Category: Auditing

History, founding and ownership

In today’s business environment it is very important that companies operate with a clear strategic path. It is this clear strategic path that will enable a company continuously search for new entrepreneurial opportunities and seize them with much effectiveness.

It is the result of this strategic process combined with the human workforce together with other resources that will determine which corporation crosses the finish line in first place or closes shop. This is therefore why management audits are carried out within department to bring out a clear picture of what is going on.

BHP Billiton came into existence in 2001 when to companies namely the Australian broken hill proprietary company (BHP) and the Anglo-Dutch Billiton plc decided to merge. Broken hill is an Australian company that was an Australian company that was incorporated back in 1885 and concentrated its business in steel manufacturing.

Later oil, copper it was later caught by global inefficiencies and closed down its steel production in the late 1990’s.On the other Hand Billiton was formed back in the 1860’s and concentrated on minerals like iron, titanium, nickel and coal before the two companies merged in June 29 2001 to form BHP BILLITON.

BHP BILLITON is currently the largest mining company which deals with a large variety of minerals. BHP Billiton which has its dual head quarters in Melbourne Australia and London England and presence in London and corporate centers in Johannesburg and Huston Texas.BHP Billiton is the world’s top mining company in terms of market capitalization, with capitalization of approximately 191 billion dollars.

According to BHP website (www.bhpbilliton.com) BHP Billiton is listed in the Australian securities exchange and London stock exchange and is a constituent of the FTSE 100 Index. Meaning it is owned by numerous shareholders who purchase their shares in the form of nominees, institutional investors and individuals.

The company operates hundreds of mines across the world and has a workforce of about 41,000 employees from about 25 different countries it is therefore evident and clear that there is large diversity among the employees that BHP Billiton has employed.

Furthermore the company made a profit of about US$ 6.3 billion in 2009 from the sale of its main products and services which fall under the mining industry. Some of these services and products include Iron ore, Diamonds, Coal, Gold, Petroleum, Aluminum, Copper, Nickel, Uranium, and Silver.

Appendix A: summary of BHP Billiton history (source www.bhpbilliton.com)

Innovation, risk taking and pro-activeness of BHP Billiton

BHP Billiton is a very large company and it has vast resources it therefore has a fairly complicated organizational structure. The company faces a lot of risk in its entrepreneurial ventures.BHP Billiton is innovative because it searches for mines across the world that offers opportunities to their business.

BHP Billiton had the first oil and gas production in deep water Gulf of Mexico; it also had the first production from the angostura in Trinidad and Tobago. Its innovation often involves being a dominant first mover and forming alliances with other companies to enter certain business areas.

BHP Billiton, often sales of its strategic business units at the right time and moves on to areas which offer more business potential. Of course this is with the help of its extremely talented research and development department that works on coming up with better mining techniques that will not destroy the environment.

BHP Billiton faces a lot of risks in its which include workforce strikes, natural disasters such as typhoons and stiff competition other big mining companies together with changing economic times. Consumer needs are continuously changing and therefore the company must adhere to this by sending out the best individuals within the organization to gather relevant research data that will help the company adapt to its environment.

BHP Billiton also faces resistance from, activists and environmental groups whom have led governments to set tight laws that govern the business of mining in various countries. This has potential effect on the market dominance and expansion plans and strategies that BHP Billiton have put in place. Therefore this affects its entrepreneurial spirit of finding new opportunities of business and making profits.

An organizational structure is a systematic arrangement of job and job groups within an organization. Therefore BHP uses CSG’S (Customer Sector Groups) which mean its organizational structure job groups are arranged by grouping the leadership and staff according to the various customer groups into various sectors which are Diamonds and specialty products, base metals, energy and coal, metallurgical coal, manganese, stainless steel and steel products and petroleum.

Therefore BHP Billiton has flat structure which allows for fewer managers a wider span of control to the managers which leads to a faster flow of communication better team spirit of employees and less bureaucracy therefore easier decision making.

The fewer levels of management means that the company will save costs. The disadvantage is that the function of each department may get blurred and roles may end up being duplicated, workers in different departments may report to one boss thus overloading his duties and at the same time this may hinder growth.

It is this Customer Sector Groups that work together with the finance, research and development, legal and marketing transport and logistics functions to achieve the mission, vision and objectives of the organization and come up with new products. In such an organizational structure various divisions that handle special projects aiming to satisfy a particular group of customers work hand in hand with the various functional areas within the organization.

BHP Billiton has set a number of strategic, management and operational controls which are tight for example each and every employee is accountable for his duty or functional area and failure to which an employee or manager is punished, This Is Why Brian Gilbertson stepped down only after six months as the C.E.O back in 2003 because his leadership style seemed not to be in line with the strategic focus of BHP Billiton that the board had set. Therefore failure is not tolerated /taken well among the top management. (Kaye, 2005 52).

Entrepreneurial overview

Today’s business environment is full of challenges that may hinder corporations from achieving its main objective of high returns and profitability It is due to this that entrepreneurial quality of employees, management and investors that decide if businesses will thrive or die.

The porter’s model can be very useful in conducting such analysis because it looks at various industry factors comprehensively to create a reliable report. Porter’s model is a model that looks at five forces which shape any industry it is this forces that will determine how well a company can operate in a give n environment and be able to satisfy its customers and realize a profit. The forces in porter’s model include

Threat of new entrants– Barriers are placed by existing companies and regulatory authorities to prevent new entrants from causing abnormal profit flows for existing companies some of the threats including government policies, exploiting cost advantages, access to distribution, capital requirements. In this case the mining industry is known to be very capital-intensive since acquisition of mines and mining equipment is quite expensive. Making this venture of BHP Billiton a good one since the higher the capital structure of an industry the more harder is it for new entrants therefore existing companies such as BHP can earn returns to their investments.

Intensity of competitive rivalry among existing firms– firms within the same industry always compete for the available market this can be trough powerful competitive strategies, innovation, structure of industry costs, switching costs, degree of product differentiation and so on Which BHP Billiton is known to apply by scanning for mines in far regions like DRC Congo, South Africa, Brazil, Indonesia and Canada.

Threat of substitute products or services-consumers can opt to go for substitute products if quality is better, price is relatively better, or the cost of switching is favorable. There are relatively few substitutes to the kind of minerals and products that BHP Billiton offers for example Iron is iron and it has no substitute the same goes for silver and minerals such as oil. This therefore means that the mining industry which is the core business BHP Billiton is highly entrepreneurial and profitable because some of the minerals they mine do not have close substitutes.

The bargaining power of customers-the bargaining power of buyers depends on number of buyers within the industry who purchase from the available suppliers, differentiation of products, the profit margin of buyers especially if they are resellers, switching costs that are associated with switching brands and the importance quality and service to the buyers.

BY providing high quality and highly differentiated products and the large number of customers demanding their products as compared to its competitors BHP Billiton is able to increase its bargaining power and reduce that of customers.

The bargaining power of suppliers-Suppliers who provide raw material can determine the profitability and viability of an industry by setting prices of implements which in turn affect the profit margins. “The concentration and number of suppliers affect their bargaining power, the importance of the industry to them, the ability of suppliers to integrate forward and the role of quality and service in the industry.” (Casson, 1982 45)

According to IBIS Australia’s largest provider of Industry Based research the Australian Mining industry occupies a vital place in the nation’s economy.

The Mining division is anticipated to make AN income of approximately $179 billion in 2010-11, A hoist from $120 billion in 2005-06. Revenue is anticipated to spike by about 20% in 2010-11, having fallen by over 15% in 2009-10 in response to the global economic meltdown. Regardless of that fall, revenue is projected to go up by an average yearly rate of about 7.9% over the five years ending in 2010-11. The division is expected to contribute over 7.1% of Australia’s GDP in 2010-11.

According to the linker mining report (Q2 2010) “an industry forecast following the 2009 recession suggests that the Business Monitor International is highly optimistic on Australia’s mining trade over the newly-extended forecast period to 2014. It is believed that expansion can average just above 6% over the coming five years”. It is expected that mining’s role to GDP rising from 6.79% in 2009 to some 8.17% by 2013, although it may drop slightly in 2014.

Competition is also very tight with BHP Billiton having almost over 25 competitors who include heavyweights such as Mobil Exxon, Xstrata, Anglo American and Rio-Tinto. The rise of china also poses a big threat to big corporations such as BHP Billiton. It is therefore right to say the industry presents opportunities and threats threat could either mean do or die for a BHP Billiton but in this case it is vital that the best of the best human resource should be acquired.

It is these people who will set strategy and policies that will primarily seize the advantages arising from porter’s model and minimize the shortcomings that arise out of this model.

Strategy is a set of long term goals and plans formulated, implemented, evaluated and corrected to achieve positive results that are directly linked to mission, vision, goals and objectives of BPH Billiton.

A firms corporate strategy can be of three type these are either growth (dominance), stability, or retrenchment (Bryson 2004 89) in BHP Billiton it is quite clear that it pursues a Growth Corporate directional strategy that insists on diversification of it different products which all fall under the same mining industry be it gold, silver, oil, manganese or iron.

A company may be run by its overall corporate strategy but it is its business strategies that can bring business strategy into reality. There are overall two types of business strategies which are either cooperative or competitive in this case BHP has used both of them.

In 2001 June BHP Billiton was formed from a merger this is a business strategy that is cooperative. Currently the company either acquires other companies via negotiations or hostile takeovers this is a good example of a competitive business strategy.

Without such business level strategies the top management won’t achieve their goals and the company will not grow and survive in such a competitive industry.

Casson (1982 78) notes “in this hierarchy of strategy the lowest level of strategy is the functional strategy that is formulated and implemented in every functional area to achieve corporate and business unit objectives by maximizing resource productivity.” BHP ensures that all its employees and lowest levels of management deliver unique high quality innovative products.

BHP Billiton performs better than its rivals when it comes to delivering products and services thus making it one of the largest and top mining companies. Functional business strategy ensures that functional areas of finance, mining, transport and procurement, marketing, Human resource work smoothly and efficiently.

An entrepreneurial audit is an all-inclusive assessment of a firm’s entrepreneurial and innovative distinctiveness. It takes a glance at the ability to recognize and seize when opportunities arise, crafting and sustaining an entrepreneurial environment, analyze the utilization of resources, and comprehend organizational efficiency to maximize time-to-profits.

In order for an internal audit to be conducted a critical look of the Internal Environment, Entrepreneurial Culture, Innovation practices, Team Dynamics, and Resource distribution (Campbell 2002 88)

Competencies of BHP Billiton

BHP Billiton key competencies include a large operating capital, its product quality, a large number of rich mines scattered across the world together with a tough human resource team fostering innovative products.

The acquisition of Athabasca Potash in Canada this year and the eight year supply contract to deliver over 20 million tons of iron ore to Hyundai motors from 2009 is some of the latest entrepreneurial ventures that BHP Billiton has achieved. Currently BHP Billiton is among the most profitable mining companies with the highest return rates.

It is therefore right to say that BHP Billiton is a profitable entrepreneurial venture that jumps ahead of other mining companies to be a fast mover and seize opportunities better. A large capital base enables BHP Billiton be able to operate huge mines that offer huge business potential to them. (Campbell ,2002 48)

Current human resource systems in BHP Billiton

The human resource purpose is to focus on recruitment, administration, and providing direction for the human resource who work in the organization. Such a department handles a wide array of tasks which include hiring, firing, performance management, handling of benefits, employee motivation, and training.

The presence of a good human resource system ensures that health and safety in workplace is there, no harassment occurs, and that gain sharing is individualized to reward the ones responsible for success.BHP Billiton has a good human resource system that many multinational companies desire to acquire.

BHP has systems and policies that are put in place to ensure equal employment opportunities and the same goes for promotion. “The management style of BHP Billiton aims to ensure safety among its workforce, integrity, high performance, win-win relationship together with respect for each other.” (Appelbaum, et al 1998 79).

BHP Billiton has both internal and external systems of recruiting employees. Graduates once a year have a chance to join the organization, these also applies to other first time employees.

But in order to encourage employee participation and motivation BHP Billiton also gives a lot consideration to internal employees while giving promotions. It is by use of software that the company ensures equal opportunities in employment, and management of its diverse workforce and be able to manage its vast talents to achieve its impeccable status to date.

BHP Billiton has put in place superior human resource management practices which include software HR SAP and other human resource information systems (HRIS) that aim to Manage Personnel, Administer Recruitment, manage Time, manage Payroll Compensation, Planning Budget for human resource Development Training. Individual personal information of every employee including their key competencies is stored to assist in implementing the human resource strategies, and allocating them to places where they are best needed.

The should be picture

The biggest challenge to date is the inability of BHP Billiton to successfully handle the problems related to its workforce diversity. It seems mine workers in regions liked Africa and South America have complained that the gain sharing structures do not favor them, and therefore they see some in equality. (Porter, 2004 89).A company an efficient Human resource system should therefore be able to manage its workforce diversity faultlessly.

Recommendations and implementation issues

The should be picture contains the following recommendations, for a manager to successfully handle workplace diversity, Camillus, (1986, 89) suggests that a HR Manager needs to alter from an ethnocentric managerial style (“our way is the best way”) to a multi-ethnocentric perspective of (“let’s take the best of a variety of ways”).

