Mission and Vision
My organization will be a retail company dealing with various retail stores in important places of Australia. The retail stores will be selling grocery items, stationary items, and electronic goods for households throughout the country.
Mission- To become one of the most successful retail chain in Australia.
Vision- To establish a sustainable business organization by following sustainable practices and to endeavor in welfare of humanity by financial assistance to the needy.
Purpose- Establishing pocket friendly, budget shopping centers for the common people and providing employment opportunity to the capable people.
Objectives- Establishing a fast growing retail business. To do social good by substantial amount of Corporate Social Activities. To give quality products in lowest price.
2 different Source of Inspiration-
- There is a large section of population who are financially not stable, through CSR activities in health and education the company will provide assistance to this section. Currently 5.36% of Australian youth is unemployed. The company will open door for huge employment opportunities.
Every company must have a vision and mission statement in order to have a clear direction where it desires to head. The mission statement of an organization denotes the immediate objectives that it wants to fulfill whereas vision is the broader philosophy that the organization follows (Kopaneva and Sias 2015)
The annual report of a company is its most important document to communicate its achievements and shortcomings to all the stake holders (Khatun et al. 2016). The stakeholders include the customers, shareholders, employees and the media. I will be ensuring a smart looking annual report that would provide details financial information about the company to all the stakeholders. The achievements of the company will be highlighted to attract more investment and increase goodwill in the market.
Customer confidence increases when they see a financially healthy company. This increases the customer base and goodwill of the company in the market. A company with strong customer base and goodwill naturally attracts attention of the investors. I will optimally use the Annual report of my company in highlighting its achievements.
Activity 1C
Situational Analysis
The organization will be dealing with various kinds of FMCG and household products. Therefore, the organization has to have business relationship with all the big companies that produce such products in Australia. The internal factor that will shape the relationship of the organization with others is the business policy drawn by the executive board and the management (Mohamad et al. 2017). The company will have its stores in various locations in Australia. There has to be a dedicated facility department which will maintain all the stores. The company will be having a huge employee base which requires a dedicated Human Resource system. The internal factors that will impact organizational performance are- organizational structure, executive board, infrastructure, human resource management, and the attitude of the employees.
The external factors are those which exist out of the organization and cannot be influenced or altered by it. Government agencies, political factors, competitors, policies, environmental factors are all considered to be within the purview of the external or macro factors of business. In this case the government agencies and policies will be playing a major role in shaping the organizational outcomes, as there will be a large number of registrations and permissions needed to establish the retail outlets (Sekaran and Bougie 2016). There are international and national competitors already in the business and therefore the company has to wisely shape the business policy and provide goods in the lowest price to attract the customers. External economic factors like supply which is dependent on a good relationship with the suppliers is also important for a successful business operation. The suppliers are needed be engaged in a good relationship with the company so that they supply the best products within the stipulated time.
Objectives
One ethical requirement to which my organization must adhere to is ethical reporting of the financial health of the organization in the annual report so that the stakeholders must be aware about the truth (Ferrell and Fraedrich 2015). Even if the organization has not performed well in any of the financial quarters that must be reported truthfully and impartially.
Apart from that the company will follow all the global standards of ethics in running business, not overpricing the products, training all the employees about ethical standards that must be followed by them, not selling a product by overhyping it. Doing an ethical and business with integrity helps in establishing goodwill in the market that will produce sustainable profit making in the business.
Strategic direction is the way in which the organization plans to reach its desired state. The strategies, and the action plans to follow to fulfill the organizational objectives fall under this category (Albers, Wohlgezogen and Zajac 2016). The organization will establish 2 retails stores at 2 important and strategic locations. These two stores will deal with FMCJ, household, and electronic products. In the time period of 1 year at least 2 more stores will be opened in two other cities. The cost of the products will be kept the lowest in comparison to all other retail chains, this can be done because the operational expenditure will be less because it will be a completely new set up. The first group of employees will be trained and counseled about the strategies, and they will be given incentives if they overshoot their targets.
Walmart is an international retail chain which is working with the same business model. In Australia there is Woolsworth which works in the similar field. Target and Costco are similar companies. If the history of these companies are looked closely they did not start with a huge capital expenditure and investment in multiple zones. They have slowly but steadily increased their footprint in various places. Investing a large amount of capital in the first place would not be sustainable. The marketing strategy that would be taken is to provide quality products in a very pocket friendly price. This is also a time tasted marketing method.
The lesson that is learnt is not to dream too ambitious in the very first phase and start with a medium investment and marketing strategy that is tried and tested. Some innovations will be brought in the business model like home delivery without charges and free parking.
