General Management - Report Example

General management Table of Contents Problem Analysis 4 Issues 4 Constraints 4 Objectives 4 Industry Analysis 4 Internal Factors 5 External Factors 5Key Success Factors 6 Consumer Analysis 6 Trade Analysis 7 Competitive Analysis 8 External Analysis 8 Political Factors 8 Economical Factors 8 Technological factors 9 Corporate Capabilities 9 Alternative Analysis 9 Recommendation 10 Work Cited 10 Appendices 11 Appendix 1 11 Appendix 2 12 Problem Analysis Issues SWO is a software company. The main issue is its financial aspects. Financially, this company is weak. In fact, its marketing strategy is also very weak. They are slowly losing their growth in the market due to the lack of promotion. The company had started off very well but slowly went on to lose most of its customers due to poor marketing & promotion values. In fact from its financial statement it has been clearly known that expenses of SWO is much higher than its earning. Apart from that he customers are not satisfied with their software service. Constraints In case of SWO, the basic restriction is its low financial growth rate. The quality of the product is high, but at the same time their production cost is also very high. Due to this, lot of money is flowing out of the business. In fact customers are also demanding for the software but at a low price rate. Both the partners are unable to get the bank loan. Objectives The main objective of SWO is to generate high revenue. To achieve this objective, they introduced highly advanced software which would be accepted by all the customers. They decided to sell few installations at a lower rate & the rest at a higher rate. With the growing situation, the customers had started to demand for good quality of software at affordable price. Industry Analysis Industry analysis is analysis of conditions and the strategies of the market which gives information about competitors, suppliers and customers. SWO is a software company which needs to analyze their software market and also identify the internal and external factors that can affect them. It can be done by SWOT analysis which measures strength, weakness, Opportunities & threats. Internal Factors Internal Factors means the factor which effects the business internally like: Strength & Weakness Strength The biggest strength of the company is its product quality Weaknesses Financial insufficiency is the biggest weakness of the company. Their market growth & promotional strategy is also poor, so capturing market segment is not possible. Insufficient capital investment in the business. External Factors External Factors are those which affect the business externally like Opportunities and Threats. Opportunities By providing high margin to the distributors sales can be increased. Opportunities can be increased by giving after sale services. Threats The distributors are not happy with the supply of SWO, so the competitors can get the opportunity to grab the market. In fact, there are many chances for the small software houses to sell their software at a cheaper rate, for which SWO can lose their customers (Ferrell, and Hartline 122-123). Key Success Factors The key success factor of SWO is the superior quality of product. They provide upgraded software to their customers at a high rate. At the same time the customers demand also started to go down. Then both the partners decided to improve their management system also. By providing well-experienced sales manager, receptionist, accountant, technical analyst, system analyst, system programmer, and many other low level staffs, they could improve their management for their better business expansion. Consumer Analysis Segment 1 Segment 2 Segment 3 Large Distributors Mid- sized Distributors Small Distributors Who Sales over $20 million Operated the firms by own Started business all over Toronto What They demanded much more of the software suppliers They often had great needs for their software suppliers. They were most often owner operated, & the owners were eager to talk about software. When They expected 24 hours service They expected immediate service for day –to-day problems They could not afford the service costs of adapting their software. Where Several hundred distributors in this Toronto area One thousand of these distributors were in Toronto area All over Toronto Why They wanted their software to be fully integrated & able to handle diverse & specific requirements of the company. Their primary need was for a good inventory control system tied up with an accounting package. The primary need of the consumers was an accounting package to handle their receivables & payables. How The purchase decision was usually made by the company board on the recommendation of consultants or by company experts The majority of product information came from word-of- mouth & testimonials from satisfied customers. Their knowledge of packages was limited to word-of-mouth reputation & in-store promotion Implications: Segment 1 Segment 2 Segment 3 Large Distributors Mid- sized Distributors Small Distributors Product Fully integrated software Software with inventory control system & accounting package Off-the-shelf software like ACCPAC Price Price could be high as they were willing to pay high for 24 hour service Price should be affordable Price should be low without charging service cost Place In Toronto In areas of Toronto All over