For ABLE Corporation - Business Plan Example

Business Plan for ABLE Introduction: In today’s global marketplace, creativity and innovation have assumed a great deal of importance and it is important for a Company to have a fresh and novel strategy if it is to succeed in the market place. “Competitive strategy is about being different.” (Porter,1996:64). Porter also states that “Strategy is the creation of a unique and valuable position, involving a different set of activities……different from rivals.” (Porter 1996: 68). Able Corporation is involved in the business of manufacturing tools, lawn mowers and one of the primary objectives of this business Plan is to devise a competitive strategy for the Company that would set it apart from its competitors in the market and draw attention to its products. There are four major aspects that are considered in this Business Plan: (a) Marketing aspects (b) Operational aspects (c) Financial aspects and (d) Management aspects. The first step however, is the framing of a mission and vision statement for the Company and this should be centered around the quality of its products. Since a global economy is customer driven, delivering quality is the best way to garner customer loyalty. Most customers who purchase power tools and electronic products are looking for superior quality, in order to receive a good return on their investment, hence a mission statement and advertising oriented towards quality is likely to be helpful in the case of Able. Marketing: Porter’s 5 forces Model visualizes an industry as being influenced by five forces: (a) Buyer Power (b) Supplier Power (c) Barriers to Entry (d) Threat of Substitutes and (e) Rivalry.(Porter 1996). In the case of Able, its entry into the American market has been facilitated because of its arrangement with large retailers like Wal Mart and Sears. This arrangement could be extended into other countries as well. For example, Wal Mart already has retail outlets in several other countries such as Argentina, China, Brazil, Canada and the United Kingdom, among others. Able could therefore solicit larger orders for its products from Walmart and seek extended distribution through Walmart stores in those countries. In this way, the company would be able to overcome the barriers to entry posed to other firms, because Walmart already has an established presence in those countries. Another aspect the Company can consider in marketing its products is the development of a website. This offers several advantages in terms of cost because it enables a direct contact with customers from all over the globe. A well designed website that offers good connectivity, providing scope for customers to place orders as well as register complaints can help Able to reach a wider base of customers in a cost effective manner. In specific countries where the company wishes to establish a presence, it may also be worthwhile to carry out pilot studies in select geographical areas, by allowing customers to test use some of the power tools for example and provide their opinion on whether or not they would purchase it if it was available in stores. Information gathered in this way would be helpful to Able in determining which countries to target through distribution of its products using the Walmart stores. This may offer Able a means of entering the market of the desired countries in a fairly cost effective manner. Able could position itself in the markets of other countries by targeting the male population in the age group of 18 to 45 for its power tools and other electronic products, while targeting women in the same age group for microwaves and ranges. Operational: The global economy has also meant that satisfying customers needs to be one of a Company’s top priorities if it is to succeed in the global marketplace. In some instances, this has been achieved through a process known as value innovation. This is often achieved through a process known as value innovation. This was the case with Bert Claeys, the Belgian company that operated movie theatres. (Chan Kim and Mauborgne, 2000). It did not try to use the traditional strategies of maximizing market share, but sought to directly address customer needs by providing a unique viewing experience with large screens, and this resulted in success. In the case of Able for example, the operational strategy in different countries may need to be different. There are vast markets to be tapped in countries such as China and India, however the availability of cheaper substitutes must be taken into consideration. If Able’s products are to address customer needs in these countries, their promotional advertisements, whether through the web or other media must focus upon emphasizing the quality of Able’s products and the long term cost benefits they could gain by investing in a slightly higher priced product. The website could be an important promotional tool and it can also provide feedback from customers. But it is important for company representatives to regularly service the websites so that customer queries are answered promptly and their complaints attended to quickly, so that a positive impression is created about the Company. A failure to maintain the website well could result in negative publicity because customers are not hesitant about telling others if they are dissatisfied with the services provided by a Company. Financial: In considering its expansion into other countries, Able must seek to do it in the most effective way possible. The website offers a low cost, yet effective means of reaching a wide base of customers. Making use of the available retailers with whom the Company already has a favorable relationship could also result in some cost benefits for the Company. This would be a much better option compared to setting up as an independent Company in a foreign country through individual distribution outlets. This could prove to be a very expensive option and may not guarantee a level of sales that could result in costs being recouped quickly. In particular, in countries like China and India, cheaper substitutes are available, while in the developed countries like Australia and UK for example, the customers may already be using a particular home brand and may prefer it. Therefore gaining a volume of sales and achieving the break even point is likely to take some time and it would be in the Company’s interest to limit its investments to the most cost effective means that are available to it. Management: Able must also identify a team of qualified and able people who can be put in charge of the expansion program. From the resource based view of sustainable competitive advantage that has been put forward by Barney (1991), organizational and intellectual human resources must be well supplied in the executive team. There must be a balance of talent among the members of the top executive group. For example, the failure to include individuals well qualified in software and technology area could result in the Company investing more in so-called better technology that costs more to produce, whereas the needs of the Company during its phase of expansion may initially be served quite adequately by less intricate systems. Team members should also be able to coordinate and work well with each other, so that the potential for conflict is reduced and progress scan be made. There is also considerable benefit that can be achieved through the use of an Intranet to be used by the Company’s employees. It helps employees to remain aware of latest developments occurring in the Company and also provides them a forum to provide their feedback , suggestions and recommendations. In conclusion, the business plan proposed for Able is as follows: 1. Develop a vision statement that focuses on the quality of the Company’s products, for example: “Able – quality you can depend on”. All employees and representatives of the Company must also be trained to adhere to the standards necessary to ensure high quality. 2. Develop a two pronged marketing plan (a) Conduct pilot marketing studies among customers in specific geographical areas to test receptivity to the product before making it available through the Walmart stores in that country (b) Design and develop an interactive website that offers excellent interconnectivity 3. Avoid traditional distribution methods, rather focus on electronic means and existing distribution network with Walmart extended into countries of choice, in order to achieve the expansion in a cost effective manner 4. Get together a strong executive/management team in charge of the new expansion plan, comprising individuals from all fields, so that knowledge in every area is easily available. Develop an Intranet for effective sharing of knowledge and communication within the firm. References: * Barney, J, 1991. “Firm resources and sustained competitive advantage.” Journal of Management, 17(1): 99-120 * Chan Kim, W and Mauborgne, Renee, 2000. “Value innovation: The strategic logic of high growth.” Harvard Business Review, at pp 103 * Porter, M. E, 1996. “What is a strategy?”, Harvard Business Review (November-December): 61-78. Read More