Peter Spaans in Holland started Spaans Cookie Co in 1896; later in 1912, he moved to USA and in 1922 opened a bakery selling donuts, potato chips, and pastries. The bakery was formed with the intention of providing the customers their preferences. The company has, in the time of operation, merged with other businesses.
It was designed to be a premium priced bakery, which targeted customers of a higher income level. The success of Spaans Cookie Co is not only in terms of having smooth operations throughout the company but also in the fact that in this industry, there is a very large margin for premium pricing if the company is able to develop a strong value with its customers.
Creating such value is very difficult because they have to cater to the cultural needs of the area they are operating in so that the food provided to the customers is acceptable.
Spaans Cookie Co caters on providing the experience to the consumers, and for that experience, we need the right people for the job. The company, just like any other business, has faced tests in its operations but has emerged stronger. This paper will explore the strategic plan to be implemented by the company to improve its services.
Vision, mission, values
Vision statement: the long-term plans of the company are to increase value in such a manner that they remain market leaders. Due to this reason, the mission statement is such that it allows them to progress globally without any problems.
The vision statement guarantees success in the long run as it allows future progress in such a manner that it is acceptable to stakeholders. Unless such windows of opportunities are utilized, it would be very difficult for the company to be in the industry in the long- run. For Spaans Cookie Co, the customers are the most important aspect and providing a value for their money their primary objective.
Mission statement- Spaans Cookie Co has a productivity mission statement that has been issued to all employees, the employees actively carry out the tasks in fulfillment of the goals in the mission statement, and the management gives high priority to the achievement of those goals.
The productivity norms are integrated with the organization’s productivity plans because productivity improvement plan is most effective if it is integrated into the organization’s strategy planning. The results of such plans are not evaluated the overall cost of production as far as Spaans Cookie Co is concerned.
Value Facet Analysis– There is a number of workers of different cultures working in Spaans Cookie Co and as such, cultural issues is a problem in Spaans Cookie Co. However, managers have been trained to handle cross-cultural teams and to deal with cultural issues within their teams.
The top recommendations given have a lot to do with the current organizational culture in Spaans Cookie Co, banking more on complacency, inefficiency, poor communication, less teamwork etc. This trend has to be halted and a new culture of efficiency, competence, effective communication, teamwork etc is brought in. The recommendations suggested would be able to bring in all these traits among the workers as well as in the management.
Most of the employees of Spaans Cookie Co seem not to be interested in aligning their values with that of the organization’s values. The recommendations suggested would align the values of the employees with that of the organization’s values and if any employee’s values cannot be aligned with that of the organization, then he or she should be forced to leave the organization.
There is a good understanding of supplier values in Spaans Cookie Co but the understanding can be hampered if supplies of materials are not made on time as agreed upon due to employee negligence and poor productivity at Spaans Cookie Co. There is need to have understanding of supplier values and provide more consideration to their values by Spaans Cookie Co.
Any organization should have a better understanding of what the customer values. In the case of Spaans Cookie Co, the customer looks up to company to deliver taste cookies. This goes a long way in meeting those customer values.
Spaans Cookie understands the values of third parties like labor unions, the government regulatory agencies etc. If regular employees were sacked for their inefficiency and poor productivity, the labor unions and regulatory agencies would react and from their reactions appropriate steps can be taken that would push Spaans Cookie Co to greater productivity levels and increase efficiency.
The Spaans Cookie Co management is unyielding in front of the labor unions and the regulatory agencies in their determination to make it a productive and efficient organization.
Currently the employees of Spaans Cookie Co who are shepherds of the owner’s assets do seem to be interested in increasing the value of their owner’s assets. However, some of them do work but their complacency hampers their productivity and therefore the increase in value for the owner’s assets is hampered.
External and Internal Environmental SWOTT Analysis Table
Business environment
Spaans Cookie Company has continued with growth in sales and remained profitable in the past five years. While it has gained market share in the last few years, some flavors have tended to struggle because of market depression. The whole industry has had to put up with, rising fuel costs and a dampened consumer demand. Spaans Cookie Company has however continued thriving, mainly due to its business model, which dwells on cost control and product quality.
Competence in management has enhanced efficiency of operations in the company. In addition, the company has a good capital base that facilitates investments in new technologies to diversify the business activities. There are strengths, weaknesses, opportunities threats, and trends that have affected the company both internally and externally. This paper addresses comprehensive factors that affect operations including the Economic, Technological, Legal & Regulatory, Social, Goals, Resource, and Innovation.
