Strategic Analysis of Seddon Company - Case Study Example

Strategic Analysis of Seddon Company Name Institution Date Table of Contents Strategic Analysis of Seddon Company 1 Name 1 Institution 1 Date 1 Introduction 2 Summary of Company’s Current Strategy 3 A Critique of the Company’s Challenges and Opportunitiess 4 SWOT Analysis 4 Analysis of the Internal and External Environment 6 External environment 6 Internal Environment 8 Potential New Strategic Options for the Company 10 Evaluation of the Options and Recommendations 11 Conclusion 13 References 14 Appendix 15 Introduction Seddon Company is a construction company owned by family members. The Company’s market is mainly of Northwest. It offers refurbishments, constructions of new buildings, maintenance services, and design of buildings and does speculative projects for development. It has several branch offices across the nation, some of which are found in Derby, Birmingham and in Chester. Thus, this paper explores the company under the spectra of strategic analysis. The paper examines the company’s current strategy, critiques the company’s opportunities and challenges, evaluates the external and internal environments, digs into the strategy options and draws conclusions based on the best options. Summary of Company’s Current Strategy The company has developed several strategies that have seen its sustainability and growth. These strategies fall under two main categories: the long and the short term strategies. The long term strategies are aimed at achieving results over a long time whereas the short term strategies are aimed at getting results over a short time. This can be broken down into details as shown: Long-term strategies Seddon Company has developed an effective customer care services. This service is concerned with availing the customers with the necessary information and providing aftercare services to their customers. This enables them to get feedback from customers which, if used positively, would help them grow the company. The company is committed towards offering training to people who have been recruited, shown by the company effort in employment of qualified staff to oversee the training of new staff. The human resource department recently saw increase of effectiveness through employment of Tony Costello as the training manager for proper planning and implementation of training of new staff. The company’s staff is well natured throughout the entire working period and when opportunities arise, it is extend to its trained staff. Retention of employees is another strategy the company is using to ensure smooth business. The company’s head on matters to do with training and customer care ensures that a retention rate of 90% is maintained continually. Employee retention is among the development objectives of Seddon. The company has initiated the “Grow Your Own” programme which is intended to promote employee retention through incentives and continued training and appreciation. Short term strategies Depending on the competition and demand in the market, Seddon regulates its prices accordingly so as not to scare away potential customers while maintaining the quality of services provided. With the reduction of cost of material, many people find it economical and hence cannot resist the temptation of investing with Seddon Company. Further, promotion of products is carried out as a short term strategy for encouraging the clients work. A Critique of the Company’s Challenges and Opportunitiess The company experiences some challenges and opportunities in a number of ways as which can better be explained by use of analysis tools such as PESTLE and SWOT and Five Forces. SWOT Analysis This technique for analysis focuses on the Strengths, Weaknesses, Opportunities and Threats as summarized in the Appendix. Strengths The company has a strong team of intellections with expert knowledge in construction works. This makes the company to stand a better chance of handling all the technical problems in order to meet the client needs. The company has sufficient staff to offer training for continuous learning, especially to keep at bar with the emerging technological trends. Weaknesses One of the weaknesses the company faces is the use of its monotonous system of staff retention over a long time. The staff becomes reluctant to new changes and incorporation of new ideas unlike other construction companies that employ people on a regular basis. Seddon Company employs a large number of people to work in the various branches in the nation. Firms with high numbers of employees face challenges of monitoring the performance of individual employees in the company. This is in contrast to other small companies that can monitor their employees to ensure quality work (Academy of International Business et al., 2009). Opportunities Orientation process benefits the employee. It makes them feel one with the company and therefore helps them to integrate in the working system. They are able to know how the company operates and it gives them the eagerness to begin working. The positive feeling from the start translates to good performance which boosts the company development. This is an opportunity that the company can exploit in order to continue the success of the company. The company can fund several students and when they are done schooling they employ them and deduct the money on the individuals’ salary and therefore this creates loyalty of the employee. They know that that they owe the company and therefore they cannot leave work until they finish paying off the debt. Moreover, the employee will feel so grateful of the opportunity to leans as well as the employment opportunity and therefore do the work with vigor (Plesničar & Zaletel-Kragelj, 2010). Threats The company experiences stiff competition for the construction and refurbishment services Within Derby and Bolton from Tarmac Ltd, Kier Group PLC and the Barratt Developments PLC. Further, the company faces competition from the companies that use the most modern technological equipment in meeting their service objectives. This means that Seddon will have to stretch its resources and buy modern equipment including heating and lighting solutions, hydraulic breakers, concrete compaction and preparation tools and mixers whose cost is projected to be higher than the cost of acquisition of current equipment. Analysis of the Internal and External Environment Existence of any company reacts to factors within its wall and outside. The factors within its wall are known as the internal environment while those outside its wall are known as the external environment and both