集中差异化战略Business Essay

约翰·琼斯举措的商业文章

 

这篇报告的目的是分析约翰·琼斯在书《麻烦终结者》中的的举措和他的举措对于Kwakumey Tableware 公司的影响。这篇文章概述了公司如何在1996年对抗1989年产生的不稳定局势。这篇文章中举例的那些评估，发现，和建议都是作者在那样的环境下通过观察得出的。

 

这篇文章介绍了对于企业的一些观点，阐述了企业的现状，遭遇的问题，并针对几年前企业遭遇挑战的情况提出了解决方法。一开始就对公司进行了批判分析，弄清了企业的竞争地位，剖析了它的内部功能，资源和可能影响到产业的外部因素。分析方法包括战略的使用和分析工具例如SWOT,波特的五种力量框架,资源审计,能力和利益相关者的分析。这些评估结果将有助于选择正确的战略，产生理想的结果。

 

此外，这篇文章还详细说明了之前被提议的集中差异化战略的特点。Kwakumey Tableware 公司采用该战略来改变和巩固自己的竞争地位和产业优势。文章也回答了企业面临的问题和挑战，针对经营和谋划方面的战略改变，提出了解决和管理这些的有效途径。总之，战略控制系统被开发出来用于解决那些可以抑制改革的因素。最后，文章为公司提出建议，帮助其顺应不断变化着的现代商业趋势，抵挡动荡环境的冲击。

 

Actions Raised By John Jones Business Essay

 

The purpose of this report is to examine the actions raised by John Jones and its implications on Kwakumey Tableware in his book Troubleshooter. The case outlines the present case of the business in 1996 as against its precarious state in 1989. The assessment, findings and recommendations adduced in this report are made in the context of observations made by the author.

 

The report covers a review of the business, its current situation and problems being encountered and the proposed solution devised which addressed the challenges it faced several years ago. It begins with a critical environmental analysis of Kwakumey Tableware to ascertain its competitive business position and know its internal capabilities and resources and the external factors that may influence its industry. Method of analysis includes the use of strategic and analytical tools such as SWOT, Porter's Five Force Framework, Resource Audit, Capability and Stakeholder Analyses. The outcome of these evaluations will aid in the selection of the right strategic options and desired outcomes.

 

Moreover, the report defines the main features of the proposed focused differentiation strategy to be adopted by Kwakumey Tableware to change and consolidate its competitive position and advantage in the industry. It also answers the issues and challenges facing the business and prescribes effective ways of approaching and managing the process of strategic change on its operations and premises. Again, strategic control systems are developed to address factors that may inhibit the change.

 

Subsequently, the report seeks to make recommendations for the company to help it meet the changing trends of modern business and withstand its turbulent environment. Recommendations outlined include:

 

improving the average collection period for accounts receivable·

 

improving/increasing inventory turnover·

 

reducing prepayments and perhaps increasing inventory levels

 

Finally, the report acknowledges that certain vital concepts were not investigated due to some limitations and lack of details from the book. Some of the limitations include:

 

forecasting figures are not provided nature and type of company is not known nor the current economic conditions data limitations as not enough information is provided or enough detail i.e. monthly details not known results are based on past performances not present

 

简介-Introduction

 

Kwakumey Group is a large Ghanaian family-run pottery business founded in 1929. It is currently managed by three Kwaku brothers - Michael, Stephen and Andrew - whose grandfather established it. The business which employs 500 persons has three divisions namely the hotelware division, mug making factory and mass-market tableware division.

 

The case study recounts how the group in 1989 acquired the services of John Jones to carefully analyse its operations and outline punitive actions to be taken. Although the hotelware division racked in profits, the study showed the tableware section faced major problems with sales, personnel, costs and advancement. He therefore prescribed changes and solutions which were implemented and proved successful on his next visit in 1996.

