The Aspects of Mark Quinns Raft - Assignment Example

1 a) 500 words- SWOT HRM Accounting and Finance Marketing Strengths Skilled and focused employees Use of eCommerce, Recession Resilience, Annual Profit Green Marketing, Societal marketing Weaknesses Limited number of skilled craftsmen Investments channelized in importing recycled teak Technical trouble in using furniture Furniture damaged in transit 6-8 week delivery Customer discounts limited to 5% Opportunities Training Franchisee model Better designs Threats Loss of skilled employees Rising teak prices Product Cycles The case study steadily charts all the aspects of Mark Quinn’s RAFT, a furniture business that thrives on recycled teak. Mark Quinn has a completely new idea that revolutionizes the way you may expect to purchase furniture and use them. For a customer, walking into a store with daintily designed furniture is a dream walk, especially when the prices are not so high in spite of the Recession and the furniture boasts to be built with recycled teak. The example of RAFT is unique, where customer complaints are dealt with expert positivity and turned into appreciation towards details. As an employer, Mark Quinn looks almost ideal as he does not blast the careless carpenter with expletives for ruining a certain angle in the drawer. In short, RAFT has a working advantage over its competitors. It assumes a humble attitude to business building and not only showcases it in its marketing and human resource management departments, but extends it to the accounting and finance department. RAFT has efficiently attained the balance between attending to challenges in its external environment and conjuring new ideas to create profit. It is important to understand the new business model and ideology to be able to frame the case completely. On undertaking a SWOT analysis of the case, we shall agree with what Mark Quinn has to say. The human resource management department has a couple of interesting strengths like skilled employee base and focused staff who do their work diligently and ensure that orders are churned out at sustainable speeds. The performance can be enhanced in terms of quality and speed through subsequent training. The accounting and finance department would do well with more ecommerce and franchisee centers, although it has been able to tide over the aftermath of Recession and enjoy steady annual profit. The marketing of the brand is sturdy, with a conviction in design and a negation of existing flaws. Its green marketing initiative supercedes its societal marketing initiative in a subtle way. There is also the evergreen scope of improving and creating new product designs using better ideas. But is this enough? While everything looks so picture perfect, parts of the business that need strengthening are the design, skill, and sustainability aspects. The designs can definitely be much better since customers are likely to tire out of the rugged finish of recycled teak in repeating product cycles, when they find them in stores in the same design over and over again. Designing new models, therefore, is a challenge that RAFT must overcome. The skills of workers must improve to minimize mistakes of the hammer or the alignment to reduce the number of complaints from customers though there has not been too many. Thirdly, the franchisee model might make the business financially sustainable but the demand and supply factor (145) still needs to be worked out. RAFT definitely needs more manufacturing units, warehouses and workshops coming up in new cities if they are planning to spread out. For globalization initiatives, the brand will do good through market appraisal, which later can decide its cost and marketing initiatives in the new market using the franchisee model. 1 b) Factors influencing the organizational culture in RAFT, which is most dominant – 250 words The organizational culture in RAFT is pretty cool with a dynamic business model driving sales at steady speed. While the market reputation of the brand is driven by its uniqueness, there are not many external factors which influence the organizational culture of RAFT. A few external factors which still find their way across include the supply of recycled teak, designer furniture launched by other brands, customer feedback and governmental regulations. However, what influences the organizational culture of RAFT is its annual sales and showroom turnout figures, which are purely internal factors. The teak factor which is an important green factor in the company’s external environment, is the most dominating of them all. Prices of teak have been soaring high and furniture developed using teak wood are difficult to afford for the average buyer. The brand relies heavily on the importance of using recycled teak that does not contribute to the act of deforestation for commercial wood procurement, a crime in today’s world. Since recycled teak is available all round the year, RAFT has a full annual production cycle. It operates all twelve months on full scale while other wood furniture providers have to wait for supplies. The designs created by RAFT’s workforce take into consideration the rugged finish that recycled teak achieves. The quality of the recycled teak does not differ too broadly since RAFT procures the raw material from fixed Indonesian providers. However, too hard a quality has an effect on the accuracy of the design being attempted by the skilled carpenter, which can give rise to alignment mistakes. The quality team must be beefed up to ensure that the recycled teak is used maximally. 