What Is The International Journal Production Economics?
AV Direct, an Ireland based company, has supplied over 8000 products, which can be divided into different categories, for instance, catering, chemicals, hospitality, janitorial, industrial packaging and packaging disposables. Some examples of products that the country provides under those different categories are cookware, kitchenware, skincare, crockery and bubble wrap. The company also provides services like cleaning, washroom, sanitary and floor-care (www.avdirect.ie. 2018). However, recently, the company is conducting a brand analysis on Utopia and Genware. It also offers discounts on its entire products and services and this discount varies from customer to customer. Their chief customers are different business entities, who provide hospitality facilities.
The company, which was initially formed as a Packaging Company in 1995 to perform a part time business, has expanded gradually. In 1998, the company started its full time business and with rapid growth, the company has gradually expanded its firm size over the year and in 2012, the company has built its own showroom with some accommodations (Committed to excellent service 2018). The company supplies its products in each part of Ireland while their products have been earned huge demand from some counties, like Louth, Cavan, Dublin and Monaghan.
The company operates its business under hospitality industry, where it is known as the supplier of hospitality, chemicals, packaging disposables and catering products. AV Direct offers wholesale services to other industries through their business-to-business (B2B) operations. Hence, their chief customers are schools, hotels, restaurants, hospitals and some public sectors, which provide amenities in Ireland. As the major concern of this company is to supply Utopia and Genware, where these brands supply tableware, glassware, and other materials related to catering, AV Direct tries to serve those items in different hotels, pubs and restaurants.
Ireland has some well-known hotels, restaurants and pubs like The Winding Stair, O’Neills at Dublin, which in turn have helped the county to boost up various companies that supply products, related to hospitality. Therefore, the AV Direct has strong competitors like Nisbets, Hugh Jordan, Easy Equipment and Brennan Catering Supplies and Galgorm Group, which supply similar products, for instance, different brands of catering equipments like Utopia and Genware, which have higher demand in market. Thus, to compete in the market, the company needs to apply some critical success factors to make a proper business plan. The principle tool of this company is to maintain customer’s satisfaction through serving products with best qualities along with best services from the company, which needs to be incorporated in their business plan.
Under the proposed plan, the company needs to build a proper budget statement, which in turn, can help AV Direct to take further business decision. Lack of proper budget statement can adversely affect this specified company to adopt any new business strategy. Thus, it is essential for this business company to maintain proper budget with the help of some efficient budget planners for long-term profitability, competitiveness and sustainability.
To develop business in domestic markets, the company should increase its resources to maintain customer’s satisfaction through quick service and on time delivery. As the company is operating in the marketing for 20 years, it can adopt competitive advantage and economies of scale to sustain over there. By providing on-time delivery facility, the company can capture a large share of market through huge numbers of customers. Hence, the company, trough purchasing more delivery vans, hiring more skilled laborers and warehouses, can increase its services in the market, which in turn, can help the company to compete with others. As the chief business of this company is to deliver various products to other companies, those factors are main resource of AV Direct.
As the chief customers of this company are other business organizations, it is beneficial for AV Direct to provide proper training to their employees for maintaining good customer relations with others, as they can understand the changing trend of this business. Proper market analysis is essential for a business entity to utilize its business strategy accordingly, which can help further the company to sustain in the market. Thus, to attain a proper target, the company can conduct market analysis by providing proper training.
At present, it becomes beneficial for an organization to expand its business through using internet. customers, especially large business organizations use internet connections to purchase products according to their requirement of business (Ekanem and Abiade 2018). Customers can easily access all products at a time and can purchase products instantly. Hence, the demand of e marketing is increasing day by day. Thus, to increase the demand for their products in market, AV Direct needs to launch its personal website, where other business entities can purchase their required products.
PEST (political, economical, social and technological) factors of each country can greatly control the business activity, which, in turn, can help the company to build necessary business strategies based on its present situations (Ho 2014). AD Direct can also be controlled by these PEST factors of Ireland.
The government of Ireland has not imposed any political restrictions on AV Direct and this further helps the company to operate their business independently. However, the company has not received any supports of funds for the government. While BREXIT has affected various business organizations negatively in U.K, the specified company has not suffered much because of its different operational area in the Republic of Ireland (Bergin et al.2016).