In addition, the human resource managers must guarantee the local professionals that these foreign talents pose no risk to their career advancements Kourdi, (2009, 26).The entrepreneurial culture is a culture of working hard and moving resources from an area of low utility to an area of high utility to realize profits.

BHP Billiton should strive to create a good gain sharing technique that aims to reward the best of their employees no matter what their cultural diversity. Gains are calculated and distributions are made regularly through a prearranged formula. Because organizations create programs that reward employees only when gains are realized by the company thus creating a win- win situation therefore adversely affect company costs. (Worthington & Britton, 2009 90)

Therefore a mentorship program should be put in place to mentor employees and let them know that their cultural diversity is aligned to the entrepreneurial spirit to the company but talent is all that counts therefore controlling and measuring performance should be at the backbone of BHP Billiton’s policies. Human resource management systems should strive to organize talents and locate them where needed accurately and lead from the front by preaching water and drinking water. (Carsrud, et al 2007, 26).

Handling resistance to change

To overcome resistance to change managers may often involve the people who will be affected by the change. Communicate a good reason that has lead to the change people will always resist change that lacks a good reason.

Choose a champion for the change, (It is vital to have a respected person in charge of the process) who will therefore marshal other employees to accept change for its good. Create a transition management team. (No one personality is compelling or talented enough to execute an organizational change).

Provide training in new values, skills, and behaviors. (Change normally involves new competencies) and by training employees you increase their moral and the faith they have in themselves therefore making them accept change. Bring in outside help if necessary. (Most superior managers are not trained in facilitating organizational change and therefore outsourcing may be necessary).

Reward people in a way that is proportionate to the gain they are expected to bring to the organization as soon as they embrace the change (This is because reward systems motivate people towards changing).

References

Appelbaum, A. 1998. Strategic organizational change: the role of leadership, learning, motivation and productivity. Management Decision Vol. 36, no. 5 pp. 289–301.

Bryson, J., 2004 Creating and implementing your strategic plan: a workbook for public and nonprofit organizations, 2nd edition. Hoboken,NJ: Wiley and Sons.

Camillus, J., 1986. Strategic planning and management control: systems for survival and Success Lexington, KY: Lexington Books.

Campbell , D. 2002. Business Strategy An Introduction, New York: A Butterworth-Heinemann .

Casson, M. 1982. The entrepreneur: an economic theory, Illustrated edition, Manhattan: Rowman & Littlefield.

Carsrud, A., Malin E. 2007. Entrepreneurship,Illustrated edition, Melbourne: Greenwood Publishing Group.

Kaye, J., 2005. Simplified strategic planning, a no-nonsense guide for busy people who want results fast. Worcester, MA: Chandler House Press.

Kourdi, J., 2009. Business Strategy: A Guide to Effective Decision Making, 2 editions, New York: Economist books.

Porter, M., 2004. Competitive advantage, Northampton, MA: Free press.

Worthington, I., Britton, C., 2009. Business environment, 6th edition, Vancouver, Canada: Pearson Education

Executive Summary

This report is on an interview I did with the Personal Property Auditor of the City of Francisco. We had a discussion on his professional and personal life and what motivates him. This interview describes the auditor’s personality and background. It was done on October 10, 2012, at his office in San Francisco.

The people who work with him describe him as exuberant and intelligent. His zeal and commitment to work has made it possible for the city to collect its highest tax revenues in a decade. He reveals more about his career in this candid interview.

Introduction

He starts by informing me what made him opt for accounting as his career. He reveals that he has always been interested in financial reports. He argues that these reports make it possible for the management of a firm to plan for the future and monitor performance. He says a career in accounting offers lucrative growth opportunities even in times of recessions.

Main Body

He reveals that, after attaining a bachelor’s degree in accounting, he worked for Wells Fargo in its foreign exchange department. He later became an AR Coordinator at Moscone Center before he left and later became a public accountant. He has worked in various industries in the country as an auditor before getting employed by the City of San Francisco. He has served both private and public clients in different industries.

He cites the independence with which he is able to perform his duties as one thing he likes most about his job. He seems to like the freedom that comes with his current position because he is able to set his own work schedules. He says that he likes working at his own pace because this helps him manage his workload better.

He says meeting rude taxpayers who come to his office once in a while is the least favorite aspect of his job. He finds fault with them because they do not respect their civic duty to pay taxes. He says this has been a blessing in disguise to him because he has learnt better ways of solving problems. He insists that his employer has the required legal authority to collect taxes from taxpayers. The auditor reveals that most taxpayers who visit his office are polite and understanding.

He reveals that, while studying to become an accountant, he did not expect that he would be writing a lot of reports in his career. He has had to deal with it because he submits weekly audit reports as well as work progress reports to the management from time to time.

He says his typical day starts at 6.45 am when he wakes up and arrives at work by 8.00 am. His principal discusses with him work related issues that happened the previous week. The rest of the day is spent serving taxpayers or compiling audit reports in his office. Sometimes, he goes out to inspect business firms and audits their financial records. He also goes to the board on specific days whenever taxpayers lodge appeals to brief the board of his findings.

He says that if he had known how his career would be like many years ago, he would still choose to be an accountant.

His advice to anyone that wants to join this field is, “take up relevant volunteer work in accounting field prior to graduation to help fill out your resume.” He insists that this is the best way to get real life work experience.

Company overview

HP is one of the companies that provide wide range of products that include personal computers (PC), software solutions, personal digital assistants, portable music players imaging and printing related products and services.

HP provides printers, digital cameras, servers, consulting services, IT services, computers and calculators (Hewlett Packard Company (a) 1). The company is the market leader in most of the computer hardware market has rapidly grown and it edged Dell Company in the global PC market in 2006 and was able to manage the lead in 2007.

The company is currently expanding to new markets and also venturing to manufacturing graphic recorders, medical electronics and other instruments. Due to the good market conditions, the company is able to maintain its brand image and also enjoys economies of scale.

Despite the company‘s huge success, it faces stiff competitions that could adversely affect its long term profitability and revenues.

Dominant Economic Traits

Market size and growth rate

The computer and peripherals industry has very many competing companies. As at 2011, the market had $12.01 billion dollars. The market has been experiencing fluctuations but the 10 year compounded interest is about 9% and 10% in the expected unit growth.

The computer industry is affected by the business and technology forces that control the products that are available and also the profit share that the company has. The market is quite competitive and most of the companies compete for the same market share.

Buyer needs and requirement

The market for home personal computer (PC) has attained its maximum growth in the United States as well as in other developed nations. This market is currently driven by the need for replacement. There is an increase in the need to have several PC within a given home.

This trend will however not affect the market growth by a large margin. The main market now lies with other areas of the world such as Asia and the developing nations. Corporate clients may also want specific computers that suit their needs.

Most of the needs for PC have reduced as the buyers have other products with computing functions such as the mobile phones. The buyer’s market is increasing relatively and is fully penetrated with about 111 million household owning a computer in the USA. Due to the saturation that exists in this market, it is difficult for new entrants to join the industry.

Number of rivals

The analysis indicates that there is intense rivalry in this industry. There are approximately 1500 companies that deal with PC, software’s and other computer related products.

The biggest share of the market is taken by Dell, Acer, Apple, Lenovo and HP. The remaining share is taken by the other small companies. Due to this intense rivalry, the market does not attract new competitors.

Economies of scale

The industry is greatly influenced by the experience and capacity of the firms. Large electronic companies have the necessary experience and enjoy economies of scales.

The economies of scale result to reduced production rate and this strengthens the competitive position of the company. Due to this reason, small and new market entrants have smaller chances of success.

Product innovation is also one of the most dominant factors in this industry. The continuous introduction of new products and services in the market is used by firms in attempt to take up a proportion of the market.

Most of the companies rapidly develop new products that are geared towards customer satisfaction. In this regard, the company must keep on developing new products that will solve most of the consumer’s problems.

Technological changes

Technological changes in the computer hardware and software development is also another key economic trait in this market. Most of the companies in this sector harness new technological innovations so as to gain competitive edge.

Potter Five Forces

Threat of new entrants-Normal

There is intense competition in this industry. The firms compete on the basis of fair price, product loyalty and quality of the product. Firms also compete for new customers and market share. HP competes at many levels with diverse products from different companies.

There are a large number of competitors who fight for the available market. Due to the intense rivalry, there is limited threat to the entry of new competitors. Entry into the market by competitors has little impact on HP. As such the threat of new entrants is normal(CPS 8).

The bargaining power of buyers-fierce

The market largely lacks product differentiations and this erodes the company brand. Most of the parts are standardized and have high operation capability. This makes the makes the prices nearly equal. Hence, there are a few customers who switch from one product to another due to cost. As a result, the bargaining power of the buyer is fierce.

The bargaining power of suppliers- very weak

The force from supplies is very weak and almost non- existing in this market. Most of the inputs are commodity items which have their own competitive pressures and hence no reasonable increase in price of inputs. The only pressure results when the company wants to release a new item as there is need to have preferential supplies who demand special treatment.

Shortages are also few as chip makers have adequate supplies at most times. The company can also integrate backwards so as to create parts they need for their end products.

The company spends time and money in developing new products and hence it is easy for them to integrate backwards. Also, since HP is huge, they have a tendency to buy in bulk and this reduces the force of suppliers during shortages. Therefore, in terms of the potter five forces, this is the weakest force.

The threat of substitute products and services-high

In the market, there are various products that are offered by the competitors. The customer may opt to buy the substitute due to its low price of high quality. The pressure from substitutes comes from products manufactured by the other companies.

There is also a growing tendency of computer applications being replaced by mobile phones such as blackberry and the iphone. Customers can get new smart phones if they want surf the web instead of using a computer. Laptops and notebooks have also replaced the use of PC.

In the games devices, there is the Microsoft x box and other play stations also take up a share of the company’s revenue. These devices are expected to displace PCs and lower the sales volume. Thus the threat by substitute is also at high level.

Pressure from rivals – very fierce

This is the strongest of all the five forces. The market has five large companies which are HP, Dell, Acer, IBM, and Apple. These companies launch new products and fresh market actions that attempt to take a larger portion of the market.

This fierce competition has resulted to firms lowering costs, developing new products, developing means of lowering labor and production costs and companies trying to differentiate their products. In order for HP Company to be able to cope with the intense competition that is currently found in the computer market, there is need that the company develops new innovative products that are both cheap, affordable and have high quality.

The company should also produce devices with high functionality and this is only possible if there is continuous innovation (Hewlett Packard (a) 20).

To counter the increase in devices from the competitors, the company should continually diverse their products and also innovate continuously. This will enable HP to actively compete with other competitor in this field.

Driving Forces

There are a number of factors that drive the change in this industry. One of these forces is the rapid development and the increasing capabilities of smart phones to be used for computing purposes.

Cloud computing is also affecting the need for faster computers and this negatively affects the sale of PC and software’s (Hewlett-Packard(c) 30). This shows that the need for PC is reducing while the price is increasing.

Product innovations

Product innovations are a force to reckon with in the PC and other products that HP develops. Customers are always looking for new innovative products in the PC market and their peripherals.

Products such as wireless keyboards and mouse, flash disks are some of the products that improve the ease of mobility among the computer users. These are in high demand. Improvement in the processing speeds and size of the products also increases the demand for new product.

Changes in customer

The market of the product also keeps of changing. Competitors mostly venture into new market and this increases their sales volume and profit margins. Due to the high competiveness of this market, most of the companies are venturing into other global markets in Africa and other continents so as to increase their sales volume.

Changes in cost and efficiency

Cost and efficiency is also an imperative factor controlling the production rates and the profits that company gain. Most of the firms have currently shifted their operations to areas with lower labor rates such as China.

With reduced production rates, most of the companies are able to lower the products prices and this enables them gain price leadership. The reduction in cost is also important especially during economic hard times. Most customers look for economically priced products and this means that reduction in price would increase the sale of HP products (Bernd 33).

Competitor’s Analysis

The HP companies have a wide range of competitors in most of the products that they produce and market. HP has four principle competitors, that is Dell, Acer, Apple and IBM. These competitors can be grouped into three main groups based on their strategic approach.

The first group comprise of Dell and IBM. This group has high returns; high market share and the operating margins are moderate. All these companies are strategizing on methods of increasing their market share and also diversifying in the related industry so as to gain high profit margins.

To improve the cost, these companies plan to move to china and outsource their productions. The HP holds the highest market share worldwide due to its diversified nature and it is closely followed by Dell. Dell however is not very diversified as compared to HP but offers relatively lower prices and high quality product as compared to HP.

HP and Dell rely on the sale of many products so as to increase their sales. Another competitor is the IBM which solely deals with servers and don’t have a lot of diversifications. IBM has high quality products and services but slightly higher prices.

The second group of competitors is Acer. This company is deeply involved in the commoditized industry. There financial performance is low as compared to HP and the other competitors. Though Acer is small company, it is expected to merge with Lenovo and take up the Chinese PC manufacturing industry.

The other group of competitor is Apple Inc. The company products are highly priced and most of the customers believe that they offer high quality products. Apples Inc produces devices that edge out the use of PC.

The company has for years maintained a market niche for luxury computing and has also ventured to manufacture of the iPod and the iphone. The long term growth prospects of this company are high and the company has a strong balance sheet and financial ratios.

