Management Applications: Stone&Ceramic Ltd - Essay Example

stone & ceramic Ltd. Management Applications 2 3 5/10 Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Background 4 Philosophy 5 Organisation Structure 6 Operations 7 Marketing 9 Competitive Strategy 10 Profitability 11 Health & Safety and Environmental Policy 11 Conclusion and Recommendation 12 Bibliography 14 Executive Summary This report is based on the study of Stone and Ceramic Ltd. which operates as a Specialist Contractor in the commercial sector of the Construction Industry. It is, as the name suggests, the supplier of all types of hard floor/walling materials, detailed and installed directly by the organization’s staff. The study attempts to understand the philosophy, operations, marketing, profitability, competitive and environmental aspects of the organization. It is found that Stone & Ceramic Ltd.’s major efforts are directed towards retention of existing clients. Its philosophy also echoes its commitment to ensure repeat clients. It is strong in operations and committed to quality. However, it makes no active efforts to create a brand recall of its products. It does not opt for any visual advertisement – print or media. Its organization structure is divisional in nature and it pays due attention to the environmental security and safety of its employees and non- employees. It is recommended that the company should pay more attention to advertising. It should launch itself into billboard and newspaper advertising which are cheaper and efficient ways of advertising to create brand recall. It should also make use of its website to spread the word of mouth. A major limitation of this project is the unavailability of the financial data. Inspite of repeated attempts to procure the data from the organization, the authors of this report were unable to fetch any data beyond 2004-2005. Introduction The report presented here concerns with the detailed study of Stone and Ceramic Ltd. which is based out of London, UK. The report aims at highlighting particulars of the company with respect to its marketing, operations, finance and environmental aspects. It encompasses the background/history of the company, its present activities and its future business plans. Stone & Ceramic Ltd. Background Stone & Ceramic, previously known as Aztec Stone Ltd., was established in January 2002. The company is a merger of two principle trade contractors from the Stonework & Ceramic industry in UK. Stone & Ceramic Ltd is involved in the design, fabrication, supply, installation & maintenance of natural stones, porcelain, mosaic, ceramic tiles & slab format. It has supplied its products and services in various business sectors such as transportation, hotels, residential, commercial, government, leisure, refurbishment and retail. Its exposure to various sectors speaks for its vast range of products/services. The company has successfully discharged 392 projects so far in different sectors combined. Philosophy Stone and Ceramic’s philosophy of work is quality job in the trades of stonework and tiling so as to retain majority of clients. Their ‘objective is to develop into a Specialist dual trade, (Stonework & Tiling) Contractor that operates in the mid to high sector market for Primary repeat Clients’ ( Stone & Ceramic Ltd., 2009) The company’s rationale is: higher the retention of clients, stronger the reputation/goodwill of the company in the market which would result into further expansion of business by new orders. To achieve its stated objectives, the company strives to make its contracts comprehensive enough to convey the range of services offered and maintain an acceptable clear price for the works in the contracts. It makes efforts to honour the contracts as per the agreed quality and time. The company believes that the contracts should reflect their professional approach and attitude so as to ensure close working relationships. ( Stone & Ceramic Ltd., 2009). By working towards its objectives, the company ensures the retention of majority of its clients. Organisation Structure Please find below the organization structure of Stone and Ceramics Ltd.: Stone & Ceramic follows Divisional Structure approach. As illustrated in the figure, there are three divisions in the organization: Marketing, Operations and Finance which are headed by the Senior Estimator, Contracts Director and Accounts manager respectively. The advantage of this type of structure is that it ensures accountability and focus on outcomes with respect to each division. The divisions have the responsiveness, the accountability and the benefits of specialization. They also have the benefits of large size that allows economies of scale in planning and execution of core activities. The organization states that its staff members are ‘reliable, well trained and disciplined’ ( Stone & Ceramic Ltd., 2009). It provides the staff with grass root training and apprentices, CITB registration and Manager Awareness courses. It places a lot of stress on training since it believes that training is paramount to the present and future success of the organisation. Operations Stone & Ceramic Ltd is involved in the design, fabrication, supply, installation & maintenance of natural stones, porcelain, mosaic, ceramic tiles & slab format. It imports its major raw materials from multiple countries throughout Europe such as Greece, Germany and Italy. The