Strategic Plan Environmental Analysis Internal Environment Strengths · BCG Design Studio has been operating for 20 years · Wide range of products · Sells exclusive art pieces · Established customer...

Strategic Plan Environmental Analysis Internal Environment

Strengths

· BCG Design Studio has been operating for 20 years

· Wide range of products

· Sells exclusive art pieces

· Established customer base

· Responsive to the requirements of their clients

· Unique and contemporary products

· Growing reputation

· Niche market

· Outstanding business growth over last 5 years

· Increased sales by 233% in last 5 years

· Exceeding targeted sales growth

· International demand for product

· Ceramic designers and gallery director communicate regularly

· High quality product

· Sales to account customers are growing steadily

· Products are made to the highest technical and artistic standards

· Existing IT infrastructure

Weakness

· Cost of selling product (manual processes)

· Ordering of products must be done in person, by phone/fax, or by email

· Ordering process time consuming

· Return on investment has decreased due to the high costs of running the gallery and

maintaining our international marketing campaign

· The main source of revenue continues to be from gallery sales (in person)

· Interstate and overseas clients find the current arrangements for purchasing

cumbersome

· No IT or technical staff employed by BCG

· Increased number of employees have increased fixed costs of the business

· The showroom has increased fixed costs dramatically in the last 3 years

· Negative return on investment in the last 3 years

· Decline in mark-up on product in the last 5 years

· Cost of goods sold has increased over last 5 years

· Showroom not big enough to display all products

· Production of un-saleable products

· Inability to capture sales information about popular products

· Double handling of products made by remote workers

· Any advertising brochures become quickly out of date due to uniqueness of each

product

· Orders from international customers entails time zone differences

· Inability of international customers to order by phone (time zone differences)

· Only personal customers can view products adequately

· Manual order forms (costs of printing)

· Time consuming to fill in order forms for phone/fax orders

· Staff can make errors transcribing information onto forms (5%errors)

· Redundant information due to multiple forms

External Environment

Opportunities

· Business expansion

· Expand into national market

· Further expansion into the international market

· Customer requests to provide online ordering facilities

· Create communication and product website

o Create website to market products (brochure site)

§ Decrease marketing costs

§ Increase profile

o Create website to sell products (e-commerce site)

§ Increase customer base

§ Increase business reach

· Establish a strong international reputation in the ‘art market’

· Move to smaller showroom to reduce fixed costs

· Gather and incorporate more feedback from customers

Threats

· Competition

· Competitors continue to make inroads into the world wide web

· Competitors have a pricing advantage because of their website (reduced marketing and

sales costs)

· Fear of being ‘left behind’ competitors if website is not implemented

· High advertising costs

· High value of Australian dollar is a constraint to exporting into international markets

o Products less affordable to overseas customers

· Growing bargaining power of account customers (25% discount fair?)

Critical Issues and Strategic Objectives

Critical Issue 1: Gallery costs

Strategic Analysis:

· Return on investment has decreased due to the high costs of running the gallery and maintaining our international marketing campaign

· The main source of revenue continues to be from gallery sales (in person)

· Cost of goods sold has increased over last 5 years

· The showroom has increased fixed costs dramatically in the last 3 years

Strategic Objective:

· Explore alternatives to selling in gallery sales

Critical Issue 2: Manual processes

Strategic Analysis:

· Manual order forms

· Cost of selling product (manual processes)

· Ordering processes time consuming

· Staff can make errors transcribing information onto forms (5%mistakes)

· Redundant information due to multiple forms

Strategic Objective:

· Automate processes for employees

Critical Issue 3: Double handling of Products

Strategic Analysis:

· Double handling of products made by remote workers

Strategic Objective:

· Develop direct shipping processes from remote workers to client

All the above could come under one heading “production costs” with strategic objective: automate production processes where possible and improve efficiency in handling goods

Critical Issue 4: Pressure on profit

Strategic Analysis

· Increased number of employees have increased fixed costs of the business

· The showroom has increased fixed costs dramatically in the last 3 years

· Negative return on investment in the last 3 years

· Decline in markup on product in the last 5 years

· Manual order forms (costs of printing)

· High advertising costs

· Exchange rate

Strategic objective:

· Reduce fixed costs

Critical Issue 5: Ordering process for customers

· Ordering of products must be done in person, by phone/fax, or by email

· Ordering process time consuming

· Interstate and overseas clients find the current arrangements for purchasing cumbersome

· Orders from international customers entails time zone differences

· Inability of international customers to order by phone (time zone differences)

· Time consuming to fill in order forms for phone/fax orders

Strategic Objective

· Automate ordering process for customers

Critical Issue 6: Lack of IT support

Strategic Analysis

· No IT or technical staff employed by BCG Design

Strategic Objective

· Hire IT staff

Critical Issue 7: Lack of showroom space

Strategic Analysis

· Showroom not big enough to display all products

Strategic Objective:

· Explore alternatives to gallery display

Critical Issue 8: Inadequate sales information

· Production of un-saleable products

· Inability to capture sales information about popular products

Strategic Objective:

Improve feedback mechanism from customers

Critical Issue 9: Advertising processes cumbersome

Strategic Analysis

· Any advertising brochures become quickly out of date due to uniqueness of each product

Strategic Objective:

· Find alternative methods of advertising

Critical Issues 10: Competition

Strategic Analysis

· Competition

· Competitors continue to make inroads into the world wide web

· Competitors have a pricing advantage because of their website (reduced marketing and sales costs)

· Fear of being ‘left behind’ competitors if website is not implemented

· Growing bargaining power of account customers (25% discount fair?)

Strategic Objective:

· Explore opportunities to improve competitiveness

· Review the current IT system described in the current BCG Design IT infrastructure inventory

You are required to develop recommendation for which option to adopt to meet BCG design business needs. You should;

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Write Gap analysis finding based on Gap analysis and your list of solution options. Use recommendation template.

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Summaries your recommendation

Recommendation (Template)

Purpose

The purposed of this document is to develop recommendations based on your gap analysis report and list of solution option.
Fill in the template below using the guidelines in red/italics. Delete these guidelines when you finished.

Implication

One table required for each option from solution options

I

II

III

IV

Recommendation;
Which option from the table above is best to implement? Why has this option been chosen? What problems are associated with the other option?