National income of Ireland is increasing rapidly as it is chiefly based on IT sectors though it has three world heritage sites, which attract tourists all over the world. Instead of a huge amount of public debt, its strong banking sector and efficient governmental activities have helped the country to recover from this phase (Sierzchula, Bakker, Maat and van Wee 2014). Moreover, the country has influenced other multinational companies to operate their business in this country due to low level of corporate taxes and higher amount of skilled workers. Hence, these strong economical activities have helped the AV Direct to operate its work efficiently, which further helps the company to earn more revenues. Strong economical environment influences a country positively. Higher GDP helps the citizen of this country to leave a lavish life, which in turn has helped hotel industries to expand its business.
The above diagram has depicted the increasing trend of Ireland’s GDP from with it can be stated that the economic condition is strong and beneficial for any business organization.
The country, along with ancient people with different cultures like Gaelic Culture, Americanization and Anglicization, has experienced diversity that have great influenced this sector. Religion has played a vital part in the country’s cultural life since ancient periods. As a consequent, the Irish pubs have become successful all over the world, since the 20th century by offering its unique cultural characteristics (Bloom et al. 2017). The dishes of Ireland have also become popular worldwide especially the “New Irish Cuisine” has earned huge popularity. Thus, the demand of catering products is huge in Ireland. Food habits among people of Ireland are also changing along with an increasing market of food service with almost 330000 individual outlets (Irish food & drink by Bord Bia 2018). This market includes various hotels, coffee shops, pubs, work place catering and restaurants and so on. In this city, most of the people utilize quick food services from different restaurants, pubs and coffee shops. Hence, this increasing trend of consuming quick and healthier foods has great influence on AV Direct as the market demand of Utopia and Genware remain high. On the other side, restaurants are adopting new recipes with international standard and the demand of those foods is increasing rapidly. With new recipes of foods and drinks, catering services are experiencing some new trends including stylish equipments of tableware and other products for serving food and drinks. As people are becoming more health conscious, they are staring consume healthy foods and drinks and consequently, demand for those items related appliances are increasing. Hence, Utopia and Genware are trying to serve different types of those appliances with safety quality.
Ireland’s foodservice market has experienced a sharp increase since 2011, because of higher wages, immigration and growth of business sectors and low level of unemployment (Academic.mintel.com 2018). Therefore, demand for foods has increased in different areas, for instance, quick service restaurants (QSR), full service restaurants (FSR), hotels and other commercial places.
Being a developed country, the technological sector of Ireland is strong enough to conduct a business efficiently. As AV Direct operates their business with other companies under hospitality sectors, it is essential for this company to apply various technological instruments to provide facilities to its customers (Foroudi et al. 2018). For which, the company can launch a website and mobile apps, where customers can easily find out their required products at any time and can also buy products, based on product descriptions with customer’s review. Presently, B2B marketing has switched its strategy towards digital era. With the assistant of expanding social platforms and new technologies, this form of marketing is becoming complicated and sophisticated as each business entity expects to obtain their required information and can access it at any time. Some chief skills required for B2B activities are brief content, leadership thought and video references.
To compete in market, it is essential for a company to analyze some external and internal factors, viz., strength, weakness, opportunities and threats (SWOT) to understand its position in market (Ervural et al. D2017). Through this analysis, the company can take various steps to overcome its weakness and threats and to sustain in the market. Moreover, by utilizing opportunities, the company can sustain in the market and this is applicable for the AV Direct, as well.
The AV Direct needs to adopt some strategies that can help to compete with other competitors. As, the chief customers of this company is other business entity, the trend of B2B service is essential to understand for this company. To expand its business by increasing strong customer base like some leading hotels, restaurants and pubs, the company needs to launch an online portal, where it can deals with customers at any time. Moreover, presence in social media is also important, as it gives opportunities to become well-known (O’Hare, Stewart and McColl 2018). The company has its page in Facebook though it needs to develop a customer relationship through other social media sites, as well. By doing so, the company can understand about the changing business strategy of catering and foods industry and according to this, AV Direct can supply their products in marketing. Moreover, through this online platform, the specified company can operate a market analyze based on the demand of their products in market compare to other competing companies. This analysis can help the company to adopt appropriate business strategy. The company can also adopt some strategies to maintain its customers’ loyalty by serving products and services with comparatively lower prices along with quick delivery services. Moreover, by providing discounts to its member customers and other gift vouchers, it can increase its number of customers.
As AV Direct is a family run business, the company does not possess any strong capital base to invest. On the other side, competitors of AV Direct, like Hugh Jordan, Nisbets and Galgorm Group have huge capital to invest within their business. Those companies have already possessed their own websites and have captured more market share compare to AV Direct (www.avdirect.ie 2018). Hence, from this perspective, the specified company is some disadvantages. However, the company is using some exclusive products for which it earn huge importance in the hospitality industry. For instance, the company has loyalty factors that can help it to continue the business process with their own customers.
