Products and Services Offered by Speedy Hire Plc Company - Essay Example

Contents A Detailed Analysis to Company, its products, and Industry Marketing is a very interesting and important activity within an organization as it not only determine the revenue generating activities within an organization but comprehend many important activities on much larger base. On strategic level, Marketing therefore encompass many important activities of strategic nature which organization undertake in order to take advantage of the existing conditions in order to gain competitive advantage to successfully function in a complex and more competitive market conditions. The company which we are going to discuss in this work is Speedy Hire Plc- a UK based company engaged into hire business of equipments and tools. Founded in 1977, the company is one of the leading businesses in UK to provide hire business. This company offers products which are business to business in nature. “The Group was traditionally focused on tool hire, but now also has complementary businesses specializing in portable accommodation, lifting, surveying, compressed air systems, pumping and power generation equipment.”(Speedy Hire Plc, 2008). The major products of the company include access equipments, drilling/breaking, Gardening, Fencing, Cranes and other earth movers etc. Speedy Hire Plc work in UK which has relatively stable political environment. Considered as a secular country with strong market orientation, UK is currently experiencing slight slow down into its economic activity mainly due to subprime crisis and there is a possibility that housing markets, on overall, may cool down thus reducing the demand for hire industry however, market for the hire equipments were growing as the growth in the market during 2006 has been 6.6% whereas 2007 estimates are 121.5 GBP. The growing inflow of the immigrants into the country has increased the requirements for the housing sector in the country and the reduced cyclicality has allowed companies to anticipate the market trends more effectively. Companies including Speedy Hire Plc within this sector is continuously relying on the information technology therefore there will be increased dependence on technology in the future also. Legal environment in the country is favorable. Environmental concerns for companies are increasingly becoming a burning issue for the hire industry and it is believed that companies successfully addressing environmental issues will competitive advantage in the future. The company has two major divisions of equipment hire and tool hire. These two divisions then offer products mentioned above through various geographical network of stores. Company also possesses a modern fleet of vehicles which help it a lot to facilitate the transportation of heavy machinery to its customers. Further, analysis of the company would also suggest that the company is in growing phase and is considering the diversification of its business areas like car hire etc. The Inbound logistics activities of the company include receiving, storing, inventory control and transportation of these inventories. As discussed in the case, Speedy Hire has a large network spread all over the country with many depots giving it enough infrastructural advantage to store, receive and manage inventory control. Operations of the company are divided into two main divisions with supporting activities distinguished according to the geographical location and equipment specification. Company’s tool hire division operations are segregated according to the geographical locations whereas the equipment hire division operations are segregated based on the equipment specification. Outbound logistics of the company include various depots and stores besides a modern fleet of more than 1800 vehicles which help company to reach its customers. Its modern fleet is also considered as its most differentiated aspect of doing business also. Company operates an integrated marketing approach which allows it to be closer to its customers. Not only this, company has been able to develop mainly through its marketing activities and by improving upon its service delivery as well as continuous development of its information technology framework and highly motivated human resource base. The Hire industry in UK is considered as one of the growing industries in the country and is considered to be in growth phase. The continuous inflow of immigrants into the country provides a very strong and lucrative market for the construction activities in the country. The increased population of the country therefore has increased the demand for the new housing projects and since companies like Speedy Hire provide business to business services, therefore the derived demand for their products are certainly going to increase too. One very important trend that has been witnessed into the hire market within UK is the fact that it is moving towards a consolidation phase. Traditionally, equipment hire and tool hire were considered as two separate business lines however, this distinction is blurring as more and more companies are offering both type of products. The increasing emphasis on environmental concerns is increasing the buying power of the buyers thus this force can be considered as more powerful and possess the capability to alter the competitive landscape of the industry. Since switching cost in this industry is low as the increasing consolidation and blurring of industry lines have given the buyers’ opportunity to prefer hire rather than purchase and due to the low cost of switching, there is a strong probability of threat