Executive Summary
The business plan consists of relevant sections that are useful in introducing new products or services in the market. Traffic Lights offers trips to various European countries, and now it is intended to introduce new trip to Asian countries. The new division is based on the vision and mission of the company that is to provide high-quality products and services to all types of customers. The proposed business model for Traffic Highlights is simple that it requires extending its product line by introducing a new division of the business. The preposition value statement of the company is clear that it is applied the customer-focused approach to enhance its brand recognition in the global market. It provides motivational training to agents, tourists guides, and marketing team to increase the volume of sales for the company. The key assumptions of this new division are listed below.
It will attract new customers towards the products and services of the company.
The diversified strategy is prepared to influence the choice of customers.
The existing customers will also move towards the product to avail the opportunity of visiting countries other than Europe.
The long-term growth can be achieved due to this division.
The tourists will prove to be beneficial in increasing the revenue of the company.
The risks involved in this division are.
Product: The product is new that involves risks of obtaining expected outcomes from it.
Brand Awareness: The extension of product in existing brand is risky as people may not show a similar response.
Pricing: Price of the product is low that may result in low profitability or even loss.
Market: Market is highly competitive as there are many substitutes for the product.
The change management issues are highlighted below.
Appointing specialized managers who are expertise in tourism business activities.
Providing training to staff so that they can provide efficient services to customers.
Addressing communication issues arise due to the differences in people living in various countries.
The legal and regulatory issues in providing product and service in another country.
The plan is effective in achieving potential benefits for the company in future. It is expected that training to staff and other employees working in a different environment will boost the sales by five percent in next two years. The change in the organizational culture and structure is expected to increase the sales of the company by 50 percent in next two to three years.
New Product or Service
Strategic Plan Part 1: New Product or Service
New Product
The travel company “Traffic Light” is the object of the current research. This company specializes on the trips to the European countries. At the same time, the Asian market grows rapidly and more people are more interested in travelling to India, China, Thailand, Sri-Lanka and other countries.
In this case, the senior management of the company “Traffic Light” has decided that it needs to open a new division in the company. It will offer tours to Asian countries. They can be ethnographicaltours or tours for health and recreation.
The proposed new product for the new company’s division is the tour to Sri-Lanka. One of the most interesting types of innovation is the proposal and development of the new tourism products. For example, it can be a unique health-improving tourism. In addition to this innovation company can assume the improving of the consumption types of well-known tourism product, as well as the services of restaurants and hotels and improving the methods of organization of marketing and management in tourism. There are many different resources, which contribute to the development of health tourism in the world (Koutoulas, 2004).
The interest among tourists to rest in Sri Lankaincreasingly grows. This island that is called Ceylon by the British is famous for not only the best tea plantations in the world. It also has a picturesque golden coast, beautiful bays and coves, national parks, which have lovely flora and fauna, historical architectural structures and a huge number of spa hotels that offer treatments through the traditional medicine “Ayurveda”. Thus, the island Sri-Lanka can be called as a gem of the Indian Ocean (Mowforth & Munt, 2003).
Customer Needs and the Company’s Advantages
The division addresses customer needs through theforming the complex product. The proposed tour can include regular diagnosis at the doctor, Ayurveda menu made for each individual, depending on the disease and yoga lessons. It should be noted that the proposed tour differs from others and it is more useful for potential tourists.
The new division of the travel company “Traffic Lights” has the following competitive advantages:
the competition in the chosen segment of the market is quite small;
compliance with service standards and the development of its ownpolicy control over the quality of customer service;
corporate identity of the company;
tiered pricing, discounts, use of other incentives, allowing evenly distribute the demand in time; introduction of the system of pre-orders for services.
It should be noted that tourism products characterize by four features that distinguish themfrom others: intangibility, inseparability of production and consumption, volatility and the inability to storage(Smith, 1994).
At the present stage, chosen travel company and its new division with all of its functions should be adapted to the needs of the market. It is not blind adjustment to the desires and needs of the customers. It means an active and purposeful influence on the customers. In addition, the new company’s division should also be responsible for the social and ecological environment.
