Where next for Grant Garden Centres - Essay Example

? Where next for Grant Garden Centre Contents Introduction 3 External environment Analysis 3 Environmental 3 Technological 3 SWOT Analysis 4 Recommended Action Plan 4 Human Resource 4 Marketing and Communication 5 Business Structure and Operations 5 Finance 6 Overall organizational Diagnosis Brief 6 References 7 Introduction The present study looks to analyze the modus operand of the business of Grant Garden Centres Ltd. primarily located in the Farmoor village in South East London. The company is headed by John Grant. Jane and Malcolm daughter and son of John are also a part of the family business. The study looks to analyze and find out the key pain points of the business with respect to core business areas such as marketing, HR, finance and operations and provide a probable solution to overcome the hindrance caused by the pain points. During the course of the study various strategic and analytical frame works such as PEST analysis, SWOT analysis, etc has been used to get the desired outcome (Henry, 2008, p.89). External environment Analysis External or Macro environmental factors include factors that cannot be controlled by the organization and yet those factors tend to have a major impact on the business operations. Hence, an organization should keep a close eye on the developments of those factors and develop or modify business operations accordingly. The external environmental factors include Political, Economic, Social, Technological, Legal and Environmental factors of (PESTEL). In the context of the present study two key factors in the form of Environmental and Technological has been chosen. Environmental With the rising threat of global warming people, government as well as corporate entities have become a lot more environment conscious. Keeping in mind the product is being produced by the company it provides a great opportunity to the company. This can help the company to grow business by targeting both B2B and B2C customer segment. Technological Technological changes have affected the business operations of companies round globe. Now days most of divisions in a company are IT enabled. Also rise of digital media has made sure that a website of a company becomes the face of the business. If a company does not have a website then it is equivalent to business suicide. Therefore, it is very important for Grant Garden Centres to become familiar with the technological factor and use them to the fullest advantage. SWOT Analysis Strengths John’s passion for gardening Expansion of business to two different locations Revenue growth in 2005 to 2009 was 20% which indicates sustainable growth. Weaknesses Autocratic Attitude of the business head Lack of formal recruitment and selections process High Employee turn over Marketing and communications activity are not up to the mark. Lack of appropriate job delegation Lack of customer service and product training Lack of IT enablement Absence of company website Profitability and liquidity position are poor. Opportunity Customers as well as the governments have become a lot more conscious about environment There lies scope to use IT facilities to make the business operations a lot more robust in nature The company can achieve economies of scale if it reduces the operating cost and liquidate stock faster. Customers will prefer cash purchase if the company increase the promotion in effective way. Threats Recent opening of a DIY store is a major threat considering the unstructured business operations. Losses of customers as there are very little customers that are repeating to the centres. 40% of the customers are over 55; i.e. the company is positioned as a youth oriented brand due to the traditional business outfit. Product diversification by other chains Under utilization of the land available. Recommended Action Plan From the above analysis it is quite clear that Grant Garden Centres needs to work upon each of the key business areas including Marketing, HR, Operations and finance. Therefore while delivering the recommended action plans each of the areas have been considered. Human Resource From the case analysis it can be understood that the company does not have any formal human resource division. One of the key responsibilities of the HR department is to select ideal candidates. But due to a lack of structured recruitment and selection plan the company is facing high level of attrition rate. Hence the management has to focus on hiring one HR manager and one executive to look after the HR department. Also the company should focus on organizational feedback mechanism as several higher level employees have left due to a lack of feedback within the organization. Also the company has to work on creating a bank of permanent employees and then as per requirement the company should hire part times. Hereby it is to be mentioned that number of full time employees should be always greater than the part timers. Also training and development activities need to be initiated to improve the product and domain knowledge of the employees to ensure better customer service and experience. Marketing and Communication One of the major draw backs of the company has been lack of marketing and communications activities leading to a dip in sales. John’s daughter Jane has got the right idea about probable marketing activities. Based on the type of products it can be said that the company should focus on relationship marketing. Presently the company is focusing on conveying message such as opening and closing hours or offers that is below per. At first the company has to develop a website. Presently most of the people spend a lot of time over the internet, hence it is suggested that the company work on the digital marketing strategy. Once the website is finished the company may decide to hire any local SEO company to look after online and social media marketing through Facebook, Twitter, and Pinterest etc (Zarrela, 2010, p. 45). This will help the company to build relationships and communities. Also the company must focus on CSR activities this may include organizing gardening events in schools and colleges, encouraging people to reap trees. This will enhance the brand image of the company and also develop relationship. This may help the company to struck partnerships with some corporate clients also. Also the company should engage in a formal research project to understand the needs of the consumers. This will help the company to developing an appropriate marketing strategy keeping in mind the 4 P’s of marketing (Wenderoth, 209, p. 359). Business Structure and Operations One of the major problems that the company is facing is the lack of organizational structure which is causing hindrance in reporting and job responsibilities. This needs to be solved. Since the magnitude of business is not large it is suggested that the company follows a functional structure. Also there should be one person leading the overall operations of each of the two branches. Since, Malcolm is interested in that the opportunity could be bestowed upon him. Also each of the departments of the company has to embrace IT enablement, especially the finance department. Finance Financial status of the company can be analysed from the key ratios extracted from the company’s financial reviews of 2009. Current ratio is 2.4 which indicate strong liquidity position of the company as current assets is 2.4 times more than current liabilities. But acid test ratio is only 0.3 which shows very critical condition of the company as this ratio always should be more than 1. It indicates that the company is highly dependent on inventory which is a major weakness. Stock turnover also supports inefficient inventory management as it is only 4 times in a year. This is the main cause behind lower acid test ratio or company’s dependency on inventory. Creditor-days ratio is much lower according to company’s liquidity position. In case of profitability, ROCE and net profit margin are very less through revenue growth in 2005 to 2009 is 20% which is good. Gearing ratio shows good capital structure and financial leverage of the company. Promotional budget indicates that the company has less focus promotion and invest less on that which the company needs very much to increase the cash sales. Overall, liquidity and profitability positions are very weak. Therefore, the company needs to highly focus on liquidising inventory or stocks very frequent and reduce the operating cost as much as possible. The company also needs to increase the promotional budget to faster sales. Thus, it can revitalise its profitability and liquidity. Overall organizational Diagnosis Brief It is needless to mention that one of the major challenges that Jane and Malcolm would face would be to convince John. Hence it would be a classic case of organizational change. It is suggested that Jane and Malcolm should adopt Kurt Lewin’s Organizational Force Field Theory of Change. This includes the process of unfreezing, movement and refreezing. References Henry, A. 2008. Understanding Strategic Management. Oxford University Press: UK. Wenderoth, M. 2009. Particularities in the Marketing Mix for Service Operations, GRIN Verlag: DE. Zarrela, D. 2010. The Social Media Marketing Book. O'Reilly Media, Inc: CAN. 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