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Ryman is famous for customer service. Everyone who works at the 237 Ryman stores nationwide aims to deliver the best possible customer experience to everyone who visits the specialist stationery stores.
This is achieved through a number of routes, including the company’s investment in training so that people in the stores have an in-depth knowledge of their product range. Employees feel valued by the organization that encourages them to come up with ‘bright ideas’ that are then shared within the business.
As well as being the nation’s high street stationery specialist, many Ryman stores offer additional services to customers. For example, many stores have a photocopier machine for customers to use and all stores provide printed stationery.
Other services range from document binding, a fax service, a photo booth, laminating, and a bulk copying service. Some stores – usually based in the larger cities – have a Copy Shop where all these services are offered. There are four Ryman stores that also have a Post Office.
Industry analysis is a tool that facilitates a company’s understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning. Industry analysis enables small business owners to identify the threats and opportunities facing their businesses, and to focus their resources on developing unique capabilities that could lead to a competitive advantage.
“Many small business owners and executives consider themselves at worst victims, and at best observers of what goes on in their industry. They sometimes fail to perceive that understanding your industry directly impacts your ability to succeed. Understanding your industry and anticipating its future trends and directions gives you the knowledge you need to react and control your portion of that industry,” Kenneth J. Cook wrote in his book The AMA Complete Guide to Strategic Planning for Small Business.”However, your analysis of this is significant only in a relative sense. Since both you and your competitors are in the same industry, the key is in finding the differing abilities between you and the competition in dealing with the industry forces that impact you. If you can identify abilities you have that are superior to competitors, you can use that ability to establish a competitive advantage.”
An industry analysis consists of three major elements: the underlying forces at work in the industry; the overall attractiveness of the industry; and the critical factors that determine a company’s success within the industry. The premier model for analyzing the structure of industries was developed by Michael E. Porter in his classic 1980 book Competitive Strategy: Techniques for Analyzing Industries and Competitors. Porter’s model shows that rivalry among firms in industry depends upon five forces: the potential for new competitors to enter the market; the bargaining power of buyers and suppliers; the availability of substitute goods; and the competitors and nature of competition. These factors are outlined below.
The first step in performing an industry analysis is to assess the impact of Porter’s five forces. “The collective strength of these forces determines the ultimate profit potential in the industry, where profit potential is measured in terms of long term return on invested capital,” Porter stated. “The goal of competitive strategy for a business unit in an industry is to find a position in the industry where the company can best defend itself against these competitive forces or can influence them in its favor.” Understanding the underlying forces determining the structure of the industry can highlight the strengths and weaknesses of a small business, show where strategic changes can make the greatest difference, and illuminate areas where industry trends may turn into opportunities or threats.
EASE OF ENTRY
Ease of entry refers to how easy or difficult it is for a new firm to begin competing in the industry. The ease of entry into an industry is important because it determines the likelihood that a company will face new competitors. In industries that are easy to enter, sources of competitive advantage tend to wane quickly. On the other hand, in industries that are difficult to enter, sources of competitive advantage last longer, and firms also tend to benefit from having a constant set of competitors.
The ease of entry into an industry depends upon two factors: the reaction of existing competitors to new entrants; and the barriers to market entry that prevail in the industry. Existing competitors are most likely to react strongly against new entrants when there is a history of such behavior, when the competitors have invested substantial resources in the industry, and when the industry is characterized by slow growth. Some of the major barriers to market entry include economies of scale, high capital requirements, switching costs for the customer, limited access to the channels of distribution, a high degree of product differentiation, and restrictive government policies.
POWER OF SUPPLIERS
Suppliers can gain bargaining power within an industry through a number of different situations. For example, suppliers gain power when an industry relies on just a few suppliers, when there are no substitutes available for the suppliers’ product, when there are switching costs associated with changing suppliers, when each purchaser accounts for just a small portion of the suppliers’ business, and when suppliers have the resources to move forward in the chain of distribution and take on the role of their customers. Supplier power can affect the relationship between a small business and its customers by influencing the quality and price of the final product. “All of these factors combined will affect your ability to compete,” Cook noted. “They will impact your ability to use your supplier relationship to establish competitive advantages with your customers.”
