketing Teacher Ltd)
SWOT of Making it Big
'Makeing it Big' is a company which is into manufacture and retailing of clothing for large and supersize women. Cynthia Riggs is the whole and sole of the business, she is the one who founded the company and now works as CEO of the MIB. MIB formed as partnership firm. The was partnership between Cynthia and Janet. They started business was started with a small capitalin the year 1984. The business runs with the operating strategy of Direct marketing and sales. The mode used for the this strategy is male orders. This mail orders contributes to major sales of the organisation. After a while Cynthia became the sole owner of the business.
accessories which included jewellery, scarves, shoes and hosiery.
Modes of Retailing:
MIB has 5 members in top management team :
Cynthia Founder and CEO
Bridget General Manager
Sharon Production Manager
JoAnn Office Manager
Cindy Retail Manager
After 2001, sales of the MIB rapidly went down and in 2002 it was down below the assumption.
One of the biggest strengths for MIB was their product design which had four main categories
Casual Sports Wear
Earlier the plus size clothing were available mainly in traditional Black, Navy, Maroon, Making it Big brought a different range of colours in the plus size clothing in more larger sizes up to 28 and above which previously was restricted in the range of 14 - 24
Comfort and Quality:
All clothing manufactured by Make it Big is double checked at every stage of manufacturing in order to ensure that the fitting and Quality of the product is as per the requirements and needs of the customers. This particular attribute helped in building the goodwill of the company and also enhanced customer patronage and loyalty resulting in repeat orders.
MIB's adapted various sales approach - Mail Order, Website , Retail sales, Fairs, radio, newspaper etc. But of all their House parties was a unique method of selling which contributed a lot towards additional sales. These house parties were a great success because it was a new way of bringing the goods to the customers.
MIB targeted the Plus-Size market with its varied product lines, Colours, and most important Large Size women clothing from size 14 to size 28 and above, According to a research company NPD 60 percent of American women wore size 12 or larger and 16 percent of teenage girls were overweight. Over 1/3rd of large women purchased their clothing from speciality stores exclusively for plus size clothing. This gave MIB a good share of prospective customers in the American apparel market.
MIB operates with a a very cost effective advertising program.their advertising is very low cost. Media used for advertising word of mouth and trade shows. These are very cost effective media as word of moths is free and very effective media. This has been working well for MIB.
Staff and Employees:
MIB has a very dedicated team of people working and thus covers most areas of business. All staff including the founder CEO Cynthia Riggs is very dedicated to their work and play a very significant role in the growth of the company.
Lack of Marketing Expertise:
MIB lacks Marketing expertise resulting in decline in sales, currently the company does not have anyone responsible for the marketing of its products.
Location of business:
MIB has a retail outlet located in California, It is a major weakness as other geographical areas and localities are neglected. Exhibit 6 clearly shows that 60% of the sales in U.S for Women's apparel are generated through Speciality stores, Discount stores and Department Stores.
The current managerial staffs at MIB is a mix and match of Skill sets and specializations, but they have their own strengths and weaknesses which when analysed bring out the fact that the right person is not appointed to do the right Job.
Products of MIB are not very well known brands in the market as compared to that of its competitors. The competition has a very recognised brand as compared to that of MIB. Thus the product has a weakness as brand name in the competitive market.
With the departure of General manager Bridget in October 2002 CEO Cynthia Riggs is now the sole decision maker in the company which adds a lot of additional work and responsibilities only to one person leading to Stress, Wrong or single sided decisions without consultation or review which might lead to overall failure of the business.
Strategic Plan and Direction:
MIB does not have a clear Strategic Plan and direction in place, it started with a Aim and mission to provide a variety of clothes to women in the Plus Size segment, but there is no plan or strategic approach to continue and develop the business.
Product remodelling and Diversification:
MIB's product line needs more diversification and a bit of remodelling that is fresh designs, more variety, consumer preferences etc.
Comprehensive Customer List:
Most of the customers on MIB order list are old and this needs to be refurbished. New customers must be added in order to improve sales. Prospective customers must be added to the list and approached accordingly.
We shift our focus to external factors when we look at opportunities. Here we try to identify areas of business we think the company is looking to enter, or should be looking to enter. We also look for opportunities to gain market share from competitors, or grow the company's market to new customers.
