Tech Data Corporation - Strategic Managers - Case Study Example

? Tech Data Tech Data Tech Data Corporation is an international company that engages in the sale and distribution of technology products. The company has made numerous different strides in the field of technology, consequently, helping very many people. Understanding the running of the company is important in an effort to appreciate the moves that it has and still makes in the highly competitive technology market of the 21st century. The best manner through which to get a better view of the company is by carrying out an audit report. This report seeks to review a company by focusing on various aspects involved in the year 2002 is important in that make it rather easier to understand the running of the company both now and on earlier days. 1. Current Situation A. Current Performance 1. 5 percent drop in net sales to 50% from 2001 to the beginning of 2002 2. Approximately 8000 associates in the United States and Canada 3. 227 in share amounts around the year 2002. B. Strategic Posture 1. Mission “To be the IT distributor of choice for our customers and business partners, thus enabling our shareholders to prosper” (Jameson, 2011). 2. Objectives Strive to achieve the continued balance in sales and improve the quality of the services and the goods that it goes through To offer innovative technology in every mission that the company seeks to undertake and achieve the number one company in the segment while at it Provision of a safe and habitable working environment for the employees in an effort to increase their working morale eventually achieving higher success for the company The company aims at increasing the market share in Canada by having a return in sales of around 5%, assets in around 7% and 15% in Equity. Moreover, the company aims at increasing the market base in Canada to level with some states in the United States 3. Strategies The company aims at introducing cloud computing as a strategy that will assist the company get to an even larger customer base. Attendance of more conferences discussing ways through which it can reach its objectives Acquisitions in other countries especially in Asia in an effort to increase familiarity with their products 4. Policies Usage of available resources for maximum profit Development of skills from within by training Increased by diversifying the types of products 2 Strategic Managers A. Board of Directors 1. 21 members in the board with 4 of them being from outside. 2. Well suited and Older generation men in this section 3. Is it time to have a change in terms of the age? B. Top Management 1. Top managers from different parts of the world 2. Experienced and Outspoken members in the corporate field. 3. Takers of risk in the Organization 3. External Environment (EFAS Table) A. Natural Environment 1. Lack of rain affects the levels of the water in hydroelectric dams that produce electricity used to charge gadgets. 2. Radiation induced problems such as cancer increasing from the use of these gadgets (Karami, 2010) B. Societal Environment 1. Economic 1. Growing economy from urbanization 2. Technological 1. Increased levels of awareness among the people 2. Counterfeit forms of the products hitting the market 3. Political-Legal 1. High tariffs induced by the government 4. Socio-cultural 1. Ignorance is one part that affects the distribution of the products as some people tend to oppose change however important it may be. 2. Career mobility requirements make it rather difficult to have a stable work. 5. Task Environment 1. Very high competitive market provided the different companies that come with the jobs. 2. Globalization as the company spreads to other countries 3. Acquisitions and Mergers from the different types of changes the company makes during expansion. 4. High number of rivals in the market 5. Low purchase power due to widespread of technology products. 6. Few customers in their Canadian branches from ignorance 4. Internal Environment (IFAS Table) A. Corporate Structure 1. Both divisional and united structure where there are unanimous decisions carried by the upper divisions but there is the dividing of groups in the lower levels from specialization. B. Corporate culture 1. Diversification whereby the company offers new products and markets them in different parts of the world C. Corporate Resources 1. Marketing In the area of marketing, the company has undertaken increased advertising and e marketing as major innovations leading to their success (Curtis, 2011) 2. Finance Doing well in terms of ratios that the company has in between revenues and expenses as it lies around 2:3 3. R&D Customer oriented where the company largely looks at the comfort of the user. 4. Operations Doesn’t change with the seasons and is independent from many market factors 5. Human Resources Commanding a worker base of around 8600 employees from all over the world by the end of 2002 (Editors, 2009) 5. Information Systems Well-upgraded information system with the ability to navigate several networks in different countries thus increased customer base. 5. Analysis of Strategic Factors A. SWOT Strengths 1. Popularity in the United States and Canada. Tech data tends to realize an upward trend in profits as a result of its popularity in America as well as globally to an extent. This in itself is a huge boost towards the company’s marketing strategies as it attracts more clients, therefore creating more income generating opportunities to explore. 