Strategies For Managers To Increase Profitability And Control In Various Industries

Factors for preferred method to enter a new industry

1.(a). The strategies managers should develop for increasing profitability of nationally branded hair dressing business are as follows (Hickman & Silva, 2018):

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Revise the payment options through credit cards: Credit card puts forward convenient payment options so switching to such business improves the salon profit as clients find the service more preferable and convenient.

Hike in Prices as per set time Line: The managers should organize and plan for imposing a hike. For instance, a hike of 3 percent can be imposed on all the products, treatment and services in each quarter.

Arm Social Media and Get in More Clients: The managers should undertake social media campaigns. Social media platforms like Instagram, Twitter and Facebook provide ideal opportunities for the business in connecting with customers, finding newer clients and promoting brand loyalty.

Expansion of the Services and Treatments: It is necessary for staying on top of newer styles and trends since it helps in expanding the repertoire of the services offered. More options allow the clients in booking an appointment.

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mproving the Search Rank of the Business Site: The higher the page remains on search engine it is likely for the potential customers to click on it followed by booking a appointment.

By Improving Efficiency and Reducing Overhead Cost of Business: Lowering the cost while maintaining higher client satisfaction becomes difficult. Therefore, the managers must adopt creative means of reducing cost. This might include shopping around same supplies at lower cost, unplugging the high energy consumption when not used, ensuring better rates on the merchant processing fees of credit cards.

B. The strategies managers should develop for a manually operated automobile company are as follows (Parmenter, 2015):

Commitment towards Identity: The managers of automobile company should not set specific growth treadmill and chase multiple market opportunities without the hope of gaining advantage. Instead, they should develop value proposition and build distinct capabilities that lasts a longer term.

Translating Long term Strategy into Everyday Activity: Managers instead of trying to adopt best practice of industry and treating external benchmarking as established path of success should view things in a different manner and translate the long-term strategy as a part of everyday activity. Besides, the managers should build and design bespoke capabilities that define a competitive edge for the company.

Implementing Culture to Work: Instead of reworking the organizational chart and rethink incentives and resist the disruptive reorganization, managers of automobile company should put current culture at work. This helps in taping the power of ingrained behavior and thinking that exist below the company’s surface thereby driving a change.

Organizational structures, controls, and cultures in small water suppliers, chain stores operating nationally, and large international banks

By Reducing the Cost for Growing Stronger: The managers should implement measures in reducing cost. They can however do so by marshaling the resources strategically doubling down the few important capabilities and shortening back on everything else.

By Shaping the Future: Managers of automobile company should become agile and not respond to the external change as fast as possible. Instead, they should shape the future through creation of a change they prefer to see.

2.The factors that make acquisition a preferred method of market entry to a newer industry are as follows (Campbell, Sirmon & Schijven, 2016):

Need to Increase in capabilities: It results in expanded research and development opportunities along with robust manufacturing operations. It also helps in reducing manufacturing cost for operations that are expensive.

Need for Gaining Larger Market Share or Competitive Advantage: This helps in gaining better marketing or distribution network. A company wanting to expand into the different markets where similar companies operate need not start from the ground zero if acquisition takes place.

Need for Diversification of Products and Services: Acquisition remains the preferred method of market entry when there is a need for complementing the present product or service. The mode of entry allows the two firms in combining the products and services and thereby gaining a competitive edge in the market.

Need for Leadership Replacement: There is a need for acquisition of the company when the present owners are unable to identify someone for succeeding them.

Need for Cutting Cost: Acquisition leads to the creation of opportunities for reducing the cost of companies selling similar line of products. Preference for acquisition as a mode of entry will have opportunity for combining locations or reducing the operating costs through integration and streamlining of support functions.

Need for Survival: Although it is very difficult for a company in willingly giving up its own identity to a different company but sometimes acquisition remains the only option for the survival of the company.

B.Australia post should enter into merger and acquisition for diversifying the telecommunications business for providing online cloud computing data services and access to the broadband for individuals and businesses (, 2018).

This is because through merger and acquisition, Australia Post, will be able to earn the following benefits (Lubatkin, 2013):

  1. The company would obtain not only additional or quality staffs but also the knowledge of the industry as well as other business intelligence. For example, businesses with good process and management systems would be useful for the buyer who seeks to achieve self improvement. However, the business chosen should possess systems that can adapt to running larger business.
  2. It would ensure accessing valuable assets or funds for newer development. It is often found that better distribution and production facilities are less expensive for buying than building. Australia Post should target business that are only marginally profitable and possess massive unused capacity.
  3. It would ensure accessing wider customer base and increased market share. The target business might possess distribution systems and channels that the acquirer can use for their own benefits.
  4. It ensures diversification of products, services and longer term business prospects. The target business would be able to offer products and services that Australian Post can sell through own channels of distribution.
  5. It ensures overhead and cost reduction by ensuring shared budgets for marketing, enhanced purchasing power and lower cost.
  6. It helps in reducing competition since buying new intellectual property, services or products seems cheaper.
  7. It accelerates the plan for growth of the existing business. Businesses belonging to the same location or sector not only reduces cost but combines resources, removes duplicated departments or facilities and enhances revenue. 

