How to Create Effective Customers - Case Study Example

Business Report on Oz Clothing Student’s name: Institution: Instructor: Subject: Business Report on Oz clothing Table of Contents Table of Contents 2 1.0 Executive Summary 3 2.0 Introduction 3 3.0 Objectives 5 4.0 Internal Problems 5 5.0 External problems 7 6.0 Oz Strategic Business Objectives 8 7.0 New Strategies 9 7.1 Management 9 7.2 Workers 10 7.3 Total Quality Management 11 7.4 Competitors 12 7.6 Effects of the new Strategies 13 8.0 Conclusion 14 9.0 References 16 1.0 Executive Summary Oz Clothing deals with manufacturing of clothes especially the undergarment. The government recently introduced Chinese competitors in the clothing industry. At the moment, there are external and internal influential factors have made Oz to be unable to cope up with this competition. The company is at the bleach of collapsing due to the numerous challenges that it is facing. Poor strategies that were set at the time of starting of the company were not competent to face the current technological world. The company was started with the aim of creating employment by the government without considering the future advancement of the company. Internally triggered challenges are poor brand of product, low skilled employees, poor management and an ineffective line manufacturing process which is the cause of poor manufacturing process that is rigid and lacks innovation. External factors are due to interference from the government and the workers union. However, the company can still survive in these challenges through restructuring of the strategies. New strategies aim to restructure the management, the working operations, carrying out total quality management and establishing a working coloration with the competitors. Implementation of these strategies would result to stakeholders experiencing more challenges in short term but numerous gains in long term 2.0 Introduction Oz clothing is a national company that specializes in manufacturing of clothes. In the recent years, it had been experiencing low productivity while the cost of production is very high. This is majorly due to the China Company that had been licensed by the government to carry out the same business as that of Oz clothing. The Chinese company has been able to produce higher volume, more fashionable at those that meet the customers need better than those of the Oz company. Further, Oz does not have the capital it would require to improve on its services. It is a company owned by the government and shareholders whose influence poses a challenge to the management while it is making the decisions. Therefore, all the decisions have to be approved by the owners. At the moment, the company is experiencing significant losses. Shareholders are expecting to get dividends at the end of the year. The labor costs are too high since the company’s system is rigid in terms of labor utilization. The labors are of low skill while the company has a rigid system that does not accommodate room for innovation and change of strategy. The company is further heavily taxed by the government while at the same time the same government expects the company to make high profits and retain all the employees. The other pressure seems to come from the employee. At national level, the employees are experiencing very high cost of living which puts the government at very hard situation. The government is only encouraging creation of more employment opportunities and strongly discouraged anything that might lead to employees of Oz company being demoted. Through the labor union, the Workers are united and therefore any attempt to make positive changes in the company that would either make the workers lose their jobs or have a more difficult life would not be encouraged. The clothing workers union and the Australian council of trade union are indirectly influencing the decisions that would be made by Oz clothing. Various options have been proposed by the management in order to solve the current problems of the company. There is the option of outsourcing the manufacturing to China; however the company has no capital to do it. There is also the proposal of retrenching the low skilled workers and employ skilled worker who would increase the efficiency and productivity of the company. However, trade unions and the government would be strongly against this move. 3.0 Objectives This report aims to find point out the internal and external influential factors that have made Oz clothing to be unable to position itself effectively in the market. The report shall further recommend on the ways through which this company can come out of this situation based on the conditions that surrounds it. 4.0 Internal Problems Internal problems are the problems that arise from within the company way of operation. In this case, this relates to the internal operation and the workers of the company (Macaulay & Cook, 2011). The company has employed too many employees most of whom are of low skills. In any company set up that aims to maintain its productivity, then it should aim to be having employees who are experts in their field of operation. Lack of proper skills in the workers is what has led to lack of innovation on improvement of the products that the company produces. In the effect, the products are neither blended nor improved to suit the customers need. At the same time, most of the staffs who are employed in the company work to be paid without considering the quality of the products that they produce. In the eyes of the customers, the products that are produced are of low quality compared to those produced by the competitors. This