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My company is Polyflor Africa, also known as Polysales. They are a flooring company that deals heavy duty flooring. They do flooring like vinyl, inter-locking and heavy duty rubber flooring. They don't do flooring for private houses, they do more commercial businesses, selling mainly to contractors and builders. You can see a lot of their flooring in hospitals.
We always believe in giving the best quality products and services, also being environmentally friendly. We are always looking for new ways to grow as a company. We work as a team at Polyflor, and we always try help others. Whether they are employees or a Corporate Social Investment.
As a company, it is very important to look at the environment around us. Meaning the inter environment and external environment. So some of the internal factors we must look at is management, marketing and finance. The external environment is just as important as the internal environment. Some of the external factors are economic, technological, social forces and so on. We also need to see how these impact our company. So we need to analyse them. Not all businesses are the same, so not all businesses have the same strategies. so those factors will influence what strategies Polyflor will have.
“Inspirational description of what an organization would like to achieve or accomplish in the mid-term or long-term future. It is intended to serves as a clear guide for choosing current and future courses of action. See also mission statement” (vision statement n.d).
Our vision is to give the best quality products to our customers while giving the best service, and to develop an environmentally and economically sustainable business and be as carbon neutral as possible.
“Written declaration of a firm's core purpose and focus which normally remain unchanged” (mission statement n.d).
Mission Statement Components
2) Products or service
5) Concern for survival, growth and profitability
8) Concern for public image
9) Concern for employees
Our products are specialized industrial flooring. It is heavy duty flooring special made to with stand wear and tear. So therefore it is used in hospitals, factories and warehouses. So our flooring has to withstand all the forces accrued on to it.
As being a heavy duty industrial flooring, we have very specific consumers. Therefore our consumers are contractors, builders, other flooring companies etc. Our markets are very wide spread. In S.A. we operate in all provinces. We also operate internationally. We have offices in the UK and Asia.
We are always looking for new ways for the business to grow. As result we try looking for new products and services. Improving the way we look at flooring. So we try keep up to date wit the latest technology. We also a very distinctive type of business. There is not much competition for what we do.
We have philosophy here at Polyflor that is “TEAMWORK”. All our employees must work together in order for our company to be successful. Our employees are also seen to at Polyflor. So therefore we don't want unhappy employees.
We are also concerned for our public image that is why we participate in a number of Corporate Social Investments (CSI).
1.2) Long Term Objectives
“Performance goals of an organization, intended to be achieved over a period of five years or more. Long-term objectives usually include specific improvements in the organization's competitive position, technology leadership, profitability, return on investment, employee relations and productivity, and corporate image” (long-term objectives n.d).
Long term objectives for Polyflor:
To provide our customers with the best quality products and services.
Provide employees with equal opportunities.
To work in a ethical and professional manner.
To become the best industrial flooring company out there.
2.1.I am the Business Strategy Consultant for Polyflor South Africa. I have been employed to do research on the internal environment of Polyflor South Africa and conduct a internal strategic management audit. I have been informed to compile a detailed internal environment report.
Internal Environment Report
Internal factors are just as important than external factors in an organisation. So we need to identify all internal factors in our business and see what impact they have on the business. There are many internal forces within an organisation.
One very important factor of internal forces is management within an organisation. We need to management in a business to keep order. In Polyflor management is very important. There isn't just one manager within the business, there are a number of them that are in charge of the various departments in the business. Then there is a general manager that is in charge of all those departments. As we know management is split into 5 basic activities:
Planning: this is managerial activities that plan for the future. This is probably the most important strategy formulation stage. Polyflor is always planning and coming up with new strategies, updating policies, setting new goals and objectives
Organising: this is related to task structure and authority relationships. And this is also very important for Polyflor they believe in an organised business. They have various jobs that have job descriptions. Various jobs in the business require specialized skills which they make sure they have. We try to be a very coordinated company.
Motivating: this has to do with employees behaviour in the company. We try do our best in motivating our employees by good leadership and communication. Trying to keep them happy, but as humans we are not perfect and could probably improve on this as we need our employees to be productive
Staffing: this is Human Resource Management, meaning dealing with the employees and their needs, such as we having a safe and friendly working environment, which we do believe we have. Also our staff are paid fairly and we believe when interviewing candidates that everyone has a fair opportunity. This is very very important
Controlling: as any company we want results in everything we do. We want sales to come through, our finances to be up to date and so on Grobler(2009,68).
Another internal force is marketing. This is very important for an organisation as it has to do with the needs of the consumer. And Polyflor's customers are very important to them. There are seven basic functions of marketing:
1) Customer analysis- as a company we need to know what our customers needs and wants are. We also need to know who our customers are, so we create profiles for each. As flooring is not for everyone we need to have a good understanding of our consumers.
2) Selling products/services- selling if our products is one of the most important aspect to us and to most if not all businesses. Polyflor needs to advertise to sell their products so we have to take into account that. We also do a lot of promotions such as giving various items to customers like pens, t-shirts and so on. So we have to consider these aspects in the selling of our products.
