Evaluation of the McBride Plc Companys Strategy - Case Study Example

McBride Plc Management Report-Evaluation of the Company’s Strategy Student Name Tutor Course Date Table of Contents Table of Contents 2 Executive Summary 3 Management Report-Evaluation of the Company’s Strategy 4 Introduction 4 Analysis and critical evaluation of the organization’s strategic position 5 Analysis of the organisation's strategic direction 8 Critical evaluation of the organisation's strategy (SAFS Framework) 9 Bibliography 12 Johson and Scholes, 2010, Strategic Choice: Suitability, Feasibility and Acceptability Model, 12 Learning Center, UK. 12 Business Master, 2012, Suitability Feasibility Acceptability (SFA) analysis Retrieved on 12 January 3rd 2013 from: 12 http://www.rc-businessmaster.com/business-planning/suitability-feasibility-acceptability-business/. 12 Riley Jim, 2012, McKinsey Growth Pyramid - Growth Strategy, Retrieved on January 3rd 12 2013 from: 12 http://www.tutor2u.net/business/strategy/mckinsey_pyramid.htm. 12 Rumelt R., 1998, “The Evaluation of Business Strategy” in B De Wit & R Meyer, Strategy – 13 Process, Content, Context, 2nd ed, International Thompson Publishing. 13 The Times 100, 2012, Achieving growth through product development. Retrieved on 13 January 3rd 2013 from: 13 http://businesscasestudies.co.uk/portakabin/achieving-growth-through-product-development/ansoffs-matrix.html#axzz2GtKJHjc4. 13 Executive Summary McBride Plc is a key manufacturing and distribution company that operates across Europe and has been expanding its geographic footprint to Vietnam (Newlane Cosmetics) and Malaysia (Fortlab). Currently, McBride operates from twenty sites of manufacturing that are located in eleven countries. The company delivers products to many more countries and it therefore faces important issues concerning the environment, safety, social issues as well as business issues across a wide and diverse cultural and geographic region. The company also faces the challenge of keeping up with the business amid the tough competition that it faces and it therefore has to put proper strategies that will enable it to compete favorably and to remain in the business as the world number one retail store. Such an ambition requires that the company spreads further in terms of its geographic coverage so as to cover more countries internationally. The company has been on this move over the past years since it has expanded to a few more countries beyond Europe; spreading to the Asian continent. The company is also working to ensure that its strategies enable it to excel in the business even with such a bold move of expansion. In addition, the company is also working on its products to ensure that the products keep up with the market demand. The evaluation of the company’s strategy will show that the company is working towards ensuring that its operations are sustainable, competitive and they push the company towards achievement of its goals and objectives; one of which is being the world number one retail store. Management Report-Evaluation of the Company’s Strategy Introduction McBride Plc has had the drive to ensure that its products are accepted in the existing markets and in the emerging markets. These products include household products and personal care products which are sold across Europe and the whole world. The company has set its goals towards becoming the best retail store in the world and ensuring that its products receive worldwide acceptability (McBride Plc, 2011). The company has continually been reviewing its strategy to ensure that it still tallies with the objectives set by the company. It is the belief of the company that through product innovation, operational efficiency and offering customers excellent service and quality, the objectives set can be achieved. Therefore, the reviews are meant to confirm the company’s operations along the set modes of operation. In this paper, the existing strategy of the company shall be evaluated and recommendations made to the board of directors on the future development of the business’ strategy. These shall be presented in form of a management report. Analysis and critical evaluation of the organization’s strategic position According to McBride Plc (2012), the strategy of the company is to impel Private Label growth in personal care as well as household sectors all through Europe and to the markets that are developing and emerging. This is meant to be achieved through innovation of products, improvement of the service and quality delivered to customers and leveraging of the company’s scale in operational and procurement efficiency. The company therefore continues to focus on the products that it believes offers the best prospects of growth and it continues to examine the opportunities for expansion of its geographic reach. While doing this, the company aims to be the best in the world in terms of retail store and retail service. The company has been using a refresh strategy that was started in early 2011 and has continually been implemented. Through this strategy, the company keeps reviewing the levels of commitment that it has input towards the achievement of its goals. This program has seen the company achieve tremendous restructuring of its operations and has enabled it to adopt other programmes like the lean manufacturing programme across the whole company group. In addition, the company has been able to establish a manufacturing