 

问题的定义-Problem Definition

 

Kwakumey Tableware faced major problems with its operations which affected the effective running of the business. This section was established to produce low-cost ceramics dishware for the large end of market tableware. However, it showed a steady decrease over a ten year period with a low 2% in 1989 which affected its sale forecast of a least 10% per annum. These led to an increase in both production and labour cost. Also, the brothers had run a conservative investment policy leading to zero debts. This practice was inhibiting capital spending in the factory especially in the areas of designs and automations. Lastly, the three brothers were faced with the challenge of seeding control of the day-to-day management of the entire business and taking oversight roles.

 

建议了一个解决方法-Proposing a Solution

 

Moving on from this current condition and reverse the decline in costs, the Kwakumey Tableware had to initiate a thorough study into its operations. After the study done by John Jones, he recommended solutions to address the prevailing pressing needs of the division. Firstly, he analysed the limitations of supplying low-margin tableware to the mass market and suggested moving up-market to deliver specific ware to a focused group as an alternative to increase profits.

 

Furthermore, there was also the need to investigate and decide how to reduce production and labour cost, make right investments and devise a marketing plan to keep the business profitable. John Jones advised the three brothers to distance themselves from the daily tasks of management and take on supervisory roles of setting strategic plans, objectives and decisions for their managers. Similarly, his aim was to change the entrenched organizational culture and thinking that existed in the business.

 

2:KWAKUMEY TABLEWARE的环境分析-2: ENVIRONMENT ANALYSIS OF KWAKUMEY TABLEWARE

 

An extensive environmental analysis is carried out to assess the company itself, its market and evaluate its competitive environment and strategic position in its industry. It seeks to satisfy the key characteristics identified by Johnson et al (2008) in their definition of strategy, namely: direction; markets; long term; advantage; resources and competence; environment and stakeholders.

 

Kwakumey Tableware operates within the pottery industry. An audit is carried out to examine the environment of the business externally - opportunities and threats, competitive forces and internally - strengths and weaknesses and its functional areas including marketing, finance, production and operations, research and development, and organizational culture and structure.

 

SWOT Analysis

 

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. This technique is used extensively in strategic planning to identify strategic factors for a specific company through an audit of both the internal resources - strengths and weaknesses and external situations - opportunities and threats. Internal strengths and external opportunities reduce the strength of competitive forces, while internal weaknesses and external threats increase the strength of the competitive forces.

 

Strengths

 

The strengths show the important abilities and resources of the company and clearly give it competitive advantages ahead of its competitors. Kwakumey Tableware possesses a modern and efficient factory capable of producing high-quality products. The presence of the other divisions responsible for hotelware and mugs also ensured the continuous and abundant raw materials. There is also the advantage of knowledge transfer between these divisions which adds to the rich experience, expertise and technical know-how with the entire Group.

 

Additional, the business has strong financial viability. It operated a sound finance policy with zero debts indicative of sales made to the tune of ₵20million in 1989. This shows its profitability and the ability to invest and expand at any given opportunity. Kwakumey Tableware employed the services of competent and skilled mangers to handle its core business to control the running of the business.

 

Weaknesses

 

Weaknesses also referred to as competitive disadvantages, shows poorly how the company operates in contrast with its competitors which in effect makes it more vulnerable to its industry competitive forces. Though Kwakumey Tableware is strong financially, it does have weaknesses too opening avenues for competition. The company particularly its owners are unprepared for advanced technology and value-added designs. Currently, it only offers two-colour designs when there is an availability to invest in multi-colour machinery and automate many of its manual processes.

 

Moreover, it runs high labour and production costs due to the hiring of a large but unskilled work force and few or less efficient kilns and equipment. Labour alone accounts for 40% of total cost, coupled with the provision of raw materials and energy rendering the entire operations impossible of achieving high profits. The business also lacked brand awareness, quality recognition and an understanding of the market. Kwakumey Tableware produced largely for price-sensitive consumers but even failed to satisfy those in the sub-region. After several decades of operation, it has just realised to introduce "Porter" - a medium-priced brand - to satisfy another niche in the market.

