Discuss about the Department of Commerce and Government Organizations.
The industry in which the Dairy Product Manufacturer company firm operates can be affected by both the internal and external environment. The external factors are the main threat that requires the organization establish appropriate strategies that enhance compliance. On the other hand, internal metrics are those within the business. Therefore, the report utilized Porter’s five and SWOT analysis to explore the market for this type of company respectively (Singh, 2010). Additionally, it is essential to apply the use these analytical tools to comprehend environmental imperatives regarding the direction to take (strategy). The assessment of the Dairy Product Manufacturer firm gaps is also important in developing a strategy for a given organization. It involves comparing the performance of at a given time and comparing it with the desired performance. As a result, the assessment of unutilized business opportunities will help in understanding the possibility of underutilization of the available resources assessment of the need for capital investment (James et al., 2011).
With this assignment, this model greatly affected the decision and strategy formulation processes by the company. The five elements described here, immensely affects the Dairy products manufacturing industry because of the stiff competition posed by rivals in the market. These elements can be summarized as shown in The threat of substitute product or service: The quality of the goods significantly determines the degree of acceptance for the goods and services offered. Apparently, dairy products have different brands, and any lag in quality gives an upper hand for the substitute products to win the contest (Whalley, 2010). This company, therefore, faces stiff competition from the available alternatives offered at a relatively low price.
The chances of new firms entering the market are very high. The reason for the new entrance emanates from the fact that the company has not done intensive diversification. For instance, the primary products manufactured include full cream milk, lite milk, and the chocolate flavored. Lack of varieties on the market endangers the marketing position of this company because new players may join the market, produce the other brands and further include the three mentioned in their portfolio.
The magnitude of competition is very high. And from the assessment, the competition is expected to take another course. Since other firms offer their products at a lower price, then this automatically implies that the new strategic marketing and development initiative our company under case study is planning to undertake will catalyze the other firms to employ a new marketing approach. This process will eventually heighten the level of rivalry (James, et al., 2011).
The market is significantly affected by the cost of production. Notably, the suppliers largely affect the purchases as they have more buyers that the companies. The justification is from the expected price increases for the marginal cost by 10%.
The users usually have an influence on the nature of products and services offered. But for this case, lack of producing a few varieties perhaps indicates that the users have no control than buying what is availed on the market. Few initiatives have been employed to influence the customers to purchase the products. They, however, rely on what is availed by producers.
Generally, the term represents the Strength, Weaknesses, Opportunities and Threats. Currently, this technique is instrumental in analyzing promoters and hindrances to a business success (Helms and Nixon, 2010). The breakdown looks at the Dairy Product Manufacturer firms’ strategic operation. The assessment of all of the four metrics will enable this firm to come up with measures that can lead it into business. And this can only be possible with able leadership who can foresee the future through the analysis of the current situations. It should also identify what it can do best than anyone else in the market thus giving the business enterprise. A Dairy Product Manufacturer firm should utilize the available human and financial resources to reduce adverse effects caused by these factors. Besides, this organization has a strong financial position, a large market base and a cost leader. These factors have, therefore, assisted in ensuring that it meets all the operational costs (NIST, 2013).
The assessment of the weaknesses will enable the management to understand its capabilities as well as inabilities. Understanding business position can assist in investing in realistic and achievable activities. The company has failed to diversify and offer a range of products to customers. Also, its strategic plans have neglected to focus on alignment of the internal setup with the core objectives. Also, acting as a cost leader is inappropriate in the industry where you don’t control the influence of suppliers.
In addition, opportunities are the un-utilized activities that if ventured in, the firm will succeed, grow and expand. Some lucrative opportunities come by chance, and if they are not sported, the competitors may enter the market and invest in such ventures. For instance, the government may come up with new legislations that significantly enhance success. With our case, however, the Diary firm can manufacture other products that are currently not on the market (Pojasek, 2013). The strong financial position also allows it to purchase the technology, and further invest in research and development to uncover various ways of improving the performance of the company.
Lastly but not least, the report analyzed business threats. These are the factors that endanger business success. A poor evaluation of the threats can result to business failure. Mostly, they emanates from the external environment where the firm under study have limited control over (Roseland, 2012). For this case, the company is faced with the threat from stiff competition. The management has to employ all available avenues to deal with the menace (Helms and Nixon, 2010).
Gap analysis refers to a way of establishing the performance difference between the current performance state of the organization and the performance state that an organization desires to achieve. This exercise helps the management to have a good understanding of the gaps that exist in the society and therefore look for ways of bridging them (Rajender and Kumar, 2012). This is necessary exercise for the growth and continuity of Dairy Product Manufacturer firm.
