Good Marketing Case Study Example - Management
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Management is the process of ensuring that the resources of the company are effectively to achieve the goals and objectives. There are various resources which are utilized by the company and they include human skills and financial resources. The aim of any organization is to improve the competitive advantage in the global market. The company should utilize the resources effectively to maximize the output while minimizing the input and this helps to improve the performance of the company. In this report therefore, the report discusses the main concepts of management and resource planning and the policies that can be used to achieve the competitive advantage in relation to Harrison Company which is among the top regional retailers in the market of operation across US. The company has been grappling with management issues of resource planning, sales management and ensuring plausible management of resources. Most fundamentally, the economic crisis has had a significant impact on the operational facets of the organization. Harrison has a slack in performance, sales stagnation, distribution management issues and so forth which has impacted on the performance of the organization. Thus, as a plausible integration by the management, it is imperative that stimulation of repeat purchases prevails and effective distribution management. Consultative approaches are fundamental towards successful outcomes. Investment into the offensive strategy is plausible towards successful outcomes. This paper will thus evaluate the concepts of management at Harrison as per the case questions.
Question 2: Ethical and socially responsible decisions
Harrison Company operates in business environment that requires proper and responsible activities to its various stakeholders. Admittedly, the business should be responsible to the community, workplace and market place.
As the first part in terms of responsibility, the community expects responsible products. Admittedly, responsible products entail proper branding, quality, safety and pricing. As such, Harrison Company should embrace an informative approach in which labeling is quite important in respect to calories, ingredients used, expiration date and manufacturer. Case in point is the Harrison Company kids’ brand in which the community is informed of the proper nutrition value of the products to the children. On the other hand, Harrison Company should focus towards maintaining a responsible environment for the community through cutting down on carbon emissions, food waste and being involved in charity work. Secondly, Harrison should focus towards enhancing and maintaining a workplace that is effective and safe for its employees. As a business, it is responsible in the workplace through proper air-conditioning, flexible working environment for its employees through work shifts which it has incorporated. Thirdly, as a business, responsible market place practices should be inculcated through maintaining legal activities, proper pricing, sustainable supplier-business relationship and avoidance of underhand activities. In maintaining responsible market place, Harrison should employ an international supply network in both maintaining proper price points and a formidable relationship with its suppliers. Evidently, the company has over suppliers in over 20 countries. A summary of the ethical issues that the company should handle include:
Question 3: Synthesizing/ analyzing
A graphical analysis of the sales at Harrison Company is as follows:
The evaluation of the sales budget reveals that sales are dwindling at an increasing rate. Accordingly, the company’s sales budget is over estimated entailing the prospect of under-selling. Hence, for the organization to increase its sales, it should invest highly into diversification. Through diversification, they will manage to develop a new market niche that will accrue revenue to the business.
Invest into research and product development
Research and development is highly significant for catapulting sales. Through research and development, innovation is bound to progress. Innovation will ensure competitive products within the market hence sparking increased sales.
The financial operations of an organization rely on effective policy statement and strategy implementation. Accordingly, from the evaluation of Harrison Company, it is mandatory that the organization implements a more comprehensive evaluation of the diverse operational aspects in their financial statements. As such, the company should implement a more organizational centric operational approach that is dependent on analysis of profitability, efficiency and so forth. Hence the implementation of an analysis of the organizational ratios should lay forth effective outcomes towards analysis of the benchmarking ratios of the organization. Benchmarking ratios are applicable to an organization since they examine the performance prospects of a business in a clearer and closer mandate. Thus, an evaluation of Harrison Company in regards to its performance is as follows:
The following ratios have been calculated for Harrison Company:
Return on year end capital employed (ROCE) 14·8%
Net asset (total assets less current liabilities) turnover 1·2 times
Gross profit margin 1·5%
Net profit margin 0.1%
Operating profit margin 10·5%
Current ratio 1·0.7:1
Closing inventory holding period 70 days
Trade receivables’ collection period 73 days
Trade payables’ payment period (using cost of sales) 108 days
Interest cover 6 times
Return on year end capital employed = earnings before interest tax/ capital employed
Net asset (total assets less current liabilities) turnover = sales revenue/ capital employed
= 2.25 times
Gross profit margin = gross profit/sales
Operating profit margin = operating income/ net sales = 6%
Current ratio= current assets/ current liabilities
Closing inventory holding period = number of days in a period/ inventory turnover for the period
Inventory turnover= cost of goods sold/average inventory
= 18.25 days
Trade receivables’ collection period = average collection period = days * average accounts receivables/ credit sales
= 65.87 days
Trade payables’ payment period (using cost of sales) = total costs of sales/average accounts payable
= 77 days
Gearing = total liabilities/shareholders’ equity
Interest cover = EBIT/ interest expense
= 4.67 times
Thus, from the above evaluation, a more comprehensive evaluation of the three fundamental ratios is as follows:
Companies require finances to sustain its operations. Moreover, the liquidity ratio is utilized to determine the organizational capability in meeting its debt obligation using its current assets. As such, a higher liquidity ratio denotes a highly liquid organization. The liquidity ratio is important for the management to determine the level of debts to incorporate that can be offset by its prevailing assets. Harrison has a current ratio of 0.7 which is quite dismal. The company needs to re-evaluate its cash management policies.
