The Expansion and Prosperity after Environmentalism - Essay Example

The Expansion and Prosperity after Environmentalism Introduction The human attitude towards its environment has changed many forms over the last few thousand years. There have been many reasons for these shifts in human attitude stemming from religious, technological and social development of human society. There was once a time when nature was a home to primitive human beings. It was considered home as man lived mostly on trees and built homes under them using their branches. The social development of our society however transferred that man into caves and finally into small societies (tribes). This evolved perspectives about nature as a provider of food and benefits rather than home. The expansion and prosperity received by human beings in the tribal society, started to increase their number many folds. This increase in number rendered the nature incapable of providing food for everyone. The concept of farming animals and crops therefore emerged. In this era nature became a mystery and areas of interest; as farming was dependent on rain and weather. As with most things humans do not understand, man began to fear and worship its environment. The nature became the basis of one of the first religions of human society. If we jump ahead into time we can however see that this bond between man and nature did not last very long. With the advent of industrial revolution man began to eat away at his environment. The exploitation of hundreds of years has finally brought nature to the brink of destruction. This has brought about a new revolution called Environmentalism. This green revolution has created awareness about increasing gardens and trees back to human life. The reality that everyone admits is that our population has expanded beyond control and our societies cover a large part of cultivable land. Therefore it’s no longer possible to plant huge forests to repair damage done to our environment. The alternate strategy is to make every piece of land around us Green. This revolution, over the last few decades has increased the number of gardens many folds and has created a market for products which facilitate it. PowerMower Company Founded in 2010, the PowerMower Company is dedicated to providing the very best of lawn mowing products technology has to offer. We present a variety of different kinds of lawn mowers for our cherished clients with varieties and combinations of pushback, cordless, heavy or simple powers. We give you the all powerful tractor versions as well as the simple lawn mowers which keep a touch a class and tradition. Our sales personnel personally assist you with the purchase as to suit your specific needs and the actual preferences you have and you want in a lawn mower. We offer the post purchase maintenance service as well so that you have the most comfortable buying experience. Our lawn mowers are state of the art equipment with a powerful touch of class. For the very best and easy to use lawn movers – buy your PowerMower today! Mission Our mission is to build lasting relationships with our clients and to constantly perk up the quality of our products. We believe in learning from each other and the world around us. Our client’s problem is our concern and their satisfaction is our reward. Give us your trust and we will give you our finest – PowerMower style! Vision ‘The mower that will be on every lawn’ We want to be what other companies benchmark against and never lose sight of what really matters; our Clients. We want to give you the best and achieve the finest solutions through the simplest ways. Competitors There are hundreds of different lawn mower manufacturers throughout the world. We would however discuss Atco to get an idea about a typical competitor PowerMower will face in the market. Atco It was formerly known as Atco, Ltd and changed its name in 1991. Atco Qualcast Ltd. is based in Stowmarket, Suffolk and is owned by Robert Bosch GmbH of Germany. The Qualcast brand is market leader in hand driven mowers in the UK and the company has significant export turnover1. It basically offers cylinder and rotary lawn movers; and shredders. The company mostly sells its products through dealers. NPD (New Product Development Strategy) There are many factors which are very important in determining the strategy for the development of a new product. This stage of strategy formulation is actually derived from an analysis of internal and external strengths and weaknesses of a company. There are three very important elements to the formulation of a new product development strategy. The primary element is obviously the capabilities and core competencies of the firm developing the product. This would include the basis of its competitive advantage. If the firm holds its competitive advantage in low manufacturing cost, a strategy of low product cost will be established etc. The second factor which contributes to strategy formulation is competitive position of the competitors. This would take into account both industry dynamics (which can be analyzed using porters five forces model of industry competitiveness) and strategies being used by current competitors. The last factor which is very important in determining the new product development strategy is market opportunities. This would include an analysis of the product life cycle (Annex 1) and demand of the product in the market. This is because lifecycle stages of a product determine how a product would be received in the market. Along with being a very important factor for determining demand it also contributes in assessing customer knowledge and information about the product. Porters 5 Forces (Annex 2) Internal Rivals The industry of the lawn mowing business in UK is quite saturated. In 2005 alone, the market was worth about £348 million. The market itself is small with emphasis on comfort and addon’s. The market is