Marketing Challenges of Walker and Company - Essay Example

Board of Directors, Walker and Company (W & C) Mohit, Consultant Profit Plan Decisions 12/10 Executive Summary: Walker and Company (W & C) had to undergo serious challenges after the immediate demise of its founder person and president Mr. Walker in 1991. Consequently, one of his three sons Ramsey Walker took over as the new president and publisher of the company. Though he was doing his graduation in business management, yet still he was practically novice in the publishing business. Consequently, in the beginning it was a bit hard for him to run the affairs of the company. The company was not going very well too and underwent few problems. The problems mainly occurred because of lack of the management’s vision to implement proper business plan regarding publication, distribution and sales. In addition, the company has scattered its business to the publication of several topics, which cost lots of time and money. Moreover, the multiplicity of topics was not productive; rather, it was putting the profit margin into grave jeopardy. Efforts, being made in wrong direction due to inadequate strategic plan, kept the company away from turning into a multinational brand even it had been working on multiple disciplines. The new president called an urgent meeting of the board of directors and decided to cut short the expenses for keeping the ball of the publishing business rolling. It was also announced in the meeting that the list of topics being published through its platform must be shortened in order to broaden the concentration to limited material for the extension of the business ventures. Though it helped the company come out of problems, yet the destination appeared to be far from the present state of affairs. As a consultant of the company, it is my obligation to point out the weak areas of the company as well as indicate the aspects that could generate profit for the company, so that it could come out of financial embarrassments on the one hand, and could make sound progress with the passage of time on the other. The purpose of the present study includes the exploration of various business avenues and internal operational methodology in order to run the business affairs of the company on smooth track. I have worked on Ramsey’s profit plan for children book line, on the basis of financial measures including trend analysis, annual sales growth, profit percentage, average unit sales, return-on-assets, ROI and operating expenses in order to escape low profit volume for the future years to come. I also intend to present some suggestions regarding the topics that are most important in market point of view. In addition, I strongly recommend the sorting out of the profit and loss volume of every material, so that the most profitable items could be focused upon. Overview of Discussion: The company was a small organization at the time when Ramsey took its control, which was facing financial problems too. Thus, the company had neither met with stability, nor had it obtained any sound recognition in the market. However, Ramsey was determined to combat with the challenges with a dogged will. At first, he thoroughly analyzed the situation of his business and made plans to devise new strategic schemes to save this precious inherited asset. Thus, he decided to look into the accounts and budgeting schemes involved in his business in order to accelerate the pace of his commercial activities. Ramsey assumed the position of Chairman, hired the services of experienced George Gibson and appointed him as the president and publisher of the company in his place. Both the chairman and president took unpleasant decisions and dropped the number of topics from the list of their publication. They reduced the number of annual new titles publishing from 150 topics to 100 subjects, so that the expenditures could be minimized significantly. In addition, Ramsey estimated the expenses and profits of every title and topic separately, and concentrated upon the most profitable and least expensive ventures to multiply his business. Further, the company explored distribution channels for the allocation of their material in an adequate manner. His company also published books for every stratum of society that immediately captured the attention of children and youth alike, and sales volume witnessed tremendous boost along with the great decrease in expenditures. Somehow, still there exists the need for confining the commercial activities to the specific picture books that are most popular in the market. For this purpose, I would like to suggest the dropping out the less profitable segments from the list of publishable items and topics in future for better earning of the company. In addition, concentration upon few topics will make the published material more refined and excellent one, which is certainly helpful in accelerating the pace of sales and the business volume subsequently. Introduction to Discussion: One of the most astounding problems faced by the company included lack of good diagnostic system, because of which the drawing out the attention of the public towards the publications had been in constant fiasco. Hence, there was an urgent need of hiring the services of professionals having experience in publication, sales and distribution businesses. The experienced professionals could be helpful for the company to determine the tasks and assignments along with the establishment of targets and goals, and could work subsequently for the achievement of these prescribed goals and targets. The inclusion of these professionals could also bring efficient distributers, who could be responsible of distributing and placement of the published material of Walker and Company. Ramsey requested George Gibson sought out the proper distribution plan and allocated the resources on distributers. The company was successful in taking orders from distinguished writers, the publication of whom earned great name and fame for W & C. As a result, W&C turned out to be an illustrated book publishing organization of the USA. The publication of books on professional and technical topics captured the attention of professionals too, who welcomed the material like hot cake. Furthermore, the new president of Walker and Company critically examined the entire business scenario and hired the services of professional and experienced publishing personnel, who articulated austere and profitable strategic schemes. It led to imperative reduction of expenditures subsequently. Increase in profit margins, according to Ramsey’s instructions, also supported the company in mitigating the expenditures. The publication of the books on specific topics and entering into contract with distributors and sales personnel made every publication a sure success. The publication of color books and picture books earned great business for the company, and Longitude took the company at the climax publication of which excelled the business to an unabated end. It was because of the bold steps taken by the president that earned sound reputation and financial stability for the publishing company. The company made gradual progress rather observing immediate jumps with the course of time. Somehow, still company is undergoing financial problems, which require thorough evaluation of the entire strategy and auditing, so that all extra expenditures could be controlled. Most important of these steps are hiring of technical, skilled and qualified marketing and management staff, which can give result oriented performance. In addition, the non technical surplus and non productive staff would be fired and replaced to escape extra expenditures. Discussion: By looking into the business situation of the Walker and Company, it becomes evident that first and the foremost challenge for it the determination of right direction. For this