The main purpose of a supplier evaluation process is to find the inefficiencies and optimize these weak points. Production processes in various fields of economic activity acquire more complex forms, lose their integrity from the regional to the global level, are formed by new factors that have a significant impact on their development. Current market trends involve the production of goods or services with minimal resources for all enterprises involved in the supply chain. Evaluating supply chain performance is challenging, thus the communication process will be highly transparent, where the targeted suppliers will be informed in every stage of evaluation. An integrated system is being formed in which it is necessary to solve the problems of improving the planning and management of business processes. The process of evaluating the effectiveness of the supply chain is a characteristic of the degree of achievement of the final result, namely, the achievement of the corporate goal of the supply efficiency.
Main body
In order for the company to adhere to ISO 9001, it must strictly follow seven quality standards. The template for evaluation will include these components shown in the table 1.
Table 1.
#
ISO 9001 Quality Standards
Evaluation Descriptions
1
Customer Focus
Customers must be a centerpiece of the evaluative procedures
2
Leadership
Correct leadership must be implemented
3
Engagement of people
Individuals involved in the process must be fully engaged
4
Process approach
The evaluation must consider the processes and their optimization
5
Improvement
The management must always show quality standards improvements
6
Evidence-based decision making
Problems must be solved or addressed by relying solely on the available evidence
7
Relationship management
There must be a strong and professional relationship among involved parties
It is important to for the company to be prepared before the certification procedure. Thus, the main consideration should be focused on assessing costs of the registrar in regards the surveillance, registration, and recertification audits ( What are Quality Standards? ). The company should fully comprehend its current level of adherence to ISO 9001 standards. In addition, the company should allocate the required amount of resources to the given project, which include implementation and development procedures. There should be a consideration for costs that are related to consultations and support groups ( What are Quality Standards? ).
The company should also record evaluation data gained from supplier evaluations in order to analyze it and present to the interested parties. Therefore, the company must take a number of preliminary measures in order to ensure that ISO 9001 certification will be acquired. The implementation plan will allocate the key resources and data collection process to the evaluation teams, which will primarily focus on outlining the key supplies. The latter should be the most important and impactful suppliers, who supply the relevant items in a regular manner. The supplier communication plan will include the stages, such as introduction of the evaluation, the statement of reasons, and the potential benefit for the evaluated supplier. The data collected through the evaluation process will be used to improve supplier performance by outlining and specifying the points of inefficiencies.
Of the many indicators used in the practice of managing enterprises, as a system of indicators of the level of logistics services and supply chain assessment, criteria should be adopted that most objectively and fully reflect the effectiveness of supply chain management for the organization, ensure clarity and measurability, and which can be adjusted, if necessary, depending on specific conditions:
the lead time;
the proportion of orders that can be completed completely and immediately;
readiness to fulfill the order;
strict adherence to deadlines;
the reliability of the execution of orders;
flexibility in order fulfillment;
reliability;
the range of products;
order fulfillment ratio;
informational readiness.
The measurement system, which forms the basis for evaluating and analyzing business processes, must be defined and agreed upon before the project is implemented, as it is applicable at two stages at the stage of analysis of the enterprise model and at the stage of evaluating the effectiveness of the entire enterprise. At the stage of model analysis, the effectiveness of business processes such as control parameters is evaluated. At the stage of evaluating the effectiveness of the reengineering project, the result of its implementation and how the control parameters have changed are evaluated. Evaluation of the economic efficiency of deliveries should be based on indicators of satisfaction with quality, cost and time, and the selection of priority processes for carrying out activities to optimize business processes in the links of the supply chain.
The importance of the processes is determined by the management of the organization, taking into account their priority according to the expectations and requirements of consumers. Quality satisfaction indicators are calculated according to customer process estimates and the supplier sustainability (Bai et al. 7047). Evaluation of the time and cost of each process is based on a study of the resources consumed by the process and its execution time. The emphasis should be on calculating and analyzing the economic efficiency of the main deliveries and related business processes, the results of which are interested in external consumers, but on its basis the analysis of both auxiliary and servicing processes can be carried out on the basis of surveys of internal consumers.
It is necessary to adapt part of the classification and supplement it with a logistic component, which would take into account the specifics of material and associated flows in the supply chains, according to which deliveries must comply with standards. Thus, the material flow includes components related to the physical parameters of the order. Examples of failures associated with material flow include damage to packages, shortages or reassortment. The information flow includes document management and information flowing inside the supply assessment during its operation. Failures may be related to the execution or circulation of documents in deliveries, or during the exchange of information between participants in this process. The financial flow is characterized by cash costs for the organization of delivery of orders in the delivery procedures. These costs may appear in the process of recovery after failures, or as a result of failures. In all flows, various kinds of emergency situations can occur, which are expedient to distinguish into a separate category.
Conclusion
In conclusion, the integration of the given proposal will allow the company to create a tool with which it can identify the causes of discrepancies, and then develop corrective and preventive measures to further improve the activities of all processes taking place in the direct supply chain. The developed assessment and data collection of the effectiveness of deliveries is based on a criteria-based approach and an integrated assessment of the results. As a result of the analysis, factors that negatively affect the positive performance of the supply chain can be identified. The value of the integral coefficient will allow the manager to determine the level of supply performance and establish what measures are necessary to improve business processes in the direct supply chain. The measures taken to improve business processes will improve the generalized and positive effectiveness, and accordingly the effectiveness of the supply chain as a whole. As a result of measures aimed at improving the evaluation of processes, an increase in the effectiveness of the supply chain as a whole can be achieved.
Works Cited
Bai, Chunguang, et al. Social Sustainable Supplier Evaluation and Selection: A Group Decision-Support Approach . International Journal of Production Research, vol. 57, no. 22, 2019, pp. 7046-7067.
Culture can be looked at as a pattern, or general ways of doing things in a community, society, or organization. It consists of fundamental values that people in the organization learned as they solved their problems of external and internal integration. These values worked well enough to be considered valid, and as a result, they are to be taught to new members as the correct way to do things. Cultures are collective beliefs that in turn shape the behavior of employees.
They are based in part, on emotions, which are particularly prominent when change is to occur. It is also based on a basis of past continuity whereby the potential loss of continuity in part explains the resistance to change. Although cultures resist change, they are constantly changing. This contradictory condition limits the speed of change and consumes large quantities of energy. (Handy1998)
Culture in an organization
An organizations culture may be hardly noticeable, taken for granted, assumes, a status quo that we live and participate in but do not question. Elements of the culture may be questioned where individual or group expectations do not correspond to the behaviors associated with the prevailing values of those who uphold the culture. Organizational culture, also known as corporate culture, comprises the attitudes, experiences, beliefs, behavior patterns, rituals and traditions, and values of an organization.
It has been defined as the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines, or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another. (Hall, 1987)
Culture in an organization generally refers to the social, behavioral expression and experiencing a whole range of issues such as:
Work organization and experiences.
Distribution and exercise of authority.
Rewarding, organizing, and controlling people.
Staff values and orientation.
The level of formalization standardizations and control through systems there is.
The value placed on planning, analysis, logic, fairness, etc.
How much initiative, risk-taking, the scope for individuality and expression is given.
Rules and expectations about such things as informality in interpersonal relations, dress, personal eccentricity, etc.
Differential status.
Emphasis given to rules, procedures, specifications of performance and results, team or individual working (Ghoshal 2003).
The perceived impact of organizational culture on employees behavior has been articulated for many years. M. P. Carrol observed in 1982 that culture, like morals, laws, and customs; shapes behavior, and is something that older generations hand down to younger ones it is like collective programming of the minds of one group that differentiates them from other groups. Employees must learn the programs of their organizations culture if they are to make the system work. (Hall, 1987)
The impact of organizational culture on the behavior of employees has been postulated for many years and its impact continues to be demonstrated. The most important factors that influence employees engagements in the organizations are:
The Chief Operating Officers vision and values
The organizations strategic plan
The operating needs of the line organizations
The organizations culture,
The level of motivation of the employees. (Intrinsic and extrinsic).
Much popular attention has been focused on the hypothesis that strong cultures, defined as a set of norms and values that are widely shared and strongly held throughout the organization (OReilly and Chatman, 1996: 166), enhance firm performance. This hypothesis is based on the intuitively powerful idea that organizations benefit from having highly motivated employees dedicated to common goals (e.g., Peters and Waterman, 1982; Kotter and Heskett, 1992).
In particular, the performance benefits of a strong corporate culture are thought to derive from three consequences of having widely shared and strongly held norms and values:- enhanced coordination and control within the firm, improved goal alignment between the organization and its members, and increased employee effort. In support of this argument, quantitative analyses have shown that firms with strong cultures outperform firms with weak cultures (Kotter and Heskett, 1992; Gordon and DiTomaso, 1992; Burt et al., 1994).
An organization can have a strong or weak culture. Strong culture exists where employees respond to stimuli because of their alignment to organizational values. It also occurs where employees are engaged in decision making particularly on issues concerning their welfare. Organizations with a culture that encourages upward communication always have motivated employees. Weak culture occurs where employees have little alignment with organizational values, and control must be exercised through extensive procedures and bureaucracy. With a strong culture, employees do things because they believe it is the right thing to do. (Donovan2006)
The management may try to determine an organizational culture. They may wish to impose organization values and standards of behavior that specifically reflect the objectives of the organization. In addition, there will also be an extant internal culture within the employees. Work-groups within the organization have their behavioral quirks and interactions which, to an extent, affect the whole system. Culture can be imported from other organizations. For example, computer technicians will have the expertise, language and behaviors gained independently of the organization, but their presence can influence positively the culture of the organization as a whole. Organization cultures that embrace new ideas and innovations from their employees increases the degree of employees engagement in the organization
Employees engagement
Employees needs may be measured in three ways. They are:
Inclusion is the level of contact and prominence an employee desires.
Control, this is the amount of power dominance and individual seeks.
Affection, this is the level of closeness and individual seeks.
