Abstract
This report is a case study for Office Break Ltd which is a supplier of ingredients for commercial establishments and factories. A SWOT Analysis for the firm was carried out where the strengths, weaknesses, threats, and opportunities were analyzed. A portfolio analysis has been conducted for based on perceived available opportunities from SWOT Analysis. The portfolio analysis has been carried out using the B.C.G and G.E. models. The SBUs have been carefully reviewed using the required guidelines and the best marketing strategy has been identified. A new marketing plan has also been developed. Lastly, a presentation for marketing has been prepared with all contents included.
It is defined as a method of analyzing a firm, its resources, and its environments. It is an acronym for major components namely: internal strengths; internal weaknesses; opportunities; and threats from the outside environment (Hsu & Powers, 2002).
1. Internal strengths
2. Internal weaknesses
3. Office Break Ltd has several internal weaknesses. The firm’s office accommodation and warehouse space is inadequate for further expansion. The firm’s level of borrowing has also reached a record high. The firm’s directors are not decisive when considering diversification strategies for the firm. Lastly, the firm’s purchasing officer is not receiving as much discounts as its competitors.
4. Opportunities
One of the Office Break Ltd large competitor’s is currently facing serious industrial relations problems which has forces it to temporarily close major operations. A small competitor is for sale at very affordable price. The other opportunity is an offer to supply products by a major customer to all its major capital city offices in Sydney. Lastly, the firms biscuit supplier has released an assortment of micro-wave cakes and pastries. Office Break Ltd has secured exclusive distribution rights.
5. Threats
One of the major threats is the poaching of her major key customers by rival firms. In addition, major customers are now adopting ‘healthy lifestyle’ initiatives which have affected negatively, the sales of sweet biscuits. Another threat is a large overseas firm offering 50 percent discount to customers on tea, coffee, and biscuit items to gain access in Australian market. The level of world’s coffee production has halved due a new agricultural disease. Lastly, the government has warned of an economic downswing which is expected to affect employment.
Ranking of opportunities
An opportunity has to be durable, attractive, and timely (Barrow, 2011, n.p.). It has to create value for the buyer or the user of that product or service. The opportunities are ranked as follows:
1) Supply of products by major customer to all cities. It will enable it expand operations considering the declining performance of its competitor.
2) Competitor industrial relation problems- the firm can take advantage by expanding its operations further.
3) Purchase of a small competitor.
4) Acquisition of exclusive distribution rights. - It may not have a major impact if healthy eating lifestyles initiatives gain momentum.
Portfolio Analysis
(a) Boston Consulting Group (B.C.G.) model is a growth-share matrix that consists of four cells namely: cash cows; stars; question marks; and dogs (Male & Langford, 2008). Cash cows have low growth in high market shares. Stars have high growth in highly competitive markets and are stronger than their rivals. Question marks have poor market share but their markets has high growth. Lastly, dogs have low market share in poor growth markets. Illustration of B.C.G. Matrix in Office Break Ltd.
Dispensing Machines Tea and Coffee
(b). Suggestions:
For B.C.G. Model- The firm should invest more in Coffee Instant and Ground since it has higher market share but low market growth. Investments in Utensils should be liquidated. Investments on dispensing Machines, tea and coffee should be cut back. Lastly, Office Break should consider divesting on Paper Products. Cutting back investment levels on tea Leaves and bags will affect negatively profitability since it commands a huge market size in dollars.
G.E. Model: Instant and ground coffee, and paper products make this market attractive. With the expectation of poor performance of global market for coffee, the better option to go by is tea leaves and tea bags. This is because, tea leaves and tea bags have a competitive advantage and Office Break Ltd is expecting to increase its competitiveness.
Developing a Marketing Plan
I. Expand sales for tea leaves and tea bags through extensive advertising and acquisition of small competitor.
II. The small competitor comes at a very low price which Office Break Ltd can buy out. The product line commands higher market size of $22,000 in spite of lower market growth rate of 2 percent. The reason is with the expected decline in the performance of coffee sand biscuits, tea leaves and tea bags will pick up and cover the larger part of the market.
III. Strategies: (i). Increase the sales for tea leaves and tea bags.
(ii). Expand the market share and key products competitiveness
IV. Tactics: (i). Use the small competitor as distribution line for expanding tea leaves and tea bags.
(ii). Increase advertising expenditure and sales force motivation.
(iii). Investing heavily on new offer by major client to procure new market and
regain the lost share.
Objectives
The objectives of Office Break Ltd is to expand its sales volume through increments in advertising expenditures by over 100 percent, improve the performance of order processing and service delivery system.
Expected Outcomes
We would expect that market share for key products like tea leaves and tea bags, to grow by huge margin through increased expenditure on advertising. The new offer will encourage its major suppliers to supply its products in Sydney capital offices and thus further expand our market.
Risks
With the expected poor performance of coffee industry due to supply and adoption of “healthy eating lifestyles” by major customers, competition on tea leaf and tea bags will increase.
a) Strengthen the distribution line for tea leaves and tea bags,
b) There is need to diversify on production of value-addition goods.
c) Increase the warehouse space.
Strengthening of the distribution line will enhance Office Break’s competitiveness with superior delivery of products. In addition, diversification will help maintain firm’s presence in the market. It is important to increase the warehouse space to accommodate expansion needs of the firm.
References
Barrow, C. (2011). Starting a Business for Dummies, UK Edition. West Sussex: John Wiley &
Sons
Hsu, H. C. & Powers T. F. (2002). Marketing hospitality. New York: John Wiley & Sons. Pg
132-133
Langford, D. & Male S. (2008). Strategic Management in Construction. :Wiley-Blackwell
McDonald, M. & Dunbar I. (2004). Market segmentation: how to do it, how to profit from it.
Burlington: Butterworth-Heinemann. Pg 289-290
