Strategic, Marketing and HR Strategy for the New Business - Essay Example

Full title topic Introduction A successful business is a cause of good strategies that actually help the management to achieve goals and objectives. The strategic formulation is not a simple job rather involve a huge analysis of external and internal environment to suggest that which strategy will suit better. It is our strategies that track the business towards success. This white paper’s aim is to develop a business plan including a complete strategic, marketing and HR strategy for the new business. SWOT Analysis The SWOT analysis is the strategic planning tool sued when the new businesses are trying to exist in the market, or new products are launched by the existing business, or same products are introduced in the new market1. Under these conditions the firm need a complete strategic planning that requires SWOT analysis. This analysis was generated at Stanford University by Albert Humphrey. The swot analysis is useful by the firm to evaluate the factors present in the internal and external environment that can directly influence the firm decisions. The SWOT analysis is divided into four main regions. External environment analysis2 1. Opportunities 2. Threats Internal environmental analysis 1. Strength 2. Weaknesses 1. Strength3: the strength of the firm is the firm’s internal factors, their expertise and unique competencies that make the firm stronger. These are the attributes of the firm that helps it to make the firm strengthen. 2. Weaknesses: these are the internal factors of the firm in which the firm is very weak and are feel risk as these weaknesses might create problem for the firm. These are the attributes of the organization that are harmful for the firm. 3. Opportunities4: these are the factors present in the external environment that create opportunity to strengthen the firm in the future. These factors are helpful for the firm. 4. Threats: these are the factors that are present in the external environment of the firm that can create problem for the firm; these are the harmful factors that can cause a huge cost to the firm. Creative use of the SWOT The creative use of the SWOT analysis is that after elaborating the strength, weaknesses, opportunities and threats we can creatively use this factors to gain maximum5. This is no a simple theory rather it involves a complete environmental analysis providing the factors that can creatively used by the firm to gain the competencies. Critiques The SWOT analysis though helps in environmental analysis, but relying on this technique would not provide the efficient planning tool. It is simply a technique that can only provide information, but this information is not as strong as these four factors changes with time. These can only provide a better understanding when we use it in a specific environment. Therefore, different other techniques like porter’s five forces analysis, core competencies analysis, pest analysis and many other techniques should be used with SWOT analysis to gain maximum output. Relying on a single SWOT analysis would not be a better decision for the firms. Conclusion about SWOT analysis The above description about the SWOT analysis shows that alone SWOT analysis would not be a better choice, therefore, for my business I will use other techniques as pest analysis, porter five forces analysis so that I can accurately analyse the environment in which I am trying to open my new business. Strategic choice through SWOT analysis Strength of the firm 1. Advance technological use 2. Expertise 3. Own labels catering to niche markets at premiums 4. Unique Ideas and Objectives Weaknesses of the firm 1. Firm lack supply chain management 2. Warehousing problems lead to financial chaos 3. Lack of direction due to non-availability of suitable leaders at different levels of management. Opportunities 1. Add on new and fresh brands to expand product portfolio 2. Expansion of the market Threat 1. Threat of competitors 2. Threat of new entrants 3. economic environment of Europe 4. market factors that influence customers' spending 5. Competition Marketing Strategies Porter’s Five Forces Analysis6 According to porter these five forces actually impact the firm in different ways and their impact is given as The competitions that occurs between the existing sellers in the market The bargaining power of customer in the market The bargaining power of suppliers and its affect on the market The threat of the new entrants in the market The threat of any substitute of the product. In order to understand the nature of each of these forces we have to take a great gaze in these five forces and must know the competitive forces within the European market sector. The bargaining power of customers7 This is actually the horizontal forces that influence the industry to provide the value. The buyer power actually means the size of the customers that attaches to your company and to the industry. The greater the customer size the more will be the power of the customers. The bargaining power of suppliers8 The suppliers bargaining power increases when there is a short list of suppliers in the sector but if the supplier lists are long within the sector than their bargaining power decreases. This has great impact on the firms and requires enough good policy to make the suppliers loyal with the firm. The switching cost of the supplier is another issue. If the switching cost of the supplier in the industry is very high then the bargaining power of the supplier will also be very high. In sector of the European Union the switching cost of the supplier is really high and this increase the bargaining power of the supplier The intensity of competitive rivalry The intensity of the rivalry shows that how much the rivalry is strong in the manufacturing of paint and wooden floor sector. The intensity of the rivalry is if very strong than it means that it will not be useful for the firm to enter into the sector. The new services, innovation, low price and something different from your rivalry will provide a great benefit to your firm in the sector wooden floor and paints within the European countries. The threat of the entry of new competitors9 The threat of new competitor is another force within the porter models. The threat of new entrant can be minimized by using different barriers. The most common form of the barriers are given below and later we will describe the either these barriers are present in the European sector or not. The barriers are Economies of scale10: economies of scale means that you are providing cheap services if the customers are dealing with your company continuously. While for product, the bulk amount of purchasing causes low cost. But as we are considering the air line sector therefore, we will only consider the type of services in it. Cost of entry: if the cost of the entry in the industry is high than less new entrants will enter in to the sector. This may requires the new technology and other expensive resources. Distribution channels: in air line sector the distribution channels means the services to different stations in the European