An organizations culture that seeks to recognize and address these needs improves employees performance and enhances their engagement in the organization. Inclusion, control, and affection correspond to positive or negative traits of some organizational cultures. Social Styles describes the behavior of employees in terms of four general categorizations. Each of the styles is expected to work best in a particular set of circumstances that may be directly related to organizational culture. They are:
Amiable,
Analytical,
Drivers,
Expressive.
The amiable style works best when the climate is free of time constraints and pressure. The Analytical style personality works best when the elements of a situation are organized and directions for implementation are provided by others. The Driver style works best when the climate is not constrained and the Expressive style works best in an open climate in which interactions with others are important.
Employees ability to shape an organizational culture is increased by the fact that certain employees tend to group into disciplines and fields of employment. The outcome is that a non-random population of individuals with similar choices inhabits many organizations. This homogeneity provides increased impetus and decreased resistance to the shaping of a desirable culture. (Schein1985)
Organizational culture can be in a way that acts to satisfy and influence employees preferences by periodical changes that favors them. Replacing key employees in the organization in a manner that promotes specialization, initiating new forms of communication, establishing new reward and recognition systems, can bring about changes is a good move. This can be achieved by including changes in the behavior that is rewarded and changing management processes, such as meeting frequencies, attendance, and agendas.
These cultural adjustments can increase employees engagement in an organization. Although the prerogative to make many of these changes lies principally with the organizations formal management, there are also many indirect ways for others with less formal power to bring about changes in the organizations culture that influence their participation. (Donovan2006)
Employees effectiveness and ability to manage change would be promoted if they were educated in the way their behavior is influenced by the culture, systems, processes, the physical environment, and supervisory verbal behavior. Most employees do not understand how immediate, real-time consequences influence what they do, how frequently they do it, or whether they stop doing it. They take it as culture or routine.
An organizational culture that regards positive reinforcement through rewards and recognition as necessary but not critical to business success has a low influence on employee engagement in their organization. They often have a vague and incomplete understanding of what drives daily employee behavior; this is a liability to the overall mission of the organization and at best, a risk to profitability. (Charles and Gareth 2001)
Types of organizations cultures
Changing an organizations culture takes a long time; the organizations culture should be able to influence employees by taking the quickest route in improving their performance and hence enhancing their output by change of employees behavior. The management should identify the employee behaviors that will help his or her work unit or department excel and reinforce such behaviors in the organization. The management should orientate the organizations culture, such that these cultures follow behavioral principles that control the factors that govern what the employees do always.
An organization that has a culture that allows interactions of seniors and junior employees increases their engagement in organization activities. The key to employee performance and job satisfaction is the frequency and quality of his or her interactions with their supervisor. The communication between the management and other employees should be aimed at either reinforcing positively or negatively the employees quality of work accordingly. This should be exercised with a lot of diplomacies so that there is a promotion of good behaviors as well as punishments for undesirable behaviors that may result in poor performances in the workplace. Leaders and all levels of management need to know how they impact employee behavior and use that knowledge for positive influence. (Charles and Gareth 2001)
Organizations with a culture of reward, recognition, and incentive systems boost employees morale and their engagement in an organization. All levels of management can become dependent on programmed rewards as replacements for hands-on coaching and supervision. Existing reward systems directly encourage the behavior that leads to the prize, the money, the payoff, or the award. As a result, the set goals and objectives of the organization are met on time.
The existing reward systems may encourage cost control or productivity. Reward and recognition systems should be evaluated for the impact they have on teamwork, quality, ethics, and many other factors that can be usurped by compelling tangible rewards. Rewards and recognition practices represent an organizational system that influences other systems particularly the social system and human behavior in profound ways.
An organization should develop a culture that meets the need and aspirations of the employees. The following case study of Starbucks is a good example of illustrates this argument
On Howard Schultzs first day as CEO of Starbucks, he shared his vision with the employees. Schultz did this to empower the employees to be part of that vision. He enlisted their help in achieving the goal he had set forth for the company he planned to build. During this meeting, Shultz realized to achieve this dream he first had to repair the morale of the people. In the process of expanding the company, Shultzs wanted to make Starbucks an enjoyable place to work. He strived to attract employees who would enjoy their work and in turn, would perform at higher levels. The management team sought to understand and meet the needs of all the employees.
One of the first steps would be to provide full-time benefits to part-time employees. The employees felt that this provided a commitment from Starbucks to its employees while reducing turnover. The decrease in turnover would in turn provide greater, more personal customer satisfaction. Schultz stated, Part-timers were vital to Starbucks, and argued that, providing them benefits would signal that the company honored their value and contribution (McGraw-Hill pgs 4-5). Shultz continued to empower the employees by creating a Mission Review team. Employees were to speak up if anyone violated the mission statement of Starbucks. Through hands-on and interactive leadership styles, Starbucks built a company in which the employees shared in the success. Tiffany Smith, (TNU 2008)
Organizations with a culture of paying their workers higher salaries have a low turnover rate of their employees. Such employees develop a sense of achievement in their work as a result of their good pay. Therefore challenges within their work serve as motivation. Threats from management, especially in times of economic instability, can cause employees to shut down and adopt a survival mode philosophy, which is counter-intuitive to the success of the organization. The management should contain practical suggestions for managing problems during difficult economic conditions.
This can be achieved by involving all the employees in looking for the best solution for this impeccable. Monetary rewards should only be linked to performance. Exemplary work should be praised. Management should discover and help employees achieve personal goals. It should treat them fairly and honestly when making decisions to prevent de-motivation This encourages employees to help improve their feelings about work during difficult times. The culture that has avenues for negotiating for benefits, networking, maintaining visibility, and adopting a long-range vision will always influence employees engagement in the organization. (Charles and Gareth 2001)
Organizations should facilitate the alignment of management and employee goals. Management and employee alignment is critical for employee motivation and participation. The company will be better equipped to succeed with managerial and employee goals aligned to each other. All employees must agree with the purpose of the goals within the organization. Attitudes have to align with organizational goals or the company will never reach its complete potential.
A company wants to make sure everyone is on the same page and working together toward a common goal. Organizations with an Employee Alignment culture allow management to ensure all company views cascade across the company. All employees need to understand the work they perform. If the companys goals and employees goals are not in alignment, then the company is unfocused. The non-involvement of upper levels of management can attribute to the failure of the organization when company strategy and employee views are not in alignment. The non-involvement of upper management can lead to the demotivation of other employees. Organizations properly aligned have measurements in place to hold upper management accountable. (Charles and Gareth 2001)
Each position within an organization uses certain tools to better accomplish goals. These tools may range from business models to the necessary financial means to operate a department or division. It is the responsibility of each organization to provide these necessities to their employees. The responsibility of the employees is to utilize these tools to reach organizational goals. Organizations face the challenges of understanding the job and the tools necessary for the workforce. The management should successfully give employees the tools necessary to perform their duties. A majority of these relate to the training provided by the company.
The training of employees is possibly the most important capability a company can provide in the pursuit of greater motivation and productivity. An organization with a training culture can retain its employees. According to Christopher S. Fringes, the positive effects of employee training are far-reaching. He states, My observation during the past 35 years is that employees who receive regular training from their employers are more productive, develop a stronger sense of company loyalty, have higher morale, and tend to stay with an organization longer.
Conclusion
An organizational culture that allows the employee the opportunity to voice his/her opinions is likely to positively influence the employee. If an employee does not have the opportunity to voice his opinions, he will be less motivated to do his job. It is through engagement that a company can find areas needing improvement. Gallup published research proves that engaged employees are more productive employees.
It also proved that engaged employees are more profitable, more customer-focused, safer, and more likely to withstand temptations to leave. Many have suspected a connection between employees level of engagement and the quality of their performances. Management should also ensure that their organizations have a culture of fair promotions, which are dependent on merit. That is, ones academic performance and experiences. (Donovan2006)
Environmental perception plays a vital role in an employees hopes. It helps them to achieve their individual goals. On the other hand, employees are demotivated when they are frustrated in attaining their goals. Management that includes the use of threats fosters discord between management and labor and results in a de-motivated workforce. Employees look for more than monetary rewards within the work experience.
Most employees, who are competent in their field, are not motivated by good salaries but are motivated by their good work accomplished. Attainable challenges and a sense of capability act as strong motivating factors for such employees. Honesty and a sense of fair play on the part of management help to build an atmosphere in which employees are motivated. Motivated employees will appreciate increased responsibilities in their work and greater authority in making decisions relating to their jobs. (Charles and Gareth 2001)
A company can become successful because of its organizational culture. An organization that fosters a spirit of comradeship and cooperation among its team members encourages top performance. They are thus very successful. If the company culture encourages their employees to think freely and be creative, they feel part of the organization and hence enhance organizations performances. (Charles and Gareth 2001)
Other factors that into-operates employees in their organizations include physical buildings; the canteen, parking garage, and other recreational facilities improves the atmosphere of the work environment. Organizations with an extraordinary culture that cultivate an entire workplace with conditions that are conducive to effectively creating happy and productive workers can generate enthusiasm and pride in a company that will translate into a company that is more productive and wealthier on many levels, this increases employees participation in the organization.(Deal and Kennedy1982)
Theories regarding motivation in the workplace suggest several driving forces ranging from physiological, safety, social, esteem, and self-actualization needs. According to Maslow, Mans behavior is seen as dominated by his unsatisfied needs . Goals and incentives are the central components of motivation. People work first and foremost in their self-enlightened interest, for they are truly happy and mentally healthy through work accomplishment. Hershey, Blanchard, and Johnson 73 (Motivation). Maslow and Herzberg suggest that people generally seek security, social systems, and personal growth . For an employee to be effective in his workplace, he will look for ways to meet those basic needs in his workforce and motivate his people to accomplish corporate goals. Motivation is critical to employee performance. An organization with a culture that highly motivates its employees retains them.
References
Hudson, Michael Dr. Solving The Mystery of Employee Morale. www.EVERYDAYLEADER.COM. 2008.
Mintzberg H, The Structuring of Organisations, Addison Wesley.
Redding W, Managerial Effectiveness, McGraw Hill.
Likert R, The Professional Manager, Wiley.