rationalization plan and the program has also enabled the company’s plan of progressing its investment to Asia to work as planned. All these have been achieved because of the refresh programme that aims to improve the focus of the company and to prioritise and execute the strategy of the company. This programme was established to encompass changes in the organization, review of the category of the company, improvement of competitiveness and to facilitate creation of new opportunities. The achievements that have resulted from the use this programme are clearly noticeable. For instance, the year 2011 saw the establishment of the international customer teams in 11 multinational consumers. In addition, there was the establishment of four category teams that were meant to drive the categories of growth. The programme facilitated the appointment of a group head of research and development whose purpose was to capture synergies and to drive effectiveness in the research and development function. It was also after the establishment of this programme that acquisitions were integrated and they progressed to plan, leading to the investments in Asia (McBride Plc, 2011). In order to continue leveraging the leadership position of the company, the company turned its focus on four key areas that can deliver growth. Through the refresh programme, the need for organizational change was identified. Further, there was need to improvise working ways that give greater focus on the increasing multinational base of customers and to channel the focus of the company to future growth strategies. This was also followed by the need for better coordination of the research and development capability of the company and the need to provide leadership to the supply chain of the company. This was then followed by the implementation of the various stated functions above (McBride, 2013). In addition to organizational change, the refresh programme identified the need to improve the competitiveness of the company and its efficiency of operation. This was further enhanced by the market conditions and the pressures of the input cost. Opportunities emerged that presented the prospect of rationalizing the supply chain. This was followed by the assessment of lean manufacturing in all the manufacturing facilities and projects were initiated that would end up increasing the savings of the company from £1 million to £3 million in a span of 3 years. The company also reviewed its category in the household and the personal care assortment and the categories that provided the company with the greatest opportunity for growth in the short and ling term were identified and selected. These were identified as the core growth categories and the company already had the capability in terms of product and market position. Some of the core growth categories that were identified included the laundry liquids, specialist cleaners and machine dishwashing while the categories for future growth included the air care, skin care, mouth wash and male grooming. The fourth area was that of exploiting new opportunities especially in the new and emerging markets. This is because of the expanding company presence in the new markets. The company embarked on strengthening the local management, implementing the company’s quality processes and systems and investing and developing the capabilities of the company in the new facilities. According the annual report by McBride (2012), the strategies give the company a competitive edge in the market since the company continually reviews its actions and its current position and determines its next step of action. This ensures that the company stays well on its track of objectives and remains competitive with its products. It therefore presents an opportunity for the company to be the world number one retail store as it purposes to be. Besides, it gives the company an opportunity to further enhance its operations to new markets and to expand its geographic footprints, which has been the main undoing of the company. Analysis of the organisation's strategic direction McBride Plc’s strategy has taken the company in a path that is well suited to the objective of the company. The strategy seeks to push the company in the world market as a force to reckon with and to help the company establish itself even in new markets. The approach taken by the company complies with the Ansoff’s matrix as stated by The Times 100 (2012). Under this strategy, managers find ways of growing their businesses through existing products or new products and in the existing or new markets. This is in line with what McBride Plc has used in its strategy. The strategy of market penetration has been used by the company to increase its market share beyond the European borders. In addition, the product development strategy has been used in coming up with new products like the 24-hour antibacterial trigger cleaners (McBride Plc, 2011). This was meant to meet customer needs for the product. The company has also used the market development strategy in enhancing its markets to the Asian continent, reaching out to China, Malaysia and Vietnam. In addition, the diversification strategy has been used by the company by driving the private label growth in the personal care and household sectors. These strategies have seen the company embark on a journey that will enhance the sustainability of the company. The company has also used the McKinsey growth