Strategic group map

The HP strategic map is shown below.

Diversification

From the strategic map, it can be seen that the companies either try to lower the prices and also diversify their operations. Acer has lower prices and reduced diversification. Apple leads in terms of high prices and has also diversified into the ipod market and iphone.

HP is the largest of all these companies with the greatest product diversifications and reasonable prices. Dell follows HP but with a little diversification and relatively the same price for PC and other products.

Key success factors

The key factors that contribute to the HP company success are

• Establishing a brand: HP must struggle to maintain its brand name. Even though the cost and product differentiation are virtually impossible, the company should market their products as being of high quality so as to maintain their brand.
• Diversification: currently HP leads in diversification. As competition increases, the company must diversify into new markets such as production of iphones as well as diversify to other computer accessories(Bennett 5)
• Economies of scale: due to the large size of this company, it is able to enjoy large economies of scale. These would be necessary so as to reduce production costs and subsequently the price of the final product. Using economies of scale, the company is able to offer competitive prices. In a competitive market, low prices are crucial in establishing and maintaining of a brand.

Overall in industry attractiveness

The market can be regarded as being very unattractive. Most of the successful business such as apple, Dell and HP and others are diversifying to other areas so as to increase their profit margins. There is high competition and the product differentiation is limited as the speeds and performance of most of the components are standardized.

Most of the companies are trying to establish a brand in this market but this problematic due to pricing and product differentiation limitations.

Works Cited

Bennett, Jon. Attractiveness of the Personal Computer Manufacturing Industry in the United States, Ohio: Ohio university press, 2009. Print.

Bernd, Panzer 2005, Technology, Market and Cost Trends 2012. Web.

CPS 2009, IT Industry Trends, Research and Developments. Web.

Hewlett Packard (a). Hewlett Packard 2012 Annual Report. 2012. Web.

Hewlett Packard (b). Company products and services. 2008. Web.

Hewlett-Packard (c) 2008, Hewlett Packard 2008 Annual report. Web.

Introduction

Business enterprises usually asses their capability in the market by conducting audits. These are analytical procedure conducted to plan for the future needs of the market.

Market audits can be conducted by the company or with the assistance of an external entity. Analysis of Du indicates that the management will access the company’s capability within the UAE market. Du is a communication company that focuses on providing quality processes to its clients.

The organization has been providing its merchandise and services for close to six years meaning that information concerning the organization is available in the public domain. This piece presents an analysis of the findings after a marketing audit process of Du Company.

Scope and purpose of the report

The report will analyze the forces controlling the activities of Du Company in the market. It is fundamental to acknowledge that information from the company’s website will be helpful in devising the most effective marketing strategy for the organization in the market.

The report presents an evaluation of the current situation of the company in the market. Moreover, the peripheral and internal forces that affect the activities of the company in the market are also analyzed independently (DU, 2012).

Company’s mission & objectives

The company ensures that they provide brilliant communication services to the Asian market. As such, Du takes pride in impressing their customers.

The management focuses on empowering the community by tapping into their potential in performing duties. Employees at the organization are empowered with the intention of maximizing their productivity. The company is concerned with preserving the environment.

Employees are dedicated to minimizing wastes in the environment. Waste management is critical; the company has set up recycling management plants.

They have supported initiatives that create awareness on the benefits of energy conservation (DU, 2010).

Several forces characterize the marketing environment of Du Company. This includes the domestic and external forces within the Asian market. The business operates within the competitive Middle East market.

Business operating within Middle East should comply with the regulations of the countries. Majority of the clients of the company are conservative. Religion influences the behavior of the populace in making decisions (DU, 2010).

The corporation has been rendering services for close to a decade. This is an indication that the organization is not very experienced in comparison to the other competing firms in the Asian market.

It is challenging to adjust to the rapid changes in the technological market. Competitors are coming up with new technology every time. It is difficult to serve million of clients without encountering technological hitches (DU, 2010).

Market environment

Market forces influence the activities of the company in the market. The influence presents several challenges to the company. Consequently, the management has to devise measures to curb the challenges.

It is advantageous that the company has a huge capital base that will allow it to meet its targets. Du Company offers services to millions of clients within the Asian market.

Consequently, it is clear that the marketing activities within Du Company will lead to the expansion of Du activities in the global market because it focuses on customers.

The mobile market has been known to be dynamic; thus, it is difficult to predict the expectations for growth of the company in the market (DU, 2010).

Political processes influence operations of the company in varied ways. Since most employees of the company are Muslims, Sharia laws play a role in affecting policy making for the company.

This affects taxation and other management policies. For example, the pay that the company offers to their marketing staff affects the entire productivity and prosperity of the corporation in the market.

This is because marketing staff require additional incentives in order to market the company effectively (DU, 2012).

The company has experienced staff capable of availing superior services to clients. Secondly, Du receives high tech components by reputable technological manufacturing companies. The support department continuously assesses the market to advise the management.

The company thrives on the fact that it has reliable suppliers. Consequently, the reliability of the suppliers allows the company to maintain its delivery of quality services (DU, 2010).

Adherence to the legal requirements of the companies within UAE is an added advantage for the company. Fortunately, Du operates based on the stipulated business ethics. Furthermore, the management recognizes diversity. It is interesting that clients of the company are influenced by brands in making a choice of products.

The lifestyles of most of the company’s clients revolve around religious belief. They are influenced by religion in making decisions.

Therefore, Du Company ensures that its entire clientele does experience poor services because of their devout practices.

There is an increase in demand for mobile accessories in the current market. Meaning, the clients of the company have a high literacy level (DU, 2012).

Product

A firm’s products determine its profitability since products are what consumers get in exchange of their money. DU deals with communication products and services in the EAU. The firm supplies both mobile and fixed telephones.

Additionally, it offers connectivity of broadband and IPTV services in residential and commercial areas. Some of the main consumers of the firm are the TV broadcasters, which get satellite UP/Downlink services from the firm.

Last year, the company managed to attract about 5 million individuals and 40,000 companies, which are now using its products and services (DU, 2012).

The 4ps

Price

Apart from the products quality, the prices of goods and services are also vital in the marketing world. A firm can fail to attract many consumers Even if the qualities of the products are high and the products are not priced correctly (DU 2010).

For instance, if the products are overpriced, a company can attract few consumers. Moreover, a company can still have low sales if its merchandise and services are poorly priced because consumers may not take the products seriously.

DU has attracted many consumers because it has priced its goods correctly. The pricing strategy for the company is different from other similar firms.

That is why the firm has more customers compared to other firms (Lamb, Hair & McDaniel, 2009).

Some of the company’s product prices are higher compared to the same products in other firms (DU, 2012). By looking at the prices of goods, one might think that the firm is overcharging.

However, the firm still more consumers compared to other firms. Some of the product prices in the company are high because the products are on high demand. Furthermore, the company’s products are of high quality.

This makes the firm to have faithful customers who stick to the products regardless of the products (Lamb, Hair & McDaniel, 2009).

DU has also managed to set higher prices for some of their products, and still have many consumers. This is because its commercials target the middle and upper class individuals who can afford the products.

Moreover, some products in the company are also cheaper compared to other companies. These products are cheap because the company spends less money in marketing and delivering them. For instance, the company sells some of the products online.

This reduces the company’s expenses since through the online services the company uses fewer workers (Rosenbloom, 2009). The firm also records high sales because it helps its consumers by giving them discounts.

An example of the discount offered by the firm is the free delivery when customers purchase certain quantity of goods (Lamb, Hair & McDaniel, 2009).

Placement

The company attracts many consumers because its stores are located at strategic places (DU, 2012). This makes its products to be available at the right time and quantities.

Additionally, the company offers online services and this reduces the customers’ travelling expenses.

This is because the customers only order for the goods and the firm delivers them (Rosenbloom, 2009). It is fundamental to restructure DU to empower it; thus, satisfying consumers.

Promotion

The company promotes its goods by offering discounts especially for their new products. In addition, the company’s high sales are moderately attributed to the commercials, which are comprehensive and address organizational goals.

It also invests in marketing researches in order to know the characteristics of its competitors. This has enabled it to know the potencies and weaknesses of its competitors.

To attract more consumers, the firm also uses special offers and gifts if the customers purchase certain quantities of products.

The firm increases the customers’ loyalty, by focusing on superior goods. In addition, its products have warranties.

According to Lamb, Hair & McDaniel (2009), DU focuses on cultural diversity because its workers come from different countries.

Therefore, the firm can serve many consumers with different cultures because the workers can speak many languages. This reduces communication barriers in the market (Lamb, Hair & McDaniel, 2009).

Furthermore, it allows the organization to embrace varied approaches that will empower the personnel. This is apparent in symposium that has the chance to address concerns that may emerge from the organization and personnel.

Conclusion

DU is a fast growing company because it offers high quality products to its consumers. The company supplies communication products and services in the EAU. The products offered by the company serve many consumers at homes and commercial areas.

According to Lamb, Hair & McDaniel (2009), the company attracts many consumers because of its excellent marketing strategies. For instance, the company has invested in the online advertisement of its goods where many people can be reached.

Additionally, through the online services, customers spend less time making orders. The customers also spend less because the merchandises are provided to their residences of places of work meaning that transportation costs are eliminated.

In addition, the company offers discounts on their products especially when the sales are massive and the administrators know customers. This encourages the consumers to buy products in bulk.

DU offers variety of superior goods meaning that the customers have fewer complaints. This also contributes to the high proportion of consumers visiting the outlets.

References

DU. (2012). Who we are. Retrieved from https://www.du.ae/about-us/who-we-are

DU. (2010). Company overview. Web.

Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2009). Marketing. Mason, Ohio: South- Western Cengage Learning.

Rosenbloom, B. (2009). Marketing channels. S.l.: South-Western.

Introduction

According to Armstrong (2005), marketing management is defined from two different, but interrelated, perspectives. The first definition is from a social perspective. To this end, marketing management is conceptualised as the various initiatives undertaken by a given business organisation.

Some of the processes undertaken by business organisations from this perspective include those meant to ensure that individuals and groups access whatever it is that they need and desire to meet their needs. Through the business organisations, groups and individuals find it easier to produce and exchange values in the society.

The values in this case include, among others, human energy, as well as the products and services generated. In his journal, Diab (2012) is of the view that it is only through such mechanisms that business organisations are able to create desirable exchange.

Marketing management is also defined from a managerial perspective. From this perspective, the concept is defined as those processes involving strategies meant to create competitive advantage and realise better market locations for the business organisation. A case in point is product differentiation, which sets the product of the company apart from those of competitors.

Efforts to improve the quality of the product are also regarded as marketing strategies from a managerial perspective. In all these forms of marketing strategies, businesses, through their management teams, promote, distribute, and price their products in the market. The management team is involved in planning and executing all the procedures associated with marketing and promotion of the product.

The two definitions above provide insights on what needs to be done to make sure that products and services from the business organisation reach the final consumer in the market. There are three theoretical frameworks from which the two definitions above operate.

The three include marketing segmentation, market targeting, and positioning strategy. It is through these three marketing concepts that the management team creates and exploits opportunities in the market.

The concepts discussed above are the major focus of this paper. The author conducts a marketing audit of Du Telecommunication Company in United Arab Emirates in the context of concepts defined above. The Du is a renowned brand in UAE telecommunication industry.

To successfully carry out the marketing audit, it is important to carry out an analysis of the actual brand by conducting a critical review of related and relevant literature. The review provides a platform from which to assess the performance of the company in the market. The author will then come up with viable recommendations for the company.

DU-UAE Telecom Company: A Brief Overview

The company, which is part of the Emirates Integrated Telecommunication Incorporation, is one of the telecommunication business enterprises operating in Saudi Arabia. Although the company is legally known by its full name, rebranding strategies has given it the new name, DU Telecommunications, which came into effect at the beginning of 2006.

In 2011, the company, through the management, invested a total of AED 1.72 billion (Diab, 2012) in its business operations in the region. The continued expansion of the company has seen it serve more that 5 million active subscribers of mobile services today. As far as telephony subscription is concerned, the company serves a total of 624,700 active consumers. The remaining segment of customers is registered under the company’s internet broadband department.

The group consists of a total of 127,000 subscribers. According to the company’s annual report, the UAE telecommunication market is already saturated. Currently, the company has no strategies or plans to expand its share in this market. On the contrary, the company is making plans to venture in other regional and international markets.

There are several products and services offered by DU Telecommunication Company. They include, among others, broadband connectivity, mobile telephony, fixed telephony, as well as IPTV services to business premises and homes.

The United Arab Emirates’ Market: An Environmental Context Analysis

According to Diab (2012), an environmental context analysis refers to a critical analysis of an external market within which a business enterprise is operating. In other articles, different writers have come to refer to this as PESTEL analysis. It is, therefore, one of the most important aspects in marketing management.

The analysis helps business managers to analyse the external environment that their business organisations are operating in. In addition to the current external environment the business is operating within, the analysis is applied in external environment within which the business is planning to operate from in the future.

In this section, the writer provides a critical analysis of the external environment within which DU Telecommunication operates. Basically, the analysis will revolve around the UAE market. To this end, the author will look at the market’s demographic environment, political and legal environment, economic environment, socio-cultural environment, as well as technological environment.

