High Flyers Ltd.: Facing Business Challenges

The company High Flyers limited is known to be one of the leading brands selling gym merchandize and costumes, based in the United Kingdom. They have a very fair reputation when it comes to the kind of things they sell. However, the company faces several issues in the market when it comes to profit in business. There are around six other companies which are competing with High Flyers in the same market. They are producing the same kind of gym merchandize and selling. The average selling price of the company would come around 65 euros. But the problem is happening when the rival companies or the ones who produce cheaper goods are selling things which have a starting range from 25 euros. The company makes high quality merchandise and they gained popularity because of their good quality hand-made options that customers can choose from. With the rising interest in sports and the UK Government supporting sports events, the need for products as such has risen, which is causing people to opt for the cheaper options due to high demands. This is causing a low in their business. The gross profit margin is low, and this takes up around 90 days for the company to pay the invoices. The fact that UK decided to exit from the European Union in 2016 has also had its adverse effects on the sales and business scenario of the company. The cost of products that are imported have drastically increased ever since the Brexit, and export demand of UK-made products in the USA and Canada are expected to rise.

Customer Power: over the last few years, the growth of sporting retail shops have been low as a lot of consumers buy online. The weak growth tells that the power is weak. But today the retailers have more options of wholesale transactions online. These options can give the retailers a chance to make the future critical to competitive advantage.

Suppliers’ power: Manufacturers are establishing and implementing systems, solutions and procedures which allow them to sell to the retailer directly. This can allow the manufacturer have leverage over the distribution network they have. But when more manufacturers attempt this way, it becomes difficult to compete with distributors offering a huge range of merchandise to retailers (Johansson and Kask 2017).

Threat of entry: The money involved in purchasing, storing and distributing remains like a barrier to entry.

Substitute products: There are high threats of losing on the market space to substitute products sold by other companies. The annual growth of a company is deeply attached to the overall consumer spending.

Competitive rivalry: Sporting goods distribution is a kind of market which is mature and growing moderately. To add to that the online platforms are also bettering the relationship between retailer, manufacturer and distributor. To maintain the competition wholesalers need to find ways (Handshake Blog, 2017).

 The Government needs to support the company to ensure that there are no political hassles in the process of establishing a business in a particular place. According to the UK Government, they could increase the amount of VAT in sporting goods. Along with the Brexit, the cost of imported things increased. This, in turn increased the export in the USA and Canada.

Porter’s Five Forces Analysis of High Flyers Ltd.

With the increase of demand of export, the economy of High Flyers Limited has flourished, where the company sales went up to 60%. The export has been increased to 35% to the USA.

The people of UK have an increasing demand for sports merchandise, and this in turn affects the business and economy of the company directly. However there are cons of this factor. There are smaller companies selling cheaper version of the same goods and people are opting for those.

The company made investments in the field of technology to automate some of the initial cutting. This is known by the name ‘labor intensive’. Technological advancements in the country are helping companies such as this and others to cope up with production requirements, promotions and other factors leading to profit. However, the problem lies that there is a lack of skilled designers. That is why the help of technology is always required to ensure that the business of a company runs successfully (Kapoor 2014).

Every company needs a set of strategies to ensure that they retain their space in the market. To continue good business and keep up with the shifting trends of the market and customer demands, each company needs to revise their strategies at intervals. The following are a few recommendations for High Flyers:

Cost effectiveness: The company is known for delivering a great line of gym merchandise. But their competitors have taken over the market allowing promoting cheaper alternatives which serve the purpose. So the company should so something about their production methods and revise their price tags without compromising on quality (Hu 2014).

Online: They should have their products more widely available online, on more number of sites. They can also opt for taking orders to personalize costumes in some ways. This could have customers coming to them for that special touch in their gym wear (Brohi 2015).

Export:  the export options should reach other continents and more number of countries using their products will get their customer base stronger, yielding more profit in the process (Fernie, Fernie and Moore 2015).

Scenario: 2Analysis of the strategic position of SCH

SCH is a well-known care service provider company of East England. Their main target is the elderly people and their mission is to provide care to the people with respect and dignity. In order to evaluate their strategic position Porter five force model analysis is used to understand the external environment of such organization (Daspit et al. 2017).

