The Strategies for Kieron Industries - Case Study Example

Strategies and tactics Lori Williams University of Phoenix Integrated Business Topics BUS475 James T. Sternieri January 4, 2009 Table of Contents Executive summary 1.0 Introduction……………………………………………….……….. 1.1 Authorization……………………………………………………. 2.0 Purpose ………………………………………………………….. 2.1 Scope……………………………………………………………. 2.2 Vision ………………………………………………………........... 2.3 Mission ………………………………………………………………… 3.0 Business concept ……………………………………………………… 4.0 Company objectives …………………………………………………… 4.1 Short term objectives ………………………………………………. … 4.2 Long term objectives ……………………………………………… 5.0 Business organization ………………………………………………… 6.0 Situational analysis ………………………………………………….. 6.1 SWOTT external …………………………………………………… 6.2 SWOTT internal ……………………………………………………… 7.0 Balanced scorecard ……………………………………………………. 8.0 Strategies and tactics …………………………………………… 9.0 Integrated marketing communication plan ………………… 9.1 Launch date ……………………………………………….. 9.2 Objectives ……………………………………………………… 9.3 Positioning and message …………………………………… 9.4 Market targeting and segmentation ……………………….. 9.5 Marketing strategy ………………………………………….. 9.6 Online advertising ……………………………………………… 9.7 Direct marketing ……………………………………………….. 9.8 Promotions ……………………………………………………… References Executive summary The world of today is presenting more and more business opportunities for entrepreneurs with knowledge on how to successfully manage a business. Unfortunately, not all persons have the ability to take of business opportunities arising from new developments in our day to day lives. As such, only entrepreneurs with the best skills in business are going to set up business and be able to provide return on investment. Therefore, any speculation of a new business opportunity should be investigated through various market analysis tools and conducting feasibility studies. Rankins (2005) says that the fist step in setting up a business is developing a business concept in which the entrepreneur assesses and evaluates his role in taking up the opportunity and providing the good/services to the market. As such, he should also be able to identify the factors that work for his business to prosper in terms of environment and market conditions. 1.0 Introduction In this course, I have learned about the essentials of staring up a business and all the essentials that go along with setting up a business. This paper therefore is a report of a strategic business plan for a safety cloth manufacturing company. 1.1 Authorization The report is sanctioned by my lecturer in Integrated Business Topics (BUS475) James T. Sternieri, in fulfillment of my module requirement, presented on (Insert date of submission) 2.0 Purpose The strategic plan for Kieron Industries, as the name of my business is to provide a guideline on the basics of running the business and how it will meet the customer requirements and needs and at the same time make business sense. The plan also theorizes on the possible problems and challenges facing the business. 2.1 Scope The strategic plan brings into focus the situational analysis in the market, in terms of business environment, market segments and product suitability in the market and analyses the strategies and tactics to achieve set goals and objectives. 2.2 Vision statement To be the leading provider of quality safety and protective clothing in the market in North America. 2.3 Mission statement Safety, concern, and care for consumers. Protection of our environment and personal and corporate integrity are the company’s highest values, and we will not compromise them. 3.0 Our business concept Kieron Industries will provide quality safety and protective wear and equipments in a show of our concern for the safety of our customers. Our products will be made with the safety of the customers in mind bearing in mind the fact that there are existing players in the industry and thus our superiority in product quality will award us a generous market share. Our products will also ensure that the users are comfortable and that they do not affect the competence of the user but rather increases competence with the assurance that he/she is protected from any harmful product or dirt that he is handling. To achieve our vision, the company will embark on extensive marketing measures and suing various strategies to help us achieve our objectives and attain sustainable competitive advantage. In operating in a highly, competitive market, our aim will be to ensure customer satisfaction and safety and at the same time ensuring growth for our company. Growth will be achieved by gaining a considerable market share that will mean increased customers and production. Our research and development team will continuously work together id identify new target markets by identifying customers needs and being pre-emptive in delivering the needed products and equipments. As work environment change to new machines and working conditions in factories, our company will be quick to provide all the necessary equipments that will be needed in working in such environments. For example, we will work to develop helmets that are resistant to heat similar to those worn by fire fighters but seek to do so at a lower cost. Such will target employees working at stations where they are exposed to heat such as hot sun to maintain their safety and comfort. The future of the company lies in our ability to continuously offer quality products that provide the protection and care for service workers in different fields. This begins with having the right types of products, materials and types of clothing that are offered to customers. This also includes the ability to offer expansion in two areas. The first is to offer innovative products