But there are more than just external opportunities. There are opportunities within a company that should be considered. Can the company combine product lines to increase sales? Maybe the company has duplicate costs that can be streamlined. Companies can always find ways to do things better.
Some opportunities to look for:
New markets for products
Financial or legal trouble for competitors
New technologies the company could adopt
Changes in regulatory / tax burdens
New markets for products:
MIB can explore new markets in other states thereby improving the sales and geographical coverage throughout America.
Better Distribution Channels:
Apart from Mail Order, Retail Outlets and House parties, MIB has an opportunity to introduce new distribution channels for e.g Franchise showrooms, Tie ups with Major chains, Fairs and Exhibitions etc.
With the available monetary resources MIB can do some planned investments in areas of Manufacturing, Brand Recognition, Marketing Surveys, Road Shows, Fashion Shows Contests, to name a few.
MIB can focus on developing Vendors who supply the raw materials accessories etc as per their custom made business and market requirements.
MIB can consider merging with a super market for better market penetration. This will help it to increase its customer base and create anational presence in the national market, which is very weak at the mement.
Finally, we need to consider threats to the company. Again, threats can be internal as well as external. In fact, I've found that internal threats usually come first, which opens the door to external threats. Therefore, it's important to do a good threat analysis.
Internal threats aren't usually classified as such, which I think is a mistake. Any internal problem is a threat to the company's well-being and should be evaluated alongside the external threats. For example, a company that relies on developing innovative products, such as Microsoft or Intel, faces the threat of losing engineering talent every day. This is an internal threat that could easily pave the way for external threats.
Some possible threats are:
Internal obstacles the company is facing.
Financial constraints on the company.
Cash flow problems.
The relative position of the company's largest competitors.
Technological advances in the industry (if the company isn't keeping pace).
New technologies that threaten to displace the company's products
MIB faces a very tough competition in the existing women's apparel market with some of the big Retail chains like Charming Shoppers Inc, Lane Bryant, Catherine's Plus Sizes etc. Also Leading brands such as Tommy Hilfiger, Old Navy have launched their Plus Size apparels and are gaining popularity and attention.
Introduction of latest improved technology is also a threat which MIB faces, The competitors have access to technology in terms of computerised Inventory and stock Management, Comprehensive customer Database, Accurate billing solutions etc.
Financial constraints on the company:
MIB's financial resources are very limited as compared to its competitors. Financial restraint hampers the growth of the company and thereby restricts influx of new technology and diversification of risk.
The company is facing certain internal obstacles in the form of Adequate Management Staff, Lack of Specialists, Defined strategy, Professional advice.
Capabilities and Competences
Capability-based strategies are based on the notion that internal resources and core competencies derived from distinctive capabilities provide the strategy platform that underlies a firm's long-term profitability. Evaluation of these capabilities begins with a company capability profile, which examines a company's strengths and weaknesses in four key areas:
Then a SWOT analysis is carried out to determine whether the company has the strengths necessary to deal with the specific forces in the external environment. This analysis enables managers to identify:
external threats and opportunities, and
distinct competencies that can ward off the threats and compensate for weaknesses.
The picture identified by the SWOT analysis helps to suggest which type of strategy, or strategic thrust the firm should use to gain competitive advantage.
Stalk, Evans and Schulman (1992) have identified four principles that serve as guidelines to achieving capability-based competition:
Corporate strategy does not depend on products or markets but on business processes.
Key strategic processes are needed to consistently provide superior value to the customer.
Investment is made in capability, not functions or SBUs.
The CEO must champion the capability-based strategy.
Capability-based strategies, sometimes referred to as the resource-based view of the firm, are determined by (a) those internal resources and capabilities that provide the platform for the firm's strategy and (b) those resources and capabilities that are the primary source of profit for the firm. A key management function is to identify what resource gaps need to be filled in order to maintain a competitive edge where these capabilities are required.
Several levels can be established in defining the firm's overall strategy platform (see figure).
At the bottom of the pyramid are the basic resources a firm has compiled over time. They can be categorised as technical factors, competitive factors, managerial factors, and financial factors.
Core competencies can be defined as the unique combination of the resources and experiences of a particular firm. It takes time to build these core competencies and they are difficult to imitate. Critical to sustaining these core competencies are their:
Durability - their life span is longer than individual product or technology life-cycles, as are the life spans of resources used to generate them, including people.
