Operational Management: Business Idea - Assignment Example

Operational Management Part Business idea The business idea is importing electronic appliances such as mobile phones, laptops, television, home theatres systems and other electronics from China to UK and selling them to retailers. Goal of the business By the close of the third financial year, the business should have created a strong international network to obtain high quality and cost-sensitive electronic products, launched the product in the market and established a significant market share in the industry which will equate the annual average sales to about 2500 pieces of the imported products at an average annual profit of $250,000 through intense public relation, market research and risk management. Aim of the business The aim of the business is to create a competitive name in the market which will boost the growth of the business though increased market share and consequently, increases the profitability and survival of the business both in the short term and long term. Part 2: Exploration of the Idea The activities necessary to the achievement of the goals of this business are presented in the diagram below. Goal Objectives Activities 1. To establish a strong international network in the electronic market. To find reputable electronics manufacturers in China 1. Research on the internet 2. Create a list of potential suppliers 3. Contact potential supplier 4. Follow-up on progress 5. Compare credibility, price, reliability and profitability. 6. Import from the best supplier based on the evaluation. 2. To establish a significant market share. 1. To create competitiveness and a strong brand reputation in the market. 2. Hold public relations meetings, press releases and promotional campaigns 3. Hold shows and exhibitions to display the variety of the product to the public. 4. Advertise to local retailers and wholesalers. 5. Market the products using the mainstream media 6. Target the youth using social media. 7. Launch an internet market where buyers can buy the product from the internet. 2. To ensure survival amidst strong competition by creating competitive advantage 1. Partner with local retailers and alternative businesses for referrals. 2. Set prices competitively. 3. Focus on customer satisfaction. 4. Emphasize of getting feedback from the customers. 5. Ask the customers to leave reviews. 6. Compensate for loyal customers through strategies such as discounts and coupons. The diagram below shows the relationship between the activities undertaken to achieve the business goals in time and space. Goal Objectives Activities Time Frame Space 1. To establish a strong international network in the electronic market. To find reputable electronics manufacturers in China 1. Research on the internet 6-12 months before importation. In the UK. 2. Create a list of potential suppliers 6-9 months before importation. In the UK. 3. Contact potential supplier 6 months before importation. In the UK. 4. Follow-up on progress 6-1month before importation. In the UK. 5. Compare credibility, price, reliability and profitability. 1-3 months before importation. In the UK. 6. Import from the best supplier based on the evaluation. At the beginning of importation. In China. 2. To establish a significant market share. 1. To create competitiveness and a strong brand reputation in the market both locally in the UK and in the international market. 1. Hold public relations meetings, press releases and promotional campaigns Immediately before and after launching the business. In the UK and throughout Europe. 2. Hold shows and exhibitions to display the variety of the product to the public. 1-6 months after launching the business. In the UK and throughout Europe. 3. Advertise to local retailers and wholesalers. 1-12 months after launching the business. In the UK and throughout Europe. 4. Market the products using the mainstream media Throughout the entire time. In the UK and globally. 5. Target the youth using social media. Throughout the entire time. In the UK and globally. 6. Launch an internet market where buyers can buy the product from the internet. Immediately after importation. In the UK and globally. 2. To ensure survival amidst strong competition by creating competitive advantage. 1. Partner with local retailers and alternative businesses for referrals. Immediately before and after launching the business. In the UK and globally. 2. Set prices competitively. Immediately before and after launching the business. In the UK and globally. 3. Focus on customer satisfaction. Immediately before and after launching the business. In the UK and globally. 4. Emphasize of getting feedback from the customers in the internet. Throughout the entire three years. In the UK and globally. 5. Ask the customers to leave reviews in the internet. Every time after purchase In the UK and globally. 6. Compensate for loyal customers through strategies such as discounts and coupons. After establishing proof of continued purchase. In the UK and globally. Types of organizational structures Wheel organizational structure This type of organizational structure is common in businesses which are evolving or have undergone slow evolution over time. The structure looks like a wheel which has the owner of the business at the centre acting like the central point or hub of the business. The spokes of the wheels are represented by operations such as sales, administration, financials, estimating and bidding, human resource, operations and equipment, collections and operations management. This type of an organizations structure is very dependent on the owner who controls all the activities. As such, it is a very risky type of a structure since, should anything happen to the owner, the business will face the challenge of disintegration. The wheel structure produces low results in a business due to lack of clear or real standards, foundation, processes or procedures for carrying out business activities. The employees lack refined roles and responsibilities and therefore their functioning is not result-oriented. The operations of the business have no direction and the overall operations of the business lacks accountability. As a result, the owner of the business has no control over the business and works to achieve nothing at the end of the day as he spends all his days troubleshooting. At the end of the day, the owner has less to gain than his keep people as he can’t even take a day off as this would paralyses all the operations of the business (Hansen & Nitin, 2004). Traditional divisional structure This type of organizational structure is characterized by