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Existing Business Expansion Plan Problem Solution Essay

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Updated: Mar 20th, 2020


The purpose of this paper is to prepare a business plan for the FlexMation, which will expand its business with existing products in the US market. However, FlexMation will open XYZ New store to address the emerging market demand for aluminum structural framing.

However, The XYZ new store will be located in one of the busiest streets of Blaine, MN, offering a variety of products that would suit with the needs of many other businesses like construction industries, real estates, recycling factories, hospitals, hotels, restaurants, and so on. Initially, the store would provide the local customers with products from categories such as carts, clean rooms, enclosures, fixtures, frames, guards, material handling, and work cells.

Among the products of cart categories, the most high quality ones would include Mobile Test-Cart, Instrument-Towers, Instrumentation-Cart, Label Cart, HEPA Enclosure-Cart, and Controlled-Environment Parts Cart. The clean room product categories will consist of Wall and Ceiling Clean Room and Controlled Environment Wall, and the enclosure categories would consist of Weld Robot, Pharma Enclosure, Machine Enclosure, Dark Room Test Station, and Positive Pressure Enclosure.

On the other hand, the fixtures would comprise of Tool Holder, Adjustable Height Fixture, etc, whereas the frames would comprise of Peristaltic Pump Stand, Test Frame, and the guards would comprise of Cat Walk and Guard, ECOSAFE Machine Guard, and Mazak Stand. In this context, with such a widely diversified product line, it is important for the store to build up popularity among its client in order to acquire a good market position in Blaine. This requires the implementation of a good advertisement strategy through which the store could create awareness between public.

This would be mostly to attract the local customers and therefore XYZ would adopt advertising forms like Billboards and Hoardings, Yellow Pages, Direct mail, Electronic Mail, and Radio for example. In addition, FlexMation will invest 60% of its total starting capital to expand its operation in the US market. As FlexMation will expand its business by opening a new store, it will be easy for the company to generate profit from the first year of its operation.


The business plan of XYZ New Store will be placed to the board of directors for review, and approval on January 2011, and design its timeframe to go into operation within three months (90 working days) that counted April12 2011. As parent company FlexMation has very strong credit line with several financial institutes, it will be less time consuming for the XYZ New Store to receive start up and working capital from bank.

Due to an extension of existing business, the XYZ New Store would face less obstacles and time constrains. The arrangement of total startup and working capital would be completed within a month i.e. February 15 2011 as the initial activities would be started from the at once after the approval of board the site selection continues from January 16 to February15 2011.

From the second month of 2011 after the sanction of bank loan, XYZ New Store will make contract with the rented premises and start decoration and renovation. To do so, the XYZ New Store will complete all contracts with the suppliers within a week starting from February 16 to February 21 2011.

All preachments, decoration, and renovation will be completed with in March 15, 2011. The project would consider adverting as a most significant tools for success and take it as an ongoing process staring next to rental premises and continues advertise in the print and electronic media in order to attract target customers.

The project XYZ New Store would like to start employee’s selection process from February 16 2011 and complete on March 14 2011. From March 2011 to April 2011, it will continue training for the employees and project has aimed to celebrate opening ceremony on April 15 2011.

The managers would provide day-to-day update to the CEO by phone or e-mail to know future tasks and start operation seriously with the objectives to reach break-even point within first year of its operation. However, the project would lead and operate complying with the following timeline that will demonstrated more elaborately the work detail and the milestone scheduling for XYZ New Store.

Deadline and milestone:

The XYZ New Store will try to finish all the initial functions within three months of project approval by the board of directors, for instance, preparing documents for the registration the name of the company. All the entrepreneurs also arrange their 15% capital within this short period. Additionally, they will contract with banks to know about initial documents, try to find out a rental premises near to selected location and secure the place by rent, contact with other suppliers, complete the procurements, employee selection and training and start operation as per following timeline and milestone which has also demonstrated in a Microsoft Project Gantt chart –

Timeline for project implication. Timeline for project implication Table.

Table-1: Timeline for project implication

(A Gantt chart has presented into the Microsoft project File)

Relationship of events:

Here, it is significant to argue that all the above functions are interconnected with each other, for instance, it would not be possible for XYZ New Store to submit the proposal for bank loan without preparing a business plan.

On the other hand, bank loan is the key factor to start new project, as the entrepreneurs would not be capable to start XYZ New Store without fund, as they would only invest 45% of the total capital involved. In addition, bank loan is also a major issue to coordinate all the operational activities, human resources management, promotional activities, as well as marketing functions.

Moreover, the fund would engage for purchasing raw materials, fixture, fittings, furniture, and appliance. In addition, appointing employees is a longer process as adverting for job position, listing selected applications, interviewing short listed candidates, and appointing potential staff as well as providing training for them.

At the same time, market research is another significant task to selection the location, assesses market risks, external business environment, attitude of the target customers, comparison the size of XYZ New Store with competitors, response of competitors, and to identifying other significant factors.

Finally, XYZ New Store intends to develop an e- commerce site in order to facilitate the customers for online order and payment opportunities, communicating with customer, advertises the company, and introduce home delivery services better than other competitors in the market.


XYZ New Store will offer following products –

List of the Products Reasons for Setting the Costs (Depending on Product Features and Quality)
Controlled-Environment Parts-Cart The product will be completely enfolded with stainless-steel top/bottom panes, poly carbonate surface panes, 2 doors through padlocking grips, 9 modifiable ledges and 4 padlocking caster-wheels
HEPA Enclosure-Cart The top of the cart would clutch a HEPA filter to compel the higher cabinet zone comprising the combination tools; the polypropylene subordinate cabinets would clutch instrumentation and spare equipment whilst the frame will size to fit through the consumer’s constricted doorways
Label Cart-Product The product could grip eight single reels of labels in a hospital product construction zone; it would restore a plastic-shelf pushcart that could only grip a couple of reels
Instrumentation Cart-Product It will hold abundant file-servers and data-collection tools; the 2 clout strips will integrate for control management from the overhead source and the backside will have SS panes that would serve as shielding and decorative pivoted-doors through the main-walkway; moreover, the unit will sit on heavy duty caster wheels and foot operated floor locks
Instrument-Towers The explicit towers would usually be for burn-in-testing and its remarkable characteristics would comprise of the louvered-SS hinged door-panes, wire-bondage, shelf-brackets, heavy-duty casters, and floor-locks
Mobile Test-Cart This custom cart will house an electo-mechanical press and the upper tower will hold the actuator enclosed by plain poly carbonate panels; the table top would be gray laminate on a wood core, whereas the base unit will have a storage with two doors that would provide access to the control panel
W I P Cart This product will handle work in progress in a manual automated assembly area; through this cart, the consumer could get 7 portions-shelves into this exceptionally mobile-cart that would assist the clients to save floor-space
SS Top-Workstations These two tables would be custom designed to suit the consumer’s particular needs possessing of stainless-steel clippings for stability and locking caster-wheels for mobility; moreover, the left table will have adjustable tilt top tray, a hinged arm for holding a flat panel screen and a detent pull-out keyboard tray
Calibration-Station This product will be a setting up precision measuring equipment; the top right will contain a hinged arm to hold the monitor and keyboard and the beneath that is an aluminum tabletop will have special features for the test fixtures; besides, the lower left will contain aluminum shelves for holding the fixed PC equipment

