Published on March 9, 2014
An Assignment on Business Strategy Submitted by: Name: ID: Submitted to: Date of submission:
Table of content Content serial Content name Page no. Executive summary 2 Content serial Content name Page no. 1.1 Missions, Visions, and Core 3 Competencies Vital Concerns Involved in 3 Strategic planning Three techniques for 5 Autoglass Task 1 1.2 1.3 Task 2 Content serial Content name 2.1 Organizational Autoglass 2.2 Environmental Audit for 8 Autoglass Significance of stakeholders 9 2.3 Audit Page no. on 6 Task 3 Content serial Content name Page no. 3.1 3.2 Alternative Strategies Future Strategies 10 11 Task 4 Content serial 4.1 Content name Page no. Roles and Responsibilities 13 4.2 for Strategy Implementation Evaluation of the Resources 13 Content serial Content name Page no. Reference 15 1
Executive Summary: From the very beginning of the growth of Autoglass; they are emphasizing the major concern on customer’s satisfaction and to provide services in the most efficient and effective way. According to the customers opinion Autoglass is number one service provider among all other opponents in the market. Relating with other companies they are way ahead in course of customer demand. In the windshield servicing industry Autoglass has become a brand name not only for satisfying the customers but also for providing the best windshield replacement or repairing service. It was statistically estimated that with the service of Autoglass 92% customers are well satisfied. The company maintains a sound and professional relationship among the customers and employees. Their core value is, if the employees are satisfied by working in Autoglass, they would provide more efficient service and quality finishing and ultimately customers will like that and would be satisfied. Autoglass is currently the market leader in their sphere of the industry and they are growing in a steady pace. They are now operating with almost 500 branches serving in the Europe. Under the above circumstances it is clear that Autoglass holds a very strong base in the market and are well prepared to take some challenges to boost their revenue. They surely hold a good fortune for their upcoming future and will be more prosperous. 2
Task 1 1.1 Missions, Core Competencies, and Visions: Autoglass Company Mission: All the future missions of an organization are fixed before starting to execute strategies to fulfill all the missions and those missions are formed based on the ongoing situations of the organization. Autoclass Company prepare all those activities by focusing on customer satisfaction. By fulfilling the missions, an organization takes shape and the objective becomes clearer. Autoglass Company Core Competency: Core competencies characterize the core operations of an organization. A core competency is a concept of theory that specifies the factors that a business sees as central to the way the company or its employees work (Grant M. R., 2010). It shapes the business missions and visions of that particular organization (Kotler, P., 2000). In case of Autoglass the core competency is that they can replace or repair any kind of broken or damaged windshield of any model, no matter what (Autoglass Company). Autoglass Company Vision: Vision of an organization is the future intentions and target that an organizations try to achieve by defining the missions and setting goals and objectives to accomplish (Kotler, P., 2000). It’s like foreseeing the future. The vision of The Autoglass Company is to serve the customers efficiently and provide their customers with the highest level of satisfaction (Autoglass Company). The vision of serving their customers with integrity and loyalty is expected to lead them to grow and set the boundaries higher in the industry. Strategic Intent: The notion of strategic intent proposes that there is a general outlook on where the business should be going rather than a decisive affirmation of an anticipated outcome and this means that there should be abounding of flexibility inside the statement to allow for employees start, group contribution and adaptation in lightweightweight of changed attenuating factors (Ivanauskiene, N, &Auruskeviciene, V., 2009). The strategic intent of Autoglass is to see itself as the market foremost habitually. They are doing all the undertakings to remain foremost. Role of strategy of Autoglass: The major task in strategic management is commonly the compilation and dissemination of the illusion and the method affirmation. This outlines, in essence, the raison d'etre of an association (Ivanauskiene, N, &Auruskeviciene, V., 2009). Autoglass has amassed their purposes in scheme making in a way that the designs maintain an exact time span in the execution (Autoglass Company). 3
