BSBMGT616 Develop and implement strategic plans

Introduction:

Canterbury Renovations has been established as a cabinet making company with specialization in custom cabinets for commercial markets, resorts and high end residences. The founder of business has extensive experience in cabinet and construction industry. A full range of service is provided by company along with installing and supplying the tools and equipment and fittings. Since, Canterbury Renovations has started up recently; they do not have existing history, clients or projects for supporting business. The main activities of Canterbury renovations are to renovate kitchens, laundries and bathroom. The proprietors have enough experience and thereby having strong financing background for running their business. The need for cabinet line was felt by owners of company with broad selection of high end finishes, design choices, quality and customer service.

Vision and mission of business organization:

Mission of Canterbury Renovations- The mission of organization is to deliver customers high quality products within their budget and on time alongside providing error free and prompt ordering system.  

Vision of Canterbury Renovations- The vision of organization is to become leading provider of cabinets to luxury homes in regional markets and high end commercial development segment. 

Identification of relevant organizational values:

A Canterbury renovation is basically a proprietorship organization which strives to respect their customer homes.  It is ensured by organization that the customers are provided with high quality of materials. For carrying out renovation services, they make use of materials such as paint, timber, plastic and tiles. Company contributes to the home improvement program by providing some very common products. Solutions is provided by the professionals that makes property of owner look beautiful than it was before. They also intend to provide some other services such as roofing, plumbing, repairs and electricity.

Identification of strength and weakness of existing and potential competitors:

The local cabinet market has many competitors with many of them delivering quality products to their customers. Costing of projects is governed by four relevant factors that include product, scope, services and design. It is mistaken by most customers that the best results are delivered by brand choice and project size. Nevertheless, the factors that influence the value and quality of customer investment are the design and service of company. There are two main types of suppliers of cabinet in the industry. Customer shops with in-house fabrication facilities and they are product oriented. The competitive edge of company would lie in providing superior project management, high volume work and superior quality while low overhead maintenance. Furthermore, the existing competitors have been surveyed by proprietors alongside identification of their weakness.

• Most of the companies are not located nearby their target market
• Higher price with large overheads
• Their target market has few strong personal contacts
• Manufacturing of subcontractors to external contacts

SWOT analysis:

Strength, weakness, opportunities and threat of business are identified by conducting SWOT analysis. Such analysis helps in identification of factors in regard to business external environment. Canterbury Renovations would be able to make use of their competitive advantage by minimizing the external threats and exploitation of opportunities in the market.

Strength- The competitive edge of company lies in providing flexibility in style and high volume whilst high quality product and excellent service. This competitive edge is regarded as one of strengths of Canterbury renovations. In addition to this, there are some other factors contributing to the strength of company. These includes the kind of financial resources which company has, staffs and personnel dedication in the country, ability of organization to respond to basic needs of customers in the market. For the requirement of suppliers, potential clients and trade person, Canterbury has a very good network of contacts. All the projects is supervised by owner of company who has experience in this field.

Weakness- There are some weakness associated with the business of Canterbury Renovations such as size of premises and lack of management skills by some employees initially. For the management succession, there is not any prominent plan and track of business record. Furthermore, the equipments possessed by organization for providing service of renovation are not enough.

Opportunities- The target market has high disposable income along with existing numbers of valuable and old homes that are already included in the target market. In the local market, the reputation of renovation business and build of tradesperson are poor. Moreover, the rapid growth of the market where increasing preference is given by owners to renovate their homes rather than shifting is the opportunity to Canterbury. 

Threat- However, there are some threats facing the business of Canterbury. Firstly, the reputation of cabinet making business has been poor in respect to reliability and quality. The industry itself has many future and existing competitors. Threats is also witnessed in terms of increase raw materials cost, sub contract businessmen and equipments. In addition to this, difficulties would also be experienced by business of Canterbury in getting reliable sub contractors and good staffs.

Analyzing the external and internal environment of Canterbury Renovations:

External and internal environment is analyzed by identifying political, social, economic and technological development.

Political factors- The operations of business of Canterbury Renovations are impacted by the political forces of the country where it is operating. Political instability can disrupt the supply chain of business and sourcing of furniture from different areas. Trade restrictions, policy of import and export and labor unrest and labor laws are some other political factors impacting the operations of business.

Social factors- The size of potential market and needs of customers are impacted social factors such as social status, level of income, family size, occupation, fashion trends and cultural factors. Personal preferences of customers impact the demand of particular project of company.

Economic factors- The purchasing power of customers and the cost of capital of Canterbury is impacted by economic factors of country where it is operating. Such factors include rate of inflation, economic growth, and cost of labor, interest rate and industry trend.

