Running header: ABLE CORPORATION PLAN
Running header: ABLE CORPORATION PLAN
What Able Corporation Needs: A Business Plan
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A Business Plan
“Organizations change and organizations compete for the same resources, competencies, and customers,” according to Drejer (2002, p. xvii). Managers must understand the needs of their companies and how strategic management is an integral part of the overall corporate plan. An effective business plan allows a company to communicate its products, services, and overall business structure to potential investors and customers. Market analysis assists the organization to identify available opportunity by identifying strengths and weaknesses in the corporate environment and external to the corporate environment. Management must understand that the business plan consists of the mission statement, key elements of value propositions, prioritization of the steps required to accomplish strategic objectives, and technology necessary to measure the effectiveness of the business plan process.
Introducing Able Corporation
Able Corporation is a U.S. manufacturing company located in Tennessee that builds power tools, lawn mowers, lawn furniture, microwaves, and ranges. The company manufactures the products locally and sells said products through retailers such as Best Buy, Sears, and Wal-Mart. Able is looking to expand into the global marketplace in addition to its thriving business in the United States and Canada.
Business Plan Analysis and Recommendations
Companies must provide pre-planning and analysis to properly identify the needs and results of the business plan. Research and analysis provides the researcher and other key personnel with a competent analysis of opportunities and issues the company will encounter during the business plan process. Such opportunities and issues include:
▪ Able Corporation Identity – The business world is highly competitive and companies must understand how to properly build a corporate identity, as this is “the first impression your customers will have on you” (LogoOrange, 2008). A mission statement and company logo will build the brand recognition required by Able Corporation to move forward as a multinational company. To properly identify the needs of the mission statement, research into current and potential customers and employees will provide a proper perception of the company.
▪ Key Elements of Value Propositions – “The value proposition consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering,” according to Kotler and Keller (2006, p. 143). The value proposition of Able Corporation would include lawn furniture and other products manufactured by the company and how these products provide a source of value for the company. In examining the products, Able Corporation could identify its strategic objectives.
▪ Set of Principles – Maximizing shareholder return and the beliefs of the company are the first steps in identifying the business plan; however, the company must also use a set of principles in “choosing marketing strategies and making marketing decisions that are consistent with these beliefs” (p. 117). Understanding the goals of the business allows the company to understand the objectives necessary in meeting said goals.
▪ Feedback and Measurements – “As it implements its strategy, a firm needs to track the results and monitor new developments” (p. 59). Change will occur in the creation and implementation of a business plan and the company needs to ensure such changes will not disrupt the business plan process. Reviewing the changes in the environment and revising current objectives allows the company a flexibility that will address future needs for the organization, including programs, strategies, and objectives.
The business plan is a living documented that will be revised during the entire life cycle of the business or business segment. Without the use of a flexible business plan, the business may encounter loss of competitive advantage and other items in meeting its objectives and goals.
Mission Statement: Corporate Identity
Kotler and Keller (2006) state companies need to provide a “clear, thoughtful mission statement” in order to provide “employees with a shared sense of purpose, direction, and opportunity” (p. 44). Mission statements are provided to all stakeholders in the corporation, including managers, employees, and customers. For Able Corporation, a good mission statement would be: “Able Corporation’s mission statement is to become a leader in the power tools and lawn equipment industry by providing the customer with reliable, cost-effective, and innovative products, while establishing standards in the pre-sales period and post-sales period.” The mission statement identifies the current capabilities and future aspirations for Able Corporation to become an international competitor in the outdoor products market and power tools market.
Operating Plan
Operating plans “outlines your product/service, its purpose, how it will be produced and the facilities to be used” (Beech, 1997, p. 29). Able Corporation can use charts, graphs, and other information necessary in the description of products and/or services. Operating principles for Able Corporation would include:
▪ Deliver superior products to our customers
▪ Focus on building the long-term value of the company
▪ Act responsibly and ethically in providing services to our customers.
Able Corporation will benefit from building a solid, long-lasting relationship with its customers by providing products currently desired by consumers in accordance with marketing conditions.
Marketing Analysis
“Market potential identifies the total demand opportunities that exist for a category of products or services. It is what 'could be' sold under ideal conditions” (Kress and Snyder, 1994, p. 219). Corporations use different techniques and methodologies in examining market conditions and issues; this is known as market analysis. Market analysis assists the organization by providing data needed to make investment and other financial decisions, promotional activities, and other changes to existing plans to strengthen the position of the organization.
One such method of market analysis includes market segmentation. Companies realize the need in identifying a target market and meeting the needs of said customers by focusing on a core set of customers and meeting the needs of these customers (is also known as niche marketing). Able Corporation’s market share of the circular saw segment is 40 percent, as the company is faced with customer complaints concerning low quality in its products. Another point involves the manufacturing plants not being properly maintained, which can reduce employee support of the company can cause lower quality output of products across the line.