segmented into 3 types; Garden Tractors (Ride-on Mowers), Powered Mowers (Petrol or Electric) Hand Propelled Mowers (Cylinder mowers). There are about over thirty companies competing in the UK market along with the ever competitive retailer own brands. There is heavy competition with the traditional UK brands and the foreign companies and the market share is distributed among them. Some of the top companies are; Atco  Al-Ko  Allen  Black & Decker  Castel / Lawn King / Grillo  Countax  Electrolux Gardena  Hayter  Honda  Mountfield New Entrants The market is quite open to new entrants as the barriers to entry aren’t that much in UK. Moreover, the small foreign entrants have grown in UK which has made the market more competitive. All the companies need to know is the need and trend of the lawn owners of that specific area and then have the technology that is needed and popular. The emphasis that today’s customer lay on is the addon’s and the extra maintenance features that come with the purchase of a lawn mower. This small companies can easily enter and provide a niche service to t he customers. Bargaining Power of Customers: The bargaining power of the customer is in the medium/upper level. This is because of the variety of different lawn mowers available now and the number of companies available. Thus, the consumers have a lot to choose from. Bargaining Power of Suppliers The suppliers bargaining power is in a medium/high level as well partially due to the fact that the number of companies is growing as well as the foreign brands entering the market who have the money to actually form relationships with the suppliers. Substitutes There are few substitutes to lawn mowers. The very latest development in the mower market is the preface of robot mowers that actually mow the lawn themselves as they are programmed according to that special lawn. The immediate substitute to lawn mowers is the hand held gardening tools which are large in number but not that popular anymore. Product life cycle The analysis of industry intensity has been provided above therefore we will start from breaking down elements of product life cycle (Annex 1). If we analyze the industry we can see that the product lie in the mature stage of the product life cycle. There are a number of reasons for this placement. First of all the product has been in the market for many years and therefore customer knowledge is adequate about its operations, capabilities etc. The second factor which supports this placement is market growth. The market growth as we can assume will only increase in a linear fashion. This is because the product is already available in the market and customers will increase with increases in number of lawns. If we look at the annexure 3, we can analyze different strategies which can be used for the product on basis of only a product life cycle analysis. The position of our company is somewhere between tenable and favorable and product is in mature stage. This would suggest that we harvest our profits and find a niche for our product. Market opportunity and demand sensitivity The lawn mower has become a product of extreme necessity in every household. The association of health with lawns and walking in grass has made their need even more obvious. According to a survey conducted by Gallup almost $17.6 dollars are spent on gardens yearly by Americans alone. The numbers of people who hire professionals to take care of their gardens are over 26 million. These promising numbers suggest that there is indeed a demand for our product in the market. The small questionnaire below has also shown a strong tendency of people towards using lawn mowers. After viewing the detailed discussion of market, internal factors and product demand we can finally decide a product development of NPD strategy. There are different strategies that can be adopted such as time to market, low product cost, service responsiveness, low development cost, product performance and quality etc. To determine which strategy would be the best for our lawn mower we must first understand back draws of other probable strategies. The time to market strategy is based on marketing a product very fast so that maximum sales can be achieved. Our product does not have a short life cycle so we cannot use time to market strategy. Service responsiveness strategy is usually useful for companies which have a strong service aspect to their products such as the information technology industry. The business will have to use a strategy which is in line with the strategies recommended by the product life cycle (Annex 3). The product life cycle (Annex 3) analysis recommends that a new entrant in this industry should be focused on differentiation and maximizing gross margins. This is because when there are many products in the market with the same function, there is tough competition in terms of price. This drives down prices and thus gross margins as well. This would render any new entrant incapable to increase its prices. There are two ways of increasing gross margin i.e. reduce cost or increase prices. As prices cannot be increased the only viable strategy for our product would be to reduce cost. Therefore the strategy recommended for our product is ‘Reduce product cost’. This will render a successful business in a maturing market. Risk Management Whenever a new product is developed the venture faces many risks. The majority of risks associated with product development stem from internal factors rather than external factors. The risk of ineffective management can be a major threat to a business. To minimize this risk we will hire a professional team with experience in product development and retailing. The risk of bad cash flows can also affect investments and reduce their value. The best method to reduce this threat is to maintain a backup of spare cash. This will ensure that functional requirements of our business are