Fentimans Company - Enhancing the Organizations Strategic Capability by Influencing the Strategy in Action - Case Study Example

Fentimans Company Name: Professor: Institution: Course: Date: Enhancing the Organization’s Strategic Capability by Influencing the Strategy in Action Introduction Fentimans is a company that has its ancestry in the North East of Great Britain that sells soft drinks and beer .It was established in 1905 by Thomas Fentiman in Gateshead. Fentiman was approached by a colleague for a loan for which the security provided was a recipe for brewing ginger beer using botanical methods. The debtor defaulted and Fentiman as per the agreement became the owner of the recipe. The company specializes in botanical methods of preparing soft drinks, by use of old recipes and drinking styles. Botanical Brewing is a simple process involving herbs and plant roots. Initially, Fentimans beverages were distributed door-to-door in stone jars as fermentation continued. Eldon Robson, Thomas Fentimans great-grandson, introduced glass bottles and pasteurization which increased the products shelf life while retaining the firms tradition of botanical brewing and fermentation over a seven day period (Buchanan 2005, p. 85). In comparison, the soft drinks that are Fentimans competitors take only a few hours production time. Fentimans soft drinks, mixers and beers are targeted at the adult market. Fentimans product catalogue includes Curiosity Cola, Mandarin and Seville Orange Jigger, Traditional Ginger Beer, Tonic Water, Shandy, Dandelion and Burdock and Victorian Lemonade. The company has faced several challenges that have restricted its success. It is important to view the company’s growth or lack of growth in comparison to its “age mates” in the beverages market such as Coca Cola (1886) and Pepsi (1893) which have become well recognized global brands and cultural icons. One of the major challenges has been environmental as the company prides itself in the use of herbs and plant roots as the main ingredients. Environmental degradation has made them hard to come by and in some instances the company has been forced to rely on imports such as of Chinese ginger (Anderson & Coughlan 1987, pp. 75-80). A businesses strategic capability is the actions a company needs to take in order to accomplish the goals of its business strategy. It is an amalgam of people, processes and technology that is directed towards a specific purpose as envisioned in the company’s business plan. Strategic capabilities are those in company planning, strategy and investment. A strategy is a method that takes into account the wider context in which the company functions, its strength and weaknesses, and the obstacles it is attempting to overcome. Strategy provides a working framework, clearly shows what the company intends to achieve and the tactics it intends to use without the details of specific activities. The subject for the company to perform different activities effectively is well examined by its capability to work within its capacity. Understanding the company’s capability is the most significant things in defining and assessing what has been achieved and what is also supposed to be worked out within the stated time frame. In the case of Fentimans, its strategy is to curve for itself a niche in the beverage market which is dominated by artificial carbonated drinks. It plans to use its heritage as one of the few companies that still use botanical methods in producing soft drinks and beers as a marketing strategy. The problem, according to me, lies in the fact that the market for its products which consists of consumers who are willing to appreciate the uniqueness of its brands is rather small. Furthermore, the company would find it hard logistically to satisfy demand if the mass market were to wholeheartedly embrace its product. This is because the processes involved in making the product take days rather than hours that its competitors in the beverage market take and it would be difficult to accelerate the manufacturing process without compromising on quality. This strategy limits the company’s horizons and once led to its closure in the mid 1960s. Botanical methods of production are its strongest point as well as its greatest weakness. But this does not have to be the case in an era of great scientific advances in the area of manufacturing and processing. The company should engage the scientific community in Great Britain as well as abroad to research on the possibilities of making its beverage making processes less time consuming, less costly and at the same time maintaining the unique taste of its products. The firm, before its closure in the mid 1960s, was mainly a door-to-door ginger beer sales company. When the supermarkets began to take over the door-to-door trade it precipitated the closure of the company until it was relaunched by Eldon Robson, the grandson of Thomas Fentiman, in 1988. To prevent the failure of the company again, I propose that the company change its product delivery channels or at the very least add new channels. A case study of its main competitor Coca Cola would provide insights into an additional distribution channel that could be of use to Fentiman. Coca Cola follows a franchise production and distribution model. The Franchises are in charge of one or more geographical areas and purchase the syrup concentrate from Coca Cola and process and bottle it for sale. Fentimans could adopt this strategy with modifications to suit