Gap analysis, in this case, involves three steps. First, the present state of the Dairy Product Manufacturer firm is established. It includes the quantity and type of dairy products that Dairy Product Manufacturer firm produces at the moment. As earlier noted, the company has not identified the need for manufacturing a variety of goods. Secondly, a look into the future is established. This step highlights what the Dairy Product Manufacturer firm expects to have in future or what it desires to achieve. It includes the quantity and type of dairy products that Dairy Product Manufacturer company want to produce. Finally, the differences between the future you want the state of the Dairy Product Manufacturer business, and its current state is established. Currently, there is a market that has not been explored. For instance, the Diary VAP, wholesalers and distributors can increase the quantity if other varieties of products are provided by this company (Milovanovi?, 2011).
Business objectives are statements of purpose explaining where the business wants to go in future. It states what a firm wants to achieve. Objectives are important because they will help to provide guidance and direction, facilitate planning and also evaluate and control performance. Some of the objectives of Dairy Product Manufacturer firm are to expand production capacity for Plant 1. This will directly increase the milk processing plant. However, the expansion will increase fixed and production costs. The firm should aim to grow in its production in order to stand competitive environment and increase profits.
Another objective for this company is to improve the marketing of its products. Marketing should aim at improving the sales of the company products. The sales for all the goods should because the rate of consumption is still low. Perhaps, marketing and sales promotion will be one of the activities that can increase the volume of sales (James et al., 2011). Also, the firm should also target to venture into new improved milk products and which have proved to work in the market through research and development. These products include developing no fat milk, lactose-free milk, organic full cream milk, organic lite milk, and milk powder and many others. It will enhance diversification of the business operation thus sustainability.
The business strategy defines the means that an organization can use to achieve its set objectives. To achieve any goal, Dairy Product Manufacturer should have an effective strategy in place. The strategy should be real, measurable and achievable. Based on the purpose improving on marketing activities, investment in advertisement and sales promotion can work well to achieve this goal. The advertisement should aim at making the product much more at the reach of the consumers (Seiler & Beall, 2010). Moreover, Dairy Product Manufacturer firms should target all users and distributors of dairy products. It will target family segment to make the products used by the family to be at reach. It should also target the infant’s segment because this will ensure the products consumed by the children have significantly increased. The advertisement should be extended to the other categories such as wholesalers and other distributors. As a result, the company will make more sales and further grow (Kotler & Amstrong, 2014).
Dairy Product Manufacturer firm has another objective of expansion of the plant. This goal will require more funding to implement and achieve it. The financing strategy here will involve borrowing cash and then distribute the repayment within a year. Borrowing can also be a strategy for financing other objectives such diversification into other dairy products and use the revenue generated from the venture to repay for the loan facility.
Conclusion
I strongly recommend the Dairy Product Manufacturer firm to initiate more process to identify profitable opportunities and invest in them. Then use the research and development and finally sales and promotion to ensure the targeted customers are reached. Goods should be presented to clients according to the market segmentation. In conclusion, it is important for Dairy Product Manufacturer firm to understand its environment of operation because this will help to come up with the appropriate objectives and strategies that are necessary for the business growth and continuity. Lastly, gap analysis is done to compare the present state with what is expected in future. This assessment will undoubtedly bring out the difference between the current and what is expected. If an appropriate strategy is taken, Dairy Product Manufacturer firm is likely to achieve its goals smoothly.
References
NIST (2013). Criteria for Performance Excellence 2013-2014. Gaithersburg, MD: US
Department of Commerce and Government Printing Office
Pojasek, Robert (2013). Organizations and their Contexts: Where Risk Management
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Rajender, K. and Kumar, K.P. (2012) ‘Knowledge Management Practices in SME Sector An Empirical Study’, International Journal of Business and Management Tomorrow
Agarwal, (2012). Meta -SWOT: introducing a new strategic planning tool. Journal of Business Strategy
Helms, M.M., and Nixon, J. (2010). Exploring SWOT analysis -where are we now?: A review of academic research from the last decade. Journal of Strategy and Management.
James, C., Paul, T., Debra, Paul, S. (2011). Business analysis techniques: 72 essential tools for success: British Informatics Society, 10(3), 212-220
Kotler.P, & Amstrong G .(2014). Principles of Marketing Pearson Education Limited
McGee, J., & Wilson, D. (2010). Strategy: Analysis and Practice. McGraw-Hill
Milovanovi?, S. (2011) ‘Aims and Critical Success Factors of Knowledge Management System Projects’, Economics and Organization
Roseland, Mark (2012). Toward Sustainable Communities. 4th Edition. Gabriola Island, British
Columbia, Canada: New Society Publishers
Seiler, W.J. & Beall, M.L. (2010). Communication: Making Connections. “Connecting in the
Organizational Context” – Chapter 18 Old Tappan, New Jersey: Pearson Longman Publishers
Singh N (2010). SWOT Analysis – A Useful Tool For Community Vision A concept paper of central Himalayan village
Whalley A (2010).Strategic Marketing: AndrewWhally and Ventus Publishing APS
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