Technological factors- The efficiency of production level, barriers to entry and outsourcing decisions are influenced by technological factors. Supply chain management, communication, information, ease of accessibility and technology incentives and service automation of Canterbury Renovations are impacted by technological factors.

Formulation of strategic objectives and strategies needed for future:

The marketing strategy that would be used by Canterbury Renovations is intended to build the reputation of company by way of developing good quality of network of contacts. For building awareness of the services and products provided by company, Canterbury will build brand awareness program. The main objective of creating the program of brand awareness is to develop effective marketing tools using brand strategy. Such marketing tools would include uniform of staffs and introduction of business cards.

It is believed by proprietors that the best marketing strategy employed by organization would be the combination of reputation for quality, good network of contacts, personal referrals and reliability. Some other strategies that would be complementing this strategy include direct contacts with home buyers, brochures and small display in local rented shops.

A first class customer service would be provided by Canterbury renovations in terms of:

• Hours of providing service to meet the needs of customers
• Minimal disruption during installation of household
• Finishing and starting the jobs to budget and on time
• Cleaning up site on job completion
• Providing after sales service

Strategy of pricing

The target market is the location where people have high disposable income and therefore, it is believed by proprietor that customers will not be particularly price sensitive. They would value service and quality of product. The competitive advantage of business will be based not on offering cheap prices but on quality.

Advertising means:

One of the best forms of promotion that can be used by business is word of mouth. There will be employment of direct marketing strategies to customers seeking renovation, local print media and specialized and selective market promotion.

Visibility and location of business:

The manufacturing facilities and business unit of Canterbury Renovations will be within ten kilometers of the farthest boundary of market and business will be location in the geographical centre. The reason for choosing such location is that some competitors are located in sub urban region that is not inconvenient to clients.

Time frame and measurable performance indicators of each strategy:

Strategies	Timeframe	Responsible parties	Measurable performance indicators
First class customer service	One year	Suppliers, Customers and other personnel.	Increased brand reputation and number of clients.
Good network contacts and referrals	Five to six months	Proprietors, suppliers, customers and other relevant parties to business	Increase in total number of clients
Pricing policy	Two months	Management and strategic partners to business	Growth in gross profit margin and growth in revenue.
Advertising means	Three to four months	Third parties to business such as media,	Number of customers retained, net promote score and number of nee contracts signed
Location and visibility	One to two months		Time to market, order fulfillment time, percentage of market share and employee churn rate.

Assessment 2

Strategic Plan of the Business

The management of the company needs to discuss the strategic plans of the business with all the employee personnel of the business. The main plan of the management of Canterbury Renovations is to offer Cabinet fillings for houses at a lower price and the same is to be of the highest quality as possible. The management of the company tends to offer best quality of products to its customers at an affordable price. The business model of the company is based on cost reduction strategies which allows the business to offer best quality of products to its customers.

The strategies of the management is to ensure that the business is able to develop a brand name and loyalty among potential customers and market as a whole. The mission of the business is to become one of the leading cabinet providing businesses for luxury houses as well as general uses. In order to attain the objectives which are discussed above, the management has formulated marketing and operational plans respectively for ensuring that the business is able to adapt to the necessary changes which are taking place in the market. The management plans to utilize the contacts of the business and also the referral program which will be bringing in new clients and thereby it gives an opportunity to the business to widen its contact list and customer base. Moreover, the management has formulated a strategy which will be highlighting the reputation and brand image of the business and the overall quality which the products of the company can be associated with. The management of the company recognizes the importance of strong market presence and brand loyalty therefore the business has introduced a brand awareness program. The program aims to remind the customers about the attributes of the business, retain customers and attract back those customers who have gone to its competitor. The business will also be promoting the products which are offered and also displaying the range of prices which are charged for different products. The management will be expending extensively on advertisement and will be using both printed media and television advertisement for promoting the products of the business.

Overview Strategies of Business

The main goal of the business is to be become one of the leading businesses in supplying cabinets and other materials for homes in the market. In order to achieve these strategies, the management has formulated plans which will allow the business to achieve the same.

• One of the primary goals which has been identified in the strategic plan of the business is to build up a band image and create customer loyalty towards the brand. This goal of the business can be achieved by following effective marketing and promotional strategies. The management can advertise about the cost effective products which are offered by the business in order to attract customers to the business. The management has invested significant amount of funds in advertisement so that the customers can be made aware of the products which the business is offering.
• Another objective of the business is to increase the overall sales of the business and increase the profitability of the business. This can be achieved by the management by following cost reduction strategy which allows the business to sell their products at a lower piece than what is charged by its competitors. This gives a competitive edge to the business and attract more customers as well to the business due to the low price which the business charges. In order to make this strategy successful, the management has put special focus on the operations of the business so that sustainable processes are followed and unproductive expenses of the business are avoided so as to reduce the overall costs of operations. This helps the business to reduce the prices for the final products of the business.

