Core Strategic Issues Facing Indigiearth Company - Case Study Example

Case Study Analysis Name Institution Date Introduction A critical business issue can be a problem or an opportunity that is crucial to the success of the organization (Evans 2013, p.1). The crisis or chance can relate to the core function of the organization. It may be affecting a considerable number of the people within and external to the organization either directly or indirectly. For a problem, it can be having adverse effects on customers and other key stakeholders to the business. Critical issues in an organization require identification and analysis since they have strategic implications for the company. Identification and analysis of problems/issues affecting an enterprise help in coming up with solutions to address them as part of the organizational strategy. This assignment uses a case study of a selected company to identify and analyze its core strategic issues facing the company in its environment. The assignment will also discuss the external strategies that the organization should pursue in its environment. The internal changes that the company requires so as to implement those external strategies and the human resource implications for these external and internal changes are described. The Selected Company The company in this analysis is the Indigiearth Company that provides services to the hotel and tourists. Sharon owns and runs the company personally regarding its management, funding, and strategic decision-making. Currently, the company is on the verge of expanding internationally, and Sharon is making several decisions to ensure that the company competes in the international market. Core Strategic Issues Facing Indigiearth Company At Indigiearth Company, Sharon is facing core strategic issues when making decisions to expand the business internationally. Sharon faces the problem of sourcing food and cosmetic ingredients that are essential for ensuring that the company produces enough to meet the international market demand. These components require specialized knowledge for their production that the enterprise does not have to be able to make their own. Currently, she is using traditional agricultural techniques to source the ingredients, and that is not sufficient for the business to meet the increasing demand in the international market. The second core strategic issue that the company faces is the selection of investors and partners in the company. Sharon wants to partner with other people and businesses in the international market as a strategy to enter the international market. She also wants more investors for the business to ensure it has enough funds when entering the international market. To grow the dealing, Sharon will require more finances to be raised by new investors to purchase new equipment for the production and packaging. There is tension in choosing the right type of investors and partners for the business. The third core strategic issue for the enterprise is scaling and building a sustainable supply chain for the company that will help in saving time for the excellent opportunity for expansion to the international market. There is also the strategic issue of recruiting new staff in the business. The new employees will cater for the increased work in the company and also access more suppliers and development of a larger scale sales framework. With the above core strategic issues, Sharon is not ready to embrace the expansion if these problems in the business still exist. To address the issues, Sharon needs to implement various external and internal strategies. External Strategies Barney (2001, p.54) says that the capability of an organization to implement new strategies is a resource for achieving competitive advantage in the market. Here, alternative strategies are necessary to improve the performance of the organization. Becker & Huselid (2006, p.910) describes that companies that want to achieve competitiveness must take alternative courses of action after evaluating the existing ones that are not useful in helping the organization achieve its goals. Sharon, the CEO of Indigiearth Company, needs to take the initiative of adopting new external strategies for the business so as to gain competitive advantage in the international market. In its environment, the Indigiearth should pursue different external strategies to enable the company embrace the expansion successfully. Indigiearth operates in a competitive international market that requires the use of advanced technology in the production of food and cosmetics. Sharon is utilizing a traditional method of sourcing ingredients for the food and cosmetic production. The current method of supply of input to the production is not sufficient for achieving the required level of food and cosmetic for the market. Indigiearth requires a better and improved method of sourcing for food and cosmetic ingredients that are sufficient for the expected production that meets the anticipated demand in the international market. Since some of the food and cosmetic ingredients require specialized knowledge for their output, Sharon will require outsourcing this knowledge for producing the components in the company. It is a good strategy that will help in reducing sourcing costs and production time. The reason is that availability of knowledge on production will enable Sharon produce the ingredients in the company and will not require purchasing them from suppliers. It is also an effective way of ensuring that the raw materials for making food and cosmetics are available within the organization and that there are no delays. Therefore, the company will be able to meet the demand for food and cosmetics in the international market. The Indigiearth Company also requires sourcing for professional advice on how to select investors and partners for the business. Currently, Sharon is not sure of the number and characteristics of partners that are necessary for the enterprise to ensure it thrives in the international market. The best