Northern Stock Feed Supplies - Case Study Example

swCase Study Analysis: Northern Stock Feed Supplies Executive summary This paper is the case analysis of Northern Stock Feed Supplies, which is a family-owned-operated business. The company being analyzed has a traditional methodology of working and is being managed by a couple, Tom and Meg. The company has been facing some major issues on account of its complacent manner of working which, sort-of believes, in not accepting change within the organizationorganization. This has led the company suffer huge losses and has, to some extent,become outdated in the market. The paper focuses on some of such issues that the company faces and suggests strategies for tackling the same. This paper proposes various change management initiatives that could be undertaken to make the business profitable and regain the lost customer base. The report also provides some detailed plan for implementing the proposed marketing strategy. Major problems within the organization Northern Stock Feed Supplies faces a number of organizational issues which are hampering its growth and the ability to garner better market share. The major issues faced by the organization are discussed in detail below: Absence of marketing strategy: The company does not believe in undertaking any marketing activities based on proven theories. For example, the advertising is limited to local horse club or other such racing events. The business largely depends on word-of-mouth advertising or through repeat customers. Although, the placement of the company has been very strategic, it has however never tried to reach out to new customer base or tried to sell the products into the market in an aggressive manner. This has resulted in lack of visibility for the company in the market and inability to capture newer customers. Limited consolidation of business: The core business of the company is that of selling stock feed and maintaining a limited range of equine products and fencing supplies for cattle and horses. The company also stocks gravel and mulch products. They also keep a small herd of Brahmans, which are being sold to the local abattoirs. The company also breeds and trains working kelpies for herding sheep and cattle. But the business has been fragmented and the couple has not been able to consolidate the company. Although, they have diversified into various segments to meet market demand, they have not sketched any business plan for selling their products or services systematically. Thus, the company has been investing into diverse products and services but due to lack of consolidation, it has not been able to reap the benefits. Absence of business plan for expansion and diversification: Although the couple has diversified the business to meet the demand from local community, yet the company does not have a formal business plan on how to sustain such diversification or to expand in future. For instance, due to changing demographics in the neighborhood, the company expanded into landscaping. But even though the landscaping business has been growing rapdily, yet the owners had not thought of expanding it in a full-fledged manner, thus restricting their vision. The company has not changed as per the demand of the market. It has merely added to its product portfolio without any consolidation plans. No succession plan or human resource management: As it is a family-owned–operated business, the couple does not venture outside the household for hiring and has only one permanent staff member, apart from other temporary staff. With the growth in business, the company was not progressive enough to hire permanent staff and neither do or had a succession plan. With the retirement of Tom and Meg, the company would have to be closed down as it does not have any staff or family member to run the business post the retirement of the founders. Identification of these problems is an important step towards further development of the business, but most importantly the company should consider preparing a marketing strategy. Although, all the problems discussed above are of importance, I have identified the need to create a marketing strategy as the most critical problem currently faced by NSFS. It goes to the company’s advantage that the business has diversified into other areas to meet the growing demand of the customers, and it organizationhas good customer base along with a strategic location. However, the business has still not been able to make a major impact in the region because of its sluggish marketing efforts. Therefore, in order to create new market and capture new segment for its services and products, the company needs to focus on developing a robust marketing strategy. Thus, this problem requires further consideration and it should be considered a subject for a change management plan. Problem analysis and change management The organization needs a robust marketing plan to expand into newer markets and garner new consumer base. In order to implement a good marketing plan, it needs to incorporate change management strategies. However, even before implementing such a strategy, it is important to analyse the problem being faced by the company and list out the pros and cons of the issue. All said and done, but it has to be born in mind by the company owners that robust marketing strategy would not involve only superficial thoughts and ideas but clear aims and goals; an flawless assessment of what needs to be achieved; a specific and comprehensive action plan, a process that is very pro-active and continuous in terms of the deliverables; and periodic reviews of the so-called robust strategy itself. The owners have to change their vision of being one from the family-centric to the one that gives them a "Big Picture" with a vast and futuristic approach. In this way what would look to them as a jig-saw puzzle to them in the beginning would actually be an exercise to envision the future opportunities; knack to grab the same and also a roadmap to success. To quote one of the best companies that has had robust marketing up its sleeve, Dell (albeit from a different domain) comes the foremost in terms of its planning and strategy. When companies were selling their computers through a very rigid and complicated process, Dell started doing the same in non-conventional manner with aggressive campaigning. Sony is another example and if segment is shifted, then Richard Bransons Virgin Atlantic is one more example. Michael Dell started as a visionary and infact challenged the conventional wisdom that a customer would not purchase a computer over the telephone. This way he challenged a very dynamic chain of the existing computer sellers who sold over a shop. To this Dell added the advanatge to a customer for having a computer customized according to the requirement. This was just one thing that helped Dell tide over any complexity that came his way. This is how transformed Dell into a global organisation from a simple college dormitory operation. Similarly the secret of Sony’s success