Mintzberg H, Lampel J, Quinn J, Ghoshal S, 2003, The Strategy Process Concepts, Contexts and Cases, Prentice Hall, I988.
Black, Richard J. (2003) Organisational Culture: Creating the Influence Needed for Strategic Success, London UK, ISBN 1-58112-211-X.
Cummings, Thomas G. & Worley, Christopher G. (2005), Organization Development and Change, 8th Ed., Thomson Southwester, USA, ISBN 0324260601.
Kotter, John. 1992 Corporate Culture and Performance, Free Press; (1992) ISBN 0-02-918467-3.
ODonovan, Gabrielle (2006). The Corporate Culture Handbook: How to Plan, Implement and Measure a Successful Culture Change Programme, The Liffey Press, ISBN 1-904148-97-2.
Charles W. L. Hill, and Gareth R. Jones, (2001) Strategic Management. Houghton Mifflin.
Hofstede, G. (1980) Cultures Consequences: International Differences in Work Related Values, Beverly Hills, CA, Sage Publications.
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Sneaker and Persistence are prospective projects that offer a lot to customers and investors. They benefit the customer as new products are released and the investors and owners when they make profits. The aim of this case analysis is to assess the two projects and provide a recommendation on which project is more attractive.
John Culter did a preliminary assessment of Persistence and his calculation of the net cash flow has some errors. John evaluated the Net Free Cash Flow (NFCF) for persistence instead of the net cash flow (NCF). Calculating the NFCF means that the results have inconsistencies; they do not represent the NCF for the project. NFCF is calculated from networking capital, EBIT less tax, and the capital expenditure. Depreciation is a fixed operating cost that should be included in the calculation of the net operating cost. John left it out while making calculations for the value of the business. Fixed assets should be included as an operating expense for the financial period of acquisition and when the assets are sold. Depreciation has no impact on cash flow for periods in between acquisition and disposal.
Revenue
Calculations of NCF include cash flow from operating, financing, and investing activities in the project. The NCF for Persistence includes cash inflows and cash outflows. I calculated the net cash flow of the project and the result was as summarized in Table 1.
Table 1: Summary of Cash flow for the Persistence project.
Year
Inflow
Outflow
Net Flow
2012
$75,000,000.00
$88,000,000.00
-$13,000,000.00
2013
$52,500,000.00
$38,956,400.00
$13,543,600.00
2014
$72,450,000.00
$51,272,800.00
$21,177,200.00
2015
$94,690,072.00
$64,496,348.00
$30,193,724.00
The assumptions for the calculations are that the inflow for 2012 (Year 0) is from revenues. The inflow from the years that follow is drawn from New Balances share of Revenue for the year. The outflows in all of them are from operating expenses and tax expenditure. The value of fixed assets is included in the outflows for Year 0 and the inflows for the last period. The value is modified for the last and first financial periods for the period.
NPR and IRR: Persistence
Quantitatively, the Persistence project is slightly attractive because it is a short-term venture. It would have been more attractive the project was long and revenues were sustainable at that time. I estimated the net present value (NPV) of the Persistence project as -$18,811,033.08. The periods for the estimation were 4 and the discount rate 14%. The Internal Rate of Return (IRR) is 0.987%; the same variables used in calculating the NPV for the project were used in estimating the IRR.
NPR and IRR: Sneaker
I estimated the net present value for Sneaker project as $167,939,976.34 and the internal rate of return as -2.747%. The discount rate used to estimate the NPR for Sneaker was 11%.
Recommendation
I recommend Persistence to Rodrigues because of the financials it posts and the fact that it is a new product with unexplored potential. It is worth noting that both projects, Persistence and Sneaker, are not attractive. They may be money pits for Rodrigues based on their quantitative elements. Even so, qualitative aspects may better the products and significantly improve their value. Based on the NPR and IRR, Persistence is a more attractive option than Sneaker. This is a quantitively less attractive project even with 7 periods. The discount rate for Sneaker is however lower, 11%, than that of Persistence, 14%.
H&M is an international fast-fashion company with Swedish origins and is the second-largest global clothing retailer. The brand operates through direct distribution in chain stores and online with solid recognition and various campaigns (Bini and Bellucci, 2020). Their operation strategy allows them to produce goods at affordable prices and address the recent environmental challenges (Bubicz et al., 2021). This paper aims to identify three critical components of H&Ms business model and discuss if sustainability plays a part in the industry.
H&Ms business model is based on providing its customers with quality fashion at a reasonable price. The key component of their strategy is direct distribution; it excludes third-party sellers and helps maintain a strong brand presence in various countries (Islam et al., 2020). Moreover, H&Ms business model includes independent production and suppliers optimally located to reduce lead times (Elizaga, 2016). Lastly, the crucial component in multiple campaigns is collaborations with celebrities, brands, and collections to make fashion more affordable (Lanzolla and Markides, 2021). Sustainability practices influence H&Ms business model, and the brand has recently launched several programs to encourage consumers to address the environmental issues caused by the industry.
The sustainability addressed by H&M in their business model includes two key benefits inside and outside of the company. The internal damage decrease by optimizing the supply chain and manufacturing (Johnson et al., 2020). The external benefit is the deliberate creation of environment protection projects such as the Conscious clothes category and garment collecting (Garcia-Torres et al., 2017). These benefits are relative to similar fast fashion brands such as Zara and Gap, yet their practices are limited to manufacturing (Beyer and Arnold, 2021). Besides, these brands have parental (Inditex for Zara) and subsidiary (Old Navy for Gap) companies; therefore, it is more challenging for them to have an optimal sustainability mission.
The sustainable performance of H&M is mainly based on encouraging consumers to participate and selling eco-friendly clothes, in contrast to Zara, with no such programs. The latter is willing to address the global challenge by switching its fabrics to be fully sustainable (Aras-Beger et al., 2020). Gap addresses the challenge by achieving a balance between the quality of all its products and less harmful production (Gap Inc., 2021). The recommendation for H&M is to optimize the manufacturing volume to decrease waste (Hsu and Chou, 2021). The company also can expand sustainable and recycled clothes production beyond their Conscious collection. Lastly, helping independent suppliers and manufacturers move towards ecology-friendly solutions is beneficial for H&Ms business model.
Reference List
Aras-Beger, G., Sa lam, B.B. and Bekki, N. (2020) Case studies on sustainability for various fashion brands, in Supply Chain Management and Logistics in the Global Fashion Sector, Routledge, Oxfordshire, pp. 242-260.
Beyer, K. and Arnold, M.G., (2021) Circular approaches and business model innovations for social sustainability in the textile industry, in Sustainable Textile and Fashion Value Chains, Springer, Cham, pp. 341-373. Web.
Bini, L. and Bellucci, M. (2020) Business model disclosure in sustainability reporting: two case studies, in Integrated Sustainability Reporting. Springer, Cham, pp. 117-150.
Hsu, T.F. and Chou, H.M., (2021) The dilemma of the sustainability of the fast-fashion industry, in Smart Design, Science and Technology, CRC Press, Boca Raton, pp. 93-95. Web.
Islam, M.M., Perry, P. and Gill, S. (2020) Mapping environmentally sustainable practices in textiles, apparel and fashion industries: a systematic literature review, Journal of Fashion Marketing and Management: An International Journal.
Johnson, G., Whittington, R., Scholes, K., Angwin, D. & Regner, P. (2020) Fundamentals of Strategy, 5th end, Pearson, Harlow.
Lanzolla, G. and Markides, C. (2021) A business model view of strategy, Journal of Management Studies, 58(2), pp. 540-553. Web.
The 21st century embodied technological progress that has encompassed most spheres of human activity. In the current age, new advancements are developed at a rapid pace and introduced across various spheres of work, leisure, and entertainment. Furthermore, this unprecedented level of progress leads to profound transformations of the industries. More specifically, new players emerge on a regular basis, quickly attaining resounding success and becoming major companies in their fields. At the same time, seemingly well-established leaders of each industry often lose their value and disappear from the business landscape. This scenario is conditioned by the lack of ability to adjust to the rapidly changing environment and the pace of the industry demonstrated by the aforementioned companies. The presence of such a tendency is descriptive of the contemporary markets that pose serious requirements in terms of organizational agility and wit. In other words, modern companies are expected to have both a clear understanding of the market development direction and the means of sustaining the required pace. The inability to observe and react to the possible changes in the environment entails adverse consequences for organizations, leaving little or no room for mistakes.
Technology has rightfully taken the position of the cornerstone of contemporary business activities. In the current environment, increased attention is paid to the concept of digital transformation. This notion suggests the profound implementation of new advancements in all aspects of an organizations sphere of activity with the intent to redefine its practices (Schallmo et al., 2019). According to Schwertner (2017), the ultimate objective of digital transformation is to eliminate the barriers between people, businesses and things (p. 388). Spoken differently, this process creates a nexus of value between organizational processes, stakeholders, and progress for the benefit of all parties involved. The purpose of technologically advanced business is not to cause additional complications but to facilitate the processes and increase the value. However, accomplishing this mission is highly demanding in terms of strategy and analysis. Under these circumstances, digital transformation tends to become the only avenue of ensuring sustainable growth and forming a competitive advantage.
However, digital transformation can transcend the level of individual companies, encompassing entire industries. Consumers become the key driving force at the heart of the process. More specifically, their behavior and desire for new, technologically advanced solutions prompt companies to seek new digital sources of value (Morakanyane et al., 2017). The sphere of video content entertainment has been a prominent example of the way in which rapid progress leads to profound transformations in a relatively short time span. By the late 1990s, consumers relied on video rental to access on-demand content. Initially, this format provided an array of opportunities for the customers who could enjoy their preferred films at home. Nevertheless, at the time, video rental services were mostly compared to movie theaters and television that lacked convenience in terms of time and variability. As the progress continued, the wider availability of broadband Internet and computers prompted strategic decision-makers to develop online streaming platforms (Jenner, 2018). As enabled by the immense choice and unprecedented convenience, this format acquired colossal popularity, attracting millions of users. Ultimately, stakeholders opted for the bespoke digital experience, leaving obsolete formats, such as the one offered by Blockbuster Videos, in the past.