strategy for Sharon is to sell some of the company shares to new investors and then retain the position of managing the business. Through the sale of some shares, and in this case, enough percentage to cater for the company sustainability in the new expansion, Indigiearth will gain enough finances to provide for the new expenditure of the dealing and enable it to thrive in the international market. Regarding partners, Indigiearth will require advertising for interested parties in partnering with the business to the international market to make applications for their selection. Those who meet the criteria specified in the advertisement will be selected. Indigiearth will also require including new destinations for their products in the new international markets. The supply chain will need looking for direct sellers or distributors for their food and cosmetics to the international market. The new distributors will be added to the existing supply chain to suit the new channel of supply for the company products. Sharon will also require advertising for the new staff position and recruit personnel to fill those positions. It will help in meeting the new work demands for Indigiearth including accessing more suppliers, and developing larger scales sales. Internal Strategies The external strategies need implementation while considering significant internal changes. Sharon needs to restructure the existing business space to accommodate the new equipment for producing food and cosmetics. The expansion will also be necessary for adapting the new increased size of production for food and cosmetics. Since new knowledge will be acquired, Sharon will need to train her employees in the new knowledge for producing the food and cosmetics ingredients. Sharon will also require stopping the traditional way of acquiring inputs which are not sufficient and incorporate the existing method with the new one for efficiency. To include new investors and partners, Sharon of Indigiearth will need to set new terms and conditions for owning the company. She will need to restructure the ownership of the business from a sole proprietor to a partnership or a joint venture. In this case, a joint venture will be the most suitable form of business structure for adopting. This structure will allow enough numbers of partners and new investors in the company since it does not have a limited number of owners. Sharon will also need to address changes in business operations whereby she will require running the business with other partners or employ a manager(s) who will oversee the enterprise operations internationally. Additionally, Sharon will need to restructure the existing supply chain and adopt a new one that caters for new distributors locally and internationally. The new supply chain will also need to restructure to provide for the own production of food and cosmetic production. Instead of sourcing for inputs, the supply chain will disregard this and incorporate own production process and direct selling to the distributors or consumers. The company will also require form a new department for the new staff who will cater for the new roles in the business. A new agency for international sales and marketing will be necessary. HR Implications The internal and external changes suggested for Indigiearth will impact on the work of the human resources practices, services of the HR, people strategies. Sharon as the manager for the company will get new tasks of recruiting new staff, learning new skills in the production of food and cosmetics, come up with training programs for the existing staff. Sharon will also need to implement a new production process for the new staff to follow when making food and cosmetics. As the HR manager, Sharon will have to provide new HR services for the company by coming up with new training programs. The programs will educate the staff of the new method of production and impact them with the new knowledge needed for mass production for international demand. The human resource structure will also change with the recruitment of new employees to cater for increased supplier access and marketing the business in the international market. With the formation of a new department, the new head of department will be required and a new structure of management formed. The human resource services will increase and need undertaking of the responsibility of appointing new people to manage the production process, supervising the production and supply process as well as overseas operations for the new business branches or distributors. HR activities will require implementing a new workforce plan and new policies that cater for the new production procedures. Conclusion Indigiearth Company requires new business strategies for ensuring it meets the international market competition. Sharon will not be ready for the expansion without implementing the new strategies to the company. The new plans will require implementation while considering the necessary internal changes suitable for the smooth operations of the company. Besides, the human resources practices and services will be impacted by the new changes in the business that needs aligning with those required modifications. By implementing all the suggested strategic alternatives in the enterprise, Sharon will be able to work efficiently and make the company gain a competitive advantage in the international market. The new suggested strategies aim at helping Sharon achieve full preparedness for the expansion. References Barney, J, 2001, Is the resource-based “view” a useful perspective for strategic management research? Yes, Academy of Management Review, 26(1): 41-56. Becker, B., & Huselid, M, 2006, Strategic Human Resources Management: Where Do We Go From Here, Journal of Management, Vol. 32, No. 6, pp.898-925. Evans, J, 2013, Addressing Critical Business Issues through Strategic Planning, Executives, Available from < http://blog.vistage.com/business-strategy-and-management/addressing-critical-business-issues-through-strategic-planning/> Read More