VBb holding S.A. is its supplier of hardware. The hardware it uses is called ROTO. Adjustable ROTO hardware is characterized by: 3 Squares / frame / set (high resistance), one opening, in addition, in the closing down mushroom Corners (for security reasons), anti-burglary standard plate, Dr.Hann-hinged extruded aluminum, adjustable in 3 directions, caught on the window frame with 4 screws, secured to 210,000 cycles ON/OFF.
Saint-Gobain Glass is its main supplier of glass. The glass has different dimensions, from 24 mm till 40 mm (depending on the insulating degree). There are many types of glass: float, low e, anti-burglary, reflexive, mat glass and 4 seasons, which is the best glass on the market in this moment.
As windows, the doors have the same components.
2.4.2. Services
In order to satisfy its customers, the company provides measurement, transportation and fitting services, free of charge.
DECO PLAST S.R.L. makes a firm commitment to repair and service the products which meet the terms of guarantee, free of charge, in a shortest possible period.
The terms of guarantee are:
- 30 years for white PVC profile;
- 10 years for colored PVC profile;
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5 years for glass (regarding condensation between two window panes);
- 2 years – free of charge services (adjustments). This guarantee is offered exclusively through purchase agreements, concluded in the offices.
On expiry of the guarantee terms, these services are provided at extra cost (available anytime, even if during the summer the working schedule is very busy).
2.5. Management team
Regardless of its size, a business is as strong as its leadership. The management team forms the leadership of the company. Customer orientation is the main axis of Deco Plast’s activity to be permanent in line with the market, with its requirements for continuous development of quality standards and diversification of services offered by it.
The current management team was formed in 2008 and is concerned both “with attaining goals and doing so as efficiently as possible”. The members are very well-prepared and try to reach the aims of the company through efficiency and effectiveness. The most important skills that characterize the management team are strategic problem solving, handling information, organizing and coordinating, in an appropriate way, all the activities inside the company, and, also, motivating the employees and handling conflicts.
By using all the tangible and intangible resources of the company, the management team tries to maximize the final outcomes as much as possible and to continuously develop its competitive advantage.
S.C. DECO PLAST S.R.L. has the following managerial structure:
Fig.3. Management organizational chart
2.6. Human resources
At Deco Plast S.R.L., human resources are considered the most important asset of the company. The employees, individually and collectively, contribute to the achievement of the strategic objectives of it. Due to Human Resources Manager, the organization has the proper mix of skilled people who leads it toward the desired direction. Being a consumer oriented company, Deco Plast S.R.L. pay very much the attention on customer’s satisfaction. The employees are trained to be efficient and effective by sticking to deadlines and satisfying the clients’ needs and wants.
The company has 22 employees with different levels of qualifications: management team which comprises people specialized in certain fields, skilled workers (engineers in charge with measurement services, commercial workers) and unskilled workers (carpenters). Because of the small number of employees, the work they are in charge with is closely watched by the general manager.
In order to keep the motivation of its employees up, the company organizes team building trips every winter, the employees receive presents at every anniversary (also 1st and 8th of March), and, what is the most important for them, they receive commissions from sales. Also, in the end of the year, the company organizes a party only for its members. These practices are adopted in order to ensure that people are adequately stimulated and to enhance their commitment to the work.
In the same time, the company provides a safe and healthy workplace for its employees, where they can properly perform their tasks.
2.7. Financial situation of DECO PLAST S.R.L. for 2010
Fig.4. The financial situation of the company at the end of 2010
Source:
According to Fig.4, the company registered a loss of 1 256 369 Lei in 2010. This loss may be the result of the financial crisis which affected the purchasing power of Leu and also the standards of living. The Debt Ratio, computed as total debts over total assets, is 1.95, the biggest coefficient in the history of the company (2010 is the only year when the company recorded a loss, as can be seen in Fig.1.). This result indicates that the organization is in risk of bankruptcy. It must, also, be mentioned that the whole industry of PVC carpentry suffered in 2010 in terms of financial indicators.
Official sources said that this year is a good one, from sales point of view, and that the company made big steps towards recovery. Despite the financial problems from 2010, Deco Plast maintained its leading position towards its clients and provided them products and services of the highest quality.
- MARKET ANALYSIS
3.1 The industry
Since the economic crisis began emerging in 2008, the construction industry was the engine of the Romanian economy, registering an annual growth of over 30%, but this change dramatically in 2009 when construction output fell by 15%, with a similar reduction following in 2010. The global financial crisis severely affected the insulating carpentry, because in construction and especially in the private sector, projects can be financed only with bank support. Therefore, construction activity is very dependent on the release of the financial system. Insulating carpentry market segment had a permanent upward trend since 1990 and huge investments had been made in this period.