Analysis of the Market’s Demographic Environment

According to the World Bank’s fact book, UAE’s demographic composition, which touches on the country’s population, has grown tremendously since the 1980s. The country had an initial population of approximately 1 million people. According to the findings of recent population census, UAE had about 5.312 million people as of 2010.

According to Diab (2012), the telecommunication environment in UAE has been restrictive for a very long time. For many years, most businesses operating in this sector were owned and controlled by the government. The competition in this industry is still very low.

For consumers, the decision to choose use the services of a mobile or telephony services provider is largely determined by their geographical location in the country. The consumers tend to go for the companies located within their locality. Basically, DU Telecommunication Company dominates this industry in some of the free zones in the country.

The company’s competitors, such as Etisalat, have gained ground, and continue to dominate, the industry in the other market zones. As a result of this, and contrary to the aspirations of most nations in UAE, the region is finding it hard to maintain its position as a global IT hub. Access to internet broadband, among other things, is still very low in the region. In comparison to other markets in the world, access data in UAE is a very expensive undertaking.

Analysis of the Market’s Political and Legal Environments

Since its inception, DU Telecommunication Company continues to face a number of challenges. Some of the challenges arise from the fact that the company operates in the information technology and telecommunication market, which is a fairly recent phenomenon on the global market. Slight changes in UAE’s ICT market end up affecting the company’s operations.

There are three major factors that affect Du Company as far as the political and legal environments are concerned. First, DU Telecommunications Company is facing a lot of criticism because of the operations in its manufacturing plant. Laws dealing with environmental protection, together with other similarly stringent regulations, have significantly affected the operations of this company. To deal with such legal provisions, the company has no option but to implement efficient and effective production methods.

The second political and legal issue has to do with civil unrests, changes in government structures, and possible government takeover. The issues are likely to have an impact on the company’s operations in the region. For example, a civil unrest will negatively affect the company’s sales volume, as well as its general operations.

The prospects of Du Company’s expansion in other markets largely depend on the local political conditions. Since its inception, the company has avoided expanding its operations into other Arab markets. The major reason for adopting this strategy is to utilise and protect the Arab market (Diab, 2012).

Analysis of the Market’s Economic Environment

There exist a number of economic variables that affect the operations of Du Company on the international market. The variables are clustered into three major categories. One of them is the recent global financial crisis, which negatively affected the company’s sales volume.

The impacts of financial crises are significant to this company given the nature of the product and services it is dealing with. The second category has to do with such macroeconomic variables as cost of labour and inflation. When the labour costs are high, for example during a crisis, the operations of the company are affected negatively. The third category of economic variables affecting the operations of the company is related to the nation’s per capita income. To this end, UAE are likely to spend more on telecommunication products.

An Analysis of the Market’s Socio-Cultural Environment

In its efforts to expand and operate in other markets, the company has to contend with various socio-cultural variables. For example, the company has to address issues to do with the local culture and ways of life. On the other hand, the operations of the company may affect the way the local people share information and use technology in their life.

When the company implements the various policies meant to deal with the market’s socio-cultural environment, its investment portfolio will be affected. The company has faced a lot of criticism in the process of distributing its technological products and services. The opposition is mainly from groups concerned with the environmental impact of the company’s operations. In addition, most people are concerned with the effects that technology has on their health. Such issues are likely to affect the operations of the company in the market.

An Analysis of the Market’s Technological Environment

Technological innovation is one of the key resources at the disposal of Du Company. In every stage of its operation, the company integrates the technological advancements made by its researchers, and that which is available on the market. The management realises the fact that the implementation of effective and appropriate technologies will enhance the company’s productivity.

The strength of the company lies in the advertising and marketing channels and strategies adopted. The two factors have continued to affect the performance of the company’s brands. Through its marketing department, the company has, since its inception, embraced such communication mediums as social networks, television, and radio.

Competitor Analysis

The UEA telecommunication market is characterised by an environment that is highly regulated by the government. There exists little competition in the telecommunication market. The choice of product and service providers is determined by the areas within which they operate. Du Company has continued to take advantage of its monopoly in the free zones. On the other hand, Etisalat, which is one of the competitors in the market, enjoys monopoly in the other areas.

Since its inception, Du Company has continued to operate in a less cycle market. The firms operating in the market lack the capacity to compete effectively. There are several issues that should be taken into consideration when analysing competition in a given market.

One of them is the ability to imitate the innovation adopted by the market leaders. In some cases, it is very easy to imitate those innovations, making it inexpensive for new entrants to operate in such a market. In case the market starts to experience a rapid growth due to the entrance of other firms, then it means that decisions by the business leaders need to be faster and effective.

Fixed telephony, broadband, and IPTV business have performed exemplarily for Du Telecommunication Company. The company’s ‘razor’ strategy is very profitable. The management realised that the reverse or blade strategy will lead to increased returns.

Figure 3 in the appendices section clearly illustrates this aspect. Several items need to be replaced from time to time. For example, the company finds it necessary to replace communication devices like those used in fixed telephony and internet subscriptions.

The company has in the past used differentiation strategies to market its products in the market. Innovation and design are some of the factors taken into consideration when the company is adopting a differentiation strategy. It adopts the strategy in the provision of such products and services as fixed telephony, internet, and broadband services.

The combination of products and services is not one of the company’s critical competitive advantages. The company has found it hard to sustain such a strategy for a long period of time. Because of this, Du Telecommunication Company will have to come up with measures that help in introducing new products and services in the market. The adoption of such a strategy helps market players to deal with competition.

Du Company, through its R&D department, has continued to introduce new and innovative products and services in the market. It is a strategy meant to create competitive advantage from in any given market. For firms that operate within a fast cycle market, it is hard to compete favourably and retain their competitive advantage in the market. To cope with this scenario, firms find it important to formulate and implement high value and innovative strategies for their products and services.

What this means is that the firms are able to take advantage of the fast cycle market sectors. There is continued expansion of the market to allow other players to operate. The expansion will force the market players to formulate and implement innovative strategies. It is in this area that Du Company takes advantage of its skills in the market.

Etisalat Telecommunication Company was formed in 1976. At that time, the company had a market share of 69% (Diab, 2012). In 2006, the monopoly of Etisalat Telecommunications Company was challenged by the entry of Du Telecommunications Company. Two years ago, another company, Yahsat, was awarded a ten year licence to operate in the telecommunication sector.

Since its inception, Du Company has continued to expand its market share in UAE. The expansion is clearly illustrated in figure 1 in the appendices section. On the other hand, Etisalat’s share market has continued to decline over the years.

Market Research and Du Company

Overview

Like in any other business organisation, research and development is an important component, as a well as a strategy, adopted by Du Company to increase its market share. Du Company has set up a research and development centre (R&D) at its manufacturing plant.

Through this R&D department, and in collaboration with personnel in other departments, the company has continued to come up with new ways to deliver quality products and services. However, the company is still at its infancy as far as development is concerned. As such, it continues to encounter a number of challenges in the market. It needs to invest more in its R&D centres to overcome such challenges. The various challenges have negatively affected the adoption of innovative technology in the company.

Customer Analysis

DU Telecommunication: market segmentation and market targeting

Market segmentation refers to the process whereby a business organisation subdivides the market within which it is operating. The market is subdivided into groups of potential future and current customers. There are various factors that guide the segmentation process. The factors, according to Armstrong (2005), include shared characteristics, shared needs, and shared consumption patterns. Segmentation strategy also assists in implementing policies aimed at enhancing the company’s competitive advantage.

There are various criteria used by Du Company to segment the market. In the first criterion, the company markets its products horizontally. Through this strategy, the company, through tariff setting on phone subscribers, spreads a small charge across this group of customers.

The second criterion adopted involves vertical marketing and segmentation. The strategy allows the company to create specific tariff charges for specific customers. For example, the company provides special broadband connectivity to business users, which is different from the one provided for home and personal users.

During product and service marketing, Du Company targets different segments of consumers. According to an article by the company, and which is cited in Diab (2012), the primary segment for Du’s products and services consists of carrier services for business individuals.

The secondary target market for telephony devices includes government agencies, home owners, and small businesses. When targeting these market segments, the company takes into consideration customers who need broadband connectivity, mobile offers, call tariffs, and IPTV connectivity.

Du Telecommunications: positioning strategy

The company has positioned itself in the market to target specific consumers. By offering different telephony products and services, the company targets low income individuals, high income home and business owners, as well as high income business carriers.

If the company made the decision to target high income businesses only, then the low and middle income earners and home owners could lose to the big players, which will affect the company’s earnings. The move will end hurting the company’s overall performance. The sales volume will be affected as a result of increased prices targeted at high income earners.

Du Product’s Marketing Mix Strategies

Product Strategy

Du Telecommunication Company, through the management team, designs a number of communication products and services that helps to meet the needs of the customers. As already indicated, the products and services offered by the company in the market include broadband connectivity, mobile telephony, fixed charges, and IPTV services.

Fixed charges, prepaid subscription, and IPTV services remain some of the most vertically-integrated and closed services offered by the company. Although Du Telecommunications offers documented interface for its communication technologies, the R&D department still needs to add more products and services to the already existing portfolio.

For example, the existing fixed telephony services do not allow consumers to make calls across networks. At the beginning of 2008, the company began to selectively block some of its VOIP traffic. The move forced many consumers to abandon the phone to computer functionality of the company’s VOIP system.

Refusal to license the consumers was justified given that the system remains illegal in most countries in UAE. Telecom providers operating in the UAE market derive most of their income from the expensive charges imposed on expatriates.

However, there exists a special form of exemption where the law permits the use of VOIP services. Consumers are able to make calls in a computer-to-computer mode. Under this arrangement, consumers can still access VOIP websites, set up their accounts, download software in VOIP mode, as well as use software to make video and audio computer-based calls.

Still in 2008, Du Company began to institute similar censorship measures on the web. The measure has for a long time been practiced by its competitor, Etisalat. According to UAE censorship results, any effort to get online content was regarded as inappropriate. As a result, the company’s page was blocked. In addition, matters related to pornography instigated the closure of various forums used to share news articles, such as blogs.

The various measures taken by the company, as analysed above, have become key components of its marketing mix strategy. Products and services are the ideal advertising platforms in marketing mix. The strategy helps in the distribution of products and services in UAE. It also helps in exploring marketing opportunities and channels to improve customer relationship.

Product Pricing Strategy

Business organisations operating in a competitive market regard pricing strategies as important aspects of their marketing strategies. Harrison (1989) argues that the worth of an enterprise depends on the perception that consumers have towards its pricing strategy. Du Company’s marketing and selling department sets competitive prices for its products. In doing this, the company uses both competitive and value based pricing strategies.

Value based pricing strategy means that the company determines the worth of the product on the basis of the value that a consumer derives from it. It is one of the strategies adopted by Du Company. For example, the company charges broadband internet subscribers depending on the amount of data bundles spent.

The company also uses market based pricing strategies. The strategy focuses on consumers who, through their fixed-line or active mobile subscriptions, pay depending on the market conditions. According to figure 2 in the appendices section, the number of pre-paid subscribers has grown at a higher rate than that of post-paid subscribers.

Promotion Strategy

The company uses three major channels to implement its promotion strategies. They include advertising campaigns carried out at the company’s customer care centre, as well as publicity stunts and personal selling to consumers.

In addition, the company advertises its products through television, billboards, and social media. Personal selling is conducted through the use of specialised and highly trained employees.

Distribution Strategy

Du Telecommunication utilises wholesalers, regional retailers, resellers, and cataloguers to distribute its products and services in the UAE market. In addition, the company’s marketing and sales department sells most of the products to third parties. The consumers targeted by the company include home owners, individuals, businesses, as well as government agencies.

Majority of the company resellers operate on narrow margins. The resellers are significantly affected by the varying economic conditions in the country.

Du Telecommunication Company’s management team believes that it is crucial to establish direct contacts with consumers. The direct contact will help the company to demonstrate to the consumers the advantage of using their products and not those of competitors.

Effective product distribution has helped the company in meeting the demands and needs of the consumers. As already indicated, the company uses a network of individual consumers, resellers, wholesalers, regional retailers, national retailers, as well as cataloguers.

Product Lifecycle

The company’s marketing strategy includes developing strong products and services suited to the market. Through its R&D department, the company has introduced a number of technologically advanced products and services in the market.

Product strategy ensures that the company, using the established distribution channels, effectively accesses the end users. The company was established recently. As such, most of its products and services are still in their growth stage. The nature of the company’s core products and services calls for continued development, creating room for further growth.

Du Company: Customer Service and Relationship Activities

Like in any other business organisation, customers are the most critical asset that the company can have. To enhance their survival in the market, business organisations need to attract new customers. At the same time, the organisation should retain the established customer base. According to Harrison (1989), customer loyalty, as far as a given brand is concerned, is very critical. The level of loyalty determines consumer’s attachment to the brand.

Through the company’s human resource department, Du Telecommunication Company has adopted a number of strategies aimed at increasing the number of customers. The strategies are aimed at establishing and maintaining a critical base of loyal consumers. At the company’s customer service centre, which is located at the headquarters, highly trained and specialised customer care representatives are used to establish a connection between the company and the consumers.

