As a manager, Jimi Henrich must be involved with what managers are expected to do. Specifically, he should be involved in all the four roles of a manager including planning, organising, leading, and controlling (Dyck & Neubert, 2010). In the planning aspect, Henrich needs to identify the goals and strategies of his firm as well as resources vital to the achievement of goals and implementation of strategies. One of the key task for him is to conduct an environmental scan of his business. One of the tools he will employ is SWOT analysis. SWOT stands for Strengths, Weakness, Opportunities, and Threats (2011). SWOT analysis will help him to know the strengths, weaknesses, opportunities, and threats which influence his business performance.
SWOT Analysis
Strengths
Jimi’s business as the capability to produce a wide range of guitars. The guitars produced is priced as low as $6,500 and as high as $35,000. The ability to produce various types of guitars with varying complexity and price suggest that the business can address the concerns of a wide range of clientele.
Jimi’s business has gained a tremendous popularity due to its good name in the industry. Therefore, he does not need to advertise his products because people get to know about it by word of mouth. As such, he can easily cut his advertising costs.
Jimi also has a skilled workforce who can help him produce the guitars to the satisfaction of the customers.
There is a high growth rate of business
There is an experience in the custom-made guitar business
The business fetches a lot of profits and revenue
There are a strong sales and distribution networks
Weakness
Jimi does not have specialised employees who are highly trained in computer applications. The absence of this kind of workers implies he cannot produce guitars which require the use of automated tools.
The business does not have computer hardware and printers used to produce guitars
The business takes a long lead time to deliver custom made guitar when using computer technology. This delay is likely to dissatisfy some customers.
The company has little financial resources needed to finance capital-intensive projects such as expensive custom-made guitars.
Business units are very small
Opportunities
Although the clientele base is relatively small, there are many opportunities for business expansion and growth.
There is accessibility to the bigger global market. The firm can start exporting its products to various countries in the world.
The firm has a greater opportunity to secure funding from other sources including customers who want to have their guitars designed and made to meet certain criteria.
There is an opportunity to earn more revenue from guitars which are custom-made to the satisfaction of certain clients because some clients are willing to leave him rights to produce and sell the designs.
There is a possibility of increasing earnings
There are growing avenues to produce new products and offer better services
Threats
As the business grows, there is increasing likelihood of competition from other manufacturers
There is a threat from technological advancements. Some customers might demand production of guitars from non-traditional based methods such as processes that require the use of computers and special materials.
Competition from other manufacturers who manufacture ordinary guitars using mass production
Availability of workers who are skilled in traditional crafts may reduce with time.
Increasing costs of operation
The cost of raw materials might rise with time
Setting Goals and Objectives
Long term
Double the profits and revenue in the next five years
Open strategic distribution units in 10 countries in the world in the next five years.
Obtain raw materials and specialised parts from cheaper sources
Medium term
Increase the business market share by 20% in the next two years.
Short term
Increase budget going to advertisement every three months for one year
Contract a consultant in advertising to not only analyse but also capitalise on the client’s buying trends
Learn primary competition in the next six months and do some brainstorming on what the firm offers which others do not.
Contingency
Hire computer expert on contract
Take some workers for a brief course on automation skills
Borrow a loan to acquire some machines and equipment such as computers and printers
References
Analoui, F. & Karami, A. (2003). Strategic Management in Small and Medium Enterprises. London: Thomson
Daft, R.L. & Marcic, D. (2011).Understanding Management. Mason, OH: South-Western Cengage Learning.
Dyck, B. & Neubert, M. (2010). Management: Current Practices and New Directions. New York, NY: Houghton Mifflin Harcourt Publishing Company
