Current Operations of Gummee Glove Ltd - Case Study Example

Project Report Affiliation PART ONE Our project plan was to consult with a small company, Gummee Glove Ltd that produces baby clothes along with toys. The company wants to expand their markets to clothing for the disabled children and babies. Our project involved consulting the current market of this market, competitive environment, and the future market estimation. I believe the overall project was fairly successful. The main critical success factors that my team adopted included well planned and organized operations. We had a common point of reference that directed us in measuring and directing our success in the project. Hence, as a result, it leads to the overall success of the project. Planning of events helped us to chart the course for the achievement of our goals. The process began with reviewing the current operations of Gummee Glove Ltd and identifying the key factors or issues that require to get addressed. The planning then involved envisioning the result that the firm wants to achieve and knowing the steps that were necessary to arrive at the proposed destination. The success got measured in terms of financial terms and the goals that comprise the highest-rated organization in terms of customer satisfaction. Thus, planning and organizing every member of the project, made everyone have a similar aim of striving for a better performance as Dennis (2007) propose. Our goals were also aggressive and realistic. The goal setting process acted as a wake-up call for my members that became complacent. The organization of the members involved assigning everyone with specific responsibilities. It contributed to our success by making everyone striving to complete their part as planned. Things did not entirely work out as planned. It is because my team members were not familiar with the market of baby goods; thus it was hard for the members to obtain the relevant information. Most of them did not know the appropriate factors that need consideration in the baby goods market. Thus, lack of experience and knowledge of the market resulted in less guideline in finding the relevant information. In this case, we needed some group members that had experience with babies and easily tell the main factors or elements in the baby goods market. Most of us did not know what children often wear and what clothes or other goods make them comfortable and satisfied or what children often play with which toys. I also had difficulties in organizing the group meetings regularly. Some group members could not attend some meetings due to their scheduled responsibilities that led to setbacks in decision-making. Moreover, the group members had different opinions concerning various factors that made it difficult to come to a conclusion. For instance, we took a lot of time in deciding on what to tool we should use to analyze the market concerning expansion of the baby goods to disabled children market. Additionally, some of the team members took it easy leaving other colleagues to perform all the work; thus, limiting contributions. The free riders can work hard on their own, but in group situations they limit the contributions (Cattani, Ferriani, Frederiksen & Florian, 2011). The perceptions of some of the team members also tended to create a negative group dynamic. It happened when some of the group members felt like they had more responsibilities compared to other group members, and sometimes they hold back some information as a result. Thus, it was not easy managing the group members due to different opinions, perceptions, and responsibilities. At the beginning of the project, I misjudged the job that was in hand. According to my thoughts, the solution or the outcomes would have been simple. In contrast, there were many aspects to think about like rival companies and currency rates for export. Hence, the realization of other important factors made us take more time due to further research. We did not have the idea that there many companies that needed consideration in terms of competition. Thus, this resulted in more research that consumed a lot of time and money. We had to get full information about the competitors to determine what will be the best market entry strategy upon the expansion of the firm. Less information concerning the competitors may lead to the company facing great competition from the existing companies and other new entrants. Thus, it was necessary to explore further on the factor to ensure that there is a grand strategy of the expansion of firm’s market. The currency rates for exports are also an important factor that also needed great research because we needed to understand the rates that will earn the firm more profits. Some of the currency rates may not be suitable for the company along with the destination restrictions. I learned several important factors in terms of globalization and market expansion. In my opinion, I found currency rate to be particularly significant. It is because I want to begin a manufacturing business in Vietnam in future. Now that it will be an “exporting goods” firm, the profit margin is directly affected by the rate of currency. Foreign exchange market permits businesses to convert a currency to another. According to our exploration, among the key risk that the exporter can face are the fluctuations in the foreign currency rates of exchange. The variations of currency can quickly have a great impact on the company’s bottom line and in some positions can threaten the survival of the firm. Therefore, foreign exchange risk refers to the risk that potentially and profitability cash flow may get negatively influenced by the foreign currency exchange rates fluctuations. According to what I learned, the risk occurs because the exporter needs to convert their invoice into their client’s currency at prevailing rates on the issuing day of the invoice. The clients settle the invoice to their local currency depending on the demanded terms and only after the funds get received, I can convert the payments into my currency. Thus, this leaves me exposed to changes of rates during the time that the invoice will get issued, and payment received. Hence, it is very important to research on the currency rate fluctuations. PART TWO My current and previous studies contribute to the decisions on the analysis of the company’s environment. I could clearly see what strategic tools to use our research on the company along with its environments. For the project of my group, I used Ansoff’s matrix and SWOT analysis to analyze Gummee Glove Ltd. The Ansoff Opportunity Matrix helped us to analyze and create a growth strategy for the company based on its products and markets. Ansoff argues that there are four appropriate combinations; market penetration, product