Source of Inspiration
Strength- The industry works in the retail industry and deals in selling various household products directly to the customers who walk in. The strength in this sector is its continuous and ongoing business in all seasons and times. The company directly deals with the customers hence customer needs and queries are fulfilled without any hamper.
Weakness- The low shelf life of the FMCG products is one of the weakness in this sector. There has to be a continuous rolling of the products otherwise they will get expired. Apart from that because there is a need of a huge human resource to support the business, there is a huge expense on HR processes.
Opportunity- The main opportunity in the business is the volume of trade it has potential to do. If the company can acquire a considerable share of the customers of the competitors, then it can expand fast into new zones as per the organization goals.
Threat- The main threats are the competitors who are very active in their business. Many of the competing companies are international players with experience and knowledge about doing business in the retail sector.
The main competitor in the field is Walmart. The company successfully increased the gross margins steadily and had an average of 25% in the last 10 years. The company exerts pressure on the suppliers to bring down the cost price of the products so that they can sell it at a lower selling price. The company has been steady at price to sales ratio of 0.4. The “dividend yield” of the company was 3.1% in 2016-17 which is high than the previous quarters.
The company has been earning profits steadily but slowly. The methods to analyze the profitability of other competitors will be same. Their history of profit making will be analyzed and recorded and required actions will be taken to replicate.
SWOT Analysis- Swot analysis is one of the most used tools for analyzing a market or a business. The full form is Strength, Weakness, Opportunities and Threats. It covers all the environmental factors of a business that may affect it (Verboncu and Condurache 2016). SWOT analysis can be done about the competitors or it can be done on the owned company to understand the possibilities.
This analysis includes all the perspectives like the strength and opportunities that can drive the organization forward or the weaknesses and threats that may harm the company’s ecosystem (Bull et al. 2016). I will be doing SWOT analysis for my organization individually and of my competitors. I will assess the weaknesses of my competitors and take advantage of those while improving the strengths of my organization.
Situational Analysis
To assess the viability of a marketing opportunity I will do a survey research that will include questionnaires about the marketing strategy and whether people are willing to accept the particular strategy or not. There will be a proper market research conducted to understand the viability of the project. Otherwise without understanding the market demand or viability the whole marketing strategy may fail after implementation (Nardi 2015). The market research would include survey questions and interviews to the target market.
The marketing objective pursued by the organization is acquiring customers from the competitors by providing goods at lesser cost. One of the external factors that may effect this is governmental agencies that regulate pricing (Lee, Kozlenkova and Palmatier 2015). The Government has various agencies that look after the taxes and pricing of various products. If the taxes on the products are increased, then the company would be forced to sell the products at higher cost. Hence the marketing objective that was adopted by the company to provide the customers with a price that is very low in comparison to the competitors would be hampered by such a policy. Therefor government policies through its various agencies is one of the external factor that may impact the marketing strategy of the company.
Organizational Goal- To expand business into double in a span of one year. Primarily 2 stores would be open, 2 more stores are expected to open in 1-year time.
Two marketing activities that would contribute-
- Making the people aware that the prices at the store is lowest than all the competitors. This will be done by advertisements and promotional campaigns that would include distribution of flyers and pamphlets at various locations.
- Giving free home delivery to the people who are ordering over phone or the internet. This will include many customers who may not be able to visit the stores directly.
Two activities that would not contribute to the goal are-
- Even if the cost is low if the employee behavior is not good towards the customers. This will alienate a lot of customers and customer retention will become a problem.
- The stores must be within reach and placed at strategic locations of the city. Accesibility is very important in ensuring a larger number of footfall in the stores.
Activity 3D
One of the marketing opportunity is to open an attached bar along with the shops. The positive impact of this on the business will include the customers who wants to relax with a drink after shopping, or who wants to party. This will add to the revenue of the business and make the place a hangout location.
However, this could have negative impact on the business as well. There are stringent government regulations about opening bar where alcohol will be sold. The process is also complicate and expensive. Apart from that many families would possibly avoid shopping because of the presence of bar within the campus.
Three stakeholders with whom the company will have to deal with are—The suppliers, the government and the shareholders (Haldane 2015).
The suppliers are from whom all the products that will be sold in the organization will be acquired. There has to be a very good relationship with the suppliers in order to get the supplies in stipulated time without procrastination (Kumar and Pani 2014).
Ethical Requirement and Business Standards
The government through its various agencies directly interact with the business. This happens in various points of contact like tax collection, registration, paperwork’s etc. Without necessary registration with the government it is not possible to start or run the business.
