Strategic management proposal

Context

 Introduction

 The company profile

 Vision and mission

 Internal environment

 External environment

 Long term objectives

 Generate evaluate, select strategies

 Management issue and implement strategies

 Implement strategies HR, Marketing, Fin/Acct, R/D, CIS

 Measure & evaluate performance

 Bibliography / References

 

 Writer  John Liu   ( ox tendon 牛筋 )       

 

Introduction

 This proposal of strategic management will be discussed and designed by general manager, managers and supervisors of department and subsidiaries as well as relative stakeholders. The purpose is to formulate an appropriate strategy for the company’s gallop development.

The Company profile

Founded in 1994, Advance Technologies Co., Ltd.(ATC) is a technology intensive private company based in Guangzhou, China. The company’s main business is in the barcode industry. It is one of the three distributors for Intermec products in China and provides barcode management solutions that integrate with ERP systems. Since the business does not have adequate funds for expansion, the owner is prepared to sell the majority ownership. Advance Technologies Co., Ltd.(ATC) was among one of the first-movers in the development and applications of barcode technology and barcode equipment repair and maintenance industry in China. The company is a member of the Automatic Identification Manufacture Association of China (AIM China) and was rated one of the top ten companies in the industry by AIM China in 2003. Over the last decade, ATC has already established itself as a competitive player in the barcode industry with solid technological strength. The company boasts a track record of success that is evident in its proven solutions and several successful cases in areas such as production control, inventory management, transportation, logistics tracking and commodities retail outlets.

 

ATC is authorized Intermec products distributor and Intermec Global Medallion Partner for repair and support in China (Intermec is an publicly listed American company, one of the largest barcode equipment manufacturers in the world). ATC distributes a series of products such as barcode label printers, barcode scanners, portable data terminals (batch), radio frequency data terminals The company also has capability for developing customized barcode information management systems for businesses.

 

Vision and mission

Our Vision

Being a leader of the barcode industry in China through the newest and highest technologies.

Our Mission

With a “unite, aggression, pragmatism and innovation” spirit, we continuously develop new science and technologies field and provide a best service for our clients 

 

  Internal environment

 1 Good product, strong support for the customer

 2.most of clients originate from end user. .

3.Lack of running capital present channels of distribution are not effective sales force.

 4.Turnover rate is high. In the barcode industry, it really facilitated to establish a small firm since it does not need much money and more people. Almost everyone especial Chinese people who has a strong aspiration of being a boss. Some employees, therefore, resigned to set up a new company while they feel they are mature and familiar with this market. No sooner they would be the destructive competitors combating with our company, because they were very familiar with the original company’s operation.

. External Environment:

   More and more people focuses on environment conservation, and the government also issue many policies to deal with the pollution of the environment. It advocates the enterprise to produce the product of conservation environment and formulate regulation to prohibit produce polluting product. The enterprise confronts contradictions in terms of how to cope with the problem of environmental conversation and how to motivate the employees to maximize the profit for the firm .(triple bottom line  note 1) 

 

 Long term objectives

Through acquisition of other businesses along the way, the company may grow into a group company with a few subsidiaries. An IPO on the stock exchanges in the US, Hong Kong or Singapore in six to eight years’ time is also attainable.

 

Generate evaluate, select strategies

Tows matrix
 

 

 

 
 
Strength-s

1.    good product

2.    high technology

3.    strong support

4.    one of the top ten

enterprises in barcode industry

5.with long histories in barcode industry

 
 
    Weakness-w

       1.lack of mass capital    

          2.turnover rate high          

          3 Intermec’s product         

    enter China later than rival
 

Opportunities-o

emerging market

current market not

saturated
 
So strategies

establish new office in

main city and develop       

reseller
 
  Wo strategies

    financing
 

Threats-t                           

main rival with sufficient               

capital can attract the talentwith abundant experience in implementing project                     

 
 
St strategies

offer lower price and

better service for our

clients
 
  Wt strategies

training and reserve

talent, use those who

with some special skill

 not comprehensive ability
 

 

SWOT Analysis

Strengths

ATC is one of the top ten players in the industry in China and the second largest of its kind in the South China area.;

The company is over 11 years old and one of the three major distributors (with exclusive distribution rights in the South China area) of the US supplier Intermec.;

ATC is the only company of its kind in China that covers a complete line of products and services from computer systems development to sales of equipment and consumables;

ATC boasts more successful cases in integrating barcode management systems with ERP systems than its competitors. Major clients for radio frequency barcode system integration include: Panasonic Guangzhou, Thermo King(US$ automobile air-conditioner manufacturer, Shenzhen and Suzhou), Hitachi Guangzhou Shenzhen, Zhong xing Communications, Yulin Diesel Engine and Selectron(US electronics firm) etc. The company also supplies equipment and consumables to Dell, Honda and Acer along with over 100 Chinese companies.;

ATC is a standing member of AIM China; ATC has extensive experience and solid expertise in serving the manufacturing industry. Its proximity to Hong Kong gives it flexibility over its competitors in providing timely delivery of equipment and consumables (mainly imported) to its customers.

Weaknesses

Lack of funds for expansion;

Its main supplier Intermec entered the China market five years later than its competitor Symbol (USA) therefore lost its first-mover advantage.