Objective and goals of Autoglass: The foremost target of Autoglass is to satisfy their clientele by fixing or refurbishing broken windscreen of any vehicle. The aim of Autoglass is to make their enterprise augment and aid the global clientele (Autoglass Company). They are increasing their enterprise by triumphant the hearts of the customers. Strategic Architecture of Autoglass: The strategic architecture of any association is the method of answering the five rudimentary inquiries of making the scheme. The inquiries are compilation of “What”, “What Else”, “What More”, “What Now”, “How” (Grant M. R., 2010). By responding these questions Autoglass forms their strategic organisations of the company. 1.2 Vital Concerns Involved in Strategic planning In order plan strategies and implement operations there are some vital issues that are needed to be considered. Based on the case, Ansoff’s model can be used to analyze the competitive advantages of Autoglass Company (Kotler, P., 2000). Autoglass is putting their focus on the customer’s preference and customer service. They have reached the highest satisfaction level in the service industry just by replacing the windscreen in a cost effective way. Autoglass should be customer oriented and try to increase their service portfolio in order to meet with the competition.Given the circumstances in the case we can enquiry the competitive benefits of Autoglass. Autoglass’s Competitive Benefits: Autoglass offers the premium service of replacing or repairing windscreens. Not only that, they are also providing their customers with several other services regarding wind screens problems. By doing so they are grabbing a fair share of the market (Autoglass Company). As Autoglass is growing day by day, they can use the Ansoff’s model to analyze their competitive advantages over others. The Ansoff’s model is given below: 4
Autoglass is providing services to more than one million customers who are having problems with their windshields every year. Ansoff’s model of Growth suggests four different sets of alternatives (Armstrong, G., &Kotler, P., 2006). Based on the scenario and research, we learned that Autoglass is expanding its market gradually and has the capability to serve more than they are doing now. So based on the present scenario, Autoglass can serve customers with their existing products and can also introduce them with new means of services (Automotive Industry, 2013). These four alternative strategies face different types of risks. The strategies are: Market penetration:A marketing strategy hereby an organization hunt for gain greater ascendency in a market in which it even now has an offering (Melody, Y. & Kevin, H., 2000). This strategy frequently focuses on seizing a larger share of a dominant market. In this strategy Autoglass can rise its market segments by selling more of their products and attract more customers. Product development: By product development we mean either inventing a new product or improving old products with new features. Autoglass can introduce a new product to the market that would complement the existing products. But this strategy has a severe drawback. If the customers failed to interpret the new product features, then it would result in losing revenue. Market development: Market development means to improve and retain market position for the products of a company. Autoglass is the current market leader in this windshield repairing industry. So they can brand Autoglass more extensively and try to grab new customers to increase its market share. Diversification:Autoglass can create a portfolio of products that will divide up the risks and reduce the chance of revenue loss. Autoglass also should emphasize on the geographic location where they should operate and specify the minimum requirements of the suppliers to get the quality products and the quantity required. Autoglass Company is in top of its operating industry. So they have the options to increase the growth rate in a steady manner by satisfying both existing as well as potential customers and increase its market share. Autoglass can set a five years growth strategy plan based on the Ansoff’s Growth Model to achieve their target. 5
Definition of Top-Down and Bottom-Up Informal planning:Informal planning is the method where the manager or foremost of a group evolves a design without any accepted structure and rigid structures (Grant M.R. 2010). For certain instant positions managers use this approach where it is not absolutely vital to pattern any patternal structure of designing or the timeline for designing is not enough. It is important to double-check short term objectives of the organization. Top Down: A top-down approach is essentially the breaking down of a system to gain insight into its compositional sub-systems (Wheelen& Hunger, T.L. &J.D., 2013). Autoglass is implementing this approach in their product R&D and they are pretty successful. This approach would help them to attain their goals. Bottom-Up: A bottom-up approach is the piecing together of systems to give rise to more complex systems, thus making the original systems sub-systems of the emergent system (Wheelen& Hunger, T.L. & J.D., 2013). Autoglass is using this approach in their service development to satisfy the customers and they have been pretty successful by using this approach. Behavioral Approach for Autoglass: Autoglass ought to approach in the Top-Down process in order to take advantage of their assets and to grip the rivalry in the future. Autoglass is a rising company in the service business and the facility they are providing will not be adequate for them to clench on to the situation in the market. They need to arise with some developments for their merchandise and market so that they might an expanded market for the clients. 1.3 Three techniques for Autoglass In order to grow in the industry, Autoglass can use three techniques, and they are: 1. BCG Growth Share Matrix Autoglass can design their products in such a manner where they can differentiate their products and also maintain a harmony in the product portfolio (Kotler, P., 2000). It will also help Autoglass to determine the time and place of a new investment in new product development and when to extract all the earnings from that product. 6