To measure the unique selling point, it is beneficial for the company make a SWOT analysis, based on their competitors. This can help the company to indentify other company’s unique selling point and also can help the specified company to makes its own unique selling strategy in market (Keller, Daronco and Cortimiglia 2017). Moreover, USP helps to differentiate AV Direct from its other competitors.
The above discussion asserts that the concerned company is offering some products and services, for instance, catering products and cleaning services, which have great demand in Ireland. The chief customer of this company is other business entities like the, hotel, pubs and restaurants, which provide hospitality services to their customers. Hence, to conduct a business with those other business entities, it is essential for AV Direct to maintain an online portal for better understanding of the market structure. The company has some strengths and opportunities, which can help it to expand the business further. However, at the same time, the company also faces some threats and weakness that can negatively influence the company. Hence, it is essential for AV Direct to overcome those situations, as discussed in the above sections. The political, economical, social and technological factors related to Ireland and hospitality industry is strong enough to expand the business of this company further. As it is a family run company and new compare to others, it needs more capital accumulation and proper business strategies to sustain in the market and for doing so, the most important tool is making an online e-commerce site. The company can also advertise their products through other social media sites, like Facebook, where it can communicate with its customers as well.
To operate efficiently and uninterruptedly, it is crucial for a company, like AV Direct, to set some objectives regarding its business, which in turn can help the company to compete with its competitors (Petkova 2017). In this context, e-marketing can play a vital role.
To operate a business, the chief factor for a company is its customers. For a company, maintaining old customers and attracting new one are very important as it helps to enhance the customer base of this firm. According to some leading companies, the cost of attracting a new customer is more compare to that for old one, though old customers are the chief factor for enhancing the business growth (Hamilton, Rust and Dev 2017). For this, AV Direct needs to train its employees to follow some rules, for instance, maintaining a good relation with customers and taking feedbacks from them. By following this objective, the company can understand their business gap and can try to fulfill it.
Through conducting market analysis, especially on other companies that provide hospitality services, the company can understand about the going trend of kitchen appliances based on which the AV Direct can sell its products. Moreover, market segmentation and geographical segmentation can help the company to target its desired customers accordingly.
Through geographical segmentation, the company can recognize its target customers. AV Direct can operate their business in some places, where the number of restaurants, pubs and hotels are large. In other words, the company can establish its showroom in some well-known cities of Ireland, where hospitality industry is expanding rapidly (Huang, Lamm and Dukes 2016). As the targeted customers of AV Direct are other hospitality companies, this segmentation can help it to develop the business with sufficient customers.
The AV Direct needs to promote advertisement regarding their business through on websites by affiliated promotions. Moreover, by conducting internal marketing through promotional emails and TV ad campaigns, the company can easily reach to its customers.
In today’s market structure, it is important to apply 6 P’s model to develop a business organization from different aspects.
Passion is essential for each business organization for attracting attention of customers within a competitive market (Walsh and Cunningham 2016). AV Direct can show its passion on its quality of product, supply of other new products, maintaining good relation with customers and provide facility to its customers through e marketing
The company offers various products and services to its customer related to catering, chemicals, and hospitality and so on. However, at present, their chief focus of this company is to sale products of Utopia and Genware to different hotels, pubs and restaurants all over the Ireland (Spicer and Hyatt 2017). This is because, the hotel and restaurant industry in this country are increasing rapidly with increasing economical conditions.
People or customers are the most crucial factors of this company. Hence, the company should know about the choice and changing trend of this hospitality industry to maintain consumer satisfaction (Hwang and Suh 2018). As AV Direct operates B2B services, the company needs to focus on the changing trend of those hotels, industries and pubs and supply them accordingly.
Place is also an important factor develop a business. AV Direct can build its showroom in those cities, where those have ample amount of hotels, pubs and restaurants (Bernardo and Palma-Oliveira 2016). Moreover, the company can operate its business through online website from where customers can search and buy products. For this, it is necessary to provide product details, clear pictures, features, and quality and consumer feedbacks.:
AV Direct supplies catering products and other cleaning services, which are sold by other companies as well. Hence, to sell more products, the company needs to set a price level, which is equal or low compare to that of other companies (Beracha and Seiler 2014). Price is the chief instrument for a company to compete in market and to attract new customers.
AV Direct can increase its business through promoting it on different social media and through its own website. By promotion, the company can inform about its product details and range of its product supply to all its customers (Fekadu 2017). Moreover, by providing discounts and campaigns, the company can promote their products as well.