The position of an organization can be affected by the entry of new player in the business market (Nguyen 2017). In the context of SCH, their business might be affected by the entrance of new care organization in the East England. However, people who are under SCH care often go to the other hospital for their daily check up. Hence, this may bring the threat for SCH in future for this reason they have started to provide daily care to the patients through trained nurse in the home of patients.

Future Strategies for High Flyers Ltd.

Supplier power refers to the demand of the suppliers for input that they give to a business (Wheelen and Hunger 2017).  However, SCH includes many auxiliary staffs and trained nurse in their business. Therefore, they give transportation cost to their staffs to go the home of the patients. This will be effective to reduce the resistant power of their supplier.

Buyer power refers to the bargaining capacity of the customers against a product or service (Bryce 2017). However, the market of care service providers is occupied by local government and some small business. Therefore, local government offers home care to the people with the lower price in comparison to SCH. This may affect their service as the customers will go for service with reasonable rate.

Competitive rivalry means the existence of the competitors within the market (Durand, Grant and Madsen 2017). In the context of SCH, local authority and some small business that provide home care to the patients are their main competitor as local authority offers care service with low price than SCH, which may a challenge for them. On the other hand, due to rising cost, many care organization are closed this may bring opportunity for such organization (Ethiraj, Gambardella,  and Helfat 2016).

 The threat of substitution occurs while competitors offer alternative service with low price (Trigeorgis and Reuer 2017). People of East England go for the routine checkup to the hospitals who are taking home care service from SCH. Hence, by providing routine care through experienced nurse SCH will be able to minimize such challenge.

 Figure 1: Porter Five force model

(Source: Nguyen 2017)

S-Strength · Provides more wage rate in comparison to local authority · Provides routine check up beside home care and their visiting hour is longer than other organization.	W-Weakness · Costly service · Provides care for only elderly patients
O-Opportunity · Many care organizations are closed due to rising cost · Emerging home care demand due to lack of funding in hospital	T-Threat · Lack of equipment · Lack of additional training to the staffs

Table 1: SWOT Analysis

(Source: Author)

According to the above analysis, it has been found that high wage rate is the main strength of SCH while high service cost focuses its weakness. Therefore, less number of care organizations brings opportunity for their business while lack of equipment resists such organization to provide routine check up beside home care to patients

Figure 2: BCG Matrix

(Source: Gans and Ryall 2017)

From the above diagram, it has been found SCH strategic position is in question mark position as it focuses on high growth market with low market share.  However, many care organizations are closed due to rising cost and due to the low funding of the hospitals, there is an emerging demand of the customers (Gans and Ryall 2017). This ensures the strategic position of SCH in question mark section of BCG matrix.

SCH possess high price in comparison to the local government organization that is a big challenge for them as customers have the intention to get similar service with low price. Therefore, the rising price of East England forces many care organizations to close or sell their business as they are unable to provide the monitoring cost of their service. On the other SCH expands a significant amount of the traveling of their staffs that enhances the operation cost of such organization. SCH only provides care to the elderly patients while there is an increased demand for service to the family that is a big issue for SCH. Wage cost often leads the organization towards loss (David and David 2017). In the context of SCH, they provide the high wage to the staffs which increase their operation cost. Therefore, many people go to the hospital for the routine check up thus SCH tries to provide them such service besides home care which requires more investment in equipment and training of the staffs. This is another issue has been facing by SCH.

SCH: A Care Service Provider in East England

Ansoff matrix includes market penetration, market development, and product development and diversification strategy (Williams, Chen and Agarwal 2017). In the context of SCH, it is a profitable care organization of East England and wants to increase 20% of its present market share. Hence by using market penetration strategy, they will be able to enhance their market share. Product diversification focuses on the introduction of new service besides existing service (Kaplan et al. 2017). However, SCH provides home care thus the patients go to the hospital for routine treatment besides taking care from SCH. Hence, there is a big opportunity for the SCH to provide routine care to the patients in their home besides providing them home care. Therefore, SCH provides care to the elderly patients while there is a huge demand in the market for family care. In order to develop the service, SCH needs to provide family care, which can enhance their profitability by enhancing the sale. However, due poor funding and huge monitoring price many care organizations are closed that bring opportunity for SCH as they will able to get a huge number of customers, which is essential for their market development.

