Category: Strategic Planning

Introduction

The purpose of this proposal is to highlight the importance of strategic workforce planning, in the context of Kudler Fine Foods. The objectives of the proposal include the following. First, the purpose of workforce planning at Kudler Fine Foods will be highlighted.

Second, the use of workforce planning in addressing international employee demand and supply issues will be discussed. Finally, the importance of workforce planning in succession planning will be discussed.

The Purpose of Strategic Workforce Planning

Strategic workforce planning is the process through which an organization ensures that it has access to suitable talent to enhance its future success. The expected loss of knowledge through staff exists, as well as, the knowledge required to sustain the organization must be taken into account during workforce planning.

The knowledge required to sustain a business or an organization include technology, workforce intelligence, as well as, new skills. Hence, the purposes of workforce planning include the following.

First, workforce planning integrates human resource planning into the businesss strategic planning. Thus, the human resource management objectives will be aligned to the firms strategic goals, as well as, priorities. Second, workforce planning will enable Kathy to understand how the functions of her organization will change over time, and how such changes will impact job requirements.

Third, workforce planning provides a framework for analyzing and understanding changes in the workforce in terms of performance, skills, as well as, demographics. Fourth, it will enable Kathy to assess the ability of her workforce to respond to future job requirements.

The assessment will help in identifying gaps in the workforce in terms of skill requirement. Finally, workforce planning helps in formulating strategies for addressing staffing needs. In this context, the strategies should be based on the gaps identified in the workforce.

International Employee Supply and Demand

Workforce planning will help in addressing international employee supply and demand issues through supply analysis and demand analysis. Supply analysis is the process through which the current workforce is profiled and future workforce composition is predicted. Supply analysis involves analyzing the current workforces attributes, reviewing trend data, as well as, forecasting future workforce supply.

Profiling the workforce helps in identifying existing jobs, the number of employees executing each job, and the importance of each job. Additionally, it helps in determining the jobs or tasks that are no longer necessary in the organization. Supply analysis will also enable Kathy to determine the existing number of employees and positions, as well as, existing performance and competency levels.

Trend data gives a picture of past occurrences such as the past hiring patterns, turnover and retirement. Thus, supply analysis will help Kathy to predict the possibility of accessing the number of employees and type of skills she will need in the new markets.

Demand analysis focuses on identifying work or tasks that the organization must perform in future and the staff required to perform them. The information about the tasks to be performed in future should be based on Kudler Fine Foods strategic plan. Decisions on the tasks to be performed in the future should also be based on information obtained or accessed through environmental scanning.

In this case, the business environment in Mexico and Canada will be analyzed in order to determine the tasks that should be performed in future. The environmental factors that are likely to affect workforce demand include legislative changes, and budget trends.

Demand analysis will also help in identifying demographic factors such as high turnover and aging population that can affect workforce demand in the new markets. Finally, demand analysis takes into account the effect of technological advancements on operations and jobs in an organization. Consequently, it will be possible to determine the effect of technology on employee demand in the new markets.

Succession Planning

Succession planning is the process through which important positions are identified and employees are prepared to fill them. Succession planning begins with assessment of the possibility of vacancies arising in key positions in the organization. The readiness of the existing employees to assume the important position is then analyzed.

The identified gaps should be addressed through appropriate strategies such as mentoring and training. Workforce planning helps in succession planning in the following ways.

First, workforce planning provides the relevant statistics that help in understanding staffing trends. Such statistics include recruitment, turnover, promotion, as well as, staff mobility rates. These statistics help in predicting the possibility of vacancies arising in future.

Second, workforce planning provides advice on how to change the staff profile in order to facilitate succession. Staff profile can be changed through appointments, promotions and transfers. Additionally, workforce planning provides information on the assistance that employees need to settle in new positions. For example, new managers can be trained in order to perfect their leadership skills.

Third, workforce planning enables organizations to deal with the change associated with succession. Preparing employees in advance to assume higher positions helps in avoiding the risks associated with unforeseeable employee exits. Additionally, all members of the organization will be prepared to work with their colleagues who assume the new positions.

Summary of Workforce Planning Principles

To begin with, workforce planning should involve all stakeholders in the organization. Thus, the employees, and the management should be involved in the formulation, and implementation of the strategic workforce plan. Strategic workforce planning is likely to succeed if the management set the overall direction, pace, tone, goals and involves other stakeholders in formulating the strategy.

The organization should define the essential skills, as well as, the competencies that it will need in the future in order to realize its strategic goals. Thus, the internal and external environmental factors that affect access to the needed skills and competencies must be analyzed.

Once an organization has identified the skill and competency gaps in its workforce, it can formulate strategies to address the identified gaps. The organization will also be able to align its human capital strategies to the overall business strategy in order to sustain the benefits of all essential skills and competencies. In this case, strategies include the policies and practices that facilitate acquisition and retention of talent.

The organization must also focus on building the capacity required to address administrative, and operation requirements for workforce planning. Finally, the progress of the organization towards achieving its human capital goals should be monitored and evaluated.

Summary of Workforce Planning Theory

Strategic planning involves getting the right number of people with the right skills, experiences and competencies in the right jobs at the right time.

It provides a framework for making human resources decisions based on the mission, desired competencies, strategic plan, and financial resources of an organization. Workforce planning enables organizations to anticipate change and identify strategies for addressing current and future workforce challenges.

The components of workforce planning include succession planning, projecting retirements, as well as, workforce demographics. Workforce planning provides information about the anticipated changes on these components and how the changes are likely to affect key positions in the organization. This enables managers to plan for timely replacement of lost skills and competencies in the workforce.

The success of an organization is contingent on the competencies of its workforce. Workforce planning enables the managers to identify the desired competencies and how to select employees with the required competencies. Additionally, workforce planning enables managers to address issues that drive workforce change.

An effective workforce plan should reflect the management, as well as, the environment of the firm. Thus, managers should focus on the information required for workforce planning and the expected outcomes. Developing a workforce plan involves conducting workforce analysis, gap analysis, transition planning, and competency assessments.

It also includes supply and demand analysis, solution analysis and monitoring and evaluation. These assessments illustrate the relationship between workforce planning and the organizations goals, human resources strategy and budgetary allocations.

Supply analysis enables managers to identify the existing competencies, staff demographics, as well as, employment trends in the organization. Through competency analysis, baseline data on the current and future competency requirements of the organization can be obtained. The effect of workforce issues such as turnover and retirement can be described and predicted through trend analysis.

Demand analysis attempts to predict the future activities, as well as, workloads in the organization. It also describes the competency set required to achieve the goals of the organization in future. Demand analysis takes into account workforce changes caused by technology, workload, and work process.

Gap analysis involves comparing the results of supply and demand analysis in order to identify the gaps or differences between the existing competencies and the expected future competency set. Gap analysis enables managers to determine whether the current competencies or number of personnel is more than or less than the future workforce needs of the organization.

Solution analysis provides a framework for formulating strategies for closing or reducing the competency gaps. The strategies that can be adopted to close the gaps include recruiting new employees, staff training and promoting employees. Solution analysis should enable the managers to select the strategy that will facilitate achievement of the desired workforce change.

Evaluation is the process in which the workforce plan is periodically and systematically reviewed. The missions and objectives of the workforce plan must be reviewed to ensure they remain relevant and valid.

The inconsistencies or problems noticed during the review process should be addressed by amending the workforce plan appropriately. In conclusion, effective workforce planning should be based on the internal and external environment of the organization. Additionally, the planning process should include all stakeholders.

References

Glower, J., Wirojanagud, P., & Gel, E. (2008). Heauristics for Workforce Planning with Worker Differences. European Journal of Operational Research, 190(3), 724-740.

Hertz, A., Lahrichi, N., & Widmer, M. (2010). A Flexible MILP Model for Multiple-Shift Workforce Planning Under Annualized Hours. European Journal of Operational Reserach, 200(3), 860-873.

Stolletz, R. (2010). Operational Workforce Planning for Check-in Counters at Airports. Transport Research: Logistics and Transport Review, 46(3), 414-425.

Toler, A., Shvarts, S., & Reuvani, H. (2010). A Report Card an the Physician Workforce: Israeli Health Care Market: Past experiences and Future Prospects. Health Policy, 97(1), 38-43.

Executive Summary

To establish a successful business, it is important to develop a comprehensive strategic plan which is the basic blueprint for the actualization of a business plan. Reflectively, the strategic plan is inclusive of the SWOT of the business environment, penetration strategies, and success measurement parameters at the micro and macro business environments. This strategic plan is for the proposed Regency Drycleaners Limited located in the UAE within the region of Abu Shagara, Sharjah.

