Where next for Grant Garden Centres - Essay Example

? Where next for Grant Garden Centres Introduction Following its inception over four decades ago, Grant Garden Centre has been under family management. The centre has, however, undergone several structural changes over this duration of time. For instance, at the beginning, the establishment was known as Farmoor Garden Centre before the founder left it to his son, John Grant. The centre also had a single operating location, in the South East region of England. After taking over, Grant reinvested virtually all profits back into the company, opening two additional branches (Westgarth, 2012). He also renamed the garden centres to “Grant Garden Centres”. Grant’s passion for gardening makes him adhere strictly to the traditional form of garden centre management, where the head gardener makes all the relevant business decisions and the rest of staff follows. Grant also expects his children, Jane and Malcolm, to toe the line, without any compromise (Pepper, Jackson and Uzzell, 2009, pp. 126–136). The authoritarian management style is costing the business numerous opportunities. For instance, there is a high labour turnover, since workers are not given an opportunity to contribute. Additionally, the firm still uses conventional advertisement methods and it does not have up-to-date technology systems, making it lag behind competitors. To remedy the situation and set the business on a path towards development and profitability, radical changes must be made in the different business functions. External Environment Analysis Technology Technology is one of the principal factors to consider in running a contemporary business setting, failure to which a business is left behind by competitors (Patterson, 2011). This is one of the principal factors negating Grant Garden Centres’ proper performance, in a highly competitive environment. The Establishment lacks an up-to-date IT system, an aspect which hinders proper control of stock. The poor technological capacity also inhibits proper financial management. Development deterrence stems from the fact that, virtually all company operations have to be done manually for each centre, making financial evaluation and stock regulation a highly difficult task. Another technological aspect, affecting gardening centres, is utilization of social media and websites as advertisement platforms. This is barely applied in the case of Grant Garden Centres, thus dragging the establishment behind its rivals (Burke, 2009, p.72). Socio-cultural Aspects The other crucial external environment factor likely to affect the gardening business is the socio-cultural environment. This is because the Centres have to interact with customers, especially due to the services segment of operations. Evident from the business’ profile, Grant Garden does not take social aspects of society into consideration, while carrying out its operations. This is an aspect attributable to Grant’s perception that, customers solely care about the plants that the Centres supply. One of his children, Jane, is largely opposed to this notion and her principal interest is in developing an establishment that plays a significant role in the community, as well as, works with stakeholders to guarantee each partisan’s benefit. If the Company were to adopt Jane’s proposal of enhanced engagement in Corporate Social Responsibility (CSR) then the Centres’ popularity among community members and other individuals would be propelled to great heights. For instance, Grant Garden Centres could formulate and execute educational programs that focus on increasing people’s awareness of gardening. Such programs would foster individuals’ interest in plants and landscaping concerns thus broadening the Company’s customer base and even appealing to the younger generation. Strengths and Weaknesses Marketing Just like everything else in the Company, marketing methods are dictated by Grant. It is Jane’s responsibility to focus on the stipulated marketing strategies, which principally entail advertisement in the local radio stations and use of roadside billboards in the area. The principal messages conveyed in these advertisements are special offers and business opening hours. The only strength depicted these marketing strategies is that; they reach a broad consumer base. However, there are several weaknesses associated with these marketing methods. For instance, both are traditional and are unlikely to appeal to the younger generation, making it difficult to attract this potentially lucrative market (Dess, Lumpkin and Eisner, 2006, p. 45). The other weakness is that, the advertisements placed focus largely on the establishment’s basic information. Additionally, the Company’s website is not fully developed and just like the other promotion methods, it conveys a basic message of business direction. The information through these platforms should be detailed, clearly outlining the products, services, and after sale services that the Company offers. Further, advertisement should take an active role, perhaps hosting local events for schools or community groups, thus strengthening ties with prospective customers. The business should also shift away from Grant’s assertion that, word of mouth is the most suitable business promotion method. Human Resource Grant Garden Centres has a traditional employee recruitment and retention strategy. This implies that Grant hires the workers he deems best, based on his personal assessment and recommendations from friends. Additionally, when a vacancy is available, there is no formal interviewing or vetting process. The informal hiring mechanism, coupled with Grant’s authoritarian management style has several weaknesses. For example, there is a high labour turnover since workers join the Centres’ labour force only to quit a short while later, for lack of involvement in vital decision making or inadequacy of proper training. Operations As mentioned, Grant has a deep passion for gardening. His