 

Opportunities

 

Opportunities are factors to the company that offers potential to reach market leadership and develop core competencies and unique resources. It gives an indication as to which aspects when fully utilised and successful leads to competitive advantage thereby lowering the effect of competitive forces.

 

Threats

 

Porter's Five Forces of Competition

 

The main purpose of this model is to analyse industry attractiveness in order to forecast industry profitability. Porter claims that there are essentially five forces which determine the underlying structure of an industry i.e. rivalry between existing players, the bargaining power of buyers, the bargaining power of suppliers, the threat of new entrants into the business and the threat of substitute products. Each can have a positive or negative effect on an industry structure by making it either more or less competitive. By examining each force and the balance between them, it is possible to determine the overall level of competition and therefore the overall attractiveness of the industry. The collective strength of the forces determines the ultimate profit potential in the industry.

 

Every company should already know what the average profitability of its industry is and how that has been changing over time. The model analyses and determines industry attractiveness in order to forecast industry profitability.

 

Resource Audit

 

The tool is used to analyse and have an internal view and understanding of Kwakumey Tableware. This analysis is purely based on (1) valuable tangible resources, (2) intangible assets and (3) unique organisational capabilities of the business (Collis and Montgomery, 2008).

 

According to Barney (1991), the major attributes of a firm's resource that creates continuous competitive advantage are: (1) valuable, having the ability to make use of opportunities and nullify threats; (2) rare, difficult to find in the industry, (3) imperfectly imitable, not easy to copy or imitate and (4) non-substitutable, difficult to replace.

 

Physical

 

The assets to be analysed are Physical, Finance and Human resources whilst the intangible assets are obtained from its Operations, Research and Development, Marketing and Sales

 

Tangible resources are the easiest to identify and evaluate: financial resources and physical assets are identifies and valued in the firm's financial statements.

 

ble

 

Intangible resources are largely invisible, but over time become more important to the firm than tangible assets because they can be a main source for a competitive advantage. Such intangible recourses include reputational assets (brands, image, etc.) and technological assets (proprietary technology and know-how).

 

 

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A study conducted by Prasad (2008) confirms that investments in technology bring innumerable intangible benefits and value creation to organization in Fiji, a developing economy.

 

Findings from a research (Liang et al., 2010) indicate that technology resources increase both internal and external capabilities thereby improving efficiency and performance but it is external capabilities that affect financial performance.

 

Organizational reputation is an intangible resource, representing an overall assessment of the firm's current assets, position and expected future performance (Teece, Pisano and Shuen, 1997: 521). As a core resource, organizational reputation could be a major factor in gaining a competitive advantage and fortifying the organization's financial position because it is difficult for competitors to match the prestige and esteem created by reputation (Hall, 1992: 138).

 

The human resource of an organization forms the basis for the formulation of a competitive strategy (Bartlett and Ghoshal, 2002).

 

Human resources or human capital are the productive services human beings offer the firm in terms of their skills, knowledge, reasoning, and decision-making abilities.

 

Structural Analysis

 

The analysis performed seeks to evaluate the current organizational structure that exists in Kwakumey Tableware. Kwakumey Tableware is managed and directed by three brothers who are also members of the executive board. There is one non-executive board member who chairs the board and spends a day or two per month on the company. The company has two senior managers in charge of Manufacturing and Marketing and other middle managers. It further employs 500 people spread across the three divisions of the entire Kwakumey Group.

 

Until the findings by John Jones, Kwakumey Tableware had a mechanised hierarchical organizational structure where entire operations and management were left in the hands of the three brothers who served as directors, shareholders and managers.

 

Executive Committee

 

Shareholders

 

Directors

 

Manufacturing

 

Director

 

Marketing

 

Director

 

Managers and Supervisors

 

Work or labour force

 

Executive Management

 

Senior Management

 

Middle Management

 

Junior Staff

 

Cultural Analysis

 

Technology is deployed for one offour reasons: 1) better service, 2) better data, 3)cost savings, and 4) improved efficiency. Don'texpect cost savings unless they are explicitly designed into the implementation, and explicitly

reduce some cost factor: people, paper, time, etc.Cost savings won't materialize without a concrete action to get the cost out.