The mission of the business is to provide the most cost-effective and reliable laundry services within the targeted region and beyond. The business will serve customers from the high, medium, and low economic ends since laundry services are used across all classes. The laundry services will be the most affordable within the Abu Shagara region. At present, the laundry service industry within the targeted region is relatively noncompetitive since very companies are offering these services. Thus, Regency Drycleaners Limited is projected to penetrate this market within very minimal resistance.

SWOT Summary

Refining the Plan: The aspect of financial and market feasibility will be examined before the business is declared viable.

General Company Description

This business will be called the Regency Drycleaners Limited abbreviated as DCL. This business will be located in the UAE in the region of Abu Shagara, Sharjah. The business will accept all kinds of dirty clothes and promises to deliver clean clothes within 24 hours. The form of ownership of the Regency Drycleaners Limited will be through sole proprietorship. This choice is informed by the fact that the starting capital is relatively small. Besides, the business does not need a lot of commitment from many managers. Besides, a sole proprietorship will enable the owner to take all the profits.

The Regency Drycleaners Limited targets customers from high-end and low-end economic classes. However, due to low prices that will be charged for the dry cleaning services, the business focuses to gain more from the lower-income bracket. Specifically, the business targets customers in the age bracket between twenty years and above since this age group often have clothes that require dry cleaning. Besides, the business intends to make sure that customers receive their clothes within twenty-four hours.

Moreover, the business will introduce discount cards such as the premium, regular and ordinary cards to customers. Customers who get these cards will have to pay even lower for the services as long as the conditions within the cards are met. The business will collect the dirty clothes from the homes and houses of clients and offer free delivery to clients with premium cards. Also, the business will charge an average of only AED 20 for every dry cleaning service. The Regency Drycleaners Limited will follow the following principles as guidance for sustainable business;

1. Honesty and integrity in handling the need and concerns of the customers and the business environment.
2. Professionalism and respect to the personality and foundation of the relationship between the business and customers.
3. Quality assurance and quick response to any request of the customers.

The mission of the Regency Drycleaners Limited will function on being the leading business in the dry laundry cleaning in Abu Shagara. The goals of the proposed Regency Drycleaners Limited are summarised into short-term goals as listed below.

1. The marketing goal will be to acquire 100 clients per week for the first 12 months. With a typically well-organized commodity pool, this business is geared to quickly increase its market share since the beneficial interests can be distributed across the commodity users. This strategy will facilitate the restructuring of effective sales and public awareness to develop product knowledge.
2. One of the product strategies that the business will utilize is to make sure that it attributes the dry cleaning laundry services to convenience and affordability. The business will charge the laundry services at AED20 as a strategy to attract consumers within the second quarter of the first years of operation.
3. The business aims to expand its customer base to regions outside the Abu Shagara by recruiting five salespersons who will double up as pick and delivery service providers within the first six months of operation.

Products and Services

The proposed Regency Drycleaners Limited will offer dry cleaning services to customers within the targeted region. The products will be segmented into premium, gold, and standard to target the high-end, middle-income, and low-income customers. The products will be differentiated based on extra services such as free delivery, time taken to dry clean, and method of dry cleaning. The rationale for creating multiple products is to attract customers from all classes and create an environment of their competition, thus locking out potential rivals.

Marketing Plan

Target market

The Regency Drycleaners Limited targets customers from the high, middle, and low income ends. However, due to low prices that will be charged for the dry cleaning services, the business focuses to gain more from the lower-income bracket (Mariotti 46). Specifically, the business targets customers in the age bracket between twenty years and above since this age group often have clothes that require dry cleaning. The customer base area for the customer segment is within the targeted region.

Product features and benefits

The Regency Drycleaners offers the most reliable, dependable, and affordable dry cleaning services. The business will adopt the product development strategy of constantly modifying its services to suit the demands of the customers. Being a customer of the Regency Drycleaners would mean having a lifetime membership card that promises free laundry services after every ten visits to this store within six months. The business will also offer a series of discounts to customers.

Product differentiation

The laundry service business will be the first of its kind in the business location area. Moreover, the business will introduce discount cards such as the premium, regular and ordinary cards to customers. Customers who get these cards will have to pay even lower for the services as long as the conditions within the cards are met. The business will collect the dirty clothes from the homes and houses of clients and offer free delivery to clients with premium cards. The business guarantees money back for justifiable dissatisfaction.

Pricing

Through the good, better, best pricing strategy comprising of discounts for every laundry service, the target client segment is projected to increase their dependence on the company. Therefore, applying the costing strategy, the company will be able to attract customers and achieve the aim of the quantity maximization by the increasing number of laundry services. The business will use a promotional price of AED20 per service.

Place (Distribution) issues

For the Regency Drycleaners to reach the target market, the company will hire three vehicles fitted with loudspeakers to announce the product across different estates where the target market is easily found. These automobiles will also be fitted with visible posters of the companys services and discounts (Cheverton 33). The automobiles will be allocated to different regions of Abu Shagara where the availability and visibility of the companys products are minimal.

Advertising

The marketing plan will comprise of a detailed calendar of the business advertisement. The year will be divided into three segments January-April, May-August, and September-December. To create customer awareness about the product, it will run daily advertisements on the television to make sure that consumers know about its activities. As consumers get to know about the product, the company will relax its advertisement program.

Therefore, the second segment will entail running the advertisements thrice per week. This will aid in keeping the clients aware of the product. Besides, it will target those consumers that might not have heard about the products. The last segment of the calendar year will involve running the television advertisement once per month. By this time, the majority of the consumers will have known about the products (Rhim and Lee 161).

Promotions

The company chooses to use sales promotion through discounts and issuance of redeemable points. This choice was made since it will help the company to increase its sales volume within a short period. In this case, the company will apply a sales promotion strategy such as push-up sales. This will facilitate in attracting and retaining new customers by issuing them with free laundry and other after-sales services such as free delivery (Cheverton 44). Sales promotion will ensure that consumers return to the company whenever they need laundry services.

Operational Plan

The Supply Chain

The supply chain determines the success of a companys marketing strategy and ease of business sustainability. This company will adopt the pseudo marketing strategy to further penetrate the market and sustain its captured market. Accessibility and transition in the marketing plan will ensure efficiency and proactive response analysis to further improve on the demands of prospective clients. To increase credibility and maintain professionalism, the market entry plan will encompass processes and features that flawlessly facilitate healthy and lifetime relationships between the business and its clients.

Among the new development elements that will be incorporated to build trust are the establishment of a strong distribution, fair retribution process, and passing accurate information to the target audience to restore confidence within the new networks. Therefore, customer retention is achievable through the creation of a reliable and affordable marketing channel that is essential in monitoring a matrix that maps out potential competitors and identifies the weaknesses and strengths of the clients. Moreover, the reporting criteria will reflect the success of the marketing calendar and set targets generated from time to time.

Quality Assurance Strategies

Production efficiency is critical in the production line since it is characterized by optimal utilization of allocated factors of production within the least possible cost. Quality improvement will be used to measure, assess, and improve client service delivery outcomes. The success of quality improvement and organizational change management will be dependent on the alignment of the production soft skills and sustainability strategy for the proposed business. If well organized, the strategy will complete the response projections for the company which shall be addressed in the proposed quality service delivery system.

IT resources

The Regency Drycleaners will require 6 computers, three office telephones, four laundry machines, and a network connection. The network connection will facilitate interaction between the general manager and other employees of the business. Besides, the telephones will be instrumental in communicating with the customers and the sales team when they are in the field.

Customer services

The Regency Drycleaners will compile a database of the potential and actual customers on the computers. Besides, the telephones will have a backup of contacts of the regular customers. Also, the company will open a social site from where customers will be in a position to see the latest promotional activities and price discounts.

Management and Organization

Management

The main determinants of success metrics in business production activities are the production strategies and the aspect of human input. The labor output will eventually determine the productivity of business activity at the micro and macro levels of business operations. In the case of the Regency Drycleaners, the business manager will be tasked with the duty of ensuring that the business guidelines are met within an efficient utilization of resources.

Under the business, the manager will be the coordinator. The business coordinator will form the primary link between the general manager and other units of the business. Under the coordinator will be the logistics officer and the marketing manager. The head of logistics and the marketing manager will ensure a smooth flow of the business activities in the company through constant coordination with the sales team consisting of 6 salespersons (Rhim and Lee 188).

Corporate culture

Quality planning of work specialization is an important policy that aims to promote long term success in business objectives since it is focused to enhance the effective exploitation of human resources (Osterman 404). The Regency Drycleaners business will adopt the professional approach and each employee will have specific duties to perform. A performance review will be carried out every three months to ensure that the employees obey the culture of hard work, quality, and transparency in serving the interests of the business.

The organization structure of the Regency Drycleaners business will be characterized by a streamlined chain of bureaucracy in the chain of command from the general manager down to the sales team. The structure will encourage security, comfort, and safety, and the prevailing physical convenience of the staff. Measuring factors such as interpersonal relations, working conditions, support and trust, welfare provisions, and work environment will greatly contribute to the organizational effectiveness within the business corporate culture (Bowden 67).