POWER OF BUYERS
The reverse situation occurs when bargaining power rests in the hands of buyers. Powerful buyers can exert pressure on small businesses by demanding lower prices, higher quality, or additional services, or by playing competitors off one another. The power of buyers tends to increase when single customers account for large volumes of the business’s product, when a substitutes are available for the product, when the costs associated with switching suppliers are low, and when buyers possess the resources to move backward in the chain of distribution.
AVAILABILITY OF SUBSTITUTES
“All firms in an industry are competing, in a broad sense, with industries producing substitute products. Substitutes limit the potential returns of an industry by placing a ceiling on the prices firms in the industry can profitably charge,” Porter explained. Product substitution occurs when a small business’s customer comes to believe that a similar product can perform the same function at a better price. Substitution can be subtle-for example, insurance agents have gradually moved into the investment field formerly controlled by financial planners-or sudden-for example, compact disc technology has taken the place of vinyl record albums. The main defense available against substitution is product differentiation. By forming a deep understanding of the customer, some companies are able to create demand specifically for their products.
“The battle you wage against competitors is one of the strongest industry forces with which you contend,” according to Cook. Competitive battles can take the form of price wars, advertising campaigns, new product introductions, or expanded service offerings-all of which can reduce the profitability of firms within an industry. The intensity of competition tends to increase when an industry is characterized by a number of well-balanced competitors, a slow rate of industry growth, high fixed costs, or a lack of differentiation between products. Another factor increasing the intensity of competition is high exit barriers-including specialized assets, emotional ties, government or social restrictions, strategic inter-relationships with other business units, labor agreements, or other fixed costs-which make competitors stay and fight even when they find the industry unprofitable.
Production planning is the function of establishing an overall level of output, called the production plan. The process also includes any other activities needed to satisfy current planned levels of sales, while meeting the firm’s general objectives regarding profit, productivity, lead times, and customer satisfaction, as expressed in the overall business plan. The managerial objective of production planning is to develop an integrated game plan where the operations portion is the production plan. This production plan, then, should link the firm’s strategic goals to operations (the production function) as well as coordinating operations with sales objectives, resource availability, and financial budgets.
The production-planning process requires the comparison of sales requirements and production capabilities and the inclusion of budgets, pro forma financial statements, and supporting plans for materials and workforce requirements, as well as the production plan itself. A primary purpose of the production plan is to establish production rates that will achieve management’s objective of satisfying customer demand. Demand satisfaction could be accomplished through the maintaining, raising, or lowering of inventories or backlogs, while keeping the workforce relatively stable. If the firm has implemented a just-in-time philosophy, the firm would utilize a chase strategy, which would mean satisfying customer demand while keeping inventories at a minimum level.
The term production planning is really too limiting since the intent is not to purely produce a plan for the operations function. Because the plan affects many firm functions, it is normally prepared with information from marketing and coordinated with the functions of manufacturing, engineering, finance, materials, and so on. Another term, sales and operations planning, has recently come into use, more accurately representing the concern with coordinating several critical activities within the firm.
The production plan also provides direct communication and consistent dialogue between the operations function and upper management, as well as between operations and the firm’s other functions. As such, the production plan must necessarily be stated in terms that are meaningful to all within the firm, not just the operations executive. Some firms state the production plan as the dollar value of total input (monthly, quarterly, etc.). Other firms may break the total output down by individual factories or major product lines. Still other firms state the plan in terms of total units for each product line. The key here is that the plan be stated in some homogeneous unit, commonly understood by all, that is also consistent with that used in other plans.