External forces
Economic- The Company’s unique cookies are of many flavors. As a result, Spaans Cookie Company determines the volume of output and the prices at which the products are sold. This increases the market demand significantly and therefore products are sold at prices that maximize the profits of the organization and hence the welfare of shareholders.
The economic power that the organization has enables it to control the marketing of its products and maintain a competitive advantage. Customers are usually willing to purchase highly priced products especially if the products are of high quality and if they are of unique types (Gitman and McDaniel, 2008).
Spaans Cookie Company has adopted this strategy since it provides high quality products in the market to maintain its market power. This has facilitated the efforts of the company to meet the market demand and maximize the welfare of its stakeholders including the customers, the employees, and the shareholders. Spaans Cookie reduces inefficiency by producing the maximum units of products possible in a day.
Technological- The Company has invested in innovation to facilitate adoption of the most sophisticated technology in production of different flavors that meets the needs of customer. This has led to production of high quality products that are highly demanded in the market.
Technology enhances the efficiency of production, which further minimizes the costs of production under the concept of scale economies. Economies of scale refer to the benefits that accrue to a firm as it increases in size. The marginal costs of production keeps on decreasing as production continue ((Sadler and Craig, 2007).
Creativity and innovation is paramount to realization of goals and objectives in an organization. The management of Spaans Cookie has recognized this element and therefore measures have been adopted to facilitate efficiency of operations in the organization. Technological advancements have enabled the company to expand its business through invention of new brands to diversify the portfolio of the organization.
Legal & Regulatory- The Company is also faced by certain legal threats that may hinder development and realization of the set goals and objectives. It is a requirement of the government of the United States for all companies to pay taxes proportionately to the amount of corporate income received.
There are fines that are imposed when the company violates the payments of certain taxes. It is possible for errors to occur in the accounting department of the organization and therefore the taxes could be underestimated. Auditing by the government officers could implicate the organizations to tax omissions whose impacts can be to taint the name of the organization in the general society.
Environment –There are social threats that face the company, which can have negative implications in the future if they are not addressed. During production of cookies, there is emission gases that are said to harmful to environment and therefore they are likely to have negative implications on people in the future.
Internal forces
Goals: Spaans Cookie is planning to boost its biggest brands in the United States by producing more advertisements and setting limitations for other new product development. With this initiative, the company is expecting an increase in their profit (Spaans Cookie, 2011).
This year, the company is acknowledging its plan to give emphasis on cookies. For Spaans Cookie, their goals are aligned with their current strategies against the soaring price of energy and other ingredients. Along with this, the company aims to increase more its advertisements for the next two years looking forward that it will generate sales growth along with their expansion. In assessing the goals of Spaans Cookie, it shows that most of them are straightforward emphasizing what really they want to happen.
The goal of Spaans Cookie is very clear, easy to understand, and measurable. Somehow, they are attainable in a sense that the company already identified certain products where they could have opportunities. Finally, their goal is realistic and with timetable, they mentioned realistic strategies on how to achieve their goals and set a period.
Resource – Efficiency of production is enhanced by the capability of an organization to allocate the resources efficiently. Resource allocation depends on the effectiveness of the company to mix the inputs of production to facilitate efficiency. The inputs include capital and labor in addition to entrepreneurship and land as factors of production. The company has not been able to meet the market demand due to the inefficiencies associated with resource allocation.
The market demand is large to the extent that the resources available in the company cannot meet it. It is therefore important for the management of the organization to increase resource endowment to facilitate increased production in the organization. The inputs of production such as capital and labor should be increased and be combined in the best rations to facilitate efficiency of operations in the organization.
Improved efficiency in resource allocation will increase the competitive advantage of the organization, which will lead to coverage of a wider market base (Pearce and Robinson, 2009). In addition, the organization will able to meet the needs of the customers by offering the required units of output to facilitate maximization of the welfare of the employees (Sadler and Craig, 2007).
Resource allocation is conducted internally under the productions department and therefore when the organization cannot effectively meet the anticipated demand, then the problem becomes a weakness, which should be rectified to facilitate the smooth running of operations in the organization. It is important for the productions manager to seek the knowledge of economists on the best methods to facilitate resource allocation in the organization.
Innovation: Venturing into new markets will require the company to develop new flavors since different customers have different tastes and preferences. In addition, the customers could be willing to consume some products but they can be constrained by several factors for example income.
