An Intro to Business Studies: Globalization, Competition, and Management - Assignment Example

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B120 AN INTRO TO BUSINESS STUDIES END-OF-MODULE ASSESSMENT Table of Contents Table of Contents 2 Question a) 3 SWOT Analysis 3 Question b) 5 Factors Influencing Organisational Culture 5 Question 4 (a) 6 Question 4 (b) 7 Question 4(c) 8 Question 5 (a) 10 Question 5 (b) 10 References 13 Question 1 (a) SWOT Analysis Marketing Human Resources Finance Strengths High volume of sales achieved on Valentine’s Day Real time supply chain updates on company’s website to help in tracking all the production activities undergone Employees of the company are motivated to work hard Good leadership skills of Wynne Reasonable priced products Hedging strategy implemented against fluctuation in buying prices of flowers Weaknesses Internet marketing as the only tool for marketing its products Low brand value Inefficiency in delegating job responsibilities to various employees Ill-managed inventory control system Complex internal control system Low spending in product innovation and research and development Inefficiency in being able to attract prospective investors Focus on recording after tax profits Opportunities New customer acquisition during peak seasons Opportunity for business growth Introduction of additional product line Use of various advertising means to increase the brand value None mentioned in the case Successful deal with Provide Commerce Borrowing capital from venture capitalists Threats Low shelf life of cut flowers Highly competitive market Fluctuations in demand depending on various macroeconomic factors Competitors might seek the advantage of poaching the talented employees of Arena Flowers Seasonal business with low profit margin Tough to manage inventory levels efficiently The SWOT analysis of the company can be done taking into account each of the three key business areas as presented in the table shown above (Preston, 2012, p.30-31). It indicates that there are some of the concerning weaknesses of the company which it can improve upon to be able to run its business efficiently and increase its profitability, ultimately being successful in achieving the goals and objectives of the company. In addition to the weaknesses, the company can improve upon the identified threats to become proactive to the situations and add to its competitive advantage in the market. The primary threat identified for the company is from its competitors. Hence, the company can think of expanding its businesses in places where the competition and could easily win the market share there. The company needs to device a strong and diverse marketing strategy to promote and advertise its business which would ensure that it would be able to increase its brand significantly. Efficiency could be achieved in its business operations if the job responsibilities are delegated to all the employees in an effective manner. The company needs to use the latest technology available to design its inventory management system through effective future forecasting of the future sales demand of its products. In order to achieve its goal of becoming one of the largest companies in the industry it needs to have a competitive advantage which could be achieved through strengthening its core competencies and investing more on research and development to innovate new products that could attract large number of customers to buy its products. Focus should be on recording pre-tax profits rather than after-tax profits to be able to attract prospective investors to invest in the company. All these initiatives can help the company to achieve its objectives and build up a sustainable business. Question 1 (b) Factors Influencing Organisational Culture Organisational culture is an important aspect of analysing a business organisation. In the context of Arena Flowers various factors can be identified which acts as a driving force in developing the cultural environment observable within the company and the business activities carried on by it. One of the major factors influencing the culture of Arena Flowers is the influence of its cofounder Mr. Wynne who is observed to having a dominant character. Most of the activities carried on by the employees of the company are found to be driven by the management style as possessed by Wynne. Apart from this the type of industry in which the company is operating its business is also found to have an impact on Arena Flowers. The completion in the industry is high and is causing concern for Wynne and his organisation. Hence he is thinking of expanding his business in a big way to have a competitive advantage in the market and become more profitable in quick time. Company expectations are also an important factor of the organisational culture of Arena Flowers because it was able to generate unprecedented sales in the recent Valentine’s Day and has thus created a high expectation that the company can become one of the leading companies in the industry. These are some of the influential factors which drive the organisational culture followed at Arena Flowers. Question 4 (a) Arena Flowers is engaged in a business which caters to one of consumer markets and consumers are the key to the success of the business. Hence market segmentation according to the needs and requirements of specific group of customers is essential for achieving the objective of Arena Flowers of expanding its business and become one of the largest organisations in the industry. One of the major concerns of Arena Flowers is its inability to attract more customers on a consistent basis during the entire year. The company is observed to have successfully attracted significant number of customers during the peak seasons n the industry like the Mother's Day and the Valentine's Day. However during the other periods the company generated low sales volumes. Hence, in order to implement its strategy of expanding its business, the company needs to identify the buying characteristics