While the process described above became relatively fast on the scale of history, it cannot be considered sporadic. Moreover, there were complex market processes behind it that prompted such serious transformations of the sphere. As a result, a new sphere of online streaming services has emerged and continues to win over larger shares of the global market. Digital consumer behavior is at the heart of this ongoing process, and it deserves additional exploration. This paper represents a comprehensive feasibility report of the online streaming industry. The analysis relies on the contemporary body of knowledge provided by the academic literature, statistics, and expert opinions in regard to the expectations of 21st-century consumers. The report recounts the key players of this industry from the dawn streaming to present days, providing a framework that describes their success, or lack thereof, from the point of view of consumer behavior. The ultimate purpose of the report is to outline the current profile of the streaming industry, as well as recommendations for the new project feasibility.
Review of the Market
The industry of online streaming is a paragon of the contemporary approach to leisure and entertainment. Today, most people have used such service to at least some capacity, and the ranger of regular users has been on a stable increase. Online content streaming embodies the most breakthrough ideas of modern technology, becoming a perfect platform for the implementation of new advancements, as well. At the same time, this sphere remains highly complex due to several important factors. First of all, the surge in the popularity of such services was not a spontaneous phenomenon by any means. On the contrary, the rise of online content streaming is enabled by an effective combination of critical factors related to consumer behavior and strategic development. Organizations that have been able to grasp the expectations of the public define the sphere and ensure its further growth.
Second, while the history of streaming barely exceeds two decades, this timespan has been filled with various turning points that instigated its development. Finally, the popularity of streaming has prompted many new players to enter the industry, thus promoting intense competition. Under these circumstances, the view of new prospects in the sphere is to be based on the examination of the history, participants, and trajectories of the market that account for its current state and development avenues.
Evolution of the Sphere
The history of the video content business predates the emergence and rise of streaming by a fine margin. Previously, this industry was mostly represented by offline stores that offered rented video content on VHS tapes or DVDs. In this context, Blockbuster remained the prominent example of a veritable business empire that dominated the market for many years. According to Ash (2020), in the late 1990s, this company owned over 9,000 video-rental stores in the United States, employed 84,000 people worldwide, and had 65 million registered customers (para. 1). Blockbuster saw the immediate success that is recounted by its founder, who reports having to close the doors of the first store on its opening day due to the excessive number of visitors. The company relied heavily on the technological advancements of the time, including a bar code tracking system. Through its efficiency, the business became multimillion, yielding high profits for the owners (Olito, 2020). At the same time, the company paid considerable attention to customer relations, engaging them with well-crafted marketing campaigns and tangible benefits (Okami et al., 2020). Ultimately, Blockbuster became the ambassador of video content streaming.
Nevertheless, in the end, the company fell victim to the very phenomenon that instigated its development in the first place, namely the technological progress. The initial success of Blockbuster was enabled by its innovative approach to the organization of the business processes (Olito, 2020). Subsequently, a similar approach promoted the emergence and rapid growth of streaming services that shortly replaced Blockbuster. At the turn of the century, the Internet became a widespread commodity across most developed nations. Before that point, the worldwide web was present in few households, which did not provide technological leaders with sufficient incentives to develop online services. In the early 2000s, the situation changed dramatically as millions of new users gained access to the Internet (Hastings, 2020). Following this development, numerous organizations allocated the funds to the creation of faster, cheaper, and more reliable Internet-based services. As the connection speed became sufficient, it rendered video content streaming feasible, as well.
The following decades of the development of streaming platforms are widely associated with the rise of Netflix. The company was founded in 2000 and provided customers with on-demand videos. However, the format of its operations was different from the current situation, as Netflix attempted to conquer the market through DVDs delivered through the mail, as the Internet download speed remained insufficient for many customers. According to Zetlin (2020), while this approach was highly promising at the time, the pace of the segments growth could not ensure the company sustained development. As a result, Netflix experienced serious financial issues in the early 2000s. At that point, Blockbuster had an opportunity to secure its position and issued an acquisition proposal to Netflix. Nevertheless, as the latters CEO mentions, the proposed amount was not sufficient (Hastings, 2020). Following the negotiations, Blockbuster refused to meet the requirements of its counterparts management. As a result, Netflix was forced to channel its remaining resources into the further development of advanced video content delivery services. This process resulted in the creation of the most popular streaming platform known today, determining the creation of the streaming industry in its current state.
Current Situation
The initial competition between Netflix and Blockbuster has entailed global implications that changed the landscape of the entertainment industry. More specifically, this impact was not limited to redefining the existing market but created an entirely new sphere. The development of the streaming segment was mostly simultaneous with the technological progress in the spheres of telecommunications and the Internet (Lobato & Lotz, 2020). While the general public remained skeptical regarding the prospects of video streaming, the industry in its current state has acquired a global scale (Burroughs, 2018). Appendix A demonstrates the growth of this segment by year, showing the considerable pace at which online content streaming continues to develop today. Such a tendency is enabled by several important factors, most of which are based on technology.
First of all, the online environment has attained an unprecedented level of accessibility for end consumers. Most households in developed countries are now equipped with computers and portable gadgets with a broadband Internet connection. Second, such a growth pace allows key players to allocate serious budgets to their production and distribution departments, providing users with high-quality, on-demand content in nearly all places (Valuates Reports, 2020). The industry actively utilizes recent advancements for the benefit of the content, including virtual reality, augmented reality, and artificial intelligence research (Fortune Business Insights, 2019). Furthermore, leading business experts state that such a pace of development can be sustained in the mid-term, projecting the market to at 12% and attain $842 billion by the year 2027 (Fortune Business Insights, 2020). Such forecasts portray video content streaming as a highly promising industry for investments.
On the other hand, such markets retain the risk of becoming overheated as more players opt for entering them. In the case of video streaming, the industry has been associated with Netflix for a considerable period. In fact, this companys input has been key to the development of the market, despite possible technological constraints of the early 21st century (Fagerjord & Kueng, 2019). In other words, Netflix was in the vanguard of content streaming development, managing to adapt the required technologies and attract the public to the new format.
However, the industrys image of today has become highly diverse as new companies continue to develop their own streaming segments. This tendency comprises not only streaming-exclusive offers but also traditional broadcast and production networks that attempt to seize their portions of the market. Gruenwedel (2021) reports that Netflix already lost 30% of its share in the United States market in 2020. Appendix B highlights the diversification of players in the current video streaming industry. As can be inferred from the statistics, the offer continues to increase, and the question arises of whether the demand will remain on the required level. The diverse representation of existing organizations in the market deserves additional exploration.
Key Players
The market of video content streaming today is represented by an array of prominent companies. Evidently, Netflix remains the primary player within this industry, with over half of the market share (Market Watch, 2021). This company stood at the source of video content streaming as a global phenomenon, having made an immeasurable contribution to the development of the segment. In the minds of many people, Netflix is synonymous with the idea of on-demand video streaming per se.
However, similarly to how it outperformed Blockbuster in its turn and pushed the competition toward oblivion, Netflix risks losing a fine portion of its market share to new projects. Today, Netlfix remains loyal to its objective of entertaining the world through the distribution of accessible, on-demand content of distinguished quality (Netflix, 2021). The company aims at a global presence, providing over 190 countries with the best documentaries, films, shows, and television series in 30 languages. A major component of Netflixs success is embedded in its original content, exclusive to the platform. The company allocates considerable resources to the development and production of its own series and films that often engage prominent actors and directors (Pilipets, 2019). The success of Netlfix translates into a global impact that forces other production companies to increase their efforts in order to remain in the competition. According to Daidj and Egert (2018), this idea includes both other streaming platforms and traditional entertainment media. Therefore, it is difficult to outperform Netflix under the current circumstances, yet it is not impossible.
In the 2020s, Netflix faces increasing competition enabled by other prominent players. As per the statistics presented in Appendix B, Amazon Prime Video is the second largest company in the U.S. content streaming market. This platform is founded with the resources of the worlds leading electronic retail store, adding a serious financial dimension to the project. Amazon Prime pursues similar objectives of providing its customers with a bespoke selection of content, including Amazon Originals. This format includes highly popular titles, such as The Boys and Lord of the Rings. The company values the technical aspect of its platform, actively developing 4K, UltraHD formats for state-of-the-art equipment (Amazon, 2021). In addition, Amazon Prime has interesting features for mobile users, allowing them to download content with a convenient application. In order to enhance the experience, the platform emphasizes its X-Ray function, offering access to behind-the-scenes materials. The combination of technological advancements and high-quality original content makes Amazon Prime a serious opponent of Netflix.
Hulu is another well-established participant of the online streaming segment mostly represented in the United States. Similar to the two companies that are placed above it in the market share ratings, Hulu pursues the value of original content for its subscribers. Having been founded in 2007, the company, thus, has a long history in the industry. Hulu presently positions itself as one of the leaders of the market, offering live and on-demand content to millions of users (Hulu, 2021). The financial support of the platform is enabled by its profound cooperation with Disneys Media and Entertainment distribution system. For a considerable time, Hulu was the primary medium of Disneys web-based representation. However, the situation has changed, following the creation of its own platform titled Disney+. This service combines the best-known and exclusive content from all Disneys assets, such as Star Wars and Marvel universes. While Disney+ is still at the beginning of its path, it already counts over 100 million subscribers in 59 countries (Disney, 2021). This way, even the leading four players of the market already constitute a highly competitive, hostile environment for new entrants.
Digital Consumer Behavior
The analysis of profiles of the most prominent companies in the video content streaming segment provides a comprehensive image of digital consumer behavior. In spite of all variations between the companies, they are united by the primary features of their format of operation. More specifically, they offer on-demand videos that allow viewers to access them at any time within the subscription period. This function is driven by the principle of convenience that separates it from previous formats. Budzinski and Lindstädt (2018) note that free-to-air, tightly scheduled content used to be the norm for consumers in the pre-digital era. However, modern users are quick to recognize the benefits of new, convenient formats. In the case of video streaming, consumers appreciate the ability to launch, pause, and resume their favorite programs at any suitable time (Oliveira et al., 2020). Many of them remember the period when they had to be present in front of their TVs to watch one episode at a time while enduring commercial breaks. Evidently, the ability to avoid such inconveniences outweighs the necessity to purchase a subscription. Therefore, modern customers are willing to pay for convenience and access.