The SWOT Analysis: Strength and weakness identification
Once a company has identified the opportunities and barriers in the external environment and internal resources, the information is used to “formulate corporate, business, and functional strategies in of the organization” (Bateman and Snell, 2003, p. 122). The SWOT analysis provides a comparison of company strengths, weaknesses, opportunities, and threats. The company can capitalize on opportunities that help the organization grow and minimize threats in the competitive environment of the company’s core industry. The strengths identified for Able Corporation are as follows:
▪ Strong circular saw brand equity
▪ Success in the cordless business segment (cordless tools)
▪ Cordless innovation with “a couple of its products” (Associated Content, 2009).
▪ Professional and customer loyalty in circular saw market
The problem identified is more weaknesses and strengths, causing some in the industry to question how Able Corporation sells any products. Such weaknesses include:
▪ Unsuccessful marketing of their products
▪ Not understanding marketing in their core industry
▪ Not understanding their competitors to develop strategies
▪ Low to moderate tool quality
Able Corporation needs to identify its core market and understand its competitors to move forward in successfully transitioning from a local manufacturer to a multinational corporation.
Strategic Objectives
Objectives provide the company with the necessary criteria in the meeting of short-term operations and long-term goals. The vision statement and mission statement often provide forward-looking statements the company moves toward to achieve strategic goals. The first step is looking at the company in one year and what goals the company wants to achieve. Given the issues plaguing the company, Able Corporation should meet two goals to improve its overall rating. The following goals for the one-year objective include a focus on marketing and improving its overall financial health. The five-year outlook is a medium-range outlook and should include the market analysis and improving tool quality, including how products are manufactured at Able. The ten-year outlook should involve increasing market share and overall profitability.
Sales Forecasting
“A sales forecast is an essential tool for managing a business of any size,” according to Business Link (2009, ¶ 2). Companies should use month-to-month analysis of their core markets to identify needs when such needs arise; however, Able Corporation would require an examination of not only monthly analysis but annual analysis to find comparable forecasting. Other factors in successfully forecasting future sales for Able Corporation would include the effects of economic factors on other industries that would have a negative impact on its core sales. A rise in utility rates (electricity and gas) means consumers would spend less on other items, including power tools and lawn furniture, thus cutting into anticipated profits. The impact on the housing market also affects sales of power tools and other household items, as people are not buying homes and construction is reduced, thus reducing the demand on power tools, cordless tools, and lawn equipment and furnishings.
Strategy Implementation
“As with any plan, formulating the appropriate strategy is not enough” (Bateman and Snell, 2003, p. 125). A good plan and solid techniques do not guarantee the successful implementation of a business plan. The company must understand the various resources and tools necessary in implementing a business plan; these resources and tools include organizational structure, human resources, information systems, and technology.
Follow-up and Feedback
The final step in the process is identifying the successful implementation of the plan and what tools can identify issues before said issues become problematic and interfere with the business plan. Metrics can be used to identify the problem in introducing employee training, for example, and provide answers by testing solutions to the issue in the database. Management would then use such metrics and identifiers to fix issues and meet new opportunities.
The Business Plan in Review
Business plans identify a corporate need or opportunity and includes such items as the mission statement and implementation strategy. Companies analyze current market influences and how such influences would affect the outcome of the business plan, thereby modifying the document to become flexible during market uncertainty and competitive forces. Able Corporation needs to understand its core customers, how to market its products more effectively, and address financial issues to continue in the market and eventually move to a multinational organization. Without the use of key valuations and other tools and techniques, Able Corporation will not make a successful transition to the global marketplace and could lose current customers.
References
Bateman, T. & Snell, S. (2003). Management: The New Competitive Landscape (6th Ed.). New York: McGraw-Hill Companies.
Beech, W. M. (1997, September). Before Hanging out Your Shingle . Create a Business Plan, It Can Be Your Road Map to Success. Black Enterprise, 28, 29. Retrieved January 4, 2009, from Questia database:
Business Link. (2008). Forecast and plan your sales. Retrieved January 4, 2009, from the Web site:
Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Westport, CT: Quorum Books. Retrieved January 4, 2009, from Questia database:
Kotler, P., & Keller, K.L. (2006). Marketing Management (12th Ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.
Kress, G. J., & Snyder, J. (1994). Forecasting and Market Analysis Techniques: A Practical Approach. Westport, CT: Quorum Books. Retrieved January 4, 2009, from Questia database:
LogoOrange. (2008). Corporate Identity: Creating the Right Perception. Retrieved January 4, 2009, from the Web site:
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