its production processes. The Franchise model is not only a distribution model but also a marketing model. Franchise owners are themselves part of a giant marketing machine due to their knowledge of their localities and their feelings of mutual ownership of the company (Moore 2006, p. 56). Conclusion The firm could also increase its presence in the internet. The internet provides endless possibilities for a company to enhance its strategic capabilities. The internet could revolutionize Fentimans, especially in marketing and distribution. Internet marketing is cheaper compared to traditional forms of marketing such as bill boards, television and radio advertising. Being in possession of viable information, and also carrying out an analysis on the same information are considered to be processes of determining the base of the company’s marketing strategy. The company’s internal and external environments constitutes of the analyzed information. The systematic gathering and scrutiny of data, though an arduous task, makes the company able to chart its direction more precisely and more knowledgeably and lays a strong foundation upon which the marketing strategy can be formulated. The process of formulating the marketing strategy considers industry trends and influences, business environment, available resources and capacities. The phase that is of intelligence is concerned with defining the kind of environment being operated by the company. A review along these lines would greatly assist Fentimans enhance its strategic capability and positively influence the company’s strategy in action (Anderson & Coughlan 1987, p. 81). As identified, a businesses strategic capability is the actions Fentimans Company should take in order to accomplish the goals of its business strategy. Therefore, it is considered to be an combination of people, processes and technology that are geared towards a specific purpose as envisioned in the company’s business plan. Strategic capabilities are those in company planning, strategy and investment. It has been determined that a strategy is a method that takes into account the wider context in which the company functions, and in this case, it talks about the strength, weaknesses, and the obstacles that Fentimans Company is attempting to overcome. With Fentimans, strategy provides a working framework by showing clearly what the company intends to achieve and the tactics it intends to use without the details of specific activities. The subject for the company to perform different activities effectively is well examined by its capability to work within its capacity. Therefore, understanding the company’s capability is the most significant things in defining and assessing what has been achieved and what is also supposed to be worked out within the stated time frame. This is what the company’s management team is trying to achieve. Organization’s Strategic Planning Processes Introduction Strategic planning is a process whereby a company asks itself questions concerning the reasons of its existence, its main goals that are supposed to be achieved, and the required resources to help the company attain its goal, and the kind of customers it is bound to have while realizing its mandate. Strategic planning is a methodical process that entails identifying the present status of the company, its mission, vision, core values, strengths, weaknesses, opportunities, threats, targets and plans. It is an important procedure in attempting to perform a company’s mission. A successful strategic planning process creates a decision making framework that assists the company in resource allocation, resolving challenges and utilizing opportunities that arise. There are a number functions that strategic planning has in the overall business functioning process. These are: a) Assisting the company’s management to comprehend more about the present positions of the company. b) Assisting the company’s management team to plan precisely and efficiently for the expectations. c) It enables individuals to have a long-sighted projection within the company thus making the company to thrive and probably survive. d) Assists in conveying the target of the company’s management team to the involving individuals. It also assigns responsibility, schedules work, coordinates and unifies efforts. Strategic planning facilitates control and evaluation of the company’s activities while creating awareness of obstacles to overcome. It also identifies opportunities and facilitates progressive advancement of the company’s goals. It is important to recognize that strategic planning works best when the company has good management, good channels of communication, is open to new ideas and is not buried in rules and bureaucracy (Bradley 2010, pp. 102-124). The followings are some of the limitations that are prone to this company: a) It is not a final guarantee for the success of the future. b) Providing better projection basing on what is expected and not a design representing the future. c) Strategic planning is just a process that is designed to assist the management in realizing whatever that has been put in place, and therefore, it is not the solution to situations arising. d) Strategic planning cannot be taken as or substitute spontaneous opinions. e) Being a process, strategic planning cannot be determine all critical issues that are normally related to the business, but tries to attempt some that are found to be significant. This is found to be effective, especially