Chaffey’s 5 Ss states about the e marketing of a company (Khin, Chau, Chuan and Tong 2016). By applying those principles, AV Direct can operate its business through online.
The chief focus of a business organization is to sell its products to customers (Zhang, Cheng and Lai 2017). AV Direct can also perform this task through online by making online websites, where the company can also provide online shopping options and internet banking facilities through accepting credit and debit cards.
The company can save its time and labor costs by providing online purchase facilities. Consumers can order their desired products after searching this on website (Belk 2014). Moreover, the consumer can get product updates and various deals provided by the company on specific goods and services through online. Moreover, the company can advertise its products through their own website and for this extra charges for advertisement is not required.
AV Direct can provide quick service to its customers through online portals. Consumers can purchase product at any time and contact with the company through their customer care service. The company can take feedbacks and complains against their products and by solving this; it can increase its value in front of its customers.
AV Direct can speak to its customers directly or over phone to understand about their experience regarding purchasing products from this company (González-Rodríguez et al. 2018). By this process, the company can understand about the behavior and pattern of choice of different customers.
Sizzle helps a company to set its business goals by providing product details and extra criteria related to this (Culley et al. 2017). For this, it is essential to provide online content that describes appropriately about the product.
Thus, to promote an e-commerce facility to its customers, especially for B2B operations, AV Direct can apply these 5 online business strategy of Chaffey (McKnight, Lankton, Nicolaou and Price 2017). With proper customer facilities, product details and well-designed websites, the company can develop its business further.
AV Direct needs to follow some business strategies to compete with other large companies, which have conducted their business successfully since many years. After setting its business objectives, AV Direct needs to implement those with proper business plans and for this, 6 P’s model and Chaffey’s 5 S’s model can help this company.
AV Direct can conduct its creative approach discussion through an online survey. By doing so, the company can analyze its position in market and also can understand about the changing trend of the market (Rymer 2017). The company, through its various innovative ideas and new market strategies, like providing discounts based on loyalty to its customers, can increase the customer base in the market. Hence, to sustain in market, AV Direct needs to adopt new creative approaches and technologies.
Proper message can help customers to understand about the company and its vision (Andersen et al. 2017). Hence, in online website, AV Direct needs to provide a designed message to its customers for describing about their activities. This message could be as follows:
“Responding to changing trends of the hospitality industry of Ireland and providing catering products with higher quality and best services to our customers within a short-period of time”
|
Media |
Costs (£) per month |
|
|
2850 |
|
|
3564 |
|
Setup |
115 |
|
Design |
3565 |
|
Content creation |
355 |
|
Maintenance |
355 |
|
Total costs |
10804 |
Table 1: Costs related to Media and website
AV Direct may bear some costs for creating an account in Twitter with complete setup and interaction with customers. For this, the company needs to pay some amounts to the company on a monthly basis. For Facebook, the cost of marketing with this social media is high compare to that for Twitter. The above chart has shown the amount of costs at the UK pound (Lu and Hampton 2017). Moreover, to maintain a website, the company needs to hire a website developer and for this, the specified company spends some amounts. Thus, the AV Direct needs to pay around £ 10804 for the first month of website development and advertisement through social media (Glozer, Caruana and Hibbert 2018). Hence, the company needs to calculate available balance and amount of loan that is going to be taken from bank.
|
Description |
Time Duration |
Budget(£) |
|
Advertisement through social media through Twitter and Facebook |
Every month |
6414 |
|
Website development |
1 year |
4390 |
|
Provide customer service through online |
1 year |
8000 |
|
Product delivery |
1 year |
9000 |
|
Remuneration of employees |
1 year |
700000 |
|
Total |
97804 |
Figure 2: Budget of AV Direct
AV Direct needs to prepare a proper budget plan for the next year to invest money. In figure 2, a budget statement of AV Direct has shown, where the company has different segments of expenditure. By aggregating all estimated elements of budget, it is seen that the concerned company requires around £97804 to develop its website, advertise and create customer relations through social media and for hiring skilled employees to operate this e-commerce site (Naldi, Nicosia, Pacifici and Pferschy 2016). Moreover, the company also needs funds for providing customer services 24 hours within a week and free delivery for them.
AV Direct can prepare this financial budget statement with the help of an efficient person and can present it through proper charts and diagrams (Bosbach, Tesch and Kirschner 2017). Moreover, to understand this statement clearly, the company can prepare a slide presentation by its employees where they can illustrate all process, steps, objectives and budgets with clear notes.
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