Vision and Business Model
The success of commercial activity in the tourism market is determined, first of all, an attractive new tourist product. It should be noted that the vision, mission and the whole value of the new product are connected with the new company’s division. The vision is to satisfy all the needs of the customers. The mission is more specified. It is that the company must provide high quality products to customers and as a result to develop effectively and profitably.
The concept of the life cycle of products is based on the fact that each product, no matter how great consumer qualities it may possess, sooner or later, can be displaced by other more perfect product. The existence of needs is permanent. At the same time, means to satisfy customers’ needs can change (Holden, 2003).
Each product has its own specific life cycle in which it finds its customers. As with any product, tourism product passes through a series of successive stages of its development, which are characterized by fluctuations in sales and profit. In this case, the proposed business model must be directed to the extension of the tourism product life cycle.
Division’s Strategic Direction
Strategy of division must contribute the forming of the complex product and its further promotion on the market. The new division characterizes by the strategy of the diversified growth. The new product should be directed to the consumer of the basic product. At the same time, the new product should be concomitant one by its features to produced products. An important condition for the implementation of this strategy is the preliminary assessment of the company’s own expertise in the production of a new product. This is one of the most difficult development strategies, since its successful implementation depends on many factors:
the competence of staff (especially, managers);
seasonality of the market;
availability of the necessary amounts of money;
others.
Guiding Principles and Values for the Division
This division of the company is the customer-focused. Also, it has an innovative mission statement. Differentiation of the new product consists of its uniqueness and different additional services, which are offered in the package tour.
One more principle that relates to the social responsibility as well as ethics is that advices and recommendations to clients regarding alleged routes and types of service associated with these routes are very important. It can help make the right choice, if a customer plans a trip and is not familiar with the route or wish to visit certain places and do not know how he can use the mode of transport.
The next principle of the effective operation of the new company’s division is the developed marketing activity. The main tools of public relations in the promotion of tourist product are the following:
information for the press,
press – conferences,
study visits (trips),
participation in the trade fairs,
organization of events.
Travel company, “Traffic Lights” admits that its sales and profit largely depend on the manner in which it motivates the consumer, travel agents and sales agents of tourist services. Thus, a sales support is one of the guiding principles of the new company’s division.
Conclusion
In conclusion one can say that the process of forming new product and its introduction on the market requires serious preparation. The vision and mission must be accurately identified before offering a new product to the customers. At the same time, the new company’s division should understand that adaptation to the customers’ needs is not always effective decision. In this case, the company’s division can use the business model of extension of the product life cycle as well as changing the customers’ needs.
Strategic Plan Swot Part 2
Currently, SWOT-analysis is used widely in various fields of economics and management by determining company’s strong and weak points as well as risks and prospects, which it can face while operating in the market. Versatility allows using it at different levels and for different objects as a tool of management survey (management review). SWOT-analysis shows what scope and functions of the subject are in need of correction, improvement (since the parties are weak), and based on the study of possible changes in future trends in comparison with the past and the present. In addition, the SWOT-analysis allows determining which areas and features (strengths) can be more fully and effectively applied (Hollensen, 2014).
In a year, Oracle Corporation, one of the world’s leading software businesses and Microsoft’s main competitor, will celebrate its 40-year anniversary. Oracle is the first and historically one of the most advanced to date implementation of a client / server architecture. Openness (tolerance + scalability) has always been the basic idea of Oracle’s developers. The current situation of the company’s database market is certainly a direct result of the openness of the system. In September 2013, Oracle was able to make a breakthrough in the creation of databases. Company introduced Oracle Database 12c system that could handle requests to 100 times faster, compared to conventional techniques. This growth was achieved due to the fact that the data were processed directly into RAM, where they were unloaded previously from the hard disk (Oracle Corporation, 2015).