in times of implementing the strategic plan. f) Since dynamism is an aspect that is encouraged within strategic planning, resistance to such change is something that is expected to take place. In this case, new problems are bound to happen with introduction of strategic planning. To understand what entails within strategic planning, then the course should begin by understanding what is planning and go on by defining and outlining the overall process involved in strategic planning. We need to find out what the expectations are and ensure everyone involved in the process of formulating the strategic plan is aware of them. The Chief Executive Officer needs to define the issues that should be addressed and what he or she expects of the process in a statement that should be availed to all the major participants in the process. Information such as the current company mission, current targets and previously implemented plans should be garnered. The current company managers should be interviewed and their views recorded on what they consider to be the decisive issues of the future. Those concerned should agree on the scope that the strategic plan should cover and the period which the plan should cover. It is essential that the strategic plan should cover a period that is sufficient to shift the company towards a certain desired state of affairs. It is important to determine how wide the plan will company, that is whether it will encompass the entire company or only certain divisions or units. A logical sequence of steps that will guide the process should be formulated and most importantly a planning committee constituted. The planning committees should determine those to be involved in the process, those would manage the process and their responsibilities and the resources required. The method used in the process will depend on the preferences of Fentimans and its management team. A bottom-up method is preferred if previous attempts by top managers at strategic planning failed (Bradley 2010, p. 104). For a small company like Fentimans a team approach might be favorable although a formal process that is favored by the larger companies would also work. The disadvantage of a more formal process is that it could hinder creative thinking and stifle new ideas. If a formal process is chosen it should be open and should avoid being ritualistic. The sole purpose of organizing the process is to produce a satisfactory strategic plan (Bradley 2010, p. 134). A strategic plan that is relevant has many characteristics most important being that it should simply be a set of priorities. Setting a list of the main concerns allows the plan to be revised according to the changing business environment. The strategic plan should be attainable, quantifiable and time conscious. It’s wiser to accomplish a few goals than to fail to achieve many goals. The targets should be quantifiable and have deadlines, and to achieve this, it is supposed to be straightforward, especially when it comes to matters to do with adjustment and adaptation. The useful strategic plan should anticipate unforeseen crises, new chances, or fluctuations in resources as well short and simple. Plans that are unnecessarily long will in most cases be ignored. Good strategic plans should illustrate the direction to a desired destination and avoid being the destination itself. A long-term strategic plan is supposed to have a time frame of about three to five years. It should also have a provision one year added and drop off for the purpose of accuracy and reliability in its timing. The Outline of Strategic Planning for Fentimans Company a) Selecting a steering committee by the board to be in charge of the overall strategic planning process. b) Elect an external consultant body to support with the strategic planning process. c) The committee should get agreement on the planning steps, responsibilities and timeline. d) The agreement should be reviewed with the board of directors. e) The committee should gather information from key management personnel on strengths, weaknesses, opportunities, threats and critical issues. f) Summarize current plans and mission and review past achievements and disappointments in the last three-year period. Therefore, it is highly recommended that the recent history is supposed to be evaluated by the planning committee and directors of the board and ascertain recent developments and position. Review previous meetings and make a draft strategic plan to be appraised with important managers, senior staff and those crucial to the plans implementation. Make adjustments and a final strategic plan that recognizes the input of all those interviewed. The committee should seek to obtain approval of strategic plan. The company proceeds to implement the strategic plan. Progress should be reviewed after six months and the plan revised accordingly. Once the committee has organized the process, the next step is to assess the current situation facing the company. Reviewing the identified mission statement is a process that needs to be done precisely after the SWOT analysis has already been determined. A mission statement describes what the company intends to do and the steps it will take to accomplish the vision. Mostly, the mission statement will be the only assertion that many people will ever read about the company. The reason for the existence of a given company normally states the overall position and impact of a better identified mission statement. To develop a working