PVC products cover 70% of the total market, the aluminum products hold only 10%, the difference being let to wooden profiles.
In 2007, PVC profiles market was worth approximately one billion euro. In 2009, estimates show a decrease of 50% of the market. In 2010 the total value of PVC profiles market reached approximately 450 million euro, representing a decrease of almost 55% as compared to 2007. In three years of crisis more than 10,000 workers have been dismissed and the market fell by 70%. This happened because of the drop of construction industry itself. Most projects started in 2007-2008 were continued until finishing phase, including installation of insulation carpentry.
All segments of the market for construction materials had drastically decrease in these three years, with peaks that reached 30%, but PVC carpentry market is the only one which dropped its volume by over 40% in a single year, namely 2009.
PVC market sky rocketed in 2007, like many sectors of the construction industry. The volume of one billion euro of that year was supported by the 6,800 companies in the area. In these years of economic crisis, insulating carpentry market fell sharply to the level of 300 million euro, representing the forecast for this year. More than 10,000 workers remained unemployed, out of a total 40,000 employees in 2008. The ownership of the industry representatives say that these years have failed only 1000-1500 producers, but market players talk about the disappearance of 80% of the 6,800 active companies in the heyday. Out of this number, 100 are companies producing more than 80 - 100 units per day.
Because of the inactivity in the construction industry and the rejection of the rehabilitation projects, PVC market does not provide signs of recovery in less than two years.
Fig. 5. The evolution of insulating carpentry market for PVC windows and doors (2005-2010 period)
Source: Ziarul Financiar (1 Sep. 2010), Bucuresti, „Evolutia pietei de tamplarie termoizolanta pentru ferestre si usi din PVC, in perioada 2005-2010”.
3.2. Clients
S.C. DECO PLAST SRL provides services to customers who appreciate the seriousness and prompt response, according to the highest quality standards. Through its activity, the company offers its services to clients in Bucharest and across the country, providing quality products and services tailored to each and every need. The company addresses, through its products, both natural and legal persons. Regardless of the products purchased, Deco Plast customer is a satisfied customer, because experience, quality, competence, professionalism recommend it.
Deco Plast S.R.L. has extensive experience in PVC carpentry, blinds, folding and roller shutters and in manufacturing double pane glass windows of all types, gathering in 7 years of experience a portfolio of over 5000 clients, individuals, companies and state authorities. It executed small, medium and large-scale works. The company offers its clients a diverse range of services, affordable prices and a superior quality of the materials it uses, which are imported from France and Germany and have 30 years guarantee, given by the producers. Working with Deco Plast, the customers have the guarantee they are working with one of the most stable companies in the market and any subsequent issues will be solved, the organization offering its services even after the collaboration ends. It emphasizes on quality products and services it offers to its clients, which are certified according to quality standards in force. That is why the company invests continuously in new equipment, production plant, quality and management standards, working conditions offered to its employees by seasonal training programs. In this way, customers will interact with highly qualified personnel.
In its way to improve the services offered to its customers, Deco Plast developed this year an online platform (PVC carpentry calculator) on its website which widely approaches Rehau double pane glass windows. The interface allows configuration of several models of PVC windows and doors with double pane glass, thus customers can receive a quicker price offer of insulating carpentry. The company sells Rehau PVC carpentry models in Bucharest and surrounding areas. To give its customers more accurate information about the products, there is the possibility to online choose from a wide range of windows and doors.
Among the most significant clients of Deco Plast, we can count SC BCD Construct Expert S.R.L., SC Rubby Food CO IMPEX S.R.L., SC Cuptorul cu lemne S.R.L., SC Glina S.A., SC Biolife Grup S.R.L., SC Printo Advertising S.R.L., SC Plurifarm S.R.L., SC Bacont MCA Construct S.R.L., SC Anuntul Telefonic S.R.L., and SC Turbo Tub S.R.L.
3.3 Suppliers
Deco Plast suppliers of raw materials and technology are all German and French companies. Throughout the collaboration, the company has enjoyed a high degree of professional assistance from them and constant monitoring so that the finished products meet and even exceed customer expectations.