High Growth and High Market Share (STARS) Low Growth but High Market Share (CASH COWS) •This strategy deals with high amount of cash and the management determine the overall cash flow in business. •The star businesses are prior to become cash cows in the future and management can harvest from the business venture. •When the products starts to lose its market share and growth rates decline then the product falls into dogs category. The organizations should divest from the business at this moment. •Management should watch over any unnecessary expenses. High Growth but Low Market Share (QUESTION MARKS) •The newly introduced products are the member of this category and have the potential of growth maximization. •The product has also the risk of being a trouble product if any revenue is not received from it. 7 Low Growth but High Market Share (CASH COWS) •From the matrix, we can see the product which has low growth but high market share is the steady business and generates steady revenue
2. Strategic Position & Action Evaluation Matrix (SPACE) Autoglass can use the SPACE matrix to determine the demand and requirements of the customers to operate and make strategies to expand the market for their product (Armstrong, G., &Kotler, P., 2006). SPACE matrix has four different segments. Each quadrant explains the organizations position and the course of actions required (Kotler, P., 2000). As Autoglass is holding a strong position in the market, they can use the aggressive strategies to capture and spread their market. It will also help them in determining the SWOT of the organizations. 3. Profit Impact of Market Strategy (PIMS) PIMS is a kind of database that gives solid information and evidence to support the policies that are undertaken to gain competitive advantages. 8
Task 2 2.1 Organizational Audit on Autoglass: SWOT Analysis •Visual Clarity •Low cost •Safety •New Product •Emerging economy Strengths Opportunities Weaknesses Threats •Promotion •Advertisement •Geographic Location •Government Policy Strengths Unlike others, Autoglass provides high quality products at low cost. The safety features in the product are high. They produce windshields with highest possible visual clarity. Weaknesses Autoglass has very poor promotion system. They hardly advertise their product. Opportunities Windshield replacing or repairing is present in emerging economy. Development of new products creates new opportunities. Threats 9
Operation in unnecessary locations is loss of capital. Government policies shape the business environment. 2.2 Environmental Audit for Autoglass 10
PESTLE analysis is helpful to find out the accurate operational strategy of an organization. It also glorifies the operation methods of the company. Several factors are needed to be accounted to operate an organization. By using the PESTLE analysis organizations can maximize their opportunities and nullify the threats. What is PESTLE analysis? Political Political climate in any country determines the attractiveness of the business. Economical Socio-cultural Technological Legal Purchasing capacity of the people determines cost and level of service in the industry. Lifestyle and preferences shapes an industry. Technology relating the designs. Law regarding safety measures is important. Some things are beyond control of the organizations such as weather, climate and climate change. Government stability is important because it may affect the future decisions. Organizations need to pay taxes and taxation policies affect the industry. The need for replacing windshield is represented by the level of economical activity Environmental The decision to own an automobile and need to replace windshield depends on the social norm. Technology of windshield manufacture. Employment and consumer law is highly emphasized. Porter’s five forces Porter’s five forces analysis helps the management to determine and understand the overall context of the industry (Kotler, P., 2000). Porter’s five forces are: 11
1. The threat of new entrants Economies of Scale: This is generally a low threat and it measures the scale of economy in the production. Government Policy: Government policy can limit the entry and exit barrier in an industry. 2. The bargaining power of customers Threat of Backward Integration: Organizations face the risk of backward integration with the suppliers. 3. The threat of substitute products Prices: Prices play an important role in any industry. Buyers may shift from one product to another just because of price sensitivity. Access: Buyers access in the industry is now a day’s much easier than before. 4. The amount of bargaining power suppliers have Threat of forward Integration: Organizations face the risk of forward integration with the suppliers. With the help suppliers, buyers can make the same products that are offered by another company. 5. The intensity of the competitive rivalry Number of Competitors: Competitor’s number plays an important role in pricing strategy. Diversity of Rivals: The rivals challenge and cross each other’s path in making and implementing strategies. 12
