Integrating Business Perspective
Introduction
- Business Concept: Organization form
Seven Red Stars is a new firm in the energy industry. In order to meet its missions of providing the most modern and affordable solar charger, and discharge its mandate effectively, it has to adapt a partnership form of business. Adoption of partnership is on grounds that, first; customers do not know the new product introduced in the market. When partnered with other key players in the industry, the company will benefit from the reputation and intangible resources for instance goodwill, a better brand name and diverse opportunities. This will boost the solar charger awareness in the market and attract more customers (Kotler, Adam, Denize & Armstrong, 2009; Barner, Blake, & Pinder, 2009).
The added pool of managerial and technical assistance will strengthen the performance of the alliance formed between Seven Red stars and its partners. Other partners have already built a strong image in the market. Consequently, when it collaborates with them, it will improve its image (Barron, 2008). The advertising cost will slump as a result saving and can channel funds in continuous research and product development projects. There is a possibility of elimination of manufacturing costs of product such as labour, capital and technological costs.
The partnership form of business has several advantages other than operating a sole trader form of business organization. First, apart from being simple and easier to form and control, there is a possibility of increased efficiency and effectiveness resulting from sharing of workloads, ideas, resources and expertise. Income and other revenue generated in the course of the business can split equally between the partners. Infant partners for instance, seven red stars can benefit from the profits earned with little efforts. Logically, the firm in initial stages of operation would not make as much what it can make if it has collaborated with the already-established and famous firms in the energy sector. Before seven red stars boom in the energy sector market, it will have to invest heavily in marketing, research and development cost. However, their partners have already taken up a business function. As noted by (Freeman, Wicks & Parmar, 2004), when in partnership, there will be a faster rate of business growth in functions such innovation, creativity, managerial among others. Partnership as a form of business is flexible in terms of business process, mechanisms, coordination and operations. Integration of the value chain into business perspective will signify that every process, function and field will have to adopt activities and procedures that minimize cost and add value to the overall business.
Research by Barner, Blake, & Pinder (2009) has indicated that a partnership tends to have more resources contributed to the business from both parties. This is advantageous as it can assist the business to access other credit facilities easily, efficiently and faster. The business will settle any outstanding liabilities without much struggle and without compromising the continuity of the business. Besides, if all partners act in good faith, in their normal course of business operations, the challenges that normally face this form of business are easier to eliminate.
Cost/benefit Analysis
Seven Red Stars will be able to grow and establish branches in all the regions, considering that the current energy sources are exorbitant, scarce and yet in high demand in the region. Collaborating with other key players in the firm will enable the firm to improve the quality, service and deliver value to its customers. The ultimate goal of the business is satisfying their energy needs. The business venture will grow into a profitable form of business in the region if the demand is high.
The cost/benefit analysis is an integrated economic concept that emphasis of the adoption of business decision and activities that will bring value into the business that justifies the resources used in achieving it (Barner, Blake, & Pinder, 2009). The major goal of the value chain is to maximize the value margin of every activity and function and avoid redundancies and wastages of resources. It is a vital tool in efficiency management of a firm resource. Its division into two type of activities entail, the supporting activities and the major activities as shown in fig 1 below.
- Report/Communicate Value
5.1 ‘Balanced Scorecard Analysis
Scorecard analysis encompasses four indicators of the firm’s operation. These indicators include the financial dimension, customer relationship, business process, and the learning and innovation dimension. The financial dimension affects the monetary situation of the organization. The organization would therefore enhance its venture in expansionary activities using its monetary power. Financial advantage stimulates confidence of the business organization to adapt to technological changes and adjustments of the market structure (Goldman, M. 2010). Although it would take relatively longer period before the organization fully adapts, it is inevitable lest the organization is reluctant to conform to changes in the market structure which is equally disastrous to growth of the organization. Financial soundness enhances risk management as well as promoting operation in real time. It is also essential for planning and evaluation of the organization’s preparedness to face stiff competition in the modern market. The firm will be able to manufacture chargers and sell at reasonable prices relative to its competitors. Partnership as a form of business is flexible in terms of business process, mechanisms, coordination and operations (Goldman, M. 2010). Integration of the value chain into business perspective will signify that every process, function and field will have to adopt activities and procedures that minimize cost and add value to the overall business.
