On return from the Great War in 1921 and requiring keen medical attention Albelt Leslie Simpkin found himself in a tricky position. With the glucose he was being given to help him recover he decided to make high-energy glucose confections. Simpkin adopted a strategy to sell the sweets he made through chemists avoiding competition from the existing confectionery building a new niche all together. Within a period of three years, he had more than 12000 accounts. The travel tin has evolved over years since it was proven alleviate symptoms of travel sickness to the present day airtight tins. This prevents the high juice sweet drops from becoming sticky when exposed to damp conditions. Simpkins has been in the export business for over half a decade now. Currently it exports to over sixty countries in different continents accounting for 25 percent of its revenues. In the past 90 years we have been able to deliver unique tastes and texture in our different brands of sweets.
As the current chief operating officer, I have to decide whether to go ahead and invest in a second tinning line, which many would consider risky at a cost of £ 50,000. However, it is a business principle that no risks no gains. Of late, we have been struggling with reduced profits margin and it is evident that something needs to be done. The four-section table below shows the SWOT analysis of the company.
In the human resource, management the company can analyzed as shown below.
The company has a work force outside U.K.
We have very highly qualified employees.
We have employees who are very loyal to the company.
We are a family business.
Our workforce is local making us loose on new ideas.
Lack of diversity in the nature of the work force.
Innovative employees on production and energy utilization will lead to huge savings.
Having a very motivated workforce will encourage innovations.
We have a workforce that venture into new energy conscious products such as drinks and energy bars.
Collaborating with other confectioneries on job trainings, research and development.
Loss of employees to other confectioneries.
Environmental insensitivity of employees is a major concern.
Sustainability of the workforce is at risk since it is composed of ageing people.
In the accounting, aspect the company can be shown to have the following features.
The company has sales outside U.K, which contribute up to 25 percent of the total revenues.
We produce for up market brands such as Disney and Macys this
We have a big number of sugar free brands, which have demand overseas these acts as a revenue booster.
We are a family business and financiers may tend to avoid such companies.
With reduced profit margins the risk of running into financial Problems.
The company is not listed leaving only private equity strategic partners as the option for financing.
Innovation on new packaging methods may boost sales hence revenues will increase.
Innovations on production and energy utilization will lead to huge savings.
We can start producing sweets with exotic flavors such as lavender and kumquat, which will create a new market niche.
Venturing into new energy conscious products such as drinks and energy bars can be a new source of revenues for the company.
Stiff competition from other confectioneries has really influenced pricing reducing profit margins.
Reduced profit margins put the company in precarious financial position.
Simpkin has been in the confectionery industry for close to ten decades now and this has not saved it from the dynamic competitive environment. The table below analyses the marketing strategy of company.
The company has diversified its marketing campaigns to markets as far as Japan and south Africa and lately south Africa.
Producing for up market brands such as Disney and Macys makes us admirable to many other private label companies.
We have clients loyal to our sweet drops which also encourages direct marketing methods such as word of mouth
We have a big number of sugar free brands, which have demand overseas.
We are a family business and many a times are when the public judges such companies as insensitive.
Our products are considered British.
The production line is not fully automated and this puts a strain whenever there is increased demand considering that we are operating at full capacity.
Lack of enough funds to finance huge marketing campaigns.
Innovation on new packaging methods is attractive to potential buyers.
Having 50g, tins will attract impulse buying, which is related with the youth habit.
We can start producing sweets with exotic flavors such as lavender and kumquat.
Experimenting with flavors that are have British heritage.
Venturing into new energy conscious products such as drinks and energy bars.
Stiff competition from other confectioneries.
The market niche has been reducing due to infiltrations by substitutes.
For Simpkins to survive and prosper innovations based on research are significant. The confectionery industry has faced challenges, ranging from increased cost in production to entry of new products leading squeezed profit margins. Careful considerations of new trends should be done while trying to woo the younger generation. A research done in Japan and South America on the concept of reducing the tin size to 50g shows that profit margins will be higher because of an increased price to sweet ratio. With the tendency of young generation to buy goods impulsively then the smaller packages will push sales. This will also motivate them to buy the 200g tins when they want good bargains.