influence the objectives of the company and its strategic plans. External environment External environment include the following factors: Level of competition Seddon Company is one of the construction companies in the UK. There are other companies that give same services as the Seddon Company and products identical to those that Seddon produces such as Tarmac Ltd, Kier Group PLC and the Barratt Developments PLC. Thus, Seddon faces competition in the level of control of market share, as the competitors offer related and substitute services of standard quality and affordable prices. This creates a degree of competition that Seddon Company has to deal with to make gain competitive advantage through price regulation, high quality but affordable services and maintaining effective customer relations. Political factors When the political factors are good the company will end up to be advantaged but when the political factors are not appealing, the company may be disadvantaged leading to great losses. For example, when the government decides to subsidize putting up of new structures, it means that companies such as Seddon Company benefits a lot through reduced costs of production. This enables the company to therefore invest in quality thus gaining customer preference in the market which translates to increased sales and subsequent profits. Ethical standards Ethical standards are the set codes for operation of a company. They entail what a company is allowed to do or what it is not allowed to do. They affect the company’s operation and how it relates to other companies, as well as individual. For example it is against the code of ethics for a company to brand its product using a name of another company without their consent. Also every company is expected to treat all customers with equality despite their race or the products they come to purchase. Seddon Company adheres to such ethical conducts and this has seen its success over the years. Social factors The behavior of the community is influenced by their beliefs, customs, norms and their religion which differ from places to places. Nevertheless, social factors have a major impact to the success or failure of a company. This is because social factors influence consumption. The Seddon Company produces goods and offers services that after effective market research with market expectations and in agreement with the beliefs and norms of its market. This implies that the company understands the demand patterns and market trends. Technology Technology influences the pace at which productions occur and affects the product innovation because better technology results in better products. Seddon Company uses technology to ensure that they produce up-to-date and technologically relevant goods which meet customer expectations. Economic factors Economic factors are factors that affect the company in the economy. There are various factors that determine the extent to which a company makes profit or losses. These factors include general demand and in the case of Seddon Company, many people are interested in their products due to fair prices they offer. This is seen in the continuous and ever growing net profit realized in the company that ranges above $200,000 per year. This shows that the services offered have reliable demand and market. Internal Environment The internal factors include: Company policy Guidelines given in a company to address different circumstances are known as the company’s policy (Elearn, 2012, p. 25). The company has various ways of addressing different situations that arise. This policy governs the behavior of the employees, as well as the managers. The company policy gives a clear picture of how the company is. Formal structure Tasks are assigned differently in Seddon Company. The way the tasks are assigned in a hierarchical manner is what is described as the formal structure. Assigning of who does what is governed, mostly, by professional qualification. If a person is assigned something they are not qualified in, it affects their performance, as well as the success of the business. The culture of the company The company has a way of doing things that is original to them and differs from one company to another. The company’s culture determines the desire for employees to go on working in that organization. This is because it affects the relationship employees have with other employees, how they are supposed to relate with their employer, as well as the client. Efficiency level of employees Employee’s level of efficiency contributes a lot to the success of the company. Where he employees are reluctant, the quality of the produce drops but where there are vibrant employees, the quality of product rises (Johnson, Scholes & Whittington, 2008). Seddon has experienced increasing net value of its products with the adoption of the programme dubbed ‘Grow Your Own’ which has seen the employees adequately motivated to offer quality services which realize quality goods and services to customers. Potential New Strategic Options for the Company With the company’s strategic plans already in place, there are a few other strategic plans that it can exploit in order to add on to its success. Opening more branches in other places, especially remote places such as developing African states which are undertaking construction is likely to increase the company’s returns due to increased sales and profits. This can add on to the success of the business. Since there are no many companies willing to venture in such places due to risks involved, Seddon Company will supply consumers with minimal completion in place. Extending the company’s link within the key technological centers will allow the company to expound its technology and improve the quality of its products. It will also ensure efficiency and a lot of work is done in a short period (Johnson, Scholes & Whittington, 2008, pp 42-65). Appointing a commission to monitor the performances of the company is also significant. Since the company has a lot of employees, it is difficult to monitor and evaluate the performance of one employee. Therefore, as a way of ensuring that no employee is reluctant on their job, they can employ commissions for this task. The commission will monitor every person and keep performance of each individual. Those found to be underperforming are relieved of their duty and other better performing individuals are given the tasks. The company has to incur additional expenses related to employee performance monitoring committee and activities. The program is likely to enhance the effectiveness of labourers as they work with the awareness of being