However, the need for purchase is expected to be justified by the quality, as well. As can be inferred from the examination of prominent streaming services, key players emphasize the value of original content. This tendency suggests that the sense of exclusivity also plays an important role in the eyes of the customers (Corfield, 2017). This way, they feel as if they gain access to a special piece of content, which raises their expectations. If previously, Netflix was able to gain its follower base with the help of an abundant library of secondary content, this approach can no longer be sustained (Wayne, 2017). More specifically, new market entrants can hardly compete with the giants of the industry without original content, which, in turn, is more expensive. Overall, consumers are accustomed to the original content and expect to see meaningful efforts on behalf of video distributors.
On the other hand, the market of video content streaming remains subject to the aforementioned overheating, not only in terms of economy. The number of platforms continues to increase on an annual basis. Currently, the traditional triumvirate of Netflix, Amazon, and Hulu has been complemented by Disney+, Apple TV+, HBO Max, and other emerging services. From one perspective, the diversity of content is positive, as it enables better selection and prevents one company from establishing a monopoly. Nevertheless, beyond a certain point, the increase in service providers may have a detrimental impact on the industry. From a consumers standpoint, the necessity to purchase multiple subscriptions at once may become annoying. For now, the increase in offer appears to be counteracted by a corresponding growth of demand. In 2020, the subscriber base of streaming services doubled, as enabled by the coronavirus pandemic and corresponding lockdowns (PWC, 2021). However, this effect may not last, meaning that the inertial emergence of new streaming services will not find a sufficient response from the public. Under these circumstances, forming a competitive advantage will be the ultimate and the most difficult goal for market entrants.
Recommendations and Conclusion
Based on the analysis presented above, it appears possible to form a set of recommendations for the envisaged project in the industry of video content streaming. First of all, it is vital to evaluate the necessity of such an endeavor. The stable growth of the industry may create unrealistic expectations among founders, but such a situation is to be avoided. The presented growth is mostly enabled by the established giants of the market who have earned their reputation. Even the most recent entrants may be new to streaming but not to content production. Apple, Disney, and HBO are well-known companies with their own pre-existing customer bases that partly translated into platform subscribers. Moreover, these services have another common feature that consists of immense financial resources. Colossal funds allow them to finance multimillion projects, original content, and substantial marketing expenditures. Accordingly, the envisaged entry to the market is to rely on serious monetary support, as well. Overall, despite the promising statistics of the streaming industry, it appears wise to postpone the entry until all requirements are met. In addition, the delay will enable a better evaluation of the post-COVID market of digital entertainment.
References
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Budzinski, O., & Lindstädt N. (2018). The new media economics of video-on-demand markets: Lessons for competition policy. Ilmenau Economics Discussion Papers, 24(116). Web.
Corfield, J. (2017). Network vs. Netflix: A Comparative Content Analysis of Demographics Across Prime-Time Television and Netflix Original Programming. (Masters thesis). Web.
Fortune Business Insights. (2019). Video streaming market size, share & industry analysis, by component (hardware, software, content delivery services), by streaming type (live video streaming, on-demand video streaming), by streaming model (advertisement-based, subscription-based, transactional-based/rental), by deployment (on-premise, cloud), by end-use (commercial, residential), and regional forecast, 2020-2027. Web.
Fortune Business Insights. (2020). Video streaming market worth USD 842.93 Billion at 12.0% CAGR, presence of advanced network infrastructure and high internet connectivity to bolster growth. Web.
Gruenwedel, E. (2021). Report: Netflix lost 30% U.S. market share in 2020. Mediaplay News. Web.
Jenner, M. (2018). Netflix and the re-invention of television. Palgrave Macmillan
Lobato, R., & Lotz, A. D. (2020). Imagining global video: The challenge of Netflix. JCMS: Journal of Cinema and Media Studies, 59(3), 132-136. Web.
Market Watch. Video streaming market share 2021 qualitative insights, competition landscape, growth rate, development trends, prominent players and opportunity assessment till 2023. Web.
Morakanyane, R., Grace, A. A., & OReilly, P. (2017). Conceptualizing digital transformation in business organizations: A systematic review of literature. BLED 2017 Proceedings, 21, 427444.
Netflix. (2021). About Netflix. Web.
Okami, L. E., Yamanoto, K. N., & Lloyd, R. A. (2020). Exploring the return on customer (ROC) model in the video sales and rental industry: An Intramodal analysis of Blockbuster, Redbox, and Netflix. Review of Integrative Business and Economics Research, 9(4), 358371.
Oliveira, A., Azevedo, A., & da Silva S. M. (2020). Streaming Services Consumer Behaviour: A Netflix User Case Study in Brazil and Portugal. n Proceedings of the 17th International Joint Conference on e-Business and Telecommunications, 3, 173-180. Web.
Alphabet is a large multinational company working in a field of innovation and technology, which also owns Google. Financial ratios help examine and analyze a companys financial status. Based on debt and equity, assets turnover, liquidity, and return on investment, one can make a judgment regarding Googles strengths and weaknesses, as well as performance. This paper will examine performance, activity, financing, and liquidity warnings of Google.
Essence
Googles gearing ratio is 2%, and it displays the debt and equity of the business ( Alphabet Inc. (GOOG), n.d.). This is a good indicator, suggesting that this company does not have much debt. In regards to liquidity, Googles current ratio, based on 2018 performance, is 3.9 ( Alphabet Inc. (GOOG), n.d.; Brigham & Ehrhardt, 2017). Next, to evaluate the activity, the total assets turnover will be examined, and for Google, it is $260,073 million for the second quarter of 2019 ( Alphabet Inc. (GOOG), n.d.).
The quick ratio is 3.75, and the cash ratio is 3.15. When analyzing the companys past performance, one can state that all three liquidity ratios have deteriorated. This means that Google either increased its short-term debt or decreased its assets.
To examine profitability, return on investment can be used, and for Google, it is 18.67 % ( Alphabet Inc. (GOOG), n.d.). Notably, this ratio has decreased since the same period of the last year. The strengths of Google; hence, it possesses a large number of assets and can invest in its development. The weaknesses include the companys liquidity since all ratios decreased significantly since 2017. Based on these ratios, one can argue that Googles performance is excellent overall. However, the liquidity of the company has decreased significantly. In general, the paper examined the financial ratios of Google Inc. and analyzed its performance based on this information.
Although climbing very high altitudes will always be risky, proper preparation may prevent disasters. Indeed, the 1996 Mount Everest tragedy demonstrated that such a dangerous adventure requires physical and mental endurance, planning, and adequate guidance. Fifteen people died during the 1996 endeavor because of several critical mistakes of the leaders and groups (Roberto & Carioggia, 2003). It appears that the root cause of this disaster was insufficient planning by the group leaders.
Although the team leads were experienced in such expeditions, they did not have time to establish good communication with clients to create a team and not a crowd of people who paid them money. The main reason for this unpreparedness was that the guides had to solve many logistical problems that appeared during the transport of oxygen supplies for the participants to Nepal (Roberto & Carioggia, 2003). The group noticed that their leader looked emotionally exhausted before the trip began (Roberto & Carioggia, 2003). Moreover, since this expedition was commercial, most clients did not have any experience in high altitudes, and they only underwent elementary physical training in the camp (Roberto & Carioggia, 2003). Overall, it seems that the leading cause of the tragedy was the lack of preparation of both the troop and its leaders.
The two main leaders of the group were Scott Fischer and Rob Hall, who have experienced climbers and good leaders, but they made some erroneous decisions during this expedition that led to the catastrophe. Both were charismatic and aspiring individuals who had good reputations. Fisher and Hall showed that they are good leaders by hiring additional consultants, professional climbers, and Sherpas, people living in these mountains, to assist clients on this trip (Roberto & Carioggia, 2003). Furthermore, they conducted a six-week training in a Himalayan camp to ensure that their clients were mentally and physically ready for the expedition and climate. However, the problem arose when Fisher and Hall made four particular mistakes. Firstly, they failed to create a team spirit; thus, everyone felt isolated as if they were climbing alone (Roberto & Carioggia, 2003). Secondly, they did not bring enough radio devices to communicate with each participant personally (Roberto & Carioggia, 2003). Thirdly, Fischer was not in good health, which affected his ability to assist his clients (Roberto & Carioggia, 2003). Lastly, they relied on unconfirmed information and did not send Sherpas to affix the ropes.
Business managers can extract five crucial lessons from the 1996 Mount Everest case. The first lesson is that the leader has to care for oneself because a physically ill and emotionally unstable individual cannot inspire and motivate others. Secondly, managers must always be oriented toward the final goal, but they should never forget about the teams needs. The third lesson is that it is critical to establish communication between the leader and group members to ensure all collaborate to attain objectives with minimum losses. Fourthly, business managers should not hesitate to hire consultants and experts in particular fields to increase work efficiency. Lastly, leaders need to develop their independent sources of insight to continue guiding the group toward a goal even if external circumstances insist on surrendering. Overall, business managers do not usually engage in such dangerous expeditions, but they can study cases like the 1996s Mount Everest disaster to make the correct conclusions to avoid similar mistakes in their organizations.
Reference
Roberto, M. A., & Carioggia, G. M. (2003). Mount Everest 1996. Harvard Business School.
4Fingers is a successful business with operations in Singapore, Indonesia, and Malaysia. Since entering new markets requires a thorough analysis, the purpose of this paper is to present a comprehensive description of the attractiveness of the Vietnamese market, including market size, growth rate, pricing trends, and competition. Besides, this paper presents an assessment of the new markets attractiveness and competitiveness following international reports data. These reports highlight potential threats that could affect doing business in Vietnam. The paper also presents examples of approaches to successful business to overcome potential problems and risks. The recommendations offer ways of doing business in the new unexplored territory of the Vietnamese market.
