Davis Service Group -Textile Maintenance Service - Case Study Example

Davis Service Group -Textile Maintenance Service EXECUTIVE SUMMARY: The Davis Service Group is a company that provides textile maintenance service to the hospitals, restaurants and private businesses of UK and EU. By developing the reputation of professional, trusted and reliable service provider Davis Service Group have managed to develop good relations with its customers and rooted firmly in the market. SERVICES: It offers a wide range of reliable maintenance services to its customers. It offers apparel for the chefs and staff, napkins, aprons, tablecloth towels, wash clothes and dust control mat services. It also provides washroom services with addition to linen services including hygienic healthcare supplies of surgical wraps, gloves, drape sheets gowns and tissues etc. In 2001 company used to be a conglomerate, According to John a conglomerate is a market diversified firm (Narver). It consisted three main companies; Sunlight Textile Maintaining Company Elliot Building Systems HSS- tool hire. Looking at the revenues generated by the tool hire-HSS business, company has decided to expand its venture in Australia after analyzing a potential market. VISION, MISSION AND OBJECTIVE: VISION: Vision of our company is to make a global impression in the tool hire company by innovation and by providing extra ordinary services to our consumers. MISSION STATEMENT: The mission of our company is to provide the most comprehensive range of professional and reliable hire tools serving the construction, domestic and industrial market. OBJECTIVE: Our objective for year 2010 is to provide a satisfying service to our loyal customers and to expand geographically to reach new heights in terms of company’s reputation and revenue. CORPORATE OBJECTIVE: To supply our customers with highest quality tools and equipments and by providing efficient service, with competent standards we thereby intend to expand our company in Australia. Looking at the previous experience of the company it plans to grow by taking over companies to strengthen the existing business efficiently. Taking over of a present company will advantage the Davis group as it would have experience and local contacts in the market of Australia. Our objective is to maintain a motivated work force driven by experienced and qualified staff which have strategies for the benefit of the company and environment it works in. SITUATIONAL ANALYSIS: Our main focus is on the tool hire business-HSS (High Speed Steel) in Australia. Looking at the standard of construction on domestic and industrial level we belief it has a potential of a vast market in here. The current competitors we face in the market are Algeco SA, ARAMARK Corporation; ATCO Structures Ltd. The market is an oligopoly with small number of sellers. MACROECONOMICAL ANALYSIS: The tool hire market consists of customers ranging from DIY users to national construction companies. In UK we currently have 450 outlets operating successfully however in Australia the market for tool hire is estimated to worth $7.63 billion.*** The industry basically represents 17000 hard working employees with an annual turnover of $820 million. INDUSTRIAL ANALYSIS: Company intends to expand by taking over on another company like in the case of Berendsen which was a success. By doing so the company has the advantage of: Reducing operating cost, for instance the outlets are already there Gives a concrete management with experienced staff Saves fixed costs Have a market experience Aware of the competition Possessing local contacts The barriers that a new competition might face from the existing opponent may include: Cultural differences: Australia’s customers and their purchasing behavior are same as customers in UK. Language Barrier: English is the language spoken there; it becomes easier to communicate with the target audience. Currency: dollar is the currency in which Australian business operates which gives an opportunity of convenient trade. However the nature of purchase is not routine but it is on an occasional and large scale. Therefore companies in this industry are highly competitive. Therefore providing good quality at low price is the best choice. MARKET ANALYSIS: MARKET SIZE: Due to large scale constructions domestically and nationally the market size for the business is increasing rapidly. Efficient tools and equipments are required for the constructions processes. MARKET TRENDS: According to the market trend, customers today demand efficient and economical equipments to speed up the work with minimum usage of resources. Thereby company has a fully well equipped managed plan that offers the advantage of ownership. The customer has the kit on site while the workers observe and manage to fulfill the service requirement. MARKET PROFITABILITY: Buyers for the HSS tools are saturated. It’s mainly a commercial business; sellers have a standardized price to offer. On price strategy there isn’t much of a difference it’s the overall package that we offer. The biggest barrier to enter the market is the existing competition. A well rooted company has a bundle of loyal customers of its own, it’s difficult to fetch for new customers in the market. The main strategy on which the company relies is through the vast experience in UK and EU and by the standard of service through which it can basket all the customers. Company has its own outlets for the distribution purpose. Offices are located at easy access location to provide the customers with competent service and products. INTERNAL ANALYSIS: Taking the internal analysis of the company, the strengths and weakness of the company could easily be classified; STRENGTHS: The company has a 10 year experience to serve the UK and EU market for a long time. It is aware of the needs and demands of the customers and is competent enough to meet the standards and expectations. The company has operated in a similar environment before; it’s easier to adjust to the culture and language style in Australia. Company has an experienced and efficient