The turnover rate high, many multi-national enterprises enter into China. Some powerful company such as Techtrend Co,ltd which is a multi-national enterprise, can offer a perfect remuneration system to strongly attract the excellent talents to join them from other company.

Opportunities

China is fast becoming a global manufacturing base and one of ATC’s strength is providing barcode solutions to manufacturing businesses. The current market concentrates on the southern, eastern and northern areas of China. The central and western parts of the Chinese market have yet to be developed.

Global RFID (Radio Frequency Identification) market size is growth exponentially. According to a research conducted by IDTechEx, The value of the total market, including systems and service, will rocket to $26.9 billion in 2015.

The Chinese barcode market is growing at 35% annually

Threats

Major competitors with sufficient funds are developing aggressively; can afford high pay to attract the high quality talent

Its main competitor TechTrend Engineering Limited has a longer history (started in 1988) and is backed by its German invested group company in Hong Kong. TechTrend is a distributor of Symbol(Intermec’s major competitor) and Zebra (USA) etc. As a foreign invested company, the TechTrend is also better manage

 

Major business strategy of our company

Intensifying distributing management, connecting the network with Radio Frequency Barcode Terminal as well as providing system solution for the client are main business of our company.

   The system integration need a sound coordinated teamwork and high techniques to support the implement of project, otherwise the project are utterly not accomplished. So a few rival can participate the completion in this segment. Relatively weak competition can heave the value of our company. Intermec’s product and technology, which is one of the largest barcode equipment manufacturers, stand for the developing trend in the world. Following Intermec’s developing orientation is a strategic target of Advance Technology.

 

Management issue and implement strategies

Establishing annual objectives

According to the estimated to the market of barcode industry. the company has potential to grow to a point in this time where its total value of sales could reach RMB30million yuan. Such sales revenue could come from the following business activities:

Software development and sales (RMB.5million);

Sales of barcode equipment (RMB 15million)

Sales of consumables (RMB 8 million )

RFID technology, printer heads (RMB 2 million)

Devising policies

Set a complete rules, regulation and expectation for the organization

 

Allocating resources

As our annual objectives is 30 million. We should set a allocation plan based on four types of resource: financial, physical, human and technological for the firm. That is how many people are allocated in this department or subsidiary? How much expense should they spend?

 

Altering existing organizational structure , restructuring& reengineering

Constitute new organizational structure, abolish old department and people that will hinder organization’s development decrease the quantity of direct salesperson for the end user., increase the representative for the channel of sales. Intensify the management of the website and collection of the information through Internet.

 

Revising reward & incentive programs

Basic salary combining bonus

Basic salary

First of all, the investigation of local life standard should be taken, secondarily we should evaluate the lever of remuneration in barcode industry, especially rival’s remuneration. Finally, in accordance with the actual situation of our company involving different position, working duration in the company, professional skill, job experience and educational lever, as well as annual objectives and long –term objective, we respectively set different basic salary for different employees.

Bonus

  The prevalent approach linking to salesperson’s amount of sales is probably the best incentive method. Most of the enterprises set the rule of commission based on performance for the salespersons. It was easy to appraise one’s performance taking advantage of quantitative calculation

 

Managing resistance to change

Resistance to change can be considered the single greatest threat to successful strategies implementation. People often resist strategy implementation because they do not understand what is happening or why changes are taking place.( note2 ).therefore it is imperative to elaborate the significance regarding the implementation of strategic management

 

Managing the natural environment

All business functions are affected by natural environment consideration or striving to make a profit. ( note 3).

 

Implement strategies HR, Marketing, Fin/Acct, R/D, CIS

Any HRM strategies must link to its business strategies. The HR management strategies rely on the business strategies of the company.

According to porter’s growth strategies and principle of 4ps, we should adopt the approach of the market penetration of intensive strategies to occupy the market.

The relative financial accounting, R/D, CIS should be built a complete system to accommodate firm’s strategies

Particularly, the e-commerce has been applied to various business. We should focus advertisement on Internet, since more and more customers learn the supplier through Internet. Client who want buy barcode equipments usually like to search on Internet to know suppliers’ information, Actually 30% of customers know our company. from Internet. e.g. people input the key words on Google, Yahoo, Sina and so on, the firm’s name will display in top of the rank that is referred to rank on the Internet, which will pay for the rank. This kind of rank emerge more popular

 

Measure & evaluate performance

Below is the Evaluation framework ( note 4) We should take advantage of balance Score card combining the evaluation framework  to evaluate performance. and also review the strategy by four .Criteria: 1.Consistency, 2.Validity, 3.Feasibility, 4.Contributes sustainable advantage..(Note5)

 

 1.Review underlying base

 Difference?

 No

 2.Measure firm

performance

 Difference?

 No

 Continue present

course

 yes

 yes

 .3.Take corrective action

 
 

 Bibliography / References

Note 1  Sharon  moore  page 58  strategic management unit outline June 2005

Note 2  Fred R . David page 254 strategic Management Concepts and Case, 8th

Note 3  Fred R . David page255 strategic Management Concepts and Case, 8th 

Note 4  Sharon  moore  page 159  strategic management unit outline June 2005

Note 5  Sharon  moore  page 158  strategic management unit outline June 2005