The Balanced Scorecard
| Objectives | Indicators | outcome |
|
Effective financial reporting | Increased profit margins |
| . | Projection on market value | |
|
Prioritizing customer requirements | stepping up of new workflow character |
| Improvement on customer communication | ||
|
Market assessment changes | Evolution of workflow |
| Improvement in development | ||
|
Amplify Capacity for technology for solar charger
|
Improve expertise in production |
Table 1
Building good relationships with customers is one of the initiatives that would eventually step up the reputation of the firm and rating among consumers of its products and the public. Strained relationships harm reputation and eventually compromise its rating by consumers of solar chargers among other products. In essence, customer relations will influence the performance of the firm amid constant changes in market structure, cutthroat competition, and technological transformations (Heiens, 2000). However, Seven Red has had vibrant operations courtesy of its positive customer relations. These relations have motivated positive outcomes since the initial stages of operation in the energy sector. Building of effective customer relationship involves reinforcement of business network. The network comprises professional acquaintances, existing and latent customers, suppliers, contractors and association members (Heiens, 2000).
Enhancement of communication between customers and the firm will help in networking with its prospective and esteemed customers. Despite the charming, persuasive and enthusiastic nature of the marketing manager, a follow up of the meeting or business card demonstrates the firm’s commitment to strengthening the bond. In the contemporary world, E-mail marketing aids in keeping the relationships strong. It becomes easier for customers to contact the firm in a bid to find solution to their queries (Heiens, 2000). Rewarding loyal customers along with making the loyal customers the best sales people is another proven strategy that boosts the relationship between the business and its diverse customers. A reward to will make the loyal customers feel appreciated for dedicating their funds to purchase products the firm produces. In addition, the customers will make good salespersons of the organization thus facilitating the process of building reputation.
The firm must give the management of business processes holistic approach. This approach will facilitate the process of aligning the firm as per customer wants and needs. Learning and innovation also play key part in upholding the operations of the organization (Goldman, M. 2010). Innovation will particularly enhance efficiency and effectiveness of the organization in the wake of technological adjustments. These processes help in attaining the goals of the organization. Through innovation, the organization advances its efficiency in marketing, production, customer care service, and public relation. Overdependence on innovation though unavoidable would compromise the firm’s adherence to its fundamental values and ideals (Goldman, M. 2010).
| Value chain | Activity | Benefits | Costs |
| Supply chain | Establishing their own supply chain department
Outsourcing of suppliers,
|
Cheap, trusted and loyal, knowledgeable
Experienced and specialised.
|
Set-up costs.
Expensive to hire and manage, mistrust problems, short-term tenure
|
| Operations | Establishment of their mechanisms, structures and policies of operations (operational design) | Original and well understood, higher loyalty, active participation and high yields | Time and resource constraints,
The operational design may not meet the standards of the industry and therefore need to adapt one from old players in the industry.
|
| Distribution | Vertical and horizontal integration and establishment of their own distribution outlets all over the region
Outsourcing/hiring
|
Part of the firm, loyal and easy to maintain
The outsources may be famous, experienced in the service delivery, Higher yields more revenue. |
Management problems, power battles
Cost of hiring is higher as the contractual terms of service are short-lived. Power battles Failure to deliver the quality service effectively |
| Sales and marketing | Joint product promotional campaigns,
Establish their product and market research departments Hire/outsources |
Cheap to execute
Create more fame for the firm Loyal and knowledgeable Experienced and more expertise in the fields. |
May fail to bring out the true identity of the firm
May be young and therefore inexperienced staff and management Expensive to install and manage the outsourced firm |
| Service department | Offer after sale service
Offer warranty service Institute the easier communication customer service manuals and brochures Institute a simpler customer support IT system in place for faster complaint and other customer –related challenges. |
customer base
Increase customer loyalty. Attract and retain more customers Simpler, faster and efficient service delivery, that results in higher profits. |
Costly and requires const budget review and adjustments.