The company also offers after sales services to the consumers. Customers who purchase IPTV are helped to connect the device. The company has adopted an extended product and service warranty strategy that lasts for more than 12 months. The customers find it easy to test and use the company’s products. Through these mechanisms, Du Company has managed to create a positive and healthy relationship with the customers.

Recommendations

Based on the discussion and analysis of Du Company conducted above, it suffices to note that marketing management is one of the strategies used in improving the operations of a given company. The management needs to implement such strategies as market segmentation, targeting, and positioning. The three are essential as they help businesses to establish and exploit opportunities in the market.

The management at Du Telecommunication Company needs to take into consideration the following recommendations, based on the marketing audit carried out on the firm:

1. It is important to conduct an environmental analysis of the market in which the company is operating (or intends to operate). The analysis will help to identify and deal with problems associated with political, economic, socio-cultural, and technological issues.
2. Understanding the market through competitor analysis will assist in managing the business. Some of the advantages accruing to competitor analysis include coming up with a viable competition strategy and the adoption of effective pricing and product positioning strategies.
3. Marketing research plays a major role in discovering new products and services. Du products are still in their early stages of development. As such, the management needs to invest more in R&D.
4. The company needs to a comprehensive consumer analysis to fully understand their needs. The analysis will help in coming up with strategies to improve customer satisfaction

References

Armstrong, K. (2005). Marketing: An introduction. New Jersey: Prentice Hall.

Diab, S. (2012). Telecommunication broadband explosion. Dubai: Dubai International Financial Centre.

Harrison, T. (1989). A handbook of advertising techniques. London: Togan Page.

Responding to suspicious items in Accounting Records

As a professional accountant, I would apply the professional ethics of accounting that require professionalism, accountability as well as integrity in monitoring the daily operations of the organization so as to be able to report accurately the strengths and weaknesses of the organization’s internal control system to the CEO.

Just the same way David Sokol did, it is important to scrutinize the company’s accounting records and interview all those concerned with accounting operations of each division in the company as well as the company’s Chief Financial Officer.

It is important to take responsibility and inform the CEO or the board of directors of the company about your findings on the company’s accounting fraud and your opinion and, give direction of what should be done to correct the accounting abuses in the company (Gibson, Knapp, Mowen, Palepu, & Shank, 2010).

In situations where I have convincing reasons to believe that the auditing firm that had been contracted to audit the firm’s financial statements might have been influenced so as to ignore the suspected misrepresentations in the financial statement data, I would advice the board or the CEO to retain a different independent auditing firm to investigate the accounting the records.

Measures for enhancing Whistle Blowing in a company

In order to enhance the capacity of corporate employees to report suspected fraud scheme cases in the organization, the firm should increase the internal auditors’ influence by permitting them to report directly to the CEO or the board of directors on their findings as well as their views of what should be done to save the situation (Gibson, et al. 2010).

Their findings and opinions need to be treated with a lot of confidentiality and proper follow up be taken immediately. The function of the internal auditors should not just be to report to the company’s CFO as in the case of Jamaica Water Properties.

The internal auditors need to be independent and not under the jurisdiction of the CFO, this way, they will be assured of their job security and therefore overcome bullying from the CFO or any other senior personnel in the organization.

The company should also put in place policy requiring the internal auditors to have unrestricted access to the audit results of the external auditors and the company’s accounting records in order to effectively determine irregularities, manipulations and fraud risks that may occur in the company’s financial statements and be able to report this to the CEO (Chhaochharia, & Yaniv, 2007).

Promoting ethical behavior among employees

It is the corporate responsibility of each employee in the organization to report suspected cases of misbehavior such as fraud to the relevant authorities as is provided in the business code of ethics. Besides, each organization has internal policies to guide the ethical conduct of workers. These policies should help employees report cases of unethical behavior by employees.

The company should therefore disseminate information to all employees of the standards of behavior expected of them and steps to take in case they observe or suspect unethical behavior and also implement internal control systems that could help eliminate financial fraud in the company (Boatright, 2003). According to Beaulier, Hall, & Kotkin (2009), rewards also help promote ethical behavior in employees.

However, rewarding ethical behavior may cause unnecessary divisions among employees and may also make employees be dependent on rewards to enhance ethical behavior.

Therefore, this should be done diligently since giving incentives especially monetary benefits to promote ethical behavior in employees may create a culture where employees are unable to differentiate bribe and reward. As Sokol says, employees in an organization should be guided by integrity and honesty.

Reducing Auditing Risks

The board of directors and company’s CEO should first acknowledge that the personal relationship that had been created between the retained auditing firm and the personnel in charge of the company’s accounting may have an impact on the results of the auditing. Therefore they should request that the auditing team present their results and opinions to the board of directors (Chhaochharia, & Yaniv, 2007).

They should present a critical analysis of their findings so as to enable the board make proper financial decisions. The board of directors should rely on the internal auditors to improve their knowledge on audit items and audit evidence.

This would enhance the board members’ capacity to analyze the strategic risks and potential fraud in the company’s business processes. The company should not rely on one auditing firm to carry out consecutive auditing of the firm’s accounting records.

Retaining different audit firms would help identify misrepresentations if any that was ignored by the previous audit firm that had been retained to audit the firm’s financial records. Sokol’s decision to request the board of directors to contract a different firm other than Ernest & Young paid off as Deloitte & Touch were more independent in their presentations.

Accounting professional’s responsibilities to shareholders

As an accounting professional, it is important to carry out comprehensive investigations into the manipulations that had been done in the accounting records of the company and report the findings to the board of directors and explain their impacts on the financial activities of the company as well as remedies for the for minimizing further losses.

The accounting professional should be able to determine the real figures of the fraud as well as the period for which the fraud had existed in the company. The accounting professional should also be able to determine what happened as well as the individuals in the organization responsible for the fraud (Gibson, et al. 2010).

This would help the board of directors provide accurate information to the shareholders which can therefore enable them make their decisions on how to respond to the company’s financial statements.

Reference List

Beaulier, S, Hall, J, & Kotkin, R. (2009). The virtue of business: How markets encourage ethical behavior. New York: Nova Science Publishers.

Boatright, J. R. (2003). Ethics and the conduct of business, 4^th Ed. Malden, MA: Blackwell Publishers.

Chhaochharia, V. & Yaniv, G. (2007). Corporate governance and firm value: The impact of the 2002 governance rules. New York: Nova Science Publishers.

Gibson, C. H., Knapp, M. C., Mowen, M. M., Palepu, K. G., & Shank, J. K. (2010). Graduate accounting capstone. Mason, OH: Cenage Learning

Introduction

The Mediafire.com operates in the online cloud support industry and has been in existence for more than eight years. From its inception, the company’s product line objective has been to provide quality products at the convenience of the clients.

The services offered by the company include online file hosting, cloud storage, file synchronization, and software vending. The company has expanded from the US to all other continents due to its customer-centricity business model.

The company’s marketing plan has been successful in customer base expansion and market penetration in the competitive online business platforms. This analytical treatise attempts to explicitly carry out a marketing audit of the Mediafire.com Company. The audit reviews product performance, distribution, pricing, promotion, and expanded marketing matrix strategies.

Marketing Audit

Products that benefit from quality, feature and style improvements

The Mediafire.com has several products that are able to benefit from quality, feature, and style improvement since the company operates in a market that is sensitive to technological changes. For instance, the Mediafire SharePoint is an application which allows enterprises to backup their documents via a private cloud.

This application by the Mediafire comes with a system for functionality or information delivery via a site. Through its ‘Cloud app model’, this application enables a user to create personalized apps which the Mediafire.com controls and hosts (MediaFire, 2015, par. 3).

The infrastructure for the SharePoint application is clunky and often unrealistic to use, especially for small businesses. Besides, the application is rudimentary since its hosting option is restricting. The application has to rely on REST API and JavaScript in order to interrelate with allied SharePoint framework.

In addition, the SharePoint application has series of cross-server communications which might negatively impact on its performance, especially when in use in large organizations (Blythe 2006). Unlike other apps, the SharePoint application is not very flexible and does not provides customized solutions to each business needs, and easy to use.

There is a need to make the product more compatible with programming languages such as NET, JavaScript, Client Object Model, and HTML among others. The will make the application to be able to support provider, remote, and on-premise hosted apps (Cone 2011).

Besides, the proposed modification will ensure that the SharePoint application has series of options for hosting besides multiple platforms for creating related applications. As a result of modifying the file sharing product, the SharePoint allocation will have the capability of efficiently replacing the sandbox and farm solutions thus, guaranteeing satisfaction to the administrators, users, and third-party application customer.

New products worth adding

There are three new products that are worth adding to the current array of online support that the Mediafire.com offers to customers across the globe. For instance, the company may integrate the OpenStack, Rackspace, Eucalyptus, and CloudStack to ensure that the current cloud deployments are customisable within different servers, as opposed to the current centralized server.

By integrating the above applications into the current cloud hosting system, the Mediafire.com will be in a position to expand its scope of operation since the new products will assist customers in creation, deploying, and hosting of different business applications (Cheverton, 2004).

Besides, the proposed applications can compute, network, and store different all-encompassing cloud deployments. In addition, the new products are compatible with KVM, Hyper-V, XenServer, and Xen Cloud Platform (XCP), which make the Mediafire server user friendly.

The pricing objectives, policies, strategies and procedures

Pricing of products and services is of fundamental importance in the four elements of marketing mix that generates profit for business enterprises. The factors that influence the price of commodities and services can be categorized as external and internal (Dagnino & Rocco, 2009). Pricing thus, is more than just simple calculations of the cost of production and setting up a mark-up.

Consequently, pricing policy becomes a major component of enterprise marketing plan, which is part of the whole business plan. The pricing objective adopted by the Mediafire.com Company is quantity maximization since the company’s main mission is to become a leader in terms of market share amongst companies vending online software and cloud support services.

Consequently, the pricing objective of the company seeks to maximize the number of the products and services sold online. Owing to the pricing objective of the company; quantity maximization, the company’s marketing strategies include multiple pricing, ‘good, better, best’ pricing, loss leader pricing, and product bundle pricing (Farooq & Jan, 2012).

Multiple pricing aims at luring customers to make large purchases by offering slight discounts to customers who buy goods in large quantities. The prices of single items are slightly higher to those that purchased in bulk. For example, buying two software applications at once will cost the customer approximately $3 less than buying single software.

Besides, the prices are offered in a series of three formats with the price of each series rising above the price of the previous series. For instance, cloud hosting series of files for a similar client will cost less than hosting the same number of files for different customers (Ira, 2002).

The products are also bundled together and the customer who buys one item can get older or complimentary software for less. Product bundling has helped the company to achieve its objective by making it possible to sell items that might have not been sold.

In calculating the unit cost of the online products retailed by the Mediafire.com, the company applies the Conjoint Analysis, which is a marketing research tool that is used to determine attributes of each product and how the features affect the prices. The choice to use conjoint analysis is supported by the fact that it is flexible and less expensive to carry out than concept testing (Farris, Bendle, Pfeifer, & Rebstein, 2010).

The extent to which the prices set are sound on cost, demand, and competitive criteria are within the scope of product affordability, product differentiation, and product usability at the Mediafire.com. For instance, due to multitude and complexity of factors involved in determining the price of products, the Mediafire.com has been proactive in assembling relevant information on the market conditions, which determine the long term price changes.

However, the short term price policies are tactical in nature as they endeavour to realize short term business objectives, and are employed by the Mediafire.com in relation to the goal they are intended to achieve for each pricing strategy (Ferrel, Lukas, Shembri, & Outi, 2012).

Distribution objectives and strategies

Marketing strategy distribution channels are essential before actualising projections of a blueprint. As a matter of fact, this plan functions on the margins of informed decision making after comprehensive research on the viability and sustainability of a new product or a modified product.

In order to achieve desired margins in sales and total revenues generated, a proper marketing plan should integrate entry strategy, comparative advantage, and market segmentation since in most cases, there is always a strong competitor or competitors that passing might prove challenging due to existence of consumer perceptions and household names.

The Mediafire.com Company’s distribution objectives and strategies are to meet the demand of customers across the globe and ensuring efficiency in the supply chain management. The Mediafire.com Company’s supply chain management is stable to ensure that customer confidence is guaranteed. As a development strategy, marketing experts within the company have proposed different expansionary channels in managing online marketing through internet tools (Kotler & Keller, 2012).

As a strategy for further penetration of the expansive global software and cloud hosting, the Mediafire.com has improved on its distribution network by adding a fleet of automobile product display shops. These automobiles are fitted with visible posters of the company products. The automobiles are allocated to different regions across the US where the availability and visibility of the company’s products are minimal.

In order to successfully implement this strategy, the Mediafire.com Company has doubled its current expenditure on product distribution channel to the market. However, this cost is projected to substantially drop after a short period of time as the company will start to benefits from economies of scale as a result of dispatching more products into the market due to improved product visibility (Harris & Dennis, 2007).

Properly designed online marketing and product distribution management has facilitated the success and sustainability of the company’s online marketing since it operated within stipulated business laws. To increase credibility and maintain professionalism, the current distribution channels of the Mediafire.com Company encompass processes and features that flawlessly facilitate healthy and lifetime relationships between the business and its clients.