development, market development and diversification (Erica, 2012). In this case, Gummee Glove Ltd. is supposed to decide its strategy based on its weaknesses and strengths and its competitors. The analysis led to several strategies. In market penetration, the company joins a market that current products currently exist as it is in the case of Gummee. The best way to succeed in this strategy is through gaining the competitor’s customers (Armstrong, 2006). The other way comprises attracting the non-users of Gummee’s products or convincing the current customers in using more of the company’s product. The penetration that the products and the brand have can get recorded by firms who offer panel measurement services of calculating this along with other consumer measures. Market penetration may have lower risks, but the company may reach market saturation with the current product it offers and may be needed to switch to another strategy. The other strategy may include product development or market development. Market development will have Gummee target the non-buying consumers in the currently targeted segments. By Gummee targeting the new consumers of the new segments, it expands its potential market. The new users can get defined as new demographic; geographic, psychographic or institutional segments. In this case by expanding its market outside the country and to the disabled children and babies, it represents the geographic and demographic segments. Another way that the sales may expand by inventing new uses for the products. The company also has a new product development that will serve the disabled children and babies. The process involves two paths, and one comprises product design, idea generation, and detail engineering; the other involves market analysis and market research. The companies see the new designs as the first stage of the product lifecycle management of the overall strategic process that will be used to grow or maintain the market share. Lastly, diversification will have the company seek to maximize profitability by great sales volume got from new markets and the new products. At business unit level, diversification is likely to increase in a new segment of the industry that the company already exists. At the corporate level, the company can invest in a promising business that is outside the existing business scope unit. Thus, Gummee being at the business level, its diversification will increase in the baby goods industry. The SWOT analysis acted as a straightforward model in the analysis of Gummee’s strengths, opportunities, weaknesses and threats to develop the marketing strategy foundation. In doing so, we accounted for what the company can and cannot do and also any potentially unfavorable or favorable conditions that relates to the firm’s services and products. The tool was the key step that related to planning. The system combines the environmental analysis information and separates it into two components; external issues and internal issues (Nag, Hambrick & Chen, 2007). The analysis level enables the firm in determining whether the present factors can aid in its achievement of the certain objective, in this case, the aim to expand the markets and develop the products. The primary goal of using the SWOT analysis is to determine and assign the significant factors that may negatively or positively impact the success of the firm’s objectives (Armstrong, 2006). Moreover, the analysis also provides an in-depth and objective look at Gummee. It is useful in developing and confirming the firms aims. Each of the four categories gives specific insights that may get used in cultivating a successful marketing strategy. The analysis of strengths encompasses on the competitive advantages, resources, the positive factors within the company’s workforce and factors related to the firm that it does well. Focusing on the internal advantages such as good financial stability and high product standards makes Gummee be in the right way in joining the international markets. The weakness analysis includes the aspects within the company that detracts its ability to maintain or obtain a competitive edge. For instance, limited expertise, substandard services, limited access to technology or skills, and poor physical location. This category was helpful in giving the organization assessment following our focus on accurate identification of the company’s weakness. The opportunities analysis reflected the external factors that represented the motivation for Gummee business to prosper and exist within the market place. The specific opportunities that we were able to identify included; market growth, resolution of current issues, lifestyle changes and basic ability to offer a great value degree in relation to the competitors. Lastly, threats analysis based on the external risks that could put Gummee at risks like currency rate fluctuations and existing competitors. Thus, based on this information of the market analysis, it was easy to come up with the grand strategy of market entry (Nag, Hambrick & Chen, 2007). There are also other frameworks that could have been important in the analysis that we did not have. The Michael Porter’s forces and PESTLE analysis could have provided a good understanding of the general environment of Gummee’s environment (Armstrong, 2006). Additionally, the macroeconomic aspects would have contributed to a deep understanding of monetary policy and fiscal policy that may be useful for recession period or understanding other nations for export. The Porter’s forces analysis gives information concerning the new entrants, bargaining power of suppliers and buyers, entry barriers and the threats of substitute services and products. The forces get often used when making a qualitative firm’s strategic position evaluation (Porter, 2008). On the other hand, PESTEL analysis is significant in providing information on political, social, economic, legal and technological factors that may impact the business objectives. Thus, the two tools are can very significant in the market analysis (Nag, Hambrick & Chen, 2007). REFERENCES Armstrong M., 2006. A handbook of Human Resource Management Practice. London: Kogan Page. Cattani G., Ferriani S., Frederiksen L., & Florian T., 2011. Project-Based Organizing and Strategic Management. Advances in Strategic Management, Vol. 28 Dennis L., 2007. Project Management (9th ed.). U.K: Gower Publishing Ltd. Erica O., 2012. Strategic Planning Kit for Dummies, 2nd Edition. United States: John Wiley & Sons, Inc. Nag R., Hambrick D. & Chen M., 2007. “What is strategic management really? Inductive derivation of a consensus definition of the field”. Strategic Management Journal Vol. 28 (9): 935-955. Porter, M., 2008. The Competitive Forces That Shape Strategy. Harvard business Review. Read More