Toronto Promotion Recommendation of consultants or by company experts Word-of-mouth & testimonials from satisfied customers. Word-of-mouth reputation & in-store promotion Trade Analysis In case of trade analysis most of the software is sold along with hardware packages. The sale of the software increased either through software house or by selling hardware with it. In fact many small & mid-sized distributors have developed a relationship with one or two hardware suppliers. Due to this, the company got a chance to raise the customer demand and satisfaction by providing software with hardware packages. Both the software firms and the customers are mutually beneficiated in this process. In fact the software companies receive 30% profit margin for its hardware sale. Competitive Analysis Significant competition in the software market is very strong. There are many competitors in the software industry like small software firms who sell their software at low price in comparison to SWO. For this reason, SWO had lost many customers from the market. Inferior quality of the software is sold by these small shop software houses to the customers. Hence, the market is mostly occupied by these small software firms. In fact readymade software packages like ACCPAC are leading such market. In case of mid- size markets, the competition is less as their product quality and price both are appreciated by the customers. The competition is very high at the large markets due to the competitors like IBM and Arthur Andersen. They have already put a strong barrier towards the entry of small software business like SWO service. External Analysis Political Factors Politically Federal Govt. had already imposed Goods and Service Tax (GST) two years earlier. GST involves a complex taxation procedure and the companies need to have a computerized system to implement GST. The government is also taking initiatives to expand the computer industry which will be helpful for all the customers Economical Factors SWO had already faced two years recession, so economy was moving very slow. The distributors had gone out of the business and sometime there are few or no sales of new software. Technological factors Technologically, SWO need to upgrade their software system in a new advance way so that better inventory and management of accounts can be done. SWO also need to introduce new software packages for the customers. Corporate Capabilities According to the corporate capabilities, SWO service has to develop their various areas. The improvement of marketing strategy can increase their sale. The change in the pricing strategy can increase the demand of the software. In fact, SWO need to decrease their production cost to strengthen their financial condition. SWO need to develop their product variety according to the customer demand. SWO also need to have strong human resource in the marketing department. Alternative Analysis In case of SWO, the software should be upgraded in a highly advance way, so that it can fulfill all the demand of the customers with a low price level. This software should be upgraded to cover up all the computerized work, no need to do any work manually. Alternatively, the mid-sized distributors should get a beneficial margin & after sale service to increase the sale of software system. If some immediate sophisticated service with good packages will be given to mid- sized distributors with less service cost, then the service sale as well as the reputation will increase. Hence, it is suggested that mid-sized distributors are the best alternative for SWO Software Company. Projected Income Statement and Balance Sheet in accordance with this alternative is given in Appendix 1 & 2. Recommendation Before starting any business it is important to start with sufficient investment. In case of bank loan, asset guarantee is vital to take guarantee loan for the business. In case of software business, improved & upgraded software is needed to satisfy the demand of all the customers but at low price. Product cost as well as the service cost should be low which will give benefits to the customers and many other distributors. If these aforementioned requirements are fulfilled, then the business can go for better expansion. Work Cited Ferrell, O. C., and Michael D. Hartline. Marketing Strategy. 5th ed. Connecticut: Cengage Learning, 2010. Print. Appendices Appendix 1 SWO Software Company   Projected Profit & Loss Account   For The Year Ended 30th April 1992   ($000s)         1992 Income $455 Cost of goods sold 150 Gross Profit 305     Expenses:-   Advertising and Promotion 6 Consulting 16 Depreciation 4 Loan Interest 16 Maintenance and repair 5 Miscellaneous 14 Office and Computer supplies 10 Rent 12 Software Expense--- Research 4 Telephone 10 Travel 5 Wages 160 Vehicle Lease 6 Total 268     Net Profit 37 Appendix 2 SWO Software Company   Projected Balance Sheet   For The Year Ended 30th April 1992   ($000s)         1992 ASSETS   Current Assets   Bank 50 Account receivable 65 Inventory 60 Total 175     Fixed Assets   Computer 48 Office equipment 45 Software 40 Total 356 Less:- Accumulated depreciation -284 Net Fixed Assets 72     Other Assets   TOTAL ASSETS 247     LIABILITY AND SHARE HOLDERS EQUITY   Current Liabilities   Accounts payable 40     Long-term Liabilities   Other loans 180     Share holders Equity 27 Total   TOTAL LIABILITY AND SHARE HOLDERS EQUITY 247     Read More