3) Product and service planning- before a product is put a on the market it goes through test marketing, where it is tested by a select few of the population. Polyflor try position themselves in the consumers mind as being the best in flooring. Polyflor has a strong after sales policy. That they will help customers even after they have bought a product from them
4) Pricing- there are a number of factors that can influence the pricing of a product. And because our products are imported from other countries, there a number of things influencing our prices
5) Distribution- our products mainly come overseas,. So we have to import our goods. Generally by shipping, then by trucks. Our products are then stored in a big warehouse at out head offices. Our products are not in short supply though
6) Marketing Research- we have people that conduct market research, as it is important to gather information. And try see some of our strengths and weaknesses
7) Opportunity Analysis- whenever a decision arises, we have to do a an opportunity analysis. Looking at all the aspects of the decision, such as pricing and so on Grobler(2009.69-70)
Finance or accounting in an organisation of any sort is very important. Polyflor finds that finance in their business is very important. Having a bad financial record could affect the business a lot. So its in the best interest of Polyflor to have an excellent financial record. Not losing money, making sure we money from debtors soon, pay creditors and so on. Also by having a good financial record will allow a better view by possible investors. There are number of accounting ratios Polyflor has to conduct. They are:
• Liquidity ratios
• Current ratios
• Return on stakeholders' equity
• Inventory turnover
• Average collection period
• And others
Production and operations is very important as it has to deal with inputs into final goods. Without that we got nothing to sell. So we need people to make the goods for us to sell. although we do import our products, we getting them from Polyflor in the UK so its still the same company. So even though it is overseas we need people tp transfer inputs into outputs.
Our Research and Development is important. We do a little bit of R&D here in South Africa, done internally. Most of our R&D comes the world head office in the UK. So you say its both internal cause the is the same business but yet still external cause the other company is in the UK.
We need management Information Systems. Polyflor generates a lot of information that needs to be sorted si it can be further used. We gather information such as financial information and marketing information. So we need various ways of managing it and sorting it. For example on paper, in databases, external hard drives and so on.
Value chain analysis is done to see the costs that are associated with the organisational activities. This is important for Polyflor as it can set a benchmark of some sort.
2.2. Internal Factor Evaluation Matrix of Polyflor South Africa.
Key internal factors Weight Rating Weighted Score
sales increased by 50% from last year 0.15 4 0,6
Well known in the trade 0.06 3 0,18
All staff members are qualified 0.07 3 0.21
Flooring is of best quality 0.1 4 0.4
Debt to asset ratio has declined 0.04 2 0.08
Average collection ratio is better than last year 0.05 3 0.15
Promotions have increased sales 0.07 3 0.21
More contracts have come through 0.08 3 0.24
Could have more internet advertising 0.1 4 0.4
Employees are not always motivated 0.15 4 0.6
Delivery days has increased 0.08 3 0.24
Parking outside could be improved 0.05 2 0.1
As you can see the weighted score is above average so Polyflor is doing pretty well. We do have a few more strengths than weaknesses. Our strongest strength being that our sales have increased and our weakest point is that some of our staff are not motivated due to reasons that still have to be looked into. Some of these points are only estimates.
3.1) As the Business Strategy Consultant for Polyflor South Africa I had to do research on the external environment and do a external audit. The external environment is “conditions, entities, events, and factors surrounding an organization which influence its activities and choices, and determine its opportunities and risks. Also called an operating environment” (external environment n.d).
External forces are split into 5 factors:
Social, cultural, demographic and environmental
Political, governmental and legal
These forces are very important. We need to know what are the economic forces are for our business. Economic forces can influence the amount people spend. Economic forces include inflation, taxes, interest rates and currency. Since Polyflor is an international company we to be aware of these factors. Polyflor ships all their products from overseas, so we need to be aware of shipping costs and the taxes that are changing continually. Also buying from foreign countries currency is going to play a big part. All of these factors play a huge part and can influence our business as it will affect our products prices. As it is an external force there is very little we can do about it but analyse it and come up with strategies.
Social, cultural, demographic and environmental forces
There are so many people in this country and you think we have an unlimited target market. Since being a specialized flooring company we have a very specific market. We have our customers, who are all sorts, different cultures and so on. So we must analyse this and make sure that we understand the different social and culture aspects of our customers. As we need them to survive. So to do so we must know how to talk to them and interact. In doing so we wont have conflict. We also have a lot of different people we deal with such as suppliers. And a lot of our suppliers are in foreign countries. So we also need to understand their language and cultures. Every country has their own ways of doing things. We need to understand and deal with these issues in order to keep in good terms with these foreign suppliers. Also another factor that plays under this force is the demographic aspect, people in different areas. We operate in all provinces in the country. So we must know where potential customers are. This might bring the thought that different areas will have different needs and wants, and so how much money they will be willing to spend.
Political, governmental and legal
Now, this is also an important factor. As we need to be up to date with all the new laws and regulations, legislation, of the country that the government puts forward. As being an international company, we also need to understand foreign too. Our products need to meet certain standards, so there are a number of laws we need to be aware of. Also there are a number of laws that we must take into account that influence the work place. So we must constantly learn all the new laws.