Such constraints means that the customers will not be able to maximize their utilities subject to the incomes they have. It is therefore important for the organization to provide a variety of products some of which should be relatively cheap to enhance affordability of different customers.
Implementation Stage- The Balanced Scorecard
The strategy implementation stage is considered as the most critical stage in the strategic management process (Dess, Lumpkin, & Eisner, 2009). The importance of this stage is because the companies face a number of challenges in making sure that the strategy is properly implemented, and unless these challenges are effectively managed, it will be very difficult for the companies to make sure that they are able to get the maximum results out of the strategic plan.
In order to make sure that the strategies are rightly implemented, we would be using the balanced scorecard. The balanced score card works by allowing the company to divide its strategy into a number of concerned areas of operation and then set measurable targets, which have to be, achieved (David, 2008). These targets also define the roles required by the company in order to achieve them.
The balanced scorecard is a strategy implementation tool, which works on the concept of developing objectives based on the company’s strategy in four areas: finance, customer, process, learning, and growth. The scorecard helps in defining the management what needs to be done in order to make sure that the strategy is able to turn tides for the company (Kaplan & Norton, 1996).
In the case of Spaans Cookie Company, they must realize it is highly essential to make sure that they are able to come up with the right strategy as well as the right implementation of the strategy so that the improve growth. The resources are highly limited and a failure in the implementation of the strategy would make it difficult for the company to grow (Wheelen & Hunger, 2010). To make it easier to understand, each of the factors of the balanced scorecard is discussed separately.
Financial Perspective: – Finances of the company are very important as they help in creating the resources that would be required for the smooth operation of the company. The Company would find it difficult to continue growing if finances are not kept in check. The appropriate strategies to make sure that the company is financially stable are
- Increase in the market share of the company to an overall 20%. This would be done through increasing the market share of the company, which would help to attract more investors.
- Maintain a profit margin of 12.3% so that future investors are attracted. Cost saving is essential as well as a continuous check on the books of accounts while marketing would help in attracting more customers
Customer Value Perspective: Customers are the most important asset for the company and therefore it is important to make sure that the customers are taken into consideration in all areas of operations. The customer perspective is therefore very important, as it would tell what to do in order to make sure that service is able to add value in the customer’s life. In this regard, the following strategies objectives are set:
- Maintain a customer turnover to an annual 4% of the overall market. Compensations to be given to customers with negative feedbacks in order to retain customers
- Achieve and maintain a 90% customer satisfaction in the business. Customer values to be created on what the company can deliver so that gap between customer expectations and the service are reduced.
- Increase customer value by increasing marketing to communicate the true value of the company. Further, to increase customer value to be done by making the service tangible.
Process Perspective: The processes, which the company takes in delivering the right product to the customers, determine how the company is communicating value to the customers. Delivering the value to the customers depends upon the processes that are employed by the company. The following objectives therefore have to be achieved to make sure that the processes of the company are in line with the strategies:
- Application of efficient production methods for quality cookies, this would be done through the understanding of the ingredients that make good flavored cookies.
- Increasing production by 10% every year in order to match market demand, this would also good marketing.
- Expanding the market by 25% through market development into other surrounding countries and all US states would help to attract more customers.
Learning and Growth Perspective: The employees especially the drivers are the only human aspect of the company, which the customers can actually see and interact. It is therefore very necessary to make sure that the employees have the right skills to perform their respective jobs. Employees are one of the main driving factors of the company and it is therefore necessary to make sure that the employees are involved in the strategic planning process.
- Maintain a 90% employee satisfaction rate at all times through the development of employee programs, which help, in developing employee skill as well as in understanding the needs of individual employees.
- Keep the employee turnover rate to at most 3% a year. Employee has to be interacted with at all times to make sure that the employee’s needs are being well understood.
- Increasing efficiency by 15% every year through the implementation of modern technology
Understanding the Balanced Scorecard
The balanced scorecard is a mere reflection of the company’s strategies which have been developed through the understanding of the company’s mission statement, vision statement, the external and the internal factors which would affect its operations as well as the SWOTT analysis that was conducted in setting up the business.
Unless these parts of the strategic plan are not considered, it would be very difficult to make sure that right strategy is formulated. The vision statement determines where the company wants to be and the mission statement further helps in clarifying the methods that the company would be using in order to achieve its vision (David, 2008).
