SWOT Analysis
Strengths
One of ST’s major strengths is its strong capital background. Despite being a small business, ST has revenues that are getting close to $25 million. Thanks to this financing, they have the freedom to allocate funds to the areas they want to prioritize for growth. Another crucial appeal of ST firm is its unique branding. The corporation has always used packaging, logos, and slogans very well and distinctively. Generally, this quality has distinguished them from rivals.
Weaknesses
One of the major drawbacks of the firm is poor customer service. The motivation of the personnel of the external sales force appears to be a significant issue, although there are many pertinent aspects. Another crucial weakness is the inventory inefficiencies identified during the meeting. During busy seasons, ST cannot adequately serve retailers and customers, especially when a sizable customer places a sizable order for a particular tea taste.
Opportunities
The committee of the senior personnel identified that there is a need for more distribution channels. Establishing a timetable for more frequent visits and keeping a steady supply of the goods on hand may help strengthen relationships with retailers and customers. Numerous store chains favor the service, as mentioned in the case. Another potential opportunity ST can tap into is providing various products. Currently, TH delivers 80% of the finished tea due to heavy reliance. The product’s quality and the effectiveness of TH’s inventory are in doubt. Essentially, it may be possible for ST to regularly deliver high-quality products to customers without changing the ingredients because of scarcity by TH by using more than one principal grower.
Threats
One threat ST may face, especially if they expand their distribution channel, is unfavorable trade regulations. There is always the possibility of tariff barriers from governments whenever different nations conduct commerce together. Another challenge they may face is an increase in the cost of production and supply due to the harsh economic situations. Recent rises in material prices have caused a decrease in profit margins. Generally, it may be harder to maintain profitability given the expected further increase in overhead expenses.
What do you think of ST’s strategy of selling only to “high-end” retail outlets?
I think it makes sense that ST would want to uphold its reputation as a premium tea supplier by only doing business with high-end stores. They will benefit from growth and development in the years to come if they accept it and approach their work with that mindset. Overall, I believe that ST may need to expand into more mainstream merchants to reach more consumers if it wants to stretch and become a larger firm.
ST still maintains a very loyal following for its product. How should the company ensure growth, or at least maintenance, of this customer base?
A great strategy to engage with customers is to send surveys to clients to ensure the product is up to the quality its users have grown to appreciate. They can offer the best products at an affordable price by paying attention to what their consumers and retailers desire. Providing value to the consumer and just contacting individuals who might be interested in the offer is more important than volume these days (Smulders, 2021). Essentially, it is crucial to guarantee that the product offered is as “high end” as they want it to be viewed to supply high-quality items constantly and to a suitable client base. Furthermore, it is vital to provide specials or promotions to strengthen ties with those customers.
How would you characterize the internal communications of the company?
The company’s core business practices are practically outdated with the current technology. Maintaining a paper-based system leads to delays and pointless sloppiness. Essentially, this inefficiency results from the requirement to manually process information and physically shuffle paperwork within an organization. Furthermore, most of the business appears disengaged from the other components. The issue is not their dispersed locations but rather their communication methods. Another problem is that some staff cannot adopt new technology and are highly hesitant to change their company practices.
What communication habits and behaviors have been established by leadership within the company to date? Evaluate how this communication influences motivation, innovation, and productivity within the company.
The organization appears to lack well-established leadership and communication practices. Motivation, creativity, and production have all suffered due to this lack of leadership and communication. External sales representatives believe they can act in any way they choose without facing the consequences. In essence, it is a huge worry if management instructs staff to use the new technology, but they do not follow through, causing delays in the process and no action to be taken. Feedback of this nature sends the wrong message to employees and implies that innovation is not vital. The company has struggled with a lack of productivity and a decline in sales, yet nothing is being done to mitigate the problem.
ST has a relatively complex supply chain, starting with growers in tea-producing countries. Discuss opportunities and challenges for the company in managing this chain.
ST faces a variety of chances for expansion and difficulties in its daily operation. One opportunity for ST is to get in touch with diverse growers in nations who can help ST provide high-quality ingredients. Additionally, the option for ST to reverse engineer existing products exists, but doing so would be expensive, time-consuming, and impossible because they do not control the formulas. The chance to deal with distributors that will handle the majority of their distribution is available to ST. However, the challenges in this situation are a lower profit, a loss of complete control, and potential reputation damage if clients think the product is of bad quality. Although it could be expensive, ST has the chance to advance financial payment systems. Another opportunity is to connect with mass merchants, even though ST is concerned about possible relationship strain with present merchants. Finally, the company’s existing leadership shortage and communication problems will be the major obstacles.
Reference
Smulders, S. (2021). How technology is changing the job of the sales professional. Forbes. Web.