Efficiency rations examine the organizational effectiveness in using the current and non-current assets to generate revenue. Through evaluating the level at which returns emanate from the organizational assets, the organization can determine the performance effectiveness. The efficiency ratio is important in determining the facets of improvement that the organization should undertake to improve on performance from its machines, and other assets. The company has a plausible efficiency ratio as evident from its return on assets
Profitability ratios are used to evaluate the degree of returns that a company obtains from the sales made. A company with an increased profitability ratio exudes extensive sales made or a higher profitability from each sale made. The profitability ratio is important to reveal the level of profitability from the total sales made in an organization. Harrison’s profitability ratio is below 1% which is highly detrimental to the organizational performance.
There are varied strategies that can be inculcated to improve the cash flow at Harrison in order to make improvements regarding its meager liquidity ratio. The three most plausible tactics that Harrison can implement towards improvement in its cash flow include;
Performing an effective forecast
Maintenance of a plausible grip in regards to current cash flow coupled with future trend is highly important. A projected increase in sales deems an increase in employees coupled with increased costs of operation. Thus, for an effective cash flow management mandate, it is advisable that the company incorporates a 12 month rolling forecast that is pegged on evaluation of the performance mandate within an organization. Through a 12 month rolling forecast, an effective and efficient management scheme of the business cash flow is bound to prevail.
Make an evaluation of the terms of operation
In most instances, businesses do not invest into beneficial terms in regards to their suppliers, debtors and clients. Thus, to ensure that cash deficits do not prevail, businesses should ensure balanced terms of payment that ensure effective cash inflows and outflows. Accounts payable, receivables should be pegged on a proper payment scheme that ensures working capital prevails within the organization.
Invest in supplier, customer and inventory segmentation
Businesses do not invest into proper mechanisms in segmenting their customers, inventory and suppliers. As a clear example, it is imperative to segment the suppliers in terms of the regular ones and the one-offs. Through segmenting the suppliers, a business accrues an effective venue in which they can negotiate better terms of payment coupled with discounts. Additionally, the business could segment the customers in terms of the biggest customers and the worst payers. Segmentation of customers enhances an effective policy mandate in ensuring an individualized payment scheme. Through effective customer segmentation, expected cash flows will be managed effectively to ensure reduced prospects of cash deficit.
c. Logistics and operations
Supply chain issues for evaluation
Supplier transportation to Harrison’s distribution centers
First and foremost, the operational aspects of an organization depend on an effective and plausible integration of activities that result into bringing of products to the consumer market and ensure consumer satisfaction. Thus, the supply management at Harrison Company focuses on ensuring a more cost effective performance options. The supply chain management mandate depends on the integration of topics that range from transportation, purchasing, distribution and packaging. Harmonization of the aforesaid activities results into profitable outcomes for the organization. Thus, an evaluation of the supply chain aspects at Harrison Company is as follows:
Storage at the distribution centers
The company boasts of an intensive investment into a highly manageable storage and distribution center. Harrison Company has a centralized storage center that emanates from its over 50% local supplies. The major investment into local suppliers has been highly empowering to the local farmers, producers and so forth. Investment into localization of the operational facets has generated a more effective storage and distribution center management. However, it is imperative to acknowledge that the company’s location of its diverse distribution centers poses a daunting environment that requires significant changes. Changes should emanate from a more comprehensive and increase of the trucks from the aforesaid should prevail. An increase in the trucks should necessitate a more efficient performance prospect.