Table 2: Products of XYZ New Store

Source: Self generated

The following figure shows the price of the products of XYZ New Store –

Price of the products.

Figure 1: Price of the products

Source: Self generated

Competitive analysis

The marking research demonstrates the result that ergonomic workstations industry is already saturated with numerous conventional competitors. FlexMation has both direct and indirect competitors for all the service and product items like Work In Progress Rack, Parts Presentation Rack, Rear Support Bar, Main Table, and Tool Holder.

Thus, several direct competitors of this industry are ShapeMaster, Terra Universal, Pentz Cast Solutions, and indirect competitors are Applied Industrial Technologies, Inc, Industrial Distribution Group, and MSC Industrial Direct Co. However, Terra Universal is the direct competitor for the Electropolished Stainless Steel Work-In-Process (WIP) Racks, DARLEX Manufacturing’s wide range of aluminum extrusion profiles,

Porter 5 forces:

Porter (2004) argued that market competition should assess by considering following five forces and these are –

Porter (2004) argued that market competition should assess by considering five forces.

Figure 2: – Porter 5 forces model for XYZ New Store

Source – Self generated from Porter (2004)

Threat of New Entrants: The threats of new entrants are relatively low in this industry due to the presence of a number of obstacles to pierce the market; therefore, despite of a quite high international demand it is rather hard for the new comers to capture a large part of the market at first instance. However, new entrants may find it easy to penetrate if they concentrate on a niche market rather than mass market.

Just like many other commercial sectors, the biggest obstacle to come into this industry is the enormous expenses related to set-up and sustain the business in such a competitive market embraced by price wars. Nonetheless, it is important to argue that since FlexMation Enterprise is already an efficient, renowned, and moneymaking business, XYZ new store will not suffer from the typical problems like lack of efficiency, finance, and hostile competition like many other new entrants.

Rivalry among competitors:

Although there are many indirect competitors of XYZ new store, but, conversely the number of direct competitors are few. Nevertheless, the competitive rivalry is quite high in the market, since the indirect players who focus on niche market have strong market share and customer base from their own positions.

In this context, all the products of the new store of FlexMation will need to compete with many other small and medium sized enterprises like Applied Industrial Technologies Inc, Industrial Distribution Group Inc, and MSC Industrial Direct Co Inc as well as the giant players like ShapeMaster, Terra Universal, and Pentz Cast Solutions.

Bargaining power of buyer: Hollingbery (2007) pointed out that the bargaining power of the buyer is low because the market demand for the products including aluminum solutions, steel products, and ergonomic Workstations is high in global market.

On the other hand, this power is low due to availability of similar products the in the market, and numerous diversified product range offered by the customers. However, the new store of FlexMation will target both individual customers as well as small medium sized companies to market these products.

Bargaining Power of Suppliers: Hitt, Ireland & Hoskisson (2001) argued that suppliers play crucial role for the well functioning of the company and the bargaining power of the suppliers in this industry is average.

In this case, this power is interrelated with many other external and internal factors, for example, production area of raw materials, availability of the products, political circumstances, financial downturn, transportation facilities, transportation costs, and so on. FlexMation will expand its business by opening a new store, so, the marketer of this store hope to buildup strong supplier base. However, XYZ New Store will focus on the existing local suppliers to avoid extra transportation costs.

Threats of substitute product: The new store has selected products like ergonomic workstations of FlexMation Enterprises, which are already available in the market. However, the threats of substitute products are comparatively low in this sector as the modern world relies on Aluminum Framing Solutions for inestimable reason.

For instance, these Aluminum products are used in everywhere from construction industry to skyscrapers; the new store XYZ will offer technologically advance products, which would substitute to the traditional appliances. The risk of substitute product is low for the XYZ store because the products would be updated in accordance with the technological change, market demand, and customer choice.

Marketing Plan & Advertising Strategy:

Market Positioning Strategy:

Jankowicz (2005) argued that positioning is an essential feature of a company’s strategy, which shows its main advantages in association with competitive offerings.

Possible value proposition for XYZ new store.

Figure 3: Possible value proposition for XYZ new store

Source: Self-generated from situation analysis

Although XYZ new store need to spend a large amount of money for starting its new business operation, it would pursue “more for more” or “more for same” strategy. Because despite the fact that the Blaine MN is a completely new place to start and expand its business, and that the costs are higher, the most important thing that would provide XYZ with the highest support is that its existing business is quite strong and it could use the revenues from that business to establish its Blaine operations.

Brand positioning map of XYZ

Since, XYZ is a new business in the Blaine market, in first few years of its formation, the brand positioning of the company will look like something illustrated in figure 4. Although there are many established brands in the entire US industry, the brand-positioning map of XYZ will consider the comparison of the brands present in the Minnesota market for a better understanding of XYZ’s current position in Blaine; players of this market are companies like Keystone Display, Wirefab, Apex Wire Products Co, Shelving Direct, Material Handling Solutions, and Braeside Displays. Although a few number of these stores are not direct competitors of XYZ, but undoubtedly they in a better position than XYZ because they are already quite popular among the people of Minnesota. With many other recognized stores present in the market, XYZ would therefore seem to hold lower market share in the state:

Brand positioning map of XYZ new store.