from the substitutes. Since the industry is undifferentiated therefore there is a very lesser degree of suppliers’ power in the industry. Overall, the competitive rivalry in the market is high as changing buying patterns and the anticipated growth only to fuel the rivalry between the players in the market. The continuous growth of the industry coupled with strong shift in the consumption patterns of the consumers provide a very strong market for the companies like Speedy Hire Plc as customers tend to avoid incurring capital expenditures on purchasing such equipments and rather prefer to obtain them on hire basis. The following sections of the report would provide detailed academic as well as practical discussion about the products and services offered by the company. This will be done by keeping in view the strategic nature of the marketing as various strategic models will be discussed and analyzed with special emphasis on the products and services offered by the company. Marketing Frameworks Starting with a very humble beginning, Speedy Hire Plc is now considered as top company in UK for hire market and is listed on Stock Exchange. Speedy Hire Plc is a business to business company and operates through two divisions of Tool Hire and Equipment Hire. The Tool hire division operates through five regional companies with 235 depots whereas Equipment Hire division also operates through the five businesses with 126 depots. Over the period of time, company has made an organic growth and now considered as one of the major players in the market. The competitive landscape in the market is changing. The market historically remain divided into two product lines however this traditional demarcation is changing and market seems to be consolidating. The increasing environmental concerns and increased use of information technology are the two factors which are further pushing the competition to the limits. This further aggravates the fact that there are very low barriers to entry into the market therefore there remains a great threat of new entrants into the market also. Besides small players mushroomed at local level can be considered as bigger threat also. Marketing Mix – 4 P’s Considering the above information, Marketing is about satisfying the consumer wants and needs and in that process, organizations tend to achieve their strategic objectives also. (Proctor, 2000). In order to successfully achieve the results, organizations tend to apply various strategic frameworks. 4 P’s are among few of the marketing frameworks which are being used extensively by the companies and are considered as one of the fundamentals in Marketing. Thus the marketing decisions generally fall into following four categories1 1) Product 2) Pricing 3) Place 4) Promotion Product A product within marketing mix mention about the product features, its quality as well as quantity in which it is offered. (Vignali, 2001).Product or service offered by any company provides an opportunity to the company to build its image in the market. This image is therefore further reflected into the perception of the consumers regarding the product or service being offered by the company. As discussed above that Speedy Hire Plc is one of the best companies in UK in Hire sector clearly identifies the perception and image of the company and its products in the eyes of the customers. Since, we have already mentioned the kind of products offered by the company and nature of its operations i.e. B2B therefore company offers generic products to its customers. The main features of the products include that they are usually used into the construction business whereas the tools which are let by the company can be used for various purposes in Do It Yourself activities. However, the main feature of these products is the fact they are manufactured keeping in view the utmost safety concerns of the users. Pricing Pricing decisions involve that how many customers are willing to pay for the product and how the pricing should decided upon based on the existing and potential target market of the company. Speedy Hire being one of the leading businesses in the country offer competitive pricing. From the available information on the website of the company, its pricing policies are not explicitly mentioned however based on the available information; it seems that due to increased competition, company offers competitive pricing. Place In order to effectively decide upon the distribution channels for delivering the products, firms must need to understand that whether the firm is willing to directly sell to the consumers or involve middlemen in the process. Placement decisions involve as to how firm decides to reach to its customers. Thus distribution channels in their essence are the means of getting to the customers. Speedy Hire has a presence in UK, Ireland as well as Europe. Its tools hire division delivers its products through several of its depts. Scattered geographically across the regions where as equipment hire division operates through depots that too are scattered all across the region. Promotion Promotional activities of the firm include its sales generating efforts, publicity, advertising, discounts, etc. Promotional decisions taken by the firm often carry more of a tactical significance rather than of strategic significance and outline that the organization must take into account various competitive factors into account while deciding upon the design of promotional activities.