 

The stakeholder analysis Business is about creating value for all those engaged in it, each of whom possess interests that vary considerably e.g. shareholders (whose goal is profit), top management (whose goals include salary, perks, prestige and power), and employees who are interested in pay, working conditions, and job security). External stakeholders include creditors, customers, unions, local communities, government, suppliers, competitors, public interest groups. All of these have important interests9. The stakeholder therefore is a key component of any business and so the ability to manage the needs and expectations of the group of people most heavily associated with the industry is a necessity. Page 5 of 8

 

The purpose of stakeholder analysis is to determine the assumptions the various stakeholder groups make about an industry. Some will support the industry and as a result create opportunities, while others will resist and present threats. Hence the necessity to carry out an analysis of stakeholder needs once a strategy has been agreed or is being implemented10. The task is to determine each stakeholders assumptions both supporting and resisting, and to place each on a grid (Figure 4), evaluating the importance of each assumption on the strategy and the extent of certainty supporting it. A scale of 0 to 10 can be used for both criteria, with 0 representing low importance and low certainty and 10 representing high importance and high certainty.

 

For a detailed description of selected units, see Appendix-II.

 

(1) Single Family Ownership Units

 

Majority of units in this industry are owned by single families, where all the members have a task

 

assigned to them. A typical feature of these units and also others is that majority of owners and

 

workers belong to potter's community who have been in the business of crafting earthenware for

 

domestic use for centuries.

 

In the villages and as well in cities, these units are usually located in the residence of owners, occupy

 

a small area including one kiln and on the average number of workers varies between 15-20 including

 

family members.

 

3:KWAKUMEY TABLEWARE公司被提议战略的主要特点-3: MAIN FEATURES OF KWAKUMEY TABLEWARE'S PROPOSED STRATEGY

 

Wright (1987, cited in Porter 1980) talks about Michael Porter's three generic strategies viz.: cost leadership, differentiation, and focus strategies. Cost leadership involves the production of goods or services at very low per-unit costs for price-sensitive consumers. Differentiation lays emphasis on the production of unique industry-wide and are addressed to many buyers who are relatively price-insensitive. Focus strategy adverts to products which fulfill the needs of particular buyers who are fewer in number in an industry. That is, ordinarily, while the cost leadership and differentiation strategies attempt to address a whole industry, the focus strategy addresses specific and smaller clusters of buyers within an industry.

 

3.1 Value Addition versus Cost Cutting

 

From the case study, the Kwakumey brothers faced with problems contemplated of having to:

 

Cut costs and go for volume at the lower end of the market, and

 

Build on a proposed new medium-priced ranged with emphasis on increased margins.

 

Currently, the business practised the former which involved the supply of a low-margin product for the large end of the market. This is a focused strategy based on lower cost. It is targeted towards satisfying the large price-sensitive buyer group with the lowest costs in the industry in order to outperform its competitors.

 

However, John Jones suggests the latter which includes moving up-market to a specific market and selling more expensive products for increased profits. This is a focused strategy based on differentiation. From the case study, it is seen to be a strategy successfully incorporated to great effect and benefits.

 

3.2 Main Features of Focused Differentiation Strategy

 

Approaches to differentiation include developing unique brand images, unique technology, unique features, unique channels, unique customer service or the like. In other words, the key to differentiation is obtaining an advantage that is readily perceived by the consumer. Increased costs can usually be passed on to the buyers due to the uniqueness of the product attributes.

 

- concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals' product.

 

The provision of value to customers through the unique product features and characteristics. Kwakumey Tableware produces five or six new different designs with varying colouring per annum. This is expedient so as to satisfy the distinctive and peculiar needs and preferences of consumers in their niche market.

 

The use of state-of-the-art machinery and the latest technology to produce differentiated products which are difficult to be imitated by competitors. It generates continuous improvement and innovation as can be seen in Kwakumey Tableware developing a core competency in the technology that produces the unique resource range of Mille Darko branded products.