and effective mission statement, the idea about the future should be tackled, and in one way or another speak about the company’s vision. The aspects of the company’s competitive boundaries are supposed to be expressed within the mission statement, and it should not be too specific, so that any changes that can be initiated should be incorporated (Levinson 2008, p. 97). We are now ready to translate Fentimans critical issues as discovered during the situational assessment into a formal plan The planning committee at this stage has sufficient information to develop a list of strategic objectives that would be important in addressing the issues of the future. An analysis of strengths, weaknesses, opportunities and threats is a good starting point that could assist the committee identify and solves critical issues. They should consider the available resources that Fentimans could rely on to solve the critical issues. Strategic aims must recognize the resource constraints that Fentimans faces. As usual top managers are likely to set overly-ambitious objectives that would be difficult for junior managers to accomplish. Consultation needs to take place between top managers and their juniors on the final list of strategic objectives. They should also consider past performance and the trends they expect to see in the future during formulation of strategic objectives to ensure that the goal Fentimans sets for itself it is able to accomplish. Previous performance is a sufficient pointer of company capabilities. The most important aim of the strategic objectives is to support Fentimans mission statement by directing company resources towards accomplishment of its most important goals. They should also be sensible and attainable when resource constraints, business environment and management approaches are considered. The committee should also ensure that the formulated objectives should be agreeable to those in charge of implementation in terms of resource availability, time constraints, staffing levels and other considerations. Strategic objectives should avoid rigidity and be flexible enough to allow changes during unforeseen circumstances while still being measurable. Ideally, strategic objectives should be simple, easy to comprehend and communicate responsibilities to specific areas. As soon as the committee completes the task of finding the strategic objectives it is now capable of creating a useful draft of the strategic plan. A complete draft will need additional sections. First, an executive summary of the plan that traces the mission, goals and current circumstances facing Fentimans. It is also important to note the principles of the company, that is the beliefs and values of Fentimans that could be important to the strategic plan and a brief history of the company. The history section should include important events that altered the direction of the company. Basic information about the company such as its markets, size and products should be included in the profile. There should be brief section on situational analysis that summarizes Fentimans strengths, weaknesses, opportunities and threats that confront the company. Conclusion The distribution of the draft strategic plan at times induces the formation of new ideas, issues and goals. It is consequently very important to refine and change the draft plan to include the input garnered after those concerned have looked at the first draft. The committee and senior management should get everyone to concur on the main objectives and targets that would direct what Fentimans would do in the next few years. Being precise and clear are the main significant features that are supposed to be incorporated in the final strategic plan (Holden 2006, p. 245). An aspect that has enabled the company to cut through the stiff competitive market is by the management team understanding that a strategic plan, that is relevant, has many characteristics; most important being that it should simply be a set of priorities. The management team has set a list of the main concerns, allowing the plan to be revised according to the changing business environment. The strategic plan should be attainable, quantifiable and time conscious. It’s wiser to accomplish a few goals than to fail to achieve many goals. The targets should be quantifiable and have deadlines, and to achieve this, it is supposed to be straightforward, especially when it comes to matters to do with adjustment and adaptation. The useful strategic plan should anticipate unforeseen crises, new chances, or fluctuations in resources as well short and simple. Plans that are unnecessarily long will in most cases be ignored. Good strategic plans should illustrate the direction to a desired destination and avoid being the destination itself. A long-term strategic plan is supposed to have a time frame of about three to five years. It should also have a provision one year added and drop off for the purpose of accuracy and reliability in its timing (Jeff 2004, pp. 114-137). Bibliography Allen E. Buchanan, Ethics, efficiency, and the market, Philosophy and Society, New York: Rowman & Littlefield, 2005, p 85. Anderson, E. and Coughlan, A. T., International Market Entry and Expansion via Independent or Integrated Channels of Distribution, New York: Rowman & Littlefield, 1987, Vol. 51. pp 71-82. Bradley Nigel, Marketing Research. Tools and Techniques, Oxford University Press, Oxford, 2010, pp. 102-156. 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