Coversheet
eWave Computers are finding it very hard to meet their aims and objectives. This is due to the poor construction of their business plan. I am acting as a business consultant and have been assigned by eWave to improve circumstances at eWave Computers. To do so I am required to do the following tasks:
- Analyse their business plan and give reason why it as not been appropriate.
- Provide a questionnaire to eWave asking about the success of the business.
- Analyse the answers to the questionnaire.
- Give recommendations on how the business could improve.
- Re-write the business plan.
- Set new aims and objectives.
Letter regarding eWave Questionnaire
Mr Zishan Ahmed
Stepney Green School
Ben Johnson Road
London E1
28 November 2006
Mr Shamsul Hoque
eWave Computers
Unit 13C
Truman’s Brewery
Brick Lane
London E1
Re: Questionnaire for eWave computers
Dear Mr Shamsul Haque,
I have enclosed with this letter a short questionnaire based on the success of eWave Computers. Please could you complete and return to the address above as soon as possible. Thank You.
Yours faithfully,
Zishan Ahmed
Questionnaire
Q1. You aimed to make a turnover of £450,000 by December 2004. Do you think you have met your target, if yes how did you manage to achieve that?
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Q2. How many schools have you visited in the past month for your workshops?
Q3. What procedure do you have in place to calculate finance in the business?
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Q4. Looking back to the past month, do you think you were able to offer “cheaper” computers than those like Dell? If not, why?
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Q5. What problems, if any, do you have with customers themselves? if so why?
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Q6. In your business plan you stated that you offered website design and hosting, how many customers have you gained in that department of the business and how did you manage to gain them?
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Q7. How many computer systems did you manage to sell in the past week?
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Report on eWave Computers
Referring back to the questionnaire, success at eWave computers seems to be at a distance. They are struggling to get anywhere close to their aims and are falling very short of their objectives.
The major problem facing eWave Computers is the number of sales. Their sales is affecting the revenue, therefore affecting the success of the business, they cannot seem to attract any customers. When asked in the questionnaire about sales in eWave, they were not able to identify the exact number but did say was very low amount. This shows that eWave Computers does not have a proper financial system in place. Without this system the finances within the business will be unstable. The reason why eWave Computers is finding customers very hard to attract is because their advertising methods haven’t been successful.
eWave Computers expected their advertising to be done through their workshops they had planned. Unfortunately they could not get permission from the schools to run these workshops, therefore the company could not publicise itself. As a result of the unavailability of these workshops, I would strongly recommend they scrapped the idea of publicising through workshops or even providing workshops should they want the business to progress.
Another reason why eWave Computers cannot attract customers is because of the location of the business. An example of a successful business would be Tesco, and one of the criteria for location is that the Tesco logo should be seen from any main road. This is not the case for eWave which creates a problem for them as customers don’t see that there is a computer retailing shop there. It also does not help with the publicity of the business.
According to the questionnaire, when eWave Computers did get customers and sold items such as be-spoke computers, customers were not paying on time. This affected their cash-flow. Which mean the owners went into further debt unless they paid from their own pockets.
Although eWave Computers are finding it very hard to settle into the computer retail industry, they do have positive sides to their business. According to the questionnaire, the only sector of the business which has been successful is the website design and development services they offer. This is because website design is unique and not many businesses provide this service, so there is a high demand for the website design and maintenance. Also there are many small businesses around the area in which they are located, Brick Lane. Many of which require websites of their own.
eWave Computers has the potential to become a major force in the business industry. To do so I would recommend it to change many of its aims and objectives, its location and mainly it’s the business sector. If eWave was to concentrate entirely on its revenue, it would see that most of money has been coming from the website design and development and also online advertising sector. I would say this is the only way forward because selling computers can be very hard as there are many companies with a higher stature than eWave selling computers. I would recommend eWave Computers changed their company name to eWave Design, as this would now be their primary activity. Also I would recommend they created a new logo. Below I have created a logo they could use. This move should make the business more successful.
eWave Computers’ marketing has not been successful. I would recommend they reconsidered their marketing strategy, eWave can advertise through their website design and maintenance customers. I would also change the current location of the business. I would recommend they changed to a location where it would be easier for customers to drop in. Although this is not necessary to change the location as they now will be designing websites and making databases. This should heighten the business publicity wise. The final thing I would change would be eWave’s aims and objectives.