4 a) RAFT are addressing a particular type of consumer. What do you think are the likely motivations and buying processes of a typical consumer for RAFT? – 375 RAFT has been clever in directing products to an audience that understands the value of recycled teak and environmental sustainability. Therefore, when creating a brand image, RAFT has kept in mind that the customer that will most likely walk in to purchase a product from its showroom is an environmentally conscious individual. As all know, recycled products cost a bit more than original products do. Teak furniture is itself hard to afford. Recycled teak on the contrary comes in a full package of looks, low ball pricing, and performance. The average customer that RAFT is targeting is looking for these aspects in the product he buys. Given that global inflation is threatening major economies, this favorable turnout is a good indicator for RAFT and similar providers in the furniture industry. To keep its customer motivated, the RAFT team has used a combination of the above facts and green marketing. Every customer feels motivated to buy when at the close of the furniture details is the encouraging note about how the product was manufactured without using any deforestation. To be able to keep their reputation intact, the marketing team has created design interests that attract different kinds of customers to separate sections of their showrooms. With an honorable market reputation, RAFT also uses sequential ordering and gives customers a promised time of delivery. This keeps customers in a line without rush in orders, while customers are aware that their order is being processed and shall be delivered with care by the due date. Thus, RAFT’s marketing strategy allows customers to opt for payment in installments over this time of scheduled delivery, specially in cases when the order is big and will take time to ship. The brand has been continuously rewarding its customers with several deals, discounts and vouchers which make buyers recommend the brand to others. Customers like contemporary packaging as much as they like receiving quality products inside the package. The RAFT team ensures to bring in seasonal discounts and attractive deals to make the customer feel satisfied with the package he receives. They give out free furniture accessories and warranty and ensure that the customer has a strong reason to come back for new purchases. Ultimately, the brand relies on getting the customer addicted to using its products and initiatives, such that they come back for different purchases relying on the quality, of the older purchase. Minor issues like furniture handling inconvenience and infestation is dealt with carefully through positive and diligent customer care. (b) To what extent and in what ways do you think RAFT are practicing societal marketing and green marketing? -375 words Recycled teak has a beauty of its own and therefore, the rugged finish and the new designs look urban in spite of small imperfections. Therefore, Quinn has decided to stick to the ‘design and look’ advantage and explain to the buyer how sleek his purchase looks, although a casual mark or an alignment problem exists. Mark Quinn analyses that the business has done well over the past eleven years only because the entire maverick approach to building business was unique and sustainable through the use of societal and green marketing. Societal Marketing: Innovative Designs: RAFT uses unique designs and attractive branding to allure customers to its latest furniture offerings. While all orders are created after being finalized by customers, the sample pieces in the showroom and those which are up for sale are unique in looks, not just because of due diligence and artful designing but also for the sleek rugged finish that recycled teak carries with it. Financial Sustainability: The pricing of the finished furniture is set at affordable rates. Although the processing of recycled wood does incur extra costs, the ease with which the labor work is accomplished makes up for the extra cost and presents finished products with an affordable price tag. Customers are also encouraged to clear payment in installments by the time of delivery. Durability: The furnitures are designed and known for durable performance. The recycled teak has a smoother finish with a rigged color and look, and is easily carvable. Therefore, although there may be a few manufacturing defects that the marketing team sorts out by positive customer handling, the furnitures are able to withstand the test of time and stay intact. The superior recycling quality and the action of correct amounts of insect repellant sprays during the time of manufacture keeps the furniture pest-free and strong for long after delivery. Scalable: The orders being placed by the customers are scaled up for performance and have been doubled often to increase number of products purchased. Friendly sales initiatives have helped no doubt, but the brand’s unique designs are to be blamed for the increase in orders. It is indeed very important that the customer service is good and the designs are open to re-adjustments on later date to suit the needs of clients. Green Marketing RAFT has always used highly specific green marketing terms to outline to buyers how well they are contributing to the society’s well being by opting for their products. They indicate clear lines like lack of deforestation drives and recycled teak products to make it clear to the market how unique and environment friendly they are. They also encourage customers to send their furniture for recycling after use. (c) Imagine that you are Mick Quinn and, in order to plan the future of the company, you are trying to identify the most pressing human resource management, and accounting and finance issues for the company. Describe two human resource management, and two accounting and finance issues currently faced by the company. -125 words We decided to try the furniture business after the Recession killed the old business of art dealership. I thoroughly understood that the business had to thrive in spite of imperfections like dwindling finances, limited workforce and complaining customers which our marketing department handles. In order to grow business however, we need to address crucial issues in the other two departments. The human resource management department has 30 worksmen in its UK factories who undertake the furniture creation process. Although they are enough skilled, more training and speed performances are required to bring an upheaval in performance and delivery. The team also lacks a specialist HR manager who can take care of additional and crucial issues in the employment area, where recycled wood providers and franchisees are handled carefully. The accounting and finance department faces issues like adapting to the franchisee model and making it sustainable and understanding and analyzing new market revenue expectations before venturing into other countries and markets. The ecommerce department needs a specialist