company sources Natural stones from various corners of the world from Wales to China. Their classifications are broken down into 8 denominations (Granite, Sandstone, Quartzites, Slate, Limestone, Travertine, Marble & Green Marble). Installation is typically mechanical (walling), sand & cement bedding (flooring) and adhesive fixed (floors & walls). The company also provides Composite stones which give an option of multitudes of colours, glasses, mirrors and aggregate choices. Technically known as Resinous Agglomerate, the natural aggregate stone is either Marble, Granite or Quartz base. The production is highly technical with large formwork blocks produced and cured under controlled conditions. Due to popular worldwide demand, average lead-in time is 6-8 weeks. The company’s product portfolio also includes Mosaic which is used to source smaller module of materials which are generally available in larger formats, e.g. glass, porcelain, ceramic & marble. However, this material has an inherent vice of slight twisting and chipped tesser; both are an acceptable part of this product. Ceramic tiles are widely used both domestically and commercially. The company mainly sources ceramic tiles from Spain, Portugal & Italy. Low production cost of this product has been a major factor for it being preferred over other varieties. With a standard red or white biscuit and overglaze technique, virtually any pattern/design is achievable. However, the company recommends this product for soft foot traffic only i.e. bare or socked feet (e.g. hotel bathroom) and for any internal wall application. Porcelain offers a re-creation of natural material that will, after the technical process, be both functional and durable. This is something that the biological products could not offer as guaranteed characteristics i.e. bending strength, water absorption, shock resistance etc. It is excellent in resisting wear which makes it a preferred choice for commercial buildings e.g. airports, offices, shopping centres etc. Stone & Ceramic’s bouquet of services consists of concept - design - scheduling - fabrication through to the final installation. Lead-in time for design approval and fabrication, from appointment, is 4 weeks and 6 weeks respectively. Fabrication is customising the product to meet customer’s needs/requirements. Thus, it not only offers its standard products but also customises the products, as per client requests, with regard to finish, choice of material and awareness of variation in shading & veining/fissure content. Stone & Ceramic tries to ensure that its product and services meet the quality standards expected out of it. An example of their quality work is the Quality Award awarded to them in 2009 to commend the job done by them at Aybrook Street Penthouses, London. It was also awarded The Tile Association Award 2006 for "Best use of tile in a construction contract" for its works at 199 Knightsbridge. For drawings and measurements the company uses the following: Plotter Printer, Brother Reader, SAGE, Job costing package, AutoCAD and around server. Delivery is directly done to the construction site in order to cut upon transportation expenses. Marketing The marketing mix of Stone and Ceramics can be analysed in terms of 4 Ps as given below: Product: The company understands that finally it is the quality of the product which can help it retain its clientele. Hence, it emphasises on toeing the contract line and delivering, as far as possible, exactly what is promised. However, Stone and Ceramic operates in a sector in which product differentiation almost doesn’t exist and the deliverables are highly dependent on external factors due to global nature of the business. Price: Stone and Ceramic contrives to win the tenders by least price bids. Since product differentiation is not possible in the category in which it operates, it tries to keep prices on a lower side so as to enhance business. They also price the services similarly (least till it is profitable), although they try to maintain the quality of service as per the contract requirement. Place: Currently, the company makes its sales only through its office in London. It has a website also but that is only informative in nature and orders cannot be placed through the website. It sells directly to clients as well as to contractors and architects. Currently it is not making use of any agent for sales. Promotion: Stone and ceramic Ltd. does not indulge in outdoor, broadcast, or covert advertising. However, it is a member of The Tile Association, UK and the Stone Federation, Great Britain. Being a member, its name is recommended by the organizations to the clients who are looking for a supplier of a profile that matches with the profile of Stone and Ceramic Ltd. It is also promoted by ‘word of mouth’ by its existing and past clients. After studying the marketing mix of Stone & Ceramic Ltd., it is found that it is not aggressive on promotion of the product and has not tried newer channels of sales such as internet and trade expos. However, it prices its products/services competitively and tries to maintain the promised quality which helps in retaining clients but does not contribute much in garnering new clients. To help improve sales figures, it could approach agents as a new sales channel and work with them to improve the sales figures. Competitive Strategy Stone & Ceramic Ltd strategizes to