fulfilled. The management will also ensure that just in time inventory methods are adopted to ensure there is no excess cash stuck in long inventory cycles. Problem Solving Mythologies The management committee will ensure that everything in the company goes according to plan. There will a problem solving council which will comprise of representatives from all departments. The final word will be of the CEO to reduce any internal departmental conflicts. The CEO will however consult each department head on issues regarding their individual departments. The members however will have to authority to call up meetings at their own will so adequate attention of the CEO is focused immediately on all problems. Lean Manufacturing The strategy chosen for our product is low product cost. This strategy as mentioned would require a lot of cost cutting. The legacy manufacturing systems have proved themselves inferior to TPS (Toyota Production systems). The concepts of lean manufacturing are a management technique that can help increase quality and reduce product cost. There are many different aspects of Lean manufacturing that can be applied to PowerMower. The primary focus will be on using the following Lean concepts: Continuous Improvement (Kaizen): The employees of the PowerMower will all participate in Continuous improvement program. This will basically be bottoms up approach. The customers will give their feedback on different aspect of the product and process to bring about improvements. Waste (MUDA): PowerMower will focus on reducing waste from the manufacturing process. This will be done by refocusing the process of manufacturing totally on value addition. The activities with reduce value additions will be eliminated. The manufacturing process will therefore comprise of small batch sizes and lean layouts for work floors. The concept of lean layout basically refers to manufacturing in circular assembly lines. S Curve and QDF The annex 6 and annex 7 show the S curve and QFD for PowerMower respectively. As we can see in Annex 6 the initiation phase is the start of the project. This is actually what we refer to as the flash of genius. At this stage the idea of a product is born. The planning phase is the strategic phase when a product development plan is made. The final phase is the actual production phase of PowerMower. The QDF shows the relationship between the customer preferences and design requirements of PowerMower in Annex 7. The customer preferences of cost effectiveness are directly dependent on module cost. This is why it’s been given a very high score of ten. The arrow show how when one increase the other would increase as well. Similarly other preferences are also linked with product design requirements. Conclusion The product strategy that we have chosen for our product is low product cost. In a saturated market, with high competitive intensity this will be the best strategy for PowerMower. The questionnaire has also shown that there is a strong demand in the market for lawn mowers. This demand is also brand centric. This would mean that in order to get a substantial sales volume, a positive brand image for PowerMower would be very important. The sales force will have to market its quality and reliability, because these are the most important factors for machinery. The main focus will be to keep quality intact and reduce cost at the same time. Therefore there will be no cost cutting leading to low quality products. Instead the company will improve the manufacturing process by lean manufacturing to reduce costs. References Baker, M. (2008) The Strategic Marketing Plan Audit. ISBN: 1902433998 Porter, M.E. (1979). How competitive forces shape strategy. Harvard business Review. Porter, M.E. (1980) Competitive Strategy. Free Press, New York, 1980. Annexure Annex 1 Annex 2 Factor Level Low Medium High Internal Rivals New Entrants Bargaining Power of Suppliers Bargaining Power of Customers Substitutes Overall Embryonic Growth Mature Aging Dominant Fast grow, Start-up FAST GROW Attain Cost Leadership Renew Defend Position Defend position, Attain cost leadership, Renew, Fast Grow Defend position, Focus, Renew, Grow with industry Strong Start-up, Differentiate, Fast-grow Fast Grow Catch-up Attain cost Leadership Differentiation Attain Cost Leadership, Renew, Focus, Differentiate, Grow with industry Find niche, Hold niche, Hand-in, Grow with industry, Harvest Favorable Start-up, Differentiate. Focus, Fast-grow Differentiate, Focus, Catch-up. Grow with industry Harvest, Hang-in, Find niche, Hold niche, Renew, Turnaround, Differentiate, Focus, Grow with industry Retrench, Turnaround Tenable Start-up, Grow with industry, Focus Harvest, Catch-up. Hold niche, Hang-in, Find niche, Turnaround, Focus, Grow with industry Harvest, Turnaround, Find niche, Retrench Divest, Retrench Weak Find niche, Catch-up, Grow with industry Turnaround, Retrench Withdraw, Divest Withdraw Annex 3 Anne 4 Questionnaire Question 1: Would you like to have a garden in your house? Answer: Yes NO Question 2: Would you like to garden it yourself? Answer: Yes No Question 3: Do you think Lawn Mowers are safe Answer: Yes No Question4: Would you be able to operate a lawn mower? Answer: Yes No Question5: Have you ever used a lawn Mower before? Answer: Yes No Question 6: Did you find you encounter useful? Answer: Yes No Question 7: Do you think brands would matter to you in a purchase decision concerning lawn mowers? Answer: Yes No Question 8: Would you want to own a lawn mower even if you had a choice of lending it? Answer: Yes No Question9: Do you think lawn mower is a necessity in every house with a garden? Answer: Yes No Question10: Do you already own a lawn Mower? Answer: Yes No Annex 5 Question No Yes No Question 1 18 2 Question 2 12 8 Question 3 9 11 Question 4 18 2 Question 5 5 15 Question 6 5 0 Question 7 20 0 Question 8 11 9 Question 9 17 3 Question 10 5 15 Annex 6 Annex 7 Read More