Figure 4: Brand positioning map of XYZ new store

Source: Self-generated from Kotler & Armstrong (2006)

Promotional Strategy:

The promotional strategies of the new store would vary accordingly with changing consumer trends, demands, and other external circumstances.

The company will plan the promotional packages depending on the factors such as different seasons, New Year festivals, Christmas Eve, occasions like Valentines Day, Easter Sunday, Black Friday, St Patrick’s Day, Earth Day, Mother’s Day, USA Independence Day, Father’s Day, Halloween, different national holidays, etc. The reason for these strategies lies behind the fact that the most of the customer groups of XYZ will be having a fluctuation in demand of the products offered by the company depending on these specific periods of the year.

The customers of Carts, Work Cells, Material Handling, etc (for example, hotels, restaurants, chain stores, pubs, supermarkets) more often order for more of those products when the public demand for their services increase. During New Year, Christmas, Mother’s day, Valentines Day the number of people visiting restaurants, or chain stores raises for which reason those businesses need more number of carts in their production process of goods.

Depending on the type of festival or occasion, XYZ will set its special offers; for instance, special promotional packages that include discount-vouchers, XYZ promotional-codes, money-off coupon codes for great discounts, and many other packages for clients of hotels and superstores. These offers will help the company to gain competitive advantage over the competitors by augmenting sales during these special periods of the year.

The discount vouchers offered on the products will vary according to the originals prices of the products, for example, for less costly items, there would 20% off, whereas for expensive product, the discounts will be about 35% to 45%. These discount vouchers will also vary for different clients, because the new store’s strategy would be to set more discounts for the loyal customers and Blaine residents rather then the seasonal customers whose aim merely remains on gaining an advantage of the discount coupons.

This strategy will benefit the company by generating an interest among the new clients for being loyal in order to gain full advantage of the promotional packages, which in turn, would raise the profit margins of the company together with the advertising campaigns.

Target market:

The target customers of the new store are hospitals, hotels, real estate companies, restaurant kitchens, chain stores, building constructors, supermarkets, airports, automobile production units, laundries, Blaine residents for their household kitchen fittings, several recycling businesses, and so on.

While deciding the location of the business the strategy maker of XYZ had to bear in mind all the factors that would influence the accessibility of the target customers from the Blaine market. These include factors such as the distance of the superstores, laundries, recycling businesses, and other manufacturing industry businesses in the city.

It is arguable that the location of the store has placed in such a way so that it is easier for the main customers of XYZ to come in touch with the company. The figure below shows that the main customers of the company are the recycling businesses (for example, cell phone, bicycle, refrigerators, and industrial waste recyclers), building constructors, local residents (for household kitchen equipments), and local restaurants:

Target Market of the XYZ New Store.

Figure 5: Target Market of the XYZ New Store

Source: Self-generated from Kuratko (2008)

Advertising Strategy:

While starting a new business out of an expansion strategy of the existing one, it is important for the new store to advertise it to create awareness among public for making them conscious about the products or services it would offer. Good advertising strategies would help XYZ to bring success in its market positioning by obtaining familiarity among customers, raising sales, and ultimately by achieving a good percentage of the market share in Blaine.

Attainment of all these goals requires the implementation of advertising in both local and national markets. Moreover, as the parent company of XYZ is a large organization, like many other new businesses, it would not have to face financial limitations while expending in advertising campaigns and it could take financial support to promote the new store. However, the store is able to advertise by itself and the following advertising strategies would assist XYZ to attract its targeted customers throughout the local market:

Advertising Strategies Table.

Table 3: Advertising Strategies

Source: Self-generated

Financial Plan:

The XYZ New Store would prepare this financial plan in order to measure the prospect of the business, and estimate the target profit. Pandey (2007) argued that business expansion plan should realistically evaluate sales, variables costs, cash flow, and working capital; therefore, this financial plan will consider a pro-forma profit and loss statement, and balance sheet to estimate the profit/loss for the fiscal year 2011 to 2013.

Important Assumptions:

FlexMation has decided to start the XYZ New Store with the total capital of $280,000 where bank will invest 40% of total fund as bank loan with 2% interest rate. On the other hand, the owners of FlexMation will invest 60% capital to expand its operation in the US market.

Projected Profit and Loss:

Three Years Income Statement for XYZ New Store:

Income Statement

XYZ New Store

2011 to 2013

(all numbers in $ 000)

2011 2012 2013
REVENUE $8,030.00 $10037.5 $12045.00
Gross Revenue
$8,030.00 $10037.5 $12045.00
Net Revenue
COST OF Service Provide $3,360.00 $4,200.0 $5040.0
Total Cost of Good Supplied
Gross Profit (Loss) $4,670.00 $5837.5 $7005.0
Selling $900.00 $1,000.00 $1,125.0
Salaries and wages $462.00 $577.50 $693.0
Advertising & Promotion $0.00 $125.0 $225.0
Other $1,362.00 $1702.5 $2,043.0
Total Selling Expenses
Directors remuneration $1,932.00 $2,415.0 $2,898.0
Rent $360.00 $450.0 $540.0
Utilities $48.00 $60.0 $72.0
Telephone $12.00 $15.0 $18
Loan repayment $1.60 $2.0 $2.4
Interest $12.00 $15.0 $18.0
Miscellaneous $20.20 $25.25 $30.30
Total General/Administrative Expenses $2,385.80 $2981.25 $3577.50
Total Operating Expenses $3,747.80 $4683.75 $5620.50
Net Income Before Taxes $922.00 $1152.50 $1383.0
Taxes on income $16.00 $20.0 $24.0
Net Income After Taxes $906.00 $1132.50 $1359.0
NET INCOME (LOSS) $906.00 $1132.5 $1359.0

Projected Balance Sheet:

The financial management team also provide pro- forma balance sheet of XYZ New Store for the year 2011 to 2013.