that provide higher quality materials than other types of protective clothing. Some of the clothing offered sometimes does not offer the highest protection needed and may in fact be a health hazard itself. Through continuing to work on designs and options, the company will have the capability of expanding product lines to include higher quality and more innovative types of clothing. With this, the company has the capability of finding specialized wear for customers. For instance, one of the difficulties with protective wear is that the clothing sometimes is not suitable for different individuals and can lead to discomfort or danger because of the use and design of materials. Combining designs with the different clothing allows for even more protection to be offered by the company and to the customers. By providing this quality and expanding the value through innovation of the products, the company will be able to provide support to service workers and those needing protective clothing (GlobalSpec, 2008). 4.0 Company Objectives Given that our company is relatively new in the market, most of our objectives have to be made realistic and minimize the risk of failure in case unprecedented sudden business conditions come into place. Unfortunately, many authors are against this idea basing their argument that where there is a high risk, the returns are usually high Rankins (2006). Faced with such dilemma, short term objectives wee first to be evaluated and the achievement or failure to achieve them will determine the direction taken by the company in formulating and drafting new long term objective and also take the necessary steps either in management of process evaluation and redesigning. 4.1 Short term objectives In the first three months the company will ensure that there is 40% brand awareness among our market segment located within a 100 Km radius of our company premises. Ensure brand awareness of 60% by all manufacturing firms within our county within the first two months with the commencement of operations. Wastage levels of production materials will be kept under 10% within the first three months of operations. The company will within the first year of operation establish its own website to help in marketing activities. 4.2 Long term objectives The company will have achieved 60% brand awareness within the state in the first five years. The company will have developed a new type of helmet suited for persons working outdoors that is relatively cheap and more resistant to heat. The company will strive to achieve ISO14001 certification on environmental conservation and minimize pollution caused by our operations to the minimal levels. The company will have launched an active environmental policy incorporating the local community within the first five years. 40% of our products will be made from recycled materials within the first five years of operations. The company will facilitate ordering of our products online in three years time. 5.0 Business organization The company will be organized into 8 different departments all under the general manager who will oversee the harmonious functioning of all the departments. These departments are human resource, finance, production, purchases, sales and marketing, research and development, quality control plus warehouse and dispatch. Each department will be headed by a manager answerable to the general manager. Kieron industries shall seek to recruit qualified employees in various fields with those with prior experience in this industry given priority. The recruitment process will always be conducted through with fairness and on merit by our human resources department. The company will initially operate with 3 main machines and 10 other minor machines in manufacturing our products. For the first three months, the company will use operators provided by the machine suppliers as agreed on the purchase of the machines. These operators are also to train our employees on working with the machines. Materials for manufacture will be sourced from Miranda Systems and Bobcats on contract basis. Due to the limited spaces in our warehouses, limited production materials will be stored in our premises. The production department will work closely with the quality control department to ensure that all our products meet our high quality levels and that they meet the customer needs. The research and development team will double up in gathering market data and providing guidance in the possible improvements of our product to meet changing consumer needs and changing regulations. The sales and marketing department will handle all transaction made with our customers and seek and maintain customers. This department will also be responsible for initiating marketing initiatives with the approval of the general manager. It will also double up as the customer relations department. The purchases department will also handle buying of all supplies from suppliers and work with the quality control department to ensure that material used in the production process meet are quality levels. The production department will be making their weekly estimates of supplies needed in order for the purchases department to make the orders. 6.0 Situational analysis The SWOTT analysis test performed to analyze the position of our business in relation to the internal and external environment puts us in a very knowledgeable position. The findings allow us to recognize what is working for or against us in our management and what challenges our operations in terms of the external environment. 