The shareholders are the people who will invest in the business. Without investment it is not possible to run a business and expand it all over the country (Fich, Harford and Tran 2015). More investment will help in growth.
One long term business objective is to become the number one retail company in Australia.
The short term objective of opening two more stores in the near future would help in rolling the wheels of overall expansion of the organization.
One of the intermediate objective is to include new product line up on the way like hardware. This will help in increasing the revenue of the business to considerable heights. More revenue will result in faster expansion of the business across new horizons and will ultimately lead in fulfilling the overall objective of the business.
Capability- The capability denotes the ability of the company to support the existing customers and make space for new customers.
Resources- Resources are the materials that are available to the organization for use in developing its business and achieving organizational goals.
Financial position- Every organization has some financial backup for emergency and there is money which is rolled over for business. Both of this combine along with the permanent and temporary properties and assets of the company including the tangible and intangible ones, to form the financial position of the company.
One marketing objective is to acquire existing customers of the competitors. This objective is compatible with the purpose of the organization because more customers will lead to more revenue. Legally the organization wants to be recognized as the largest retail company in Australia, hence more customers will help the organization towards that goal. Ethically the organization wants to provide the best financial returns to the investors, hence more customer base will make that objective achievable.
KPI is also known as the Key Performance Indicator. The four aspects of the business which form its long term objectives and can be measured by the KPI are- financial objectives, marketing objectives, CSR objectives, and growth objectives.
The financial indicator will show if the company is financially performing well and doing profits. The marketing objectives indicator will indicate whether the marketing objectives are fulfilled within time. Every company is expected to perform social responsibilities, that will be indicated, and lastly the desired growth of the company will be tracked.
Strategic Direction
A risk to the financial health of the company is increased taxes by the tax department in the luxury goods. This may reduce consumption of such goods and the company may see loss in that sector.
Risk management strategy is the strategy of the company to tackle risks (Sadgrove 2016). One risk management strategy that can be used to tackle this problem is to properly analyze the government’s attitude and then deciding on the inventories. Those products which may see an increased tax burden may not be kept at all.
One risk management strategy that would not work in this case is taking risk management actions after the taxes has been increased. People will instantly stop buying the products which are not necessary and the company will bear losses.
The marketing objectives will be formulated after proper brain storming among the top management. Then the objectives will be recorded into the KPI software in various categories. Each KPI category will have short term and long term objectives. The managers will be given responsibility for the fulfillment of the objectives. Papers will be maintained by all the managers about their performance records. The defaulters will have to show cause about failure in meeting deadlines.
- Evaluating information from various sources are very important to analyze information about market process. The marketing strategies that are adopted are first analyzed from existing case studies. Key word research is conducted on the internet and information, research and case studies from authentic sources are duly analyzed.
- Complex business concepts had to be comprehended and explained through writing in clear terms. The first activity was to assemble templates, charts and graphs of to represent the ideas in simple terms. Then the ideas will be put into short and crisp terms and presented to the audience.
- Feedbacks were taken from various stakeholders and experts about the writing. They were approached in person, or they were mailed the documents. Their feedback was duly considered and there was time frame to bring the necessary changes in the documents.
- There are different sets of audiences who were to be taken into account, the structure for the finance experts included data statistics and financial information on the other hand people dealing with technical data were produces with all the infrastructure requirements. Hence different documents were set for each of the audience catagories.
Entry 2
- The personnel and the stakeholders would be given indication of communication that includes nonverbal ones like hand indications which will induce them to work in a particular way. Sessions to train them about the particular nonverbal communications in front of the customers will be taken.
- At the end of everyday there will be meetings to clarify all the queries in the mind of people associated with the project. Detailed discussion and interactive sessions will be held. There will be questions which will be duly answered by the key people.
- There will be continuous research about new data that is emerging from various researches which will help in the development of the project. Software will be used for data analysis and experts will predict their opinions based on the data analysis.
- Decision making will be fast without procrastination. Therefore, a small body concerning final decision making will be constituted. Organizational objectives must be met within stipulated time and there will be no delay because of conflict among the decision making board.
Entry 3
- Its important for the owner of the business to understand the legal rights that he or she possesses and the responsibilities that are needed to be fulfilled. A high level lawyer will be consulted who will be permanently associated with the project consulting about various legal aspects.
- Decision making about certain aspects needs participation from all the sections of the stakeholders. The people who will be impacted by the decision made will be taken into account and discussion will be held among all before the commencement of final decision.