Among the new development elements that have been incorporated in the current distribution strategies include trust, fair retribution process, and passing accurate information to target audience (Cone 2011).

In summary, since the current distribution channel is already developed and the Mediafire.com brand preference stable, the distribution strategies are very realistic since marketing resources (distribution patterns) are fully operational to facilitate a market exercise on target and segmenting position for the company’s products. The market share increase is to be realized within twenty four months with periodic updates activated after every month to facilitate progress and success measurement against projections of the market share expansion objective.

The organization’s promotional objectives and strategies

The Mediafire.com actively uses the new media element (NME) techniques to promote both their production and their vision on art and fashion. They are willing to use innovations in style, which brings fruits of colourful, bright presentation of online products with unusual forms.

Such a production has to be published and promoted on Instagram, company website, and social media where software creators, vendors, and users can see promotion and be excited. The Mediafire.com has its own website where promotional campaign is a little bit more than just gallery with pictures. The website functions as a blog where they can announce upcoming products and form customer community. The company’s website is part of its communication strategy and it requires professional attitude in order to keep content under control (MediaFire, 2015, par. 7).

The Mediafire.com Company’s website has been optimised through the use of the Search Engine Optimisation strategy and is tailored to include a unique cookie which is transferable to the users of the website. The unique cookie for the website is transferable to all primary and secondary visitors of this site hence broadening the spread information on the website across the US and beyond.

Optimising the SEO has the potential of making the website go viral since the unique cookie will spread to the primary and secondary users (Blythe, 2006). Through timely appeal to emotions and self prejudice, the Mediafire.com products are packaged to engage the ‘perceived goodness’ and need to identify with ‘the ideal’ in the functionality and deployment within different television, social, and print media advertisements (Liu, Liao, & Peng, 2005).

These attractive values are clearly painted as perfect in the various advertisements about the products through use of bright and powerful communication themes such as universal compatibility with the programming languages such as NET, JavaScript, Client Object Model, and HTML among others. In order to make this strategy successful, the advertisement messages are modelled on the platform of consistency and direct appeal to the target market.

As indicated by the current marketing manager of the company, market penetration for the Mediafire.com products has been possible due to the unique qualities (Jin, Suh, & Donavan, 2008). Advertisements are very manipulative and use tactics that directly and involuntarily appeal to the mind of the target person.

Usually, advertisements appeal to memory or emotional response. Reflectively, the success of the Mediafire products promotion messages are deeply entrenched in the principle of keeping reliable and professional reputation in exchanging ideas and convincing customers. The advertisement messages are presented in two channels, that is, below-the-line and above-the-line.

Under the below-the-line approach, the products are marketed directly through the print and visual press. On the other hand, under the above-the-line approach, the advertising messages are presented via the social media to appeal to the customer segment consisting of the young technological gauchos and digerati (Roberts, 2005). The use of promotional strategies for the Mediafire.com products was informed by the need to;

Attract

The main objective of the Mediafire.com marketing plan is to attract the younger customers market through the company website and a twitter fan page in order to sell the applications. The objective aimed at packaging the Mediafire.com products as favourite of the younger customers who frequent social media and actually share a common technological culture. Apparently, this segment forms the largest bracket of those who will use the software and cloud hosting applications (McKinney, 2005).

Customer retention and loyalty building

Properly modified Mediafire.com products website and the social media pages have been successful in reassuring the customers on quality. Through massive recruitment of the Mediafire.com product fans in the twitter page, the company has not only benefited from an increased traffic of online compliments, but also recorded high rates of customer loyalty as most customers are influenced by reactions from other clients.

This customer retention strategy was meant to position the company as a market leader in terms of customer satisfaction tracking and response (Pergelova & Angulo-Ruiz, 2013). This was achieved through optimisation of the Mediafire.com products website’s search engine.

Promotion and points of sale

Since the Mediafire.com products are based on B2B model, the company’s promotion and advertising activities include usage of all marketing tools of B2B. With its decided joint partner strategy, the company has recruited several marketing companies with the responsibility of marketing its products.

This strategy is has been successful since the contracted company have better knowledge of the industry, requirements, and approach to minimize conflict as a result of different perceptions (Stokes, 2011).

Improving promotional budget to get better results

The Mediafire.com may improve the promotional budget to get better results through increasing the current marketing budget allocation for social media marketing by 20%. Since most the products offered by the Mediafire.com Company are online based, increased online marketing activities will increase product visibility and intake from customers across the globe (Sarin, Challagalla, & Kohli, 2012).

The company may recruit an online marketing company to implement, manage, and generate feedback on the effectiveness of the short messages, link referrals, and fan pages. Since the company has a data base of the contact of the targeted clients, increased social media marketing will translate into improved sales recorded.

The use of expanded marketing mix to improve the performance

The Mediafire.com may use the expanded marketing mix to improve the performance of the company through creation and successfully implementation the marketing strategy to ensure customer loyalty and market expansion. The company’s product multi-branding as a positioning strategy may enable it to integrate the expanded marketing mix by balancing the elements of intangibility, inseparability, and heterogeneity in the 7Ps of its market mix as a result of improved product visibility for each target segment (Tynan & McKechnie, 2009).

The company can use a strategic brand equity model to integrate the advertisement approach to its market penetration strategies. To achieve this, the company should segment and differentiate its market along consumer-based market segmentation procedures. Specifically, the online kiosk model should use the local media channels to keep in touch with the target segment (Winchester, 2006).

This is summarised in the proposed brand equity model diagram below.

(Source: Self generated)

In order to increase credibility and maintain product visibility, the Mediafire.com website and social media channels should be modified to encompass processes and features that flawlessly facilitate a healthy lifetime relationship between the product and its clients across the globe.

Conclusion

Marketing communication strategies are important in aligning a company towards the target market in order to achieve optimal sales. The main determinants of a successful marketing communication plan lies in the proper brand alignment and research on segmentation.

In order to achieve the desired goals, Mediafire.com Company’s positioning ensures clear difference of its products from the existing products of other competitors. The strategic plan has internalised the aspects of business vision, mission, and values in its promotional, pricing, distribution, and marketing mix strategies.

The company has a potential of increasing customer base by introducing more cloud hosting systems besides improving on the current SharePoint product. The Mediafire.com Company is positioned to reap heavily from the recommendations proposed. Despite its wide market, there is need to counter competition and ensure business sustainability. Currently, the market dynamics discussed above should be skewed to optimise the company’s product performance.

References

Blythe, J. (2006). Essentials of marketing communications. New York, NY: FT/Prentice Hall.

Cheverton, P. (2004). Key marketing skills: strategies, tools, and techniques for marketing success, Sterling. London, UK: Kogan Page.

Cone, S. (2011). Steal these ideas: Marketing secrets that will make you a star. New York, NY: John Wiley & Sons.

Dagnino, G., & Rocco, E. (2009). Competition strategy: theory, experiments and cases. New York, NY: Rutledge.

Farooq, F., & Jan, Z. (2012). The Impact of Social Networking to Influence Marketing through Product Reviews. International Journal of Information and Communication Technology Research, 2(8): 627-637.

Farris, P., Bendle, N., Pfeifer, P., & Rebstein, D. (2010). Marketing metrics: The definitive guide to measuring marketing performance. Alabama, AL: FT Press.

Ferrel, C., Lukas, B., Shembri, S., & Outi, N. (2012). Marketing Principles: Asia Pacific Edition. Sidney, Australia: Cengage Learning.

Harris, L., & Dennis, C. (2007). Marketing the eBusiness, New York, NY: John Wiley & Sons.

Ira, K. (2002). E-Marketing: What Went Wrong and How to Do It Right. Los Angeles, LA: K&A Press.

Jin, H., Suh, J., & Donavan, T. (2008). Salient Effects of Publicity in Advertised Brand Recall and Recognition: The List-Strength Paradigm. Journal of Advertising, 37(1): 45-57.

Kotler, P., & Keller, K. (2012). Marketing management (14th ed.). New Jersey, NJ: Pearson Prentice Hall

Liu, S., Liao, S., & Peng, C. (2005). Applying the technology acceptance model and flow theory to online consumer behavior. Information System Research, 13(2): 205- 223.

McKinney, L.N. (2005). Creating a satisfying internet shopping experience via atmospheric variables. International Journal of Consumer Studies, 28(3), 268-83.

MediaFire. (2015). Advertising. Retrieved from https://www.mediafire.com/advertising/

Pergelova, A., & Angulo-Ruiz, L. (2013). Marketing and corporate social performance: steering the wheel towards marketing’s impact on society, Social Business, 3(2), 201-224.

Roberts, J. (2005). Defensive marketing: How a strong incumbent can protect its position. Harvard Business Review, 83(11): 150-210.

Sarin, S., Challagalla, G., & Kohli, A. (2012). Implementing changes in marketing strategy: The role of perceived outcome and process-oriented supervisory actions, Journal of Marketing Research, 3(12), 564-580.

Stokes, R. (2011). eMarketing: The essential guide to digital marketing. London, UK: Quirk eMarketing (Pty) Ltd.

Tynan, C., & McKechnie, S. (2009). Experience marketing: a review and reassessment, Journal of Marketing Management, 25(6), 501-527.

Winchester, M. (2006). Positive and negative brand beliefs and brand defection/uptake. European Journal of Marketing, 42(6), 553-570.

Introduction

With 3,645 hotels and more than 470,000 rooms in 92 countries that are spread across all continents, Accor Group of Hotel is one on the largest chain of hotels in the world. As at June 2014, the company had an estimated €8.2 billion market capitalisation. It had revenue of €5536 million as at 2013.

Accor Group is a market leader in Europe and a major player in the world. The hotel group is ranked among the world’s top ten largest hotels in the world. With over 45 years and its presence worldwide, the hotel has a well-deserved position (Accor Group 2014).

The company has a portfolio of hotel brands that cover all market segments from economy to luxury. The portfolio ensures a wide coverage of as many consumers as possible. Its five-star brands of hotels include the Sofitel brand, while its four-star brands include the Novetel brand. Its three-star and two-star hotel brands are the Ibis and Hotel F1 respectively.

Despite its presence in nearly all continents, the company’s profits have lagged behind other competitors’ earnings. The situation has been attributed to many factors, among them being its expansion model through leases. The new planned measures of dividing the company into two divisions, namely HotelServices and HotelInvest, will go a long way in improving profits and better returns to investors.

It will also position the group to be more competitive. As the company moves ahead, it will have to put more resources to market its brand and cement it in its existing market locations to boost its profitability while at the same time playing an important role in enabling future successes in its expansion plans. This paper will discuss important aspects of market auditing and planning to position the company to be more competitive in its market segment.

Importance of Market Planning and Auditing at Accor Group of Hotels

The hotel industry is a highly essential business. It is important in providing accommodation for people on transit, holidays, and conferences among others. It also supports other essential sectors of the world economy such as tourism, transport, and agriculture (Middleton & Clarke 2012).

With the increasing globalisation and movement of people between countries, as well as within their respective nations, the hotel industry will continue to grow and provide essential services to the society. However, the industry is highly competitive. Hotels are competing to offer similar or differentiated services to consumers (Tollin & Carù 2008).

While goods in the form of food are sold in the hotel industry, the focus of the paper is the marketing of services such as accommodation and related luxuries such as security, experience, comfort, entertainment, and dinner experiences. Marketing auditing is a major aspect of any organisation’s marketing planning process since it seeks to position itself to be more competitive and profitable in the industry (McDonald & Wilson 2011).

It allows an organisation to look into its macro and microenvironments and effectively identity the trends in the industry, its strengths and weakness, opportunities, and threats, which allow it to have competitive advantage over its rivals. Further, it allows the organisation to come up with a corporate strategy with goals that it is sure of achieving based on its strengths and opportunities that are identified in the auditing process.

As Accor Group of Hotels moves ahead with its plan of dividing its hotel management approaches into two segments, it is important to have a marketing audit, which will guide its marketing plans and strategies towards more profitability. Further, due to the high competition in the industry, marketing audit is a very good tool for ensuring that the company can identify the trends and best practices in the industry.

It also stands a chance to identify its strengths and opportunities that it can maximise to its advantage. Consequently, marketing audit is an important and relevant tool that Accor Group of Hotels must use to guide its market planning process and development of the corporate strategies.

Specific Business Tools for Marketing Auditing and Planning at Accor

Accor can utilise various marketing audit tools to evaluate its marketing assets and/or review its marketing strategies, objectives, policies, and the means it seeks to use to achieve these goals and objectives. In the changing business environment, it is important to not only do auditing before the planning process, but also during the implementation process and the evaluation of the company’s future possible marketing actions (Taghian & Shaw 2008).

The marketing audit allows an organisation to understand its external and internal environment, as well as its strategy development (Violeta 2012). To carry out marketing audit, various business tools are used to cover both external and internal business environment.

At Accor Group of Hotels, a SWOT analysis can help the organisation to establish the key areas that it can emphasise while reducing its weak areas in its marketing strategies in an effort to boost its competitiveness through its restructuring plan.

For example, this tool can be used to identify the viability of its marketing plans that are focused on expanding its business in locations such as North America and Africa where it has less presence. It can help the company to ensure that its marketing strategies are aligned with the prevailing market conditions in the specific markets.