6.1 SWOTT-external forces factor Strength weakness opportunity technologic trends Legal and regulatory factors Supports Factories Act No legal expert representing the firm All workers in factories must wear safety clothing and equipments We have high-tech machines and produce quality products Increased awareness on need of protective clothing Economic factors Have ample financial resources to service budget Factories are adopting robots and better machines instead of workers Factories are closing down due to credit crunch Increased threats in factories Increased concern over safety of workers Enactment of other safety laws. High technology in production cuts cost of production and increases SCA manufacturing companies are phasing out old technologies in production to increase efficiency and capacity Innovation New production machines New and better management strategies new innovations are costly to implement and requires long periods of time to evaluate and implement our high technology facilitates innovation in new products and improvement on existing products High technology powers innovation and quality Doubling up of safety with safety. “Green” protective clothing and equipments Environmental we have a sound environmental policy that lays emphasis on using organic materials in our production where applicable and reducing our wastage using organic materials on our production increase our cost of production Our products are positioned in the market as more safe to the user and reduces risk high technology in our production reduces wastage and release of harmful products into the environment such as smoke there is more global emphasis on “green” products and production processes which we are pursuing 6.2 SWOTT-internal forces factor Strength weakness opportunity technologic trends strategy Have a well stated vision, mission and company values. Our workers use our products Failure of our products can lead to legal procedures against the company Increased trust by our customers means increased business for our company production using the highest technology ensures that our strategic message to our customers is complete by maintaining the highest quality possible Increased regulation in safety matters as governed by the World Health Organization and ISO are forming the basis of perception by consumers Resources We have adequately served budget with all capital outlay in terms of machines and spare parts in place Our production unit outlay cannot meet unprecedented increase in production past our initial market requirement estimates our company is located in an expansive area with extensive area for future expansion of our factory Our production machines are of the latest technology and have a long lasting useful life that will reduce our costs of maintenance and replacements. Investments in resources are being made on long term considerations leadership Our team of top management executives comprising of nine individuals has an experience totaling 93 years as managers thus giving us depth in management option and expertise in strategic decision making Large management team leads to disagreements and time lag in decisions making Management software tools such as in CRM and accounting favor are phasing out large number of managers experience presented to the company our management team provides us with the needed expertise to operate successful Management software tools such as in CRM and accounting increase efficiency Business management and business leadership have proved to be the perfect ingredient in business growth and it’s something that our company possesses in abundance 7.0 Balanced scorecard Rankins (2006) does not explicitly give priority to the importance of having a balanced scorecard but emphasizes on the need to have all the company’s objectives, values, and mission and vision statement aligned together. This is indicative of the fact the, it is the top decision making organ in a company that will be involved in delivering and implementing a balanced scorecard t any time. This is done hinged on the business environment as indicated by the SWOTT test. It is indispensable to locate the place of objective in the general process of the Balanced Scorecard management system proposed in order to measure and evaluate the progress and growth of the company. The making of the Balanced Scorecard is instigated by aligning the company’s overall strategy or mission statement that reflects the values of the company to the simple short term events. The general direction of the company will explained to all employees and its importance emphasized and reflected in all business processes. In this phase the importance is to consult with top management rather than the line managers to obtain a clear picture of where the company wants to be in three to five years. With the corporate strategy in place the managers have a guide in the derivation of three to five goals relative to four or more depending on the industry that applies to the perspectives of the customers, internal business, innovation, financials, and development of specific measures to support each goal. Subsequently, the Balances Scorecard approach proceeds by associating with each objective series of measures and targets, and by identifying initiatives that relates to the objectives. Finally, the Balanced Scorecard approach cascades objectives and measures down to business units, teams, and individuals. The Balanced Scorecard approach requires communication of vision and strategy, and establishment of objectives that support the vision, strategy, and development of the relevant measurement that can tract progress toward the objectives. The next steps are creating systems for relevant data collection and analysis in addition to feedback from management and employees. The Balanced Scorecard’s value consists in acting like a bridge in helping the organization get from beginning to end strategies