The supplier for PVC profiles is S.C. REHAU POLYMER S.R.L. Expertise and innovative spirit have made REHAU a leading systems and service provider for polymer-based solutions in construction, automotive and industry. By combining strong development capabilities with decentralized sales and service excellence, it has become one of the top providers in the market. The highest levels of professionalism from material development through manufacturing, together with a passion for the unlimited potential of polymers are the foundation of its worldwide success as a premium brand. Their approach was to replace conventional materials with more capable polymers and to create system solutions that generate added value for the customers.
VBH HOLDING S.A. is the company’s supplier of hardware. It is a Germany-based wholesaler of hardware for the construction industry. The company acts as an intermediary between hardware producers and consumers that use the products in technical and industrial processes. Other products offered include fixings, sealing components, a range of tools and power tools, machines and components for safety and fire protection technology. The company operates worldwide in over 40 countries through more than 130 branches.
The supplier for glass is SAINT GOBAIN GLASS. It is a French-based company and a global leader on habitat and construction markets; it designs, manufactures and distributes construction materials, providing innovative solutions to meet growing demand in emerging economies regarding energy efficiency and environmental protection. Saint Gobain produced the glass for construction of the Louvre Pyramid and for the works in Beijing and Shanghai.
By choosing to collaborate with ones of the best organizations in the area, Deco Plast displays a high degree of confidence towards its customers.
3.4. Competitors
The main competitors for Deco Plast are SC APLAST S.R.L., SC FAR EST S.R.L., SC LAMAR TRUST S.R.L. and SC AMVIC S.R.L. These are companies based in Bucharest, but they also have offices in various cities in the country. Besides these, there are much more small companies which activate in this field and have developed, over time, a fierce competition.
The difference among them is made by distinctive competences which lead to competitive advantage. The construction materials they work with, the suppliers, past experience, seriousness, the attention they give to their customers, all these have the purpose to influence customers’ decision.
- SWOT ANALYSIS
Strengths
- Deco Plast uses Rehau PVC profiles - a well known brand;
- The company offers a wide range of products and services;
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High response rate to changes made in internal or external environment;
- The company benefits from a modern management;
- The organization enjoys a young working team;
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Deliveries are made on time;
- The company has high quality equipment and machinery.
Weaknesses
- Lower sales during the winter;
- Lean campaign of promoting the company and the products in media;
- Lack of realistic strategies based on market research and macroeconomic forecasts.
Opportunities
- Finding sources of cheaper raw materials supply;
- Increase of the construction industry (during the economic crisis, the PVC carpentry market fell by 50%);
- Development of the portfolio of products in line with market trends;
- Raise in purchasing power of buyers by increasing the average wage;
- Possibility to conclude advantageous agreements or alliances.
Threats
- National currency fluctuations against euro;
- Slower growth, stagnation or even recession on the market;
- The current economic crisis;
- Market saturation;
- Increasing pressure from the competition.
- MANAGEMENT FUNCTIONS
5.1 Planning
Planning is the primary function of management and occupies the first position in the management process. All the other management functions are related to planning. It involves setting up well-defined objectives and directions for processes and developing appropriate courses of actions to achieve these objectives.
The mission of DECO PLAST S.R.L. consists in enhancing the quality of the products and services they offer through continuous development, integration of new technology and constant training of their current and future employees for the benefit of the customers who show their satisfaction by being interested in their portfolio of products. It adds value by recognizing new business opportunities, innovations, as well as identifying and developing human potential. It tries to achieve its mission by constant quality improvement.
The vision of the company is to be a stable, flexible and modern organization which aims to occupy the leading position in PVC production and sale of blinds in the region, in terms of quality of its services, professional attitude of their employees and satisfaction of their clients.
The company uses the time-planning approach. The management team does an outstanding work of executing strategic plans and creating equity value in the company. Deco Plast’s actual strategic plan involves its recovery caused by the actual turmoil. It intends to be a successful business with profit. In order to achieve this objective, the company continuously monitors the quality of its products, constantly invests in technology and development, improves communications and continuous education of its staff and it also monitors the requests of the customers.
The organization’s short term objectives for 2011 are:
- Increase turnover by 10% compared to 2010
- Strengthening the leading position
- Expending the range of products and services according to market trends.
- Forming strong partnerships with future suppliers the company intends to have.
Also, Deco Plast constantly tests other experiences and ways of service providing that lead to improvement of any aspect of the business.
5.2 Organising
The organising function of management is the process of making sure the necessary resources (physical, financial and human resources) are available to meet the goals of the organization. A good implementation of the organising process results in achievement of the organisational goals, optimum use of resources and the expansion of business activity.
