Introduction
Innobus is an organization that operates in the industry of manufacturing commuter coaches. The product and quality is good. Yet the financial progress of this firm has been very weak. It is very close to bankruptcy and this creates a huge challenge that the firm needs to overcome for the purpose of its survival. Innobus needs to focus on multiple factors and ensure that it is able to bring a turnabout to reach success.
Moreover since there are several changes in the transition policy of the state, it results in temporary decline in demand for the product. Marketing and management as well as effective usage of resources become extremely important or critical factors for the success of Innobus as it operates in a highly competitive environment. Internal analysis can help the firm ensure higher levels of accuracy in selection of appropriate strategies.
Internal analysis
Internal analysis refers to the process of analyzing internal factors and strategies of the firm as well as factors that relate particularly to a single firm, which in this case is Innobus. It focuses on critical success factors and helps analyze the strengths and weaknesses along with identification of opportunities and threats. In this way internal analysis can prove to be extremely useful for a firm like Innobus.
The dynamics of production and human resources management are very different from that of marketing and sales and require tremendous leadership skills, motivational ability and understanding of the production processes. In the given case we can notice that there is lack of organization and synchrony in case of the production processes which is resulting in severe managerial problems. There is no standardization of processes and also there exist several human resource relevant problems. Internal analysis can help ensure that these problems are taken care of and also understood in greater detail.
Crux of interviews with managers with relation to marketing and organizing and general management
The major crux of interviews with managers results in information about competitors and helps understand that development of marketing strategies can help create better levels of branding for the firm, all over the world. Expansion becomes crucial. It is extremely important for a firm to do a situational analysis when embarking on a new or modified marketing program in order to ensure that they very well understand the business environment as well as the forces that are influencing the business. This helps in the process of formulating appropriate marketing strategies which are extremely important for a marketing program. Moreover it also gives an indication that the main factor for bankruptcy is that it limits the business space to government and depending on a single, small and not very substantially sustainable
Marketing
Product: Marketing is an essential element of all businesses and helps a firm like Innobus create unique selling propositions which can help the firm create an offering that sustains and hits the markets. In case of marketing of Innobus, the product mainly consists of the commuting buses and this is mainly sold to the government.
Concentration of sales: Having a single large consumer can be risky as in the present case a change in the government policy and reduction in the consumption of these vehicles, mainly used for public transport has led to a major impact on the profitability and revenue of the firm. It becomes essential to ensure that there are multiple consumers and so Innobus should try and focus on selling to the private sector as well (Buttle.F, , 1994).
Market share: It is essential that Innobus ensures an increase in the market share by creating effective ways of promotion and striking deals with private firms. In case of there not being appropriate supply chain also costs have been increasing and so the channels of distribution are to be essentially reviewed and revived so that Innobus can ensure cost control strategies.
Information gathering and knowledge of customer needs: The firm is currently not involved in market research. It is important because in this way promotion, supply chain and target market strategies are three main elements that Innobus needs to consider while creating changes in the firm and ensuring that the firm is able to expand its operations (Dessler, Cole Goodman & Sutherland, 1991).
Product service mix: Since the firm is involved only in a single product this factor is not quite applicable. Yet if it does try and diversify then may be it can avoid bankruptcy.
Channels of distribution: The channels of distribution are not strong enough to cater to the global markets and hence need to be further strengthened.
Quality, reputation and goodwill: The goodwill of the firm is quite strong and this can help them banking on their quality to promote the product to other market segments as well.
Pricing strategy: The pricing strategy is focused on ensuring higher levels of competitiveness and this is a positive factor.
Procedures for feedback and new product development: This factor has not been well developed or formally organized in the Innobus.
After sale service: The after sale service of Innobus when compared to competitors is quite weak and so is not a positive factor.
Internal organization and operations
Goodwill: The internal organization and operations or processes of a firm has grave impact on the success of the firm. The first most important factor in case of internal organization and operations is based on organizational structure. Apart from this the firm's image and goodwill, it's communication policies and work culture are important elements that impact the internal organization and operations.
Organization structure: The organizational structure of the firm is not very strong. It results in communication gaps. it is crucial that the organizational structure be upgraded to a flexible one where in communication occurs at a rapid and open manner along with a knowledge management system. A matrix organization allows for a much more blended environment (e.g - vertical administrative functions with horizontal areas of expertise) and encourages innovation, better information flow, and rapid action. It is beneficial to an online company as multiple functions can be taken care of.
Communication: Moreover the usage of work breakdown structure (WBS) can also help in effective improvement of communication and work culture in the organization since it is presently not very strong. The Work structure Breakdown (WSB) plays an extremely important role in helping to develop the risk matrix (Pearce, J. & Robinson, R, 1995).