The production schedule is derived from the production plan; it is a plan that authorized the operations function to produce a certain quantity of an item within a specified time frame. In a large firm, the production schedule is drawn in the production planning department, whereas, within a small firm, a production schedule could originate with a lone production scheduler or even a line supervisor.
Production scheduling has three primary goals or objectives. The first involves due dates and avoiding late completion of jobs. The second goal involves throughput times; the firm wants to minimize the time a job spends in the system, from the opening of a shop order until it is closed or completed. The third goal concerns the utilization of work centers. Firms usually want to fully utilize costly equipment and personnel.
Often, there is conflict among the three objectives. Excess capacity makes for better due-date performance and reduces throughput time but wreaks havoc on utilization. Releasing extra jobs to the shop can increase the utilization rate and perhaps improve due-date performance but tends to increase throughput time.
Quite a few sequencing rules (for determining the sequence in which production orders are to be run in the production schedule) have appeared in research and in practice. Some well-known ones adapted from Vollmann, Berry, Whybark and Jacobs (2005) are presented in Operations Scheduling.
THE PRODUCTION PLANNING AND PRODUCTION SCHEDULING INTERFACE
There are fundamental differences in production planning and production scheduling. Planning models often utilize aggregate data, cover multiple stages in a medium-range time frame, in an effort to minimize total costs. Scheduling models use detailed information, usually for a single stage or facility over a short term horizon, in an effort to complete jobs in a timely manner. Despite these differences, planning and scheduling often have to be incorporated into a single framework, share information, and interact extensively with one another. They also may interact with other models such as forecasting models or facility location models.
It should be noted that a major shift in direction has occurred in recent research on scheduling methods. Much of what was discussed was developed for job shops. As a result of innovations such as computer-integrated manufacturing (CIM) and just-in-time (JIT), new processes being established in today’s firms are designed to capture the benefits of repetitive manufacturing and continuous flow manufacturing. Therefore, much of the new scheduling research concerns new concepts and techniques for repetitive manufacturing-type operations. In addition, many of today’s firms cannot plan and schedule only within the walls of their own factory as most are an entity with an overall supply chain. Supply chain management requires the coordination and integration of operations in all stages of the chain. If successive stages in a supply belong to the same firm, then these successive stages can be incorporated into a single planning and scheduling model. If not, constant interaction and information sharing are required to optimize the overall supply chain.
An operational planning is a subset of strategic work plan. It describes short-term ways of achieving milestones and explains how, or what portion of, a strategic plan will be put into operation during a given operational period, in the case of commercial application, a fiscal year or another given budgetary term. An operational plan is the basis for, and justification of an annual operating budget request. Therefore, a five-year strategic plan would need five operational plans funded by five operating budgets.
Operational plans should establish the activities and budgets for each part of the organization for the next 1 – 3 years. They link the strategic plan with the activities the organization will deliver and the resources required to deliver them.
An operational plan draws directly from agency and program strategic plans to describe agency and program missions and goals, program objectives, and program activities. Like a strategic plan, an operational plan addresses four questions:
Where are we now?
Where do we want to be?
How do we get there?
How do we measure our progress?
The OP is both the first and the last step in preparing an operating budget request. As the first step, the OP provides a plan for resource allocation; as the last step, the OP may be modified to reflect policy decisions or financial changes made during the budget development process.
Operational plans should be prepared by the people who will be involved in implementation. There is often a need for significant cross-departmental dialogue as plans created by one part of the organisation inevitably have implications for other parts.
Operational plans should contain:
activities to be delivered
staffing and resource requirements
a process for monitoring progress.
Budgeting can be difficult for students, which is why Ryman offers a discount on line of 12.5% for extra NUS customers. All you need to do is enter your card number in the shopping basket page or show your card in store.
If you are student but not a member of NUS Extra, you can receive a 10% discount in store if you show your student ID.
Helping those Looking for Gift Ideas
The great thing about stationery is that it is always useful, so it is an ideal gift for the practically-minded. You can now buy special pre-paid gift cards at various prices.