was in the development of new technologies with a perfect backing of standardization that would be acceptable globally and to almost every segment that they catered to. They passed this ethos on to even the last person in the supply chain. Virgin’s success lies in its diversity; the group has more than 200 companies under its umbrella that cater to almost every other individual in some or the other way. Quality and service are the benchmark for each. Pros and cons of the issue The major advantage for the organization is that the customers still trust the company for its core business for selling stock feed. The company enjoys a loyal customer base in the older generation who appreciate the warmth and friendly attitude displayed by the owners. The company’s diversified businesses also offers added value to the existing customer base. Further, the community appreciates the charity work and sponsorship programs that are taken up by the company from time to time and thus people find the company as “one of their own”. However, on account of lack of a comprehensive marketing strategy, the company was unable to enter newer markets; that is even though the company diversified its services. But due to lack of advertising its revenues were dented and thereforethis diversification was as good as not having diversified. The same was the case with the expansion ventures of landscaping, breeding or training working kelpies and selling Brahmans. Since they were not given due coverage and publicity in various media, they could not grow beyond being a liability. Other things that could have been leveraged for better image building was advertising the company’s friendly attitude had the same been advertised, which they were not. Also what was not advertised was the fact that the company still delivers the products without any charges; but again not many knew of it. Thus, with the overall change in the image of the company, it may also regain some of the lost audience and capture new customer base. This will help it gear up to the market pressure and changing phase of demographics. Change management and the issue The organization would be facing a number of issues due to the problem identified. The issues are as follows: Losing newer markets: As the organization does not have a marketing strategy and follows traditional method of advertising itself, it is not becoming visible in the market and therefore, failing to attract new customers. Failing to compete with other players: Despite the fact that the organization has a loyal customer base due to its quality service and warm business environment, it is not able to expand as aggressively as its competitors. This is largely because of lack of advertising and marketing itself aggressively. Failing to sell its diversified range of products: The organization has diversified its product portfolio as per the market requirement. However, due to the lack of a comprehensive marketing strategy, the company has failed to sell all its diversified range of products. Marketing strategy and change management Change management is described as making or creating changes within an organizationorganization that are undertaken in a planned or systematic manner (Nickols 2002). It is also termed as a science or art for creating changes into a system within an organization. This is done through an orderly, planned and systematic manner for creating a sense in an organization and for providing a common platform to the employees, vendors, suppliers and customers (Axelrod 2000; Pettinger 2004). These changes are internal and are affected inside an organization (Caudron 1996). Although, these changes can impact some external environment and even change the entire organization, essentially these changes takes place within the internal setup of a company (Kotter 2002). For instance, if an organization decides to raise the prices of its services or products, it would be seen as an internal change initiated by the management but would invariably impact the external factors i.e. customers or market pricings (Balogun & Hope Hailey 2004). Some more internal organizational decisions that may impact the larger external environment include retrenching employees, increasing production, diversifying and expanding business, changing the management of the company etc (Rieley & Clarkson 2001, McNamara 1999). In case of Northern Stock, the company needs to adopt change management in terms of its marketing strategy for gaining a larger customer base. Change management would help garner higher reputation and brand equity in the market place. It will also make the company recognizable within the target audience. The aggressive marketing plan will help the company in pruning losses and competing with the other players in the market. A vigorous marketing strategy will ensure changing the overall image of the company with the target audience. Further, it will help the company to become more organized which can be very beneficial for the customers. In order to create change management, the company needs to understand various arts and sciences such as the psychology of the customers and the market, sociological impact of its decision, business administration, technological innovations, economies, human resources development as well as organizational behavior (Taylor & Hirst 2001; Altman & Iles 1998). Experts opine that changes done in an organization comprise of several stressful activities that a company has to endure (Bamford & Forrester 2003). It has been seen that in such cases most companies deal with such a change due to the fact that the company is initiating the change to make it a profitable venture. Also through the new product offerings and ideas, the company would be able to compete with its competitors (Doyle 2002). Thus, in addition to designing a robust marketing strategy, the company should change the basic characteristics for delivering goods or services as per the market requirements. It been analyzed that strategies on change management have often proved profitable for business and have helped them survive for a longer period of time (Burnes 2004). Also, innovating services or products helps them improve customer base and expand their businesses (Carnall 2003). However, it should also be kept in mind that in order to initiate change management, the company would have to invest huge amounts of money as well as time into the project (Graetz 2000). The resources would be required to upgrade the company, invest into newer technologies, hire new talents, train new employees along with ingraining newer belief systems into the company (Kanter et al 1999; Guimaraes & Armstrong 1998). It also needs to be understood that change should never be restricted and it would be a constant process (Luecke 2003). It is a natural cycle for the business to evolve and in order to survive in today’s competitive world the change needs to be constant (Moran & Brightman 2001). The company has to understand that to be successful they will have to create avenues for changes to take place (Paton & McCalman 2000). Suggested course of action 1. Marketing through local events: Per the current scenario and as mentioned in the beginning of this paper, the company has been focusing at marketing through local horse club events. It should however market through more local events for garnering market visibility. It should advertise through jingles and catchphrases and much more. The advertising has to be innovative and catchy (Taylor & Hirst 2001). 