At the moment eWave’s aims are very unrealistic. However all is not lost, it is possible to change all this as they will change the whole business itself. If eWave just provided website design and development services and database services, they will be more successful.
Here are some of the Aims I would set them:
- Offer high quality, up to date websites at low affordable rates.
- Build a strong residual income through website design and maintenance and online advertising which will now be their primary activity.
- Build partnerships with smaller companies through activities to publicise the company.
Objectives I would set them are:
- Turnover of £300,000 by December 2007
- Net profit of 15% from January 2007 – June 2007 and 20% from July 2007 – December 2007
- 30% gross margin by December 2007
- Establish a minimum of 3 online services per week
- Advertise to a minimum of 100 business by December 2007
Report on the Computer Market
eWave Computers are currently operating their business in the computer market industry. A recent survey taken by research firm Gartner Dataquest, show that there is a major decrease of computers sales as the demand for personal computers is decreasing rapidly.
According to Gartner Dataquest, a world-wide company who collect and interpret critical market data, the September 11th attacks on America have exacerbated the slowdown of sales. In 2001 PC sales went down for the first time in 15 years. Most of the world market back then was mainly the computer industry, but since then PC sales has continued to fall. The worry for the globe is that this downfall of sales in America may even affect all economies around the world. The number of PC shipments throughout the globe has also been going down. From the year 2000 to 2001 the global shipments have gone down by 11.6%.
During this time the leading computer sales company was Dell. They had just taken over from Compaq earlier that year. Dell had the most number of global sales, 13.8% of the sales were from Dell. Whereas Compaq, they only claimed 10.4%. The others included IBM who got 6.6% and Hewlett-Packard ranked 4th , earned 6.4% of global shipments.
The computer industry has many examples of companies who have found it “difficult to cope”. A perfect example would be Tiny Computers. Tiny Computers were once a major force in the computing industry. In the year 2000 they sold a total 200,000 computers throughout the year. This is a huge number compared to other companies in that industry. Tiny had around 150 retail outlets in big shopping malls and high-streets all throughout the UK, but the success at Tiny Computers didn’t last long, they went into administration. But this was not the end for Tiny Computers. Time Computers, another company in the computing industry and arch-rival of Tiny, bought out the company just days after they went into administration.
Both the companies combined and changed their names to “The Computer World”. The companies thought they would save money by combining together. This would cut costs for making new stores as they could just replace the current ones. The Computer World would sell PC’s and related accessories under the Time and Tiny brands.
Although Tiny and Time had made major changes to their business, still there was hints of failure. Time would have to complete all outstanding deliveries of Tiny computers, and take over the company's customer support and warranty contracts left behind by Tiny Computers. This was believed to have removed all debt left by Tiny Computers. Obviously this all came at a cost and maybe just too much for The Computer World to cope with.
It wasn’t long until Tiny Computers again went into administration. So what is meant when a company is said have “gone into administration”. This is when a company in financial difficulties, in this case Tiny Computers, is given a chance by the law, to apply to the court for an Administration order. On the making of an administration order, the company receives protection from people who claim the company as their own. It also tries to preserve the company as a going concern and to avoid the company from completely disappearing.
Tiny Computers had many customers before they went into administration and when the news reached to the customers, it left customers very unhappy. The reasons for this was many of the computers sold were with warranty. And there were also customers who had paid for their computers but still had not received them. Tiny Computers going into administration meant that those customers couldn’t get their computers fixed if they were damaged. And for customers who paid for their items but never received them, well they wouldn’t receive their items, although there was a refund available.
A reason for the company’s failure could be because they had a faulty past. Tiny Computers found it very hard to maintain the high quality of products which is why they had a high number of customer complaints over faulty products. Customer satisfaction was an issue for Tiny Computers for some time. An example of poor quality service is when a customer ordered a Tiny.com plasma screen worth £2,000 but on its arrival saw that the screen was cracked all the way round. This shows that customer satisfaction was clearly a problem and was probably the reason why Tiny went into administration.
Another major force in the computing industry is Dell Inc. Dell is an American based company which offer a wide range of products and services. Products include items such as personal computers, servers, data storage devices, network switches, PDAs, software, computer peripherals. Dell is ranked the 25th largest company in the USA by revenue and has consistently outperformed the computer market over the previous 15 years. Success at Dell came through their marketing. Dell advertise on newspapers and through television. This method of advertising seems to be very successful in Dells case. They can advertise worldwide through television and advertise locally through the newspapers. Dell also supply monthly brochures to existing customers which a good method to keep customers happy, as they get monthly information on the company’s offers.