Introduction
4Fingers is a company that provides services in several countries in the Asia-Pacific region Singapore, Indonesia, Malaysia. Therefore, a natural step is to expand the companys business and enter new markets. The first step in this expansion is the opening of a new restaurant in Vietnam. This paper aims to present the analysis of market attractiveness and find the appropriate business model that will help overcome institutional voids that may impact the Vietnamese market.
Assessing the Attractiveness of the Vietnamese Market
Understanding market attractiveness is required when a company enters a new market to evaluate whether investing will prove beneficial. The criteria by which the assessment is carried out includes four main metrics market size, growth rate, margins and pricing trends, and competition (Bhasin, 2019). Some marketers also consider the overall risk in the industry and the ability to differentiate products and services (Olsen, n.d.). According to most experts, Vietnams market attractiveness is high, especially in the context of the trade wars between the US and China and the Vietnamese governments imposition of policies to make it easier to do business. Vietnam also responded very quickly to the challenges of COVID-19, starting to introduce measures to combat the virus back in January 2020. Therefore, the Vietnamese market, including the restaurant and hotel business, has already begun to recover, relying on domestic demand.
Notably, AT Kearney named Vietnam as one of the six most attractive retail markets in the world. According to its Global Retail Development Index (GRDI), only the markets of India, China, Malaysia, Turkey, and the UAE turned out to be more attractive (Van, 2017). At the same time, Vietnam was ahead of Indonesia, Thailand, the Philippines, Kazakhstan, and Saudi Arabia. The GRDI rating considers 25 factors related to macroeconomics and retail trade (Van, 2017). This rise in attractiveness to foreign investors emerged since the government allowed foreign retailers to own 100% of their equity. The free trade agreement with the EU has also improved the attractiveness scores. The innovations have led to significant retail sales growth, increased investment inflows, and GDP growth rates.
Besides, government policies to attract foreign investors have led to an extension in the urban population and the middle class. This process influenced rising costs and willingness to pay for quality products and services (The attractiveness of Vietnam retail market, 2017). Therefore, given that the countrys vast population, it can be summed up that Vietnam is a large and rapidly growing market. Besides, the simplified taxation system and the dynamism of market processes allow for good margins and flexibility in pricing processes.
A negative factor is the growth of competitive pressure in retail, tourism, restaurant, and hotel businesses. At the same time, development can be predicted in the tourism sector, closely related to the restaurant business. The country receives about 13 million tourists every year, with the bulk coming from Asia China, South Korea, and Japan (Enhancing the Vietnamese tourism industry, 2018). Less than 2 million come from Europe Russia, UK, France, and Germany; about 1 million tourists come from the US and Australia (Enhancing the Vietnamese tourism industry, 2018). These factors should be considered when developing a unique business model that will target the local market.
Institutional Voids
Despite the Vietnamese markets high attractiveness for investors, the country has institutional voids reflected in the World Economic Forum Global Competitiveness Index, the World Bank, IMF, and OECD reports. Vietnam ranks as the 67th most competitive country in the world out of 141 countries, according to the 2019 Global Competitiveness Report published by the World Economic Forum (Vy, 2019). It is noteworthy that for the first time, Vietnam was in the top half of the list. A prerequisite for this success was the governments efforts to reform investment policy. It is also believed that Vietnam took advantage of the US-China trade war to attract investor capital (Vy, 2019). Another critical factor was the attempt to introduce e-government and support for the start-up system.
Remarkably, the World Economic Forum report in 2019 gave several examples of global institutional voids. Over the past decade, the global economy has found itself trapped in a cycle of low or constant productivity growth, despite central banks support, according to the report (Global competitiveness report, 2019). To change the situation in the next decade, experts advised countries to pay more attention to stimulating economic processes in domestic markets and increasing the dynamics and access to international markets. The report also noted that the Asia-Pacific region is today the most competitive globally, followed by Europe and North America.
At the same time, Singapore is the most competitive country in the region. The report recommends that market players use a universal approach in emerging economies, integrate technologies, and pay attention to personnel education (Global competitiveness report, 2019). The report also noted a slowdown in reducing extreme poverty in the least developed countries and increased hunger incidence. Fortunately, Vietnam has managed to overcome these negative trends, but the risks should not be underestimated. Experts also advised governments to increase economic resilience by increasing competitiveness, especially given the economic downturn that followed COVID-19.
Further, according to the OECD study, Vietnam needs to create an integrated and transparent market economy. This step will help avoid getting stuck in the dualistic economic structure typical of economies with a large middle class, which in Vietnam will exceed 40 million people by 2030 (Multi-dimensional review, 2020). An integrated economy involves creating equal opportunities for foreign and local companies and maintaining a balance between an export orientation and a competitive domestic market. Given the broad middle class, it is noted that a domestic demand-driven electricity market can help balance global uncertainty.
There are also problems associated with environmental pollution that require immediate solutions. In particular, according to the OECD study, Vietnam needs a natural resource management strategy due to ongoing air and water pollution by fine particles (Multi-dimensional review, 2020). Besides, the Mekong River is one of the four leading rivers polluting the worlds oceans, as industrial and domestic waste in Vietnam is discharged right into waterways without a proper treatment system (The World Bank in Vietnam, 2020). This situation poses a threat to the health of the countrys inhabitants and the global ecology. Interestingly, despite the governments concrete steps to simplify the taxation and administration system, the OECD notes the need for a thorough analysis of the tax structure and tax collection system. This step will attract long-term investors, such as insurance companies, which guarantees the development of a more diversified financial system.
Vietnams success in the fight against COVID-19 deserves special attention. The World Bank report notes that the impact of the virus on health in Vietnam has not been as severe as in other countries, thanks to proactive measures at the national level. Nonetheless, experts predict a slowdown in economic growth to 3-4% in 2020, compared to 6.5% in 2019 (The World Bank in Vietnam, 2020). Given the stability of other indicators, experts predict a rapid recovery of the Vietnamese economy in 2021 (Lee, 2020). At the same time, IMF experts note that Vietnams policy containing COVID-19 is an example for other countries. Thanks to the implementation of this strategy, there were 352 confirmed cases of COVID-19 and no deaths in Vietnam (Vietnams success in containing COVID-19, 2020). As a result, the country was one of the first to lift almost all internal containment measures.
In light of the above, it can be assumed that the consequences of COVID-19 will have the most significant impact on Vietnams economic processes. Also, the advice on creating an integrated and transparent market economy in the country, given the middle classs growth, deserves special attention, since a halt in economic growth, which may be observed in the next ten years, is inevitable otherwise. The situation may also be exacerbated by the Vietnamese populations ageing factor, which will lead to an increased burden on the budget and a decrease in the workforce. Besides, environmental pollution creates problems for doing business, lowering the countrys ranking. Simultaneously, the development of information technology is a critical factor in the successful development, and one can expect the continued integration of IT into economic and business processes.
Features of Providing Similar Services on the Market
The results of numerous researches that study the specifics of running a restaurant business in Vietnam can be of great value to cope with the presented challenges. According to Long et al. (2019), brand equity, value equity, and relationship equity are decisive factors when deciding to revisit a restaurant. Further, Pham (2018) notes that for most craft-beer restaurants in Vietnam, returning decisions are usually affected by access, local connection, unique seeking, hedonic and social influence, and willingness to pay. In other words, attentiveness to customers and a high level of service are the keys to success in Vietnams growing service market.
In the Vietnamese restaurant industry, management pays much attention to employee retention, since low staff turnover is associated with a higher quality of service. Besides, employee retention ensures a contribution to developing an integrated and transparent market. Therefore, Huong (2017) cites seven staff turnover factors, the most important of which is supportive management oversight, in the absence of which employees are more likely to leave work. Other factors are peer support, training, and development, suitable working conditions, promotion, communication, decent wages, and benefits.
Considering the environmental problems in Vietnam, the role of restaurants should be estimated, since they are the primary source of municipal solid waste. In particular, according to Phu et al. (2019), restaurants generate 74.5% of municipal waste. The composition of municipal waste includes biodegradable waste 66.8%, recyclable waste 20.1%, combustible waste 11.3% (Phu et al., 2019). Adherence to effective waste management practices is essential to running a sustainable business.
Another unexpected trend was the increase in Vietnamese residents meat consumption, traditionally inclined to a more varied diet. Scientists note that such changes are driven by rising incomes, urbanization, and foreign culinary influences (Hansen, 2018). Since the beginning of market reforms, the consumption of meat in Vietnam has grown significantly. Scientists believe that the reasons are changes in meat supply systems, the intensification of traditional meat dishes, the import of meat nutrition methods from abroad, and the growing spread of eating outside the home. There is also positive social perception of meat as a symbol of development and progress.
Choosing the Right Business Model
When creating a new enterprise in Vietnam, the right type of enterprise should be chosen, as this will determine its capabilities in doing business. There are three main types of companies a representative office, a limited liability company, and a trading company (Shira, 2019). Since 4Fingers is opening the first restaurant in Vietnam, a limited liability company will work best. The LLC can hire locals and write checks, which can be very useful in doing business. Besides, due to simplified tax and administrative procedures, opening an LLC will not cause problems. It should be borne in mind that LLCs are of two types a service company and a trading company. Trading companies are usually engaged in the export and import of large volumes of goods, require large financial turnover, and hire contractors. 4Fingers do not need such capabilities; therefore, a service company would be the best choice.
It is also necessary to define a business model according to which business processes will be carried out. Experts point out that a business model is a conceptual framework that sustains the viability of a business and explains how it works, makes money, and intends to achieve its goals (Das, 2020, para. 4). Therefore, franchises, bricks-and-clicks, and high touch business models will be the best choice for 4Fingers business. Doing business will not be complicated by disproportionate taxes, since service companies are subject to the following rates: corporate income tax 20%, personal income tax 5% to 30%, value-added tax 10% (Guide to taxes, 2018). Therefore, the listed approaches will ensure the effective start for a new business.