3.i. Small Water Supplier in Local Town


Figure 1: Organizational Structure of Small Water Supply in Local Town

Strategies for managers of manually operated automobile companies

Source: (Knox  & Mayer, 2013)

The control for a small water supplier in local town lay not only in improving the design and planning but the hygiene behavior and sanitation of the water supplies (González-Gómez et al., 2013). It can be done through the introduction of sanitation program and improvements in the water services undertaken by the engineers, planners and politicians.

The small water supplier in small town can benefit maintaining a corporate culture that helps in keeping the people productive and engaged thereby improving the business performance (Croes, Lee & Olson, 2013). Therefore, a small business leader should consciously plant the seeds and ensure a consistent effort. With time, the efforts help in fostering the values and habits amongst the staffs.


Figure 2: Organizational Structure of Chain Store Operating Worldwide

Source: (McCormack & Johnson 2016)

There are four types of control mechanism that the chain store can implement for improving the performance (Saebi & Foss, 2015) .These include market control, audit control, clan control and ensuring performance standards. Market control refers to the capability of the buyers and sellers in exerting influence over quantity or price of service, goods or commodity being exchanged in the market.  Clan control relies on the values, beliefs, shared norms, corporate culture and the informal culture for regulating the employee behavior and facilitating the achievement of the organizational goals. Audit control refers to the procedure of self examination as it relates to the products and accounts. Performance standards refer to approved set of organizational goals, requirements and the expectations met by the employees. The four mechanisms remain dominant in the present business world for efficiently and effectively doing business for meeting the goals of the organizations.

The culture persisting within a chain store operating worldwide should have an inclusive culture (Steenkamp & Geyskens, 2013). An inclusive culture results in successful integration of the diverse people into the industry or the work place.

Figure 3: Organizational Structure of Large International Bank

Source : Fan,  Wong & Zhang, T. (2013).

The large international bank should gain operational and financial control thereby helping the bank in gaining centralized control of the key decisions while ensuring flexibility at local level. This should however include the following (Neely, 2015):

  1. Opting for facilities of In house Banking: This ensures providing a centralized control over the funding decisions while allowing the subsidiaries in maintaining responsibility for the routine operations.
  2. Ensuring the presence of the payment factories: This involves attaching the receivables and payments factories to the in house bank there ensuring a centralized control over the operations.
  3. Creation of shared service center:  This ensures providing the foreign subsidiaries with access to the resources, centralizing the operational areas while ensuring the maintenance of localized funding structure.

The large international bank has a culture that not only support execution of growth strategy but also influences the overall aspects of the process of decision making (Kanagaretnam, Lim & Lobo, 2013).  The culture represents something more the ethical behavior. It in fact represents the overall operations that include the hiring, firing and rewarding of employees, allocation of resources and the management of opportunities and risk.

References: (2018). Retrieved from

Campbell, J. T., Sirmon, D. G., & Schijven, M. (2016). Fuzzy logic and the market: A configurational approach to investor perceptions of acquisition announcements. Academy of Management Journal, 59(1), 163-187.

Croes, R., Lee, S. H., & Olson, E. D. (2013). Authenticity in tourism in small island destinations: a local perspective. Journal of Tourism and Cultural Change, 11(1-2), 1-20.

Fan, J. P., Wong, T. J., & Zhang, T. (2013). Institutions and organizational structure: The case of state-owned corporate pyramids. The Journal of Law, Economics, and Organization, 29(6), 1217-1252.

González-Gómez, F., García?Rubio, M. A., Alcalá-Olid, F., & Ortega-Díaz, M. I. (2013). Outsourcing and efficiency in the management of rural water services. Water resources management, 27(3), 731-747.

Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.

Kanagaretnam, K., Lim, C. Y., & Lobo, G. J. (2013). Influence of national culture on accounting conservatism and risk-taking in the banking industry. The Accounting Review, 89(3), 1115-1149.

Knox, P., & Mayer, H. (2013). Small town sustainability: Economic, social, and environmental innovation. Walter de Gruyter.

Lubatkin, M. (2013). Merger strategies and stockholder value. In Mergers & Acquisitions (pp. 43-57). Routledge.

McCormack, K. P., & Johnson, W. C. (2016). Supply chain networks and business process orientation: advanced strategies and best practices. CRC Press.

Neely, C. J. (2015). Unconventional monetary policy had large international effects. Journal of Banking & Finance, 52, 101-111.

Parmenter, D. (2015). Key performance indicators: developing, implementing, and using winning KPIs. John Wiley & Sons.

Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201-213.

Steenkamp, J. B. E., & Geyskens, I. (2013). Manufacturer and retailer strategies to impact store brand share: Global integration, local adaptation, and worldwide learning. Marketing Science, 33(1), 6-26.