of its customers. Hence the first step towards implementation of the expansion strategy of Arena Flowers would be to develop an effective segmentation strategy for the company. Different types of criteria can be used by different organisation to develop effective market segmentation like geographic, psychographic, behavioural and demographic factors (Schaefer, 2011, p.15). The products sold by Arena Flowers are mostly perishable products which has a very short shelf life. Hence, geographic segmentation should be the best option for the company because it needs to expand its business on certain geographical locations where the required products needed to be bought by the company are easily available and at lower costs. This can boost the profitability of the company by exploring the cost advantages associated with favoured locations that would be identified by the company. The other criteria that should be used by Arena Flowers to segment its customers are the demographic segmentation criteria. It is so because the customers of the types of products offered by Arena Flowers vary according to the various demographic factors like age, lifestyle and economic condition in the market. The buying patterns of the customers differ according to various types of needs which mainly depends on the occasions or specific events for which they would be requiring the products offered by Arena Flowers. Hence, these are the two importation criteria which should be utilised to the greatest effect by the company to develop its customer segments and then develop strategies to target those specific segments to position its products in a unique way. Question 4 (b) Arena Flowers wishes to become one of the largest companies in the industry. In order to achieve this objective the company needs to expand its business in an effective way through proper segmentation of the customers which it would target to sell its products. The ultimate aim would be to increase the customer base of the company so that it can help the company to generate high volume. Hence it needs to target new customer segments to sell its products. Apart from the market segments the company is focused upon at present it needs to target new customer segments as well. The company operates its business in an industry where the product demand is greatly affected through the different buying patterns followed by different groups of customers. It is a seasonal industry which is characterised of high intensity of fluctuations in demand of the product types offered by Arena Flowers. The company has managed to generate significant revenues in the peak seasons which are mainly driven by the particular needs of customers driven by a particular even occurring in a particular day like the Valentine’s Day and the Mother’s Day. However, the company needs to have customers who are need of its products during other periods of the year as well. Hence it needs to increase its customer base and target new customer segments according to their behavioural patterns where they might be requiring the products offered by the company in other periods of the year as well. This can be achieved by having knowledge of the buying and behavioural patterns of other customer segments that require flowers, gifts and other products offered by Arena Flowers during other times of the year. After identifying this new customer segment the company needs to employ an effective promotional mix strategy in order to communicate about its offerings to the targeted customers (Schaefer, 2011, p. 60). There are various ways of promoting the products offered by Arena Flowers but it has been observed that the company only uses internet advertising as the only means of promoting its products. For implementing a successful marketing strategy it is necessary that the product features and other things associated with the products are effectively communicated with the targeted customers. Sales promotions through different attractive promotional schemes for new customers and creating a favourable image about the products in the minds of the targeted customers could be good options for the company to target its new market segments. This would ultimately help in acquiring new customers and add to the profits of the company. Question 4(c) Planning for the future growth and expansion of Arena Flowers it is necessary to identify the key issues concerned with the company at present. Addressing such key issues after its proper identification would help the company to turn its weaknesses into its strengths and gain competitive advantage in the market. The two most important human resource issues that can be identified for the company, has been discussed here. One of the major issues is the company not having any kind of recruitment and selection policy in effect as of now. It is necessary for the company to address this issue because for implementing its expansion strategy it needs to hire more employees and they should be chosen taking care of the specific needs of the company (Preston, 2011, p.35-36). The other human resource issue faced by the company is its organisational culture which is mainly driven by the dominating effect of Wynne, the owner of the company. The job responsibilities need to be delegated effectively to the efficient employees of the company and should be give decision making authorities based on their expertise in their respective fields. The two finance and accounting issues faced by the company at present are the issues related to the inventory management system of the company and the company’s strategy of spending low amounts in research and development. Inventories are items which remain unused at the end of an accounting period and with effective inventory management it can add to the profits of the company (Day, & Krakhmal, 2011, p. 46). In order to have a competitive advantage in the market the company needs to develop innovative ideas and offerings for its customers so they get attracted towards its products. Apart from that it