tackle competition on the basis of price. Its low pricing enables it to make its mark in a generic industry. The company is able to charge low prices because of the following factors: Not resourcing multi-trades Internal co-ordination between disciplines Offering combined packages (for reduced supervisory rates) Profitability The annual turnover of Stone & Ceramic in the end of July 2004 was in the range of 7 million pounds sterling. It grew by 28% in the following year and its turnover reached 9 million pounds sterling in the end of July. However, their annual turnover figures for the following years are not available which acts as a constraint on doing profitability analysis of the company. This becomes a limitation of this project. Inspite of repeated attempts to procure the data from the organization, the authors of this report were unable to fetch any data beyond 2004-2005. Health & Safety and Environmental Policy Stone & Ceramic Ltd. is actively involved in developing site awareness of Health & Safety issues; right from the conception of the Method Statements, COSHH and Risk Assessment, through to conveying important information to the operatives on site. All the procedures are monitored, followed and recorded. The Health & Safety policy is a set of six points which reiterates the company’s commitment towards the good health and safety of its employees, non- employees (such as visitors in the work arena) and to meet the statutory requirements pertaining to health and safety in an efficient and responsible manner. The company is also committed to a sustained environment which is evident from its environmental policy. Its Environmental Policy, a nine point statement, states the measures taken by the company to minimise any adverse impact their services may have on the environment. Some of the major steps taken are given below: 1. Implementation of our Environmental Management System, and to continually improve its performance against objectives and developments in environmental legislation and guidance. 2. Effective application of its quality management system designed to satisfy the requirements of EN ISO 14001: 1996 and providing a framework for establishing and reviewing its environmental objectives. 3. Providing effective training to all the staff to help safeguard the environment & prevent pollution 4. Maintaining an accurate knowledge of and complying with all relevant environmental legislation, requirements, best practice and guidelines. Conclusion and Recommendation From the details mentioned above, it can be safely deduced that Stone & Ceramic Ltd. is not a very aggressive entity in terms of marketing its product. It relies more on the word of mouth and accolades to attract new business. Its major focus is on operations i.e. the process that goes into manufacturing the product and providing services. It always pays to be quality conscious. However, it would pay more if the customer is told about this attribute of the company. Since the industry is generic in nature, it does not leave much scope for product differentiation. Thus, it is advisable that the company attends to the demand of active promotion of its products and services. The best way to do so would be to make their name visible through billboards and newspaper ads. The billboards should be located at regular distance interval with fifteen kilometres radius of the Woolwich area (where the office is located). Advertisements should be placed every week in a widely circulated daily for a period of minimum three months. These measures would enable the company to create brand recall in the minds of the prospective customers. Since Stone & Ceramic Ltd. relies more on word of mouth, on its website, it should post positive comments from its existing/past clients about its work. This would encourage the surfer to consider confidently the products/ services of the company. It can also make use of agents to increase its sales figures. On the product front, the company could look into expanding its current range of products (such as introducing glass tiles and 3D tiles) or it could even look at selling the same product along with warranty. The same is being practised by few of the well known tiling companies in UK market such as F. Jones Cleaveland. It is providing a ten year warranty on its granite works (TSJ, 2010). The divisional structure of the organization appears to be suitable for the company since it enables specialised focus on the core job of the division. The company is strong in operations, although its product range is quite traditional one. It does not actively involve itself into innovation/research and thus lacks the first mover advantage. Due to generic nature of the industry, even a small innovation could make a big difference to the product. Thus, it is recommended that the company invests in research to improve the quality of its product/services. Overall, inspite of already being a growing concern, the company has lot of potential to become still bigger. It should work upon its brand building so as to take full advantage of its quality deliveries. Bibliography Stone & Ceramic Ltd. (2009). Mission. Retrieved May 7, 2010, from Stone & Ceramic Ltd.s Website: http://www.stone-ceramic.co.uk/mission.asp TSJ. (2010). News in Brief. Retrieved May 9, 2010, from Tile and Stone Journal Website: http://www.tileandstonejournal.com/archive/tsj_june09.pdf Read More