Transportation from the distribution centers to the stores
The transportation facet of an organization relies on effective performance prospects. Thus, from the examination of Harrison Company, the main approaches towards revolutionizing the transportation from the evident distribution center to the stores include:
Freight transportation: freight changes in regards to the distribution from the international market are imperative. Sustenance of freight changes relies on an implementation of a widespread inculcation of all the modes of transport. The company should invest into prompt pickup, Excellency in customer service and sustenance of effective delivery of services.
Air transportation: there has been a significant development in the air industry. The changes in the infrastructure industry have resulted into the investment into effective performance mandate. Air transport growth means that organizations can effectively purchase and evaluate the goods and services provided.
Storage in the stores
Storage is imperative towards provision of fresh products to the consumer market. The provision of fresh products emanates from the inculcation of plausible storage facilities. Thus, from the evaluation of Harrison Company, it is mandatory that it increases its storage structure in its 80 stores. The changes in its facilities are bound to catapult its performance prospects.
Information needs, covering all the above items including merchandise purchasing and store re-ordering
Maintenance of accessibility to information is mandatory towards revenue yield. Accordingly, from the evaluation of Harrison Company, the implementation of accessibility to information among the various stakeholders should be dependent on effective government intervention. The government role towards successful performance and information access should denote implementation of intranet and extranet in their operational obligations.
Within the performance mandate of Harrison company, the company’s strategies are developed through a five levels in regards to information access should entail;
Business objective setting: as the first step in sales strategy formulation, a combination of the various top management is incorporated towards setting the performance mandate to be attained.
Strategic level: the strategic level denotes the supply side activities which comprise of product or service life cycle management, effective pricing, maintaining sales and marketing the products within the organization.
Operational level: operational level strategies entail planning for the production levels, supplier management, sales planning, demand forecasting coupled with inventory management
Transactional level: within the transactional level, activities such as purchases made, payments orders and deliveries are effectively managed to align to the organizational goals. A vigorous management of deliveries coupled with orders sustains the transactional level.
Monitoring of objectives- the sales objectives accomplished are evaluated and monitored extensively to ensure that the targets set have been met. Through an emphatic management of sales, the company reviews the sales targets set and ensures performance is within the stipulated mandate.
Question 4: Identifying industry and global trends
The retail industry has been evidenced by diverse trends that the organization has to evaluate in a more comprehensive manner. From the evaluation of the case study, the main industry trends include:
Increase in acquisition and mergers
Consolidation of diverse industry players
Customers are highly price-sensitive
Increase in internationalization by the large companies
New supplier relationships with businesses from developing counties
An additional issue that may impact on the industry performance of Harrison is the market structure. Thus, an analysis of the market structure is as follows:
Business environments have different market structures such as competitive, monopolistic and oligopolistic. Accordingly, the various structures determine the level of barriers of entry in terms of new comers to the industry. Continuously, the oligopolistic market in which Harrison Company operates is consistent of a few market leaders who determine the direction of the industry in terms of pricing and output. Further, the US supermarket or retail industry is highly oligopolistic. As such, the various major supermarkets, Wal-Mart, Target, Costco and Amazon, have an over 75% control of the market share. Hence, the big supermarkets have a formidable control of the market. Case in point, Wal-Mart has a 35% share of the consumer market in US. Through its oligopolistic powers, the company has been on the growth trend. As such, in in 2001 the company purchased 120 convenience stores hence growing its market share. Continuously, as at 2006, the company had acquired over 6% in terms of the convenience food market. Hence, with such control of the market, Wal-Mart is an oligopolistic leader together with its counterparts in determining prices and output. Admittedly, the price wars are usually minimal among the controlling large retailers. In the major supermarkets, the price differences in their commodities are usually insignificant. However, the increasing concept of price sensitive consumers is bound to make the need for more price centric operational approaches mandatory. Harnessing price centric performance approaches is mandatory towards sustenance of profitability among the diverse organizations.
The global economy is ever becoming fast paced and cutthroat in terms of operations by the major supermarkets in the region. As such the market forces are resulting into a somewhat quick response by the various supermarkets in the locality. Accordingly, two of the imperative global market forces that are affecting Harrison Company are comparison and transactional factors.
