Issues Involved in Arrowhead Ltd - Case Study Example

Case Study - Arrowhead Ltd Issues involved in Arrowhead Arrowhead furniture manufacturing company targeted mainly the first-time home buyers who are short of money due to the high mortgage repayments. In other words they have concentrated in building businesses with the middle class customers or the lower middle class customers. Normally, upper class customers may not bother much about the high mortgage repayments. Only the ordinary people or the poor people will be bothered about the mortgage repayments. Thus, Arrowhead business strategies resulted in building a comparatively non-productive lower class customer base for Arrowhead. The liberal strategies adapted to this segment of customers finally bounced back as a major threat to the existence of the company. As a production director, I should approach the above issue seriously. Drastic changes in the business strategy are necessary in Arrowhead. No organization can survive in the current extremely competitive world, either with a particular product alone or with a particular segment only as the customer base. Greg Kitson (2009) has argued that every market experiences some seasonality diversification of the customer base is the only option to stay busy throughout the year (Kitson 2009). It is suicidal to depend heavily on a particular customer base for ever to sustain a business. Avoiding customers who are volatile to market fluctuations is necessary to sustain the business prospects of Arrowhead. Arrowhead should concentrate more on building a customer base that are capable of withstanding any type of pressure exerted from the market. The recent financial crisis has affected Arrowhead worse since most of their customer base was from the mostly affected community, the lower and middle class. The current financial crisis has not affected the upper class much because of their immense financial strengths to overcome such crisis situations. On the other hand, the rest of the community were seriously affected by the financial crisis. Arrowhead should build high quality products in order to canvass the upper class people. The current customers of Arrowhead are not much worried about the quality of the furniture produced by arrowhead. It is quiet natural since they are getting furniture at an affordable price and that also in instalment payment basis. They cannot bargain much to reduce the price or to improve the quality of the Arrowhead products because of their obligations to the company. On the other hand, upper class people are not like that. They normally look for the quality of the product rather than the price of the product. Price comes only at the secondary place for them. These people normally may not go for credit purchasing and they will pay ready cash when they take furniture from Arrowhead. “One of the nice traits about core luxury customers is they are brand loyal and like to feel that the brand knows them and they are not just a bottomless wallet” (Lorre White, The Guru of Luxury, 2010). Arrowhead should exploit such brand loyalties of the luxury customers. Once this core segment of customers attracted by the brand value and quality of Arrowhead products, they will never go away for another product as far as they are able to get good services. Luxury customers are interested in shopping privately and Arrowhead should capitalize such habits of this segment of customers. Online business is another option Arrowhead can think of. Among the "new" buying habits of ultra high end consumers, online shopping is more important (Lorre White, The Guru of Luxury, 2010). As mentioned earlier, luxury customers always wanted to keep their privacy intact unlike other customers. Other customers normally purchase products publicly in order to show others that they are capable of purchasing such expensive products. On the other hand, the luxury customers don’t have anything to prove in front of others. Their financial capabilities are well known to the public and they don’t bother much in exhibitionism. Arrowhead should develop a good e-commerce website to boost their online business. The current Arrowhead furniture designs were not up to the international standards. Since the major customer base of Arrowhead was the lower middle class, problems in designs caused fewer headaches to Arrowhead furniture sales. On the other hand when Arrowhead tries to canvass the luxury sector, they should, develop new designs to compete effectively in the furniture business segment. Design is one of the major concerns of the luxury class while they take purchasing decisions. They will always go for up to date technologies and designs rather than going for the conventional ones. Arrowhead designing department should work more closely with the marketing department in order to give the market feedbacks to visual forms. Fresh designers needed to inject into the designing department of the Arrowhead. Only the fresh blood designers have the ability to bring new challenging ideas in their designs. “Design is the fundamental soul of a human-made creation that ends up expressing itself in successive outer layers of the product” (Campbell, 2007). Man, material, machine and money are usually considered as the four M’s required for the successful operation of an organization. Out of this four M’s manpower or the workforce seems to be the most important one. All the other resources needed the brainpower or intelligence of human for the effective utilization. Lucy Caudle (2007) has mentioned that a workforce with right skills and experience can contribute heavily in achieving organizational goals (Caudle 2007). Arrowhead is currently facing the shortage of smart workers. The available workforce is not skilled enough to meet the requirement of the modern world. Better skilled workforce is essential for Arrowhead to compete effectively in the market. Along with skilled workers modern machineries are also essential to reduce the workload and to deliver good quality finished furniture. Creation of suitable learning environment Training is essential for the Arrowhead workforce in order to make them aware of the developments and trends in the current world. It is necessary to make the workers aware of the need of learning or training in order to make a good learning environment. For that purpose they should have given opportunity to watch and test new furniture entering in the market. As a Production director, I should educate the workers about the challenges Arrowhead facing in the market. I should also make the workforce aware of the benefits they are going to receive as part of the training and skill development. Motivation is essential for creating a better learning environment. Only the motivated workforce may have the right attitude towards training. The challenges faced by Arrowhead in the market and the probable benefits arrowhead workforce may receive after training may definitely motivate the workforce. The arrival of new machineries and work culture will create enthusiasm among workers. The major advantage Arrowhead has is that available craftsmen are capable of providing training. At the