Made Maid: Vision, Mission, and Strategic Analysis - Research Paper Example

Made Maid: Vision, Mission, and Strategic Analysis Vision: To become the leading company in domestic staff training in Saudi Arabia Mission ment: Made Maid will be the leading provider of highest quality domestic help service training, where graduates are expected to have proficiency in Arabic, and expertise in major household chores such as cooking, laundry, and house cleaning. Strategic Objectives: After the company has defined its vision and mission and after examining its external and internal environments, it has now set for itself some goals and objectives for the planning period of ten years. These goals are set in order to determine what the company would want to achieve after some period of time. After setting the goals, the next task is to determine the strategic operational tactics on how to achieve such goals and objectives. After establishing the initial branch in Jeddah, a second branch is expected to be put up within five years of operations. It is also expected to offer, after five years, courses for would be drivers, where the curriculum would include teaching aside from driving skills, the various routes in KSA, and driving rules and regulations within the kingdom. Just like the training program for domestic staff, student drivers will also be given courses on the Arabic language. Within ten years, a third branch is expected to be established within Jeddah. By this time, a branch will also be considered in Riyadh, the capital of KSA. In ten years time, therefore, Made Maid will have four branches in the entire kingdom. Financially, the company will aim for a 15 – 20 per cent growth annually. All these plans are embodied in the target objectives of the company, to wit, 1. In five years, Made Maid plans to open another branch in Jeddah. 2. In five years, Made Maid plans to offer courses for drivers; these courses would include Arabic courses and Courses that would teach them the major routes and attractions in Jeddah. 3. In ten years, Made Maid plans to open a third branch in Jeddah. 4. In ten years, Made Maid plans to introduce itself in Riyadh by opening a branch there. 5. Made Maid plans to breakeven its start-up expenses within 18 months of the beginning of its operations. 6. Achieving revenue growth of 15% to20% per year. Business level competitive strategies: After setting the goals of the company, the firm will have to draw the strategies on how the goals and objectives will be achieved. Accordingly, every business must tailor a strategy to achieve its goals. Porter has suggested three generic types of strategies for achieving the set goals. These are: 1. Overall cost leadership In an overall cost leadership strategy, the company aims to achieve the lowest production and distribution costs, so that it can price lower than its competitors and win a large market share. Firms adopting this strategy are those that are good at engineering, purchasing, manufacturing, and physical distribution and need less skill in marketing. However, among the pitfalls when adopting this strategy is that there will be other firms that will emerge with lower cost of production and will hurt the firm that relied heavily on this strategy. With Made Maid, this strategy may not be applicable since from the analysis of the five forces of competition, there are few competitors in the industry, if there is at all. Pricing its services lower is not a logical step since there is almost nil competition at least at the start of the business. Pioneers in the industry can really skim the market and take advantage of the pioneer status position. 2. Differentiation Differentiation strategy concentrates on attaining superior performance in an important and highly valued market segment. Firms adopting this strategy are usually the service leader, the quality leader, the style leader, the technology leader, etc. The firm highlights those strengths that will give it a competitive advantage in one or more market segments. By offering a unique service in the market, Made Maid stands to benefit by adopting the product differentiation strategy. At first glance, it seems the company would be in a unique position to offer the first ever domestic staff training services in KSA. Such services are highly valued in the growingly dependent families on foreign workers employed as domestic staff. While there are no new entrants in the market, the firm will serve as the service leader in the industry. In five years time, it will offer services to train student drivers. It will again be a leader in the market by offering this unique service, assuming that no competitor has established itself to offer such kind of training service by that time. 3. Focus Firms adopting the focus strategy focus on one or more narrow market segments rather than going after a large market. The firm gets to know the needs of these segments and pursues either cost leadership or a form of differentiation within the target segment. Focus strategy may not yet be an appropriate strategy for Made Maid since it aims to capture a bigger market with its service product offer. The company is poised to offer a unique service that is not yet being offered widely in KSA, and it need not focus on a small market niche as it has the entire market all for the taking. According to Porter, those firms pursing the same strategy directed to the same market or market segment constitute a strategic group. The firm that carries off that strategy best will make the most profits. Firms that do not pursue a clear strategy, or those that he referred to as the “middle-of-the-roaders” have the potentials to become worst performers, as they try to be good in all strategic dimensions, but ending up being not particularly excellent at anything. With those wisdom from Porter, it is imperative therefore for the company to implement its differentiation strategy well to attain its set goal and objectives. In this sense, the company has to focus on how to enhance its service offer to the public, making it an important commodity that customers will find nowhere else but only in Made Maid. It has to determine well what the customers want, and what they value most, in order for the firm to not only satisfy the customers, but also to delight them with the excellent service being offered. Product/Industry Life Cycle: According to Kotler, the product/industry life cycle “portrays distinct stages in the sales history of a product (or service)”. Consequently, these stages have corresponding distinct opportunities and problems with respect to marketing strategy and profit