Business Improvement - Martemis Pty Company - Assignment Example

Business Improvement Methodology Introduction Martemis Pty Company is a family business dealing with electronics and is managed solely by an individual. The company has been in the market for a longer period of time though the company’s sales seem not to be rising as it is expected in any other profit making organization. The company has however been able to maintain and meet their variable and fixed cost expenses all this time. As a strategic consultant, after carefully studying the books of accounts in the company, I have realized that the working capital of the company has been maintained within the required standards i.e. the accounting ratios are within the range as per the International Financial Reporting Standards (IFRSs). Discussion Marketing is very important since it will help the company to overcome the problems of low sales. They will further overcome this problem by serving many customers appropriately and reaching new customers in the market. Remember that the most important person in the market is the customer because without the customer there will be no business going on in the market and consequently the sales of the company will be down. According to Gretzel, the company should do anything possible to ensure that market research is carried out so that they can discover the exact needs and wants of the customers in the market. There are several strategies which can be used to improve the performance of the company. Monitor your inventory To address the problem of delays in supplying the customers with the products they need and on a timely manner, the company needs to research on the needs of the customers in the market. They have to know the purchasing process and behaviours of the customers in the market and develop advertisements which will emphasise on these issues. For example, one of the most important things which the customers want in the product is “benefit seeking.” This is a case where the customer is interested to know the benefit which can be obtained by using the products (Worley & Cummings, 2008). Develop a “Preferred Customer” List Keeping customers in the business is easier than looking for new ones. Besides, the only way to survive in this highly competitive market is to keep the customers in the business. This is because they will act as the company’s advertising tool. Researchers have indicated that satisfied customers will be off referrals. This means that the customers will bring other customers whenever they are satisfied with the services of the company, thus increasing the sales of the company (Lee, et. Al., 2009) Develop a Newsletter A newsletter is an important tool which reduces the gap between the customers and the business. The management of this company should introduce newsletter especially to the regular customers. This newsletter is useful as it will personalise the company’s advertisement and an above all, it makes things more professional. This newsletter should contain some important issues such as frequently asked questions. They should also be printed in a way to attract the customers’ attention thereby creating the desire of wanting to know more about the information contained in the newsletter (Cateora, 2009). Pricing strategy Pricing is very important to this organization as it is not only one of the major factors of marketing mix but also as a tool of positioning the product. The following are the strategies which the company should consider when setting its prices in the market. These strategies are; loss leader policy, versioning, competitive pricing, close out, cost plus mark-up and quantity discounts and bundling (Kerzner, 2009). Create a Positive Work Environment To solve the problems of poor performance within the company, they should create a positive work environment. This is only achieved through the following means. First, the management should have good relationship with the workers. Workers in the work place should be free to seek for clarifications, ask questions and even to complain to the top management. All these will be achieved only if freedom is exercised. They should also introduce suggestion box whereby the employees can communicate to the top managers within the company (Kapoor, Hughes & Pride, 2009). Distribution The company should improve their channels of distribution to ensure that the customers receive the goods at the right time. Besides, distribution is very important because of the following reasons. Distribution affects sales because if the company fails to distribute they can not sale. Many customers are not willing to wait. This company operates in a very competitive field with many competitors therefore customers have many alternatives of making their purchases. Secondly, distribution affects the profit of the company because if the company fails to sale, there will be no profits made. Consequently, it will influence the competitiveness of the company because distribution affects the prices at which the goods will finally be sold. Technology The management should ensure that the electronics they sell in the market are of latest versions which will attract the customers. Many people who buy electronics are young people who like advanced technological machines. Technology has become part of business in this era because every department within the company needs to carry out its activities using advanced technological devices. The company should respond effectively to the competitors in the market. Promotion and advertising strategies The company should also utilize various forms of promotions so as to reach several customers in the market. They should consider some effective forms of communications such as personal selling and use of magazines and internet. Furthermore, the company should also consider other ways of attracting customers like use of free samples, lowering prices etc. These means are effective because of the personal contact with the customers. It gives room to the sales person to convince the customer to buy the product even if the customer had not planned to spend on such products (Mooij & Marieke, 2009). SWOT Analysis (see appendix). Apply marketing theories The company can apply marketing theories when serving their customers in the market. Such theories include Value Innovation and the Value Curve. This is a very important theory because it focuses on the value and the needs of the customer. This theory will be effective due to the long term experience the company has gained in the market. Still, the company should establish research and development department which will analyse the market that the company is eyeing and identify the needs of that segment (Gareth & Hill, 2009). Conclusion In conclusion, the company has been facing various challenges that are internal