Factors That Affect Organizational Culture
Organizational culture constitutes a pattern of basic assumptions held by the employees in the organization, which are used in different processes. The readiness of employees to handle issues arising in the organization is an aspect of the culture. There are various factors that determine a culture in an organization they include but not limited to the origin of the pioneer management, existence of relational channels through which workers can diverge information, colleague similarity since the company sources workers from the locality of production. Since the organization exhibits a task oriented organizational growth, workers posses a lot of knowledge concerning the whole company. Since the company has not been hiring in large quantities then there is no openness to innovation to keep up with the dynamic world (Rulke, Diane, Srilata and Marc, 2000)
The nature of the business influences the culture of the organization this is because the confectionary industry will expect workers at Simpkins to be always neat and clean. For sure government policies will have to be adhered to at the production line. Sex of the top and mid management will also affect the culture since most women are known to be softhearted and very considerate whereas men are seen to be very aggressive. Clients of Simpkins influence in many ways its culture. While working with the pharmaceutical industry then a health concern is always raised and timely delivery is a must with others demanding delivery in odd hours? This forces the company to have shifts in order to meet these demands. The goals and objectives of the company will always determine its culture. To align the various divisions of the company so as to ensure achievement of the set goals then a set of guidelines have to be in place to oversee this.
In the highly competitive environment, that we are in Simpkins has to use a cost effective, fast and convenient selection method in order to meet the personnel needs for a new production line. Some of the methods that can be considered for use in the selection process include resume and reference checks, online job boards or utilizing the company website, online pre-employment screening tests, screening for honesty, integrity and knowledge level through aptitude tests and use of personality tests. First impressions may not be important in this case since in plant operations the image do not count a lot as compared to the level of skills that one has.
The limitation of online approaches in human resource selection is that the applicant's attitudes and perceptions are not determined (Camara & Merenda, 2000). Based on the on the restrictive and legitimacy of online screening tests and the concerns of the new recruits fitting into the companies culture within a very short period then it is advisable to use a combination of personality test and aptitude tests. The two will ensure that an individual of high integrity and knowledgeable will only be selected. A well-developed personality test is able to predict three individuals behavior on the job (Gatewood & Field, 1998). In addition, redaction of the person reaction to various situations may determine and only those that fit in the culture of the company are accommodated.
For the company to successfully open a new production line then after the selection of the qualified applicants as plant operatives then an induction program is necessary. The program should provide an understanding of the working culture within the company as well as enhancing the technical skills of the plant operators to ensure professionalism. The program should be able to enhance the leadership and interpersonal skills of the new entrants. Those attending the program will be able to acquire a collaborative support network in the production process and understand the family ethos of the company. Expectations of the management from the entrants will be well communicated to ensure ethics are adhered to. Individual operators will be able to be motivated for progress towards attaining high levels of productivity and production process standards. A
Good induction program makes the recruits feel to be part of the organization and increase the rates of employee retention after training. Informal processes of the organization should also be communicated; however, the working culture and technical skills required for a successful second production line are the key issues that the newcomers should clearly understand.
Issues Affecting Accounting and Finance and Marketing Functions
Simpkins has been experiencing reduced profit margins recently. This problem can be solved by introducing new 50g tins in the market since they have a bigger margin and will still boost sales for the larger 200g tins. Overdependence on sales from one country is quite risky. With only 25 percent of revenues coming from outside United Kingdom the company needs to focus a lot on new and emerging economies, which can provide huge markets and increasing revenues.
The large airtight tins of sweet, which are perceived to be plain and outdated by the young generation, should be replaced with flashy smaller packages. Such a move will capture the eye of the funky and impulsive youth. To capture the environmental conscious people packages that are environmental friendly can as well be introduced. Through aggressive marketing and research and development exotic fruity flavors and unusual combinations that give a tingling sensation can be introduced.
This is the aspect of increasing the means of interaction and connectivity between different countries .an organization having a presence in different regions of the world is considered to be globalised. Globalization comes with the advantage of expanded markets hence increased revenues and a challenge of management issues. The ability of the management to anticipate challenges and changes that comes with such kind of expansion is significant for it to succeed in the various markets. Simpkins exports to 60 different countries, which contributes a quarter of its revenues.
The four aspects that drive globalization of an industry are market, cost, government and competition. Market globalization involves the global customer having similar needs and wants and can get them through available channels. Cost globalization is about the scale and scope economies as well efficiency in production. High volumes of imports and exports lead to flooding of a locality with global competitors. In cases where integration of markets occurs every company gets an opportunity to expand while still facing competition. Globalization of government policies through elimination of trade barriers and putting in place favorable foreign investment policies encourages globalization. The most influential global driver is the market. The extent to which a company can achieve higher revenues is determined by availability of market in a foreign country.
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