Abstract
The market, which any organization serves, is dynamic in nature. This is mainly attributed to changes in the environment in which the organization is existent. The various environments which affect organizations include: Political, Economic, Social, Technological and Environmental.
Constant monitoring and evaluation of these environments should therefore be carried out to track any changes that may occur and undertake appropriate measures. These issues should be addressed with immediate effect as failure to do so may cause dire consequences for the organization. This paper will therefore focus on these issues in one fruit producing company, L&M as well as a functional strategic plan that will steer the organization in the right direction.
Introduction
L&M is a fruit producing company that has been in business for the last 20 years. Overtime, the company has reported robust growth over the last few decades which has mainly been attributed to the rapidly changing consumer lifestyle trends. The current health campaign witnessed all over the country has increased demand in fresh fruit and vegetable products.
L&M has gone out of its way to make sure it meets these needs in a bid to satisfy the customer. As a result of this intervention, the organization has been catapulted to higher levels leading to increased profit margins. The industry has also witnessed entry of new businesses aiming to cut a niche in the rapidly growing market.
This has prompted the company to review and adjust its plan in order to position it in such a manner that it will continue surviving and thriving in the market. As a result of the new developments, the organization’s strategic plan will ensure that it addresses these challenges appropriately as well as provide a roadmap for the organization for the next five years.
Organizational profile
The combined produce industry is one that has seen tremendous growth over the last decades as a result of a shift in lifestyle trends with most consumers advocating for fresh fruits and vegetables. L&M is one of the companies that identified this market gap and as a result decided to exploit this opportunity.
The next 55 years is nothing but a tell-tale that explains the benefits of proper planning and market research that has seen the organization continue to reap benefits in the form of increased sales revenues. L&M is accredited to producing fresh and wholesome fruits and vegetables as well as maintaining solid relationships with customers and suppliers, rooted in a foundation of respect, passion, leadership and excellence
Vision
To be a world-class fresh produce provider
Mission
To enable L&M become a dominant force in the industry while providing quality products and services to customers
Core Values
- Integrity- Uphold trust and respect in all engagements
- Product and service excellence- Strive to provide quality products and services to customers or other relevant stakeholder.
- Accountability- Ensure all operations exhibit aspects of fairness and transparency.
- Professionalism- Undertake all operations and activities diligently and professionally.
Product offerings
L&M provides a wide array of fresh fruit and vegetable produce to our customers. They are grown under hygienic conditions and t monitored constantly to ensure that they meet the required quality standards. Examples of these products include fruits such as apples and cherries and vegetables such as cucumbers, tomatoes, potatoes, onions and the like.
Customer support
L&M emphasizes on providing customer support and this is evidenced in the 24 Care centre that offers assistance to customers, addressing their queries. This is also proven by providing full support in the supply chain as it deals with the entire process, starting from farming, packing, logistics and finally to sales.
The L&M family
L&M treats every employee, customers and suppliers as family. This helps foster a sense of belonging and association hence nurtures loyalty. It has a diverse network of growers situated in different states and even countries all having good values and work ethic.
Although they may differ in age, language or gender, all are united by one fact, their passion for farming. They are all recognized as part of the L&M family. This network ensures that supply of products is constant and subdues any demand eventualities hence guaranteeing fresh quality produce to our customers.
Leadership
L&M success would not have been possible without the dedicated workforce that has made L&M be what it is now. The leadership and vision of the management team, starting from the founder and chairman, Joe McGee and President and CEO, John Oxford, down to the employee in the apple orchids, the growth of the company would not have been experienced. They their vast knowledge in the produce market have provided guidance and helped steer the organization in the right direction.
Strategic plan
According to May, a strategic plan is a firm’s roadmap that details direction that “guides an organization to achieve its set objectives” (25). Strategic planning, according to Steiner, is an “organization’s process of defining its strategy or direction and making decisions on allocating resources to pursue this strategy” (16). It seeks to answer the following questions:
- What do we do?
- How do we excel?
- Where do we see ourselves in the future from now?