and external. Some of the internal problems include the lack of proper leadership in the company, poor succession plan and low performance in terms of sales. The diagram below summarizes the entire process of ensuring good succession plan and how to develop leaders through training. The human resource manager and other top managers should establish various departments such as the customer care, research and development department etc. These departments will help to handle customers appropriately. They will also assist in carrying out research on how to improve the performance of the company i.e. R&D department. Recommendations There are several recommendations I will make concerning the company. First, the company should introduce research and development department which will research the target market to obtain the exact needs of the customers, distribution channels to use and what the competitors are doing. This information is very important since it will be used for decision making, designing marketing and business plan of the company. Secondly, the human resource manager should take the matters concerning recruitment seriously so as to improve the services being offered to the customers. It is very important to have enough employees to avoid the problem of overworking the employees. According to the Fayol Henri-a scientist, employees are very productive when they are not overworked (Hackney & Hasik, 2008). Thirdly, the issue of training employees should be arranged as soon as possible so that they will be competent in performing their duties in the company. Many customers are well educated and they are aware about the quality of services which are worth their money. This training program should also include the training of customer care people because they are the one dealing with the customers. Motivation is another important factor which needs to be considered. The success of the organization depends on the performances of employees in the market. Human resource manager should arrange for various events in the company such as a party. In addition, human resource manager should use other motivational ways like praising the good work in the company. Other theorist such as the Charles Taylor believed that employees can also be motivated by giving targets which they should achieve and their achievements recognized (Blazey, 2009). Lastly, the management of the company should introduce a customer care department. they should ensure that this department is very effective and this can be achieved by training, highlighting the roles and informing the customer care person on the importance of customer care department to entire company. This customer care person should be able to handle the problems of customers in a quick and professional manner, so that they can influence the customers trust in the company (Goodson, 2009). References Gareth, J. & Hill, C. (2009). Strategic Management Theory: An Integrated Approach. Cengage Learning. Blazey, L. (2009). Insights to Performance Excellence 2009-2010: An Inside Look at the 2009- 2010 Baldrige Award Criteria. American Society for Quality magt. Worley, G. & Cummings, T. (2008). Organization Development & Change [With Online Access Code]. Cengage Learning, 2008. Kapoor, R. J., Hughes, R. J. & Pride, M. W. (2009). Business. Cengage Learning Kerzner, H. (2009). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. John Wiley and Sons Cateora, P. R. (2009). International marketing. McGraw-Hill Mooij, M. & Marieke, K. (2009).Global Marketing and Advertising: Understanding Cultural Paradoxes. SAGE Gretzel, U., Rob, L. & Hopken, W. (2009). Information and Communication Technologies. Springer. Goodson, P. (2009) Theory in Health Promotion Research and Practice. Jones & Bartlett Lee, R., Kotler, P. & Cheng, Hong. (2009) Social Marketing for Public Health: Global Trends and Success Stories. Jones & Bartlett Publishers Hackney, R. & Hasik, J. (2008). McGraw-Hill's GMAT. McGraw-Hill Professional Appendix a). Porter’s Five Forces The power of suppliers This can be used to access the impact of suppliers in the market. Does it influence the price of products? This will depend with the number of suppliers in the market. Buyer power: The effect of buyers is felt when they are few in the market which may force the prices from competing companies to lower the prices. The company can overcome this problem by ensuring that they produce quality products which will attract customers and convince them to buy at premium prices. They use high prices to signal high quality products. Threat of New Entrants: The new entrants have been the source of competitors in the market. The company should therefore create some barriers for these new entrants. Such barriers include the brand loyalty of customers in the market. They should develop good relationship with the customers and establish a powerful customer care. Other barriers may include introduction of distribution networks in the market. Competitive Rivalry To ensure that the company becomes a market leader in a competitive market, they have to offer quality product which will make customers to make repeat purchase on the market. Threat of Substitution This has been the major threat to the company, customers have many alternatives of getting products from other companies or they can get a different product but offers the same services. This problem can be solved by carrying out research to establish the exact needs of customers. They then consider those needs in their products. Furthermore, they can carry out massive advertisement of their products in the market so as to attract many customers. SWOT Analysis Strengths The major strengths of the company are their capabilities of offering quality products due to its experienced employees who had worked in R&D for Sony and Microsoft. Availability of such staff ensures that the company customers are well served with high level respect and offering personalised service. Weaknesses The main weakness in the company is poor leadership. The company should train its potential employees who are educated so that they can be promoted to lead others. Besides, the company has poor succession plan which may cause the company to fail in case the CEO retires with no one to replace him. Opportunities The opportunities within the company are the availability of staff that worked before in a R&D in other companies. Such employees have experience that could assist the company when the same department is introduced. Threats The major threats in this company are presence of competitors in the market. Such competitors cause various negative aspects in the market i.e. fall in the prices and general sales of the company. The other threats are loss of key staff such as the CEO and other 2 qualified electronics technicians. b) Training program. Read More