Balance Sheet for XYZ New Store:

Balance Sheet
XYZ New Store

For the year ended 2011 to 2013

2011 2012 2013
Current Assets
Cash $997800 $311812.5 $374175
Bank Account 0 $935437.5 $1122525
Total Current Assets $997800 $1247250 $1496700
Fixed Assets
Starting Asset 0
Other Fixed Asset $170000 $212500 $255000
Goodwill $20000 $25000 $30000
Total Net Fixed Assets $170000 $212500 $255000
TOTAL ASSETS $1187800 $1484750 $1781700
Current Liabilities
Interest 0 $28800 $28800
Profit/Loss $906000 $1132500 $1359000
Accruals & other payables $1800 $2250 $2700
Total Current Liabilities $907800 $1163550 $1390500
Long-term Liabilities
Capital (owner + bank) $280000 $280000 $280000
Other long-term liabilities
Total Long-term Liabilities $280000 $280000 $280000
TOTAL LIABILITIES $1187800 $1484750 $1781700

Pro-forma Cash Flow:

Cash Flow Statement for XYZ New Store

for 2011 to 2013

2011 2012 2013
Cash sales 8,030,000.00 10,037,500.00 120,45,000.0
New equity inflow $160,000.0 160,000 160,000 160,000
Loans received $120,000 120,000 120,000 120,000
Total Receipts $280,000 8,310,000.00 103,87,500.00 124,65,000.00
Cash purchases 3,360,000.00 42,00,000.00 50,40,000.00
Payments to creditors 0.00
Salaries and wages 2,832,000 35,40,000.00 42,48,000.00
Rent 360,000 4,50,000.00 5,40,000.00
Utilities 48,000 60,000.00 72,000.00
Telephone 12,000 15,000 18,000
Advertising 249,000 3,11,250.00 3,73,500.00
Marketing/promotion 213,000 2,66,250.00 3,19,500.00
Bank charges 9,600 15,000 18,000.00
Miscellaneous 20,200 25,250.00 30,300.00
Loan repayments 28,800 36,000 43,200.00
Tax payments 9,600 15,000 18,000.00
Capital purchases 150,000 187,500.00 2,55,000.00
Other 20,000 25,000.00 30,000.00
Total Payments 7,312,200.00 91,40,250.00 109,68,300.00
Cash Balance 997,800.00 12,47,250.00 14,96,700.00

Break-even Analysis:

Brealey & Myers (2002) pointed out that break-even is a point where there is exist no profit or loss from the business operation, and loss occurs when business generates less revenue than from the break-even, and the business produces profit when business generates more revenue than the break-even point.

As FlexMation will expand its business by opening a new store, it will be easy for the company to generate profit from the first year of its operation. However, the marketer of XYZ New Store intends to reach break-even point at the third quarter of 2011, and it will reach at break- even point when projected sales revenue will be $37,47,800.0 and expenses $37,47,800.0 that indicates no profit no loss situation, which can be represented graphically as

Break-even analysis of XYZ New Store.

Figure 6: Break-even analysis of XYZ New Store

Source: Self generated

Store Managers Expectations:

Supervisory management functions for the New XYZ Company:

Being a logistic equipment supplier the New XYZ Company has keen concentration on their Manager’s leadership quality as well as supervisory management functions. Briefly, supervisory management of the Company has deal the acts[1] for managing their employees in doing business operations.

Training on relevant professional skill development is the most effective tool to handling teamwork and improve supervisory positions in terms of fulfilling clients and Company’s needs and demand as well. Mangers of the Company have to work hard and soul to contribute most effective supervisory performances (Ellis-Christensen, 2010), the manager’s role has demonstrated in the following diagram –

Leadership role of the Mangers.

Figure 7: Leadership role of the Mangers

Source: World Scientific Publishing Co (2010, p.10)

Effective leadership style and qualities

Like any other industries, the New XYZ Store has followed several common effective leadership style and qualities. From this viewpoint of this company, Mangers have enthusiastic to learn new skills and to provide guidance to their subordinates.

Gordon (1998, p5) mentioned that, in the light of goal setting theory, key qualities of managers have concerned with frank listener, strategically draw clear guideline, always supporting optimistic proposals, following time-frame, participate both official and informal presentation, assist subordinates to resolve dilemmas, draw proper organizational behavior, appreciate other’s contribution, establish idea sharing, conflict management and delegate duties and responsibilities.

Effective supervisory management program in terms of leadership role

Strategically for New XYZ Store, “On-Job” training is the most effective approach for the Mangers of the Company to promote their working position and additionally, execution of their responsibilities. Following are the eight strategic steps for effective leadership role for logistic supply (EIO, 2005),

Planning: in order to existing and current obstacles of Company, Mangers have got involved in defining key vision and objectives of the firm and hence, it will be easier for them to direct their subordinates,

Organizing: allocation of three major dynamics scheduling, workforce and financial resources least amount of wastage of New XYZ Store,

Controlling: under team management distribute duties and responsibilities among the subordinates of the Manger therefore each and every employee has to motive through “do it all by me”,

Positioning performance standards: Being a follower a Manger has the right to expect better performance from his/her subordinates and for the reason it has urgent for them to draw performance standards position for staffs individually,

Performance appraisal: It is a motivational tool for the subordinates to perform better,

Communicating: Opposite to the Company’s needs and demand, an employee has also few expectations from his/her supervisor and the Company as well. Concerning this view, the New XYZ Company’s Managers have efficient in communication and make liaison with his/her subordinates,

Motivation: without any compromising employee morale, Managers have adequate motivational skill to get marginal effort from their subordinates.

Application of decision-making strategy: Managers of this Company have enough frank and friendly to discuss with their subordinates during decision-making and additionally, get effective desired results.

Key benefits

Effective leadership role of the New XYZ Company has contributed several benefits through satisfying three party consumers, the Company, and the entire employees.

Some of them have included potential team management, protect and prevent individual personal problems, advance managerial skills as well as ensure self discipline issues like leadership role and style, liaison, motivation, controlling, and sequence maintenance of the emergence tasks, correction of pay-off tasks, time management, training aid, discipline, minimizing dilemmas, decision-making and performance appraisal (Business Works, 2010).

Key challenges

Logistic supply of the New XYZ Company has currently faced several challenging dynamics due to twisted competitive global market. Both hypothetically and in practice, logistic equipment supply is an area of proactive business operation and conversely reactive responses towards changes.

Consequence of this the Company has faced labor crisis challenges. Additionally, there have four key constrains for business expansion. These have involved in lack of public awareness about the industry, dynamics of the business operation has changed promptly, crisis of sufficient employee/workforce skill improvement program and socio-economic pressures (Alberta, 2010).

