Business Models and Organisation Structure - Case Study Example

Business Models Paper Name Student’s Name: Date: Q and V Quantitative In the recent past “R” Us have been enjoying a large market share but this has changed in the past few years. The recent years have seen the competitors taken some of their market share. The company sales have reduced and have been taking less 20% of the total market share. This has been a 50% of market share in the past years. This has led to a reduction in the profit margin by around 20% percent this can highly be attributed to the price wars which the major competitors have undertaken such that they have been pushing other players in the industry out of the market. The firm’s current performance in terms of sales the company has been reducing in the domestic market taking a small market share domestically but its participation in the international market has not been so successful. The company has been suffering from competition from other major leading companies in the world. The company profits in 2012 declined massively and the company earned losses. The company services have been highly preferred domestically and to some extent in the international market. This due to high quality of its services to its clientele base that makes it out compete other firms in the industry. The performance of the industry as a whole has been on the rise and improving day by day. This is due to the increased usage of the services by the highest number of people both internationally and domestically. The company has not been in a stable financial position because it has been earning reduced profits which have highly affected the operations of the company. Value There are a lot of changes that are taking place in the toys industry. Most of the companies have undertaken innovation management. Innovation management is used to ensure the companies moves towards product development and towards organisational innovation. Innovation management provide the stakeholders with the necessary tools that will help them develop goals and processes that can be achieved by use of innovation. This allows managers and other stakeholders to react to external and internal challenges and opportunities that may arise in their industry of operation. This will enable the mangers to come with creative ways of fight any pressure either from internal or external so as to maintain their current customers or even increase their customers’ base by introducing new products and new ideas so as to gain competitive advantage. Innovation management involves all the stakeholders including employees at every level so as to allow them to come up with creative ways to develop their company brand in manufacturing and marketing. This will ensure continuous development of the company products. New assumptions The industry allows free entry into the market. An industry that allows free entrant of new players in the market experiences pressure because a new company in the market have an aim of gaining market share and therefore, they introduce lower prices and find ways of reducing costs and this increases competition because they start taking away the customers of the existing players. There is entry of new players in the market and these have led to increase competition for both the market and resources. There are price wars in the market which have been applied by competitors to push their rivals out of the market. In this industry competition is very high and there is a lot of rivalry among the players in the industry. Rivalry makes companies introduce ways such as price wars so as to out compete each other in the market. New operating metrics This part of the report presents issues both affecting the company’s organisation and customer’s organisation. It also explains the meaning of global sourcing, logistics and supply chains issues. The part involves identifying the most suitable organisational structure to help control the company mechanism and help the company become successful in international marketing. The company’s organisation will be affected by government influence and other factors. The company will have to adjust to make room for foreign government requirements. These requirements include paying taxes to the government which will reduce the company’s profits. Venture into the international market will strain the company’s resources both capital and human because they will have to cater for the new venture. The customer organisation will change due the new entrant in the market. This will increase his or her variety of products. There is need to cut production and distribution cost. The best value chain strategy to achieve competitive advantage in the industry the company requires undertaking cost leadership where it will cut down the operating cost and production costs this will enable the company out compete other companies in the industry. This refers to the process under which the product or service is delivered to a consumer. The company should ensure the channels used to offer the product are helpful to the customer. The process involves how long a customer takes to be served, and the time he or she takes to get the commodity. The company should, therefore, ensure products are provided in time. The customers get attracted to services such as credit. The company should know the customer is always interested in getting the services, but not how the company runs. The company should, therefore, ensure their channels and processes favor the customer by giving the best services in the industry. The company will be able to penetrate the market if it treats the customers the right way. The company should undertake global outsourcing. This is an act out acquiring resources or goods from other countries, which share the, same political ideologies. The method aims at exploiting the advantages that come with such organizations’ and political blocks. These advantages enable a company to deliver a product or service by incurring lower costs. This result from low cost labor, low cost of raw material and