Development and Implementation of Strategic Plans - Organix - Case Study Example

Development and Implementation of Strategic Plans Name: ID: Subject: Lecturer: Tutor: Introduction Organix Company is one of the fastest growing distributors of horticultural products; fruits vegetables and flowers in Melbourne. Thomas and Alex Andrews formed the company in 2013 as a family business but later invited investors to improve its financial position. The company commenced operations at the family’s garage in Sydney before acquiring official offices in the same area. The small company supplies its products to customers within the city using its delivery trucks. The company has a shown a steady rate of growth since its establishment and the management seeks to improve its operations to maximize its profit base and expand its operations. Mission The mission of the company defines the current position of the company, its operations and defines the ideal position of the business (Newbert 2008 p.182). It therefore dictates the purpose of the business as well as its objectives. The aims and objectives of the business seek to facilitate the attainment of the mission and include maximization of customer satisfaction, efficient product distribution, and responsible operations. The mission includes: Exceed the customers’ expectations in delivery of the company’s products in Australia Deliver quality services by offering efficient and reliable delivery networks Become the industry leader through value creation and instilling pride in the stakeholders and responsibility sharing Vision The vision of Organix is to facilitate the development of a healthy nation through offering fresh organic food products to Australian citizens. The vision covers the timely delivery of agricultural produce to its customers through offering quality services and commodities. Values The Organix values include the core principles that dictate the way it runs its daily operations. These standard pre-determined by the company remain the same during the life of the company and circumstances have no effect on them. The company’s values include: Prioritize customer satisfaction Promote teamwork Honesty Challenge and improve operations Work for the world Assess success through profit sustainability Passion for the stakeholders The major core principle of the company is the customer satisfaction since the customer dictates the kind of products purchased by the company as well as the mode of delivery. The success of the business relies on the customer’s satisfaction with the quality of services provided. Organix obtains its customers through recommendations from its initial customers. Satisfaction therefore becomes a key ingredient in ensuring the success of this web marketing. Strengths of the Competitor Green Enterprise is the major competitor of Organix Company since they both operate in the same industry and have similar target customers. Green Enterprise started operations five years ago hence has a higher level of experience with the business and the overall industry’s operations. Green has an elaborate delivery network serving customers from the entire country hence has a wider customer base. It utilizes a wide range of delivery mediums such as branded trucks, vans, pickups, and motorbikes. This enhances the efficiency of their service delivery and expands their market. Green sources its products from the best suppliers in the country hence offering its customers quality products. The enterprise has a reputation for quality products and services, which largely promotes its corporate image and continuously attracts new customers. Its large workforce also offers the enterprise competitive advantage since they attend to customers’ needs on a timely basis while ensuring satisfactory service delivery (Barney 2002 p.28). Weaknesses of the Competitor Due to the large number of customers, Green fails to offer the customers a personalized experience. The enterprise fails to focus on the customers’ experience and instead focuses on maximizing its sales. This has cost the enterprise some customers who feel unsatisfied with the quality of service. The large workforce acts as both strength and weakness to the business since it faces challenges in coordinating their efforts. Some members of the workforce lack sufficient knowledge about the enterprise’s vision and therefore lack goals that guide their performance (Barney 2002 p.41). Lack of supervision for the delivery workers poses a challenge to the management in controlling and standardizing the service delivery. SWOT Analysis of Organix Strengths The company possesses sufficient assets to supply its growing demand comfortably through sufficient storage space and delivery vans. It utilizes a centralized form of decision making that ensures coordination of activities throughout the organization. Operating its business in one city enables the keen focus on the quality of services offered to the customers. The coordinated efforts enable the company to offer personalized experiences to its customers hence the high level of customer satisfaction. Weaknesses Organix operates as a family business hence feces challenges in financing its operations since the management must maintain a certain capital structure. Expanding the business has therefore faced many financing challenges since it turns down some funding opportunities. The marketing strategy adopted by the company requires revision since the number of customers has increased at a slow pace. The small size of the company raises its operational costs hence reducing its profit margin over the two financial periods. Opportunities The internet offers Organix an opportunity to improve on offering personalized experiences to its customers. It would increase the level of interaction with its customers, taking personalized orders, and obtain feedback on their experience. This would also improve the communication within the organization to ensure continuous delivery of efficient services. Threats The easy entry into the industry by other businesses offers a major threat to the company in maintenance of its customers. Lack of control over the suppliers denies the opportunity of the company to control the quality of products obtained for delivery. The success of the company’s operations largely depends on the quality of the commodities since low standards would drive away customers. Background Information Michael Porter introduced the concept of competitive advantage in strategic management. (Barney 2002) expounded on the concept by highlighting that an organization realizes competitive advantage when it engages in activities similar to those of its competitors but manages to acquire an economic value. The firm therefore creates a value through strategizing to attain more benefits from an activity undertaken by its competitors. Its rivals therefore find it difficult to duplicate the benefits obtained by the organization giving it an advantage over other firms. Porter’s five forces offer a framework for the analysis of the level of competition within an industry (Barney 2002 p.33). The analysis determines the competitive intensity and the attractiveness of an industry in terms