although many say that our website has the best interface in the industry. Question 5 (a) Explain the extent to which you think that RAFT is a globalised business. – 250 words The approach to business by RAFT has been clearly global. They use providers of recycled teak wood from Indonesia and manufacture the furniture in UK. They have developed a balance between meeting the needs of both the markets and are posed to set up franchisee showrooms and dealers in Indonesia and other countries wherever they find a suitable buyer price. However, to work out market analytics and revenue statistics in the new scenario is a massive challenge. Therefore, although they have an initial global set-up, their growth and expansion into a global brand has still a long way to go. It will begin after they have decided the franchisee base to start with. Also, there are other challenges in turning global. RAFT has relied on excellent customer service, a cool attitude and focused craftsmanship and marketing in all its endeavors till now. The onus lies on how well, the franchisees will be able to deliver the same satisfaction level to customers in new countries. As is already known, the products may have a few technical snags which customers might complain about. The brand will receive a massive blow if the franchisees are unable to handle these queries and complaints in a satisfactory manner. Ultimately, RAFT success relies on its market reputation and green marketing initiatives. To be able to stick to these goals, the franchisee set-up has to be tested and tried before launching. If this set-up works out, then globally RAFT can expect to grow and bring in more providers of recycled teak wood and supplies and increase the number of manufacturing units. However, till then, it is hard to say if RAFT will be able to succeed as a global brand. (b) Evaluate the relevance of each of the four drivers of globalization to this case. Which do you think is the strongest? – 625 words The four main drivers of globalization are cost, market, government and competition. With respect to RAFT’s global outlook, it is worthwhile to study whether the four drivers of globalization are present in adequate amounts in the company’s profile. Cost Driver: In RAFT’s case. There is ample evidence that lower costs of manufacturing and shipping is going to be a major force behind its globalization drive (34). The brand can achieve economic scalability through the use of lower labor costs in countries in the Middle East, Indian and Asian continents. It is also possible that RAFT finds other providers of recycled teak that is close to the target market and therefore, incurs lower shipping costs. In short, the probabilities of cost drivers making globalization happen to RAFT is extremely high. Market Drivers: Probably the strongest factor in RAFT’s success till now and one of the most important factors that will exist in its globalization drive, market drivers (34) are many for RAFT. To begin with, many markets are unused to the concept of recycled wooden furniture, and wood more than often welcome RAFT’s entry into the furniture industry therein. Secondly, franchisees see an opportunity to expand their economic offerings through the use of RAFT’s brand reputation. Therefore, RAFT can depend upon the franchisee’s hold on the market and vice versa to establish itself in new areas. Thirdly, travel expenses are going down in the market and RAF can easily cash in upon it. Government Drivers: UK has a favorable trading policy with Russia and the rest of the world and therefore, RAFT can hope to expand its base in all those countries relying solely upon the friendliness of the tariff plans between the governments of the two countries (35). Many brands in UK have successfully made the shift with due assistance from the governments in the new market. India has opened its economy to FDI and so have many other small countries where services based economies are slowly turning towards globalized economy structure. In short, government drivers are many for RAFT to use and sort. Competition Drivers: The existence of furniture brands all over the world which have local origin and popularity is a great challenge that RAFT has to overcome (35). Although there can be nothing that equals the glamour of original teak, the chances of RAF thriving in markets which enjoy steady flow of original teakwood furniture are a matter of concern. It is to be noted that although RAFT will not have direct competition from other providers of recycled teak wood furniture, it will still have to overcome the popularity and glamour of original wood furniture which, due to high availability are available at affordable prices in these new markets. Therefore, competition analysis will be a major decider whether RAFT will move into a new market in the first place or not. Out of all the four drivers of globalization, RAFT is sure to be influenced most by the cost driver, which decides ultimately whether the other drivers will be effective in bringing huge market dividends to the brand. As already mentioned, finding new recycled teak providers may help RAFT set up new manufacturing units near a target market. This will reduce cost of production. RAFT will also need to train its labor force to create ultimate designs in perfectly chiseled furniture, something that it has not achieved till now. Cost of training new employees and marketing professionals will be another major aspect in RAFT’s initiatives in franchisee showrooms. However, overall, with proper market analysis, the decision to invest in the right market alone will be able to ensure whether these costs form a negligible part of their investments and market returns. In most cases, a thorough market analysis that is complete with travel plans, governmental sanctions and existing competitor’s equity research, will help RAFT make the best decision about which market to venture in. After this, the cost driver will itself propel sales and marketing in the new market. Another important factor that will effect RAFT’s market presence is its green initiative. If it can build awareness about green technology and use its green marketing to build initiatives which have higher social impacts pre-launch, then the brand will be able to reap rich dividends at launch. Read More