2. High performance of the commodities and thus larger market from quality goods. This is another high contributor, adding to the major strengths of Tech Data Co. It comes from within the company; in that it is from its own effort to produce these particular services and commodities of high quality as well as standards. Weaknesses 1. Ignorance in the technology market. It comes in where the target market for Tech Data are somehow unaware of the latest technology products and features produced for them and which are currently running in the market. With this, the company finds itself cornered and in a difficult position which call for deeper strategizing in order for them to communicate to their target market, and make them aware of new deals that are amazing and up to date with the latest technology. 2. Dependent on retailers. If only companies would embrace self-reliance, dependency on retailers would not be an issue to deal with. It is not possible for major companies such as Tech Data to reach out and fully explore the ready market out there. Instead, it results to use of retailers to further reach out to them. Retailers are at times great to carry out business with, though not always. This is because they are individual firms that have a threat similar to that of any other firm, and internal issues would cause the company to fall. In an instance of retailers falling, primarily the main company suffers deterioration to their reputation. This is a major blow to start with, as what follows is dropping popularity and consequently, dropping sales. Opportunities 1. Integration into the international community spreading up to Australia, thanks to the promising marketing strategies that the company may have adapted to. Exploring such a wide spread market may prove to be a big load of investment on the company’s side, but in return, income generated is equally high or much more. 2. Diversity depending on gender. The company intends to put into consideration the gender diversity among the targeted market. This is whereby the company aims at the gender that is researched to have shown more interest in the technology sector. With this, it is easier for the company to accurately aim at the more preferred target in terms of gender, so as to realize more profits. Threats 1. Harsh competition. This is common in at most every business situation. It tends to be as a result of certain issues which may be such as unhealthy competition, where immediate rivals feel intimidated by the company’s success to a point of practicing unfair business to pull the rival company down in terms of its success. The government may also play a part as a threat, whereby certain policies may “oppress”. Tax and compulsory insurance policies are among some of those policies that tend to pause a threat to the continuous growth of the company in terms of the profits that it realizes. 2. Abusive rivals. They put up a huge percentage of the major threats of in the success of Tech Data as a company. Abusive rivals are among those competitors who use tactics to outdo their competition. This may be tactics such as inciting clients and the market at large. With negative incites, competition may tend not to favor the victimized company, and instead work in favor of the inciter. Because of this, the company may tend to realize continuous losses, threatening the company to reach a point of bankruptcy and what may follow may be liquidation of the company. B. Review of Current Mission and Objectives Appropriate mission in terms of the market Achievable objectives for the company in terms of eventually attaining the goals 6. Strategic Alternatives and Recommended Strategy An alternative to the strategies is an increase in international income through marketing done through increased advertisement and a higher number of sales representatives. A negative factor to this is the effect the setting up of it would have on the financial department. It would be rather recommended to set up cost effective marketing strategies and marketing strategies as well. Another recommended strategy for the company is that involving the purchase of highly functioning machines for quality products. It is obvious that another factor that could in some cases be considered a backbone to the success of Tech Data is the quality of the products and services produced because it is the produce that attracts clients who invest in Tech Data Co. The more the clients, the more the investment, and what follows is increased profit. Production of this top class products and services is only possible by high-class machinery. Employment of highly qualified personnel to run the various divisions in the company as per specialization is another recommended strategy for the company. Personnel with exemplary knowledge on the sector are necessary for Tech Data to perform well and maintain its high ranks around the globe. The managerial