staff that works with a team spirit for the benefit of the company as a whole which satisfies our customers. WEAKNESS: The only weakness that the company posse is for the time being it lacks of awareness in the market. It requires time to sustain in the market to be acknowledged by its work and quality of service. SUMMARY OF THE CURRENT SITUATION: Currently the company has a successful business set up in UK and EU; therefore it has planned to expand in Australia. Looking at the potential in Australian market most of the companies are operating here at different sites for which they require the basic tools and equipment for construction. The company have estimated the expenses and forecasted the turnover for the year 2011 for the Australian venture of Davis Group. MARKETING STRATEGIES: The main strategy is to increase the sales with the quality of service and equipments we supply. Operating in a new surrounding would certainly require more staff; the main strategy is to attract highly qualified staff for the job with a considerable experience to add to the company’s reputation. As a beginner our main focus is to promote the company and create awareness through different effective Medias. Our creative team has their heads down to make an innovative package for our consumers to offer them easy access and satisfied job. Company as whole has a diversified approach however for its HSS business it intends to grow by horizontal integration that is by taking over or mergers looking at the advantages and benefits the takeover has brought before. IMPLEMENTATION: We intend to imply our strategies in action by: Attracting new qualified employees who are aware of the market currents and are ready to adapt to it. Special benefits are offered to the employees of Davis Group. Company has a new approach towards advertisement and promotion of the business which is discussed ahead. Creative’s have meetings and strategies that are to be applied to experiment market response. PRODUCT: The product is well defined as the tools and equipments required for the commercial construction. PLACE: It is to be placed in Australia which has a great scope for this market to boost. PRICE: We provide our consumers with economical and reasonable prices in special packages which satisfies our customers. PROMOTION: Because of its initial level, company has decided to invest on its promotional activities. Posters are hanged on to bill boards near the construction sites and an official website link is added to the home page of Davis Group of companies for easy access to us. Quality detail about the equipments and its advancement are regularly updated on the website. Outlets are to be opened in the commercial zone near the constructor’s office to attract new customers. PEOPLE: The main target audience for the company is the commercial constructors for which our sales representatives have personally met and proposed our offer to make them aware of the different and efficient services we offer. PROCESSES: The main process that the company uses is by providing quality service and satisfying our customers. PHYSICAL EVIDENCES: Quality Assurance: we have a keen policy of following and supplying the equipments according to the need of our customers. We have a cost effective package that we offer our customers which relies on economical approach. Environmental Policies: We belief as a company we owe our duty towards the environment therefore we have a policy to: Minimize the environmental effects through strategic planning Reduce waste and extra consumption of energy and resources Ensure that the staff uses the machinery effectively and efficiently Reduce pollution causing machinery. Safety Policies: we intend to provide our staff with : Effective training required for the job Introduce written safety and emergency plans Monitor the performance of the workers Monitor the hygiene surrounding our employees require Asses the tools and equipments use on their sustainability and usage. BUDGETARY REQUIREMENTS: Consolidated statement of comprehensive income and expense For the year ended 31st December 2009 Year to 31st December 2009 £m Profit for the year 45.8 Other comprehensive income: Currency translation differences Actuarial losses (Loss)/gain on cash flow hedges (4.5) (13.4) (14.4) Other comprehensive (expense)/income for the year, net of tax (32.3) Total comprehensive income for the year 13.5 Attributable to: Minority interest Equity shareholders 0.5 13.0 Consolidated balance sheet As at 31st December 2009 As at 31st December 2009 Assets Intangible assets: – Goodwill – Other intangible assets Property, plant and equipment Assets classified as held for sale Deferred tax assets Derivative financial instruments Trade and other receivables Pension scheme surplus Total non-current assets 461.7 68.0 535.3 1.6 30.4 24.7 3.6 - 1,125.3 Inventories Income tax receivable Derivative financial instruments Trade and other receivables Cash and cash equivalents 39.9 8.8 0.2 161.0 272.2 Total current assets 482.1 Liabilities Interest bearing loans and borrowings Derivative financial instruments Income tax payable Trade and other payables Provisions Total current liabilities Net current assets Interest bearing loans and borrowings Derivative financial instruments Pension scheme deficits Deferred tax liabilities Trade and other payables– Provisions Total non-current liabilities Net assets Equity Share capital Share premium Other reserves Capital redemption reserve Retained earnings Total shareholders’ equity Minority interest in equity Total equity (3.2) (3.4) (17.8) (206.0) (5.2) (235.6) 246.5 (753.9) (42.3) (32.9) (62.6) (1.8) (2.5) (896.0) 475.8 51.5 96.4 (3.3) 150.9 176.5 472.0 3.8 475.8 (Davis) CONTROL MILESTONE AND CORRECTIVE ACTION: To maintain the service standards and product quality is the biggest milestone we need to achieve as a team. When expanding geographically that is the main act to keep a balance between the two and as a team we believe we can achieve it. LIST OF REFRENCES: “Davis.” 2010.< http://www.dsgplc.co.uk/investors/reportandaccounts/> Read More