- The employees would be encouraged to become a part of the company. Various employee welfare steps will be taken. Cultural diversity within the workplace will be maintained by employing people from all sections of the society and nationality. The goals will be shared because when the company attains the goals everyone will be benefitted.
- The planning and strategies will be built strictly according to the situation and context. The strategies will be dynamic and changed if the situation at hand changes. There will be algorithmic decision making where the decisions will be based on logic and reasoning.
Entry 4
- There will be systemic analysis of the company’s current position, like SWOT analysis for internal environment of the company and PESTEL analysis for external environment. According to the information received strategy will be formulated.
- If the customers base start to fall, new advertisement campaigns with lesser price will be launched. If the government increases tax of certain products the operational cost will be reduced by extreme cost cutting measures and price will be kept same.
Task 2
- One financial management technique that will be used is cost forecasting The financial managers regularly engage in forecasting and predicting the increase and decrease of cost of the products.
- Legislation-The government legislation about retail sector includes Competition and consumer act 2010 that tends to control competition for extreme profit making and protects consumer rights (gov.au 2018.).
Codes of Practice- The Australian people needs to follow ethical codes of practice in business to value and protect the consumer rights and fair competition.
National Standards- There are national standards about fire safety that has to be followed by the company to get the desired registrations.
- Products/Service- The company will be mainly dealing with various kinds of retail and FMCG products that needs to be sourced from the suppliers of various categories. The company needs to establish good business relationship with all the suppliers and manufactures. The retail chain has to sell quality products at low rate so that it can acquire customers. The big retail companies have opportunity to avail bank loans because of their big business operations. This is helpful to increase the business base and include more brands and products in the list. The company because of its close relation with the suppliers and vast business activities can provide products at very cheap rate as compared to stand alone stores. In this organization the management will keep its close watch on the data it gathers from the insights of the shoppers. This data will be utilized to increase efficiency of the service and include more products. The customers in no situation should find themselves in out of stock situations. “On shelf product availability” will be given most importance as a strategy in the company. The “out of stock” rate of certain products reflects the product demand by the consumers and the consequent availability. The management team will reflect on various aspects like marketability, demand, popularity, profit margin and quality to decide on the products that will be sold in the retail shops. Marketability is the appeal of the products to the public whereas demand and popularity comes when a product has been marketed adequately. The service of the company will include free home delivery to the customers which will provide a unique selling proposition or USP to the company. Therefore, a strong logistics system has to be maintained at all times and delivery executives have to be appointed in sufficient number. The company will run on the principles of category management where the responsibilities will be divided properly in departments.
- The marketing practice of the organization according to its vision statement is to provide best quality goods to the customers of all classes at the most budget price. The two marketing concepts of “product concept” and “selling concept” will be used.
- The strategic technique is to sell the products at a lower cost to acquire new customers. The operational technique coordinates the various department of the business and keeps a synchronization to reach the organizational goals. The tactical technique is to set short term goals to reach the greater organizational goal. This includes the marketing campaigns.
Task 3
Strategic analysis- The strategic analysis of the business will be mainly done by SWOT tool. Swot investigation is a standout amongst the most utilized instruments for dissecting a market or a business. The full shape is Strength, Weakness, Opportunities and Threats. It covers all the ecological components of a business that may influence it. SWOT investigation should predict about the contenders to comprehend the conceivable outcomes. This examination incorporates each one of the viewpoints like the quality and openings that can drive the association forward or the shortcomings and dangers that may hurt the organization’s environment. As it was already found from the SWOT analysis that the strengths of the company lie in its ability to serve the customers with best quality products in budget price. The tool of SWOT is mainly used to analyze the internal factors of a business, however it is a composite tool that can also analyze some aspects of the external factors like Opportunities and Threats that comes from external agents. The retail company mainly faces threat from the competitors who are well established in the field and internationally famous.
- Short and long term marketing objectives
Short- The short term goal is to establish two retail outlets and make them run successfully. This is how the journey of the retail store will begin and slowly it will increase the number of stores throughout the country.
Long- The long term goal is to become the number one retail chain in Australia. The mission statement gives a clear indication of what the company desires to achieve as the long term goal.
Just like KPI or Key Performance indicator, key risk indicator will be developed. KPI is usually indicator of the past whereas the KRI is the indicator of the future predicting business risks. There has to be recognition of tolerance level in the business and those monitored closely. The risk of the business can be predicted by the usage of adequately prepared Key Risk Indicator. The predicted risks can be averted by taking actions that are designed for the risks predicted. If a risk of financial loss is predicted it can be averted by removing the cause of such loss.
References:
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