focus, therefore, is primarily on plants and unlike other garden centre chains; Grant Garden has not diversified its operations into other areas. Most company operations are centred on plant production processes, overlooking crucial aspects like human resource management, customer service enhancement, technological advancement and financial management. This is a significant weakness, since the operations are not balanced out for optimal performance. For instance, failure to account for customer service operations has left the establishment with a mere following of 40% aged customers, while the rest comprise of first time customers who rarely come back. All the same there is a partial strength, because extensive focus on production guarantees high quality plants. Finance Based on Grant Garden’s financial analysis of the 2009 fiscal year, the Company has a net profit margin of 2%. This is a meager margin compared to the Company’s massive investment in all its centres. Additionally, the return on capital employed (ROCE) is at a low 0.3% further proving that the establishment is not operating at its optimal capacity. The promotional budget is limited to 0.05%, which is very low and this could even explain why the Company’s advertisement efforts barely have an impact on its performance. The revenue growth, for the four year duration between 2005 and 2009 is 20%, a rather slow growth rate especially given the fact that, it can exploit enhanced environmental awareness to grow faster. The returns obtained by Grant Garden are further limited by utilization of special offers and price cutting of products over the past several years, which Grant insists are vital to the business’ survival. Grant Garden Centres SWOT Diagram Strengths Relatively strong capital base Production of high quality plants Weaknesses Limited technological know how Poor human resource practices like informal recruitment and authoritarian management Poor customer relations Inadequate promotion strategies Opportunities Increased environmental protection awareness Corporate social responsibility (CSR) Technology based stock control and financial management approaches Threats Launch of a do it yourself (DIY) garden centre adjacent to Grant Garden’s largest centre High labour turnover, even that of senior personnel Strategic Direction Plan Creation of an experience Grant Garden Centres must make an effort to overcome its current performance negating situations. There are different things that need to be altered, in order to make sure that it improves on productivity and revenue. In comparison to product items, which are purchased frequently like food, clothing, and literature, in autonomous garden centres, customers are focused not only on a plant, but they are also mostly looking for a business that is trustworthy and that has the capability to assist them in creating a complete yard, a huge flower bed, and a small island planting among others (Davis, Golicic and Boerstler, 2010, 467-479). Therefore, Grant Garden should create diversity and cease operating as a mass merchandiser, instead opting to sell plants individually or personalizing customer service. This is because; the company has more than one operation location and can therefore capitalize on such a venture. This means that they should embark on offering products in well laid out display centres, rather than just focusing on production units. The display of the plants should be impeccable and up to standard, show casing beautiful plant troughs and containers. It is also imperative for the company to produce detailed brochures that they can offer to a customer (Hawes and Crittendon, 1994, p. 275-287). This is because there is a possibility for a new customer to come across the brochure or when the customer needs plants they can get contacts and specific products easily from the brochure. For true gardeners, they are after looking for more than the shopping experience because they would like to come back and receive the same kind of reception after a period of time. Garden centre’s display rooms should then have diverse products, and they should also focus on customer service because if customers are appealed by the products and services in future, they will be willing to spend more on the Centres’ gardening products (Grant, R. M., 2004, p. 67). Other improvements and recommendations that Grant Garden can adopt are, as discussed herein. Rebranding The company should re-brand the business because the family affiliated name does not attract customers with the pull and diversity usually linked to landscaping and nature in general. Having a name that is more creative will give new customers the need to visit their stores frequently. This will also be more impressive to the workers because a family name makes them feel like the company is more authoritarian and there is no flexibility especially in making decisions. Rebranding will help in changing the consumers’ perception about their facilities. Having a new name, a logo and a vision statement will appeal to more customers, especially the young people who fail to frequent in Grant Garden Centres. It is imperative to note that, many women are focusing on gardening and this is an area that is very sensitive in improving the image of the company, as well as, appealing to more customers (Fournier, 1998, pp. 343-372). For example, women visit the centres with their children who can sometimes be a bother and inhibit the concentration of the mother. Therefore, the company should create leisure areas where parents can drop off their children when shopping. The principal goal is to make sure that the workers in the sales department get sufficient time to show customers the diverse products and also give them advice on the different plants and landscape designs. Competitive advantage Grant Garden should focus more on selective products, as well as, programs that are not familiar to their competitors in the industry. This means that they do not have to focus more on becoming