Business
Ans1.The sunflower company was started with the initial capital of $30,000. In early 1990’s many opportunities were available with the companies like it was easy to get registered, demand for new products was high and competition was low. But the biggest challenge company had been to decide which product to focus. Initially company relied on hit or miss approach and used to sell metal products, sandwiches and snacks during visit of Pope John Paul in 19993. In 1994, when company got its first loan for 6months, the company shifted its product line tremendously towards tire repair and store display system. Then with the increase in competition and demand of new products, sunflower expanded in the new market of transportation. Poland vendors became sunflower’s initial vendors and they learnt a lot about store display system from its vendors. Store display system again expanded their product line to – food and non-food stores. Diversified product line led to tremendous growth of sunflower company and this strategy was successful because there was high demand in Lithuania and competition was low that gave an opportunity to the company to try different approaches and cater to niche market. Being a newly independent country having a huge industrial base (chemicals, metals, processing) , offered huge opportunities.
However, this cannot be held true for every company. Frequent change in product lines in established market poses a serious question remains that will this strategy be successful? Established and successful products undergoing a modification may lead to customer dissatisfaction and may prove a fortune to company. Change the product just to satisfy the whims of ambitious executive or to diversify the company may not only prove costly but can also leads to an unsuccessful venture and may lead to decline in market share.
Ans2.1st May, 2004 Lithuania became member of European Union and country became part of a market with 350million inhabitants and the company’s revenue also increased by 20% due to foreign interest in furniture market. But the major challenge sunflower had to face was competing with the low cost of Chinese furniture. Chinese were specialized in high volume orders and in Lithuania labor cost was increasing. The director of the company took a wise decision and sold its furniture business and even transferred the employees and the building was rented to purchasing department. Selling of furniture business turned out to be profitable and tire repairs business grew rapidly. In 2007, sunflower entered into its first international expansion in Latvian market. Latvia being an under developed company offered many opportunities and being a part of EU itself directly reported to manager in Vilnius. By the end of 2008, company is expected to expand in Poland and Estonia.
Ans3. The major challenges faced by sunflower company are:
- Employee Retention- Employee retention has become challenging after EU agreement as people now have got varied options and can chose to work in a company that offers them better propositions. Director of the company has come up with unique plan under which employees will be vested with power and authority every five years. This will give hardworking and diligent employees an opportunity to grow and learn new concepts. Company should also make a congenial atmosphere in the organization and employee should be feeling safe and secure about his job, income and position in the company.
- Applying Information Technology- Effective and modern methods should be applied not only in the case of monitoring employees but also in different departments of the company. Improving transfer of communication through emails, website for maintaining flow of information from company to the customers. Technology also helps to design products like houses, furniture, design layout for operations etc.
- Splitting up the company- Splitting up the company in terms of sales network, equipment specialists, repair technicians, and real estate. Sunflower should sell the share of the company which needs handling of the expert or the unit that is secondary to its main business.
- Managing country and regional economic factors- Economic meltdown, recession, inflation or other economic factors hampers the growth of the company. This can be dealt only if the company has a strong employee base and low turnover rate. Along with manufacturing good quality products, low labor cost, it’s essential for company to retain employees with high experience and skill.
References
Gaughan, R. (n.d.). How to Use Technology to Work More Effectively. . Retrieved , from http://smallbusiness.chron.com/use-technology-work-effectively-56864.html
Watkis, N. (2013, October 13). ) Why do companies change successful products?. . Retrieved May 18, 2014, from http://customerthink.com/new_improved_but_not_as_good_why_do_companies_change_successful_products/
Heathfield, S. (n.d.). Top 10 Ways to Retain Your Great Employees. . Retrieved May 18, 2014, from http://humanresources.about.com/od/retention/a/more_retention.htm