System Analysis:

The aim of the system analysis of XYZ New Store is to providing an IT[2] strategic plan that will consider the purpose of IS[3] strategy, to provide better and more efficient service, and to advance knowledge sharing process and networking for all its stakeholders. The First part of this analysis would deliberate on the necessary software and the second part would particularly on the demand of particular hardwires those would be necessary to run the software.

Identifying the Necessary Software:

The purpose of the IS strategic plan for XYZ New Store is to put together every department’s IT requirements with business strategy and this plan represents the incorporation of thoughts and requirements for an all-inclusive business view of how to handle the IS assets of the company.

The IS strategic plan has various purposes for XYZ New Store starting from the integration of information technology in its corporate structure through which the primary operations are conducted through integrating IT from the products inventory to sales and marketing ensuring the most fast and convenient services to the customers.

It is one of the foremost suppliers of the company FlexMation includes Aluminium fittings and assembling services in the US market while the XYZ New Store has aimed for not only the development of these products, but also for their marketing and distribution.

The function and maintenance of the company’s information technology system has executed altogether by an amalgamation of outsourced and centrally managed services; these systems comprise of billing, organizational resource planning, business intelligence, corporate network, and payroll, data warehousing and desktop infrastructure to encounter in the market.

To integrate all above functions through IT implication XYZ New Store would develop an online resource with php, and mySql database where some essential software would be integrated.

Moreover, this site would work as an e-commerce site where the customers could buy its services in one click staying at home- this would ensure their convenience and satisfaction thus contributing to increase sales, as more customers will be attracted towards the products of XYZ New Store for less effort required to acquiring them.

The E-commerce facilities would turn as XYZ New Store’s main competitive weapon while it strives to reduction of costs; the operation of e-commerce habitually let businesses to enjoy large cost diminution scope to amplify its competitive advantage.

The major software for XYZ New Store is SAP, which has solid base on ERP including HRM, accounting, materials management, sales, and services and will facilitate the company with most of the functionality of its business process. Moreover the parent organization of XYZ New Store the FlexMation already been in use of SAP and licensed to use it at any outlet. Thus, selection of SAP would facilitate the XYZ New Store to reduce high cost of such ERP software and bring operational efficiently.

SAP (2006, p.1) pointed out that the SAP NetWeave platform has introduced to serve the business process management to boost their capabilities those would facilitate the users to incessantly settle in their processes to new business models and strategies that will appropriately address to the modern quick shifting business environment enabling ICT[4] opportunities to respond quickly to the raising needs.

In case of XYZ New Store, the SAP platform will provide the technological tools to support its business processes with free integration and application platform that will positively decrease the TCO[5] for complete IT integration for the company while its BPM[6] provide open opportunity to effectually meeting any new system integration.

SAP will also facilitate the XYZ New Store to analyze business processes, its dynamic modification combining with internal and external resources, dynamic modification of business, workflow system, messaging interface, and value creation for the company by maximizes the returns, and advanced decision-making. EMC Corporation (2006, p.5) mentioned that built-in intellectual property safety measures of SAP has strongly guaranteed security authentication at various level to protect all the system.

Identifying the Appropriate Hardware:

The necessary hardware to integrate SAP at XYZ New Store would depend upon a number of issues like minimum system requirement, network integrity, and actionable information that the company is willing to process. At the opening, the store may face minimal workload that will gradually increase, so here the chosen configuration would be heavy duty single server, multiple system, and optional load balancing interface.

EMC Corporation (2006, p.5) mentioned for such environment SAP integration will be needed a content and database server hosted within in a single machine with at least Pentium IV, two pin processor for Windows 2000 with 4GB RAM and 100 GB Hard Disk including RAID 5 and initial JAVA Heap Size of 512 MB. For multiple systems, it will require two same hard disk configured machine, while one will be dedicated for the content and database server and the other server is for SAP archive services.

Regarding the choice of database, SAP is friendly with most of the database software, so new store have the opportunity to use mySql, Oracle 9 or latest and even MS SQL for its web Application Server as needed. Both for UNIX hardware and Windows, SAP installation utilizes almost equivalent processor speed, memory consumption along with I/O performance, so, XYZ New Store has the liberty to choice any of the hardware group.

Employee Handbook

Employee handbook 2010–11 has composed for the entire employees of the XYZ New Store to inform and clarify employee’s working policies and procedures those have coherently attached with the employment process. The personnel have enthusiastic to welcome optimistic suggestions to amend and improve the handbook as well as possibly will conferred to the HRD/HRM[7] supervisors to approve.

Employees have to be pointed that codes of the handbook possibly will amended or superseded at any moment of the working period to get better personal and professional growth. Entire workforces of the XYZ New Store have responsible to read, understand, and employ the codes of conduct of the handbook and the XYZ New Store has committed to afford a friendly and constructive working atmosphere. (FISD, 2010)

Employment application:

The XYZ New Store has selected their employees based on accurate information available in the employment application and additionally, available data during hiring process. Under this circumstance any type of misconduct[8] would keep out from employment and in case of final selection, it might be resulted termination

Employee status definition:

The XYZ New Store has represented a person as an employee whilst the person (he/she) has appointed to work regularly in terms of wages and salary. Under employee status of the XYZ New Store diverse classes of employees have worked[9] where the XYZ New Store has the authoritative power to supervise duties, responsibilities and performance appraisal (US/DOL, 2001).

Employment policies and procedures: Under this clause of handbook, XYZ New Store would emphasis on the issues to illustrate brief account of the employment policies and rules.

Equal Opportunity Status: The XYZ New Store has followed equal employment regulation where job applicants have not any scope of facing discriminations[10]. This status has applicable in the entire employment affairs but does not restricted towards employment phases[11]. Moreover, this Enterprise has obeyed the Federal laws and regulations to protecting additional classes of applicants like certain diseases bearer (HIV/AIDS), homosexual persons (Anon, 2010).

Disabilities Act compliance: An employee selection and compliance rule of the XYZ New Store has adhered towards the ADA[12]. In the light of ADA, it has prohibited to discriminate a competent applicant with disability. Recruited employees have responsible to inform the XYZ New Store about such dilemmas as said by the ADA. Moreover, the XYZ New Store has dedicated to accommodate an undue hardship support in such cases.

Following are the issues of few known disabilities according to the ADA (Anon, 2010). Firstly, person has physical/mental injury that has substantially restricted his/her key daily like activity/activities or second, have such previous record of impairments and third, have regarded to know impairments.