makes the market for the low quality products clothing to be rejected by the customer. Customers end up having negative impression on the product if it consistently does not meet their needs. The company production line is also not up to standard. Since its initiation, the Oz Company never had the goal of improving the quality of the products. In this case, the production line is rigid and never allows any form of flexibility. In fact, bringing new ideas in the system would require shaking up of the entire company way of working. Improving or coming up with new products cannot be accommodated in the system. It is for this reason that the company has continuously made the same mistake over and over again without accommodating the presence of external ideas to help in improving the system. Furthermore, in this kind of environment, it is difficult to come up with innovative designs that would help to solve the problem. All the staff has been accustomed to doing something over and over again without giving their input since the system is rigid. The management has also played a significant role toward the company not progressing in the right direction. The role of the management is to coordinate the internal operations of the company with the external world. The management is supposed to foresee any kind of problem before it arises so that it puts the appropriate measures to stop its effect in future. In this case, Oz management ought to have identified the lack of skills, poor production line and possibility of future competition. As a result, it would have been able to put appropriate measures that would have seen the company been in a position to handle the challenges at the right stage. Again, the management needed to have coordinated with the shareholders, the government and the employees in advising them on the right direction of the company. Poor service delivery comes results when different bodies that are supposed to coordinate to achieve a specific goal fail. In this case, the government, the stakeholders and the management had different expectations. The management, being the main drivers of the company, failed to effectively coordinate the internal operations of the company effectively. The company further lacks a specific brand for its company. Most of the successful companies have known brand that uniquely distinguishes them from the rest of their competitors. This is mainly so because the company never had a specific brand during its initiation. In this case therefore, the company is not popular in from the customer’s point of view. All their products are considered to be poor and of low quality. 5.0 External problems External problems are the problems that arise without the control of the organization (Roland & Jessica, 2011). They arise out of the environment that the company is operating yet the company has no control over them. The government has been contributed significantly to the fail of the Oz clothing. First, the government allowed Chinese Competitor to come into the market initially monopolized by the local company. The government never puts any form of restrictions or conditions that would help the local company to overcome the problems that would arise out of this competition. As a result, when the Chinese comes into the market, Oz has no escape route or a way of at least maintaining the sales. Furthermore, the government would not support any move by the company to retrench some of its staff in order to improve productivity. The government also fails to put appropriate measures that would help the local companies to be competitive against international companies. The government further imposes high taxes on Oz Company. The worker union is other challenging bodies to the company. The clothing workers union fights for workers without considering the situation which the company is in. Their business is to make sure that the workers are well paid and their conditions are fully met by their employers. In this case, Oz Company finds it hard to adjust its operations with the aim of improving its services since anything that would interfere with the worker would definitely raise a wrong alarm to the workers union. The source of funding of the workers union is from the workers which the union represents. Workers on the other hand are paid by the companies that they work for. In this case, there is an indirect payment that the company pays to the union for the work they are neither interested in and does not bring value to them. On the other hand, the Australian Council of Trade union does not have enough influence that would make Oz problems to be properly catered for. This union represents the company so that it is not oppressed by the external forces. However, the operating environment of the union does not have support from any other institution. Therefore, their proposals often ends up not being implemented failing to properly represent the company’s need. 6.0 Oz Strategic Business Objectives Any company that wishes to prosper in its business goals needs to give the customer the first priority. However, the business objectives for Oz Company seem to have fallen short of this at the time of their initiation. The government was started by the government with the aim of creating employment for the citizens of the Australia. This is why it absorbed many unskilled workers in their operations. This further led to the company having poor quality of the products that were being produced. In terms of Industrial Relation (IR), at the time the company was started, it had good relationship with all the stakeholders since the main reason for starting of the company was met. When the Chinese competitors were allowed in the market however, the company started experiencing difficulties and inability to meet the demands of the government and the stakeholders. As a result, the industrial relation between the company management, the customers and the owners started being poor. At the moment, the company is about to create a very poor relationship will government, shareholders and the employee. 