would help the company to attract prospective investors as well. Question 5 (a) Globalisation is a process which is described as a process of creating a world environment which is characterised of having frequent and relatively free movement of capital, goods, people, ideas and information internationally (Ball, 2011, p. 32). Globalisation process is found to work through various means which are interconnected with each other and various factors are institutional towards driving the process of globalisation in the world. Arena Flowers is a multinational corporation which is engaged in operating its business in six different European nations at present. Its business operation mainly relies on its websites to promote its products as well as carry on its supply chain management of its products online. Hence Arena Flowers can be considered to have globalised its business activities but not to a significant effect. It is restricted to the European continent only and that too only in a few nations in the continent. The products offered by Arena Flowers are universal in nature and not specific to any particular location. This explains that the company has a globalised operation to cater to the needs of customers of different parts of the world through its websites. However, if we look at the suppliers’ orientation and characteristics of the company it can be adjudged that it is mainly relied on local suppliers where it operates its business or the places where it needs to deliver its products to its customers. Overall it can be said that the company’s business is globalised in nature and has to maintain a good relationship with all its varied customers and suppliers. Question 5 (b) Globalisation process creates both barriers to, and opportunities for the developmental process of the human world. Globalisation is considered to be an ongoing process that is helping to create linkage between people, cities, neighbourhoods, and countries to bring them more close to each other. There are different types of driving factors which are institutional in creating change in the business organisations to adopt the strategy of globalising its business activities. Various driving forces act in the process towards development of globalisation (Ball, 2011, p. 34-35). Four of the important driving factors behind the globalisation process followed by Arena Flowers are discussed below: a. Cost Drivers: It means the need of organisation to lower its production costs to facilitate higher profit generation drive them towards finding available opportunities in the foreign market where it wishes to expand its business. A particular business organisation has the opportunity to gain economies of scale through its business expansion and globalisation of its business activities. In case of Arena Flowers this factor had an impact in driving it towards its business expansion in different parts of the world because it wishes to become the leading company in industry and such motive can be achieved by increasing its profitability through reduction in various cost elements associated with its business operations. b. Market Drivers: It means those market forces which drive organisations towards globalisation so as to explore the varied demand and preferences of the customers in different regions of the world. It can be achieved through various means like establishing global brands for the products offered by the companies, taking advantage of increased purchasing power of customers in foreign countries, etc. This is an important driving force which is effective in case of Arena Flowers because it is looking to expand its business with the motive of attracting new types of customers who have different preferences for its products. Hence, through globalisation of its business activities to other geographical areas like USA it can explore the opportunity to cater to the different needs of its products by the customers present there. c. Government Drivers: It means different government policies which can be advantageous for organisations to increase its profitability in various ways. Those government policies might be reduction in trade barriers, reduction in tariffs related to export or import of goods, etc. This driving factor is not that institutional in case of Area Flowers because it does not have such a significant impact on its desire to expand its business and no such facts relevant to this driver have been mentioned in the given case. d. Competition Drivers: It means the increasing competition from the competitors in the local market drives the companies to strive for competitive advantage in different foreign markets of the world. It is an important driving factor in case of Arena Flowers because it operates its business in a highly competitive industry and it is trying to create competitive advantage in markets where it can cater to the specific needs of the customers in a better way. Hence the existing competition in the markets where Arena Flowers is operating its business presently might be driving it towards seeking the opportunity to explore other foreign markets where the competition is less. Hence it can be concluded from the above discussion regarding the driving factors of the globalisation process that the market driver was most influential in the market expansion strategy decision taken by Arena Flowers because it would help the company to acquire new customers, increase its customer base and thereby increase its profitability. References Ball, K. (2011). Book 5: Different ways of looking at business. Milton Keynes: The Open University. Day, J., & Krakhmal, V. (2011). Book 3: An introduction to accounting and finance in business. Milton Keynes: The Open University. Preston, D. (2011). Book 2: An introduction to human resource management in business. Milton Keynes: The Open University. Preston, D. (2012). Book 1: What is a business? Milton Keynes: The Open University. Schaefer, A. (2011). Book 4: An introduction to marketing. Milton Keynes: The Open University. . Read More