Leadership philosophy

The Regency Drycleaners leadership philosophy will operate on the periphery of Patagonias philosophies of management as mere guidelines for rationale rather than rules cast on stones (Kotler and Keller 42). Basically, this philosophy of ethical conduct code functions on responsible business undertakings with moral worth. This philosophy will create a sense of responsibility among the employees to promote business environmental sustainability through the preservation of professionalism and the general business environment for success.

Job descriptions

Business manager:

• Administrative role.
• Planning and organizing sales drive in different regions.
• Setting targets within the business.
• Planning of the strategies and monitoring progress of the previous plans.
• Registering and receiving bi-monthly sales reports.

Business coordinator:

• Planning and organizing sales drive in different regions.
• Implementing the set targets within the business.
• Answer questions about the products.
• Being the companys brand ambassador to new clients.

Marketing Manager/Logistics officer:

• Promoting and marketing the companys products.
• Planning and organizing sales drive in different regions.
• Setting personal targets for the sales teams within the companys targets.
• Planning of the sales strategies and monitoring the progress of the previous plans.

Retail sales associate:

• Promoting and marketing the companys products.
• Planning and organizing sales drive in different regions.
• Executing the sales strategies and monitoring the progress of the previous plans.
• Registering and receiving bi-monthly sales reports.
• Collecting products that are defective from customers within a defined region.
• Being the companys brand ambassador to new clients.

Job specifications (Qualification for Job)

Business manager:

• University degree in business management.
• Language skills: Fluent in English and the local language.
• Two years of experience in a senior management position.
• Proficient with the latest sales and marketing applications.

Business Coordinator:

• University degree in sales and marketing.
• Language skills: Fluent in English and the local language.
• Two years of experience in a senior management position.
• Proficient with the latest sales and marketing applications.

Logistics/Marketing manager:

• University degree in sales and marketing.
• Language skills: Fluent in English and the local language.
• Two years experience in a mid-management position.
• Proficient with the latest sales and marketing applications.

Retail sales associate:

• College diploma in sales and marketing.
• Language skills: Fluent in English and the local language.
• One year of experience in sales and marketing.
• Ability to work under pressure.

Training employees

Developing a training and development strategy requires the creation of relevant objectives and a realistic budget. The training and development strategy is continuous but periodically executed after every six months. The first phase of training will be on personal development while the second phase on teamwork and production quality skills. The two phases will target the Intra and interpersonal development of the employees about performance in the work environment (Cheverton 39). This is summarised in the table below.

Compensation

The compensations that will be offered to employees of the Regency Drycleaners Limited will be in the form of monthly salaries payable after every thirty continuous days of labor provision. The proposed salary package for each position is presented in the table below.

Incentives

To motivate the staff of the Regency Drycleaners, it will use a mixture of motivation enhancing practices promotions, rewards, and recognition. For instance, the sales team will be given a commission on top of their salary for meeting the monthly targets. The management team will be entitled to an annual salary increment and end year gratitude which will be five percent of the annual returns. Also, the business will give the first employees a five percent stake in the business.

Personal Financial Statement

The Regency Drycleaners Limited 12-Month Income Statement

The Regency Drycleaners Limited, Balance Sheet As of 30^th December 2017.

Start-up Expenses and Capitalization

From the above estimations, the business will need start-up capital of AED74, 000. Therefore, the owners of the business will have to apply for a long term loan of AED74, 000 repayable within three years. Part of the loan will be used for expansion in the second year of operations.

Financial Plan

Business financing has become a challenge for those aspiring to expand an existing business or start a business. Thus, this part attempts to explicitly review the sources of funding options available for the Regency Drycleaners Limited. Besides, the treatise explores the cost aspects of each source of business financing and the importance of financial planning. Business financing has become a challenge for those aspiring to expand an existing business or start a business. Thus, this part attempts to explicitly review the sources of funding options available for the Regency Drycleaners Limited. Besides, the treatise explores the cost aspects of each source of business financing and the importance of financial planning.

Internal Sources

The internal financing options available for the company include personal sources such as retained profits and share capital. Basically, the retained profit is the funds generated by the initial business when it profitably trades. Reflectively, retained profits are necessary is financing the further expansion of the company since the business has the potential of making consistent sales. Besides, the company has the option of acquiring funding from the share capital which has been the main source of funding for the start up (Kotler and Keller 34). Through share capital, the owner will be in a position to retain full control and ownership of the company, especially if he or she is the sole contributor.

External Funding Sources

Among the most viable external funding sources available for the Regency Drycleaners Limited include loan capital in the form of bank overdraft or bank loan, engaging external investors, and convincing business angels to be part of the company.

Bank loan/Overdraft

Under a bank loan option, the Regency Drycleaners Limited will be in a position to receive funding that is fixed over some time. The loan(s) will attract different interest rates, depending on the type and amount that the business will borrow. Reflectively, bank loans are repaid over a longer period and repayment schedules are fixed. Besides the bank loan, the Regency Drycleaners Limited has the option of acquiring financing through a bank overdraft. Basically, a bank overdraft is a short term loan. Bank overdrafts are a very flexible source of business financing since they can be used to handle temporary cash flow fluctuations in the company (Bowden 69). Besides, bank overdrafts may offer the company a lifeline when it experiences temporary cash flow challenges.

Share Capital from Outside Investors

Another source of financing available for the Regency Drycleaners Limited is the use of funds from outside investors such as contributions from family, friends, and interested investors who will be given shares in the company according to their contribution (Cheverton 29). The fund contributors will be allocated shares in line with the total capital that the company requires for the expansion of the business.

Debt Financing Securing Plan

Full knowledge of the business costs will be instrumental in deciding the most cost benefits funding sources available for the business. This implies that financial planning at the Regency Drycleaners Limited will ensure an easy cash flow forecast and managing internal funds flow. Considering the nature of the business and industry, the most appropriate source of funding would be bank overdraft and share capital from external investors funding (Bowden 68). Bank overdrafts will give the business leverage against temporary cash flow problems and under or overestimations. Besides, bank overdraft is a flexible source of funding for the Regency Drycleaners Limited.

Works Cited

Bowden, John. The Process of Customer Engagement: A Conceptual Framework. Journal of Marketing Theory & Practice, 17.1 (2009): 63-74. Print.

Cheverton, Philip. Key Marketing Skills: Strategies, Tools, and Techniques for Marketing success, London: Kogan Page, 2009. Print.

Kotler, Philip, and Kevin Keller. Marketing Management, New Jersey: Pearson Prentice Hall, 2012. Print.

Mariotti, Steve. Entrepreneurship: Starting and Operating a Small Business, New York: Prentice Hall, 2007. Print.

Osterman, Paul. Job Design in the Context of the Job Market. Journal of Organizational Behavior 31.2 (2010): 401411. Print.

Rhim, Hosus, and Chan Lee. Assessing Potential Threats to Incumbent Brands: New Product Positioning Under Price Competition in a Multi Segmented Markets. International Journal of Research in Marketing, 22.1 (2005): 159-182. Print.

An organization needs to have a well-developed financial plan to ensure its survival and success in the business environment. This plan needs to be comprehensive and should be understood by all players in the organization so as to ensure its success. The management needs to come up with materials and resources that will ensure that the objectives are met. Initially, Community Hospital Healthcare System (CHHS) had a strong financial performance and a good credit rating over a long period of time. The company used cost management strategy to accumulate large sums of money and to do better than competitors. However, this strategy could not be sustained for long because the management of the company failed to invest in the areas that were critical to the future success.

CHHS was aging and there was a need to improve the condition of the facilities. Besides, the management had to come up with better ways to attract and retain the employees. Due to the condition of the facility, the hospital experience financial crisis in the year 2001. There was a drop in the bottom line and the crediting rating also deteriorated. There was a need for a turnaround strategy. In response to the dwindling performance, the management decided to come up with two phases of capital expenditure. The first phase which was approved in 1990 was aimed at improving the competitive position of the hospital. The second phase was a makeover of the facility that was estimated to cost about $90 million (Kaufman, 2006). This money was supposed to be used to improve acute care campus and to provide new services.

The management of the hospital found it is important to evaluate the viability of the second phase of capital expenditure program. In order to achieve this, they decided to create a link between strategic, capital, and capital planning to the entire organization. This was an integrated approach that was aimed at having a comprehensive view of the financial standing of the entity together with all its components. The company followed some key steps in order to come up with the comprehensive outcome. The first six steps entailed understanding credit, capital liquidity, debt capacity, capital position analysis, and cash flow targets. The final step entailed evaluating the feasibility of the increased capital expenditure by retesting capital position and cash flow targets. After analysis each of these components the management realized that if they followed the incremental process, then it could have ruined the entity (Sirman, Hitt & Ireland, 2003). However, the management used an integrated approach and it realized that the organization was not able to afford the second phase of expansion. CHHS needed to stick to the $75 million expansion program until the financial results improved (Kaufman, 2006).