Another tool that Accor Group can use for marketing audit is the PEST analysis, which analyses the political, environmental, social, and technological conditions of the various markets where it exists. For instance, the company can use this tool to identify the conditions in the market and the viability of expanding its luxury hotels in specific market locations that the company may consider now or in the future.

Macro-environment for Accor Group in Asia

Macro environmental elements are the factors that happen in an organisation’s external environment that it cannot control, yet they are important in guiding its decision-making processes (Chabra 2012). They relate to the political, economic, social, and technological matters that must be considered at all times in an organisation’s strategic planning process.

Looking at Accor’s Asia market, the organisation must consider various important macro-environment factors as shown below:

From the above table, political stability is a major factor that must be considered by Accor Group. The hotel industry is highly dependent on tourism and travel sectors, which only flourish where there is political stability. Therefore, it is important for the company to strive to ensure that its expansion plans consider the political climate of the respective countries.

For example, major uprisings in the Middle East from groups such as Al-Qaida and the ISIS are a real threat to the tourism industry and in extension the hotel industry. Therefore, it is important for Accor Group to consider these factors in its expansion plans for its Asian market.

Micro-environment for Accor Group in Asia

The microenvironment refers to the immediate business factors in a business’ area of operations. They can influence its performance and its decision-making capabilities. These factors are unique to the business. They include customers, suppliers, producers, distribution channels, and the public among others (McDonald & Wilson 2011).

Porter’s five-force model is an important tool for analysing Accor Group’s microenvironment. The model considers supplier powers, threats of new entrants, customer powers, substitutes, and competitive rivalry. In the case of Accor Group, the threat of new entrants is not very high since the company targets different consumer segments to ensure that is has a competitive advantage over others, especially the new and emerging players.

However, considerable threats of entrants are evident with reference to other existing and reputable companies that can set base and compete effectively with Accor Group in the areas where it dominates. For instance, the Intercontinental Hotel Group is a major competitor. It also has a wide coverage as Accor Group.

Secondly, the threat of substitute is very high in the industry due to the high number of hotels in the sector. However, the company has remedied this situation by establishing hotels that target various levels of consumers from five-star to two-star hotels. The plan ensures that the company is competitive in terms of pricing. The company should also guarantee quality services and reduced operation costs to improve its profit margins.

The third important factor is customer bargaining authority. The hotel industry serves a wide array of customers. Hence, it experiences a moderate to low pressure with reference to customer powers in the sector. Further, customers are driven by many factors such as quality services, pricing, and security.

Hence, no customer can monopolise the industry. There is also an increasing brand loyalty for Accor Group, which erodes customer bargaining power. Fourthly, supplier bargaining command can play an important role in Accor Group’s microenvironment.

However, with its presence in numerous countries, and consequently a high number of suppliers, it is difficult for suppliers to leverage a significant power over Accor Group of Hotels. Lastly, rivalry in the industry is very high. Accor Group of Hotels must consider this factor the most important. The process of attracting customers with various offers and services is competitive.

In addition, other players are increasingly adopting cost-effective strategies to increase their profit margins. For instance, automating management systems and the adoption of technologies are the new frontier for competition in Accor Group’s luxury market segment.

Market Research and Market Intelligence

Timely and informed research is an important ingredient for successful decision-making in any given industry. For instance, looking at the hotel industry, especially in the mid-market segment in Asia where Accor Group has interest in, it is worth carrying out an informed decision-making process that is guided by market research.

In the Asian market, the region has been experiencing phenomenal economic growths that are fuelled by the emergence of economic powerhouses such as China and the oil-rich Middle East Asian nations (Kurkarni 2014). These encouraging conditions have attracted many hotels that are keen on increasing expenditure on luxury and transport.

For instance, major hotel players such as Intercontinental, Starwood, and Mantra have focused almost 80% of their expansion plans on this area of the world. Further, with more than 250 million visitors coming to China each year, the hotel industry will continue to surge even higher. Further, hotel occupancy has consistently been higher than 82% since 2012. This finding is an encouraging trend, which hotels must recognise and maximise.

Another important fact is that the luxury segment of 35% dominates the Asian market while the mid-market segment constitutes only 24%. Hence, by focusing on this segment, Accor Group will serve an obviously underserved and overlooked market segment.

By carrying out market research and intelligence, the company will be in a better position to understand market trends and competition levels. Hence, it will identify the target customers, especially in the middle class for its mid-market segment hotels.

Segmentation and Specific Segmentation Variables

Segmentation is an important factor for any business. It allows an organisation to identify and divide its target customers into various groups that have specific characteristics (Rusten & Bryson 2010). These characteristics or variables may include age, sex, and income among others.

For example, the luxury segment of Accor Group mostly targets high-income individuals, especially people in executive positions or corporate clients. These clients can be found in major cities of the world. Such clients are mostly in the age working bracket of 30 to 55 years. By segmenting the market, Accor Group is in a better position to design its marketing strategies that best suit this group of customers.

Market Positioning

Positioning involves the efforts that an organisation exerts towards creating a specific brand image. For instance, through its various brands, the company has positioned itself as a flexible company that can satisfy the expectations of other businesses while at the same time offering the highest luxury levels to all its customers (Tollin & Carù 2008).

The company’s luxury segment has positioned itself as an excellent segment that offers outstanding and memorable experiences to its customers, regardless of the location where they receive the services. In other words, the organisation seeks consistency of services across its outlets in the world.

Understanding Buyer Behaviour

The customer is always the king. This claim cannot be far from the truth, especially in the hotel industry. For instance, Accor Group must always understand the prevailing customer preferences and trends and implement them as soon as they arise. Consequently, market research should be an ongoing process to guarantee innovation and creativity, and hence organisational competitiveness.

Conclusion

Marketing is an elaborate subject that covers diverse areas that are critical in an organisation’s strategic planning. As discussed herein, Accor Group of hotels must undertake marketing audit that involves identification of its powers, flaws, success chances, and threats that will guide its marketing planning.

It is also an important process of understanding competition. The company needs to identify and appeal to its customers through segmentation and positioning of its brand.

References

Accor Group 2014, Key Figures. Web.

Chabra, T 2012, Marketing management, University Press, New York, NY.

Kurkarni, A 2014, Hotel views 2014: Asia Pacific. Web.

McDonald, M & Wilson, H 2011, Marketing Plans: How to prepare them, how to use them, John Wiley & Sons, New York, NY.

Middleton, V & Clarke, J 2012, Marketing in travel and tourism, Routledge, New York, NY.

Rusten, G & Bryson, J 2010, Industrial design, competition and globalisation, Palgrave Macmillan, Basingstoke, UK.

Taghian, M & Shaw, R 2008, ‘The marketing audit and organisational performance: an empirical profiling’, The Journal of Marketing Theory and Practice, vol. 16 no. 4, pp. 341-350.

Tollin, K & Carù, A 2008, Strategic market creation: A New Perspective on, John Wiley and Sons, Cambridge, UK.

Violeta, R 2012, ‘The role of market analysis in developing efficient marketing audit’, International Journal of Academic Research in Economics and Management Sciences, vol. 1 no. 5, pp. 222-229.

Executive Summary

Marketing is the process through which companies identify their customers’ needs in order to develop solutions that satisfy the identified needs. An effective marketing strategy enables companies to build a strong brand. This is often achieved through a “marketing mix that enables the marketing executives to develop the right product and to sell it at the right price in the right place”.

Moreover, using the most appropriate promotional activities helps in building a strong brand. In this regard, the components of a strong brand include brand awareness, image, personality, culture and identity. Prada is an example of a strong brand in the UK. This is an indication that the brand was established using an effective marketing strategy.

Introduction

Brands create value to consumers who use them and the companies that own them. A company with a strong brand is often capable of outperforming its competitors in the market. This is because customers usually identify with strong brands by associating them with superior qualities or attributes. A brand audit refers to the process through which a company undertakes a comprehensive examination of its brand.

An effective brand audit should enable the firm to identify the source of its brand equity and how it can leverage it. This paper will focus on inter-brand marketing audit. Concisely, it will analyze the Prada brand and one of its products.

Key Components of a Brand: Prada

A brand refers to the idea or the image of a specific product that consumers connect with by indentifying the name or the logo of the company that owns the product. Branding is the process through which the idea or image is marketed so that customers can recognize and identify with it.

Thus, a brand is a differentiation tool that is used to distinguish a product from its competitors in the market. For instance, Prada uses a logo and a name to distinguish itself and its products in the textile and apparel industry. The main components of a brand include the following.

Brand Identity

Brand identity is a set of distinctive characteristics or attributes that define the brand. These attributes define what the brand stands for in the market. In this context, the attributes of a brand are essentially a promise from the company to the customers. In a nutshell, a company must be able to offer products whose actual qualities match the perceived qualities.

Hence, brand identity helps companies to strengthen the relationship between their brand and customers. This is often achieved through a value proposition that is characterized by functional and emotional benefits. Prada is associated with high quality, luxurious and trendy products (Prada). These are the unique associations that define Prada’s brand identity, and promise to its customers.

Concisely, the customers expect the company to consistently offer high quality and trendy products. Brand identity is often reflected in the pricing strategy. For example, a brand that is associated with superior qualities often sells at a higher price than similar brands that are associated with inferior qualities.

Brand Image

Brand image refers to the brand’s reputation in the markets in which it is sold. It describes customers’ current perception of the brand. A strong brand image helps in creating a recognizable brand identity. Prada has a strong brand image due to its good reputation in the market. Customers believe that Prada’s products are superior and unique.

Individuals interested in luxurious fashion products often purchase the Prada brands in order to distinguish themselves from the rest of the society. Prada established a strong brand image by aligning its marketing mix to the values of its customers (Prada). This involved improving product quality by incorporating customers’ feedback in product development.

Brand Character

Brand character refers to the integrity or the trustworthiness of the brand. A strong brand must be trusted by the customers. This can be achieved if the company is capable of maintaining a specific level of service or product quality over a period of time.

Thus, brand character also represents the company’s promise to its customers. Having stayed in the industry for close to a century, Prada has established a brand character that is known for consistent quality and value for money.

Brand Awareness

Brand awareness refers to the ease with which customers can remember and recognize a particular brand. It enables customers to link the brand name or logo to past experiences with the brand. Prada’s logo plays a critical role in enhancing its brand awareness.

This is based on the fact that the company’s logo is associated with the quality and authenticity of its products. In a nutshell, the customers use the logo to distinguish the original or genuine Prada brands from the fake ones.

Brand Personality

Brand personality refers to the human attributes that are associated with a given brand. These attributes include gender, age and socio-economic status. Prada has products that are associated with certain human characteristics. For example, the wallets are associated with male customers.

Brand Culture

Brand culture is a type of an organizational culture that enables the employees to uphold the brand values. It enables employees to develop solutions that help in delivering a branded customer experience. A relevant and sustainable brand must operate like a culture. The company must convince the public that it believes in its brand.

Thus, the brand must always be included in the company’s official communications such as advertisements, business memos and public statements. Prada enhances its brand culture by using its logo in every written statement that is meant for public consumption.

Comparison of Brand Logos (the logos are shown in figure 1 and 2 in the appendix)

Marketing

Marketing is “an all-embracing function that links the business with customer needs and wants in order to get the right product to the right people at the right time”. Thus, marketing is an organization-wide process in which customer requirements are identified and fulfilled in a manner that is efficient and profitable.

The main objective of marketing is to enable a business organization to achieve its goals by outperforming its competitors in satisfying customer needs. The roles of marketing include the following. First, it helps the company to identify customers’ requirements. This is often achieved through marketing research that focuses on customers’ needs or changes in tastes and preferences.

Customers’ needs can also be identified and understood through an effective feedback system that enables the firm to communicate with its customers. Second, marketing helps in creating awareness about the company’s products. Awareness is created through marketing activities such as advertising, personal selling and sales promotions. Third, marketing helps in satisfying the needs of the customers.

Concisely, marketing initiatives help in product development. For instance, the feedback obtained from customers through a market research helps managers to develop the right products. Finally, marketing helps in establishing and maintaining relationships with customers.

Marketing initiatives such as loyalty programs enable companies to establish long term relationships with their customers. Similarly, discounts and after sales services help businesses to nurture their relationships with customers.

Marketing Mix

Marketing mix is a tool that enables a company to develop the right product and to sell it in the right place at the right time using the most appropriate promotional activities. The key elements of a marketing mix include place, price, promotion and product. Price refers to the monetary value of the product or service that is being sold. It is the “amount of money that a customer must pay in order to acquire a product or to enjoy a service”.

A product refers to the “actual good or service that satisfies the specific needs and wants of the customers”. Place refers to the location in which the product or service can be bought. It describes the distribution channels that are used by the company to reach its customers. For example, retail outlets are normally used to sell consumer products such as cosmetics.

Finally, promotion refers to the business communication initiatives that enable companies to reach their customers. Promotional activities usually provide information that enables customers to make the right decisions before purchasing a given product or service. The roles of marketing mix include the following.

First, it helps marketers to understand what customers want from a given product. It enables marketers to identify the needs that their products are expected to satisfy, as well as, the features that their products must have in order to satisfy the identified needs. In this context, marketing mix facilitates marketing functions such as product development, branding and product differentiation.