Intransparency - it is difficult for competitors to imitate these competencies quickly.
Immobility - these capabilities and resources are difficult to transfer
MIB is a small but growing company and after doing the above S.W.O.T Analysis. I can see that there is lot of potential in the company's business which if tapped in the right way can turn Making it Big into a very successful company.
Following are my recommendations and suggestions:
According to me after doing the S.W.O.T analysis it is clear that the company lacks a proper business plan. Hence the company must focus on developing a strategic business plan keeping in mind the current and long term goals and objectives which the company wants to achieve and how the company is to grow.
I recommend that MIB must put into place a robust marketing plan and invest some considerable amount of time and money in developing and implementing this Plan. Professional marketing firms or agencies must be involved to map and develop the entire process.
Expertise and Specialist services:
I think MIB must take expert and specialist services especially in the areas of Marketing and Product design as currently the company lacks in these two important areas. This will not only help the company to move in the right direction but will also help in improving its Brand image.
Franchise showrooms and Speciality stores:
MIB is already a popular brand and people are aware of its products and presence. I feel Franchise showrooms will uplift the sales by providing a wider distribution channel and making products readily available to a large number of customers in their Local Areas.
MIB is a Labour intensive company, I recommend that the company must improve the technology used to manufacture and quality check the products at every stage of production. Automation will result in improved Labour efficiency, better quality products and optimum utilisation of resources.
I feel that making new customers is another priority for MIB, most of the business is from repeat customers. MIB must aggressively look out for new or potential customers through various channels such as Television, Road Shows, and Exhibitions etc. Customer Database is up to date and the profiles must be accurate and up to date. New customers must be promptly added to the database.
Discount and Points scheme:
I suggest MIB must introduce a Points and Discount scheme on purchases for all new and existing customers, this will help to improve the sales and clearing old stocks or inventories.
Following are my recommendations on Staffing:
Re organisation of staff:
The current staffing must be closely reviewed, especially the management staff there is a lot of mix and match in the skill sets against their job profiles. Re organisation of staff will ensure that the right person is appointed to do the Job. Each member of the management team should be assessed on their Skills, Strengths and Weaknesses and then aligned to the correct position.
Coaching and Cross Skilling:
The company must ensure that all staff is well trained in their work and clearly understand what are the Goals and Objectives of the company and what is expected from them in their role. Cross skilling or multitasking will ensure optimum utilisation of human resources.
Employee Benefits - Bonus and Incentives:
Happy employees result in better output and improved work efficiency. The company must ensure that all staff receives timely Bonus and performance based Incentives, this will keep them motivated and ensure smooth operation of business.
The company must have an Internal Job Posting policy which will give eligible employees an opportunity to apply for senior positions thereby fulfilling the company's requirement if someone leaves the company and also saving the cost of Training and recruiting.
I think the above recommendations and suggestions will definitely benefit the company in the short and long term. MIB has the potential to grow and retain its position and presence in the Plus size womens apparel market throughout America. I have arrived at all my recommendations keeping in mind the available resorurces both Financial and Human and also considering the fact that MIB is a growing company with limited exposure and clientele. CEO Cynthia Riggs being the founder and Owner of the company must review these recommendations and implement them to compete and be a Leader in the Plus Size Apparel Market.
The various tools and techniques used for crafting and executing business strategy (e.g. S.W.O.T analysis, PEST Analysis, Competitor Analysis, and Five Forces Analysis etc) are all scientifically tested and tried methods and are universally used by all types of organizations whether Big or Small to design and develop their business strategy.
I think these tools and techniques will work well in crafting and implementing the business strategy for small businesses. By using these analytical tools owners and managers of small businesses will know what are the essential requirements for their Business, then formulate a strategy based on the findings and results. We must not forget that even if the business is small and has very limited resources including specialist staff or expertise there is a great potential for them to grow if they have a well designed business strategy which will serve as a guide and point the working of the business in the right direction.
I feel the academic models used for studying Business strategy are not complex if the right tools and analysis are used it boosts the performance of a business it does not matter whether the business is small or big. Yes the larger businesses do have an advantage with regards to Working Capital, Infrastructure, Quality Staff, Brand name and Goodwill etc but this does not necessarily mean that this scientific approach and analysis will not work for smaller organizations.