New entrants in the produce market have prompted the need to develop a strategic plan that would steer the organization in the right direction. This will help ensure the organization remains relevant and successful in a competitive environment.
The L&M strategic plan will therefore provide focus for the organization and also ensure proper utilization of available resources, embracing new technologies that would increase production, and embrace relevant technologies that would improve the quality of produce and most importantly, provide alternatives for the development and growth of supplier alliances, retaining the current suppliers as well as attracting new and able suppliers for the constant supply of fresh produce. This will take L&M to a new level to even compete in the global platform.
I&M 2013-2017 strategic plan
The strategic plan is detailed to ensure that the organization adopt relevant strategies that will guide the organization in the right direction. It details the challenges that are currently being experienced by the company, provides strategic objectives that will guide the organization in the specified time and strategic goals that aim at achieving the identified objectives.
L&M external environment
The external environment is comprised of the Political, Economic, Social, Technological and Environmental (PESTEL) aspects. However, the external environment is one that is beyond an organization’s control and therefore, the PESTEL analysis is a preventive measure. In the view of evaluating these environments in order to identify their relevance to the organization, a PESTEL analysis should be carried out. The variables that affect the company strategy as per the analysis are detailed below:
Political aspect- Following efforts made by the government and other law makers in the industry following their endorsement of encouraging healthy eating habits, this has translated to improved business for the organization.
Economic aspect- Throughout the years, rapid diversification of the market has been experienced. This has contributed to increase in food production. It has therefore led to development of strong competitive pressure in the industry that has not particularly favored the organization.
This, coupled with increasing prices of farm inputs that have led to increase in supplier prices as well as high inflation experienced in the market has compromised the strategic position of the organization in the market. This has prompted the need to come up with measures that will deal with these issues as provided by the 2013-2017 Strategic plan.
Social aspect- Changing lifestyle trends, with most people opting for healthy food has seen the adoption of fresh produce as opposed to pre-packaged produce. Recent demographic surveys have also revealed increase in population growth rate hence increased demand for food products. This makes business better for the organization.
Technological aspect- Technology is ever changing, aiming to simplify work done by human beings. The organization is on the receiving end with this one as it has not adopted advanced technology fully in its processes hence lead to lost or expensive business.
Legal aspect- L&M has a large aspect of external growers who are guided by contracts offered by the organization. There is need for stricter contract enforcement to ensure that produce are delivered well in their time schedules.
Apart from the PESTEL analysis, a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is also applicable, particularly in the Opportunities and Threats aspects. This analysis focuses on analyzing the opportunities that are available for the organization as well as the threats facing the organization in the market such as ready local and regional markets.
The above variables will affect the organization in one way or another and contrary to this will place the business on the losing end. Proper undertaking of this analysis will provide guidance to the organization in ways of improving its undertakings.
L&M’s internal environment
This environment is one that is within the organization’s control since it deals with internal aspects of the organization, therefore, a SWOT analysis is carried out. In accordance with the organization, the following strengths and weaknesses are exhibited.
Strengths
Dedicated workforce- The organization is fortunate to have hardworking and resilient employees as well as suppliers who enable the smooth running of the organization’s day to day operations.
Diverse supplier networks- The organization has a diverse networking ranging from growers from different states to different countries. This ensures the constant supply of produce hence guaranteeing supply of products to customers.
Stakeholder participation- Participation from government, customers, suppliers and creditors help establish the organization and ground it firmly amidst increasing competition pressure.
Weaknesses
Low adaptability of advanced technology- Advanced technology benefits organizations in the sense that it lowers production cost hence translating to lower wholesale and retail costs. It also positions the organization in the competitive market. Unfortunately, L&M has not been able to fully adopt new technology hence causing lost business opportunities.
Increased competition- L&M over the years has faced stiff competition from existing and new competitors. This has resulted to the loss of business for the organization. Therefore, in a bid to address this issue, the organization should adopt the competitive strategies for survival (Michael 233).
L&M resources
L&M most prized resource is human resource. This is because it manifests itself in the growers, who supply fresh produce to the organization, as well as employees who run the day-to-day operations of the organization.
Other important resources are L&M farms which help supplement the organization’s produce, as well as equipment which are used throughout the process.