countries. Cost advantages: the cost advantages are also the barrier to the new entrant. But suppose the new entrants are introducing a new technology or strategy that may lowers their cost. Government legislations: the government rules and regulations may be the other barrier to the new company. Taking the rules in consideration, the government of the Europe did not launch any such regulations that may cause the barrier to the new firm to enter into the market. Differentiation: differentiation includes that such brand that can not be copied and therefore causes a barrier. The threat of new substitutes The threat of new substitutes is another major part of the porter’s five forces analysis. This threat occurs when your competitor introduces new product with high quality and low price tag. This threat of substitute causes a huge switching cost to the firm. Critiques The porter’s five forces analysis can not be used alone for the external environmental analysis because it only emphasis on the competitors. Therefore, the firm must used other theories and models to follow a complete analysis of the firm. Therefore, I will consider many other marketing tools along with this tool to analyse the each factor of the external environmental that can affect the firm directly or indirectly Conclusion The firm is required to use the porter’s five forces analysis to take competitors in consideration. But this model alone is not enough to provide a complete knowledge of the external environment. Therefore, when dealing with the marketing strategies various other techniques and tools must be taken in account. Human Resource Strategies The human resource strategies for any business must match with the business level strategies. MBO11, management by objectives tool work better for the firm in which firm goals are taken in account to by the management and they discuss it with the employees to know that how they can achieve these objectives, what actually we should adopt system through which eh employee’s can work better. The MBO system is define as with its main six steps 1. Setting the organizational goals: this step is already performed in the initial section of the paper showing objectives and goals 2. Setting departmental goals: next, the departments of the company acquire these goals and form their goals that actually match with the firm goals to achieve what they together want to achieves. 3. Discuss departmental goals: the next step is that the departmental head discuss these goals with their employees and asking their reviews. They want to know the choice of HR strategy that the firm should adopt. They discuss with these employees and ask them their views, and their contribution that the firm can expect from them 4. Define expected results12: the short-term individual performance for each individual is set by the departmental heads 5. Performance reviews: the second last step is that the firm measures the actual and targeted performance of the employees 6. Provide feedback: the departmental heads provide a feedback system to the employees informing about their performance. Some insights The MBO technique is useful for the firm as it provide the clear concept of the employees and their contribution. The employees can better understand the objectives of the firm and their contribution towards the firm can easily be measured. Moreover, the employees are also motivated as they are directly in contacted to know their views and contribution. This is a modest technique in which the contributions of the employees are elaborated. Critiques of MBO The MBP include three major problems in it. 1. Setting of unclear objectives13 is the major drawback of the technique, as in this the departments or the employees stated their objective that they will do a better job of training. These unclear objectives will create a problem for the firm as these are unable to achieve and cause disambiguate within the firm. 2. Second problem is that this is a long process and consumes much of the management time14. Setting the goals, meetings and other processes will cause a huge time cost. Therefore, this is the major drawbacks of the firm. 3. Tug-of-war15 is created within the firm and its employees during setting the goals and objectives. Therefore, the managers are required to fulfil the meetings efficiently with the employees and must motivate them. Conclusion Using the simple MBO technique simply will not suit the firm. As to meet with competition and to provide a better end to consumers, better human resource techniques are required. Therefore, I decided to use two other types of training to gain maximum output from the employees. The employees need a better training for the technological uses and to gain expert skills in their field. We are trying to use the mix of traditional and electronic training system in the firm. I have chosen two types of training programs for the employees and these are: Apprenticeship training and electronic training. Apprenticeship training involves a mix of On-the-job Training and classroom lectures. In this training system the employees are trained through classroom lectures according to the requirement if the firm. Usually the classroom lectures are provided for 7 days that will work for the next six months of the firm. On-the-job training is provided by the firm on daily basis to enhance the learning of the employee during its practical work. Electronic training is provided to the employees during their work time trough Electronic Performance Support System16. This system is required by the firm as the firm will sue the latest technologies not only to provide quality but also to ease the work of the employee’s. This system not only provides low time cost, better feedback system but also helps the firm to gain maximum productivity. This system enhances the training of the employees as they use different systems during work that increases their learning’s. References And Jackson Mathis and Jackson (2006) “Human Resource Management” First Edition Charles W.L. Hill, Gareth R, Jones (2003) “Strategic Management” 6th Edition Fred R, David (2005) “Strategic Management” Eleventh Edition Garth Saloner, Andrea Shepard (2001) “Strategic Management” Gregory G. Dess, G. T. Lumpkin (2003) “Strategic Management” Henry Mintzberg (2003) “Strategic Planning Jobber. D., 1997. CIM Handbook of Selling & Sales Strategy. Butterworth Heinmann John Bratton, Jeffery Gold (2001) Human Resource Management” Second Edition Lee J. Krajewski and Larry P. Ritzman (2003) “Operations Management” Sixth Edition Michael Armstrong (2003) “Human Resource Management” Ninth Edition Michael Losey, Sue Meisinger, Dave Ulrich (2004) “The Future of Human Resource Management” 1st Edition Payne.A.,ed.1995. Relationship Marketing for Competitive Advantage. Butterworth Heinemann. Peter Ferdinand Drucker (2007) “Management” 1st edition Philips Kotler (2003) “Marketing Management” Eleventh edition Robert L. Mathis (2006) “Human Resource Management”, Eleventh Edition William O Bearden, Thomas N Ingram, Raymond W LaForge (January 13, 2003) “Marketing, Principles and Perspectives”, Third Edition. Read More