 

It requires investments in automated machinery, constant upgrading of existing machinery and a trained and skilled workforce in the industry. From the case study, Kwakumey Table invested ₵1.5million on mechanization and new designs. It further invested in a new dust pressing unit and multi-colour total transfer machines. Again, the design department have acquired the requisite technical expertise necessary in producing new and attractive designs.

 

Premium prices are charged for differentiated products to cater for production costs. It also enables the company to increase its earnings and stay ahead of competition. This has contributed largely to the increased sales, profits and earnings per share of the entire Group.

 

This strategy enables business to build global brands and corporate reputation due to the high quality and value of their differentiated product or service from production to packaging and transport. Such businesses are open to research and scientific development.#p#分页标题#e#

 

4:KWAKUMEY TABLEWARE公司战略变化的过程-4: THE STRATEGIC CHANGE PROCESS AT KWAKUMEY TABLEWARE

 

Every aspect of life including business is subject to change. The economy, business environment and technology but to mention a few have been experiencing constant change which brings along its own myriad of challenges and problems. In order to curtail the impact and risk of such changes, it is important to manage the process and turn it into benefits for organisations (Muralidharan, 2004; Jayashree and Hussain, 2011).

 

Luecke (2003) and Barrett (2002) both point out that change can occur due to the launch of a new product or service, introduction of new leadership or technology and a merger or acquisition with its attendant effects on the structure, costs, processes and culture of a company. Change may also happen from unexpected environment changes and a decrease in performance (Roberts, 2008). Strategic change forms an integral part of changing the fortunes of a firm for the better (Barker and Duhaime, 1997). Often, most firms without the ability to survive or remain stable may succumb to such pressures and collapse (Mintzberg and Westley, 1992).

 

Managing the Process of Strategic Change

 

The process of managing strategic change is essential to implementing strategies. The strategic change process requires understanding, planning, implementation and consolidation. It also demands the total input of all stakeholders and resources in a business. Figure 4.1 show a close link between strategic resource analysis, strategic change, corporate politics and stakeholder power, organizational values and strategic change.

 

Source: Corporate Strategy, Lynch, 2008 p. 238

 

Figure 4.1: The relationship between resources, culture, change and power

 

Kotter (2007) in his paper, Leading Change, outlines the eight key actions necessary to perform strategic change and transform businesses. In the case of Kwakumey Tableware, it is imperative to make strategic changes to absolve it from further difficulties. The basis and issues of change at Kwakumey include market responsiveness, technology, objectives and goals, falling quality, organisational culture and corporate structure.

 

Communication and education is one of the solutions to the resistance of change as it educates and provides all employees with information a company's strategy and motivates them to support it full throttle (Barrett, 2002).

 

Strategic Intent

 

The creation and communication of the vision is central to the change process. Kwakumey Tableware seems to have an unclear and undefined strategic intent which has greatly affected its growth and progress. The company has failed to change its vision, mission, goals and objectives through the various successions from grandfather to grandsons to meet and counteract changing environment it operates in. Kotler, P. (2002: 40) agrees that the impact and applicability of mission statements may be lost in the long term because of market and environmental variations. This has contributed significantly to the strategic change being outlined by John Jones and the unclear growth, profits and sales forecasts.

 

Consequently, Kwakumey Tableware needs a remodelling of its vision and communicating it effectively. In order to manage resistance against the new vision, Gioia et al (2012) proposes the adoption of an ambiguous vision statement for successful strategic change since it will suit the varying interpretations from the numerous stakeholders. Argenti et al. (2005) state the crucial function strategic communication has on organisations. Barrett (2002) justifies this assertion and confirms the fundamental role communication plays in managing strategic change such as educating employees about a company's vision, strategic goals and what the change means to them.

 

Marketing Responsiveness and Falling Quality

 

Due the problems facing Kwakumey Tableware, the factory could not match the responsiveness of mass-market of tableware products especially from competition from Nigeria and South Africa. There is the need to have a marketing strategy in place to supply the ever-changing global market demands. The marketing plans developed must rely on qualitative and quantitative research and measurements to improve decision making and customer service.