Some local forces in the computing industry are PC World and Milltech Computers. They many of the services and products offered by eWave Computers. This includes:-
- PC and Laptop Repairs
- Data Protection & Disaster Recovery
- Email / remote access / internet connectivity
Purchasing
- PC & Server service packs, patches and fixes
- Network configuration
- Server & workstation rollouts
- PC and network upgrades
- Application service packs, upgrades, fixes, etc.
- PC & Network optimization
- Virus protection and maintenance
- Disaster recovery and backup (link to backup plans)
- Network performance measures
- Software analysis, review and rollout
- Proactive maintenance measures - define, implement and monitor the network
- Reactive maintenance - trouble-shoot IT issues on an adhoc basis
PC World and Milltech keep their prices competitive as they have enough customers to cover costs. They also can lower prices of items as they have the advantage of economies of scale. Economies of scale means as production increases, the cost of producing each additional unit falls. So products are then made cheaper. Bigger companies such as Dell and Compaq have the advantage of economies of scale over eWave so this would mean it would be very difficult for eWave Computers to compete. This shows that the computer industry is a very hard industry to compete in if the company is a start up firm.
J Sainsbury PLC
Sainsbury’s is one the leading supermarkets in the UK today. Their status as a public limited company means that the company is owned by general members of the public and the shares ore sold on the London Stock Exchange. As a successful public limited company with branches all over the country it is no surprise that Sainsbury’s can afford to provide raw materials, processed and frozen foods, electrical goods, clothing and distinctive services such as the Sainsbury’s Bank etc. Sainsbury’s not only play a big role in the tertiary market but they also offer a lot of their own products made in Sainsbury’s factories and sold across stores all over the UK.
The first ever Sainsbury’s store was opened in 1869 by John James and his wife Mary Ann Sainsbury at 173 Drury Lane. Time past since the opening of the store and the Sainsbury’s shop became vastly popular with the locals and it wasn’t long until Sainsbury’s chose to expand the business with the opening of new branches on the streets of Stepney, Kentish Town and Islington. As Sainsbury’s became more successful, competition began to increase. So in the late 1800’s John James decided to the ownership to private limited company and resulted in the number of branches trebling from 16 to 48. By the early 1970’s the business was required to change to a public limited company as it reached a very high status and the only way forward was to change the type of ownership. The company's public flotation in 1973 was at the time the largest ever flotation on the Stock Exchange, with a 45-fold oversubscription for shares.
The current headquarters of Sainsbury’s is located at Holborn Place, 33 Holborn, London, EC1. Sainsbury’ believe that it offers the business a massive amount of office space and there are a lot of other businesses around which Sainsbury’s could to deals with. With close by underground links and easy access roads the location of their headquarters meets the location demands of the company. Employees have no problems as it is very easy for them to arrive to work. The headquarters in Holborn is a perfect choice additionally it has a Sainsbury’s Local store at ground level.
In the next few pages I will be investigating the aims and objectives of Sainsbury’s and recommend how they could achieve their aims by setting SMART Targets. I will be using the Sainsbury’s Annual report 2006 for my main source of information, in addition to the Sainsbury’s website, articles provided by the BBC website. I have also done my own individual research by visiting a Sainsbury’s superstore located in Oxford Street, London and I have also interviewed one of the employees there.
Sainsbury’s Activities – Aims & Objectives
Sainsbury’s is a major force in the supermarket industry so they need to ensure that their company is of the highest standards. To reach those high standards need to set themselves their own aims and objectives. Sainsbury’s main aims are in general what all the supermarkets target for, which is to develop the business and like all businesses, to take full advantage of their profits.
Besides that they also aim to keep customers satisfied, keep good relations with suppliers, maximise sales revenue, and become the most popular supermarket in Britain. Another of Sainsbury’s aims is to survive as business. This seems not a problem bearing in mind what they have already achieved.
The following table shows some of the activities, aims and objectives that a Sainsbury’s supermarket should fulfil in order to attract customers, keep existing ones loyal and become “The Supreme Supermarket”