other favorable economic factors such as tax holidays and low trade tariffs. The company should also aim at creating supply chains, which are short. This will ensure the products reach the customer within the shortest time possible. This will increase the company’s productivity due to high production. Mission Statement The purpose of a mission statement for a company is to help in guiding the company in a summarized way on how to achieve its objectives. The mission statement for the business will be: To earn increased profits as much as possible through leading in technology in the toys industry. Objectives Change of production and marketing strategies. There are three choices of strategies that are available to the company. These include focus, differentiation and low cost. Focus is a strategy that put emphasis on a specific part of the target group. The company may decide to take a small geographic area as its market and cover it extensively. Another strategy is differentiation where the company aims at presenting its products in a different way from those of other companies. This can be possible through giving the best prices in the industry for high quality products. The firm can also create customers loyalty in such a way that it will be hard for other companies to enter the market. The other strategy is low cost the firm here aim at producing high quality products at a lower cost. This may be as a result of economies of scale. The company’s strategy is differentiation because the firm aims at being the leading company in the mobile phone industry through the use of technology. This will help the company achieve its mission of earning high profits. Promote employee welfare. The companies should ensure that planning process is taken care in the best way possible to ensure that all the required resources are available before any product is introduced in the market. The managers should also ensure that they lead from the front so as to motivate their employees to perform their duties in the best way possible. The managers should also plan for human resource to be deployed in the company. There should be emphasis on dedication to organization goals so as to hire and plan for the resources that will enable the company move in the right direction. Recommendations The company will need to highly invest in research and development to ensure that it has the best technology in the industry so as to be the leading company. There should be refresher courses and on job training for the employees so that they can keep up with the growing technology. Differentiation will help the company in its marketing because it will be providing unique products. The company will ensure that it hires highly trained personnel who are endowed with experience to make sure that the company produces high quality products that can compete with other companies in the industry. Integrating human resource planning and other aspects like strategy and employee development is necessary in making planning a responsibility of the organization. When planning, there is supposed to be an attempt of forecasting the likelihood of whether there will be a disparity between demand and the supply of labor, and therefore, prepare the correct adjustment policies. When planning, there is the need to put in mind the external environment versus the internal supply. There is need to consider the investment environment in country including the internal structures in the country so as to know the challenges and opportunities in such a country. The most important factors should be economic, legal, political and social factors because they determine the domestic trends in the country. There is also need to analyze competition nature in a country and therefore, to invest in new venture competition is very important for a company’s survivor. It is also important for a country to engage in diversification so as to benefit from getting what the country cannot produce and dispose of what it produces in excess. The company’s nature of trade determines investment in such industries. The company should consider the consumer behavior because; their changes in cultural practices will lead to changes in their fashions and styles. They should also consider the population structure, that is, the age structure. This will help plan effectively on current market situation and to predict the future. Toy ‘R’ U should invest where there are a lot of young people because they form a large base of their customers. The company should work towards identifying the social changes that might occur in future. This will help them plan for the future market situation. The legal factors should also be considered. These are the laid down rules and policies that companies should follow. There is need to identify such policies in their areas of investment. The legal frameworks include consumer protection, environmental legislations, health and safety and employment law. A company should work to understand the policies in time of their investment. The company should take proactive measures to ahead of such changes in case they occur. The company should, therefore, follow the laid down policies to the letter to avoid disturbances in the market. The company should ensure that they follow the set labor policies. Conclusion In conclusion, the report has presented the analysis of the external and competitive environment of the firm in the mobile phone industry. The company objectives have been achieved and this has been as a result of high quality products through modifying the current technology in the mobile phone industry. The company needs to continue investing in research and development so as to continue achieving its objective and goals because there is ever changing technology. The selection of middle aged generation as the target market has played a great part in ensuring that the company earns increased profits for its products. The strategic plan will help the company realize its set objectives if followed to the letter. 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