strategy through its operational skills, its growth skills, its special relationships with the market and its privileged assets (Riley, 2012). Through this strategy, the company has used the existing products to enhance its sales to the existing base of customers. The company has also used the existing products to reach out to new markets in China, Vietnam and Malaysia. This also comes in line with exploration of new geographies; where the company has explored beyond Europe to reach out to Asia. In addition, the company’s refresh programme has enabled it to develop a new industry structure that it has used to capture the competition and consolidate the industry. Therefore, the company is working its way towards staying as the number one retail store. Critical evaluation of the organisation's strategy (SAFS Framework) According to Johson and Scholes (2010), a selected strategy should be suitable and compatible in the expected and the current external environment. The company’s approach in trying to expand its products to the European and other markets that are emerging is suitable for the growth of the company’s market. It also helps the company to increase its sales across the markets. The laid approaches by which this can be achieved, especially the strategy refreshing programme is well suited for the company in reaching out to new markets. On the contrary, this strategy could make the company lack a commitment in its services since it does not have commitment to a specific market. The company should therefore continually review its products’ quality to ensure that it is meeting the customers’ demands. Business Master (2012) stated that the chosen strategies should be able to meet the expectations of stakeholders through the levels or the risks and returns. The strategy of the McBride Company has been able to meet the expectations in terms of increased company savings and increased total revenue. This has been achieved while the products have been produced to the expected quality (McBride Plc, 2012). The organizations strategy is therefore acceptable. The strategy is supposed to be attempted in the physical, financial and human resources available (Rumelt, 1998). From the analysis done by the McBride Company’s on its core competence, these were found to be household and personal care products. These are products that the company has capability of delivering at high level and the strategy to use these products to propel it to the market is feasible. In addition, the brand name established by the company in the European market can see it through the competition. Jacobs et al (2000) argued that the strategy should be sustainable by the company. McBride’s sustainability report in 2010 stated that the company’s commitment is to attain a long term and successful business that is sustainable (McBride, 2010). The approach used by the company towards the environment and towards the health and safety of its operations and products align the company towards sustainability. Conclusion and recommendation McBride Plc Company’s effort towards becoming the number one company and retail store has been seen in its commitment to expanding its operations beyond Europe and to increase its sales. The company has also worked to fend off competition in the market through continuous review of the products and improvement of quality as well as coming up with new products for both the existing and new markets. This has seen the company attain increased sales and total returns (McBride, 2012). Use of the strategy refresh programme has also helped the company in streamlining its operations and working towards sustainability. To better establish itself to the existing and new markets, the company should resort to choosing specific products for specific markets. This will increase the company’s competitive edge when it goes into markets that already have established products and will increase the chance for the company to get established in the market. This strategy will work better for the new local and geographic markets. Bibliography Ambrosini et al., Exploring Techniques of Analysis and Evaluation in Strategic Management. Johson and Scholes, 2010, Strategic Choice: Suitability, Feasibility and Acceptability Model, Learning Center, UK. Business Master, 2012, Suitability Feasibility Acceptability (SFA) analysis Retrieved on January 3rd 2013 from: http://www.rc-businessmaster.com/business-planning/suitability-feasibility-acceptability-business/. Jacobs et al, 2000, “Strengths, weaknesses, opportunities and threats (SWOT) analysis” in V McBride, 2010, Passionate About Sustainability, UK. McBride Plc, 2011, Annual Report and Accounts 2011, UK. McBride Plc, 2012, Annual Report and Accounts 2012, UK. McBride, 2013, Leadership in Private Label, Retrieved on January 3, 2013 from: http://www.mcbride.co.uk/leadership-in-private-label/leadership-in-private-label. Riley Jim, 2012, McKinsey Growth Pyramid - Growth Strategy, Retrieved on January 3rd 2013 from: http://www.tutor2u.net/business/strategy/mckinsey_pyramid.htm. Rumelt R., 1998, “The Evaluation of Business Strategy” in B De Wit & R Meyer, Strategy – Process, Content, Context, 2nd ed, International Thompson Publishing. The Times 100, 2012, Achieving growth through product development. Retrieved on January 3rd 2013 from: http://businesscasestudies.co.uk/portakabin/achieving-growth-through-product-development/ansoffs-matrix.html#axzz2GtKJHjc4. Read More