There are a number of other lessons that the management also learned from the integrated approach. First, pursing the second phase of the capital expansion program would have lead to the downgrading of the crediting rating. Secondly, the amount of capital required for the expansion program ranged between $75 million to $165 million. However, the performance of the hospital could not support any amount that was greater than $75 million. Thirdly, it was important to restore the historical debt level because it had reduced drastically. Also, it important not to increase the capital short falls further. Another lesson learned from the process was that financial planning must be integrated with the capital structure. Therefore, the case of CHHS illustrates that it is important to use an integrated approach and not incremental approach in financial planning.

References

Kaufman, K. P. (2006). Best practice financial management: Six key concepts of health care. Alabama, AL: Health Administration Press.

Sirman, D., Hitt, M., & Ireland, R. (2003). Dynamically managing firm resources for competitive advantage: creating value for shareholders. Washington DC, DC: Saettle Academy of Management Publication.

Introduction

Beverly Wilshire Hotel sits on Wilshire Avenue in the eastern side of Beverly Ranges in California. Built by Walter G. McCarty, the hotels construction was finished in 1928. The E-shaped Hotel was referred then as Wilshire Apartment Hotel. Its design reflects the Renaissance architecture of the Italians. The hotel underwent an overhaul where new features such as ballroom and swimming pool were added. The hotel has been undergoing change of ownerships.

It boasts of having hosted key icons, including politicians and popular musicians over its historic years of operation. It has served as filming site for movies like Pretty Woman and Entourage TV series cast from 2004 until 2011. The success of the organization has not come without competition, emergence of new opportunities, and weaknesses. The management has had to deal proactively with new markets internal and external challenges to ensure the hotel continues to offer quality and high-standard services to all its clients to enhance business stability in the changing business environment.

Beverly Wilshire Hotel operates in the service industry. Services are different from products since they are intangible. Hence, managing an organization that deals with services is different from managing a product-making company. The current paper presents a strategic project on a service organization with a particular focus on the hotel industry. It uses Beverly Wilshire Hotel as the case in point. The goal of the paper is to present an internal and external analysis of businesses situations that the hotel faces. This goal is realized by conducting PESTLE analysis, opportunities and threats, Porters five-force analysis, and scenario analysis. This analysis sets the stage for the development of strategies for creating and managing relationships with the hotels customers together with developing or improving strategies for communicating the service to the hotels clientele, including the creation of a service brand and image.

Porters Five-force Analysis for Beverly Wilshire Hotel

Business industry interacts with different forces, which help in inducing appropriate strategies for continuous success in the short and in long term. From Michael Porters perspective, the five forces shown in figure 1 are important in shaping the business environment of any organization, irrespective of whether it trades in products or services. The analysis of these forces in the context of Beverly Wilshire Hotel helps in describing its business environment while providing a mechanism for analyzing the forces that determine the organizations competition.

In the global perspective, the viability of any hotel-based strategic project depends on the ability to respond proactively to the forces that shape the industrys competition. Although there may be an array of factors that determine the competitive advantage of the hotel industry in the international arena, service quality and geographical location relative to the target market are two important factors that organizations must consider when establishing a business in the industry. The hotel industry produces commodities and services that function as close substitutes. Therefore, a strategic project should aim at developing appropriate mechanisms for ensuring that Beverly Wilshire Hotel secures a sustainable competitive advantage for long-term success. To this extent, the five forces that shape an industrys competition will have an impact on Beverly Wilshire Hotels operations costs and the prices of its products. They will also influence its decision for investments.

Forces that shape the competition of an industry

Porters five forces influence the ability of Beverly Wilshire Hotel to serve its customers. Porter (2008) describes these factors as comprising the micro-environmental elements that determine a firms performance in any industry. Alterations of any of these forces compel an organization to re-evaluate its marketplace in response to any fluctuations of the available market information. This way, the organization acquires the capacity to deploy its core competences consistent with its business model to ensure that it generates profitability well above the industry average. As shown in figure 1, Porters five forces entail three horizontal forces and two vertical forces that influence competition. Substitutes, new entrants, and the established rivals comprise the horizontal competition forces. Consumers and suppliers bargaining authority forms the vertical forces of competition.

Substitutes

In the hotel industry, every hotel has its neighboring competitors. For example, Beverly Hills Hotel competes with Beverly Wilshire Hotel in California. A competing hotel offers products at close range prices, but with different characteristics of services and amenities. For Beverly Wilshire Hotel, the biggest and most frequent challenge entails ensuring that guests select it as their preferred hotel as opposed to those that offer substitutes. Incorporation of technologies such as the internet in the hotel industry not only makes Beverly Wilshire Hotel more efficient but also increases the size of its market potential.

The internet is a critical marketing tool that enables organizations to have real global reach in marketing efforts that are aimed at increasing its competitive advantage by drawing more clientele. However, technologies also increase threats of substitutes since all organizations can easily advertise to multicultural global communities both at ease and at low costs. Therefore, customers acquire a platform for making close comparisons of different products and services on offer in the global hotel industry.

Indeed, Southgate and Westoby (2010) assert that through technologies such as the internet, the hotel industry develops the capability for developing appropriate value chains that support event management across it. It also helps in structuring and the sharing of customer-focused value chain data to enhance the performance of value chains and of electronic commerce (Southgate & Westoby, 2010, p.350). Technology shapes the hotel industry competition by increasing substitute product information availability. This situation raises the threats for substitutes in case of Beverly Wilshire Hotel.

Customer Rivalry

Buyers purchasing power is high in organizations that operate in the hotel industry, including Beverly Wilshire Hotel. A major contributor to the increased bargaining power may be attributed to technological changes and the rising number of hotels that offer services, which similar in standards to those that are offered by Beverly Wilshire Hotel, as they all seek to impress their customers to encourage loyalty.

Business people and tourists are now technologically well-informed hotel industrys clients. Canina and Carvell (2005) observe that people have high accessibility to computers. Hence, by clicking a button, they can look for information on hotels that offer the best services at the most favorable prices. They now deploy lesser services of travel consultants and travel agents who operate as intermediaries in the hotel industry. Porters model notes that for any industry to perform optimally, it has to eliminate all intermediaries (Porter, 2008). This prediction manifests itself well in the hotel industry with the adoption of internet technology when looking for places to stay.

Apart from hosting prominent people, Beverly Wilshire Hotel is a major destination for tourists. However, through the increased use of web 2.0 applications such as cheaphotels.com, people increase their bargaining power for Beverly Wilshire Hotels industry of operation. Through the networks, they can bargain for stay prices. This situation increases their ability to switch from one hotel to another, depending on the price and service packages that meet their utility needs. Consequently, customer loyalty is overtaken by events unless where Beverly Wilshire Hotel seizes an opportunity to impress a first timer through value differentiation.

Rivalry among Competitors

Although clients in the hotel industry have a high bargaining power, competitors participate in fierce competition in the effort to attract a large number of clientele. In the industry, competition occurs through value addition for the services provided accompanied by creating intense awareness of the available differentiated services and products through advertising via both new and traditional media. People look for hotels that offer the best prices without sacrificing on their stay experience. Therefore, the tendency of many competitors in the hotel industry involves exploring cost differentiation strategies while eliminating the notion that low prices signify lower quality stay-experience.

Intense competition among the existing competitors of Beverly Wilshire Hotel may be explained by the increased geographical reach of means through which people can access information about the available places of stay within a given geographical area. For example, people who seek to visit LAs landmarks can choose to stay in a hotel that is much closer to their landmark of interest if such a hotel provides similar services and products or even better experiences that are accompanied by the best price packages that match those offered by Beverly Wilshire Hotel. Fixed and variable expenses of running business for Beverly Wilshire Hotel may be too high within its area of operation, thus making it impossible to reduce its prices beyond certain thresholds for it to remain in business. This situation leads to losing clients to organizations that are located in areas where they can comfortably explore low-cost strategies as a mechanism for gaining competitive advantage. Consequently, rivalry among different competitors remains incredibly high.

New Entrants

Establishing an organization to meet the standards and reputation of Beverly Wilshire Hotel requires the commitment of high capital and time to build confidence in the quality of services. Therefore, threats of new entrants are low in case of Beverly Wilshire Hotel. However, marketing costs may reduce barriers to new entrants through the utilization of new media in marketing a new hotel. For example, through new media, it is possible to reach a large number of people globally with minimal expenditure of organizational financial resources (Abhamid & McGrath, 2005).