2.3 Significance of stakeholders The stakeholders’ grid: 1. Promoters: It refers to the stakeholders who influence the strategies and also has high interest. 2. Latent’s: It refers to the stakeholders who influence strategies but has low interest. 3. Apathetic: It refers to the Stakeholders who has low interest and seldom influences the strategies. 4. Defenders: It refers to the stakeholders who have low influence in the strategy making but high interest. The stakeholders are reserved in four arrangements so that every stakeholder has their exact rights and burdens in esteem of the making the policies for the organization which will be applied for the improvement of the organization. Autoglass has charted the stakeholders in the business so that the stakeholders can complete their duty in esteem of the organization’s advantage. 13
Task 3 3.1 Alternative Strategies Organic Growth: Aback a business alignment achieves beforehand over its own business which is as above as the alpha of the organization, it is declared amoebic growth. It excludes any beforehand that is acquired by accepting into any added business or accord or acquisition. Merger: Accord is the activity by which two companies gets affiliated and turns into one commodity through accustomed consolidation. The alpha of Autoglass was through such merger. Acquisition: This is the activity breadth one authentic accession purchases accession complete accession and establishes itself as the owner. In this activity 100% or beside 100% diplomacy has to be bought. Strategic Alliance: This is the activity breadth two or added companies accept aloft a basal of accustomed objectives and allocation ceremony other’s assets to accommodated those objectives. This admission is actually an absorption that stays amidst the absorption of amoebic beforehand and accord or acquisition. Licensing: It is the activity through which a mother accession (licensor) allows accession accession (licensee) to use its cast and accustom the accessories or casework on the abject of agreements on several terms. The acceding board the licensing fee that has to be paid to the licensor. Franchising: It is the process, through which a accession earns the adapted to use accession company’s trademark, business model, operations breadth the franchisor gives the adapted to the franchisee. For accepting exchange allocation abroad, Autoglass adeptness use this admission by allocation franchises in adapted locations. Substantive Growth: Horizontal Integration: In accumbent amalgamation a accession forms or acquires accession adeptness of accompanying or accustomed accessories (Melody, Y. & Kevin, H., 2000). Sometimes it may additionally arise that a accession purchases one of its competitors and appraisal integration. Autoglass adeptness appraisal such amalgamation by bandage with added accession that are accompanying to its complete products. 14
Vertical Integration: In vertical amalgamation a accession links with the companies or accessory of the accession alternation and in abounding cases all the accessory of the alternation breach below a audible client (Melody, Y. & Kevin, H., 2000). Autoglass adeptness accredit into vertical amalgamation by bandage with the suppliers and distributors. Related Diversification: Aback a accession expands its business with some changeabout in the complete achievement bandage (Arazy, O, &Gellatly, I., 2012). The new productions are affiliated to the complete products. Unrelated Diversification: It is the activity aback a accession engages into changeabout by introducing new accessories and casework that doesn’t bender with the complete achievement bandage (Arazy, O, &Gellatly, I., 2012). It can be altered changeabout if Autoglass starts diplomacy home window glasses or adorableness mirrors. Limited Growth Market Penetration: It bureau bitter the advancing exchange by alms advancing bulk abut the bulk of the competitors. This admission is acclimated to instantly beforehand the competitors by accepting their customers. It is about acclimated to accession sales growth. Market Development: It bureau targeting new chump segments and adorable the non-buying bargain of that segment. It helps to admission the exchange allocation by abacus new allocation of customers. It is attainable for Autoglass to beforehand the exchange by geographically accession the business and all-encompassing the customers. Product Development: It bureau developing new accessories that do not accept currently and appropriately adorable bargain to buy added varieties of accessories or services. Innovation: It bureau attractive out an actually new allegation of the bargain in the exchange and innovating a new achievement or annual to accommodated that need. Autoglass adeptness try to arrangement out such allegation in the exchange and accustom an innovated achievement or service. Disinvestment: Retrenchment:An activity acclimated by corporations to allay the array or the all-embracing admeasurement of the operations of the company. This activity is about acclimated in acclimation to cut costs with the appetite of adequate an added cyberbanking constant business. 15