7.0 New Strategies Though the company is experiencing numerous challenges and is at a bleach of closing down its operations, the company still has the capacity to recover from the situation and continue prospering. Commitment and numerous effort to the various department concerned are required so as to achieve this. Furthermore, putting the interest of the company is of ultimate importance since failure to do this would lead to the company collapsing. In this case therefore, urgent measures, both short term and long term need to be put in place to ensure that the company recovers. 7.1 Management The current management needs to come up with new ways of addressing the challenges. In this case, the strategies need to be geared toward addressing the needs of the customer as the ultimate priority. The management would therefore require involving all the bodies concerned in making of these decisions for the interest of saving the company. In short term, the company needs to restructure the operations of the company so that they are more flexible and able to accommodate ideas from the all avenues. Furthermore, the restructuring of mode of operation should be in a position to allow production of new products. Simultaneously, the company should start training its workers so that they can conform to the new mode of operation. In long term, Oz Clothing should aim to absorb new talents and experts in the industry from colleges to ensure that the company shall remain competitive even in future. The management should also restructure the manufacturing process. It needs to urgently come up with a unique brand that shall uniquely identify the company. The first thing to do at this stage is to design a new and unique brand of underwear that is of high quality and low cost. It should put appropriate measures to ensure that this brand beats those of their competitors in price, quality and confort. It should also set long term goals of ensuring it produces new products at least yearly. This will not only widen the market, but also ensure that it has a variety of stock. Of importance though is to ensure that its products are of the highest quality always. In long term, the company needs to consider producing different types of clothes in different parts of the country. 7.2 Workers Employees are the main reason that any company is able to achieve its objectives. (Patrick, 2007). The company should restructure the way it handles its employees so that it accommodates them in making some of the most important decisions of the company. In this case, the company should seek ways of collaborating with the workers unions in making these decisions. A system of management that gives privileges to the union whenever they support the company in achieving its goals should be established. At the moment, workers may be affected in a way in course of implementation of the strategies for the sake of saving the company. The workers through the union may not want anything to do with it. In this case, the company should establish a legal binding agreement with the worker’s union to enable it to implement the strategies easily. Ensuring there is good relationship between the workers union and the company would create favorable conditions with the staff in implementing the new strategies. 7.3 Total Quality Management Any company that remains competitive at all time is the one that puts the interests of the customer first (Moss & Hollye, 2007). Putting the interest of the customer comes with responsibility of ensuring the operations of the company are only centered toward understanding what the customer needs and making sure he or she gets it in the right way. Furthermore, this is the best known way of ensuring you beat the business competitors in a fair market (Rowold, 2011). The surest way of achieving this is carrying out total quality management. In short term, the company should restructure the company towards ensuring every worker delivers. The company should ensure that workers sign contract and quality service delivery declaration. This should be done by all staff starting from those in the management to the junior staff. However, the company should bear in mind the considerations of the workers union since this is likely to cause eruption of more problems. The workers union is likely to oppose this move. The company should seek support from other well wishers of the company like the government and the shareholders. At the same time, genuine suggestions from the workers union should be put into consideration. In long term, the company should aim to establish a system that does everything with the aim of fulfilling the customers need. In this case, it should consider doing thorough research on the clothing requirements. Further, the system should be enhanced so that there is continuous implementation of the customers need in the manufacturing. The manufacturing process therefore needs to be very highly effective, so that it is capable of achieving these objectives in shortest time possible. 