Requires experienced technical and operational staff Expensive in terms of installation and maintenance
|
| Product R&D, Department | Install up-to-date customer research tools, structures, mechanism and design
Hiring of an experienced researcher |
More accurate research findings
Higher propensity of satisfaction customer needs. More profits |
Expensive
Staff may be inexperienced and therefore fail to use it for its purpose. The design takes time to install and therefore lose a substantial market share in the industry. The more experienced staff may be expensive to hire, retain and maintain. |
| Human resource management | Hiring more staff
Training and development Outsourcing Retrenching |
More outputs
Increased creativity and innovation Less costs more profits |
Expensive to maintain
Time constraints Mistrust and lack of confidentiality Society dissonance |
| General administration | Hire experienced managers
Formulate new and existing policies |
More talent and abilities | Management problems,
Power battles |
Table 2
Customer perspective
It is a business orientation takes up the perception, opinions, reactions and predispositions of customers towards the business firms. It integrates some of the business variables such as customer satisfactions rates, market share and new customer entrants. As argued by Kaplan & Norton (1996), the elements of customer service include timely of product delivery, quality, satisfaction rates. For instance, the market share represents the total of the customer base in the entire industry and every firm compete for the same type of customers. The firm with the highest rate of the customer has the higher market share. Consequently, it more profitable and grows faster than the firms that have a relatively lower market share (Porter, 1985).
Internal business process perspective
Internal business perspective integrates all the structures, policies, mechanisms and procedures used in business to create value for a profit. As noted by Goldman (2010), all the above process entail three generic strategies such as cost reduction, differentiation, speed and focus. First, a cost reduction strategy ensures little wastage of resources. The cost accelerates the strategy of comparative advantage between firms. Seven Red stars will reduce the cost of raw materials, maintain a leaner staff, collaborate with other key players in the industry and formulate policies that are cheaper and effective in the general administration in the entire value chain.
Product differentiation in its operation, design, aesthetic and other crucial qualities will make the solar charger appear unique to customers hence more appealing. Consequently, the idea will serve to attract and retain more customers. Differentiation will enhance the reputation of the firm. This will boost the market share of firm.
The firm can redefine its business processes to focus on a type of a particular customer segments. For instance, it can focus on both the city and rural middle class dwellers, which have higher energy needs and need an uninterrupted power supply for running of their businesses. The firm can best known how to customize their products to fit this customer segment for higher yields in the market (Goldman, 2010; Kotler, Adam, Denize & Armstrong, 2009)
Innovation and Learning perspective
Innovation and creativity in a firm is a paramount tool of evaluation of a given business. As argued by (Goldman, M. 2010), it improves the employee capabilities, reduce absenteeism and training. Besides, it speeds up the organization climate that in turn improves their motivation. There is a possibility of increased returns arising from employee learning and training (Barner, Blake & Pinder, 2009). Creativity improves the quality of products and boosts the satisfaction rates. The firm can integrate rapid customer response in its business processes. For instance, it will have to improve the on-delivery of supplies, prompt customer service delivery and handling of customer complaints. This will promote the confidence and loyalty customers will have in the firm hence boosting the brand name of the business.
Financial perspective
The financial perspective examines the perception of the firm in the eye of the shareholders. Profit and cost measures determine its viability. Financial are used to ascertain the profitability, how efficient resources are being utilized, how faster the business is able to generate cash and pay its debts. The shareholders worth is measured and determined by the different financial ratios (Heiens, 2000).
Bibliography
Barnes, C., Blake, H., Pinder, D. 2009, Creating & Delivering Your Value Proposition, Kogan Page Limited, London, United Kingdom.
Barron, M. 2008, Fundamentals of Business Law, 6th edn, McGraw-Hill, North Ryde, NSW
Freeman, R.E., Wicks, A.C., Parmar, B. 2004, „Stakeholder Theory and “The Corporate Objective Revisited”‟, Organisation Science, vol. 15, no. 3, pp. 364-369.
Goldman, M. 2010, „Assessing Business Viability and Beginning a Turnaround Process‟, viewed 30 October 2011, <http://www.michaelgoldman.com/assessing_viability.htm>
Heiens, R.A, 2000, „Market Orientation: Toward an Integrated Framework‟, Academy of Marketing Science Review, vol. 2000, no. 1, pp. 1-4.
Kaplan, R., Norton, D. 1996, „Using the Balance Scorecard as a strategic management system‟, Harvard Business Review, vol. 74, no. 1, pp. 75-75.
Kotler, P., Adam, S., Denize, Armstrong, G. 2009, Principles of Marketing, 4th edn, Pearson Education, Queensland, Australia
Porter, M.E., 1985, The Competitive Advantage: Creating and Sustaining Superior Performance, The Free Press, New York, USA