For e.g. If a owner/ manager of a small business unit manufacturing Candles wants to design and Plan a Business strategy, he can use the above tools like S.W.O.T analysis to determine the Strengths, Weaknesses of his unit and then also look at the various Opportunities and Threats for the business. After a detail review of the findings he will begin with the designing of a strategic plan which will improve the strengths (More Variety of candles, New Markets, More Customers, Staff etc) reduce the weaknesses, Explore the Opportunities and Eliminate the Threats from competitors and Technological advancements. Once the Strategic Plan is ready and implemented the business will definitely show a positive outcome.
A strategic plan can help to steer a company to operational success over a short or long period of time. If an enterprise pokes along without a sense of direction, it may end up going nowhere. That is why you need to write a strategic plan to guide your organization through good times and bad. (Rose Halas)
Many companies form strategic planning committees, with members from all major departments. Every area should be represented so that no employee feels left out or disenfranchised. Employee representation is vital for staff buy-in and implementation. (Rose Halas)
Organize monthly meetings, with the chair setting an agenda and, with the committee's help, establishing a timeline for completing a draft of the plan. After each meeting, the committee report should be published in the company newsletter or in a special section of the Web site, if applicable, to keep everyone informed of the document's progress. (Rose Halas)
Feedback should be sought from non-committee employees on a routine basis. As each draft of the strategic plan comes together, it should be reported in company media, with feedback invited by a certain time. Or copies of the plan can be circulated with a request for proposed editing changes by a specific date. That way no one can say he or she did not have a voice in setting the company's future goals. (Rose Halas)
Goals to be considered may include objectives like these:
-Improve safety by increasing parking lot lighting
-Increase customer satisfaction by reducing turnaround time on orders from four days to two.
-Enhance the foyer appearance by adding live plants and carpeting.
Larger or long-range goals should be set under broad categories:
As one goal is met, replace it with another. There are always ways in which to improve company performance.
In additional to operational objectives, five- and ten-year goals should be emphasized, along with the steps for reaching them:
-increase profits by 25%
(expand customer base through sales calls, increase advertising budget by 10%)
-increase staff by 10%
(hire full-time employee each year for five years)
-add 2,500 square feet of production space
(purchase adjacent lot and erect a pole building)
-reduce waste by 20%
(double-check product content daily)
-decrease absenteeism by 30%
(offer $200 annual bonus for perfect attendance)
These clear-cut, measurable goals and steps can be attained through employee motivation and cooperation. At staff meetings take time to explain the purpose of the plan and the overall value to the company, its employees, and your customers. In putting the plan on paper, divide departments or areas into sections, list the steps for achieving each goal along with a timeline for completing the action step, and circulate the plan for final approval before pronouncing it complete. (Rose Halas)
When the plan is formally adopted, be sure that each employee gets a copy. Make reference to it at staff meetings, retreats, and other special programs. The committee should review the plan at least once a year for updates and reprioritization. A competent strategic plan can provide the structure and vision that will lead your company to the next level of achievement. (Rose Hallas)
Making it Big - The Way forwardâ€¦â€¦..
After doing an S.W.O.T analysis for MIB it is clear that the company had a Vision and mission of manufacturing comfortable, fashionable and quality Plus Size Apparels for large American women and Teenagers. But the company did not have a Strategy to pint the business in the right Direction.
Even though Founder Cynthia Riggs and other staff worked very hard after a few years the company showed a decline in sales. This when analysed today using one of the Tools has put forward the root causes and bottlenecks in the growth of the company.
According to me the way forward for Making it Big is definitely prosperous and the company has the potential to grow and emerge as a leader in the Plus Size Apparel Market.
I must mention that there might not be a single analytical tool or technique which is the best suited for any organisation whether big, medium or small. At times companies have to use a Mix of Tools in order to design and implement its Business Strategy.
Making it Big is a growing company specialising in large size clothing and has a very specific target market to serve, form the above analysis and my experience I think the first thing for MIB to do is to formulate and design a Long Term Business strategy which will give direction to the company and the staff will be aware of what is to be achieve and how it is to be achieved.
Next step will be to focus on MIB's Weaknesses and work on converting those weaknesses into strengths e.g. Staff alignment and Marketing Plan. Then shift their focus on the Opportunities and finally eliminate the Threats from competitors and volatile Market conditions. I am confident MIB with the above approach MIB will come out of its currents crises and setbacks and reap long term benefits going forward.