Operational Strategies for Primark Stores - Case Study Example

OPERATIONAL STRATEGIES FOR PRIMARK STORES Name: Course: Professor’s Name University Name City, State Date due Introduction An organization’s operational management usually covers the different activities that are undertaken by the business. The operational activities usually consider the products and services provided by the business, their market and marketing requirements and the operational resources expected to be used in the operational management process. Operational management seeks to enable the organizations to plan and execute the different strategies that they have to enhance their organizational performance. The major operational management functions within the different organizations usually entails marketing and sales, production processes, research and development and the support provided for the customers. The operational management of an organization also seeks to provide the organization with a capacity that helps them in the optimization of the planning process and the conservation of resources during the production and marketing processes of the organization [Dad13]. The study will be done on Primark stores and will provide details on how the organization has been undertaking its operational strategies for capacity management. Primark store is a subsidiary of Associated British Foods that was founded in 1969. Primark store specializes in the sale and production of ladies, men, and children wear, footwear and cosmetics. Primark has its operations in Austria, Germany, Ireland, France, and Belgium, and operates under the name Penneys in those countries. The company’s headquarters is in Dublin in Ireland and had a total of 277 stores by the start of 2014. In the financial year ended 2014, Primark stores recorded a revenue return of £4,273 million. Strategies employed by Primark stores Marketing is one of the vital operational activities that need to be undertaken by Primark stores to ensure that they have a continuous supply of customers into the stores to provide continuous revenue into the organization. With the increase in competitors facing the organization from the different countries that it operates in strategic marketing seeks to provide the organization with constant flow of customers who are usually attracted and assured of the products provided by the organization Primark Store targets to earn the loyalty of the consumers of its products and increasing their market base by designing strategies that are aimed at attracting and retaining customers. The performance dimensions used by Primark stores for the operations strategy include but not limited to quality, speed in responding to their customers, flexibility and cost effectiveness. In terms of product quality, Primark Store aims to produce quality products that are appealing to the consumers to ensure that they derive the maximum utility after purchasing the company’s products. Quality is one of the strengths that the organization uses while marketing their products thus giving the customers an assurance while purchasing the company’s products. When customers make requests and complains to the organization, Primark stores responds almost instantly to the demands of the customers. The organization has also provided an online platform that allows them to conveniently communicate with customers from the different geographical regions. Speed also entails the time in which inventory is kept as stock in the warehouses. Where inventory stays for long in the warehouses, the products may be surpassed by the fashion trends in the market. Primark stores need to maintain strong inventory control systems to ensure that the stock movement is done in a particular format such as the first in first out basis [Gra07]. To enhance flexibility in Primark Stores constantly promote planning by the management team to enhance growth and efficiency and accuracy of information during the processes from production to the time when the products reach the market. Given the competitive status of today’s market, the prices that companies sell their goods are likely to influence their market control. Given a fixed amount of household disposable income, all other factors held constant like the level of technology, the determinant of the brand that consumers are likely to purchase is dependable on the prices. Primark stores aim to offers their products to the market at the lowest possible prices [Ric04]. Porter’s value chain analysis for the appropriateness of the capacity strategies used by Primark stores The porter’s value chain analysis provides an audit to that examines the internal position of the organization. The tools could be ideal to help examine the operational activities and processes that are undertaken by Primark stores. The value chain analysis provides for the processes that are undertaken to convert the inputs fully into outputs. The process of converting the inputs into outputs provides for value addition. It is the difference in value added to the different products and services that determine the customers’ preferences of some goods and services over others. The porter’s value chain analysis provides a classification of the activities provided by the organization into either the primary activities or the secondary activities. The primary activities of the organization refer to the activities that are directly involved in the direct production and conversion of the inputs into outputs. Among the primary operational activities conducted by Primark stores include sales and marketing, operations and after sales services. The secondary activities are usually the support activities that are made on the primary activities. The secondary activities usually provide support to the primary activities through resources through the human resource management, infrastructure, procurement and technology required for production. For capacity to be effectively planned in Primark stores, it is important to have a well defined distinction between the primary and secondary activities provided by the organization [Mic082]. Capacity planning Capacity planning entails an understanding of the maximum volume of product that can be produced or sold to the marketing in a given period of time while factoring in the different constraints that face the organization during production. Capacity can be quantified as it determines the efficiency of production and the resource utilization in the organization. While making decisions on the capacity planning process the management of Primark stores should consider the issue of over capacity and under capacity. Over capacity or space capacity occurs in an instance where there is underutilization of the resources available to the organization both human and natural resources. In such a case, some resources are left idle and thus full capacity is not achieved. Under capacity occurs in an instance where the demand that is made by the customers is more than the capacity that the organization can produce. Both over capacity and under capacity are usually a disadvantage to the organization as they increase the costs incurred by the organization and reduces the potential revenue that can be collected respectively [Por03]. The organizational difference that make capacity planning a vital element in the operations include the degree of volume that the organization can produce within a given timeframe, demand variations, degree of variety from the production processes to create flexibility and customer visibility. It is hard to forecast demand of goods and services given that Primark stores usually offers goods that could be classified as secondary needs for most customers. A balance in the organizational performance should be struck between the balancing of capacity planning and achieving the demands that are provided by the customers. The lack of proper management by the organization would mean that the funds are usually tied up unnecessarily. Proper planning encourages the organization to have plans for changes in demand. In case the demand is more than the capacity, the organization can contract the services of other organization to keep their customers satisfied. The capacity planning strategy should focus on the utilization of a number of factors, among them being the trading hours of the organization, labour deployment and the stock replenishment cycles. The trading hours by Primark stores are a large determinant of the revenue that they collect from their activities in the course of a given accounting period. The timing of the organization’s trading hours is determined by the demand that is available for them and the geographical region that the organization serves. The increased in demand in the market forces the organization to extend their service hours. Similarly, since the organization is a multi-national organization and some of its activities are conducted online, they are equally forced to trade all through the year. Labour deployment should consider the demand that is being advanced by the customers in the different geographical regions that the organization operates. The regions with the higher demand require that more human resources be directed to such regions to ensure that the customers are effectively served and that they receive optimal satisfaction from the services. Finally, the stock replenishment cycle is usually based on the demand that the organization receives on the different goods in different periods of the year. Efficiency, physical space and resource availability should also be considered while determining the lead time. Physical space consists of the space in the ware house where the replenishment stock could be held so as to save time in the case of stock run outs in the stores. With the trends in the market during each accounting period, Primark stores should provide rough estimated from information gathered during the different years of operations and make stock decisions using such information [Chu10]. Conclusion The welfare of the shareholders remains a primary requirement so that the business may see its operations in the foreseeable future. Their main welfare is in the profits that the companies make and is dependent on the revenue from sales. Customers remain the primary interest of the company and once their need and requirements are met, the company enjoys a constant increase in profits. The customers also become loyal to the products of the company if the company engages them in the production process, offers the products at competitive prices, offer discounts and also offer after sale services to the consumers of their products. REFERENCES Dad13: , (Dadson, 2013, p. 2), Gra07: , (Greame, et al., 2007, p. 1), Ric04: , (Ricky & Bruce, 2004), Mic082: , (Michael, 2008), Por03: , (Porter & Ketels, 2003), Chu10: , (Chu, 2010), Read More