Helping sport – the Ryman League
Ryman are proud sponsors of the Isthmian Football League, called the Ryman League. The clubs are highly supportive of the company’s charity fundraising and played with red footballs in support of the Red Nose Day and Sport Relief, as well as organising bucket collections.
Helping those in Need
The business has a great track record in supporting good causes and raised half a million pounds for Red Nose Day in 2009 and over £225,000 for Sport Relief this year.
Employee fundraising is encouraged at all levels.
The company’s dynamic Chief Executive Officer, Kypros Kyprianou, says that business should be fun, as well as being about making money. Perhaps this is why the company holds conferences for employees twice a year and encourages high performance through bonus schemes.
The high level of employee satisfaction might explain the low turnover of employees within the business, something that is very unusual within the competitive retail industry.
It is the belief of Chairman Theo Paphitis, who is the Skillsmart Retail Apprentice’s Champion, that happy employees provide the best possible customer service.
All store employees have to be thoroughly trained before they can serve a customer, not least because they need to be aware of legislation relating to the sale of various goods. Training is then run on an on-going basis, resulting in employees joining the company’s own Five Star Training program.
In addition, the company has just set up a Retail Academy that is currently training groups of store employees who are gaining a new qualification while working and so far the feedback has been very positive all round.
Ryman is a supporter of the retail trust charity which offers a confidential counselling service to retail employees.
Product Range and Sourcing
Product quality is important to Ryman and the company makes sure that all suppliers comply with the code of ethical trading (The Ethical Trading Initiative Base Code) and continues to monitor these standards on a regular basis. Like all forward-thinking companies, Ryman aims to minimize its carbon emissions and has put plans in place to achieve this important aim.
A marketing plan is a business document written for the purpose of describing the current market position of a business and its marketing strategy for the period covered by the marketing plan. Marketing plans usually have a life of from one to five years.
Purpose of a Marketing Plan
The purpose of creating a marketing plan is to clearly show what steps will be undertaken to achieve the business’ marketing objectives.
While some small business owners include their marketing plan as part of their overall business plan, if a business owner follows the recommended SBA format, parts of the marketing plan will be included in the various areas of the business plan. As an alternative, the marketing plan may be attached in its entirety as an appendix to a business plan.
What’s in a Marketing Plan?
A typical small business marketing plan might include a description of its competitors, the demand for the product or service, and the strengths and weaknesses from a market standpoint of both the business and its competitors.
Other elements usually contained in a marketing plan include:
Description of the product or service, including special features
Marketing budget, including the advertising and promotional plan
Description of the business location, including advantages and disadvantages for marketing
Market segmentation (specializing in specific niche markets or, if mass marketing, how marketing strategy might differ between different segments, such as age groups).
Behind the corporate objectives, which in themselves offer the main context for the marketing plan, will lie the “corporate mission,” which in turn provides the context for these corporate objectives. In a sales-oriented organization, the marketing planning function designs incentive pay plans to not only motivate and reward frontline staff fairly but also to align marketing activities with corporate mission.
This “corporate mission” can be thought of as a definition of what the organization is, of what it does: “Our business is”. This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that “We are in the business of making meat-scales,” as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless; “We want to make a profit” is not too helpful in developing specific plans.
Abell suggested that the definition should cover three dimensions: “customer groups” to be served, “customer needs” to be served, and “technologies” to be utilized. Thus, the definition of IBM’s “corporate mission” in the 1940s might well have been: “We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology].”
Perhaps the most important factor in successful marketing is the “corporate vision.” Surprisingly, it is largely neglected by marketing textbooks, although not by the popular exponents of corporate strategy – indeed, it was perhaps the main theme of the book by Peters and Waterman, in the form of their “Super ordinate Goals.” “In Search of Excellence” said: “Nothing drives progress like the imagination. The idea precedes the deed.” If the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is a good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not least because its strategies will be consistent and will be supported by its staff at all levels. In this context, all of IBM’s marketing activities were underpinned by its philosophy of “customer service,” a vision originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on obtaining a complete and accurate picture.