However, while the mission statement tells what needs to be done in order to achieve this vision, it cannot tell how this vision can be achieved. The company therefore needs to develop a strategy, which will determine the right path to pursue the company’s vision.
The strategies that have been formulated by Spaans Cookie Company are developed through the company’s vision. In fact, it included in the whole process, which starts with the evaluation of the external and internal factors and then led to the SWOTT analysis.
In this way, the opportunities as well as the industry trends of the company are highlighted which identified what strategies should be made in order to grasp these opportunities. At times, it is also necessary for the company to make sure that it operates outside the industry trend creating a blue ocean for itself (Spaans Cookie, 2011).
In the balance scorecard that has been developed above is the clear representation of the SWOTT analysis, which was conducted before. This includes areas of opportunity such modern technology and understanding the quality production methods to have been integrated into this scorecard. The measures that have been taken in each of these objectives are also created with the understanding of the capability of the company given its resources.
The period that has been put in this balanced scorecard also helps to identify when do the objective needs to be achieved so that the company does not falls behind time. When the employees know about the objectives that are to be achieved in a particular timeframe, they themselves start to make sure that they play their role in the achievement of these objectives (Hrebiniak, 2005).
Thus, balanced scorecard is a useful tool for any company as it helps to determine the right approach to be used by the company. A strategy implementation tool, this scorecard helps in the development of the right set of objectives, which the company would pursue in order to make sure that the company’s vision is achieved. Strategic management is a very delicate process, and usually takes time from the development of the strategy to the implementation of it (Pearce and Robinson, 2009).
Managers must make sure that while developing the objectives for the scorecard, they have a complete understanding of the company’s capabilities otherwise the objectives developed would be unreachable by the company.
Communication plan
The communications mix is comprised of advertising, personal selling, sales promotion, and publicity or public relations. The company combines these four elements with different emphasis on each. More focus has been given on advertising and sales promotion, as they are the most suitable for an industry.
Advertising and sales promotion Personal selling and public relations are important for creating brand equity. Each staff member has a sense of responsibility and capability while being attentive to the needs of the customers. Word of mouth is free but it means ensuring a good reputation.
Managing Risks
This business is prone to both internal and external risks. The management of these risks has been made possible by the company through preparation. One of the major risks that the company has faced is from the employees who are not be able to perform up to expectations. In order to cope up with this risk, motivational strategies have been used such that the employees are kept motivated at all time.
The risk of a very strong competition is also very high simply due to the fact that a new competitor may come up in either one or all of the business locations which would negatively impact the revenues. In order to minimize such a risk, the company has come up with specific operational strategies and also resorted in high levels of marketing so that it is able to communicate brand values with the customers.
While these risks are controllable, the company has kept in mind the probability of an uncontrolled risk which may have a very significant impact on the business. Similarly, the economic disasters such as inflation and other economic crisis will significantly impact the costs of operations as well as the overall purchasing power of the customers.
Conclusion
The successful operations of any business depend upon a number of reasons, each of which has to be understood carefully so that the right strategies can be developed. For existing companies like Spaans Cookie Company, it is very important to make sure that all the industrial factors are carefully analyzed and understood in so that the right operational strategies are developed.
It must also be kept in mind that the success of the business is not only in the generation of the right strategies but also in the fact that the strategies should be applied in an effective manner. In this regard, the balanced scorecard will be used to make sure that the strategy is applied as it has been intended to be and generates the maximum result expected from it.
References
David, F. R. (2008). Strategic Management: Concepts and Cases. New York: Prentice Hall.
Dess, G., Lumpkin, G., & Eisner, A. (2009). Strategic Management: Creating Competitive Advantages. New York: McGraw-Hill/Irwin.
Gitman, L. J., & McDaniel, C. (2008). The Future of Business: The Essentials. New York: Cengage Learning .
Hrebiniak, L. G. (2005). Making Strategy Work: Leading Effective Execution and Change. New Delhi: Pearson Prentice Hall.
Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action. Boston: Harvard Business Press.
Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control. New York: McGraw-Hill
Sadler, P., and Craig, J. (2007). Strategic Management. London: Kogan Page
Spaans Cookie, (2011). Spaans Cookies. Retrieved from <http://spaanscookies.com/>
Wheelen, T. L., & Hunger, D. J. (2010). Concepts in Strategic Management and Business Policy. New York: Pearson Prentice Hall.