We need to keep up to date with new technology that is always being developed. A company must always have new technology or new ways of doing things. Polyflor is constantly coming up with new products of flooring or new ways of flooring. Our biggest new thing is “green” products. Flooring made out of recycled items.
This is all about knowing your competition; we have two main competitors in this specialized field of flooring. They are Marley Flooring and Floorworx. We need to always analyse this force. See how are competitors are doing, what new things they doing and so on. We need to do it because we must come up with ways to better our company and gain competitive advantage.
Now we have identified our external forces, we need to do an external audit. “The purpose of an external audit is to develop a finite list of opportunities that can benefit the company and help to avoid threats” Grobler(2009:38).
.EFE MATRIX FOR POLYFLOR
KEY EXTERNAL FACTORS WEIGHT
Finding new customers, that are wanting our products 0.10 4 0.4
Finding new suppliers in different countries. 0.05 2 0.1
Finding new suppliers within S.A, using domestic suppliers. 0.05 2 0.1
Finding a new market within the domestic trade, flooring for homes 0.01 1 0.01
New innovations within the “green” products trade. 0.08 3 0.24
New technologies, making of new types of flooring and putting in of flooring 0.09 3 0.27
Finding of better skilled employees. 0.09 3 0.27
Joining with competition 0.02 1 0.02
Competition, new entries within the flooring trade 0.10 4 0.4
Loss of customers 0.09 3 0.27
Not enough of skilled employees 0.07 2 0.14
Lack of suppliers 0.03 1 0.03
New legislation, new laws stating the standard of products 0.07 2 0.14
We have done a EFE Matrix for Polyflor, an EFE Matrix looks at the external factors of Polyflor. This Matrix looks at opportunities and threats of the company. As you can see they have different weights. The ones with the highest weights are the most important and have the highest ratings. Some of Polyflor's most important opportunities will be finding new customers, employees, developing new products and technologies. The threats are the same. High score, most important, like economic status, taxes and such because Polyflor is international. Another huge threat is competition. Like competition is a threat for most companies. Polyflor got a total score of 2.9 which is above average.
This CPM looks at my company against my main competitors, who are Marley Flooring and Floorworx. We took the factors gave them a weight, again the important factors got high weights. Then we rated each factor. Each company might of had different ratings, depending on what they think of each factor. As you can see Polyflor and Floorworx have the same score of 3.71, which means they are very similar, as where Marley Flooring has a lower score of 2.79. So meaning Polyflor and Floorworx have better scores for every factor than Marley Flooring.
4.1) There are a number of different types of strategies that a business should look at when making various strategies. Polyflor could come up with a number of different types of strategies, but we cant just do any strategies we want. We must look at the organisation and see which ones will be best suited. We will conduct a IE Matrix.
IE Matrix Of Polyflor SA
IFE matrix=3.41, EFE matrix=2.9
4.2 From doing this IE Matrix we can see where Polyflor is and what kind of strategies we need to do. As you can see Polyflor's scores were 3.41 for the IFE Matrix and 2.9 for the EFE Matrix. So as you can see we will use those 3 blocks of the IE Matrix. Cause we are using those 3 blocks we will be using integration strategies, which is forward, backward and horizontal integration strategies. Then we can use intensive strategies, which is market penetration, market development, and product development. Then the last one we can use is diversification strategies, which is split into two, related and unrelated diversification.
Now I have to look at the various strategies from our IE Matrix and recommend which ones would be best for Polyflor. We could do all of them but it might not be the best for Polyflor so it's better to analyse Polyflor and then use the ones that will benefit Polyflor the most.
Horizontal integration would be a good strategy for Polyflor. They can get control over their competitors. Would eliminate some of their competition. They can do this by buying up their competitors or joining together. Polyflor could try become the leader in the flooring industry.
Another strategy would be market penetration; Polyflor can increase their sales with their present products. They can do this by increasing their efforts of selling their products. They would have to increase the usage of their current customers. We would have to increase going out and selling our company, also increase our advertising.
They could also do related diversification, adding related flooring products to the organisation. They could do this by having new flooring designs, or coming up with some new kind of adhesive to lay the flooring down.
Cause we need to implement some strategies, it might cause some conflict. Therefore we need to manage this conflict. There are a few approaches we can do in order to manage this conflict. I think that the best approach for Polyflor to use when implementing strategies is confrontation. We must tell everyone about this and make sure they understand and if there are still problems sort it out there and then.
We have looked at the business strategy of Polyflor SA, form the mission and vision statement to seeing what strategies Polyflor should look at implementing due to the internal and external environment of the organisation. We did an extensive analysis of both the internal and external environment. We also did an analysis of the competitive analysis. From this we have seen what Polyflor needs to do and also how to manage conflict.
• Grobler,W 2009,Business Strategy, activities of management, CTI Education Group and London School of Business and Management.
• Grobler,W 2009,Business Strategy, functions of management, CTI Education Group and London School of Business and Management.
• Anon n.d, Business dictionary: external environment. Retrieved 8 August2009, from http://www.businessdictionary.com/definition/external-environment.html
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