Social media is a low-cost promotional strategy. Customers share promotional information with minimal efforts from an organization. The organization only initiates the marketing strategy by sending promotional materials to first recipients. Where the campaign becomes viral, an organization losses control of what is said about its brand (Southgate & Westoby, 2010). Challenges only emerge where the viral messages are against the brand profiles of an organization.

On the global platforms, important barriers to new entrants in the hotel industry include differentiation and expertise. Hotels that differentiate themselves in terms of amenities on offer, service differences, and geographical locations or any other service attribute stand better opportunities for attracting new and the existing clientele. Hence, since Beverly Wilshire Hotel differentiates itself in terms of its strategic location in LA and the quality of services offered, it is more likely to remain competitive and free from fierce force of threat of new entrants into its industry of operation. Similarly, the level of expertise may constitute an immense source of increased clientele flow into a hotel. To this extent, expertise of more than 83 years has ensured that Beverly Wilshire Hotel retains high barriers to new entrants that threaten to attract its loyal customers.

Supplier Rivalry

Suppliers have a capacity to shape the degree of competition in an industry. Although their presence may present less challenges in the hotel industry, rivalry among suppliers may influence it through labor supply. For example, in a nation with high age population, there may be less people to take up service job opening within the hotel industry. An organization that operates in the industry with an objective of providing the best experience to its clients cannot shun from employing young, vibrant, and energetic service staff members. Limited supply of such people leads to high wage and salary demands. Beverly Wilshire Hotel offers competitive pay that is consistent with the US labor laws on minimum wages and salaries. Considering that it also has good work environment, it remains immune to threats of labor supply rivalry.

PESTLE Analysis and Ethical Issues that influence the Hospitality Industry

Economics, political-legal, socio-cultural, demographic and technological factors influence the hotel/hospitality industry. Other ethical issues must be considered for the industry to deliver value to the owners of different organizations that operate in it. Political-legal, economic, socio-cultural, demographic, and technological factors are components of PESTLE analysis approach for the operational environment of an organization (Gerry, Kevan, & Whittington, 2005).

PESTLE Analysis

Political-Legal Factors

Beverly Wilshire Hotel operates in an environment that has political elements that shape the conduct of business entities. In fact, all organizations that operate in domestic, national, and international markets are subjected to different political-legal environments, which shape the manner in which they execute their business activities. At the domestic and national level, an organization faces fewer challenges since it can establish policies that homogeneously comply with the established legal guidelines for doing business. In the international arena, different nations may have different policies, rules, and regulations for the hospitality industry. Therefore, an organization cannot guarantee uniformity in its policies due to the different compliance requirements.

The legal environment influences the operations of the hospitality industry in the domestic, national, and international platforms via taxing policies since organizations must file their returns each fiscal year. The management must also comply with environmental regulations, tariffs, and employment laws that are established within different nations. They also need to comply with trade restriction policies. Due to cross-border differences in legal policies, different organizations may report different income streams, yet the level of capital commitment is the same.

This situation influences business strategic plans for pursuing competitive advantage. For example, in nations where an organizations net profit is heavily taxed, price deferential occurs when compared to nations that have less taxation. This situation may present an organization as discriminating its clients in terms of price. Additionally, nations with political hostilities and instabilities may increase the cost of doing business, thus resulting to high prices since business continuity is only possible in case an organization breaks even.

Economic Factors

Economic factor predict the performance of a given nation. The factors produce resonance to the financial performance of organizations that operate in the hospitality industry. For example, increasing inflation in an economy influences the hotel sector in terms of price increment for services and products sold to people who stay in the facilities. Hence, the purchasing power of people who seek accommodation and other services offered by the hospitality industry is also affected to the extent of destabilizing the demand-supply equilibrium, which affects the buyers and suppliers bargaining authority.

The hospitality industry is supported by various industries to effectively run and offer optimal services. Therefore, economic factors that influence the supportive industries also affect the cost of the hospitality industry. For instance, in the national and international domains, fluctuation in fuel prices destabilizes the prices of services and products offered in the hospitality industry. The case puts barriers to the profit margin that a hotel can reinvest in its growth and/or CSR. Other economic factors that have a significant implication to the hospitality industry at domestic, national, and international levels encompass FDI, the rate of economic growth, the rate of interest, and the rate of foreign exchange.

Socio-Cultural Factors

Socio-cultural differences act as an immense success factor for the hospitality industry. In the industry, there is a need to comply with food safety standards. In the international arena, different regulations ensure socio-cultural compliance of organizations. For example, in the recent past, the UK introduced legislation on minimum wages. It also established another ruling that required firms to recycle their wastes as a measure of being environmentally green. These two legal legislations have influenced the hospitality industrys profitability levels since extra costs are encountered in waste treatment and recycling.

An important socio-cultural factor that influences the hospitality industry at domestic, national, and international levels is the seasonality of the demand. For example, in the western cultures, people mostly travel over holidays and during leaves from their routine work. Hence, at domestic, national, and international levels, the hospitality industry is characterized by fluctuations in demand for services and products.

In some situations, the demand may be in such a way that a hospitality facility cannot sufficiently and optimally handle clients without compromising quality during peak seasons. In case of Beverly Wilshire Hotel, this challenge makes it turn away booking once it has been booked to capacity. This situation introduces the challenge of putting off first timers who may develop loyalty to competing organizations, yet there is no assurance that the current people who occupy the hotel will return the next season as those who have been forced to get help from the competing organizations.

Demographic Factors

Depending on the demographic patterns, the hospitality industry may experience different changes at the domestic, national, and international level. Canina and Carvell (2005) assert that Europe and the US have been experiencing a reduced rate of population growth at levels whereby people who are leaving employment are more compared to those who join it. In this context, the high aging population leaves an empty space in the employment sector. This gap produces a negative effect on an industry that demands young vibrant populations such as the hospitality industry. Indeed, this effect is not confined to domestic and national levels. It also influences the international business. For example, where an organization has operations in nations with lower populations of young people, it may have to import expensive labor from nations that have a high population of highly skilled unemployed young people.

Technological Factors

Technology constitutes one of the factors that have caused a revolution in the hospitality industry. At the domestic, national, and international levels, technological systems such as the integrated management systems enable institutions of all calibers to attract guests of various types. This turn-up ensures high revenue generation and/or improved efficiency of the hospitality sector organizations. Improved capabilities of information management systems such as the enterprise resource planning (ERP) guarantee good tracking of customer booking and delivery of tailored services depending on guests unique tastes and preferences.

Technology enables customers to have virtual experience in hotels by accessing the facilities in an online environment. This strategy ensures a close comparison of services and products on offer. The ramification here is the increased competition for clients even before the actual physical-stay-experience. Indeed, due to technology, the era of intermediaries such as travel agents and advisors is almost gone. Therefore, hospitality organizations are only left with the option of increasing their appeal to potential clients in an online environment as the only way to increase their competitive advantage.

Ethical Issues

Marketing is inevitable in an industry that experiences high competition in domestic, national, and international markets such as the hospitality industry. Therefore, apart from work ethics, for instance, good etiquette when handling clients, marketing hospitality products and services attracts a huge ethical concern. Marketing brings a large number of people to work together in a teamwork environment. The work teams are guided by codes of action that define what needs to be done during the marketing and what should not be done. Marketers have the role of placing products and services with success in a market. However, it is a violation of marketing code of ethics to deceive while attempting to make a sale or win clients to make booking in a hospitality organization.

All marketing efforts must ensure that the target audience gains the greatest good from the products offered for sale. Kerr (2007) asserts that ethics in marketing refers to principles and standards that define the acceptable conduct in the market place (p.128). Hence, ethics in marketing involves all practices, which have the capacity to result in the greatest happiness among all people. Some of the marketing practices that are considered unethical in the hospitality industry entail attempts, which are openly meant to deceive and/or take advantage of a given situation for individualistic or group gains.

Opportunities and Threats of the Hotel/Hospitality Industry

People always travel. Thus, the hospitality industry cannot be substituted. While in a hotel, people will never avoid eating all together. The hospitality industry is also an open sector that provides opportunities even to those with limited educational attainment. Apart from being a global industry, it has international markets with high demand. Labor intensiveness makes it hard to outsource. The hospitality industry is also highly flexible.

Opportunities include the existing external chances, which while utilized well make an organization improve its performance (Hill & Westbrook, 1997). Structural changes that result in high intake of women in the hospitality industry provide an opportunity. They imply less time for cooking at home. It also provides an opportunity for acquiring the much-needed labor supply in the industry. Increased emphasis on quality offers an opportunity for widening products and service differentiation. Globalization provides the opportunity for pursuing an internationalization strategy as an organization seeks to meet eating and accommodation needs for borderless tourists and business communities.