purpose, research marketing is vehemently proposed. Being the consultant, I suggest that company must also allocate a part of its business on diagnostic control system by paying due heed to financial management, datasheets and cash flows. It would be highly supportive in determining the title most beneficial for the company in profit point of view. The company should also allocate resources on publishing fiction, particularly the science fiction, which is in vogue these days. Although the company had already been working on the publication or valuable material, yet it certainly required the orders that were hot and fast selling according to the market need. Hence, the company diverted its concentration from mixed material to specific market product, so that pace of sale and profit scales could be improved. Being the consultant, I would like to suggest the chairman and the president for publishing more books resembling with Longitude along with the picture books, in order to avoid the stamp of the publisher of photo books for children only. Since thousands of children get admission every year at hundreds of educational institutions, children books immediately capture the attention of distributors. Variety in books and innovative ideas while publishing the books will boost the sales volume and profit earning of the company. The major predicament undergone by W&C includes its insufficient scheme for measuring many of its business ventures, which stops it from experiencing big business jumps with the passage of time. Most of the firms and organizations fail to survive just because of the lack of vision, absence of exposure and dedication as well as deficiency in the leadership qualities of the management. The most imperative step the company should be taken is the current business trends. By looking into the sales volume of the books at global perspective, it appears to be crystal clear that general fiction and science fiction have always been the most popular publishing materials, which is equally demanded by the people belonging to every age group, profession and socioeconomic status. In addition, theology and religious studies are also the evergreen subjects, which should also be taken into serious consideration while publishing the material on annual basis for the rapid increase of business. The material related to information technology, navigation and communication are also very popular in this era of technological advancements. Walker and Company can enter into joint ventures with IT companies including Microsoft Corporation, Red Hat, Apple Inc. and others for the immediate and sizeable increase in its business volume. Picture books containing poems, alphabets and the material for the children studying in primary classes are also very profit generating. Since many thousands children get admission at various schools every year, publication of picture books on children would be highly supportive for the commercial activities of Walker and Company. The company must consider the past trends while preparing picture books for children, so that the most popular characteristics could be included to increase the sales volume. The books on international affairs, history and economics are also equally popular among all strata of society. In addition, periodicals, business journals and fashion magazines also capture the attention of the readers. Hence, allocation of funds from its budget on conducting market research to observe current trends would provide a boost to the business of the company. While discussing annual growth rate, it becomes evident that annual growth rate can be measured by subtracting total cost and expenses by total sales and dividing it by 12 in order to get monthly growth rate too. Ramsey and Gibson must consider monthly, quarterly and annual datasheets to withdraw finances from less profitable items, and allocate them to high profit generating material. It will not only be helpful in taking bold decision regarding the selection of various segments, but also will prove supportive in respect of moving the efforts of the company towards right direction. Hence, both time and energies could also be saved along with the saving of money and resources. Since employees and workers serve as the most precious asset of the organizations, which are not only the identity mark of the companies, but also are responsible for all their productivity and output at large. Hence, recruitment must be made in such a way that the staff can render best services according to the growing requirements of their organization. “Average unit sales” is another important measurement methodology to assess and estimate the profit ratio of the business. Average unit sale is measured on the basis of the sale of every title and book being published through its platform. Hence, the company can analyze which of the products is earning highest profit for the company. Since previous statistics reveal the very fact that picture books have earned highest profit for Walker and Company, and has raised its profit ratio to a great extent. Hence, being the consultant of the company, I vehemently recommend the publishing of picture books for small and school going children. Run-on-assets simply mean the exact allocation of expenses and assets in order to escape the wastage of money and assets while entering into business ventures. The strategy emphasizes upon the application of austere and precise measures to be taken while taking any step towards right direction. Since it is a comprehensive measure for the accurate examination of cost and revenue, it shows that some specific products are more useful and profit generating than others. I also propose that the company should work on the run-on-assets for the better allocation of resources and energies. Alternative Measurement Systems: Being the consultant of Walker & Company, I also suggest several alternative measurement systems for the drawing out of best possible results subsequently. Beyond budgeting is also an important measure in this regards, where the company could be able to make alterations in the business plans according to the changing market scenario. I will suggest the president to establish market research cell in the company, where the highly qualified and experienced professionals would make analysis of the current market situation, on the basis of which the company would make further plans related to publication procedure. Six Sigma is another imperative strategy to be applied for the estimation of the business situation. The system was first introduced by the renowned US brand Motorola in order to bring improvements in the quality of outputs by exploring the flaws of the strategic plans in order to remove these flaws and defects in future. The same schemes could be applied in publication business. Walker and Company already has devised this scheme by reducing the number of topics from 150 to 100. In addition, it has also put its energies into picture books for children, which has earned huge business for the company. Similarly, quality can be measured by assessing certain programs that try to increase donors and attract outside guests to attend shows, or it can be viewed as being the quality of the actual opera house and the shows it performs. In addition, balance score card system can also be adopted in order to look into the work performance of the managers, workers and employees for some specific period of time. Business scorecard system covers financial activities, internal processes, the evaluation and satisfaction of customers’ demands and needs, and the learning and development of the organization as well. Hence, balanced scorecard provides a clear picture of the tangible and intangible assets, human resource, available equipments, customers range and quality, and the plans necessary for the financial growth of the organization. Read More