Classification of the employees: As defined by the HRM an employee in an “Employee at will”. In addition, this slogan has displayed that both employer and the employee has right to terminate employment relationship under several considerations[13]. In case of advance notice employer should notify the employee before two weeks on termination.

The employment personnel have responsible to clarify about the employee classes of the New XYZ Company. A written employment contract should included termination, working hours, and types on employment. Considering these three views following are the employee categories of the New XYZ Company.

Regular full-time: they have required working as a minimum 40 hours within a week and have not any termination time frame and moreover, either termed as non-exempt (hourly) or by the exempt (salaried).

Regular part-time: working schedule has outlined to work between (10 – 40) hours during a week and has no termination period.

Temporary employee: have recruited for a certain length of time and their payment have paid according to the hours performed and have not receive any fringe benefits like holiday/vacation payment.

Provisional employee: employees have not yet completed 90 days provisional/training period after they have recruited and after successful completion of the provision period, an employee would be graded as a regular staff.

Exempt employee: this grade of employment has usually paid a salary through including few terms[14] and does not require overtime.

Non-exempt employee: they have not eligible for the exempt status and usual payment has paid through hourly basis where overtime has included.

Confidentiality: Consequence of final selection, an employee of the XYZ New Store has responsible to obey confidential issues[15] of the Enterprise as an exclusive property as well as employment continuation in this organization.

Working schedules/Office hours and overtime: The XYZ New Store has opened their store Sunday through Saturday opening at 12.01 am and closing at midnight 12.00 am and the employees have to attend standard 40 office hours of a week excluding holidays (US/DOL, 2001). Only non-exempt staffs are eligible to perform overtime[16] in excluding 40 office hours per week and paid 1.5 times weigh against to regular pay hour. (SLS, 2010)

Meal/lunch hours: Usual lunch break has between 11am – 2.00pm of minimum 30 minutes for each employee and hence; clients would has not feel any inconvenience due to absence of an employee.

Break/refreshment hour: In accordance with the notification of the immediate supervisor an employee would have taken his/her break time for the unexpected personal business conduct but employee who has not adhere to this policy would be subject to the disciplinary action as well as termination (US/DOL, 2001).

Personnel file: Accurately a record of personnel information at 24 hours 7 days has greater significant in avoidance of upcoming dilemmas such as shift change and the employees have to responsible to keep attach with their superiors of the HRM with updated information[17].

Personnel data changes: All the employees of the XYZ New Store have responsible to notify accurately their HRM supervisor of any changes of their personnel information as soon as possible. Here, the list of personnel information

The list of personnel information.

Emergency closing: Due to emergency circumstance such as inclement weather (over rain flow, snowfall) HRM supervisors have instructed to flex working hours (SLS, 2010).

Performance review as well as planning conferences: This term of condition has guided the HRM supervisors to conduct for the entire regular full time and regular part time after completion of the 6 months of employment and for the provisionary employees it has applicable at the end of 90 days/3 months. All of the performance review and planning approaches should followed job description and job specification for each individual staff.

Outside employment: According to the company policy of the New XYZ Company, an employee has legally permitted to attend outside jobs/employment if it has not made any inconvenience on current job duties, responsibilities and working hours but internal tools of the Enterprise has not authorized to employ during outside employment.

Employment relationship/ corrective action: Due to certain deviates from required working conditions of an employee supervisors of the XYZ New Store have instructed to taking corrective action including several initiatives[18]. Additionally, evaluation of the parameter of infraction supervisors should consider employee’s past working record along with several aspects[19].

Termination: Employment termination is an inevitable portion of the personnel activities in the XYZ New Store due to several rationales. During terminated from their employment, non exempt employees have given a written notice before at least 2 weeks and for the exempt employees it has before 4 weeks. Consequently, both employer and provisional employees of the XYZ New Store has authorized to employment termination and the terminated staff has right to payback his/her all of personnel files as well as financial obligation as per Company policy. Following are the common termination aspects.

Resignation: A voluntary employment termination has initiated by the staff.

Termination: an involuntary employment termination has initiated by the Company.

Layoff: an involuntary employment termination has initiated by the Company due to non-disciplinary performances.

Safety: The XYZ New Store has as much as necessary concern on utmost priority on employee safety in consistent[20] with the OSHA[21] 1970. Conversely, employees of the company have also responsible to taking part during this management and in case of a single violence of the rules employees has instructed to reporting their immediate supervisor. Moreover, the XYZ New Store has committed to covering accidents during workplace in terms of WCI[22] pursuant towards the Country’s Labor Act (Anon, 2010).

Health related issues/ Required medical attention and insurance

Heath status of the Company has required that employees have to notify their HRR[23] supervisors any of health related complicacies including pregnancy and the Company has responsible to initiate those in terms of written work permit by an authorized doctor and for the emergencies should grant leaves as well as transportation supports.

The XYZ New Store has a compliance policy of the compensation package for their eligible employees[24] insurance[25] as well as their family members (SLS, 2010).

Security: Security issues have included office keys, alarm system, door lock, and proper lighting system and employees should strictly obey the rules of security purpose as well as not to utilize Company properties after working schedules without authorization of the supervisors.

Supplies, expenditures, and obligating the organization: Without any written authorization, a single employee has not allowed to purchase supplies in the name of the Company.

Expense reimbursement: On behalf of the Company, employees should have a written authorization by his/her manager to incur any expense and should submit the expense report or vouchers and this policy have also applicable on employee’s personal vehicle cost (SLS, 2010).

Parking: Employees should park their vehicles in the restricted areas provided by the organization.

Visitors in the workplace: In the XYZ New Store, only authorized visitors have allowed during workplace due to employees’ safety and security and the Company as well.

Immigration law compliance: The XYZ New Store has employed those individuals who have legally authorized working in this country in reference to the IRCA[26] of 1986 and in addition, the XYZ New Store has not allowed an employee whose legal work permit in this country has terminated in the country.

Wage and salary standards:

Increase of wage or salary: Duties, responsibilities, and working performance of an employee are determinants of wage and salary increase after end of performance review period[27].

Timekeeping: The XYZ New Store has utilized time card approach in timekeeping for their all exempt employees, the non-exempt employees are not allowable to eligible to issue a time card during their first employment day, and the personnel authority has reviewed the time card records each week. Additionally, the Company should not pay any breaks for the personal business and employees possibly will charge for replacing/lost/stolen the time card.