The global market is being shaped by the growth in comparison and internet use by the various consumers. In a supermarket industry where the various giants are ever competing in terms of services and commodities, comparison has been an ever rising trend. As such, the various customers in the global market are embracing internet in a bid to search for the best offers and make comparison decisions. As such, the increased use of comparison initiative has led to marketing strategies incorporated at Harrison Company. Online ordering, purchasing, competitive pricing and so forth have to be incorporated by Harrison Company in a view to meet comparison aspect in the market.
Easier and cheaper ways of conducting transactions are ever emerging in the global market. Admittedly, the traditional customer cashier transaction in the supermarket is declining considerably in the global market. As a market force, to meet the changing transaction trends, Harrison Company will have to inculcate online trading with its clients whereby mobile currency and online credit card payments. Clear example of other organizational approaches is the use of applications. Tesco, a UK company has new wine app that enables clients to purchase Tesco wine using their mobile phones.
Question 5: Leadership and group dynamics
Specific leadership actions and behaviors
In order to improve the efficiency of the above operations, the management of the company should develop a consultative leadership style. This is the leadership style which helps to involve the employees when making decision making. This is important as it helps to encourage change in the company because the employees will be part of the decision thus they will take part in implementing the change. This could eliminate the resistance to change thus improving the above operations.
Further, the human resource manager with the support of top management should develop mentorship programs. The management should identify some mentors who will help to improve the knowledge of the employees. The mentoring programs should be evaluated to evaluate its effectiveness. Mentorship helps to improve the skills of the employees thus achieving the results better which improve the management of the human skills for the company to achieve its goals and objectives.
In addition, the human resource manager should develop effective teams in the company so that the tasks can be achieved better. Through teamwork, the employees are required to work in teams so that they can improve their socialization as a way of improving the skills. Through teamwork, tasks can be achieved better unlike when the tasks are performed by individual tasks. Synergy helps to improve the achievement of the tasks thus improving the management of the human resource operations. Therefore teams should be developed in the company to improve the productivity of the employees and that of Harrison as well.
How to address infighting and conflicts at work
The following are strategies that have been implemented for positive employee relations. To begin with we have communication audit. For an organization to conduct its programs, activities and so on it must conduct communication audit since this helps an organization to learn smoothly because through auditing it will be able to identify the problems early and how to solve them. Also employee relations has been improved since the management looks at a communication practices system which is most appropriate and effective to learn the activities of Harrison Company and if they find out it lacks some efficiency it should formulate effective communication strategy which will help to improve employee relations.
Another strategy that the management of Harrison Company has to implement to have positive employee relations is to have proper interactive leadership style. Harrison Company has leaders who are well equipped skills and experience. This enables them to have good communication system from top management to their subordinates. On the other hand for Harrison Company to have positive employee relations, the management organizes social meetings which enable them to interact with different employees. This assists them to learn different ideas and approaches, they developed employee forums where they will meet with their management to discuss matters of the same interest and finally they should recognize employees’ efforts by giving them bonuses on top of their basic salaries. This help to build the relationship which exists between management and employees.
In addition in improving the employee relations, Harrison Company has to clearly implement the organizational policies and procedures towards management of infighting among employees. These help employees to be well acquitted with the policies and procedure of that company. Hence no more confusion will exist between employees and management. Also when policies and produces are well implemented, these help to build employee confidence because they are aware of the policies and precautions in case they fail to adhere to them. Therefore employees will develop positive attitude towards their management.
On the other hand another strategy that has been implemented to improve employee relations is by formulating effective compensation strategies. When employees are being rewarded properly according to their work done they get motivated, productivity also increases and absenteeism and labor turnover reduces too. Therefore this will build good reputation of Harrison Company within and to the outsiders hence more will be attracted due to the good image they have about the company name and also due to good employee relations from management.
Finally another strategy that has been implemented by Harrison Company to have positive employee relations is effective delegation of duties and responsibilities properly. This is done when management clearly indicates the duties and responsibilities of every employee and to whom everyone is supposed to report to and to show who will have more authority compared to the other to avoid confusion of who is more superior than another so that he or she can be respected according to the position he or she hold in that organization. Through effective delegation of duties and responsibilities the company has been able to avoid conflicts among the employees leading to better employee relations.