body would discuss to what extent of investment they are willing to reach to facilitate the employment of highly qualified employees, and if it is safe to do so, considering the expected product outcome that in this case is projected to be even higher. Development of training grounds in different parts of the country in an effort to improve quality of work is an important strategy to incorporate into the running of the organization. The governing board of the company could also deliberate on how the company may independently reach the common citizen. This in itself cuts on the expenses incurred by using intermediary sources. Training grounds give more people the opportunity to train freely and fairly and to a certain extent, could be considered a way of the company giving back to society. Targeting of a particular age group with the hope of eventually capturing the attention of all kinds of people is vital. This is another strategy easily implemented and results to increasing outcome. If the company for instance decides to target the youth in the country, assuming that the youth interact well with majority of the other age groups thus creating a chance that, with the youth’s attention captured, gradually follows the rest and as a result, improved performance by the company. There should be increased marketing through the usage of various tools such as the marketing matrix. Similarly, they could use their own expertise to improve on their marketing. The company could practice the latest technology to place adverts that are visible throughout the internet to any user who has access to the web. Branding and sponsorship of famous individuals, teams and buildings too could lead to realization of higher produce. Presentation of the successful workers with rewards while still punishing the lazy ones comes in as another important strategy. This appraisal tool is very effective. It also showers other workers with the morale to do better with an aim of getting rewards. Employees who prove not to be fruitful could be punished though leniently, this act in itself discourages other employees against laziness and facilitates hard work that results to better fruits. Increasing the commissions that the sales people get is important in an effort to have them motivated to work even harder. No one gives better and admirable results as a motivated worker. This would extend to earning not only their loyalty but trust as well there for improving work quality and building employees morale. There should be attendance of workshops that assist the workers gains insight on better job delivery. Loyalty and trust is not enough to ensure success in a company, it is vital to hold workshops for them to frequently revise their skills and polish up on forgotten issues. Commitment by the top management and board to convene more meetings would help in faster decision-making. This is a major encouragement to the employees, seeing their superiors working as hard to contribute to the success of the company. A committed managerial squad gives the company a strong foundation as it realizes effort from each and every one hence success of the firm could be considered a guarantee. Implementation The implementation of these strategies is to be achieved by the coordination of all the individuals involved in the product making process. The government should also have a major role in this as it is in charge of licensing the products and monitoring competitions to keep unhealthy ones at bay. Evaluation and Control The evaluation and control methods used by the company are out of date and require revisiting. Moreover, employment of language specialists to assist in negotiating prices with multilingual people should be taken up. EFAS Table External Factors Weight Rating Comments Opportunities Advancing into the Australian market 20 4.2 Merger taking Economic development of Asia 0.5 1.0 Increase the client base Threats Increased Government regulations .3 .8 To regulate trade High Competition 0.2 0.6 To get the best quality products Notion of old companies 0.5 0.2 That they are expired Total Socres 1.5 IFAS Table Internal Factors Weight Rating Comments Strengths Quality top management .05 4.2 Understand the assets Vertical Integration .10 3.9 Effective for idea flow Weaknesses Financial State .15 2.0 Well off position Distribution Channels 0.5 2.0 Spread across different areas. Total 0.65 SFAS Matrix Strategic Factors Weight Rating Short Intermediary Long Comments Culture .10 5.0 X Quality key to Success Financial Position .10 2.0 X X They are in a great position Global Positioning .15 2.2 X X In the United States, Canada, and parts of Europe International Integration .10 4.1 X Reach wider market Trends in Super Stores .10 1.8 X Great with them Total Scores 1.55 Referencing Editors, V. (2009). Vaults/Inroads. New York: McGraw Hill Publishers. Curtis, M. (2011). Maintaining Mission Critical System. London: Oxford University Press. Karami, A. (2010). Strategic Management in Small and Medium Enterprises. Cengage Learning: New York. Jameson, D. (2011). Tech Data Corporation. Retrieved on 28th November 2012 from http://www.techdata.com/content/visitor/abouttd/default.aspx Read More