Business Strategy Formulation: Kiddles Company

1. Please explain your rationale for choosing the following

Allied Company (parallel real world company)

Name of Company (Your own - what you are creating)

Type of domain (Products/ services your company wishes to offer)

Customers (Type of customers your company will cater to)

Choice of strategy for your company (e.g. low cost leadership/ differentiator)

2. Who are the critical stakeholders for your organization? Show the pie chart, explain why and how will you cater to their needs, also assess the priority of stakeholders whose needs you will assess and not assess.

Please give detailed explanations to these.

3. What kind of general and specific environmental elements will impact your organization? Show a visual representation (description of elements and connections between them)

Use these to explain the Environmental Uncertainty (complexity, dynamism and richness) your organization will face.

4. What are the critical roles in your organization?

Where would these fit in the Mintzberg's configuration (Strategic Apex, operating core, middle line, techno structure or support staff) - Explain your rationale for placing the roles in these parts.

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What structure would you like your organization to follow - choose an appropriate framework from the following to explain why this type of structure would suit your organization the best.

Organic or Mechanistic

Mintzberg's structural types

Functional, Divisional, Network or Hybrid

How has the elements discussed as part of points 1, 2, 3 lead to what you would describe in the selection of your structure?

KIDDLES

Kiddles is a company that is into the FMCG industry for infants. The primary markets it is catering to is the infants and children aged below 36 months.

This company is modelled on an inspiration of the Johnson & Johnson. To delve into the rationale behind choosing this market is, the urbanization of the country. From a very long time India's population remained in villages in close-knit communities where young parents usually lived with a joint family and the aunts, grand parents in the house used to take care of all the needs of the newly born baby. But with the urbanization many of the young parents have moved to the cities and the fabric of joint family is being replaced by the nuclear family structure. Therefore, it becomes hard for the parents to take of the baby's needs all her by themselves. At this point, Kiddles will come into picture with its super absorbent diapers and wipes which will make the job of the mother easier by reducing the frequency of cleaning the baby whenever it relieves itself.

Also with the number of women in the workforce increasing, coupled with an increase in the affordability of the nation as a whole, the baby product market is in a boom and certainly there is a chance that new players can be accommodated. Hence, to make use of these factors, Kiddles has come up with a range of mild products suitable for the babies.It has multiple products on its portfolio. It is serving the needs of the babies' diapers, wipes, talcum powder, oil, moisturiser and other products that parents of infants tend to use.

Though the end consumers will be the babies, in this case the customer is taken as the parents since the products are bought by them for babies. We are targeting parents who are in the age group of 20-35 years and in the urban and semi-urban areas with an annual family income of more than 1.5 lakhs. We have chosen to cater these segments because in most of the rural India though the affordability has risen in the past few years it still has not reached that standard where the parents' willingness to pay much for the baby FMCG, will make our transaction costs involved in conducting business there viable.

Kiddles has decided- to opt for the cost leadership model as it feels that by building the facilities that produce the product on an efficient scale and adopt practices with the least waste, improve its operational strategies on experiences continuously, it feels it can carve out a niche for itself in the baby FMCG market.

After analysing the many available organization structures one can adopt, we fixated on the product division structure. We believe that best fits the goals and current size of the organization. Since we are offering multiple products, manufacturing them in the same manufacturing unit will prove to be difficult. Hence, we broadly divided the manufacturing into two different divisons. One division solely concentrates on the diaper and wipes since these require high volumes of production and will be relatively consumed quicker than the other products. They also vary significantly in the machinery involved and the space required. The other products are clustered together and they can be manufactured under one division. This layout will ensure more horizontal differentiation of the business with a divisional manager incharge of each of the two divisions. The control also increases as this is a manufacturing process and which needs continuous monitoring for deviations from the prescribed procedures.

The manufacturing divisions will be headed by a divisional manager who will report to the senior operations manager who again directly reports to the CEO. At the senior management level we have four branches, namely finance, operations, marketing, R&D each headed by a senior manager. The product division managers will be responsible for the inventory management, process improvement, quality, output.

Both these division will be supported centrally by the support functions like the finance, marketing and R&D. This will reduce the costs of having a separate support teams for each of the product divisions and also gives a greater transparency regarding each of these divisions. All the managers in the second tier directly report to the CEO.

As the strategy adopted is a cost leadership model this models helps us to identify the deficiencies in each of the product lines effectively and the centralized decision making will help implement the decisions quite quickly and efficiently.