Threats are the external chances that impair the performance of an organization (Hill &Westbrook, 1997). Inadequate highly qualified personnel may compromise the quality of services offered in hospitality industry, particularly in this hotel. Political instabilities and unrest together with terrorism pose a major threat to the prosperity of the industry. Nations that have a high aging population witness the threat of difficulties in labor recruitment. Climate change may influence peoples decision on long-distance travels.

Scenario Analysis: Comparing Beverly Wilshire Hotel and Beverly Hills Hotel

From the context of scenario analysis, Beverly Wilshire Hotel and Beverly Hills Hotel host prominent people who include politicians, musicians, and high-caliber business personalities. Looking into the future, especially after considering that the two hotels have long historical reputation for quality service and modifications of its facilities to suit the needs of specific clients, they will continue focusing on targeting people who earn the highest incomes in the US. For example, a typical room costs about $1,045 per night in case of Beverly Hills Hotel (Callahan, 2014). For presidential bungalows, the cost may rise to $15,380 per night (Callahan, 2014). Comparably, Beverly Wilshire Hotel has rooms that cost up to $7500 per night (Valhouli, 2015). The table below offer more details for comparison.

Reference List

Abhamid, N., & McGrath, M. (2005). The Diffusion of Internets Interactivity on E-tail Web Sites: A Customer Relationship Model. Communications of the International Information Management Association, 2(1), 45-70.

Callahan, M. (2014). A Night at the vacant Beverly Hills Hotel. The New York Post, p. 17.

Canina, L., & Carvell, S. (2005). Lodging Demand for Urban Hotels in Major Metropolitan Markets. Journal of Hospitality and Tourism Research, 29(3), 291-311.

Gerry, J., Kevan, S., & Whittington, R. (2005). Exploring corporate strategy: text and cases. London: Prentice Hall.

Hill, T., & Westbrook, R. (1997). SWOT Analysis: Its Time for a Product Recall. Long Range Planning, 30(1), 4652.

Kerr, S. (2007). Rational decision making in business organizations. American Economic Review, 1(1), 123-129.

Porter, M. (2008). The five forces that shape strategy. Harvard business review, 3(1), 56-63.

Southgate, D., & Westoby, P. (2010). Creative determinants of viral viewing. International Journal of Advertising, 29(3), 349368.

Valhouli, C. (2015). The Worlds Most Expensive Hotel Rooms. Web.

Strategic planning

Strategic planning is an important part of any business entity that is focusing on growth. Through strategic planning, an organization is able to link its mission and vision statements, and also prepare adequately for the competitive future. Strategic planning also offers a channel through which decision making process can be improved and hence promotes efficient stewardship.

Linda Jacobers case study is a perfect example of how strategic planning helps to foster efficiency in an organization. Strategic planning is therefore a well-coordinated effort that is aimed at producing major pronouncements and actions that help in the shaping and guidance a business entity. It also defines what an organization offers in terms of products.

This analysis offers a good example of the challenges that organizations face while coming up with a strategic plan and putting the same into action. The general process of takeover of a business entity was not that easy since the situation was complex due to the implementation of a new strategic plan (Roche, 2009).

The new owner of the business faced several challenges ranging from the business policy in place and the change in the strategy, to more complex difficulties. The style of business policy at the time the business was taken over was quite different from the proposed strategy. The development and implementation of the policy was hectic and challenging.

The company was facing some legal problems involving financial bankruptcy cases as well as between the company and independent distributors. The companys major supply source was in the main reason why it was shut down. This led to another problem since the company had to seek another supply source. The new strategy therefore, came into play when Mac was still adapting to the new conditions.

Challenges

Linda Jacober had faced many organizational challenges since the first day she joined this company. These problems were diverse such as the companys preference of low-level over high-level employees ideas when making major decisions and the business policy in place which seemed to be outdated (Roche, 2009). The company was also in poor relationship with the outside vendors.

However, Linda developed some level of credibility since she was open to negotiations compared to the former management. The policy that she came up with on cutting down expenses also posed a major challenge as the company sales dropped drastically, especially cutting down of truck inventory by 50%. Reducing the overhead expenses posed a major challenge because the company had to cancel training sessions resulting into uncollected receivables (Roche, 2009).

Linda had worked as a manager in the Toy Company at the department of corporate licensing. This responsibility was challenging for her and as such, she was astonished by the offer at Mac tools. This was the case since she lacked experience in jobs that dealt with industrial products distribution. Mac tools had also put in place a new initiative called Mac Direct and its success was dependent on Lindas decisions.

For Mac to be upfront from its major rivals, a strategic plan had to be developed and implemented in order to drive Mac tools to success. In this case, the risks to be taken were extremely high in terms of the management of the assets and increment on the sales representatives (Roche, 2009). This company had to be treated like a new industry in the market that required new strategies and methods that would ensure its success.

There were available ways that could have been used to overcome the challenges. The company had invested very little in talent development even though the workers had greater desires to learn (Roche, 2009). Lindas strategy was based on corporate culture change. However, her juniors were quite eager for changes in terms of leadership and the instrument of direction in the company.

The leadership offered by Linda was based on her prior experience. She came up with a strategy that ensured team building was properly put in place and laying down the strategies to be used on the daily running of the company (Uyterhoeven, 1998).

Performance

Lindas performance represents the normal day-to-day life cycle of a business. She joined the company that had numerous challenges. Through her endeavoring strategies, the company gained stability, became profitable and competitive. After some time, the company started facing some challenges again. This is a normal business cycle (Uyterhoeven, 1998).

Linda did not employ any business tactics. Some of the tactics such as renovation of the company during the decline stage would have helped the organization to pick up with a greater force, thereby stabilizing itself in the market. For Mac tools to survive the competitive market, restructuring is inevitable. If a company loses its market share and becomes less profitable it is bound to collapse.

The only performance measure that can assist such an organization is adequate restructuring of both the top management and subordinate staff (Uyterhoeven, 1998). Besides, the use of a market mix strategy will boost the competitiveness of an organization.

Learning experience

Lindas experiences offer a credible lesson that can enhance a vibrant business strategy is put in place and consequently implemented to avert such crisis. The development of corporate culture in this case study must involve leadership. The latter ought to usher followership that will ensure all employees are working as a team (Uyterhoeven, 1998). Finally, success is dependent on the belief system of an individual. Hence, an individual should be self-driven and demonstrate high level of professionalism when handling corporate issues.

References

Roche, O. P. (2009). Corporate Governance & Organization Life Cycle: The Changing Role and Composition of the Board of Directors. New York, NY: Cambria Press.

Uyterhoeven, R.H. (1998). Custom Case Book. Newton: Lasell College.

Strategic option for expanding global operations for Riordon

Riordan is a global plastic manufacturing company extending its operations beyond its boundaries. The company has vigorously expanded because of its focus on its mission, vision, and value statements. The mission and vision statements concentrate on four areas, which are the customer management programs, building long-term relationships with stakeholders, having innovative employees, and sustaining future growth.

It is achieved by having innovative employees, offering innovative solutions to customers, ensuring quality by reducing defects. The combination will enable the company to realize its vision and mission. There is also the use of the six sigma model to meet customers, shareholders, and employee demands. The value statement concentrates on giving all stakeholders value in the products of the company. This is ensured through the continuous focus on quality improvement and defect prevention by investing in research and development. It has adopted a variety of strategies that ensure the smooth running of the companys operations.

To be a leading plastic manufacturer both today and in the future, the company has focused its energy on customer relationships, employees, the companys focus, and the future vision. It has been in line with its mission and value statement. Also, Riordan manufacturing is concerned about its material purchasing process between the employees and the vendors. The management is considering implementing a database that will support web-based communication. The strategy will avail the users of a real-time picture of the companys operations. It is essential to any company intending to venture into global markets Nwadei (2004, p.122).

Most important countries in which a global country should participate today

The global market has become excessively competitive, with developed industrial companies expanding to diversify their risks. The developed countries are protecting their infant companies by diverting unfair competition. Some of the developed countries are making intensive investments in third world countries. For instance, European companies have made intensive capital investments in the third countries whilst creating both complex and global supply chains.

Also, the European exporters have increasingly ventured into emerging economies, which include India, Brazil, China, and Russia, among others. It is according to the global Europe framework (2006, p.3). Therefore, the underdeveloped countries and the developing ones are the best countries to invest in because the competition is low. Also, local customers prefer foreign goods and services to the local ones. It necessitates foreign companies to capture a large base of customers within a short period.

Countries like China and Russia are developing at an accelerating rate, and this poses a threat to the countries making investments in those countries. In a decade, it is believed that some countries will have developed fully to support their population with locally generated products. Therefore, the list of the most vital countries to invest in will change and exclude the countries that are developing vigorously today.

Risk profiling

The Riordan manufacturing company, as a global company has developed some strategic plan options. The developments are cultivated by the idea that the company needs to attain its goals and objectives. The strategic plan options for this company were to reach too many customers as possible and to modernize its technology. The strategic options have their risks which are, both technical and market uncertainty.