the industry leader but retain more customers because of their impeccable products. For instance, members of staff should offer help in planting the selected products, thus effectively competing with the adjacent DIY store (Mintel Oxygen, 2005). Advertising The company’s management should change modes of advertising. Grant Garden should focus on designing creative advertising strategies, which are different from the conventional promotion forms in the industry (Parnell, 1997, 175-181). Many people in the past did not take gardening seriously. This is why; it is important to have advertisements that are appealing and motivating to customers. This is because the aim of the advertisement is to reach, as well as, acquire a new demographic consumer base especially the young people. Therefore it is appropriate for Grant Garden to design advertisements that will scream for the attention needed, by: Posting advertisements on local weekly newspaper and magazines. It is also imperative to continue utilizing road side billboards situated at very strategic areas which are appealing to the motorists. These ads and boards should, however, be more detailed than they currently are. Launching a new website-After rebranding, it is necessary to design a new website or develop the current one, to make it more appealing and well updated according to the products being offered. The website should have an email, and social media tabs that will also assist with more advertisement as well as responding to customers, current and prospective alike. Organizing a landscapers’ showcase-This is another mode of advertisement that Grant Garden should adopt. This is because a showcase will allow the customers to mingle with the company workers, gain knowledge of the different products. This is also a more appealing way of advertisement because people are able to gain practical experience with the different activities associated with gardening Retail Staff Training Grant Garden rarely trains the floor staff on consumer retention methods or in selling. Customer service is the most imperative aspect when running such a business. Therefore, it is important to train the staff on personal and interpersonal communication skills. Additionally, there is need to equip the workers with cross cultural training which is extremely vital when dealing with customers who are not UK natives. This will appeal to a bigger customer base (Nilsson and Rapp, 2005, pp. 71-83). Customer Loyalty Creation of a loyal following to the company’s brand, as well as, building a strong relationship with their consumers should be a priority for Grant Garden Centres. This can be achieved by ensuring that there is impeccable customer service and also focusing on making people view gardening as a horticultural lifestyle (Mintel Oxygen, 2001). With the modern busy schedule of many people in the UK, gardens of diverse sizes get looked upon as a place of resting and tranquility. Therefore, Grant Garden should embark on capitalizing on this new trend by offering products that advocate for more value of plants not simply as horticultural items, but also as representatives of a luxurious lifestyle (Guillermo, 2009, pp.25-40). Conclusion Grant Garden is a company that needs major improvement, in order to ensure that there is proper management, productivity and profitability. Among other ways of achieving this, up-to date standards in terms of operations and technology must be adopted. These will aid in improving the Company’s market and also increase revenue, because it will be able to have a better chance of effectively serving customers. Additionally, Grant Garden should try and execute the strategies that have been discussed, in ensuring that the company is at par with the other organizations in the industry. Bibliography Burke, P., 2009. Providing explanations to customers for service and recovery failures: The impact on satisfaction. PhD. ProQuest Dissertations and Theses, pp 1-160. Davis, F. Golicic, S. and Boerstler, C., 2010. Benefits and Challenges of Conducting Multiple methods in Marketing. Journal of Academic Marketing Science, 39, pp.467-479. Dess, G., Lumpkin, G., and Eisner, A., 2006. Strategic Management: Text and Cases. Boston: McGraw-Hill Irwin. Fournier, S., 1998. Consumers and their brands: Developing relationship theory in consumer research. Journal of Consumer Research, 24(4), pp.343-372.  Grant, R. M., 2004. Contemporary strategy analysis: concepts, techniques, applications. 5th ed. Oxford: Blackwell Publishing. Guillermo, W., 2009. The Relationship between Rewards and Recognition, Service-Oriented Organizational Citizenship Behavior and Customer Satisfaction. PhD. ProQuest Dissertations and Theses, pp. 1-125. Hawes, J. and Crittendon, W., 1994. Taxonomy of competitive retailing strategies. Strategic Management Journal, 5 (2), pp. 275-287. Nilsson, F. and Rapp, B., 2005. Understanding Competitive Advantage: The Importance of Strategic Congruence and Integrated Control. New York: Springer. Parnell, J.A. 1997. New evidence in the generic strategy and business performance debate: A research note. British Journal of Management, 8, pp. 175-181. Peattie, K. and Collins, A., 2009. Guest editorial: Perspectives on sustainable consumption. International Journal of Consumer Studies, 33, pp.107–112. Pepper, M. Jackson, T. and Uzzell, D., 2009. An examination of the values that motivate socially conscious and frugal consumer behaviors. International Journal of Consumer Studies, 33, pp.126–136. Westgarth, J. 2012. Garden Products Retailing. [Online]. Available at< http://academic.mintel.com/display/590187/# > [Accessed 24 April, 2013]. Mintel Oxygen. 2005. Impact of the Media on DIY and Gardening. [Online]. Available at [Accessed 24 April, 2013]. Patterson, B. 2011. Home Improvement. [Online]. Available at [Accessed 24 April, 2013]. Mintel Oxygen . 2001. Flowers & Potted Plants. Available at< http://academic.mintel.com/display/482/?highlight=true#> [Accessed 24 April, 2013]. Read More