 

Organisational Culture and Leadership

 

Trice and Beyer (1991) describes the relationship that exists between leaders and culture in an organization.

 

In a study by Boeker (1997), the tenure of top management is employed as a key variable to measure its influence on strategic change.

 

Boeker (1989) explores how different factors and strategies of organisation are influenced by its founding and initial establishment and intent on strategic change. He considers management, ownership, strategic direction, tenure of founding entrepreneur, commitment to investments as some of the factors that influence strategic change.

 

Therefore it is crucial that the process of change in the organizational culture is seen as empowering to employees. Not only do empowered employees make better decisions, but empowering employees with decision making capacities also allows power, guidance, and direction to be redistributed from upper echelons to employees at all levels throughout the organization (Ncube and Wasburn, 2006).

 

Delegation of decision making to managers is efficient when managers allocate resources, including their own efforts, in ways that do not divert from owners' objectives (Sengul, Gimeno and Dial, 2012).

 

Using the case of T. Eaton Company, Poulin and Hackman (2001) shows the correlation between the leadership and strategy. It chronicles the various leaders of the great retail Canadian store and how their leadership styles affect its success or failure. Notable traits of its successful leader were empowerment and innovation.

 

One of the major problems facing most family-run businesses is the issue of ownership and intergenerational succession (Bjuggren and Sund, 2001).

 

Technology

 

The critical review of Kwakumey Tableware's factory operations by John Jones shows the lack of exploitation of technology as a performance enabler. The current capabilities of Kwakumey Tableware provide little support for new designs and technology. The budget allocated to new designs in relation to total revenue is minute. Kwakumey Tableware has neglected technology because of past under-investment relative to other sections over an extended period of time, a lack of understanding of the critical role that effective and efficient use of technology and automation have on manufacturing, a lack of expertise and skills in designing complex multi-colour design and operation of mechanized equipment and the absence of strategic plans and business objectives in relation to technology and process innovation.

 

However, various literatures have been written based on empirical evidence to show the benefits of technology. The use of information technology performs a major strategic role (Porter and Millar, 1985) and has caused meaningful change (Henderson and Venkatraman, 1999). Capital injection and proper management of organizational IT resources enhances performance (Liang et al., 2010). Likewise, the commercialisation of technology leads to gains in market share, customer satisfaction and increased profits (Zahra and Nielsen, 2002).

 

Factors Inhibiting Strategic Change

 

According to Bovey and Hede (2001), "resistance to change is an essential factor to be considered in any change process, since a proper management of resistance is the key for change success or failure". As Lynch (2006: 238) points out, resistance emanates from different sources particularly staff and individuals during strategy implementation and must be effectively manage early. This is why the change process is the predecessor to analysis so as to ensure the full implementation of desired strategies.

 

Findings from a research done by Beer and Eisenstat (2000) showed more than 75 percent attest to these factors as barriers to strategy implementation. The factors include management style, unclear strategy and prioritization, ineffective senior management team, poor communication, lack of coordination across business and inadequate leadership skills and development amongst staff.

 

The choice to pursue new technologies as well as the extent of adoption may be dependent upon the anticipated degree of internal resistance as well as degree of variance from the current operation.

 

As strategy is formulated, one must consider potential individual barriers to adoption of technology (Miller, Martineau, & Clark, 2000; Bjarnason, 2003; Surry & Land, 2000) such as:

 

 Lack of technological literacy or competency of the faculty member

 

 Fear on the part of faculty members that students are more adept at the technology than they are

 

 Inertia and comfort with traditional delivery methodology

 

 Belief that learning is more effective in the classroom

 

 Time commitment to learn the new technology which competes with other demands such as advising, research and service

 

Threat to academic freedom and autonomy

 

Strategic control systems are crucial to management since it offers them the power to monitor performance and enact immediate action and response in an organization (Muralidharan, 2004).