developed by the management to the daily actions of the employees. The Balanced Scorecard facilitates the movement from the uncertainty of strategy to the tasks and activities of daily work. For the Balanced Scorecard is the translation of strategic plans to actionable and measurable objectives that are ready for execution at all levels within the organization. The mission, vision, and values of any organization are statements of purpose or the guiding principles without which any managers or employees will not exist. For this reason there is one thing that objectives of the Balanced Scorecard fulfill is the support to the mission, vision, and values of the organization. Objectives are the difference between where the organization is now and the vision and mission defined are considered the true drivers of performance for the organization as a whole. Objective effectively link the company down to the rank and file to top management and are expected to lead the organization toward top management’s vision. This is the basic building blocks for the strategy which enables the “sorting” to begin. According to Thompson et al (2006), a company’s unitary vision and mission are translated into a set of objectives through the identification of key success factors and key performance indicators. As the objectives are being formulated the question becomes “what are the critical success factors?” In the Balanced Scorecard process, goals and objectives are set at the management level after determining analyses and policies, and are then filtered down to operations or processes, and teams all the way down to the individual employee level. In establishing the objectives most organizations are involving line managers and staff members sometimes including customers. The involvement of these members might take form of an executive workshop at which the participants are going to review and discuss the goals and other appropriate measures in consideration of the results of the SWOTT analysis. This is an effective picture of the current status of any organization’s internal and external environment. During this mode of engaging as many “stakeholders” as possible will build a consensus around the Balanced Scorecard and reduce the potential for unrealistic goals to be handed down from top management. Objectives are brainstormed as well as discussions assisting in clarifying and narrowing the objectives. Through an interview and rank voting process with a cross section of leaders and stakeholders the objectives are sorted. 8.0 Strategies and tactics Campbell et al (2002) makes a distinction of tactics from strategies by saying that strategies are defined methods by which accompany uses in achieving both its long term and short term objectives and the mission and vision statements. On the other hand, tactics are the functional aspects of carrying out the strategy. Selling Kieron products to the target market will thus a continuous process that will be executed in an efficient manner and help the company achieve competitive advantage. While aggressive marketing informs our business clients on the need to equip their employees with our safety products and equipments, we will have to be careful in doing so as there lays legal risk if our promises on our products do not deliver the promises. Thompson et al (2006) suggests one way of introducing our products in the market as under promising on the performance of our products in order to surpass consumer expectation. Unfortunately, this strategy is not viewed as the best by Campbell et al (2002). He says that there are consumers who totally believe in the marketers’ words and thus giving “more than enough” information on the product is a key selling point. In order to accomplish the level of brand awareness that we seek both in the long term and short term, Rankins (2005) suggests the writing introductory mails to our potential clients and informing them on the need to buy our products and why they fit their operations. These mails will emphasize on the need of safety clothing to employees and explain our role as a firm in that through our product range. Such letter should be accompanied by brochures/catalogues quoting our prices. This is in line with showing concern on the safety of our consumer as per our mission statement. Other additional MC such as newspaper adverts and participation in trade fairs and promotions will be employed. As our company progresses, we have to challenge the threats and weaknesses that face our operations and utilize the strengths opportunities presented to us as per the SWOTT analysis with due observance of the law. In order to comply with increasing global regulations on environment, materials used in the manufacture of our products will be biodegradable and where possible made from recycled materials. Again environmental management polices such as natural capitalism that upholds recycling and reduction in wastage will be upheld. This will help in reducing our costs and wastage which will increase our competitive advantage. In the era of the internet, our company cannot afford to be left behind. The company shall establish its website to facilitate customer relations and in future allow customers to make their orders online. To achieve this, the progress of the system will have to be monitored closely whereby numbers of visitors to our website are recorded. Such data will not only be helpful to our R&D department but also to evaluate the effectiveness of our online marketing activities. Campbell et al (2002) informs us that though tactics are developed to achieve strategies, their efficiency should always be tracked in order to discard and develop new ones in case the old ones are not working. One of our strategies