Second, marketing mix helps companies to identify the places in which buyers look for their products. In this case, it enables marketers to select the right distribution channel and the most appropriate selling method. For instance, it will be necessary to use a sales force if customers are interested in products that are delivered directly to them.

Third, marketing mix is used by managers to select the best communication channel. In this regard, it helps managers to appraise the existing marketing communication channels. For instance, a company can decide to create awareness about its products through TV adverts if the targeted customers have access to TV sets. Additionally, it enables companies to analyze the effect of their competitors’ promotional activities.

Finally, marketing mix helps in formulating the pricing strategy (Kotler, Keller and Brady p. 117). Concisely, it enables marketers to understand the customers’ perception of the product’s value. Moreover, it enables marketing executives to analyze the effect of price changes in the market.

Prada’s Handbags

The Product

Prada is known for manufacturing and selling luxurious handbags. In order to satisfy the needs of its customers, the company sells a variety of handbags. Concisely, the handbags have different colors, shapes and sizes. Additionally they are made of different leather materials.

Prada’s handbags have been positioned as the best products in their market segment. This is because they are made of high quality leather. Moreover, their designs are considered to be the best in the industry.

The Place

Prada’s handbags are distributed through three channels. First, the handbags are sold through the company’s retail outlets (Prada). The company has established several retail outlets in various cities in the UK. This distribution channel was adopted to enable the company to interact with its customers. The interaction enables the company to understand the needs of its customers.

Second, the handbags can be bought through the company’s distributors. This is meant to improve the visibility of the product. Third, the handbags can be bought through the company’s sales website. Selling the handbags through the company’s website was adopted because it is efficient and cost effective.

The website enables the customers to view the handbags that are available so that they can choose the right product (Prada). Moreover, online sales enable the firm to reach customers who are not located near any of its retail outlets.

Promotion

Prada’s promotional activities include discounts, advertising and internet selling. The adverts are done through print and electronic media. The company also uses its sales website to advertise the handbags that are available in its stores (Prada). Additionally, social media such as facebook and twitter are used to inform the customers about the products and the promotional activities that are being run by the company.

The sales promotions include discounts on cash purchases (Prada). For example, a customer who is participating in the company’s loyalty program is entitled to a discount on repeat purchases. Internet selling is done through the company’s website, which contains all the information about the handbags and how they can be purchased.

Price

The price depends on the size of the handbag and the material that was used to manufacture it. For example, handbags that are made of pure leather cost approximately 1050 Euros. Prada uses the premium pricing strategy to determine the retail price of its high quality handbags.

In this case, the handbags are sold at a high price due to their superior quality. However, the firm uses the penetration pricing strategy to determine the price of its standard handbags. This involves selling the handbags at low prices in order to gain market share (Kotler, Keller and Brady p. 89).

The strengths associated with Prada’s marketing strategy include the following. The brand has several distribution channels that enable customers to access the product easily. By selling a variety of handbags, the firm is able to meet the diverse needs of its customers. The pricing strategies that have been adopted by the firm can help it to increase its market share and revenue.

However, they can have a negative effect on the brand identity because the handbags have different prices. Thus, customers who are not able to distinguish the features of the handbags will not connect or identify with the brand. Despite this weakness, Prada’s marketing strategy is effective due to the aforementioned strengths.

Conclusion

Marketing enables companies to identify customer needs and to develop products or solutions that can satisfy the identified needs. An effective marketing strategy must have a good marketing mix. The elements of the marketing mix include place, price, product and promotion. By leveraging these elements, a company can build a strong brand.

This is because customers are likely to identify with a brand that is known for high quality and is sold at the right price in the right place using the most appropriate promotional activities. In this regard, the components of a strong brand include brand image, character, awareness, culture and identity.

Appendix

Figure 1: Prada’s Logo

Figure 2: Louis Vuitton’s Logo

Works Cited

Burrow, James. Marketing. New York: McGraw-Hill, 2008. Print.

Kotler, Philip, Kevin Keller and Mairead Brady. Marketing Management. New York: McGraw-Hill, 2009. Print.

Lamb, Charles. Marketing. Boston: Routledge, 2011. Print.

Loudon, David, Robert Stevens and Bruce Wrenn. Marketing Management. New York: McGraw-Hill, 2004. Print.

McColl, Julie and Christopher Moore. “An Exploration of Fashion Retailer Own Brand Strategies.” Journal of Fashion Marketing Management 15.1 (2011): 91-107. Print.

Prada. Group Profile. Prada, 5 Nov. 2012. Web.

Pride, William and Charles Ferrell. Marketing. New York: McGraw-Hill, 2011. Print.

Ross, Jill and Rod Harradine. “Fashion Velue Brands: relationship Between Identity and Image.” Journal of Fashion Marketing and Management 15.3 (2011): 306-325. Print.

Winer, Russ and Ravi Dhar. Marketing Management. London: Oxford University Press, 2010. Print.

Introduction

Strategy audit refers to a concept that implements the process of decision making. It aims at evaluating the risks of management and analyzing the functions of corporate institutions. It also focuses on the holistic examination of the present performance, environment, strategies applied and control of the strategies.

It determines the organizational strengths and weaknesses exposing problems that exist in the organization. It is, therefore, a crucial tool that facilitates decision making which is a major pillar in the prosperity of an organization. Therefore, strategy audit is an inevitable process for any successful organization.

In this paper, we shall focus on the Delloite and Touché Company.

Description

Deloitte and Touché Company is an international private company. In the 1800s, its conception was started by Deloitte when he was staying within London. They developed the company to offer professional services.

The services included financial advisory, assurance, enterprise risk, tax advisory, and consultation among others. It has employed about 193000 employees and operates on one hundred and fifty countries in the world.

Background and Context

Carrying out a strategic audit for this company is appropriate due to various reasons. First, the company has a long history that gives it a sense of popularity. As a result, the company meets enormous challenges and management’s risks that should be audited.

Secondly, the company has a huge organization capacity that comprises of 150 branches around the world.

Consequently, there arise a lot of strategic risks in the process of coordinating the branches and working harmoniously. The two factors also offer the necessary familiarity with the company and make the analysis easy.

The company deals with customers who pay a lot of money for services. Failure to deliver quality services would lead to loss of customers to the competitors. We, therefore, aim at understanding the various pitfalls that would lead to the downfall of the company.

The possible pitfalls would be organizational, structural or financial. Although we might not be able to make changes in the company, this analysis will sharpen personal and strategic skills that we can apply in other organizations.

Summary of Analysis

We seek to determine the strengths and weaknesses of the company. These two aspects of the company are the major pillars of its strategic audit. Consequently, the approach provides the necessary knowledge that allows the company to suppress the weaknesses.

The company has a good business foundation within 150 countries of the world. This has enabled this company to capture a wide market for its products. Also, the network has enabled it to compete against its competitors.

The company is enjoying economic competence and solvency by concentrating its focus on large consulting firms. This has built large revenues that have amounted to about thirty two billion in US dollars. It offers a good working environment that enables it to tap competitive staff from the market.

Many of the workers who were granted a chance to work for Deloitte and Touché considered it to be a fortune employer.

On the other hand, the company has several challenges that need to be addressed. First, the company has faced a lot of criticisms and operational failure. For example, the court system of California reported termination of a project that was assigned to Deloitte and Touché Company.

They reported that they had allocated $260 million for the project. During termination, the company had used $500 million for the project and had not set up any court to operation.

In another case, the commission of security and exchange reported that Deloitte had to pay $50 to Adelphia Communication Company due to flaws in their financial statement.

It is clear that the company is confronted by serious set up failures. The failures can lead to customer dissatisfaction and financial breakdown of the company.

This company has, also, portrayed a state of incompetence. For example, Australian Custom Department hired this company to make a report about illegal tobacco. The department described that the report was misleading. When Deloitte repeated this work, the department declared the report as baseless (Morgan 1996).

This was a huge blow to the company. It portrayed a lack of competence on the company’s side. In addition, it induces the customer to lose confidence and trust for future services in the company.

It is clear that the company should aim at eliminating weaknesses that are mentioned above and stop relying fully on their strong brand.

Summary of Findings

The company benefits from strong brands that it has managed to make over the years. These brands give the company enough reputation that earns credibility and reliability.

It is clear that evolution of the company has experienced a lot of rebranding. Most customers have identified the company by the present brand. Consequently, rebranding is not a good choice for the company unless it is necessary.

The company has issues with quality of services they offer. Some customers have raised issues that portray dissatisfaction and mistrust in the company. The criticism arising from various companies has determined the company as wanting. In fact, some of the criticism arose recently.

A credible example is the allegations concerning Iranian Standard Chartered Bank. Deloitte was needed to explain the allegations suggesting that it helped the bank to make fraud money attempting to cover a loss.

The company practices global and international economies through branching in many countries. However, there exists insufficient supervision of branches by the company’s management.

In this case, many firms have collaborated with the company. These firms originate from different companies around the world. Consequently, coordinating the branches and inducing them to work harmoniously in the same platform is a great challenge.

Recommendations

There are various recommendations that will help the company to retain economic power that sustain customers. First, the company should strengthen inside-out strategy.

This implies that they should focus on the core strengths of the company to enhance change, develop services and encourage discovery. Therefore, the company aims at achieving efficiency and adapting to variation of situations in the market.

The company should also adopt the spirit of value maximization rather than profit maximization. In this case, the company aims at meeting the customers’ expectations alongside making profits. However, the two concepts must be balanced in a bid to realize economic solvency of the company.

Diligent monitoring and communication with customers during projects should be considered in a desirable manner. For example, the Electrical Holding Company of Guangdong Kelon accused Deloitte for lack of communication.

They alleged that the company did not inform them about the poor financial position. Timely communication and supervision play a crucial role in determining the credibility of services.

Value Creation and Value Capture

Creating value and capturing value are essential factors of an organization that succeeds financially. In creating value, the company should ensure that customers are satisfied by the services. It, also, aims at creating a good organizational reputation that attracts the customers.

In this case, Deloitte should ensure making of individualized considerations, employment of competitive experts and creation of a wide coverage. In value capturing, the company aims at retaining its solvency and satisfying the current customers. It uses the available strengths to gain customers.

Capturing is done through offers, sponsorship of customers’ events and offering related services. This ensures that a company maintains and earns their trust leading to solvency.

Making Tough Decisions

The toughest decision Deloitte Company will make is related to value and profit maximization. The company should make a hard decision of choosing to incorporate value maximization. In this case, it will focus on the customers’ satisfaction and maintenance of profits made in the company.

The company also needs to make a tough choice of investing on competent staff and building a strong software system. For example, there was a great problem with the software of the company in schools of Los Angeles.

In this case, the company’s systems incurred an error that led to underpayment, overpayment and lack of payment to teachers. The case reduced the credibility of the company greatly.

Deloitte and Touché and Competitors

The company’s experience is worth of competition from other companies that offer similar services. A credible example is Coopers & Lybrand Company which is called Price Water Coopers presently. It comprises of Deloitte elements that refused to merge with Touché Ross and make Deloitte &Touché.

On the face of competition, the company should adopt some strategies to provide competitive advantage. First, they should ensure that quality services are offered to emboss efficiency and accuracy. Quality assurance ensures that there is no loss of clients to other companies. It, also, attracts more clients who are seeking services from the company.

Severally, prices of services exceed the original budget that the company had given. This case was evident in California court system. In this case, the company used $ 500 million rather than the original amount set at $260 million. This is a great business menace that should be curbed.

As a result, the company should plan for expenditure before starting any project. This plan helps the company to project and predict the possible cost of operation.

Therefore, it eliminates the possibility of demanding for additional funds. These strategies can help the company to maintain its customers and satisfy their needs without conflict.

Design of Deloitte &Touch Company

Organization of Deloitte and Touché Company

The company comprises of three members. These members are Deloitte, Touché and Tohmatsu. This implies that Deloitte and Touché Company harbor a fairly complex organization. The organization limits the liabilities for any actions in the other components of the company.

The firms within the company are independent. They do not have authority over each other. At the same time, the members are not responsible for the mistakes performed by other members since there is no dependency.

Its structure gives individual members the right to join International Forum of Accounts (IFAC). The International Forum of Accounts is a forum that forms a network of accounting in the global scope.

It, also, has a complex global organization that includes countries that have collaborated with their services. In this case, its headquarters are in USA. Particularly, it is found in New York at 30 Rockefeller Plaza.

The headquarters are the common administrative point/centers. It has the senior company auditors of the company. The headquarters coordinate and monitor operations of branches in the world.

The company’s staff has diverse expertise. These experts include retired US marines, entrepreneurs, investors, politicians, bank’s CEOs, and governors among others.

The diversification of staff enables the organization to pool diverse knowledge and experience. The diversification has also played a crucial role in ensuring prosperity of the company.

Conclusion

From the analysis, the company is enjoying a fair stability within its structure and organization. However, we understand that it has few challenges within its organization. A quick action to meet those challenges would enable the company to make financial progress.

Reference

Morgan, M 1996, A transcript of proceedings of the Australian Tobacco Quality Towards 2001 seminar, Department of Natural Resources and Environment, Melbourne.