Paydays and payroll: Employees of the XYZ New Store will be paid at the 15th of each month in terms of check and their payment would calculate on the 1st of each month. In case of holiday during a regular payday accounts division should pay the checks before on the payday (SLS, 2010).

Code of conducts:

Work Rules: Standards work rules of the XYZ New Store has significant to regard and the entire employees have also instructed to familiar with them and additionally, obey and follow them faithfully during conducting Company’s business.

Attendance and punctuality: The XYZ New Store has believed in employee’s quality as well as better performance in terms of attendance and punctuality. The Company has required that entire employees should attend in the workplace before 15minutes of the work schedule except sick leave or previous notification.

Absence without notice: Employees have instructed to notify their immediate supervisors due to leave of absence and absence without notification would be resulted cut of payment from the payroll.

Leave of absences: Employees of the XYZ New Store has an opportunity to consume sick leave, funeral leave of 3day with pay, maternity leave of 90 days with pay, military leaves circulated by the government. Alternatively, the Company has the authoritative power to notify their eligible staffs to join in leave period in terms of “jury duty”.


Harassments and discrimination policies: A common harassment and discrimination policy of the XYZ New Store has treated each and every employee with respect and dignity where workplace has to be free from all classes of unlawful discrimination as well as harassments[28].

Cellular telephone use: The Company has allowed their employees to use cellular telephones only for the job related business; otherwise, it might bone a subject of termination and indiscipline as well.

Computer use & E-mail policy: Likewise, cellular telephone computers and e-mail an account of an individual employee has authorized only for job duties and responsibilities perform.

Public image: Individual professional appearance of the XYZ New Store has significantly reviewed during contact with a consumer. In addition, the employees have to be well groom as well as appropriate dressed in consistent with their job position and additionally, inappropriate working attire[29] has treated as violence of office discipline.

Substance abuse and tobacco products/ smoking, drug, and alcohol use

As per Company policy, the personnel of XYZ New Store have strictly instructed to free from substances like alcohol, tobacco, and drug during work schedule. Supervisors should taken immediate action in terms of termination during such abuses.

Dress code: Dress code of the Company should followed well individual grooming and hygiene and additionally, safety accessories provided by the Company for each and every employee. Conversely, management, sales personnel, and the executive staffs have to wear traditional business clothes in consistence with the company image.

Employee benefits and services

Cobra benefits: Several common qualifying events[30] have conduct in consistence with the COBRA[31] benefits in the New XYZ Company.

Social security and simple IRA

Income tax, medical support has included in the social security of the XYZ New Store employees and the simple IRA plan has administered by an investment firm appointed the Company where an employee has authorized to consume (1–3) % cost of living.

Record keeping: The HRD of the Company has maintained vacation days in consistence with the employment classification and work hour required to perform.

Holidays: Common government holidays[32] for all employees (non-paid for the non-exempt employees) of the Company have been treated as at every year.

Educational assistance, training and professional skill development: For professional skill development as well as personal growth the XYZ New Store has always be friendly to support their entire employees.

Employee communications: Employee communications of the XYZ New Store has conducted through staffs meeting, bulletin boards; suggestion box and has necessary steps to handle clients complains. Staffs meeting of the Company has held at the end of each month to submit and resolve any type of difficulties during workplace both employee and consumers.

Identify Potential Quality Projects:

Emergence product quality:

Product quality is reflection of the consumer’s response to what degree of available logistic supply of the XYZ New Store has fulfilled retained the potential clients and satisfied their needs and demand. Any product of the Company would be denoted either as high quality or as low quality in terms of consumer’s satisfaction. Alternatively, product quality can be termed as the strategic response of the trade participation difficulties removal containing following “three Cs”. (UNIDO, 2006)

Competitiveness: minimize supply chain difficulties through developing competent logistic potentiality.

Conformity: The product conformity has developed and ensured through both technical and market demand fulfillment of XYZ store

Connectivity: market connectivity has drawn through superior integration.

Emergence of product quality.

Figure 9: Emergence of product quality

Source: UNIDO (2006, p.6)

Illustration of the product quality projects for the XYZ New Store:

Pareto Chart:

The Pareto chart has identified and analyzed causes behind low product quality and this tool has widely utilized in developing superior product quality and arranged through a team management.

In consistence with the tool, key difficulties of logistic products has included repetitive product faults, time consuming repairing of the defective products, high level of material requirements and comparatively lower productivity. The Pareto chart has suggested to drawing an inspection checklist in order to maintaining quality control where key default reason, working hours should be incorporated.

Similar to the following table, supervisors of the Company have to calculate percentage (%) of defects and successively cumulative defect percentage. Finally, according to the 80/20 principle of the Pareto chart, 20% potential defect cause of the product has generated 80% defective products. Alternatively, this chart has also been composed through utilizing A0/A1 size MS Excel paper of computer (ILO, 2010).

Pareto Chart Table.

Figure 10: Pareto Chart

Source: ILO (2010, p. 3)

Merits and demerits:

Key contribution of the Pareto chart has illustrated major defect cause, suggested quality development modes and save financial resources as well as time. Conversely, key limitation of the approach has enabled to analyzing quality information.

Pareto Chart.

Figure 11: Pareto Chart

Source: ILO (2010, p. 3)

Fishbone Diagram:

The fishbone diagram has integrated through two broader ingredient cause and effect where actual and potential difficulties have pointed and additionally, has provided a group discussion module to illustrate causes. Alternatively, it is a communicating tool to make trade-off among product defect causes and product quality difficulties.

Additionally, this integration has offered the product quality controller to build employee performance development interventions[33] to overcome potential and actual defects of a product. Before illustration of the fishbone diagram, it has urgent to clarify about client’s demand and actual problem statement (WBI Evaluation Group, 2007).

Fishbone Diagram.

Figure 12: Fishbone Diagram

Source: Anon (2010, p.2)

Merits and demerits:

Major advantage of the strategy is that it has optimistic clarification on fundamental defects against consumer demand and additionally, less time consuming as well as supplement defect dynamics of the product have also evaluated. On the other hand, simple form of the defect evaluation is the key weakness of this approach as well as its strength and therefore, this tool has incompatible to analyze complex attributes (WBI Evaluation Group, 2007)

Diversity council guideline for the XYZ New Store

Diversity council of the XYZ New Store has termed as the “bulletin board” where workplace ethical dilemmas and discrimination issues have discussed in order to developing diversity along with equality practice. Major vision of the board has to explore and patronize consciousness on diversity, equality, and child issues during workplace. The bulletin board of the company has guided its employees though different modes and counseling (OMC, 2006).

