Chapter 1 Introduction And Problem Definition Commerce Essay

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Bio Link (Pvt) Ltd is a medical equipment distribution company was found by Mr.M.I.M. Jaleel in 1999. At the beginning there were only a few employees working in this organization. Bio Link first started its distribution business only in the city of Colombo with its first product as the "Glucose meter". They were and are the sole agents for this particular brand of glucose meter. Once the Colombo district was a success, they expanded their area to other parts of the country little by little (E.g.:- Ampara, Batticaloa, Kandy, Kalutara, Galle, Puttlam). Gradually they started introducing other products as well

(E.g.:- Blood Pressure meter, Stethoscope, Nebulizer, etc…). At present they have around 20 equipments in their distribution business. But they are not the sole agents for all these products in the country.

Problem Definition

The existing problem of the Bio Lanka is not directly visible, which was founded through the analysis of medical equipment industry, business process of the company, business strategies, cost factors, profit margin, marketing strategies and the company's goals. The research Analysis founded that the company is not in positive future environment due to Market Strategy, therefore the research expect to propose an market plan & Distribution System, Solution to overcome the present critical environment.

Introduction to Problems Definition

Over the past years the Bio Link s annual sales is increasing by quite a number, but the profit margin gets smaller.. ??. This problem is due to the increasing cost mainly generated by Transport and Marketing department. The main threat of the company is that there are many new competitors arriving into the industry, since new comers cane easily enter into the industry, which has low risk and high profit factors, therefore Bio link has to reduce their cost to compete the target market.

The most affected are of the organization is marketing department is running without a proper planning and there is no vehicle scheduling systems. So this causes to spend more money by the company.

Nature of the Problems

Bio link has problems in maintaining the quality of the product. Still they receive quite a number of complains from end customers regarding the quality of the product. Also, they experience in high transportation cost, where they do not have a proper way to restrict the cost. Another important problem is that Bio link faces lack of a proper marketing strategy; customers complain about lack of knowledge of the company and its products, which shows that the awareness about the company and the products among the customers is very low or null.

It is a major challenge for Bio link to satisfy their existing customers and recoup potential customers towards the company. They also have to control the high transportation cost to some extent.

The study shows that the company is not aware about their internal and external environment, also they do not have a proper route management processes. Based on these problems the research have decided to provide a better solution for reducing the distribution cost by providing effective root management process and provide efficient marketing strategy for the company to compete with the market.

Business Strategic Problems in Bio Link

Due to the poor management strategy the company has facing the above listed problem even the annual sales increase, which should be sorted-out soon to compete the market competitors.

Distribution Problems

High Transportation Cost:

The company does not have a proper route management process. Routing operations are not designed and coordinated properly. This causes repeated journey to the same venue and it cost more money.

Under utilization of Trucks

The major issue found is the company is not aware about the truck or vehicle capacity when they perform the distribution process.

Marketing Problems

Improper Marketing Plan

The company does not have a proper marketing strategy to perform.

Poor Promotion

The agents are not willing to promote the company's product widely, because they do not have a definite advantage on the process. Also The Company does not have a proper team to promote the. The company deals with only two medical representatives for the whole country, unfortunately the medical reps are less experienced; they do not have a clear idea about their responsibilities.

Literature Review

The project will evaluate the Bio Link (Pvt) Ltd Market & Distribution Strategies and will come up with the most appropriate Distribution Strategies for the Bio Link (Pvt) Ltd, which is also could applicable for other companies.

The Project will cover some aspects of the MBA studies as Strategic Marketing, Strategic Management, Strategic Operation issues, Strategic Supply Chain management, Strategic Human Resources & Leadership with the focus on the topic. As well, the initial understanding of this topic is based on the following references.

Baker M. J.(1991) Marketing , An Introductory Text, (Fifth Edition) Macmillan Education Ltd, Houndmills, Basingstoke, Hampshire.

Cravens D.W.Lamb (Jr) C. W. (1983) Strategic Marketing Cases and Applications Richard D. Irwin Inc.

Kotler P., Armstrong G.(1999), Principles of Marketing (Eighth Edition), Prentice Hall of India Pvt. Ltd New Delhi

Wilson R. M. S., Gilligan C.(1999) Strategic Marketing Management Planning, Implementation and Control, Viva Books Pvt. Ltd India

Raymond A. Noe,John R. Hollenbeck,Barry Gerhart &Patrick M. Wright, Human Resource Management ,6th Edition

Slack, Chambers, Johnston and Betts, Operations and Process Management, 1st edition, Pearson Education Limited 2006

Mark Saunders, Philip Lewis, Adrian Tharnhill, Research Methods for Business Students( Fourth Edition)

"Salesmanship and Publicity" - Rustom S. Davar, Sohrab R. Davar, Nusli R. Davar

Management of Information Technology: - Carroll W. Frenzel

Laudon & Laudon, 2000, Management Information System

Thomas, L& David Hunzer, J, 2005, Strategic Management and Business Policy

Thomson,A.& Strickland,A.J,2006,Crafting and executing strategy, New York

http://www.nist.gov/dads/HTML/shortestpath.html

Data Collection

Several methods use to collect data, which used to the primary research These data collection is helps to understand the market and existing problem of the company as well as which would helps to provide a good solution for the company.

Techniques for Primary Data Collection

Primary data collection is obtained through interviews and Questionnaires from the key informants. Primary data's highly important for this project, which helps to find out Bio Links strengths and improve upon their weaknesses for their success. And also provides information about the Sri Lankan Medical equipments industry.