Practical Steps and Conclusion
The 4Fingers organization will need to take several steps to enter the Vietnamese market. First, it will need to set up a Vietnam service company that can hire employees, issue checks to customers, and pay employees salaries. Further, when starting and setting up work processes, bricks-and-clicks and high touch business models should be chosen, since the first one makes it possible to order dishes via the Internet, and the second one will ensure an attentive attitude towards customers. Besides, the new restaurant will likely use the franchise business model since the company is a recognizable brand. It is noteworthy that Ho Chi Minh City can be the most suitable place for a new restaurant since it is the centre of the countrys business and economic activities. In the future, restaurants can be opened in tourist regions.
When setting up business processes, special attention should be paid to menu design. The service market in Vietnam is highly competitive, and the inclusion of some dishes more traditional for Vietnamese cuisine will increase demand. Since Vietnam is a global exporter of rice, coffee, tea, and other goods, it will be most profitable to purchase products from local markets or retail chains. Special attention will be paid to the practices of hiring and training employees and providing them with the right working conditions to meet the increased competition.
Further, since 4Fingers is an environmentally-friendly business, it will be essential to reduce environmental pollution and establish a practice of sorting waste, ensuring its further processing. Besides, the menu will need to include more vegetarian options and more vegetable snacks to improve public health and adequate meat consumption. Its good that today 4Fingers offer seafood dishes like squid and batter shrimp. Since Vietnam is one of the leading exporters of seafood, these dishes should be left on the menu.
Given the markets high attractiveness, there is a high likelihood that the new business will find many buyers and occupy its niche in the market. Considering that Vietnam has already dealt with the consequences of COVID-19, the restaurant will have enough visitors. However, 4Fingers will have to ensure visitors safety, mainly through implementing an existing virus prevention program. Besides, a system of discounts associated with the local markets peculiarities and the fact that 4Fingers enters the market should be developed to attract customers.
Hansen, A. (2018) Meat consumption and capitalist development: The meatification of food provision and practice in Vietnam, Geoforum, 93(1), pp. 57-68.
Huong, TCD (2017) Factors affecting turnover intention of fine-dining restaurants-A study in Ho Chi Minh City, in Ho Chi Minh City Vietnam. PhD thesis. International University-HCMC.
Lee, C. (2020) IMF: Vietnam GDP to grow at 7% next year, Vietnam Times, Web.
Long, N.H., Van Oanh, D., Hoa, P.H., Dung, V.T., Thanh, P.T.K. and Quang, N.N. (2019). The effects of customer equity on customer loyalty for chain restaurants: Case study of KFC Vietnam, Socio-Economic and Environmental Issues in Development, pp. 229-243.
Pham, H. and Nguyen, T. (2018). Understanding consumer returning decision with the mediation of willingness to pay: A case study of craft-beer restaurants in Vietnam, In Proceedings of Asia Conference on Business and Economic Studies (ACBES), pp. 750-765.
Phu, P., Takeshi, F., Giang, M. and Dinh, V. (2019) An analysis of the commercial waste characterization in a tourism city in Vietnam, International Journal of Environment and Waste Management, 23(3), pp.319-335.
Risk management programs play a vital role in ensuring the safety of workers, patients, and any other stakeholders in a healthcare setting. Therefore, such programs should be implemented meticulously based on the provided guidelines to ensure that maximum benefits are derived in the long run. This assertion calls for a thorough knowledge of the different aspects of such programs including the role of MIPPA-approved accreditation bodies and the functions played by the different levels of administrative personnel in healthcare ethics. This paper discusses the various aspects of the risk management program discussed in part one of this project.
Role of MIPPA-Approved Accreditation Body
The Joint Commission (JC) is the MIPPA-approved accreditation body used in the selected organization a large community healthcare institution. The role of the JC is covered in its mission statement, which is To continuously improve the safety of and quality of care provided to the public through the provision of health care accreditation and related services that support performance improvement in health care organizations (OLeary, n.d., p. 3). In line with this mission, the JC has developed standards that allow health care organizations to conduct an objective evaluation process to appraise, evaluate, and better performance. According to the Joint Commission (2020), The standards focus on important patient, individual, or resident care and organization functions that are essential to providing safe, high-quality care (para. 1). In the community health care institution, the JC plays the role of a convener, collaborator, and listener. Therefore, the JCs role is collaborative as it works hand-in-hand with the organization in accreditation and certification, ensuring patient safety, measuring performance, disseminating information, and engaging in public policy initiatives. In addition, the JC evaluates the organization against the set standards and takes part in accreditation decision-making.
Roles of Different Levels of Administrative Personnel
In any organization, the human resources management (HRM) department is tasked with the work of allocating duties to various employees to establish and sustain employer/employee-focused organizational risk management strategies and operational policies. On their part, employers ensure that all staffing needs are adequately met so that there could be enough workers to execute organizational risk management strategies. This goal is achieved by availing the required resources for the HRM department to recruit a sufficient number of qualified employees. On the other hand, the HRM department is divided into various levels from top-most managers to junior officers to ensure that tasks are executed effectively. HR managers make overall decisions on hiring and training programs to equip companies with the needed expertise in risk management. At departmental levels, the risk management department is headed by a specialist in this field to guide the organization in the establishment, implementation, and sustenance of risk management programs. These managers work with other teams to ensure that everyone in the organization is aware of how various aspects of the risk management program should be implemented in their areas of work.
Organizations Risk Management and Compliance Programs
In the selected organization, the current risk management and compliance programs are designed in line with the ethical code of conduct governing the health care sector. First, patient safety and privacy are some of the leading concerns that health care providers have to address in the process of implementing the risk management program. According to Ballard (2017), all privacy-related issues arising within the program should be monitored and recorded, as their violation could lead to punitive fines and expensive lawsuits. Therefore, the program has reliable mechanisms to ensure that patients privacy is protected. Similarly, the issues of patient consent and autonomy are protected within this program. Truog et al. (2015) argue that patients rights should be respected at all times irrespective of the given circumstances. Within Ballards (2017) risk management program, all decisions made and the taken actions should be within the stipulated code of conduct that governs the health care sector. Patients rights, autonomy, responsibilities, and other related attributes should take the central place in any risk management program.
Legal and Ethical Responsibilities of Health Care Professionals
Risk management policies should be upheld at all times because any lapse could lead to adverse care outcomes by affecting patient safety. Therefore, health care professionals are expected to be careful when handling patients. However, various legal and ethical challenges arise in the course of executing their duties. For instance, in the organization in question, the issue of understaffing is a major problem, as in many other health care facilities. Understaffing in the health care sector occurs due to various reasons, including the lack of adequate resources and a qualified workforce.
According to the non-maleficence principle of medical ethics, ensuring patients safety and preventing any injury or damage to them is a major priority for healthcare providers (Kadivar et al., 2017, p. 2). However, due to limited resources, care providers have to make tough choices in terms of the quality of care that could be availed to patients. As such, at times, the quality of care may be compromised. Legally, care providers should ensure informed consent, but this can be difficult in cases when patients and their families have differing opinions from those of care providers. Sometimes, accidental exposure of patients data could occur, which is a major legal and ethical challenge.
Quality Improvement Processes and Overall Journey to Excellence
The overall success of any organization in the health care industry depends largely on the quality of services offered to patients. Accreditation, which is part of quality improvement, ensures that patients get high-quality services and are assured of their safety. In the organization in question, accreditation has ensured that only qualified medical staff members are recruited. As such, it becomes easy to follow the set guidelines when interacting with patients by upholding professionalism. Additionally, employees operating in the facility are likely to be satisfied with their work because the organization has put in place mechanisms for continuous learning, effective leadership, and a good working environment as part of the risk management process. Therefore, in the end, the quality improvement processes support and contribute significantly to the overall journey to excellence.
Conclusion
Risk management programs in the health care sector are part of quality improvement processes as they allow organizations to minimize safety and quality issues that could be exposed to both employees and patients in the workplace. The selected organization uses the JC as the MIPPA-approved accreditation body. Within the organization, various administrative personnel operating at different levels work together to ensure that the risk management program is implemented successfully. The program is designed to ensure that the ethical code of conduct is observed at all times when dealing with patients. However, the issue of understaffing poses serious legal and ethical challenges as care professionals in the organization try to implement the risk management program. Nevertheless, this program contributes significantly to the overall success and excellence of the organization.
References
Ballard, D.C. (2017). Risk management. In D.C. Ballard & P. D. Grant (Eds.), Law for nurse leaders (2nd ed.), (pp. 141-164). Springer Publishing Company.
Kadivar, M., Manookian, A., Asghari, F., Niknafs, N., Okazi, A., & Zarvani, A. (2017). Ethical and legal aspects of patients safety: A clinical case report. Journal of medical ethics and history of medicine, 10(15), 1-5.
OLeary, D. S. (N.d.). The role of the Joint Commission in health care quality. Web.
The Joint Commission. (2020). About our standards. Web.
Truog, R. D., Brown, S. D., Browning, D., Hundert, E. M., Rider, E. A., Bell, S. K., & Meyer, E. C. (2015). Microethics: The ethics of everyday clinical practice. Hastings Center Report, 45(1), 11-17.
Information technology has emerged as an important concept that enhances and ensures the competitiveness of an organization in todays global economy. The relationship between information technology and strategic planning was for a long time not viewed as important by managers and leaders in positions of authority. This was because information systems were viewed to entail data processing activities only. In recent times, however, there has been a growing realization that has placed a lot of emphasis on the importance of strategic planning to the information systems and technology of an organization. This essay will focus on the concept of strategic information systems planning for the information technology activities of a company.
Literature Review
Due to the increased competitive nature of the global market, strategic planning for information technology has become an important concept that is necessary for the efficient and effective performance of an organization. The planning of information systems provides organizations with the opportunity to align their operations with the business strategies that have been outlined. This alignment is done to anticipate environmental and technological changes in the economy (Byrd et al, 2006).
To better understand SISP, Battaglia (1991) states that The result of using SISP is an action plan that shows the desired course of actions that are necessary for an organization to align its information use with its strategic direction .