Turn around: Turnaround administering is a activity committed to accumulated renewal. It uses appraisal and planning to save afflicted companies and allocation them to solvency. Turnaround administering involves administering review, activity based costing, base aborticide causes analysis, and SWOT appraisal to activate why the accession is failing. In acclimation to achieve a advance in the industry organizations allegation to accession out the base of the problems and based on those problems they allegation to achieve up new strategies and behavior to afflicted those problems. Liquidation: Aback a business or abutting is assured or bankrupt, its assets are ample and the accretion pay creditors. Any array are advertisement to shareholders. Liquidating a abutting is the aftermost date of the firm’s survival. If no addition strategies accept with the organizations afresh it needs to accustom its assets and afresh pay up the shareholders and stakeholders. Divestment: The activity of diplomacy an asset. Additionally accustomed as divestiture, it is bogus for either cyberbanking or agreeable goals. Abnegation is the adverse of investment. It is the activity of diplomacy out the assets in operation and sells those to accommodated the gap in the cyberbanking problems and in acclimation to banknote the alignment abnegation is all-important for any organization. Porter’s Generic Strategy Michael Porter explained the general strategies for an organization to operate in the industry. Companies usethese strategies to gain competitive advantages (Kotler, P., 2000). The strategies are: Overall Cost Leadership Differentiation Focal Point 16
Overall Cost Leadership Differentiation Focal Point Based on the case it can be inferred that Autoglass is following the cost leadership in the industry and they are offering their services in the lowest cost possible (Armstrong, G., &Kotler, P. 2006). It is helpful to attract more customers and enter in the new market. Cost leadership alone cannot help an organization to enjoy profit from the market. Differentiation is necessary to bring in more profits and grabbing more customers (Armstrong, G., &Kotler, P. 2006). The Autoglass is offering 24/7 customer services to differentiate them from the others. To improve business in the industry organizations needs to focus on a specific objective (Armstrong, G., &Kotler, P., 2006). Autoglass is focusing on serving the customers and satisfy them for their money worth. Autoglass has become the best windshield repairing or replacing service providers. 3.2 Future Strategies In instruction to increase the market section Autoglass Company wants new policies and new products which can be cooperative for them to flourish the market. So in view of future policy they can mature a BCG growth share matrix and arrange a product assortment from which they can decide their upcoming strategies (Gudonaviciene, R. &Rutelione, A., 2009). Autoglass should be following the vertical growth approach to raise their business. They can go with association with automakers to apprehension the new market segment. Autoglass is in a strong place and they might be capable to go with the association with new organizations. As this strategy is suitable for the organizations evolution and their core competences match with the policy. Alliance with connected organizations will allow Autoglass to put additional focus on the client’s preference and can grow new product group to achieve the needs of the clienteles. Only opening new product streak and expanding the marketplace will not single-handedly help the Autoglass Company to enlarge in the market. Autoglass should continually review the response of the clienteles so that they might distinguish what the customers are watching for and to what level of gratification customers want. Autoglass management prerequisites to describe the roles and accountabilities to the staffs so that they can deliver the highest level of gratification to the customers. 17
The Autoglass is currently have a 92% satisfaction rate amongst the customers. But with growth of the business the gratification rate might vary and Autoglass need to shape a period for the new aims and extension of the new facilities. Considering the location in the business, Autoglass can deliver a 5 year plan that will be adequate for Autoglass to cope up with the rivalry and maintain association with the automakers to enlarge the business. Autoglass can benchmark 2019 to comply with policies they have taken and achieve the pledge to the customers. 18
Task 4 4.1 Comparison of Roles and Responsibilities for Implementing Strategies: Now a day’s one of the vital issues of doing business is “Strategy and Policy Execution”. If the decisions are taken perfectly and wisely; and if those decisions are executed properly then the organization will must flourish with a vast growth and big amount of profit. The top level management is not for doing only their own job, rather they need to spread their eye throughout the whole organization and have a vision of every single threat of distant future. They have to prepare new plans and execute various strategies to overcome every obstacle of anomaly market situations. For any company like Autoglass, to understand the market situations and to evaluate every possible strategy is the foremost duty and responsibility of management and this is a very significant role for the organization. The figure-head of any organization, CEO or President or Managing Director has to play a vital role in the organization. Though