Today, the company occupies 16th position with $28B of market capitalization and over $37B of revenue among the most valuable brands in the world by Forbes opinion (Forbes, 2016). Oracle is the absolute market leader in database management systems. It is almost two times faster than such monstersas IBM and Microsoft. It owns about 45% of the market. In other areas (CRM-systems, ERP-systems, middleware, and so on) Oracle is not as successful, but still among the leaders (Oracle Corporation, 2015).
SWOT-analysis of Oracle Corporation is presented below.
As it was mentioned above, Oracle is known to be a market leader. By using the strategy of acquisitions, corporation increase its presence on different technological segments, including web-tracking, cloud-based solutions, mobile applications, digital marketing solutions, networking hardware, etc. Thus, the company offers its customers a wide range of technological innovations. The founder and leader of Oracle constantly challenged the market. Therein one of the main secrets of company’s success lies, even despite Larry Ellison’s stepping down of CEO’s position (Oracle Corporation, 2015).
The company may not attain the projected development or cost savings prospects of conducted rearrangements, or behave so during the estimated timeframe. Mentioned effects could reappear with regard to future purchases and other rearrangements and company’s proceeds and other consequences of functioning could be negatively impacted. Oracle outsources the design, engineering, assembly and supply of particular of its hardware goods to a diversity of organizations, numerous of which are situated outside the United States. Oracle’s sales to government customersare exposedit to business instability and dangers, including state budgeting phases and assumptions, early expiry, inspections, investigations, agreements and penalties (Oracle Corporation, 2015).
Technological market is very intensive as there are key major players, who form oligopolistic structure. A characteristic feature of the oligopolistic market is interdependence of firms, where any of the oligopolists is under significant influence of the behavior of other firms and should take into account this dependence. Competitive behavior of each seller has an impact on the behavior of all its competitors, causing a corresponding reaction of the latter (Hollensen, 2014).
Oracle operates in 145 countries all over the world, so its geographical presence is broadband customer base is large. Only Oracle offers the most comprehensive portfolio of industry solutions for virtualization of different systems – from the desktop to the data center –with virtualization capabilities and management of all components of hardware and software, from applications to disk (Oracle Corporation, 2015). In general, the United States is the country of very attractive business environment, but complex tax system. With the highest trade deficit in the world, the United States remains technologically advanced state, which GDP and population growth are among the highest in the world (Trading economics, 2016). Environmental regulations, namelythe Directive on Restriction of Hazardous Substances (RoHS) and the Waste Electrical and Electronic Equipment Directive (WEEE Directive), both formulated by the European Union, and China’s legislation on Management Methods for Controlling Pollution Caused by Electronic Information Products, can affect the growth of Oracle’sexpenseson doing business globally and affectcompany’s hardware systems proceeds from the European Union, China and other states with comparable ecological laws as the corporation attempts to adhere to and implement mentioned requirements. Sustained slow speed of economic recovery in European and the USA’s parts as well as Asia and South America can negatively impact company’s operation (Oracle Corporation, 2015).
Thus, the company has more strengths than weaknesses as well as opportunities prevail over risks, operating on the technological market. Its supply chain is multi-layer, worldwide and highly difficult. As a supplier of hardware systems end solutions, Oracle is some stages removed from the excavating and manufacturing or purifying of any fight minerals in its supply chain. Therefore, company’s capability to define with inevitability the foundation and chain of charge of conflict minerals is restricted. In case Oracle cannot present its solutions as conflict-free, its interactions with consumers and providers could suffer. The corporation can also face growing expenses in adhering to conflict minerals release concerns (Oracle Corporation, 2015).
Balanced Scorecard
Shareholder Value and Financial Perspective
The financial and shareholder value objectives are as follows:
The metric to measure the strategic objective and the target are the total revenue and 20% for three years in that order.
The metric and the targets are the increase in market share and 20% for three years respectively.
The metric and targets are profitability and 30% in the next three years respectively.
The target and the metric are 20% in the next four years and increase in competitiveness.
Customer Value Perspective
The customer value objectives are as follows:
The target is 20% in the next three years and metric is the number of customers the company has retained.
The metric is the number of customers satisfied with the products and services offered and the target 60% in the next two years.
