Strategic management Essay
Introduction Making losses and not meeting set objectives are two issues that all organisations must be wary of. Goals are set to be met and therefore failure in meeting goals is a depiction of problem that are either in the organisation or in its operational environment; this can also be said of making losses which is failure to meet a key goal of any business entity which is making profits (Shim, Siegel & Dauber 2008).
It is therefore important for any organisation to be aware of its operational environment and the nature of its processes to ease the process of identification of threats and opportunities to ensure effectiveness in operations (Johnson, Scholes & Whittington 2008 p. 172). ,Entry into any industry segment is a complex process and should be based on factual information since failure in analysing the environment may culminate in the collapse of the business enterprise that may have been avoided had more emphasis been placed on the true nature of the environment (Arussy 2005, p.55).
The development of strategies that will ensure opportunities that exist in the operational environment are harnessed effectively is just part of daily logistics and operations. To ensure effectiveness all processes have to be effective and goal oriented (Bryson 2004, p. 56). Success in any business entity is not just measured by the profit margin an organisation achieves in normal economic times but can also be determined by the nature of their operations during financial hard times and their approach to crisis management.
B&Q Company has in the past being growing at a constant rate as it enjoyed a large market share due to the advantageous competitive edge it had established. Increase in competition as new players came into the market has had a negative impact on the company causing a tremendous decrease in sales hence profit margins. This situation has called to company’s management to seek strategies that can be implemented to enable it regain the profitability it enjoyed before.
This case looks at the current company and financial situation of B&Q company determines the strategies that can be developed to ensure that the company resumes the large market share and competitive advantage it had that enabled it to record high sales hence large profit margins. Best Strategies that can be implemented to bring B&Q back on track The current B&Q operational environment is characterised by a large number of dynamic variables whose behaviour can not be precisely determined.
The company’s success hence depends on the strategies it implements (Monks & Minow 2008, p. 23). Creativity and innovation is one of the strategies characteristic of most if not all successful companies that enjoy high sales and huge profits. Innovation as an approach to business operations is associated with high levels of efficiency and cost effectiveness (Gilad 2003, p. 11). Though different from each other, innovation and creativity complement each other and are desirable qualities that organisation should look for in their employees.
In order for B&Q to regain the making the high profits it was before, the management has to reintroduce and emphasize on this culture in the company (Kao 2007, p. 33). Creativity and innovation enables the company to come up with different ways of production that may be cost effective. It also enables an organization to come up with new designs and products. This is important as it makes it possible for the company to diversify in its production. The company will be able to produce a range of goods which makes it possible for the company to increase its sales.
Creativity and innovation would also enable the company to make many different designs of their products which is appealing to consumers as it gives them a variety to choose from and also gives them a reason to come back to the stores (Griffin 2008, p. 22). The company could also employ a market based approach in its operations. This involves identifying what consumers need in the products being offered and designing them accordingly. Market based approach means that the company gives consumers what they need and not what it thinks is good for them (Eilon 1999, p.102).
Satisfying consumer needs should be the sole purpose of any strategy being implemented. This is because a company can not sale anything unless the consumers are satisfied with it (Merna & Al-Thani 2008, p. 22). An organization can not survive without sales hence the need to please consumers. Identifying consumer needs and any changes in their behaviour will give the company an upper hand against its rivals. Consumers want products that are of high quality, stylish, functional and whose price is sensible (not too high).
The company can find out the specifications from the consumers and design its products in a way that they meet them. The company will also need to identify any changes in these needs especially design and keep at par with them. This will attract consumers and increase sales hence the profit margins (Soros 2008, p. 33). Another strategy that B&Q could implement in order to beat its competitors and record high sales is by increasing the range of goods the company produces and launching new designs of their products more frequently.
Having a range of products is a way of diversification of the company’s production. This enables it to have an option to fall back on in the event that the performance of one line of production is negatively affected. This approach takes the form of not putting all of your eggs in one basket. Having a variety of designs especially for the home and house furnishings. Consumers have different tastes and require the producers to give them a variety to choose from (Johnson, Scholes & Whittington 2008 p.180).
Launching different designs periodically gives consumers a reason to come back to the stores as they look at latest arrivals. Women consumers love new stylish designs and could be taken advantage of this away (Melewar 2008, p. 22). B&Q deals with products that require it to employ individuals to assist the consumers. The way a company handles consumers matters a lot. Customers need to be treated in a way that is satisfying to them (Griffin 2008, p. 66).
B&Q should ensure that the customers are given all the assistance they require whenever they visit their stores whether they are purchasing anything at the time or not (Kotler & Armstrong 1999, p. 22). Providing good services is appealing to customers and always make them want to come back or refer their friends to the company’s stores. Employing strategies that will ensure this will increase the company’s competitive advantage hence sales resulting to higher profits. Marketing is an important aspect that determines a company’s sales and profits.
Marketing has been termed as one of the best ways of dealing with competition. Marketing which involves making consumers aware of a business’ products, convincing them to buy and maintaining them is a must for any business that wants to establish a market for itself (Hooley, Piercy & Nicoulaud 2008, p. 65). Marketing and advertisement are heavily utilised by industry players as each player in constant search for opportunities that will give them an advantage over others. In order for B&Q to overcome its current situation, it has to re-evaluate its marketing strategies.
The company needs to ensure that the marketing strategies employed are effective such that they reach the target group of consumers and explain what the company offers convincingly. Marketing is a powerful tool for increasing ones sales. It enables consumers to be aware of the company’s new products or designs of certain brands. The company should ensure that the marketing tools implemented have a message that is satisfying to consumer needs and expectations of the products. Marketing and advertisement should and must always be objective (Hazell & Fitzpatrick 2006, p.75).
Focussing on ways through which the competition can be dealt with rather than how to deal with an organisation is important in ensuring objectivity and therefore giving and edge to the promotional approach that will be employed as it complements the true nature of the organisation thus effectively ensures that the service offering are transmitted to the market segments (Luecke 2006, p. 11). The company hence needs to employ the best marketing strategies it can in order to contain the competition that is causing it to reduce its sales hence profits.
Most successful organizations have identified team work as one of the best ways of solving problems especially those that need multiple judgements (Simon 2000, p. 132). The problem facing B&Q is not one that can be solved by an individual. The management needs to form a team that will come up with solutions (Hare 1999, p. 6). Teams consist of individuals with different skills and experience hence have the advantage of producing solutions that are diverse. Teams could give a variety of solutions enabling the company to have other options in the event that one solution fails to work.