Capabilities
The organization has the potential to grow beyond the current level. This is because once it adopts new technology, output will surely increase.
It can also improve the sales levels by diversifying the product base by adopting products with established markets as well as those in high demand.
Core competencies
Close supplier relationship- The organization strives at maintaining close links with suppliers. This helps foster stable relationships that have present or future advantages. All operations therefore are carried out in good faith. A good working relationship with suppliers provides a base for good business on behalf of the organization.
Employee loyalty- L&M considers every employee as family. The feeling of belonging is important as makes individuals to feel wanted and valued hence do their best in their duties. Therefore, this means improved and efficient service.
Strategic goals
The objectives as detailed indicated below will provide guidance to the organization in the period specified, 2013-2017:
- Enhance competitiveness of the organization
- Embrace technology for improved productivity
- Improve effectiveness of the supply chain
- Expand product base
Strategic Goal 1: Enhance competitiveness of the organization
Due to the increased competition in the market, seeing the rise of new entrants and efforts made by the existing competitors, they have posed a threat to the organization. Therefore, in order to deal with this, the organization should incorporate Information and Technology systems in their processes. This will improve customer service hence improve their loyal relationship with the organization.
Another way of achieving this goal is by undertaking proper market research. This will help establish gaps in the market that provide the organization with opportunity for improved business and improved product delivery that will satisfy changing customer needs. Researches will also assist the organization determine appropriate fruit products with wide profit margins and in high demand, that the organization can opt at producing for improved business (Philip 348).
L&M should also embrace value addition. According to Belkaoui, this is the process of improving the original state of a product by “modifying it for its end use by the consumer” (40). The organization should invest in the appropriate technology to make this possible. This will improve the position of the organization in the market hence steer clear from competitors.
Strategic Goal 2: Embrace technology for improved productivity
Technology will go a long way in improving productivity. Recent systems that can be applicable for L&M include the Enterprise Resource Systems, (ERP). According to Harwood, ERP is a set of integrated systems “operating in a business that control business functions more effectively and efficiently” (11). This will assist different departments within the organization to communicate, such as the finance department and the operations departments.
Another technology that can be adopted is one that interconnects supplier networks sites to the organizations’ own. Therefore, in case there is a decrease in the levels of certain products in the organization’s inventory, the supplier is promptly notified and therefore fills up the deficiency. This translates to improved business as there is constant supply of products.
Strategic Goal 3: Improve effectiveness of the supply chain
Proper monitoring of the Supply chain will seek to identify ways and means of reducing costs in the process. This will enable the organization save up and divert the money to other processes that really need it.
The organization could also improve the participation of customers by involving them in the process. For instance, L&M could adopt an online ordering system that will allow them place their orders electronically. The website should therefore be updated and made user friendly for easy navigation.
Strategic Goal 4: Expand product base
L&M should look into other products in order to diversify their product line. This will translate to improved business. The organization should invest in research in a bid to identify suitable products it could adopt based on market demand and projected sales revenues.
Conclusion
Therefore, the organization should keep abreast of changing trends in the market and supplement them in the Strategic Plan. This plan should not be static but flexible in order to provide room for change based on the prevailing market trends or aspects affecting the organization.
The organization during the planning process should take into consideration its financial position, it should also ensure it implements change effectively in areas where it is required for reception by employees. The organization should finally provide updated financial reports to assess whether it is in the right financial position to implement change. This will make the organization implement the strategic plan effectively.
Works Cited
Belkaoui, Ahmed. Value added reporting: Lessons for the United States. Washington: McGraw-Hill Publishers, 1999. Print.
Harwood, Samuel. ERP. New York: Sage Publishers, 2003. Print.
May, Gary. Strategic planning: Fundamentals for small businesses. New York: Sage Publishers, 2010. Print.
Philip, Sadler. Strategic management. London: Kogan Page Publishers, 2003. Print.
Michael, Porter. On competition. New York: Joessey Publishers, 2008. Print.
Steiner, George. Strategic planning. New York: McGraw-Hill Publishers, 2010. Print