potential. By identifying the stage that a product is in, companies can be in a better position to formulate the appropriate marketing plans. These four stages are known as introduction, growth, maturity and decline. Introduction – a period of slow sales growth as the product is introduced in the market. Profits are non-existent at this stage because of the heavy expenses related to marketing and product introduction. Growth – a period of rapid market acceptance and substantial profit improvement. Maturity – a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased marketing outlays to defend the product against competition. Decline – period when sales show a downward trend and profits are eroded. Obviously, the Made Maid service offer will be in the introduction stage, where the service will be introduced in the market for the first time in KSA. It is therefore expected that profits will be none at this stage, considering the marketing expenses and other overhead cost that will be incurred not only to introduce the services to the market, but also to put up the business infrastructure in order to render the service. The company, therefore, has to move quickly to bring the service from the introductory stage to the growth stage so that profits can start to come in for the benefit of the business. While at the growth stage, the company has to devise ways on how to prolong such growth before it reaches maturity and eventually decline. By reaching the maturity earlier that desired will slow down the profit potentials of the business. Moreover, if competition has started to set in, a shorter life cycle is expected, which means that the company can only earn its profits in a shorter period of time. When this happens, profit performance is eroded, and turnaround strategies must be devised or formulated to reverse the situation. When such situation happens, strategic remedies available to the firm include the following: 1. asset cost surgery 2. selective product or market pruning 3. piecemeal productivity improvement Corporate level competitive strategy: Corporate level competitive strategies would refer to the core strategies adopted by firms in order to gain a sustained competitive advantage among its rival firms in a particular industry. By designing a corporate level competitive strategy, firms are able to answer strategically the following questions: 1. What businesses the corporation should compete in? 2. How should these businesses be managed to jointly create more value than if they were free standing units? Among the options open to firms is diversification. With this strategy, firms can diversify their business portfolio through three modes. These modes are: 1. Acquisition and merger – the firm buys target companies and merges its operations for resource sharing 2. Strategic alliances and joint ventures – builds alliances and joint ventures or partnerships for cost sharing and profit sharing 3. Internal development – develops new business using inherent strengths and resources Each mode has its own advantages and disadvantages, and each mode will be particularly attractive to the firm depending on available resources it has, and the strategic objectives it would want to achieve in the near future. The underlying benefit is synergy, where shared resources can produce an effect that will drive productivity and efficiency to higher levels bringing better financial opportunities for the firm. Firms can either engage in related diversification, or unrelated diversification. By engaging in related diversification, firms are able to build on core competencies, share infrastructure, and increase market power. Horizontal relationships among firms can take the form of sharing intangible and tangible resources. Unrelated diversification, on the other hand, takes the form of hierarchical or vertical relationships. Corporate level competitive strategy would be useful to Made Maid especially since it plans to diversify after some time its service offer from solely offering a domestic staff training service to adding driver training service. If it decides to adopt related diversification, in the absence of competitor firm to acquire, it just have to do the business of internal development, wherein offering the driver training service will have to be done through the internal strengths and resources of the company itself. If there are sufficient opportunities however that will be presenting itself in the near future, the company’s options can be the following: 1. Acquire an employment agency that supply foreign workers to families in KSA (acquisition and merger) 2. Partner with an existing driving school where the training of the drivers will be subcontracted to the firm (joint venture and strategic alliance) 3. As mentioned above, offer a driver training service through the internally developed technology of the firm (internal development) 4. Build a subsidiary employment agency that will recruit foreign workers for deployment as domestic staff and drivers in KSA (vertical/forward integration). 5. Establish a subsidiary that will supply the trainors or teachers what will be employed by the firm to conduct the training sessions (backward integration) Made Maid will be operating under the manpower training or human resource development industry in KSA. Opportunities for diversification will be known to the company as soon as it launched successfully its initial business of providing or offering domestic staff training services in Jeddah. It will have to develop first its core competency, acquiring and improving its competitive advantage, in order to become a potent training service provider in KSA. After achieving its target goals in the short run or within five years, it will then assess its capabilities vis-à-vis the opportunities in the environment. Hopefully, a profitable opportunity will present itself, where the company will immediately reconfigure its strategic options in order to take advantage of the profitable market conditions. Many options can be considered, and Made Maid will choose the option that will deliver the optimum benefits for the company. References ______. The product life cycle. 2010. [Online] Available at: http://www.quickmba.com/marketing/product/lifecycle/ [Accessed 15 May 2010] ______. Generic strategies. 2010. Online] Available at: http://www.marketingteacher.com/Lessons/lesson_generic_strategies.htm [Accessed 15 May 2010] Cateora, P. International marketing. 9th edition. 1996. Irwin Group. U.S.A. Kotler, P. Marketing Management – analysis, planning, implementation, and control. 8th Edition. 1994. Prentice Hall Inc. New Jersey, USA Read More