(Davies,1992). One of the strengths of the company is the fact that it operates an integrated marketing approach with strong communication between the company and the customers. Products are offered with training being offered to the customers in terms of the safety issues related with the operations of the equipments and tools rented by Speedy Hire Plc. SWOT analysis In its essence, SWOT analysis is a very simple tool of assessing the strengths, weaknesses, Opportunities and threats of the organization. However, deep down its one of the strongest strategic tools which if applied correctly can provide many strategic insights into the company’s internal and external environment. One of the basic assumption behind the development of SWOT as a tool is that it assumes that managers can plan the alignment of firm’s resources with its environment (Novicevic, et al, 2004). Based on the information extracted from the various sources especially website of the company, following SWOT is presented: Strengths: 1) Higher level of consumer acceptability in the market. 2) Mature company with stable growth patterns. 3) Large network of sales points 4) Modern fleet 5) Strong marketing efforts. Weaknesses 1) Segregation of business on two lines only may create management problems. 2) Not so developed information technology set up. 3) Reliance on road transport as the only mean of transportation. Opportunities 1) Online business may provide high growth avenues to the company. 2) Diversification into other areas such as car hires may provide new avenues of business. 3) Increasing inflow of immigrants. Threats 1) Low cost producers mushroomed across various geographical areas. 2) Low cost of entry into the market. 3) Threats of internet companies. ANSOFF Matrix Developed in late 1950’s. The ANSOFF matrix is one of the most important tools for business to decide upon their growth strategies. (www.mindtools.com,2008). It provides a quick and simple way of deciding upon the growth strategies while working into any industry or sector. However, there are various arguments against ANSOFF Matrix as the basic means of addressing the growth of the business. The main argument that is often put forward is the basic difference behind the dynamics of the small and large business. ANSOFF Matrix does not take into account different dimensions of dynamics behind the growth strategies being adapted by both small as well as large firms. (Watts, Cope,Hulme, 1998) ANSOFF Matrix provides four important and different growth strategies in terms of existing products and new products and existing markets and new markets. These four strategies include: 1) Market Penetration 2) Market Development 3) Product Development 4) Diversification The market penetration strategy outline that the firm tend to further capture its existing markets whereas market development strategy necessitate that the organization tend to develop new markets. Product development also entails the development of new products whereas diversification requires that the company must look for other business areas also. Considering the information provided in the case study, it seems that market development can be an ideal strategies for Speedy Hire Plc to pursue. Though Market penetration is also a viable strategy as UK market is anticipated to grow however considering the low barriers to entry and high prospects of growth in markets other UK, there is a strong chance that Speedy Hire can develop markets in Australasia and rest of Europe. Firm has strong fleet therefore transporting equipments and tools from one place to another is always its strength therefore it would be ideal for the firm to look for market development and look for Greenfield projects outside UK to capture better growth prospects. Conclusion Considering the above analysis made, it is very evident that the company has been able to maintain and keep intact its existing markets through various means. Products that are offered by the company are well respected, have a well developed market as well as mature. Speedy Hire Plc works in an industry which is largely undifferentiated therefore the probability of offering the differentiated products to gain the competitive advantages is remote. Similarly cost structures are more or less same and what distinguishes Speedy Hire from other competitors is its ability to focus on delivering value to its customers. Speedy Hire’s ability to spot the areas where demand is higher provides it opportunity to deliver better services. Thus strong promotional activities, better distribution channels and market penetration strategies adapted by the firm have provided its products a ready market to explore with strong potential for market development. References 1. Speedy Hire Plc. (2008). Home. Available: http://www.speedyhire.plc.uk/. Last accessed 29 May 2008. 2. Proctor, Tony (2000). Strategic Marketing: An Introduction. London: Rutledge. P-2. 3. Net MBA. (2008). Marketing Mix. Available: http://www.netmba.com/marketing/mix/. Last accessed 29 May 2008. 4. Vignali, Claudio. (2001). McDonald’s: “think global, act local” – the marketing mix. British Food Journal. 103 (2), pp: 97-111. 5. Davies, Mark. (1992). Sales Promotions as a Competitive Strategy. Management Decision. 30 (7), 10. 6. Novicevic, Milorad M., Harvey, Michael, Autry, Chad W,Bond III. (2004). Dual-perspective SWOT: a synthesis of marketing intelligence and planning. Marketing Intelligence & Planning. 22 (1), Pp84-94. 7. www.mindtools.com. (2008). The Ansoff Matrix. Available: http://www.mindtools.com/pages/article/newTMC_90.htm. Last accessed 29 May 2008. 8. Watts, Gerald, Cope, Jason, Hulme. Michael. (1998). Ansoff’s Matrix, pain and gain. International Journal of Entrepreneurial Behaviour & Research. 4 (2), 101-111. Read More