of profitability. The forces include the threat of new entrants and substitutes, industry rivalry as well as the bargaining power of suppliers and buyers. They offer guidelines to businesses on strategizing their activities to obtain competitive advantage. This gives the Organix management background information on how to formulate strategies that improve the position of the company in the industry. (Newbert 2008) focuses on the aspect of corporate scorecard that explains that a firm’s performance involves several dimensions apart from the financial perspective. The performance also depends on the internal, customer, learning, and innovation perspectives. The research focused on the utilization of valuable resources to attain competitive advantage and improve the organization’s performance. Strategic Objectives and Plans Customer Experience The company recognizes that its existence solely depends on the presence of buyers for its commodities. Customers determine the amount of sales made hence the overall sales revenue. Quality involves the ability of the company to exceed its customers’ expectations through high levels of performance. The customer experience strategy involves allowing the customer expectations to dictate the operations of the entire entity. The objective of this strategic plan is to maximize customer satisfaction from the firm’s products and services (Barney 2002 p.157). The firm needs to maintain a sustainable system of identifying the ever-changing customer needs. The needs of the customers vary with the season, market trends and social factors. The firm therefore needs to devise measures that enable the updating of the list of customer expectation to keep up with the industry demands. This strategy focuses on improving the level of interaction between the company and its customers. The company will invite feedback on its website where the customers can interact with one another, raise their concerns, and express their satisfaction. Survey reports where customers offer response about the firm’s products through encouraging the narration of personal experiences of individual customers. The management will then analyze the feedback to correct the defects in service delivery and ensure a high level of performance. The priority of this strategy prioritizes maximizing the customer experience through obtaining feedback from the customers on their experience. The timeframe of the execution of this strategy is one month. This strategy is easy to implement due to the availability of convenient media of communication between the company and its customers. The internet for instance offers instant feedback while surveys may take a while longer to collect. The delivery persons as well as the customer care personnel will take the direct responsibility of implementing this strategy within the period (Barney 2002 p.159). The company will measure the success of this strategy though the number of repetitive purchases and the number of active participants on the company’s website. Product Diversification The aim of this strategic decision is the maximum utilization of the company’s resources. The delivery workers make several trips across the city to make deliveries but they could make the deliveries more economical by increasing the variety of commodities. Product diversification involves focusing on various forms of the products already offered. The company already distributes fruits and can now diversify into packed fruit juice that would increase its customer base. The company could also consider making personal deliveries that do not entirely involve food to diversify the product base. Product diversification would offer competitive advantage to the company by placing it ahead of competitors who only offer a limited number of products (Newbert 2008 p.177). Increasing the variety of commodities would offer the customers a wide variety hence representing the varying interests of different customers. This strategy would take six months to implement since it raises the need for a market survey to determine the viability of introducing new brands. The marketing department as well as the delivery persons will facilitate the conduction of the market survey to identify the opinions the customers on the new product categories (Barney 2002 p.144). The procurement department will ensure the actual implementation of the strategy through sourcing necessary outputs from the suppliers. The company will need to develop a production department to oversee the production of packed fresh juice. The success of the strategy manifests in the level of acceptance of this juice brand through the sales units as well as the number of customers requesting for personal deliveries. Widening the Market Share Organix only operates in Sydney currently and therefore venturing into other markets would increase its sales revenue. This strategy involves intensive marketing of its services to potential customers in other major towns. The marketing strategy would introduce the company’s services to potential customers and convincing the customers to join the distribution network. Strategizing on the personal experience would convince the customers of the consideration of their personal requirements (Barney 2002 p.123). This would further strengthen the competitive advantage of the company and enable the expansion of its market share. This strategy will take one year to implement since the advertisements require prior planning and designing. The marketing department takes full responsibility for this strategy through developing plans to penetrate the new market (Barney 2002 p.122). The plan prioritizes the strategic marketing on offering information about the services to attract a new customer base. Measuring the success of this strategy involves the number of sales units purchased by customers in other towns outside Sydney. Due Diligence Undertaking the proposed business strategies to improve the company’s performance requires an in-depth research on the viability of the strategies and the ability of the business to handle the proposed strategic plans (Newbert 2008 p.149). Improving the customer’s experience has more benefits than challenges due to the simplicity of the strategy and the ease of implementation. Product diversification would have an effect on the corporate image since it would distract from the core business of its operations. A failure in the introduced product lines will have a significant effect on the overall performance of the company. Widening the market share requires an in-depth research on the status of the business and its ability to handle the expansion of the customer base. This would curb the acquisition of the market share that the business cannot handle. The business therefore requires proper change management strategies to facilitate the expansion of operations to match the increasing demand. Bibliography Barney Jay 2002.Gaining and Sustaining Competitive Advantage. 2nd Ed. Upper Saddle River. Prentice Hall. Newbert S.L. 2008. Value, Rareness, Competitive Advantage And Performance: A Conceptual-Level Empirical Investigation Of The Resource-Based View Of The Firm. Strategic Management Journal. 745-68. Read More