2. Marketing value-added services: The company should also highlight its value-added services such as free home delivery and customized offerings with friendly business environment. This would provide a major edge over the competitors. However, the company must mention that these services are for their regular customers or for customers who buy in bulk and above certain limit (Pettinger 2004). 3. Marketing products and offerings as packages: The business should focus on selling all its products and offerings, besides focusing on its core business of selling stock feed. The campaign should focus on all the products and services that the company deals in. Further, it should come out with package deals such as selling kelpies at lower rates for people buying bulk stock feeds or providing fencing at a discount prices along with landscaping equipments. It will help if the company comes out with these packages in order to gain more customers and sell some value added services or products (Burnes 2004). 4. Marketing a newer look of the company: The company needs to change its internal character to suit the requirements of its customers. It may need younger people for taking up marketing campaigns and promoting the services or products (Carnall 2003). The present owners may need to involve their children. With the change in management and induction of new and young people, the company should be able to market itself better and get younger families as a customer base. As Meg and Tom, the owners, are currently able to connect with the older generations, the newer generation will be able to gain confidence with the younger people that will eventually help the company grow further. Action plan In order to implement the marketing strategy, the company would require undertaking an aggressive action plan. The following tasks and role assignments, along with the timeframe should be implemented: Tasks Role Timeframe Estimated budget Steps for implementation Intended outcome Identifying the business areas Meg, Tom and Toby 1 week Not required Brainstorming sessions to find out the gap areas and understand the problems in the business The organization would be able to identify the major issues it is facing currently Identifying the value-added services Meg, Tom and Toby 2 days Not required Brainstorming sessions to identify the value-added services that the company provides to its customers through analysis of its various products and services. This would help the company in identifying the business areas that the company is strong in and further highlight them in the marketing plan Getting feedback from regular and new customers Meg, Tom, Toby, Boris, temporary staff and customers 2 week Not required Preparing a questioner Conducting feedback session Compiling the results Analysing the results This would help the organization to understand the customer perceptions about the company and indentify the gap areas Outlining the marketing plan after incorporating customer feedbacks Meg, Tom and Toby 1 week Not Required Brainstorming about the customer feedback analysis Identifying the strengths and weaknesses of the company Preparing a marketing plan highlighting the strengths and taking into consideration the customer suggestions This would help in developing a robust marketing plan, formulated as per the customer perception and suggestions. Employing a local PR agency for branding purposes Meg, Tom, Toby and PR executives 1 week $1000/week Meeting with PR executives to discuss branding needs and identifying strength areas This will help in professionally handling the branding of the company Generating PR and marketing campaigns PR executives 2 weeks $3000/week Disseminating news about the company in local media Organizing events for the company Implementing marketing campaigns The organization would be able to garner better visibility in the market and media Advertising through various medium and events Advertising company On going $5000/week Creating ad campaigns as per the new marketing plan Advertising using various mediums such as television, newspapers and hoardings The organization would receive wide publicity and thereby garner better market share and new customers Analysing the post-event impacts PR executives, Meg, Tom and Toby 1 week $1000/week Understanding the impact of the campaign Identifying the pros and cons of the marketing efforts The organization would be able to understand whether the marketing effort was a success or not. Thus, the company would, at least, require two months time frame to complete and implement its changed marketing plan. The action plan should include employing a PR company so that the company is able to change its image in the market through employing the local media and advertising in local events. Further, analysis of the impact of the marketing campaigns is also necessary to understand whether the campaign was a success or not. References: Axelrod, R. 2000, “Terms of Engagement, Changing the Way We Change Organizations”, San Fransico: Berret-Koehler Publisher. Kotter, J. P. 2002, “The Heart of Change, Real Life Stories of how People Changed Their Organization”, Boston: Harvard Business School. McNamara, C. 1999, “Basic Context for Organizational Change”, Organizational Change. Balogun, J. and Hope Hailey, V. 2004, "Exploring Strategic Change,” 2nd edn, London: Prentice Hall. Bamford, D. R. and Forrester, P. 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Luecke, R. 2003, “Managing Change and Transition”, Boston, MA: Harvard Business School Press. Moran, J. W. and Brightman, B. K. 2001 “Leading organizational change,” Career Development International, 6(2), pp. 111–118. Paton, R. A. and McCalman, J. 2000, “Change Management: A Guide to Effective Implementation,” 2nd edn, London: SAGE Publications. Pettinger, R. 2004, “Contemporary Strategic Management”, Basingstoke: Palgrave MacMillan. Rieley, J. B. and Clarkson, I. 2001, “The impact of change on performance,” Journal of Change Management, 2(2), pp. 160–172. Taylor, P. and Hirst, J. 2001, “Facilitating effective change and continuous improvement: The Mortgage Express way,” Journal of Change Management, 2(1), pp. 67–71. Altman, Y. and Iles, P. 1998, “Learning, leadership, teams: corporate learning and organizational change,” Journal of Management Development, 17(1), pp. 44–55. Caudron, S. 1996, November, “Managing the Pain and Gain of Radical Change”, BusinessFinanceMag.com. Nickols, F. 2002, February 7, “Change Management 101 - A Primer”, Abstract retrieved September 19, 2010, from http://home.att.net/~nickols/change.htm Read More