The metrics is increasing customer value and the target 50% within two years.
Process and Internal Operations Perspectives
Ensure 100% customization of products and services provided to customers within two years.
The metric is customization of services and products and the target is 100% within two years.
Increasing the delivery time for products and services by 20% within one year.
The metric is delivery time and the target is 20% in one year.
Training the staff to increase their knowledge and skills by 50% within two years.
The metric is an increase in knowledge and the acquisition of skills and the target is 50% within two years.
Learning and Growth (Employee) Perspective
Increase employee satisfaction with their jobs by 15% within the next two years by providing training and development programs and involving them in the decision-making process.
The metric is the number of employees satisfied with the job and the target is 15% within two years.
Reduce employee turnover by 50% in two years by ensuring they are satisfied with their jobs and appreciating their contribution to the attainment of organizational goals.
The metric is the turnover rate and the target is 50% in two years.
100% modification of the organizational culture and climate within the next two years by developing a strong culture that values customers.
The metric is a positive organizational culture and climate and the target is a 100 % change within two years.
Traffic Lights SWOT Analysis and Alternative Solutions
Traffic Light weakness includes focusing on the European countries only. There are many opportunities available to the Traffic Light. One of the opportunities is the growth of the Asian markets including China, India, Thailand, and Sri-Lanka. The Company has an opportunity to expand to Sri-Lanka by launching a new product for its new division. Additionally, the firm should provide health tourism to consumers. The strength of the company is the distinct product, including the diagnosis by the physician, Ayurveda menu that is customized for every customer based on the disease and yoga lessons. The suggested tour differs from other tours and it is critical to tourists. The firm has a competitive advantage, including the less stiff competition in the selected segment, the opportunity to develop its own policy to govern the quality of services offered and corporate identity. Another advantage is the tiered pricing, use of discounts and incentives and the introduction of the pre-orders for service system. The alternative solutions are expanding to Sri Lanka to increase its market share and customer base instead of relying on the European market. Also, the company should increase its competitiveness by offering unique offerings to customers to attract and retain them.
Risks and Mitigation Plan
There are risks associated with expanding into a new market and the company should take them into account. The risks include product, brand awareness, pricing and market (Khatta, 2008). The direct and indirect costs involved in the pricing of the product and the impact of taxes, insurance, and transportation should be considered when pricing the new product (Khatta, 2008). Most companies assume that their brands are known in other markets. However, this assumption is not correct, especially when the organization is targeting emerging markets. Brand strength is an essential marketing factor and it should be accurately assessed (Khatta, 2008). Market risks, develop when the organization tries to develop markets and differentiate utilizing consumer groups it has not served. The market risk occurs when the target market fails to accept the new product. In this case, Traffic Light will mitigate the risk by marketing its new product to create brand awareness and ensure consumers accept it. The product risks happen when the new product introduced fails to function as expected and have the desired benefits (Campbell, Edgar & Stonehouse, 2011).
Communication Plan
A communication plan is critical to communicating the objectives and goals of the company to stakeholders, including customers, employees, shareholders among others (Holtz, 2004). In this case, the communication plan is aimed at communicating Traffic Light’s strategic objectives identified in the balanced scorecard to create awareness and ensure all stakeholders are involved in the implementation of the scorecard. The target audiences for the plan are the stakeholders, including employees, customers, staff, suppliers, and shareholders. The stakeholders have different interests and need the information on the strategic objectives to determine how the company affects them and establish whether it meets their needs. A range of communication channels will be used to communicate with the target audience. The communication channels include print media and electronic media. Electronic media, including television, e-mail, and the company’s websites will be used to share the objectives as they reach a large number of the audience. Television advertisements highlighting Traffic Light’s strategic objectives are essential to communicating to stakeholders outside and inside the organization. The print media, including newspaper, are key to sharing the strategic objectives to shareholders. Lastly, meetings will be held to inform the employee and the senior management about the strategic objectives developed to create awareness and ensure they work towards achieving the objectives.