Performance management and rewards
Furthermore, performance management is the process that should be applied by the Harrison Company to determine the performance of the employees. It is important to measure the performance of the employees so that appropriate measures will be taken to improve the productivity of the employees whose performance has declined. Performance management enables the management of the company to determine the value of each employee. The performance management strategy which is applied by Harrison Company is management by objectives. In this strategy, human resource manager evaluates the performance of the employees by assessing the achievement of the employees and the achievement of the objectives. Each employee should work towards achieving the set objectives. The benefit of management by objectives is that it enables the company to determine the progress of the company towards achieving the set objectives. However, it may be hard to assess the performance of each individual for effective record keeping. Performance management is important since it helps to develop effective training programmers to meet the different needs of the employees so that they can improve their performance. It also helps to make decisions regarding promotions and demotions depending on the performance of each individual. However, performance management can be time consuming and also uses resources of the company.
On the other hand, reward management is the function which deals with identifying the reward strategy to be implemented by the organization to improve the motivation of the employees. The need of providing rewards to the employees is to motivate them with the aim of improving their productivity, attract and retain competent human skills and also meeting the objectives of the employees so that they can feel part of the company. According to the motivation theory, it can be indicated that the employees are motivated better when they are provided with rewards and that is why there is reward management function which goes hand in hand with motivation theory. Harrison Company applies both financial and non-financial reward strategies to reward employees. The financial reward strategy involves providing financial incentives like bonuses and financial rewards as well as providing tokens to the best performing employees. This strategy enables the company to meet the financial needs of the employees thus improving their motivation which in turn improve their productivity and quality of services provided to the customers although it may be costly to implement as it consumes financial resources.
The non-financial rewards provided to the employees include the promotions and recognition. Best performing employees are promoted and recognized during meetings. This helps to improve the morale of other staff members so that they can improve their morale which in turn improves the performance of the company. The benefit of non-financial rewards is that it helps to save the financial resources of the company since the employees are motivated without using the finance. It also helps to improve the career path of the employees once they are promoted to learn the management skills. However, the non-financial have the challenge of measuring the performance of the employees with the rewards provided.
The importance of providing rewards is that it should enable the Harrison Company to attract and retain the employees from the competitive labor market as a result of improving the reputation of the company and managing the infighting among the employees. Rewards also help to improve the motivation of the employees as well as managing the employee turnover once they are satisfied with their jobs. Rewards also have enabled the company to achieve the competitive advantage in the global market.
Question 1: Implications of integrated business processes
The organization should undertake an offensive strategy towards enhancing its sales and profitability. As such, the company should incorporate an expansionary approach. Expansionary approach in organizational mandate in respect to diverse organizations is incorporated to perform the following functions that ensure effective sales management at Harrison Company;
Enhancing the selection of market segments
Some consumers possess a higher tendency to become purchases as compared to others. Hence, an effective database enables a seller to determine and target a greater and more diverse as potential clients. Hence, the inculcation of an effective data base will enable sellers to target the client base that is highly likely to purchase the commodities.
Stimulation of repeat purchases
An effective database records the purchases made by a customer and varied information pertaining to the consumer. Through a clear record of the client details, a seller can determine the commodity purchased concurrently and incorporate a direct marketing approach towards stimulating more purchases.
Customer relationship management
Customer relationship management, as per diverse pundits requires extensive development and maintenance of vast information pertaining to the clients. The main focus of CRM is to establish a personalized relationship with the consumers. CRM relies extensively on management of information to avoid the prospect of overlapping customer characteristics. Hence, an organization must develop a proper database program that manages customer information.
Recruitment strategy for effective retention of employees
Recruitment and selection process entails a rigorous organizational based activity directed towards internalizing employees who can be aligned to the organizational strategies and performance targets. Thus, in sales operations, the various significances of recruitment and selection strategy of a sales team and organizational operational mandate at Harrison Company should include;
Recruitment and selection enables an organizational human resource managers to focus on the facets in which the candidates have exuded competency in their working or from academic perspective. A focus on competency enables an organization to determine the sales approach that can be incorporated by the diverse sales teams.
Through recruitment and selection, an organization can forecast successful job performance within their sales teams. Inculcating a sales team that is based on varied competencies gives an organization an avenue to use motivational tools to sustain performance.
