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The main aim of getting involved in any business activity is earning a profit in the end. The following memo gives a clear scenario where a firm purchases a house wear company on the verge of closing down. This house ware company was previously facing erosion due to stiff competition from other companies operating in the same business. The acquisition of this firm, influenced some changes in the managerial positions in the company. The main task ahead is rejuvenating the house ware company into a competitive stature. This memo intends to lay down procedures and necessary measures, which will ensure that the main objective of its acquisition accomplished.
The biggest intention at hand is ensuring that this house ware company is back on its feet and there is competition against other firms dealing in house wares. In addition, a turn-around plan for this company ensures that it achieves its full competitive stature. The other crucial thing is to look at the SWOT analysis of this firm and, try to seal all the loopholes available in the discovery and come up with all the corrective responses towards any identifiable problem. The final task is to convince the management of this company of the readiness of the company to work and that it has attained its full competitive power in the house ware industry. Below is a detailed memorandum on the company and the objective for fulfillment.
Linen n Things Company was established in 1975. Eugene Kalkin established it four years after he established Bed, Birth and Beyond Company. This company deals with selling home wear stuff like bedding, towels and other home ware accessories. The main reason behind the establishment of these two companies was to provide people with home ware facilities that were of exceptionally high quality in the region. The main contravening issue is that Linen n things company came to a state of bankruptcy while Bed, Birth and Beyond Company continued its competitive nature in the industry. When trying to come up with a plan of action to ensure that this company regains its competitive power, it is fundamental that one makes a keen review of the company's internal and external environment.
Firstly, it is crucial to consider the internal environment of business. The internal environment of a business refers to any factor, which affects the operation of the business from inside. These include factors such as, objectives of business, management policies and styles of the business and the personnel skills and knowledge. It is also beneficial to look at the workers and their working conditions. In addition, it is necessary to consider the external factors, which affected the operation of the company. This includes competitors, consumers and the government. Bearing in mind that these are the key players in the success of any business, utmost seriousness needs to be considered to make them effective.
The main objective behind establishing Linens n Things Company is to come up with a company, which provided the best house ware facilities in the region. This is one of the primary internal objectives of the company. The company aims at gaining a spot in the competitive line of the company and, increases its influence in the market as much as possible. In order to make this possible, the company needs to ensure that they stick to the objectives of the business. This entails coming up with strict and clear rules and regulations directed towards the attainment of the set goals of Linen n Things Company. In addition, the Linen n Things Company needs to have a strong managerial system. It is exciting to find out that the company replaced its previous manager with a new manager. This is an extremely crucial step to the success of the company. However, management cannot always improve by simply hiring and firing managers. Anybody holding any managerial position in this company should undergo training to ensure that they are well equipped with skills for better management.
In addition, the company should ensure that all workers have undergone training. This is essential to ensure that they are aware of the objectives of the business. They all need to work towards the attainment of a common goal in the company. They should know how to relate well with their customers in order to satisfy their needs in the best way possible.
The external environment plays a significant role in the success of the business. Firstly, it is crucial to look at the most prestigious parties in the external environment. These are the customers. When Linen n Thinks Company acquired the new manager DiNicola decided that the best way for the business to improve was to make the customers their first priority. He had to come up with ways in which the company could come up with high-quality products but at a reasonably low price to the customers. He employed the required strategies for winning customers that was through advertisements and sales promotion.
The figure above gives a graphical representation on the importance of using better advertising methods over a period. It shows a the percentage change in sales level against time. Customer awareness increases throughout the period of four months. This strategy seemed expensive since it significantly increased the company's level of sales. Customer's needs and wants are a basic requirement if their needs are to be satisfied in the best way possible. Since Linen n Things Company purchased before going bankrupt, the new management of the company had to try to ensure that the company attained its competitive state, as other companies and their biggest target was the consumers. DiNicola intensified his advertisement of their products through successive sales promotion techniques. This however, saw their sales level move up by a considerable amount.
Another key essential element in the external environment of the Linen n Things Company is its competitors. Competitors are other businesses, which deal in the same products, in any given market. Linen n Things Company had many competitors in the market. A great example of one of its competitors includes the Bed, Birth and Beyond Company. This company deals with house wear materials. Unlike Linen n Things Company, BBB Company has a strong managerial structure and this has made it the leading seller of house ware materials in this industry.
BBB Company employed strategies, to improve on their sales and these have proven successful since its formation, four years before the Linen n Things Company. Competitors are key determiners of the current position of any given company. This is because they help a firm to determine whether it is on the top of the industry or not. BBB Company has since given Linen n Things Company a run for their money. They have since proven to be the company is leading competitor. They are the most dominant company in the house wear industry. Just like customers, a company has to lay down strategies in order to ensure that competitors defeated in the industry.
When coming up with a plan of action to try to convince the management of Linen n Things Company, it is vital that the SWOT analysis be put in place. SWOT analysis is business analyses, which looks at any given business and try to evaluate how strong the company is. The SWOT analysis clearly looks at the strengths, weaknesses, opportunities and threats that a company may be facing. It is crucial to look at these elements to keenly in order to come up with the required plan of action that will ensure the success of the company in the future. One of Linens n Things Company's biggest strategy and their strength came into being when they filed for bankruptcy. This is not just a move to salvage the company from closure but, it was a business strategy aimed at rejuvenating the company. Apollo acquired this company when it was on the verge of closure.
He later filed for bankruptcy with an aim of protecting the company against any liabilities, which any creditors could use against them. This gave the company a superb chance to start its operations and try to create come- back into the market. Since the company enjoys protection from any creditors who may want to demand their money, the Linen n Things Company can spend the limited financial resources it has to ensure that it regains its competitive power in the industry. In addition, the company can identify any given opportunities, which exists in order to improve. In the previous discussion, it is clear that this company, through the new management has intensified its advertisement techniques. Advertisement is one of the basic key to marketing of any organizations products. It is fundamental that this company intensify most of its monetary resources to advertising. Their advertisements should be appealing to the customers. It should also ensure that their adverts are undemanding and clear for consumers to understand.
Another key way of making use of their opportunities in the market is to ensure that they participate in exhibitions and trade fairs as a strategy to advertise their products. This company has an added advantage of the fact that they are offering the best quality of house ware materials in the industry. This is evident by the fact that it was the key strategy of the company to ensure that this is effective.
In addition, Linen n Things Company, needs to put into consideration their threats and weaknesses in the market. This however is not exceeding crucial in determining how the company will regain its competitive powers in the industry. The most urgent task, is to try to come up with a reasonable plan that will ensure that this company does not close down but has regained its competitive stature in the market in the near future.
The second strategy that this company needs to put into place is closing down some of its branches and stores. This is a strategy aimed at cutting the operational costs of the company. Having many stores yet the company is not entirely financially stable means that the company will spend lots of money maintaining the store. A lot of money used in acquiring trade or operational licenses for these branches of the Linen n Things Company. The money saved because of closing down other branches of the company is useful in the following ways. Firstly, it should ensure that there is an introduction of the best quality products to consumers at a reasonable price. Improvement of the quality of products to consumers assures the company of improvements in their level of sales. Secondly, cutting costs involves reducing the size of the enterprise where a manager reduces the number of people. This however, is the best strategy for the company.
It is crucial to recommend that, the Linen n Thing Company should employ all the necessary cost cutting and, advertisement measures to ensure that their cost level rises in order for them to rise in the house ware industry. Many resources require direction towards offering the best products and using the best methods of advertising to improve on their sales. After all this, strategies become effective; there is an assurance of raising and becoming a serious house ware company in the industry.