 

Figure 3: Ansoff matrix

(Source: Kaplan et al. 2017)

Scholes model focuses on the current price as for example, SCH charges the high price for their home care service while government organization charges the low price in East England hence, by offering reasonable price such organization will be able to increase their sales in the competitive market. Johnson framework highlights on the value chain analysis of a business which enhances their profitability (Pollanen et al. 2017). However, has the scope to expand their market share by analyzing the current market that includes high demand for home care due to lack of care organizations. Whittington’s four generic approaches include classical, evolutionary, systematic and processual such four components. The Classical approach will enable SCH to analyze a plan to enhance their market share while through evolutionary approach SCH will able to keep their operation cost low that is important to catch the market demand by increasing the number of customers. A systematic approach will allow such organization to maintain the local rule as without the green signal of local authority SCH will not able to expand their business within East England. Moreover, processula will enable them to maintain the flow of their business.

 

Figure 4: Whittington’s four generic approaches

(Source: Pollanen et al. 2017)

SCH wants to expand its market share, however, for this reason, collection of Tactics will be helpful for such organization to develop their strategic planning which will satisfy their customers.

Development of broad action oriented strategies will be beneficial for SCH as it will enable such organization to take necessary action actions to mitigate the challenges regarding their service.

Sharing and communicating vision is another important strategic direction for the SCH. This will enable them to involve their employees in decision making regarding the care service, which will fulfill the growing demand of the East England.

Evaluating the Strategic Position of SCH Using Porter’s Five Forces Analysis.

Porter diamond model and PEST analysis are helpful for SCH in order to identify the strategic position of their competitors and the external environment. Such tools and model will enable such organization to understand the current demand of patients regarding care service in order to mitigate the challenges that occur due to changing demand of consumers.

Resistance to change is an important action which is being taken by the individuals or the groups which state that the change which is taking place is regarded as a threat to the employees (Bateh et al. 2013). Any changes irrespective of the fact whether it is informed or uninformed to the employees of the organization, would resist the changes which might hamper their working styles, job satisfaction and economy relating to their salary. Any kinds of changes which are also taken into consideration regarding hampering the personal life of the individuals in the organization, can also be resisted by the individuals (Bateh et al. 2013; Benn, Dunphy and Griffths 2014).

CID design which is an UK based business which remained an independent company. However in the year 2015, the company faced some of the financial difficulties which led to the takeover of the company by DD design. Since the day DD design took over, many important designers and creative specialists left the job of CID design, and this resulted to the loss of 10 and 30 of its staffs through the mode resignation. However DD design is considered to be quite profitable in terms of its efficient operations, scale based on economies and the base of low cost. Now the company is also looking forward to restructure CID design group. The staffs are actually unhappy about the fact that the pace of changes that are taking place inside the organization is really too fast and they worry that reputation and values of CID design will lose.

The staffs are resistant to the changes because of the following possibilities

• New Roles: Staffs are not happy about the fact that the new roles they are going to play under the new structure of DD design (Cummings and Worley 2014). They think that they would not be competent enough to play new roles in the CID design organization.
• Redundancy: The staffs of the CID design felt that they would become redundant with the change of structural innovation which took place after DD design took over. Personally they are afraid that they would lose the jobs which in turn might affect their family (Cummings and Worley 2014).
• Personally the individuals would think that the importance of the company is being lost under another company. The reputation and prestige of the CID design is being sold out to the DD design (Cummings and Worley 2014).

The DD design follows a change management process in order to bring innovations to the firm of the CID design. However the changes are being strongly resisted by the staffs of CID design. DD design followed the change management process in order to meet the needs of the CID design and make it profitable.

