Essay, Pages 10 (2398 words)
The organization that is considered in this report is Galaxy Star Trading (GST). Galaxy Star Trading Ltd was founded in 1989 in Nairobi, Kenya. Since then it has expanded significantly in terms of diversification of goods and services it provides. In 1994, GST came up with branches across Africa and operational offices in Asia. This strategic change was due to the growing market. GST is currently a dynamic company with extensive network throughout Africa and United Arab Emirates.
The company deals with goods and services including sale of Mobile phones handsets, electronic equipments for example, televisions and radios.
In addition the company deals with automotive spare parts and importation of new and used cars. Also the company deals in importation of new and used clothes and shoes. This reflects how the company is aggressive in its operation.
The vision for GST is to remain very competitive in the market and to expand in other regions that it has not. Its origin being East Africa it intends to dominate and lead the East Africa market by being the biggest import and export company.
In addition, its mission is to supply and maintain telecommunication equipments within the evolving global telecommunication trends and satisfy its client base through personalized and professional services.
Business Organizational Objectives
The organization aims to maximize the profits by reducing the costs. The company is doing this by streamlining its structure and the various facets. Hence the company does this by sustaining its self in the market by keeping an edge over its rivals.
The company aims to grow into multi international company by creating franchisees all over the world and it is to this effect that is ensures the profits are maximized so that it can have some extra money for expansion. In this regards the company ensures that it penetrates the market by opening at least one new branch every year.
The company aims to dominate the market and targets to start by dominating the East Africa market after which it aims to dominate the global market regardless of the stiff competition. In its endeavor to do this the company consistently builds a brand name using its name. It markets its products using the GST brand to ensure that the brand becomes a household name in East Africa. Its objective is to make it to be a leading brand name in Africa. This has seen the company spending a hefty percentage of their revenue in advertising to ensure that the brand is known.
For the company to survive in the contemporary competitive world the company has come up with strategic diversification program that ensures that the company embraces various cultural background and people of diverse origins. With a cocktail of all these elements the company is bound to dominate the market it penetrates only if it denotes an element of consistency in its marketing, advertising and the quality of services that it offers. In addition the company has diversified the goods that it imports and supplies so that it continuously has business and thus having revenue from all the diverse portfolios.
The company is influenced by both internal and external forces in its operation. The company’s operation has been influenced heavily by the shareholders who meet annually to contemplate on the way forward for the company. The decisions made during the meeting are eventually implemented by the management in the company. On the other hand customers influence the running of the company such that it is the buyer’s power that determines where the company has to market its products and where to expand to. Buyer’s ability to identify the brand, and brand concentration versus industry substitutes available influences the company’s decision and strategies (Kotler: 2005).
In the long run this makes the company compete with others in terms of pricing. For instance if the brand is the darling of the local community then the locals will not consider it’s pricing since they trust the product. This works perfectly well where there is high purchasing power by buyers. Buyers or customers influence the company trend such that they sell the company using a word of mouth according to the information they have and the knowledge they have from their experience about the products. In addition the expansion of the company is not only influenced by the buyer power but also by the buyer volume. The company in this case will tend to expand to areas where there is a large volume of buyers, for the sole purpose of increasing sales which will result to increased profits.
Employees have a direct influence to the company (Barrow: 1998). It is the employees that directly interact with the customers. At GST, not all employees are well trained in the various departments to handle customers effectively. This influences the company such that some customers who emphasize on professionalism tend to be lost through apparently mediocre services. It is to this effect that the employees ought to be trained so that they can be empowered to disseminate the company’s services in the most appropriate way.
Another factor that influences the company is the barrier at some entry points (Walter: 2006). This is as a result of some governments having some policies which are not friendly to foreign companies businesses. In this regard the company sometimes faces unfavorable economic and political favor by the local companies giving the foreign ones stringent measures making the company either to be kept out of the countries or go into the areas and get low profits. Another factor that influences the company’s expansion is the local community in which the company operates in.
The local community actually promotes the company by buying the company’s products thus showing the trust they have in the brand. Though this has a positive influence in the native country there is a negative influence from some of the foreign communities which feel that the company has brought about unnecessary competition. This elicits blackmail about the company which negatively affects the growth of the company.
Other factors that influence the company include fluctuations in foreign currency change and interest rates which sometimes see the company get low profits despite the high sales. Sometimes the company gets high threats from the inability to maintain good relationships with their partners in importing and exporting and thereafter leading to poor distribution of its products. This in the long run leads to poor supply of the company’s products thus low sale translating to low profits.
The functional areas that have the biggest impact upon the business achievement of its objective are the information technology area and the human resource area. The information technology area at GST is wanting and this affects information flow in the company which sometimes leads to lapse of information. The company has been lacking networked computers which thwart the rate at which transactions are done all over the company. This being a company with a goal of being a multi national company it ought to embrace full technology since it is the only way forward in the contemporary world.