To start with, the technical risk is that the strategic plan options were not developed in a manner to address diverse customers needs. It can hurt the market in that the company can experience difficulties when dealing with the customers. Also, a market is a dynamic place, and to cope with the changing environment, the company should flexibly frame its strategies. It will necessitate the company to adjust according to the demanding environment. The technical risk ranks at the top and should be addressed critically. The analysis suggests that companies need to position themselves properly to excel in competition.

Reference List

Europe Framework. (2006). Market access in a changing global economy. Europe: Publication Office.

Nwadei, C. (2004). The relationship between perceived values and congruence and organizational commitment in multinational organizations. Australia: Universal Publishers.

Strategic planning

Planning is the designing of desired future and effective ways of bringing it. There are two types of planning that are short term planning which is budgeting and long-term which is strategic planning. This aspect of planning and control assumes increasing importance as businesses grow in size and complexity. The proprietor of a small business, aided by common sense or intuition, can usually gauge the efficiency of the business using plans.

He is near enough to each section to form accurate judgments and to act quickly in order to correct anything he considers to be unsatisfactory. As a business grows, however, the proprietor tends to become more and more remote from the factory floor as problems of policy increasingly claim his attention. He is therefore compelled to delegate much of his authority and at the same time to control his executives to ensure that each is performing efficiently and within the general policy which he has established. He finds it necessary for quantitative interpretations of performance, where previously his eye told him all he wanted to know.

We can define strategic planning as a systematic and formalized process for purpose of directing and controlling future operations towards desired objectives for a period extending one year. Strategic planning involves decision-making in determining which specific investment among the available should be accepted. This must a project that has positive results that are increasing profitability. It also involves the decision on how much will be spent and which portfolio should be accepted.

All this is evaluated in relation to contributing to achieving the corporate goals. There are many goals for organizations but the most important is the goal of profit maximization. The goal of profit maximization increases shareholders wealth. There strategic planning is always involved in reconciling the goals of survival and profit maximization through increasing the value of the firm which in turn increases the market value of ordinary shares and distributable profits. This increases the shareholders wealth.

Forecasting

While preparing a budget forecasting has been used in determining the figures be incorporated into the budget. Take for example the incorporation inflation in the budget. The management takes into account the changes in the purchasing power index. From the Riordan case, they have explained how they have taken into account inflationary measures. High oil prices, and to a lesser extent the weaker dollar, are contributing to raised expectations for inflation. An expected decrease in the rate of increase in labor productivity is another factor that is contributing to higher inflation expectations. On the other hand, there are factors that are contributing to lower inflation expectations.

These include the fact that while it is expected that the rate of increase in labor productivity will decline, productivity gains are still relatively good or at least on-trend. Other important factors are the relatively weak labor market (wage gains should be small but on an increasing trend), the expectation that Federal Reserve policies will restrain inflation, strong competition in the retail market, and strong international economic competition. The factors all balance to forecasts for the inflation rate continuing to be less than 3.00% this means that all the forecasted figures will be adjusted for 3%.

This will be as follows for most items (1+0.03) x forested figure.

Elements of master budgeting

The master budget is prepared after all other budgets have been prepared.this includes the profit and loss budget and balance sheet. When preparing the master budget some defined processes are followed. First, one begins with preparing the sales budget, which shows quantities of each product being sold and the intended selling price. it provides the total expected revenue to be generated by the sales. This becomes the foundation of all other budgets.

After the sales budget has been made the production budget is made. This involves the quantities that will be produced and it is normally the responsibility of the production manager. The main aim is to ensure that there are sufficient stocks to meet sales. Other budgets like the direct materials usage and direct materials purchase budgets are derived. Other expenses are also budgeted for. Then each department produces their budgets, which are amalgamated to produce the master budget.

The mater budget must have various elements, which include; budgeted profit and loss account. The profit and loss account contains sales derived from the sales budget, opening stock derived from the stock sheet, purchases from the purchase budget, direct labor from labor budget, and other expenses, which also are derived from various expenses budgets. Budgeted balance sheet; this is derived from various budgets including the strategic planning budget. It contains Land, buildings, and other fixed assets which are a result of capital budgeting, current assets like stock, debtors, and cash derived from the cash budget.

Assumptions of the cash budget

The objectives of the cash budget are to ensure that sufficient cash is available at all times to meet the level of operations. Cash budgets ensure that there is enough cash, which is not surplus use, and the excess is made for investments. The assumptions for the cash budget are many are based on the other budgetary assumptions. For example, the assumption that the sales will be ass estimated in the sales budget and actually the sales will be made in either cash or credit as shown in the sales budget. However, to detect errors in the assumptions due to incorrect information provided one needs to have controls. The controls may include follow-ups, aggressive advertising to keep the sales to the level required.

Concerns

In preparing the most recent budgets the managers will be concerned about a number of issues like inflation, incorrect assumptions, exchange rates for those, buying and selling outside the country, escalating of labor costs, and fluctuation of interest rates. In trying to solve these concerns, the manager will need to do the following;

1. Inflation: Inflation affects anticipated cash inflows by an increase in prices of purchase. In order for one to incorporate inflation in the future, cash flows, the prices have to be adjusted for inflation for the purchases and sales.
2. Labor costs: negotiation has to be made between employees representatives and the management so that future expected demands are captured in the budget.
3. Fluctuating interest rates: the management needs to prepare them to negotiate for constant interest rates if not the hedge against it. This should be captured in the Budget.
4. The issue of exchange rates fluctuations the management needs to they should negotiate for forwarding contracts.

References

Ask, U, Ax, C. and Johnsons (1996); cost management in Sweden: from modern to post modern management accounting.

Drury c (1998):costing An introduction international ,business press Thomson Learning.

Demski, J.S. (1997) Analyzing the effectiveness of traditional standard costing variance model.

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Introduction of the Strategy  Executive Summary

iWork aims to support businesses in redefining how real estate transactions are executed in order to motivate them to provide wider choice and mobility to their employees, resulting in a happier workforce and a supportive environment. The business will also develop exciting environments in which solitary workers, satellite teams, budding firms, and established businesses can thrive. We aspire to develop work environments that provide you with the atmosphere, tools, and professional network you need to Get Work Done.

Business Description

iWork is an online accommodation marketplace that hosts listed houses, offers an online marketplace for rented houses, offers a variety of unique accommodations, and provides property damage protection. By hosting listed houses, the business will provide its consumers with a platform where they can easily access listed houses. By offering an online marketplace for rented houses, iWork will ensure its consumers easily access available rented houses through its online platform and website. Similarly, iWork will provide its consumers with a variety of uniquely developed accommodations to provide them with various designs that will potentially meet their housing needs. Given that not all consumers that use rented housing have good intentions, iWork will provide property damage protection for those houses that might be vandalized by users.

To expand the business to Canada and later to the Caribbean, iWork has to meet the following goals to facilitate its expansion. The business will have to develop an effective sales plan that will enable it successfully reach the Canadian consumer. Through a good networking system, the business will effectively communicate with its consumers to market its services in Canada. Given the nature of the business, web presence is a critical aspect in achieving success, and therefore, iWork will ensure it has an effective internet presence for ease of accessibility. An ideal client profile will also play a critical role in how iWork will market its services in Canada. The same applies to the businesss accounting process since it will allow for clarity in its financials. The presence of an effective healthcare plan will ensure all employees focus on the business instead of worrying over their health. Communicating with the Canadian authority will ensure the business handles any potential taxation issues, which will contribute to its revenue repatriation.

SWOT Analysis

Having a team filled with experienced business and technical professionals, as well as properties secured, provides strength for our SWOT analysis. However, iWork lacks the funding to roll out the final program and lacks a proper marketing team to promote our company. However, these weaknesses will be rectified in the future.

We face serious competition and expect legal challenges that threaten the success of our company, however. The Canadian government is an advocate for remote work, and we also have large commercial property owners that are eager to work with our company.

Competitor Analysis

The new business is expected to face competition from Airbnb, with certain factors viewed as difficult to overcome, such as scaling the business to secure the market share. Moreover, since iWork is still a young business competing against existing organizations, Airbnb, for example, will require setting up various locations throughout Canada and the Caribbean countries to effectively compete. However, the company is expected to be able to compete effectively against known and potential competition due to the current state of work and the possibility of venture capital interest. iWork will essentially be the first company to have a platform that supports remote work for any company. Further, iWork will capitalize on the existing information by engaging its workforce to be entirely committed to minimizing possibilities of hesitance among employees, which impacts business performance.

Business Viability Assessment  Basis for the Strategy

The basis for the strategy will rely on the existing/intended business activities. As shown in the BVA, the corresponding proofs of commitment and passion for the business, primary business drivers, and additional commentary as proof of commitment and drivers will be aligned according to the respective business activities.