A “traditional” – albeit product-based – format for a “brand reference book” (or, indeed, a “marketing facts book”) was suggested by Godley more than three decades ago:
Financial data-Facts for this section will come from management accounting, costing and finance sections.
Product data-From production, research and development.
Sales and distribution data – Sales, packaging, distribution sections.
Advertising, sales promotion, merchandising data – Information from these departments.
Market data and miscellany – From market research, who would in most cases act as a source for this information. His sources of data, however, assume the resources of a very large organization. In most organizations they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone).
It is apparent that a marketing audit can be a complex process, but the aim is simple: “it is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company.” It is clear that the basic material to be input to the marketing audit should be comprehensive.
Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself – when time is usually at a premium.
Even so, the first task of this annual process should be to check that the material held in the current facts book or facts files actually is comprehensive and accurate, and can form a sound basis for the marketing audit itself.
The structure of the facts book will be designed to match the specific needs of the organization, but one simple format – suggested by Malcolm McDonald – may be applicable in many cases. This splits the material into three groups:
Review of the marketing environment. A study of the organization’s markets, customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation.
Review of the detailed marketing activity. A study of the company’s marketing mix; in terms of the 7 Ps – (see below)
Review of the marketing system. A study of the marketing organization, marketing research systems and the current marketing objectives and strategies. The last of these is too frequently ignored. The marketing system itself needs to be regularly questioned, because the validity of the whole marketing plan is reliant upon the accuracy of the input from this system, and `garbage in, garbage out’ applies with a vengeance.
Portfolio planning. In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio.
80:20 rule. To achieve the maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20 percent of products or services, and on the 20 percent of customers, which will account for 80 percent of the volume and 80 percent of the profit.
7 P’s: Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 P’s can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.
A financial plan consists of sets of financial statement that forecast the resource implications of making business decisions. For example, a company that is deciding to expand e.g. by buying and fitting out a new factory will create a financial plan which considers the resources required and the financial performance that will justify their use. You can see from this statement that the financial plan will need to take into account sources of finance, costs of finance, costs of developing the project, as well as the revenues and likely profits to justify the expansion program.
Planning models may consist of thousands of calculations. Typically these plans will be constructed with the aid of forecasting models and spreadsheets that can calculate and recalculate figures such as profit, cash flows and balance sheets simply by changing the assumptions. For example, the business may want to do one set of calculations for low, medium, and high demand figures for its products.
Financial plans are typically made out for a given time period, e.g. one, three or five years. The length of the time considered depends on the importance of projecting into the future and the reliability of estimates the further we consider the future.
Long-term plans are created for major strategic decisions made by a business such as:
take over and merger activity
expansion of capacity
development of new products
In addition financial planning will be carried out for shorter time spans. For example, annual budgets will be created which can be analysed by month and by cost centre.
Short term financial plans then provide targets for junior and middle management, and a measure against which actual performance can be monitored and controlled. In addition it is normal practice for a business to prepare a three- or five-year plan in less detail, which is updated annually.
A budget is a short term financial plan. It is sometimes referred to as a plan expressed in money – but it is more accurately described as a plan involving numbers.
A cost centre is defined by CIMA as ‘a production or service location, function, activity or item of equipment whose costs may be attributed to cost units’.
This Financial Plan template will help you to identify the:
Types of labour costs to be incurred during the project
Items of equipment needed to deliver the project
Various materials needed by the project
Unit costs for labor, equipment and materials
Other costs types such as administration
Amount of contingency needed
You can then use the Financial Plan template to create a budget by:
Calculating the total cost involved in completing the project
Identifying the total cost of each project activity
Creating a schedule of expenses
Creating a project budget is an extremely important part in any project, as it gives you a goal post to aim for. This Financial Plan will help you meet that goal post, by giving you a clear process and template for creating a budget for your project.
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