Lederer and Sethi (1988) defined strategic information systems planning as the process of designing a portfolio of computer-based applications that will aid the organization to achieve its goals and objectives. They further termed SISP as a set of defined, complex, and interrelated information system activities. Current research on the concept of SISP has focused on the comprehensive aspect of strategic planning for information systems within an organization. As Fredrickson and Mitchell (1984) state the comprehensiveness of SISP is the extent to which an organization attempts to make and integrate strategic decisions in an inclusive and exhaustive .
Janis and Mann (1977) highlighted seven behaviors that illustrated the comprehensiveness of strategic planning of information systems within an organization. These behaviors were developing a large set of options, surveying a full set of objectives, weighing carefully the costs and risks of each probable outcome, intensively searching for new information that is relevant for each option or alternative, considering any new information, reconsidering the consequences of the options or alternatives before choosing the best option, and developing detailed provisions for the implementation of the selected option. These behaviors represented the concept of SISP in an organization ensuring the process of information systems was carried out in a precise way.
Doherty and Fulford (2006) describe strategic planning to encompass three information planning activities which are technical resource planning activities, personnel resources planning, and data security planning activities.
Technical resource planning activities involve planning activities that deal with systems and application software, hardware, and network communications. Personnel resource planning activities involve activities that are people-oriented and concerned with the technical training of personnel within the organization and end-user computing. Data security planning activities involve the planning for activities that are associated with the protection of the organizations systems from outside intrusions and recovering information that has undergone unwanted intrusion (Doherty and Fulford, 2006).
Earl (1993) viewed SISP in terms of five different approaches which have been referred to as business-led approaches that focus on the organization as a whole, method driven approaches that focus on planning techniques, administrative approaches that focus on available organizational resources, the technology of the information systems model and the organizational approach that has its focus on employee learning.
Other contributors, NewKirk and Lederer (2006) described SISP in terms of phases and activities found within the SISP process. These phases and activities represent components of the strategic planning process with each component and phase having a different set of objectives, techniques, and conditions. The phases are used in describing an organizations comprehensive efforts in the strategic information technology planning process.
An example of a phase and activity described by Newkirk and Lederer is the strategy formulation phase which entails identifying new business processes leading to the design and development of new information technology structures. These structures lead to the development of new projects and priorities for the new projects. The extent to which an organization executes each phase and activity will ensure the assessment of the comprehensive nature of the strategic information system plan.
SWOT Analysis
During the strategic planning process, managers perform a SWOT analysis which examines the companys strengths, weaknesses, opportunities, and threats. A SWOT analysis contributes significantly to the process of strategic planning by identifying the human financial and technical resources. It is also used in formulating strategies and policies that will be used by the organization for future operations (Shelly and Rosenblatt, 2010).
In carrying out the SWOT analysis, managers must ask themselves questions such as what are the strengths of the company and what must be done to maximize these strengths in the future, what are the weaknesses of the company and what should be done to overcome them, what must be done to strengthen the IT functions of the organization, how should the weaknesses in IT resources be addressed, what are the major opportunities and what IT plans can be used to support these opportunities, what major threats does the company face and what can be done to deal with threats to the success of the information systems of an organization ( Shelly and Rosenblatt, 2010).
SWOT Analysis for Perisher Blue
Perisher Blue is a mountain resort ski company that was started in 1995 to provide ski services and facilities in the Perisher Valley, Blue Cow, Guthega resort, and Smiggin Holes areas which make up the Perisher Range. These areas are located in the alpine regions of southeastern Australia with urban areas such as Cooma, Canberra, and Tumut located nearby. The Perisher range forms part of the Kosciuszko National Park (Perisher Blue, 2002).
Strengths
The company has come up with an award-winning master plan for its ski resort that outlines objectives and goals that will be accomplished in the next ten to fifteen years. The plan will cover the operations of ski slopes such as Perisher Valley and Blue Cow, and ensure the facilities are up to date. This will give it a competitive edge in terms of alpine skiing facilities and services. Having ski lifts and buildings on the mountain slopes such as restaurants and toilets ensures that the ski visitors enjoy their skiing experience at Perisher valley. The ski resort has a strong market for skiing activities and operations that is expected to remain strong in the next 25 years. Perisher Blue has experienced market growth of 4.6%, a figure that is likely to grow in the coming years.
Weaknesses
Several roads within the mountain slope and the ski resort cannot be used because of the unstable nature of the terrain. The roads have also been affected by either extreme weather conditions such as heavy or unseasoned snowfalls, a lot of wetness on the track, or snowdrifts at the end of the winter season. These factors have at times led to the closure of roads or tracks in the Blue Cow, Perisher Valley, Smiggon Holes, and Guthega areas. Ski resort visitors are also limited to the number of vehicles they can use in the slope or resort because of the unstable nature of the terrain (Perisher Blue, 2002).
Opportunities
The Perisher Blue master plan will see the construction of additional buildings in the valley which will create employment opportunities for the people of Perisher Valley. The employment opportunities will strengthen the economic base of the regions located around Perisher Valley. The resort attracts 16,000 visitors in one day during winter peak times with this number expected to increase with the establishment of more ski facilities. The Perisher area is the largest skiing field in the whole of Australia which ensures that it will be the predominant provider of winter recreational activities in the country. Snow tourism in the alpine region also boosts the economy of the urban areas located around Perisher valley.
Threats
The greenhouse effect or global warming will have a major impact on the skiing activities of Perisher Valley. The unpredictable weather patterns will affect the operations in the ski resort which mostly relies on the winter season for its profits. The variations in weather patterns and climatic conditions might affect the amount of snow on the slopes which might lead to a decrease in skiing activities. The resort will also face the prospect of losing out on ski visitors as a result of competition coming from other ski resorts in the New South Wales Region of Australia such as the Thredbo ski field and international ski resorts such as those based in Switzerland (Perisher Blue, 2002).
Recommendations
Perisher Blue enjoys a large customer base with projections pointing to the number of ski visitors increasing in the next ten to fifteen years. To manage its large customer base, Perisher Blue needs to incorporate into the master plan strategic planning of its information system to ensure that the customer database is well managed and up to date. Current systems will also ensure that its database management systems are up to the standard of systems that are used by international ski resorts such as those based in Switzerland.
Because most of its operations and activities rely heavily on the winter season, the resort should look into other investments for activities that can be carried out during other seasons of the year such as mountain hiking which will ensure the resort has a constant source of income. The resort should also look for ways to stabilize its track roads during the winter season to ensure ski visitors are not limited to particular areas of the Perisher Range. Investing in current weather systems will also ensure the management of Perisher Blue can determine the amount of snow to expect at certain times.
Conclusion
Strategic information system planning is an important concept for all organizations, but integrating it into the business activities of the company is not an easy task. As Shelly and Rosenblatt, (2010) state, strategic systems are meant to cater for the strategic demands of the organization which are meeting the objectives of the company and creating a competitive environment . Companies need to plan adequately for their information systems while at the same time recognizing that the systems will not only be used as tools for cutting costs but also systems that will add value to the company.
The return on investment in information systems is increasing each year; this will have an impact on the information technology of a company. Re-engineering business systems for organizations is a process that is likely to continue well into the future with the ever-increasing role that information technology is playing in todays global world.
Appendix
Business Process Flow Chart
Business processes flow charts influence the redesign of information system flows within an organization. These flow charts display the activities that an organization needs to perform in order to achieve the successful carrying out of its business operations. The activities highlighted in the process flow chart are meant to be guides when planning the business activities of the organization. The flow chart should include information that displays a connection between the various systems of the organization. Business process charts are beneficial to a company because they give everyone in the company a clear understanding of the business process, they help in identifying non-value added activities, and they facilitate communication networks and teamwork within the organization (Andersen, 1999).
Adaptive business processes provide a company with a competitive edge over its competitors while at the same time ensuring the success of the company. Business processes facilitate the interaction between the information system, services and people in order to achieve the operational and strategic objectives. The execution of business processes enables organizations to provide goods and services that are of a high quality at a lower cost of production (Kumar and Rizwan, 2008).
Business process charts are designed for the various activities within an organization such as communication, purchasing, supply and filing. The following is a business process flow chart that shows the supply process for Perisher Blue.
Supply process chart for Perisher Blue.
References
Andersen, B. (1999) Business process improvement toolbox. Wisconsin: American Society for Quality.
Battaglia, G. (1991) Strategic Information Planning: a corporate necessity, Journal of Systems Management. 12-36.
Byrd, T.A., Lewis, B.R., and Bryan, R.W. (2006) The leveraging influence of strategic alignment on IT investment: an empirical examination. Journal of Information and Management , Vol.43, No.3, pp 308-321.
Doherty, N.F., and Fulford, H. (2006) Aligning the information security policy with the strategic information systems plan. Computers and Security, Vol.25, No.1, pp.55-63.
Earl, M.J. (1993) Experiences in strategic information systems planning. MIS Quarterly, Vol.17, No.1, pp. 1-24.
Fredrickson, J.W., and Mitchell, T.R. (1984) Strategic decision processes: Comprehensiveness and performance in an industry with an unstable environment. Academy of Management Journal, Vol.27, No.2, pp.399-423.
Janis, I.L. and Mann, L. (1977) Decision making: a psychological analysis of conflict, choice and commitment. New York: Free Press.
Kumar, M., and Rizwan, M.K. (2008) Business process platform. How fast can you change? Web.
Lederer, A.L. and Sethi, V. (1988) The implementation of strategic information systems planning methodologies, MIS Quarterly Journal, Vol. 12, No.3, pp 445-461.
Newkirk, H.E., and Lederer, A.L. (2006) Incremental and comprehensive strategic Information systems planning in an uncertain environment. IEEE Transactions on Engineering Management, Vol. 53, No.3, pp 380-394.
Perisher Blue (2002) Perisher Blue Ski Resort. Web.
Shelly, G.B., and Rosenblatt, H.J. (2010) Systems analysis and design. 8th Edition. Boston, USA: Course Technology.