specialization of tasks among the staff of the organization, there is centralized authority, narrow span or control and functional departments. As the organization grow larger, job specialization increases. The manager decides the basis on which to divide and group the tasks in a manner which makes efficiency and achievement of the goals possible. The number of staff per group depended on the number of people a particular manager could manage. The authority is also distributed in various ways within the organization. The structure of the authority is vertical where the final power is vested on the highest head of the organization. Power flows downwards to the lowest employees. The employees are not involved in the decisions making of the organization. When this structure is presented in a diagram, it forms a pyramid with the president at the top of the pyramid followed by few of the executives. There are few vice-presidents heading different departments under the president, which are also known as senior managers. The layers increases in size as power decreases with most of the employees occupying the huge base of the pyramid. The grouped employees are organized into departments (OReilly &Michael, 2004). Business Unit structure This type of an organizational structure is employed by small business as they grow and expand into new horizons and encroach into new operations which require a complete and revitalized re-organization. As the business grows, there are changes in bureaucracy due to formation of new operations and new positions calling for new opportunities and needs. As changes both in the external and internal business environment change, bureaucracy poses a challenge. This is because of the sluggish manner of thinking coupled by the complexity and size of the business. Business Unit structure encourages new thinking ways by reorganization of the different parts of the organization into autonomous and independent parts. The autonomous groups are set as separate companies especially where the business has expanded into large boundaries which are not easy to control. The separate business units are responsible for their won operations complete with their departments. The responsibility of accountability of profit and loss is vested on the top management such as the president. The units are based on differentiated lines such as geographic markets or product lines (Brews & Christopher, 2004). Matrix structure A matrix structure is a combination of different organizational structures in order to take care of different structural needs. The matrix structure combines the divisional and functional organizational structures presented in a vertical and horizontal command structures. The functional structure is represented by the vertical command and it does not change as it is represented by normal departments in an organization such as research and development, production, marketing or finance. The divisional command structure varies and has aspects such as geographical region, customer, brand or product. The matrix is preferred by organizations who wish to facilitate high level of specialization for both the equipment and employees of the organization. Application of specialization allows the business to enjoy unique functionality by avoiding duplication of functions. This saves not only time, but also the resources and human personnel efforts by promoting functional expertise. The matrix is prone to potential conflicts at the management level as there are two heads who may have conflict of interest and they may impact the conflict on the personnel under them. This can make the working environment very tense and result in loss of productivity (Ticoll, 2004). The following diagram shows the best method of organizing 50 to 100 employees, associates and directors. Since this is an international organization, a Business Unit Structure would be perfect as it will allow new needs and opportune ties in the growing business to be accommodated for by new people under different positions and in different regions. For easy management of the many units, this type of an organization structure is effective in ensuring smooth operation of business functions (Lumpkin & Gregory, 2004). Advantages of Business Unit Structure over the Other Organizational Structures I would choose to apply the business unit structure in my business since I believe that a great business requires an unlimited input of all the employees of the business. As the business grow, I would wish it to revitalize and constantly change the way of thinking as trends in the market change. Technology is also changing, and since my business relies heavily on technology for global marketing, business unit structure will allow me to handle regional and global units while in the UK. Furthermore, this organizations structure far outweighs the others (Hansen & Nitin, 2004). Business unit structure is better than the wheel structure since the wheel structure is solely dependent on the owner and therefore, it is a very risky structure for a business wishing to establish perpetuity and expand to greater boundaries. It is also better than the traditional divisional structure since the business unit structure encourages people at different levels of management to contribute in the decision making process therefore increasing the pool of ideas which pushes the business to greater heights. Furthermore, diversifying the management into different units allows the business to benefits from revitalized and new ways of thinking. Furthermore, the business unit structure is better than the matrix organizational structure since the matrix is faced with risks of poor communication and therefore requires that cautious measures at the top management be established to ensure smooth development of projects. Also, the matrix is prone to potential conflict due to the different structures and two bosses. As such, it results in hindrance of organizational functioning (Ticoll, 2004). References Brews, P. J., & Christopher L. T., (2004). Exploring the Structural Effects of Internetworking. Strategic Management Journal 25, no. 5. 429–452. Hansen, M. T., & Nitin N. (2004). How to Build Collaborative Advantage. MIT Sloan Management Review 46, no. 1 (2004): 22–31. Lumpkin, G.T., & Gregory G. D. (2004). E-Business Strategies and Internet Business Models: How the Internet Adds Value. Organizational Dynamics 33, no. 2.161–173. OReilly, C. A., III, & Michael L. T. (2004). The Ambidextrous Organization. Harvard Business Review 82, no. 4 (2004): 74–82. Ticoll, D. (2004). Get Self-Organized. Harvard Business Review 82, no. 9.18–20. Read More