Through effective recruitment and selection process, an organization can assess the targeted behavioral aspects of their sales teams. A proper prediction mandate can lead to an effective planning of tasks and roles to be issued to the several sales teams.
Recruitment and selection process of sales teams can lead to the generation of a proper assessment center which is simplified and based on the varied characteristics of the several sales teams. An effective sales team selection poses a frontier in which the management can maintain a database that can evaluate the personnel and determine the performing and underperforming teams.
Through recruitment and selection of sales teams, an organization can internalize proper personnel who can be aligned to the organizational sales strategies. Competent and learned employees ensure that the performance targets are attained.
Furthermore, the process of performance mandate in the global environment denotes an evaluation of the various aspects of performance. Thus, from the analysis of Harrison Company, it should capitalize on:
accessibility to global value chains
Majority of analysis assert that the international frontier has enabled an avenue for sourcing and outsourcing which are pivotal value chains. Through the inculcation of outsourcing of varied operations, an organization can obtain enhanced sales force within the foreign markets thus sustaining performance. Hence, organizations should capitalize on the various sourcing and outsourcing aspects available.
extensive customer and consume segmentation
The sales function has been manifested by an avenue in which an origination can invest highly into proper approaches towards customer segmentation. The international frontier is highly diverse and organizations that invest into proper segmentation approach are bound to maintain sales competency in different segments across the international spectrum.
multiple value chains for diverse products
An international market has been evidenced by value chains in which an organization can sell diverse products and services. Organizations have to cope with an extensive frontier in which various markets in which they can ensure a cost effective value chain is evident. Hence, organizations have to cope with an increased value chain which sales delivery can be enhanced.
increased pressure to provide greater services
Globalization has enabled an avenue in which organizations have to incorporate proper strategies to provide exclusive and diverse services to the various markets within the international frontier. An international market manifested by diverse markets in which individualized service delivery is imperative.
Hence, through the above opportunities, the organizational operational mandate should mainly focus on a profitable marketing approach. The marketing approach at Harrison Company should be focused on:
Inculcation of a promotional mix
First and foremost, a promotional mix denotes the various tools that are used by an organization to accomplish the communication objectives. Among the various elements of a marketing mix include; advertisings, direct marketing, sales promotion and public relations. First and foremost, personal selling denotes a person to person communication whereby a seller tries to persuade prospective clients into purchasing the organizational product of service. As such, personal selling is an extensive interaction between the buyer and the seller. Hence, personal selling supports the promotional mix for Harrison Company towards plausible outcomes should be in the following manner;
Advertising entails a paid form of non-personal communication of an organizational product, service idea and so forth. As such, the non-personal aspect entails a mass media approach to advertising. Nonetheless, direct advertising has generated an avenue in which personal selling supports advertising. As such, through direct advertising, organizations advertise directly to their customers generating an avenue in which extensive customer feedback is evidenced. A direct advertising approach generates an avenue in which an individualized communicative approach is evidenced.
Direct marketing entails an approach in which organizations communicate directly to their target clienteles. Through a more direct communicative mandate, the organization manages to generate response which is imperative towards making sales. Thus, direct marketing generates an avenue in which an organization operates like a person and maintains a more personalized approach to marketing. Direct marketing eliminates the costs incurred in mass marketing and generates a frontier in which direct communication and feedback emanates. Through an individualized approach to marketing, the notion of personal selling emanates since the organization maintains a feedback performance approach that entails personal selling.
Sales promotion entails the extra incentives to the varied sales force, distributors and ultimate consumer that stimulate instant sales. Sales promotion is divided into two aspects of consumer oriented and trade oriented. Thus personal selling supports trade oriented sales promotion through the prospect of trade fairs and exhibitions. Through trade fairs and exhibitions, a more individualized approach to marketing is incorporated within an organization to sustain and promote sales.
Business operations depend on plausible management and implementation of operational strategies. Accordingly, from the evaluation of diverse organizations, it is imperative that effective management approaches are implemented towards successful outcomes. Thus, from the above evaluation of Harrison Company, it is mandatory that plausible policies are implemented towards enhancement of the sales. Enhancing sales should form the operational targets towards catapulting the organizational profitability and revenue yield.
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