7.4 Competitors In a business environment, competitors can pose a challenge to the progress of the business or create a better working platform for the business (MacGregor, 2010). When the competitors are in same business environment, they interact. This kind of interaction mostly result to them exchanging ideas on how best to meet the common challenges they are encountering in course of their business. However, in situations where one company is weak that the other, then the business environment would only favor those with better facilities, organization and influence to the customer (Ozman, 2010). In the case of Oz Clothing, the competitors have brought in more challenges to the company. The company therefore needs to raise its bar to the level which it can gain mutual gain with those of its Chinese competitor. In short term, the company should make moves that will ensure there is partial collaboration of the company with those of the competitors. Collaboration could be in terms of marketing, distribution and market research. In this case, the Company should contract for short period of time, the manufacturing process to the Chinese company while it enhances its distribution and marketing department to be of highest standard. It shall be possible to achieve this since Oz Clothing has a thorough understanding of the market distribution than their competitors. In course of this collaboration, the company would also be able to offer training to the standard of their competitors. It shall be possible to know what they do differently. At the same time, the company should be restructuring its internal operations so that they shall eventually exceed those of the competitors. 7.6 Effects of the new Strategies The new strategies will have different effects to the stakeholders. The shareholders of the company shall get less profit when the strategies start being implemented. There shall be some funds that shall be required in restructuring the mode of operation of the organization, implementation of total quality management system and kick starting the procedures for maintaining positive progress of Oz clothing. In this case, shareholders might need to reject this proposal in short term. However, the management has the capacity to influence them to accept this since failure to do so the results would be worse. In long term, the company would experience progression and high profit therefore benefiting the shareholders. The main stake holders that will be affected by the implementation of the new strategies are Oz employee, shareholders, the government, Chinese industry and the Workers unions. The Oz employees would experience shake up during the implementation of the strategies. Some of the staff shall be relocated while been required to be retrained. In case of collaboration strategy, some staff may be required to relocate. All these are likely not to be welcomed by the employees. CWU is likely to object the move while ACTU and TWU shall embrace restructuring of the company. In this case it shall be necessary to put appropriate measures to ensure that these groups do not negatively interfere with implementation of the new strategies. However in long term, the employee will benefit greatly. They shall be highly productive, skilled and enjoy higher pay when the company gains. The Chinese industry shall benefit from the collaboration with Oz clothing. It shall specialize in production and manufacturing while marketing and sales shall be made by the Oz. This will be a positive move for the entry in the new market. However, according to long term goals of Oz clothing, eventually the company will be having stiff competition and would need to change its strategies in future so that they meet those of the Oz clothing. There is expected to be stiff competition in future between the Chinese industry and Oz company, all of which would mean the customer shall have better services from these companies. The government on the other hand would get higher income from interests that comes from this company. 8.0 Conclusion Oz Clothing is a local company that manufactures clothes. Its main products are the under wears. Since the establishment of the Chinese competitors, the company has continuously faced challenges that have almost made the company to collapse. With all these problems in place, the company has many ways of repositioning itself so that it continues to gain market share and make profit. This report looks at the main causes of the situation that the company is at the moment. It identifies the areas that had been neglected at the initiation of the company and how they have contributed to the fail of the company. The report further identifies the internal and the external problems have directed the company to the state it is in now. The report then makes recommendations on the new strategies that would make the company return to its rightful position. The report also points out on how different stakeholders shall view and affected by the implementation of these strategies. 9.0 References Macaulay, S & Cook, S. (2011), A customer-centric action plan, How to Create Effective Customers, 35(5), 14-16. MacGregor, J. (2010), Leadership, Ricky Publisher: San Francisco. Moss & Hollye, K.(2007), Improving service quality with the theory of constraints, Journal of Academy of Business and Economics, 3(4), 44-56. Ozman, M (2010), The knowledge base of Products: Implications for organizational structures, Organization Studies,( 3) 8. 61 -111. Patrick, K (2007), Performance through people’, People Management Strategy, 3, (1) 14 -58. Roland, K & Jessica, L. (2011), Working out the quality of work life, International Marketing Review, 19 (3)39-45. Rowold, J. (2011), Relationship between leadership behaviors and performance, Leadership and Organization Development Journal, 32, (6), 628-647. Read More