Personal Interview

Personal Interview is the most effective and efficient method to get information about the current situation of the firm. This method communicates more understanding than the other processes personal interview carry-on by:

Direct Personal Observation

The Data is collected by interviewing staffs personally.

Indirect Oral Interview (Observation)

The details of the processes are collected by observing their current activities.

Telephone Interviews:

The data is collected over the Telephone Interviews. Especially outstation agent's problems and details are collected from this method.

Bio Link management staff's

Bio Link management staff's helped to provide information about their current process and also helped to find out existing problems of the process

Agents

They provided information regards to, how they sell the Bio Link products. From their detail found the reasons for industrial and company problems.

Financial Department

The staffs of financial department provided information about annual income details, distribution and labor cost details up to certain extend, Transportation costs.

Marketing Department

The staffs of marketing department provided information about the Promotion methods and customer satisfaction evaluation methods.

Drivers

From the interview with drivers, get to know their distribution routes and problems.

Questionnaire

Descriptions

July/2010

August/2010

September/2010

1 W

2 W

3 W

4 W

1 W

2 W

3 W

4 W

1 W

2 W

3 W

4 W

Project Proposal

Project Literature

Data Collection

First Draft

Project Proposal Submission

Review

Final Project Submission

The questionnaires contain a list of questions to find the problems where the company is facing. This is the best way to communicate between the investigator and the responded. Set of questionnaire prepared for the Marketing department, which contains questions about the company's distribution methods and prepared a separate questionnaire for other employees that contains about the Transportation details and management details

Secondary Data collection

Time series and cross section data is exploited from company's document and reports. This data is used to get more detail about the company goal, objectives and their current situation.

Reviewing Documents

Reviewing document method provided required information about the company process.

Especially reviewed the annual income report, vehicle routing documents.

Time Schedule

Methodologies

The Bio link is badly affected by High Transportation cost, Poor marketing Strategy problems. The company needs s to overcome this situation as soon as possible. Therefore decide to use these methodologies to overcome the situation.

There are many methods can be a solution for these problems. But selected best methods to overcome this situation. These methods definitely give proper solution for increasing Transportation cost and it will provide good marketing strategy for the company.

Phase 1- Environment Analysis

PEST Analysis

Critical Success Factor Theory

SWOT analysis

Phase 2: Marketing strategy

Marketing Mix

Communication

Marketing plan

Phase 3: Cost effective Distribution

Vehicle routing Problem

Traveling Sales man Problem

Phase 4: Team recommendation

Leadership management

Team Building

Phase 01: Environmental Analysis of Bio Link

In this phase the external and internal view of the company and the stability of the company will be analyzed. SWOT analysis and Critical Success Factor Theory, PEST analysis are used to do these Internal and External view analysis.

PEST

A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors: Political, Economic, Social, and Technological. The Political analysis will analyze the political forces that affect the company and Economic analysis will analyze the Country's Economic factor that affect the company and the Social and Technological factor will analyze the relationship between the society and Technology with the company. A PEST analysis fits into an overall environmental scan. The PEST factors combined with external micro environmental factors can be classified as opportunities and threats in a SWOT analysis.

Critical Success Factor Theory

Every business has certain critical success factors (CSFs), without which the success of the business would plummet. This CSFs Will analyze the Bio links Critical success factor, that can be competed with others.

SWOT

I mainly focused on SWOT analysis, provided identity for strengths, weaknesses, market opportunities for the company, and business threats. And also helps instrumental rationality to improve organizational effectiveness and profitability. From this, any firm can quickly move from revealing the irrationality of strategy as practiced to recommending improvement.

Phase 02: Marketing strategy

In this phase try to discuss about the marketing strategy for the company. Mainly focus on 4Ps. The product, Price, Promotion, Place are the main topics are tries to consider. Also try to expand the topic by analyzing advertising and promotion theories, communication methods and so on. This helps to provide Market plan for the company.

Marketing Mix

In 4Ps, consider this distribution topic. In this topic discuss about the distribution methods that can use effectively. Also the promotion methods also will be broadly analyzed in this topic.

Communication Methods

This topic discusses about the way of effective communication methods. Also provide some tips to improve the communication ability of the Bio Link staffs.

Marketing Plan

This section providing a proper detail marketing plan, that Bio Link can use it for their future marketing processes.

Phase 03: Cost Effective Distribution

This phase considering cost effective strategic process, implemented to providing cost effective vehicle routing. There are several techniques that can be used to find cost effective distribution routes, like "Vehicle Routing Problem" (VRP), "Traveling Salesman Problem" (TSP), Shortest Path, etc…

But for the Bio Link Shortest Path technique is the most eligible, because they deliver Equipments from a specific store to specific agents.

Shortest Path Algorithm

Shortest Path (Dijkstr's algorithm) helps to find the smallest possible length from Source (S) to Destination (D). Shortest path can handle three types of problems;

Shortest Path between two specific nodes

Shortest Path from one to all nodes

Shortest Path between all nodes

Phase 04: Team Recommendation

In this Stage After preparing a proper distribution system and marketing strategy, I need to make all the staff aware of the new changes that have taken place. And also need to teach them about the new systems, the importance of the new systems and the advantages of them. So this phase includes our recommendation as 'Team building' and 'Leadership Building Tips' and I recommend that this is important to all the staff.

Conclusion

I believe that with the appropriate Market Strategy & Distribution Systems developed in this project, the Bio Link will gain good market strategy and low transportation cost to compete with their competitors.

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