SWOT consists, of examining the current activities of the company Strengths and Weaknesses then using this and external research data to set out the Opportunities and Threats that exist.
3.1.1. STRENGHTS
The strengths of the company are as follows:
- Florence Manufacturing Limited has an excellent relationship with both retailers and suppliers, which means they can deliver goods to customers at the right time and the right place. This makes them unique and individual. In addition company has good credit agreement with their suppliers.
- Florence Manufacturing Limited longitivety in the market means they know consumer needs and wants which gives them a hedge over their competitors. They are already taking a step ahead to penetrate the EU Market. For example, they have just signed a contract with one of the French Company.
- Florence Manufacturing Limited holds monthly meeting on the company position in sales, review customer complains as well as staff performance.
- WEAKNESSES
- Time management. The company has taken their position for granted; as a result they have failed to meet deadlines. Invoice goes missing and a major contract was lost. Which is affecting the company's production and image. Also lateness and absenteeism is common in the workforce in addition there is poor communication at management levels.
- Florence Manufacturing has employed external staff instead of internal promotion. This makes the staff feel undervalue and fail to provide upward progression. This is de-motivating and affects their performance and production.
- Another de-motivating factor for employees is the lack of training opprtunities for the staff. If new machinery is introduced and the staffs are not trained to use it, this will affect employee’s performance and the quality of the goods.
3.1.3. OPPORTUNITIES
- The company policy states that "staff are the assets of the organisation" and they need to be kept up to date with all the latest machinery, so they need to be provided with training on how the machinery works. This will keep the cost of wastage of raw material at a minimum level. Otherwise the level of wastage of raw material will increase, costing the organisation a fortune. Also the productivity will slow down and the values of the goods will decrease.
Training plays a major part in the future of any organisation, since training, affords the different levels of management to communicate with their staff. In order to determine what other training needs are required.
- With the appointment of Mr Jenkins as the Managing Director of the organisation, he has decided to introduce team working within the organisation; so staffs can communicate with each other, as well as, achieving targets set by the organisation.
One reason Mr Jenkins decided to implement team working, as a strategy is to allow the different groups to compete with each other in terms of the quality of goods and the amount of goods produce. In other words to increase productivity and the quality of the goods, in addition keep the cost of raw material wastage at a minimum level.
- Mr Jenkins believes that Florence Manufacturing Ltd should be market orientated rather that production orientated. The reason behind this is simple. If Florence Manufacturing Ltd is market orientated it will lead to long-term profitability and less storage of stock, this minimises out of date stock. The production orientated policy meant pushing the goods in the market while there was no demand and also selling at a cheaper price consumer.
3.1.4. THREATS
- The UK is a member of the EU consequently they will face competition from other EU organisation which manufacturing can products, for example since Florence Manufacturing Limited has created competition in France, they should also expect competition from other EU countries in UK, since there are no barriers to trade between EU countries.
- Because of expected competition the company need to realise their market share will decrease and other EU companies pose serious threats.
3.2. PEST ANALYSIS
PEST analysis stands for Political, Economical, Social, and Technological
The Pest analysis is part of Florence Manufacturing Limited analysis and can be applied to the company’s case study.
3.2.1. POLITICAL FACTORS
- The Political factors, which will benefit the company is the no trade barriers to trade within the EU countries. Which mean there are no duties charged on goods within the EU.
- The Political factor, which affects the company, is the different rate of VAT taxation between different EU States.
- ECONOMICAL FACTORS
- Since the introduction of the minimum wage there is an increase in household disposable income. Whereby the sales of can drinks have increased because people socialise more this gives them more spending power.
- The Exchange rate plays a major part in the business, especially between countries with different currency. For example if Bon Marche orders goods worth 10,000 Euro at an exchange rate of 1.51 Euro to 1 Pound, if the exchange rate goes up to 1.61 Euro to 1 Pound, ultimately Bon Marche will end up paying 1,000 Euro extra.
3.2.3. SOCIAL FACTORS
- Consumes are becoming more health conscious. This will can Florence manufacturing Limited sales. Consumer might prefer fresh juice rather than canned drinks, resulting from the shelf life of can drinks and its health benefit.
- The increasing number of women going to work, has led to the need for time saving products since women have no time to prepare fresh drinks at home therefore Florence Manufacturing Limited will benefit from increase in sales and profit in addition productivity will also see an increase.
3.2.4. TECHNOLOGICAL FACTOR
- New technology plays a very big part in production. If introduced that means the machinery is up to date and is cost effective. It will create economy of scale, which means there will be more goods produced at a cheaper price.
- New ways of communication, examples are Internet, Email, Web cam can be use to communicate within the organisation also via the radio and intranet between all departments, which will save time.
4.0. CONCLUSION
As a business consultant, the four options available to the company-listed in the case study outlined to the shareholders by Mr Jenkins at the meeting are explained below:
OPTION 1: To close the business down
This means the business will not have any reputation with their customers.
Advantages
1. There will be no additional cost.
2. The organisation will not be known as a market leader.
Disadvantages
- Losses in contract with "Bon March” company and other future contract coming up.
- All investment will be lost including that of shareholders.
- The cost will be closure of the business; Florence Manufacturing Company will encounter unemployment in the manufacturing industry.
OPTION 2: To merge with another company and benefit from the synergy and their expertise
Advantages
- Quality control will improve i.e. to merge with other company, will lead to innovation being achieved, good communication flow through internal and external means, they will have product improvement, increase productivity as well as motivation and staff performances.
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The other company might have a good communication, ultra improving that of Florence Manufacturing Limited. According to the memorandum given by Andy Thurston, Florence Manufacturing Limited have poor communication flow within the company; so merging with another company will improve the flow of communication, staff performances as, well as organisation performances.
Disadvantage
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More cost in terms of production training: In order to meet the standard of the company; the cost will be expensive to rise, which will lead to inadequate training not being provided for their staff.
- Company merger means less staff; there will be competition between staff, for internal position.
- Merging with another company means Florence Manufacturing Limited will lose their market leadership.
- Communication may be difficult in short terms within the new organisation.
OPTION 3: To have a fresh start, and attempt to recruit new personnel with the values the company wishes to portray
Advantages
- To introduce new personnel means creating new ideas using new ways of communicating.
Disadvantages
- It will cost the company a fortune to recruit new personnel, because money is needed to recruit and train new staff.
- A fresh start means reorganising the organisational plan and company profile.
- To recruit externally will affect staff performance because internal staff will be unhappy about these issues, which could lead to de-motivation, lack of communication and lack of interest in the company overall performance.
OPTION 4: To attempt to change the present situation by achieving the objectives set using the present personnel
Advantages
- Less costly because using the present staff means the company do not have to recruit externally.
- Using the present personnel means they could still retain their market share and also be the market leader.
Disadvantages
- Communication using present personnel might not improve.
5.0. RECOMMENDATIONS
It is different to come to a firm conclusion because not only do the advantages and disadvantages cancel each other out but also added that Florence Manufacturing Limited might sees this options to stand to benefit or might see this as an opportunity as well to the above options available to the company.
Based on the findings, the business consultant will recommend option 4, which is 'to attempts to change the present situation by achieving, the objectives, set using the present personnel'.
Since Mr Jenkins has set new objectives by providing training, teamwork, to improve both internal and external communication at the company and also to improve the co-ordination of the company resources
Mr Jenkins also believes that all these will be achieved without any radical change in personnel or by merging with another company.