How the Balanced Scorecard will affect Stakeholders
The balanced scorecard will affect internal and external stakeholders. The scorecard will affect employees in the organization as they are required to work towards attaining the strategic objectives. They should focus on providing quality and timely tour products and services to increase customer satisfaction. Thus, employee performance will be measured based on the attainment of the objectives (Savkin, 2011). Customers and shareholders will also be affected as their needs including getting quality tour products and services and making wealth respectively will be met. The failure to achieve the objectives will hinder the fulfillment of the needs of the stakeholders. Hence, the risk will be mitigated by monitoring employee performance and marketing the company, product, and services to create awareness and brand loyalty. The contingency plan includes modifying the objectives if not achieved and the implementation process (Savkin, 2011).
The implementation of the balanced scorecard raises ethical questions if the company’s actions are detrimental to stakeholders. For instance, the implementation of the balanced scorecard can lead to losses if the company does not make profits and increase its market share and affect shareholders. Also, providing substandard products and services to consumers will affect them and lead to the loss of customer loyalty and customer base (Savkin, 2011).
Career Connection: Final part Strategic Plan
The strategic plan for Traffic Lights requires three years to complete all its tasks for moving towards the new division of the business. It is a long-term process that includes different operational activities to be fulfilled in an effective manner. It can be explained by the help of chart provided below.
Marketing and IT Tactics
The marketing and IT strategy are mandatory for a new product as customers should be aware of the new products. It requires diversified marketing strategy to show that the product or service is available to all. Traffic Lights deals with emerging technology so it can use email and social media marketing to attract target audience for the new product. The promotions by print and electronic media are also helpful in engaging a large number of customers. Traffic light should create an effective message that will prove to be beneficial in attracting targeted customers who are willing to avail the new opportunity (Dowhan, 2013).
Methods for Monitoring and Control
Monitoring and control of the strategic plan can help in identifying if all strategies are working in the same direction. The tracking system can determine that all functions or tasks are operating, or there is a lack of it. Also, it is helpful in identifying that each task or subtask is providing expected outcomes or not. In the case of determination of weak area, the change strategy will be prepared to redesign the direction of business function. It should follow the marketing strategy to avoid any difficulties in obtaining expected goals or objectives. Premise control is also beneficial in determining whether it is valid for the current business conditions of the organization or not. Special Alert control is help in the evaluation of strategic plan to identify changes required immediate action of the management. Also, implementation control is effective in the successful completion of the overall project or task (Pride, Hughes, & Kapoor, 2009).
Options for Evaluating Business Plan
Traffic Highlights requires the evaluation of a business plan for launching a new product that includes evaluation of current operational activities and worth of business in the market. It will help in making plans for expanding the business in future. It should not rely on assets that are expected to provide benefits in future. The company can increase its sales by focusing on sales strategy and competencies and increase the number of customers to obtain profits. The business plan may require changes during implementation so Traffic Highlights should incorporate those changes to boost its sales. All the essential of business plan should be assessed separately to identify the area that is not providing expected results to ensure long-term growth of business (Eckhart, 2016).
Corporate Social Responsibility
It is the implied corporate responsibility of the tourism providers to ensure triple bottom line implementation that comprises of people, planet, and profit. The framework is essential for creating greater business value and ensures sustainability of business in the long run. The implementation of this framework is ensured by analyzing that all safety measures are taken for customers, drivers, guides, and others providing services to customers. The high-quality vehicles and regular checks on the parts of vehicles will ensure the high protection of the environment (Woonsocket, 2015). Also, the company will not compromise or ignore its profitability that will be ensured by preparing effective sales and marketing strategies.
Ethical and Legal Issues
Ethical and legal issues should be addressed properly to ensure growth in any organization. Traffic Highlights is planning for providing a product “tourism to Asian countries” that involves different countries that have a variety of laws, policies, and regulations. It is mandatory for the organization to acknowledge those laws to ensure a smooth move towards success. However, it is also the ethical responsibility of Traffic Highlights to disclose all facts while offering products to different types of customers. It should include information regarding costs and routes (Werther & Chandler, 2010).
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