in reducing cost is recycling waste materials. This will be indicated by a low level of wastage materials in the production process which we will aim at keeping it at less than 10% of the total materials used in production within the first year of operation. Visitors to our company website will be recorded on a daily basis with the figures indicating the possibility of setting up a membership program for our returning customers who will be awarded additional benefits such as discounts. Another tactic to be used in checking our strategies is aligning our operations with new developments the market. This will be achieved by ensuring that our research and development team is up to date with new technologies, new laws and market requirements that will necessitate our company to change its processes and strategies to meet consumer needs and wishes. These strategies and tactics should also be constantly re-evaluated and aligned to the core function of the company as stated in the mission statement as “Safety, concern, and care for consumers. Protection of our environment and personal and corporate integrity are the company’s highest values, and we will not compromise them”. In addition to this, the tactics and strategies will be applied wholesomely for uniform growth into the future as dictated by balanced scorecard ideals. 9.0 Integrated marketing communication plan for Kieron Industries Communication is the cornerstone of marketing according to Pearce and Robinson (2005). In addition to this, the writer says that marketing communication efforts should compliments the quality of the product in delivering the promise and meeting or even surpassing customer expectations. An integrated approach in marketing communications seeks to use all the tools of marketing communications such as promotions advertising, direct sales, offers and discounts, public relations and branding to give one consistent message. For a new company the market as in our case, informing the market of our products and responsibility in the market should form our major priority according to Shaw (1999). For Kieron Industries, this is expressed by our long term and short term objectives of gaining considerable brand awareness in the market. The challenge now remains how effectively and consistently we carry on our marketing communication policy. 9.1 Launch date The company will officially be launched one month after commencing operations in order to be able to display our products. The event will be take place in the company’s premises. Notable personalities such as the Assistant Secretary of Trade have been invited. This will take place in February 27th 2009. 9.2 Objectives As expressed in the company objectives The launching event shall be witnessed by major manufacturing company heads who are our potential clients. The marketing campaign expects around 20 of them. Gain as 1% market share in the state within the first two months. 9.3 Positioning and message Our products in the market will be marketed as safety clothing and equipments that are environmentally friendly and healthy to the user and maintaining comfort of the user to uphold competence. Our message in marketing will thus be consistent with the position we take. 9.4 Market targeting and segmentation The MC plan for Kieron will target large scale business customers. Additional customers will be targeted as individual consumers. Heavy industrial manufacturers will form their own category of market as their protective clothing is different and more expensive to manufacture. 9.5 Marketing strategy A combination of push, pull and profile strategy will be used. Pull strategy will be used to achieve the awareness levels stated in the objectives. Profile strategy will lead to interest mobilization in the company’s products. Push strategy will try to reach as many people as possible with the MC message (Niven, 2006). 9.6 Online advertising This will be best accomplished after the establishment of our company’s website. 9.7 Direct marketing Direct marketing will be used to reach our various targeted market segments. This will potentially increase our number of customers willing to try out our products. 9.8 Promotions 10% discount offers will be made to business customers who place large orders with us in the first year on contract basis. References Anonymous (2008). About Safety Clothing. GlobalSpec at, http://material-handling.globalspec.com/LearnMore/Manufacturing_Process_Equipment/Safety_Personal_Protective_Equipment/Safety_Clothing (Accessed on 12th Dec 2008) Anonymous (2008). Shaping Tomorrow’s Business Leaders: Principles and Practices for a Model Business Ethics Program. Business Roundtable for Corporate Ethics, Anonymous (2008).Protective Clothing. Tradekey. Retrieved December 2, 2008, from http://www.tradekey.com/ks-safety-clothing Campbell, D. Stonehouse, G., Houston B. (2002), Business Strategy second edition, (London, Heinemann) Hall, M. (2000, Nov/Dec.). Bridging the Distance: Using the Balanced Scorecard to move from leadership strategy to employee action and organizational results. Harvard Business Review. http://www.dau.mil/pubs/pm/pmpdf00/halln-d.pdf(Accessed on 29th Dec 2008) Holt, St. John A. (2005), Principles of Health and Safety at Work, 7th Edition, (London, IOSH Services Ltd) Niven, P. (2006). Maximizing Performance and Maintaining Results. Balanced Scorecard Step-by-step(2ed). At,http://www.intracen.org/ipsms/webhelp/pati/vision_mission_and_objectives_htm (Accessed on 28th Dec 2008) Pearce, J., & Robinson, R. (2005). Strategic Management: Formulation, Implementation, and Control (9th ed.). Boston: McGraw Hill. Rankins, G. (2006, November). Improving Strategy Implementation. 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