• Urgency: When CID design was hit by the financial instability in the year 2015, to save it from this problem, DD design which is a German Company took over the CID design company (Rosemann and Brock 2015).
• Building a team: DD design wants to make a team of designers and specialists of the CID design in order to meet the needs of the organization.
• Purpose: The purpose of the DD design is to innovate some of the cost saving steps in order to bring back profits to the CID design and outsource some of its designed work to China and India and also looking forward to shift its IT hub to Berlin where they are having operations (Goetsch and Davis 2014).
• Rebranding CID design: DD design is looking forward to rebrand CID design under the functional design rather than allowing it as standalone division.
• To stop bringing changes and reduce the turnovers of the staffs of the CID design and also make them understand the requirements of the changes through staff meeting (Goetsch and Davis 2014).

The right people need to be selected in the first place through the testing of their behavior and also the screening of their competency (Hancock et al 2013). An interview would be conducted in the beginning just to check whether the person can fit in the new culture of the CID design.

The suitable people for the posts of the office are needed to be recruited who has the talent and the ability to work smarter in almost in any positions. CID design must hire the smart people who have the capacity to express their versatility in their work. Even if there are changes in the work environment the staff must be compatible to adjust them in the changed working phenomenon (Hancock et al 2013; Michel et al 2013).

CID design must offer the staffs with benefit packages with the working flexibilities in the organization, life insurance facility and many such related packages (Shipp et al 2014).

It is important for the CID design to give opportunities to the people to share their knowledge about their job and also making them work on the team assignments under the umbrella of the new structure to check whether they can adjust with the new tasks provided to them.

The problems of the staffs are needed to understand deeply that what they are facing out of this change system of the company. The problems of the team members are needed to be acknowledged properly by the managers and they are to be addressed instantly.

The employers are needed to be balanced in their work arena by allowing them the flexible times along with flexible ending hours (Shipp et al 2014; Michel et al 2013).

The excellent performance of the employers is needed to be recognized and also paying to reduce the turnovers of the employee. The employees are needed to be motivated while working in a changed organizational atmosphere

Career progression of the employees is needed to recognize by the organization in terms of serving under the structured functional organization.  

In order to reduce the employee turnover, the CID design needs to make sure the existing employees about the relevant information of change which would bring to the organization (Shipp et al 2014). The company needs to address these changes to the employees and take the feedbacks of them. They should make sure that they are not going to lose their job and the company would try their best to retain the existing environment which would provide benefit to the employers working other them (Shipp et al 2014; Michel et al 2013).

To motivate the individuals to keep pace with the structural changes, DD design is managing with this change management process and also in order to stop the maximum turnover of the employees, the Lewin’s model is implemented here to manage with the change management process (Cummings et al 2016).

Lewin’s three stage model can be applied in order to manage change management process. The model states the practical views in order to get hold on the process of transformation. In the view of Lewin, the process of change or the transformation which incorporate the view about the ardent need of change in required and also consolidating the norm which is used as a base for all modern changes.

DD design in this respect just in order tokeep par with the change management process, the application of the Lewin’s model is well recognized in this particular case study.

Unfreezing: Once the information about the change in communicated to the employees, the employees become freeze and that is why it is the responsibility of the company is to create the reasons for change and further communicating to the employees (Cummings et al 2016). The most necessary element of this stage is the communication which is important to explain the logic behind the changes to the employees. The organization also needs to make the employees know about the changes and how it is going to provide benefits to the employees. The idea which could be derived from this stage is that, if the employers are being motivated about the changes and therefore the change is needed to be accepted (Cummings et al 2016).

Changing: In this particular stage, changing is a new behavior and it becomes a reality. It is the period of time when the uncertainty and the fear start affecting the changes and this in turn become one of the hardest steps to ride over (Cummings et al 2016; Burnes and Cook 2013). As the employees are gradually becoming used to the changes and for this reason, education, communication are necessary for the employers to become accustomed to the transformation and how this change would benefit them once they are completely implemented properly (Cummings et al 2016).

Refreezing: It is also considered to be one of the important states of change in the Lewin’s model and DD design by applying this method are needed to make sure that the people however are not going back to the previous behavior. It is the phase where the individuals are being used to the changes in the organization and gradually they are settling down by considering the changes. To keep up with the pace of changes and making the employers work in the changed environment in order to reduce the turnovers of the employees, the rewards and recognitions are needed to be given to the employees (Cummings et al 2016). This would result to the properly settling down the employers. The organization need to take into account that the changes are fixed and this is positively affecting the working of the employees.

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