under watch. However, such a step must be explained to the workforce to avoid defiance from employees. The Seddon Company can improve on its advertisement by strengthening its presence on the web because many people in the current society spend a lot of time on the web. The Seddon Company can also form alliances with other companies situated in areas with potential market demand for its goods, or those that deal in related goods and services such as Kier Group and the Barratt Developments PLC in order to grow even further. For example, it can offer its brand name to other companies as long as they supply their products to them or get a good percentage of the profit the company makes. With this, the name of the company will dominate the market and the company will make a lot of profit. This will be an effective step if the brand name is sold to a firm in a region where the services and goods of Seddon Construction Company have gained popularity and customer preference in the market despite lack of a branch to adequately meet the market demand for its goods. Evaluation of the Options and Recommendations The Seddon Company is a well-known company that has been in existence for a long time. Several strategies in place have placed Seddon in the position it is to date but times and seasons are changing. Therefore, there is need to embrace new strategies as in the discussion above on new option and strategies. The company has a solid base to start venturing into remote places and performing well. Due to lack of adequate demand and ready market for construction services, there are fewer construction companies in rural settings. People in rural and remote areas may therefore lack adequate resources to build structures. This might compel them to seek construction services and goods from cities and towns. This discourages them from building nice structures. If the Seddon Company sets up branches in such areas, it not only benefits the people but realizes increased returns out of increased sales. It will also be creating more employment opportunities for those working in the construction sites hence improving on the living standard of the people through increase in the labourers’ incomes. Adoption of modern and appropriate construction technology by far is the leading contributor of many successful companies. Technology will help them design the building materials in different ways as desired by clients. This will lead to customer satisfaction and when the customers are satisfied, they will continue to use the products of Seddon Company and hence the company will develop permanent customers. Production of unique goods and services out of enhanced innovation and creativity may reduce the level of competition out in the market (Cartwright, 2002 .p 42). Therefore, the company is bound to make a lot of money and reduce competition if they produce goods and services that have not been introduced in the market. Their employees will always have an easy time while working to deliver their best. Employing of a commission to ensure the degree of performance for the employees is at its best will boost the quality of services offered. This is because the employer will fear being discontinued, and therefore, will endeavour to please the customers at all times. With this, they will go to extents of coming up with products that are new in the market. Internet is one of the best medium of advertising products. It cuts across all groups of people. There are different sites where people can view the product advertised. It reaches many people and is easy to get feedback from them. It also makes communication with people living in various places far off easier. Therefore, this adds on to the success of the company. Forming alliances is a proved way of strengthening a company. There is more than one way in which the companies get to be advantaged and therefore, this will add on to the success of the company. Conclusion Thus, Seddon Company has exploited a wide market dealing with a wide variety of products that reach a wide market. By so doing it captures the attention of many clients. The company has over years operated on several strategies such as promoting their product, retention of employees, reducing prices on the products and training. These strategies have seen the success of the company. It faces several challenges like monotony of the workers due to their retention policy. The company still has to deal with external, as well as an internal environment. The external environment surrounding the company includes politics, economic factors, social factors as well as the technology. The internal environments that affect company include the culture of the company, formal structure and the policy of the company. There are some strategies that have been suggested that can aid in development of the company. They include employing a commission to check on the performance of the employees, forming alliances and creating more presence on the web. All these will improve the quality of the company. References Top of Form Academy of International Business., Ibeh, K., Davies, S., & Palgrave Connect (Online service). (2009). Contemporary challenges to international business. Basingstoke [England: Palgrave Macmillan. Cartwright, R. (2002). Mastering marketing management. New York: Palgave. Bottom of Form Bottom of Form Construction Services, Property Maintenance and Building Refurbishment (2015). Retrieved from: http://www.seddon.co.uk. [Accessed 12 March 2015]. Top of Form Elearn, . (2012). Business Environment Revised Edition. Hoboken: Taylor & Francis. Jenster, P. V., & Hussey, D. E. (2001). Company analysis: Determining strategic capability. Chichester: Wiley. Bottom of Form Johnson, G., Scholes, K. and Whittington R. (2008). Exploring Corporate Strategy. (8th ed.). Harlow, Financial Times Prentice Hall. Plesničar, A., & Zaletel-Kragelj, L. (January 01, 2010). SWOT analysis. Methods and Tools in Public Health, 809-820. Appendix (A) SWOT Analysis Strengths These are things that add value to Seddon such as: Distinctiveness Innovations A good Location Good Administration Powerful product quality Reputation Conveniences Weaknesses These lead to lose of value and include: Poor location at range Poor reputation Inexperience Low distinctiveness Controlling a wide business territory. Opportunities Opportunities can be the upcoming markets such as joint ventures, mergers, strategic alliances with the other local & global retailers Threats Threats include price wars, new competitors, innovative competitors, taxation, and competitors with improved distributions. (B) PESTLE Analysis Read More