Goals Established

iWork will begin by seeking legal help as the business expands to Canada, determining Canadian market structure, finding the appropriate location for iWorks branch in Canada, and researching competitors, specifically those based in Canada. Thereafter, iWork must accomplish the following tasks that define its goals. First, the business must include a personal touch in its services while empowering its subordinates to customize its workspace. Second, under design space to be user-friendly and attractive and encourage networking, iWork must provide conference rooms or co-working spaces, which are equipped with internet-capable gadgets such as laptops, smartphones, and tablets. In line with the co-working spaces, the business will also provide secured internet and secured ports or computers, allowing for connections with personal computers. Additionally, iWork must set up a common working or resting space where its members, individually or collaboratively, can work to achieve the objectives of the business, separate from the working area.

Ideas for Attaining Goals/Objectives

For iWork, the ideas for attaining goals/objectives will depend on the goal. For goal 1, seek legal help as the business expands to Canada, the idea/solution will be to contact the Canadian authority. For goal 2, Determine Canadian market structure, the idea/solution will be to research the market. Based on the diagram, the respective goals and ideas/solution relationship will follow the same association as already shown.

Action Steps to Implement Ideas/Solutions

To implement the ideas/solutions established in goals 1-7, iWork will establish a focused plan where every goal will be concentrated on. Specific attention relative to the key business drivers will enable the business to build that necessary focus on the activities to take and categorize them based on actions to take. By increasing steps while varying existing initiatives in near-term implementation and coming up with fast solutions, iWork will then be able to work clearly and coherently. Through this, the business will utilize the available business resources by applying differentiated leverage and power. This will be essential for establishing absorbers against potential business distractions.

The New Business in the first year

The average cost of a single-family rental house for one month is $2,095, meaning that to achieve the anticipated $2.12 million dollars in returns in the first quarter, iWork will have to rent more than one thousand houses in the three months. Moreover, with a projected eligible expense of 17% for the first three months, iWork is expected to give out $360,400 for tax and working expenses. As such, for the business to make the projected $2.12 million in revenue, it will have to rent an additional 173 houses for the same period. Meaning iWork will rent 1,185 houses for three months to make a revenue of $2.12 million. The same calculations will be applied for the second quarter, the third, and the fourth quarters throughout 2023.

Incorporation Structure, Employees, Work Locations, Key Aspects

Country fit for your business

From research, the following were established as success factors for iWork in Canada. Canadas GDP has been on the rise in the past three decades and is one of the main indicators that shows a countrys economic performance. With a strong GDP, businesses are afforded the confidence to invest more, in turn laying the foundation for economic growth in the future. With a strong GDP, it means the Canadian government is willing to support businesses by providing loans for organizations to thrive. Canada has a thriving online market that amounts to US$35 billion in revenue as of 2021, giving iWork an opportunity to share in the market. Moreover, entering the Canadian market is relatively easy, presenting iWork with a platform that facilitates room for growth. Canada has a strong legal right meaning the afforded security right will ensure the business is safeguarded from the collateral damage of iWorks original assets and assets leased for operations. Even with Covid-19 in place, the temporal rental market size in Canada has been on the rise, and this promises iWork to invest in the market to partake of the rising demand for the services.

Strategy Evaluation Scorecard

Since the business is expanding its operations to Canada, the objectives set for the first year are to contact the Canadian federal authority for guidance on corporate law and research about the market. Other objectives for the first year of operation will be to research available locations, identify user targets, standardize conference rooms, and choose the right conference rooms. With the objectives in place, iWork targets to increase its cash flow, generate opportunities, and generate visibility. The necessary things to consider for the businesss future in Canada will be when to innovate, innovation opportunities, and how the business will evolve. Since the business is yet to start, every associated plan is a work in progress.

New Business Strategy Summary

iWork develops exciting environments where businesses can thrive, gets work done, and support businesses in redefining how real estate transactions. The business will host listed houses for sale, offer an online marketplace for rented houses, offer a variety of unique accommodations, and provide property damage protection. The business is expected to face competition from Airbnb, compete against existing organizations, compete effectively against known and potential, and capitalize on the existing information. By the end of the year 2023, the business anticipates it will have reached $2.5 million, and in five years, the business will have grown by a 9 percent margin.

Introduction

The continuing rapid growth of internet applications and web technology is evident in the home access to the internet; this figure has increased 32% over the 1998-2000 period from 33% to 65% (Khosrowpour, 2001). The world is changing fast and the role of information and communication technology is increasingly having more of an impact on every sector as well as on the society at large (Kamel, 2003)Thus, this dynamic nature of information technology makes it a special case in strategic planning.

Strategies that apply

Some of the strategies in strategic planning that have been mentioned by Wirth do apply in the IT sector. They are:

Benefits for strategic planning

The benefits that apply here are: planning is categorized as being one of the important things, with proper allocation of resources such as time, talent, and money being allocated to the activities with the most benefits; planning proves awareness of the changing environment as is evinced by the statistics on internet usage figures given by Khosropow; the need to bring about change in the company due to the changing environment; allows for poor-performing areas to be identified and eliminated and thus give a sense of security among employees that comes with the better understanding of the changing environment and the companys ability to change with it (Wirth, 2010).

Pitfalls to strategic planning

Some of the pitfalls identified by Wirth that apply to the IT industry are poor communication between the management and the employees hence a lack of direction for them; failure to involve key employees in all phases of the planning environment and failure to adapt to changes in the industry. Once these pitfalls have been identified, it means they can be eliminated and thus make strategic planning more practical and productive in the IT sector.

Implementation problems

The implementation challenges cited by Wirth are specific to small companies, while the IT industry is composed of both small and large corporations, making the challenges subjective to the size of the company.

Key factors that influence company performance

The ability to bring about change in the IT market is the most profound factor that will influence the impact the IT company has on its market. Today, opportunities and challenges of available technology can be utilized as strategic and tactical resources by an IT company to leverage market gains on its side (Khosropow, 2001). This is therefore the most important factor for consideration during strategy planning by an IT company.

Strategies that do not apply

Some of the strategies highlighted by Wirth do not apply in the context of IT companies. They are:

Benefits for strategic planning

Setting objectives in the IT industry is not a sure-footed approach to strategic planning because of the changing nature of the industry. This will be a risky endeavor.

Implementation Problems

The implementation problems put forth by Wirth assume that there is no planning to plan (Wirth, 2001), and this is logically impossible because it is usually the first step in coming up with a strategy.

Conclusion

Finally, dynamism is the main factor to be considered while coming up with a strategy for IT companies, due to the changing nature of the industry. Hence, it is prudent for an IT company to be able to adapt to the changes effectively.

References

Kamel, M. (2003). Managing Globally With Information Tecnology. Pennsylvania: Idea Group Inc (IGI).

Khosropow, M. (2001). Managing Information Tcechnology In A Global Economy. Pennsylvania: Idea Group Inc (IGI).

Managing change Setting The Standard

This company is a quality service oriented organization. To achieve its specific objectives, benchmark follows these simple steps;

• Organizing the team;
• analyzing the situation of the market;
• strategize on how to reach the destination;
• align, adjust through delegation, training so as to reach to the set goals.
• rovide the best available health care personnel in the home and health care sector.

These activities go simultaneously, to help the organization realize its mission.

Strategic Processes and planning

Planning is one of the core functions of a manager. It involves the organisation of various parts of an organisation towards common goals and objectives. The planning process starts from the management, only to be implemented by line workers. Through the use of strategic planning, companies are able to meet their goal of profit maximisation. Through this, the broader perspective of the organisation is spelled out to the employees. They clearly understand their role in the organisation. Through well understood roles and functions, employees are motivated to excel. The relationship between employees and customers is reengineered. The major function of strategic management in Benchmark Care Company is to mix various functional branches of an organisation fully and ensure they are harmonised. Well harmonised departments correlate to produce efficiency and effectiveness.

Through strategic management, the progress of the organisation is kept under watch. The realisation of goals and objectives is clearly marketed and monitored through strategic management. Financial planning forms one of the major pillars in an organisation. Financial capability determines the initial propelling of an organisation. These financial factors fall within the equity base of an organisation. Well managed and planned equities lead to profitability and wealth creation. The financial manager is endowed to manage the funds provided it maximises profits and increases their wealth. Through the use of these tools, competitiveness within the global market gets hot. Managements should emulate and apply the use of strategic management and planning in the daily management of organisation activities. Achievement of various objectives of the organisation starts with a path and guidelines on the direction to take. Therefore, strategic planning and management should be used prior to creating a successful organisation (Womack & Jones, 1996).

References

Womack, J. P., & Jones, D. T. (1996). Lean thinking: banish waste and create wealth in your corporation. New York, NY: Simon & Schuster.