For the company to thrive and attain its objective, it is planning to invest heavily on information technology. It endeavors to develop a website that will enable them to market their products globally. The lack of adequate technological advancement in turn costs the company an enormous amount of money. The company also has to train their employees on the advantages of information technology so that the employees do not feel as if the introduction of new technology is a threat to their employment.
The first step towards achieving this is to by establishing an IT department which will help in synchronizing the technology in the company. This change when it is accomplished GST will realize its main objectives of maximizing profits and growing all through the countries they operate in.
Another functional area that has an impact upon the business achievement is the human resource area. Though the company keeps its employees for the long term-which is a good thing- it ought to consider bringing in fresh people who understand the current markets and economy. The company has conserved these employees who have played a big role in resisting the change of technology for the fear of losing their jobs. This being a competitive business the company in this effect is sitting on a time bomb.
Schools of management evidence with this business
The company has a leaning of the Classical School of Management and Organization. This in the company is shown by the way it approaches its operations by considering the goals of the company and its structure. The employees of the company first are required to identify the objectives of the company and later on they are required to pick or undertake specific tasks. Thus with the identification of individual tasks the management and the employee breakdown the general tasks into several tasks in various departments or at different levels (Drummond: 1994).
These in essence are ideals of the Classical School Management and Organization. The impact of this school of management is great in the attainment of the business’s objective such that it enables or ensures that the employees and the management are focused towards the goals they have to accomplish. In this school of management coordination is done by defined levels which ensure that there is accountability, authority and responsibility (Drummond: 1994).
At each level and branch at GST, there is a leader who is bestowed by authority to ensure that every thing is done to the expected standards and thus shows how this organization leans towards this school of management. The greatest merit for this school is in this sense that it ensures that every one is focused towards the responsibility allocated to him/her failure to which one is penalized accordingly.
The Future of the Business
The future of the company depends on establishing their Information Technology. The company can thrive to greater heights if this is attained in the nearest future. For instance the company can buy its products on line and save the money it uses in sending their sales men to the various destinations to purchase whatever products. In addition the company can comprehensively market itself by developing a comprehensive and interactive website which will ensure that their customer buy their products easily and are informed about the products.
The company’s future is dependant on how the marketing department does a comprehensive marketing to its products. It should stamp a permanent trust to its product. This will in essence ensure that the buyers have total faith in the products and thus increase their sales. In addition the company has to regulate their prices so that it can compete with emerging companies offering similar services and products at a lower price.
The company therefore has to be more flexible and offer not only quality products but also subsidized. The company has to be very careful in its operation and ensure that costs are minimized because rivalry might lead to price cuts which will reduce profits to a very low figure. In this regard the company should not show complacency in the areas that it has dominated but instead market aggressively to outshine the presence of its competitors.
The future of the company is in consistently being ahead of their competitors. This can be done by improving features on their products, for instance coming up with nice packaging that will attract their customers. The company can also take advantage of their competitors by using the best distribution channels to their suppliers. For example by doing a comprehensive survey to identify areas that will require certain imported products and then coming up with supply stores in these areas.
In essence they should exploit their relationship with suppliers by ensuring that suppliers meet their demand for the products and their prices. By so doing the company’s future will be promising since it will be having a share of its market. Thus it will be on the right track in achieving its goal of market growth and expansion and becoming a multi national company.
To jealously protect their market niche, the company should come up with a strategy that will make a barrier to new entries in the market. For instance they should ensure that their prices are very low in the markets that they dominate so that when a new entry comes into the market, it finds it impossible to compete and at the same time make profits.
In addition the influence of the governments in the business expansion affects the rate of the company’s expansion and thus its future growth. In some countries, the company has been given stiff regulations by the governments. In this case the government aims at protecting the local companies against competition. The governments have barred competitions by granting monopolies in these countries. In other countries, government regulate prices and this having a direct negative impact to the company, it opt to stay out of the country. Thus the regulation of business and other legal procedures that are required by the governments affects the future of the company’s growth.
Other elements that appear to be having a direct impact to the future of the company is the company structure which is not properly defined. The company has to have a clearly defined structure which should ensure that all the departments within the structure are functional. In addition the future of the company is determined by its employee. Therefore the company has to focus on employing qualified manpower for it to compete effectively in the competitive business environment. Failure to have competent employees will result to mediocre services which will eventually turn out to be a threat to the future of the company. The company structure has to be synchronized to enhance information flow and its general operations.
List of References
Barrow, C. (1998) Business Management 5th Edition. London: Kogan Page Limited
Dewett, K. (2001) Modern Marketing. New Delhi: Ram Nagar
Drummond J. B. (1994) Managing Business Ethics. Oxford: Butterworth Heineman
Greg, M. (1991) Business Strategies. New York: Guilford
Kotler, P. (2005) Principles of Marketing. Cambridge: Harvard University Press
Mulgan, G. (1991) Communication and control: Networks and the new economics of communication. New York: Guilford
Sampson, R (1993) Companies and Environment. NJ: Prentice Hall
Walter, J. (2006) Word of Mouth Marketing: How Smart Companies Get People Talking. New York: Houghton Mifflin