The major diversity counseling of the XYZ New Store has aimed to motivate employee’s thoughts to protect and prevent all classes of biasness and discrimination as well as interact to take initiatives to build development services for the helpless children along with their family members. For this noble task, the Company board has followed the guideline prepared by the NCCC[34], which has a vast tool to educate employees against workplace diversity, inequality, and discrimination prevention.

Meanwhile, make assistant for the critical reflection of one’s own though as well as show the road map of modern thinking and illustrate the significance to know about diversity and equality policy practice relates towards the women and children workers. Five, propose a complete guideline for team working and networking as well.

To develop a guideline to prevent discriminatory issues during workplace, XYZ New Store would evaluating modes to appraise critically better childcare atmosphere and make support on necessary data and information on workplace racism towards both male, female and childcare. At the same time, XYZ New Store will evaluate to allocate modern resources, development program, and the rest amendments on current diversity management rules and policies to accumulate latest supporting skills to modify workplace equality issues as well.

Reference List

Alberta (2010) Building and Educating Tomorrow’s Workforce: Alberta’s 10 Year Strategy. Web.

Anon (2010) Employee Handbook 2010-2011. Web.

Anon (2010) Fishbone Diagram: Factory Improvement Programme, Module 2: Quality, Tool 7. Web.

Business Works (2010) Effective Supervisory Management. Web.

EIO (2005) Eight Steps to Effective Supervisory Management. Web.

Ellis-Christensen, E. (2010) Web.

EMC Corporation (2006) Minimum Hardware Configurations for EMC Documentum Archive Services for SAP Practical Sizing Guide. Web.

FISD (2010) Employee Handbook 2010-2011. Web.

Gordon, T. (1998) . Web.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2001). Strategic Management. (4th ed). Singapore: South- Western Thosmson Learning.

ILO (2010) Using Pareto Charts in Quality Control. Web.

Jankowicz, A. D. (2005) Business Research Projects. (4th ed) London: Thomson.

Kotler, P., & Armstrong, G. (2006). Principles of Marketing. (11th ed). New Delhi: Prentice-Hall Private Limited.

Kuratko, D. F. (2008) Entrepreneurship: Theory, Process, and Practice. (8th ed). South-Western College Pub.

OMC (2006) Diversity and equality guidelines for childcare providers. Web.

SAP (2010) SAP Solution Brief: Business Process Management with SAP NetWeaver. Web.

SLS (2010) Employee Handbook Template. Web.

UNIDO (2006) Product quality-A guide for small and medium-sized enterprises. Web.

US/DOL (2001) Template for Employee Manual. Web.

WBI Evaluation Group (2007) , Needs Assessment Knowledge Base. Web.

World Scientific Publishing Co. (2010) Chapter 4: Topics in Lean Supply Chain Leadership. Web.


  1. Meetings, reviewing performance, scheduling, assigning raises or bonuses, and hiring or firing employees could all be part of someone’s job in the supervisory management field
  2. Information Technology
  3. Information System
  4. Information & Communication Technology
  5. Total Cost of Ownership
  6. Business Process Management
  7. Human Resources Development/ Human Resources Management
  8. Misrepresentations, falsifications or material omissions in any of this information or data
  9. Exempt, non-exempt, regular full-time, regular part-time and temporary persons and others employed
  10. On the basis of race, religion, color, sex, age, national origin, mental or physical disability, veteran or family status, genetic information, or any other status or condition protected by applicable federal, state, or local laws, except where a bona fide occupational qualification applies
  11. Recruiting, interviewing, job assignments, training, compensation, benefits, discipline, use of facilities, participation in Company-sponsored activities, termination, and all other terms, conditions and privileges of employment
  12. The Americans with Disabilities Act
  13. At any time, with or without cause, and with or without advance notice
  14. An executive, professional, administrator, outside salesperson or manager
  15. Personnel information, suppliers, procedures, cost of merchandise, sales data, price lists, financial information, records, business plans, prospect names, business opportunities, confidential reports, customer lists and contracts as well as any other information specific to Enterprise
  16. No lunch, sick, holiday or vacation time is included in calculating overtime
  17. Name, home address, telephone number, number of dependents, or any other information pertinent to your employment with Company
  18. An oral warning, a written warning, probation, and finally termination of employment
  19. Theft in any form, insubordinate behavior, vandalism or destruction of company property, being on company property during non-business hours, the use of company equipment and/or company vehicles without prior authorization by the Executive Staff, untruthfulness about personal work history, skills, or training, divulging Company business practices, and misrepresentations of the Company Name and image to a customer, a prospective customer, the general public or an employee
  20. Strives to provide a clean, hazard-free, and safe environment
  21. The Occupational Safety and Health Act
  22. Worker’s Compensation Insurance
  23. Human Resources Representative
  24. Eligible employees are all full-time employees who have completed ninety (90) calendar days of employment; and part-time employees who work at least twenty-five (25) regular hours a week and have completed ninety (90) calendar days of employment
  25. Health insurance, life insurance and accidental death coverage (group benefits)
  26. Immigration Reform and Control Act
  27. Every six (6) months from the date you were hired with the exception of the three (3) month review at the end of your provisional period
  28. Racial and sexual harassment on the basis of race, religion, color, sex, age, national origin, mental or physical disability, veteran or family status, or any other status or condition protected by applicable federal, state, or local laws
  29. Open-toed sandals, Spaghetti-strapped shirts, Tank tops or revealing shirts, Short mini skirts, Sheer clothing, T-shirts with inappropriate or offensive gestures or advertising
  30. Resignation, termination of employment, or death of an employee; a reduction in an employee’s hours or leave of absence, divorce or legal separation and a dependent child no longer meeting eligibility requirements
  31. The Federal Consolidated Budget Reconciliation Act
  32. New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving Day, Christmas Day
  33. A combination of mentoring, job aids, training, motivation, new expectations
  34. National Childcare Coordinating Committee
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