same time, in my opinion, the services of experts from outside should also be used for the training purpose. The arrival of trainers from external world will definitely be taken seriously by the workforce in Arrowhead. A proper Training process should answer four basic questions in order to make it a success; what, when, where and who (Preparing Your Training Environment, 2010). The training schedule should be decided, training place should be finalized, trainers need to be finalized and the content or the syllabus for the training also should be decided well in advance. Improvements in quality standards “Quality is a continual process that doesnt just happen but it evolves over time and with experience” (Quality & Business Improvement, 2010). Proper environment is necessary for the development of quality standards. Quality standards can be raised only with the help of the workforce and the machineries. Even if the workforces are skilled, poor machineries can spoil their effort. Same way even better machineries may become wastes in the hands of non-skilled labours. So, basically both the workforce and the machineries should be in good condition to raise the quality standards of the finished goods. The third important thing which needed to be addressed as part of quality improvement is the attitude of the workforce. If the workforce doesn’t have the right attitude, they will not deliver goods even if they have the skills and the machineries were in excellent conditions. So, improvements in the working environment and the remuneration package will definitely improve the quality of the products. Rewards and punishments can also serve as the motivational factor for improving quality of the works. Punishments or the fear factor is not used in many organizations in order to motivate the workforce. Instead of punishments teamwork is encouraged in many organizations in order to improve the quality and the productivity of the workers. It is better to display every day work statistics in the notice board in order to improve the quality. The workers can take more care when they start their work after an examination of the previous day statistics. Maintaining appropriate work culture in Arrowhead As mentioned before, as a production director, I like to use the self explanatory statistics more to motivate the workforce. The display of production statistics using graphical representations and statistical methods in a simple manner will definitely motivate the workforce. I would like to encourage the workforce to have a look on the notice board before they enter into the workshop everyday in order to get an idea about the previous day work statistics. The modern computer programs are capable of portraying the work statistics in an attractive and self explanatory manner. “Personalities and experiences of employees create the culture of an organization. For example, if most of the people in an organization are very outgoing, the culture is likely to be open and sociable” (Heathfield, 2010). I would like to incorporate such an outgoing or sociable culture in Arrowhead. I don’t like people working just like machines. In my opinion, people because of their emotional and social needs cannot work like machines and the development of a sociable culture may increase their productivity and quality of works. I would also like to incorporate teamwork in Arrowhead more comprehensively. At present, most of the workers are concentrating on their individual brilliance and they often try to outsmart their counterparts. Such unhealthy competitions often create conflicts and jealousy among the workers in the organization. Teamwork on the other hand, helps each worker to get the advice from their team members to correct their mistake. Many experts have argued that teamwork is really an effective tool in organizations where work is highly interconnected and demands up to date information sharing. For that purpose, it is imperative to first build an effective team and second to motivate them in various monetary and non monetary ways to gain maximum output (Veneeva, 2010) Development of sense of pride among the staff in the Arrowhead brand No organization can develop properly if the employees don’t derive any pleasure from their workplace. Employees should have pride in working in Arrowheads and for that purpose the image and brand value of Arrowhead should be boosted. Workplace is the second home for every worker and the merits of the workplace would be considered as the merits of their own by the workers. No employee would like to disclose their identity if they happened to see some consumers cursing his company’s product in the market. On the other hand same employee would disclose his identity happily if he may witness some consumers praising the products of the company in which he is working. Employees who are empowered to manage their own growth and achievement on the job tend to be more self-satisfied and more cooperative (About a sense of pride, 2007). Such employees will definitely develop a sense of pride and as a Production director I would like to incorporate such a strategy in Arrowhead in order to develop sense of pride among the employees. Conclusions Arrowhead ltd is a furniture company which should change their customer base from the lower class to upper class in order to meet the challenges in the market. Thorough restructuring in organizational climate, work environment and business strategies is necessary in Arrowhead to sustain their business progress in the market. References 1. About a sense of pride, (2007), Retrieved on 18 March 2010 from http://www.asenseofpride.co.uk/about-us.htm 2. Campbell Chris, (2007), Welcome to Particletree, Retrieved on 18 March 2010 from http://particletree.com/features/the-importance-of-design-in-business/ 3. Caudle Lucy (2007), The Key Importance of Workforce Management for Organizations, Retrieved on 18 March 2010 from http://www.articlesbase.com/management-articles/the-key-importance-of-workforce-management-for-organizations-290297.html 4. Heathfield,Susan Kitson M (2010), Six More Characteristics of Culture, Retrieved on 18 March 2010 from http://humanresources.about.com/od/organizationalculture/a/culture_2.htm 5. Greg (2009), Diversifying Your Customer Base, Retrieved on 18 March 2010 from http://www.impressionsmag.com/impressions/content_display/screen-printing/e3i82908c6716f89cd1530e652a1907a216 6. Lorre White, The Guru of Luxury, (2010), Retrieved on 18 March 2010 from http://luxguru.typepad.com/lorre_white_the_luxury_gu/2010/02/among-the-new-buying-habits-of-ultra-high-end-consumers-is-more-private-shopping-browsing-online-fir.html 7. Preparing Your Training Environment, (2010), Retrieved on 18 March 2010 from http://as.dummies.com/how-to/content/preparing-your-training-environment.html 8. Quality & Business Improvement, (2010), Retrieved on 18 March 2010 from http://www.bsigroup.com/en/sectorsandservices/Disciplines/Quality-Business-Improvement/ 9. Veneeva Verena (2010), Ensuring Effective Teamwork in Organization, Retrieved on 18 March 2010 from http://ezinearticles.com/?Ensuring-Effective-Teamwork-in-Organization&id=232585 Read More