Overall organization control system: Firm's record for objectives: It helps form a suitable way of analyzing risk through the analysis of each of the activities of the project and also helps understand the critical points of the project, thus helping form a basis to analyze risk at each stage of the project and then calculate the overall risk involved in the project.
In this way the Work structure Breakdown (WSB) helps a project manager to understand risk through breaking down of the project into several risk elements and then forming the risk matrix. The matrix structure in research and development of a product is extremely essential and also advantageous. This change can help Innobus improve its organizational structure and internal operations to a substantially higher level (Pearce, J. & Robinson, R, 1995).
General management and resources
Top management skills : Top management skills and resources as well as strategic planning and inter-organizational synergy are essential elements in a business which helps ensure effective formation of competencies in the firm. it is extremely essential to ensure that these factors are strong so that it is possible to ensure synergies in the firm (Saeed Samiee and Kendall Roth., 1992).
Systematic procedures in decision making: The usage of knowledge management systems as well as effective technology for communication can help Innobus to a great extent. A value proposition is nothing but a promise to the customer that he will be provided value out of the good or service that he is purchasing and that it will help him achieve customer satisfaction and this can be improved only when the management of the firm is strong enough.
Organizational climate and culture: The present day firms have access to business intelligence which helps them use information systems effectively for the purpose of marketing their products appropriately and also reaching out to customers in a better manner by collecting their information and data on their likes and preferences (Johnson et al, 1998).
Strategic planning system and intra-organizational strategy: This can help Innobus to achieve better levels of market information and share it as well as make it the basis of information analysis, strategy formation and decision making in Innobus. Competition, Strategic innovation and efficiency in operations, especially manufacturing are some of the other issues that the firm needs to consider while ensuring that there be appropriate usage of strategies that can help in improving each of these elements.
The four categories of institutional buyers on which Innobus needs to focus include the following:
a) industrial buyers/organization: These are production houses and buy raw material
b) institutional buyers/organization: These may be multi national organizations or service firms and may buy equipment
c) intermediate buyers/organization: They buy to sell to other organizations
d) government and public-sector organization: This include the government and public sector firms Strengths and weaknesses with relation to marketing and organizing and general management
SWOT Analysis
Strengths
- Community oriented
- Adaptable for other sectors
- Catering to demand when needed
- Hours of operation are long with early opening and late night service thus creating a strong brand
- Excellent staff that is competent and friendly
- The required ambience and atmosphere is available in all parts of the organization
- There is effective promotion
- Long standing goodwill
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Weaknesses
- Weak organizational structure
- Dependent on the local economy and layoffs
- Marketing and cost of advertising is high
- Providing a large range of variations and products is expensive
- Maintenance of costs and decorum
- Subject to economy
- Weak communication
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The above analysis shows that there is a lot of scope for further improvement and strengthening of the positive aspects of Innobus. The basic factors that need to be improved upon include procurement and costing as well as staffing and effective management. These factors can help ensure that the firm is able to operate at an economical scale and also expand due to building up of internal competencies like the supply chain and providing catering services. These elements can help have a competitive edge over its competitors and also create customer loyalty .Ranking with relation to marketing and organizing and general management
The following is the summarization and ranking of several of the internal factors that have significant impact on the operations and market position of Innobus base don the above analysis:
|
Significance
|
Internal factors
|
Opportunity
|
Neutral
|
Threat
|
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
|
Marketing |
|
Product |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Concentration of sales |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Market share |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Information gathering and knowledge of customer needs |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Product service mix |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Channels of distribution |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Quality and goodwill |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Pricing strategy |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Feedback and new product development |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
After sale service |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
|
Management and organization |
|
Goodwill |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Organization structure |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Communication |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Overall organization control system |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Top management skills |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Systematic procedures in decision making |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Organizational climate and culture |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
Strategic planning system and intra-organizational strategy |
1
|
2
|
3
|
0
|
-1
|
-2
|
-3
|
References
- Pearce, J. & Robinson, R. (1995).
Strategic management: Formulation, implementation and Control
(9thEdition). New York: The McGraw-Hill Companies.
- Buttle.F, (1994),
Relationship Marketing – Theory and practice,
UK, SAGE
- Dessler, Cole Goodman & Sutherland (1991), Management of Human Resources, Sutherland- Second Canadian edition
- Saeed Samiee and Kendall Roth. (1992). The Influence of Global Marketing Standardization on Performance, The Journal of Marketing Vol. 56, No. 2 (Apr., 1992), pp. 1-17
- Johnson et al, 1998, Exploring Corporate Strategy, USA, Pearson Education