The physical resources are represented by the infrastructure (offices, factory, machineries, professional equipment and transportation means) needed to properly perform the work. Deco Plast use mass production technology, its factory being 90% mechanized. With modern equipment, the company manufactures insulating windows and doors that meet the most exactly quality standards. Almost all the operations are assisted by computer, eliminating, in this way, human errors. For making products of the highest quality, the technological flow is constantly controlled by the Technical Manager.
In order to reduce the wastage of resources in the company, the right people occupy the right positions. The organization has a narrow span of control, meaning that a manager has under supervision a relatively small number of subordinates. This may be caused by the small number of employees and the wide range of services and products Deco Plast offers.
Decision-making process is decentralized in order to maximize response time and to allow the employees to improve their performance by being able to act to improve deficient or inefficient areas immediately without approval from the top management.
Fig. 6. The functional organisational structure of Deco Plast S.R.L. in 2010
5.3. Leading
The leading function of management involves motivating, communicating, guiding and encouraging the employees in an organization. Effective leadership implies an interaction, an exchange between the leader and the followers, and occasionally, a shift in roles.
Deco Plast S.R.L. adopts a participative leadership approach. This implies that management team shares problems with subordinates as a group. The managers created a climate that encourages new ideas and employee input. They also share information and let the employees know the latest news in the company. Satisfied employees work harder and take more ownership in their job position. Until now, this strategy resulted in a higher level of customer satisfaction.
A distinction should be made between management and leadership concepts. The first one is formal position and the second one is attitude (informal position). When managers want to lead they have to give up formal authoritarian control, because to lead is to have followers, and following is always a voluntary activity.
Because a great number of employees from Deco Plast (commercial workers, engineers, carpenters) work directly with the customers, they need to be satisfied about the existent climate in the workplace. This is the reason a relationship-oriented leadership behaviour is adopted within the company. It focuses on maintaining or improving relations with subordinates (developing, recognizing, and otherwise supporting the employees). An indirect consequence of this behaviour is customer satisfaction. It is a chain based on strong relationships. In order to achieve the goals of the company, all the parties involved in the selling-buying process must be satisfied (from different points of view).
5.4. Controlling
Controlling consists of verifying whether everything occurs in conformity with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources in order to achieve the planned goals. It measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions.
Deco Plast is a consumer-oriented company and because of this, it focuses a lot on control process. The loyalty of its customers is very important, that is why the company keeps in line with market trends and offers a wide range of products and services. The management team involves in the process of assessing the contentment level among customers, related to which extent the company’s services are in accordance with the ones stipulated in the contract. A direct way used by Deco Plast to measure the customer fulfillment is feedback recording. The clients are asked about the level of involvement of the personnel in solving the problems that arose during the collaboration, the extent to which the company is prepared to encounter and solve the difficulties, and also the place of the organization on PVC market. An indirect way of controlling the quality of the services the company offers is through the level of customers choosing Deco Plast’s other products and facilities, over time.
The company adopted a concurrent control system, continuously monitoring if the objectives are met, errors avoided and complexity faced. During the collaboration, the commercial worker who concluded the contract keep in touch with the customer, mainly by phone, and whenever a problem occurs, he/she solve it immediately, by speaking with the right people or be sending there an engineer to see what is happening.
Controlling is a continuous process. Not all the deviations of controlling are taken to top level managers, only key areas deviations which are beyond the specific range.
- CONCLUSION
Given the position Deco Plast occupies on PVC carpentry market and the competitive advantages it has towards other companies from the same sector, the organization may become the number 1 choice of any client who appreciates seriousness and prompt response. Over time, the company managed to grow and to offer its clients a wide variety of products and services. It is characterized by professional employees, high-quality products and a young management team, oriented on customer satisfaction.
In my opinion, the company adjusts quickly to changes in external and internal environment due to the efficient management team and the employees who play an important role in the success of the organization. It is still in development, with clear objectives set up for the foreseeable future and beyond. It intends to develop strong partnerships both in Bucharest and other cities such as Ploiesti, Brasov, Slobozia, Calarasi, Giurgiu, etc.
BIBLIOGRAPHY
- Bratianu C., Mandruleanu A., Vasilache S., Dumitru I. (2011), Business Management, Editura Universitara, Bucuresti, pg. 32
- Ziarul Financiar (1 Sep. 2010), Bucuresti, “Evolutia pietei de tamplarie termoizolanta pentru ferestre si usi din PVC, in perioada 2005-2010”
- http://www.decopvc.ro/
- http://www.saint-gobain.ro/
Bratianu C., Mandruleanu A., Vasilache S., Dumitru I. (2011), Business Management, Editura Universitara, Bucuresti, pg. 32