that is a complex job but is a significant one. Before attending any formal discussion he need to analyze the present and future condition of the organization compared with the market situation. He also needs to be willing to maintain a harmony in the workplace and the output of the employees which ensures success of his decisions. Autoglass administration has to actuate the business and sales strategies to ensure the best bazaar allotment and sales. The sales aggregation should be developed in a way that can accumulate up with the antagonism in the market. Effective advertisements in accordant areas ability advice a lot in this regard. The amount competencies should be acutely focused to allure the customers. Moreover, before finalizing any strategy the figure-head need to have real access to the reliable statistics and information. Outdated or fabricated information can cause ruin to any objective. So apart from the internal duties the management needs to keep eye on the outside world and concern about all the relevant news of the market. 19
4.2: Resource Evaluation for New Strategy: Allocation of sufficient resources is the most important key for the production and supportive activities. A company management needs to have a clear idea about the place from where he will produce or import necessary resources and how could he allocate those resources. Here management should identify the common place where maximum portion of the production are being produced and what are the services depends on that sector. For Autoclass, they give the most priority on human resources and they think that is the key resource and using that resource they serve the customer better than their competitors. That’s why they posses 159 customer advisors working 24/7 for serving their customers. Fleet service is one of their additional customer services which make them special. Autoglass is sanctioning more money for their further improvement in employee training and quality services. They already scored 92% customer satisfaction. To provide the best product they ensure highest safety and durability. Autoglass put much more allocation than other companies to posses the best raw materials for glass. As per the given case description, Autoglass is a successful company for maintaining the quality and allocating sufficient and good quality of raw materials. 20
4.3 Discuss targets and timescales for achievement for Autoglass to monitor a given strategy: Evaluation of the benchmark outcomes: Quarter The company ought to be point out with the methods and conclude the 1 practicability of the methods whether or not the methods would replicate within the expected outcome. They will take the feedback of the shoppers and conclude what else they're searching for within the screen repairing service. There ought to be weekly and monthly observance by the road managers of the divisions. Quarter During the amount Autoglass ought to review the customer’s feedback and 2 implement the required conceive to expand the business. The road managers ought to be answerable for aggregation the feedbacks and acting towards it. Quarter This is the quarter of gathering data and takes analysis note on the enforced 3 methods. The management ought to conclude the gap between the expected outcome and actual outcome. The GAP would possibly occur owing to lack of coordination or unskillfulness of the workers and line managers. Quarter Management ought to organize an educational program to fill within the gap. So 4 the workers are able to do the organization goal in desired manner. Quarter In this quarter the organization would possibly deliver the goods the required 5 results supported the strategy creating and therefore the implementation technique. If the management fails to attain the objectives through the methods, then they need to initiate actions supported data like coaching the workers or providing support to them. 21
Conclusion: All owners of houses with broken windows can stay in calm and have some relaxation because all their tension are being handled by Autoglass, the best glass making Company. For several years Autoglass is making high quality glasses and earning more and more trust from their customer. Surely they are providing the best products with best services (Schultz 2013). They have proved their potentiality by putting their competitors far behind them. Autoglass initiated the required and effective strategies to keep ahead in the race. Surely they are going more far ahead in the coming future. 22
Reference Armstrong, G., & Kotler, P., (2006). Marketing: An introduction (8thed.). New York: Prentice Hall. Autoglass Company. [ONLINE] Available at: http://www.autoglass.co.uk/Glass-repair-and- replacement.186.0.html. [Accessed 11 November, 2013]. Automotive Industry: Market Research Reports, Statistics and Analysis. 2013. Automotive Industry: Market Research Reports, Statistics and Analysis. [ONLINE] Available http://www.reportlinker.com/ci02294/Automotive.html. [Accessed 19 November, 2013]. Kotler, P., 2000. Marketing Management. 5th ed. New Delhi: Prentice hall of India. Schultz, H., (2006). Discover the Traits of Top Management [online]. S.N.[Accessed 30 November, 2013]. Wheelen& Hunger, T.L. &J.D., 2013.Strategic Management and Business Policy. 5thed. Delhi: Pearson. 23 at:
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