Allocation of Responsibility

In order to achieve the goals which are set by the business, the management needs every department to work in a cohesive manner so that maximum results can be obtained from the same. All the departments have a vital role to play in the implementation of the strategic plan of the business. The management will be allocating the supervisors the task to review the processes of production of cabinets and the resources which are applied for the same. The operational manager will be responsible for any faults on the part of production team and will have the power to review performance and implement different strategies which are formulated by the top-level management. The sales team will be responsible for providing customers with hassle free services and also adhere to any compliant or feedbacks which they receive from the clients. The sales personnel will be working under the sales manager and are expected to behave in a friendly manner with all the clients. The marketing team and its manager will be responsible for implementing the marketing plans which are set by the business and use all resources to promote the products of the business. The marketing manager is also responsible for selecting the medium through which advertisement is to be made.

Measuring and Monitoring Performance

Name/position: Sales Department		Manager:		Review period:
Reference from operational plan	Key result area		Indicator of success/ performance	By when	Status report
Marketing and Sales Manager	Increase in overall sales of the business and Building of Brand Image and Loyalty		% increase in sales and number of customers of the business.	31st March	Work in Progress
Operational Manager	Reduction in operational costs		Better handling of resources reducing the mistakes and losses	15 August	Work in Progress
Manager’s comments:			Signature:   Date:
Staff member’s comments:			Signature:   Date:

The management will be focusing on the implementation of plans which will help the business to formulate strategies in order to achieve the goals which are set by the business. The marketing manager and the sales manager will be playing an important role in the implementation process of a business. The monitoring plan of the business will be done by considering the performance indicators and the key result areas (KRAs) of the business. The monitoring of the performance will be done by the supervisors and also the top-level management and operational manager. The performance of each department can be measured by following weekly or monthly performance reports which must be submitted to the management at regular intervals.

Assessment 3

Effectiveness of the Strategies

The effectiveness of the strategy which is formulated by the business can be checked with the help of key performance indicators of the business and also with the overall development of the business. The management of Canterbury Renovation needs to focus on the key result areas which will be determining whether the strategies which is formulated by the business is helping or not. The management will be able to judge from the growth and development which is achieved by the business whether the strategy which was implemented by the business is meeting the expectations of the management and also that of the customers.

Productivity of the Strategies Implemented

Key performance indicators	Current status (Red, Green, Amber)	Comments
The cabinets offered by the business are in demand for houses.	Green	The increasing demand and sales of the business are efficient indicators that the strategies which are placed by the business.
The efficiency of the sales employees of the business has improved which results in reduction and time savings in completion of an order.	Amber	Some members of the sales team do not have the skills for which proper training of employees are required to be incorporated in the plans of the business.
Meeting standards as per Budget and financial plan of the business which will be reducing the costs of the business.	Amber	The management has started to implement the budget and ensure that everything is as per the schedule, however it is expected that every part of the budget may not be followed in time.
Achieving Profit Targets	Amber	The management is not expecting to meet the profit targets as certain initial unproductive costs and cost overruns have already been incurred by the company.
Milestone Achievement	Green	The management as per the plan should be able to meet the targets and goals which are set by the business.

Areas of Under Performance

The areas of underperformance which are related to different areas of the business are given below:

• The marketing activities of the business needs to be improved and the targets of the marketing plan may not be achieved by the business.
• The overall cost of the business might increase due to the implementation of new marketing regime and therefore, the cost reduction strategy of the business might not work as efficiently as required. In addition to this, the old employees of the business might not be able to adjust to the changes made in the business structure which will further contribute to inefficiency of the business. The marketing plan of the business requires expenses in advertisements and therefore the same will also be increasing the overall costs of the business.

Recommendations

The management needs to cover up the gaps in the strategic plan of the business in order to improve the viability and effectiveness of the strategic plans of the business. The management can incorporate following recommendations in order to make the strategic plan of the company more efficient:

• The management needs to incorporate a proper training plan so that new recruits and old employees of the business can train effectively in same way so that the overall costs which the business incurs due to inefficiency or mistakes of the employees can be minimized.
• The management needs to improve the sales of the business by increasing overall contact list of employees of the business which can be done by referrals, joint venture projects, lumpsum orders of the business.

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