Company

Boston Beer Company, which is one of America’s leading brewer of high-quality beer (Boston Beer Company). The company was founder in the year 1884 by Jim Koch in Boston, Massachusetts. The company started its operations as a microbrewery and used to sell its beer caters only to the local bars of Boston. The expansion started soon, and by the later years of 1980s the operations had extended to the east coast and to the entire country by 1992. By 1995 the company had been incorporated and listed in the New York Stock Exchange.

The one thing that has remained constant throughout the growth is the Samuel Adams Lager product line, which has not changed since the company’s inception (Cleary et al p. 2). The company own almost 50% of its breweries which are located in Cincinnati, Ohio and Boston, Massachusetts. Of the remaining breweries many others are contacted. These are located in Eden, North Carolina, Rochester, New York, and La Crosse, Wisconsin (Reuters 2) The company has a network of over 400 distributors who operate wholesale over the entire country.

The distributors then resell the products to various bars & pubs, restaurants & hotels, and various other retails outlets. While the company predominantly operates in the United States it has quite a few international operations in countries like Canada, Europe, the Caribbean, and the Pacific Rim (Reuters 4) This paper presents a strategic analysis of the company, the problems it faces and proposes certain measures to counter it.

Boston Beer SWOT Analysis

The following section gives the strengths weaknesses opportunities and threats of the Boston Beer Company.

It analyses both the external and internal environment, including the conditions of the brewing industry in America. The internal environment is highlighted by the Strength and Weakness segments, which highlight the strong areas or the company as well as the area it needs to work on. The external environment is analyzed using opportunities and threats which give the possible avenues of strategies available with the company. The opportunity section give the possible avenues of expansion and the threat section gives the areas the company needs to guard itself against.

Company Strengths

1. Brand Image – The biggest strength of the company is the brand image it has among the consumers. Boston Beer, specifically the Samuel Adams, well known from the superior quality and expensive ingredients used along with the traditional brewing techniques which give it an excellent flavor, which cannot be easily copied by the other competitors. In addition the use of less water in its products also has given it a positive advantage in terms of product quality. In fact the fact the company makes unadulterated beer using only barley, bops, yeast and water, Samuel Adams brand became the first beer to be sold in Germany. You may also be interested in PESTEL Analysis beer industry. This in turn gave the company an additional stamp of quality. The consumers always expect the brew coming from Boston Beer to be “better-beer”, because of this favorable brand image(Isom et al p. 23)
2. Product Innovation – With a view to promote the Samuel Adams Product line, the company creates and sells a variety of traditional beverages and other alcoholic beverages. These help the company in exploring newer market areas and also expand to newer markets using any of the wide range of products. In addition the wide product range also give stiff competition of other fellow brewing companies who have to come up against the company in almost all ranges of beer (Isom et al p. 23)
3. High Quality – The commitment of the company to produce high-end and premium beer by using better quality process started from company’s founder Jim Koch whose commitment to produce only hand crafted traditional beer using traditional processes is well known. Craft beer industry is meant only for companies who have extensive experience in this field. Jim Koch, being a sixth generation brewer has this experience in plenty and this comes to fore while competing with its competitors (Isom et al p. 23)
4. Distribution Strategy – The Company has always focused its distribution in the national market and has made a few strategic international attempts. This makes sure that the company does not lose its primary market and also extends it as and when the time is good. Many of its competitors do not get to use the distribution channel Boston Beer uses, because of their obscure brands (Isom et al p.23)
5. Product Strategy – The company always keeps its seasonal products has single SKUs, so that the transfer/ordering of the products in the transitional periods between seasons is easy. This keeps the product sales at an optimum level even in the off-season period (Isom et al p. 23)

Company Weaknesses

1. High Overall Unit Costs – One logical outcome of any handcrafted industry si the cost of product, and craft brewing industry is no exception. Hence, the problem Boston Beer faces is not unique, and is universal among other craft brewers. While Boston Beer remains the undisputed leader of this field, the problem comes when it competes with American companies like Budweiser, Coors and Miller or foreign companies like Corona, Heineken, and Guinness (Isom et al p. 23)
2. Distribution Companies – While the distribution network of the company is one of the very best among the craft beer industry, it is still weak as compared to the larger rivals mentioned above. There is a lack of integration among the various channels. The networks are usually fragmented and also not widely distributed, with most of the distributors being local (Isom et al p.23)
3. Export Market – The strategy of the company has been to mostly be in the national market, making occasional forays into the international market. With many foreign companies entering the national market, the Boston beer too needs to expand. Unfortunately Boston Beer Co. does not have financial or physical resources to export their products en masse. In addition their brand image is not very popular outside the US market and also American beer market is very weak outside US probably because of poor brand image (Isom et al p. 23)
4. Economies of Sale – In comparison to the major brads, Boston Beer Co. also enjoys smaller economies of sale, meaning lower profit margins(Isom et al p. 23)
5. Production times – In addition to the higher end product cost, handcrafted beer also has another disadvantage of increased production times. Using traditional methods to increase the beer quality does increase the quality and taste but the process rules out faster production or cheaper methods of production (Isom et al p. 23)

Opportunities

1. Acquisitions – One very favorable opportunity available o the company is to acquire smaller breweries to further distance themselves within the craft brewing industries. The smaller brewing industries operate under a much lower scale than the Boston Beer Co. and can be easily acquired (Isom et al p. 24)
2. Financial backing – The company could focus on getting more finance for its expansion plans. The reserves of the company are really small as compared to the one required for an international expansion. One way to do this to either take on a professional financial backer who would stay away from the company’s way of operation giving it the required freedom of operation to make its own strategic decisions. Another way is to go in for some kind of tie up with the major brewing industries. These companies will enable Boston Beer to expand in newer markets in addition to providing the financial backing it needs (Isom et al p. 24)
3. International Market – The international market is a largely uncharted one with many newer economies cropping up. Boston Beer Co. can extend this operation into some of the newer markets by either taking on distributors abroad or tying up with the foreign companies who have not yet made an huge international impact. The hand crafted beer is still a novelty which can be explored to a larger extent if the strategy is good (Isom et al p. 24)

Threats

1. Buyouts, takeovers – The take over or buy out strategy which is an opportunity for Boston Beer can also be taken as a threat as the same ploy can be used by its competitors on the companies. This threat is posed not only by the larger American companies, but also the other foreign giants which are foraying into the US market and are looking for local partners for extending their base in America (Isom et al p.24)
2. Government regulation – Of late the government regulations have become strict with plans to introduce newer taxes and other regulations on the sales of alcohol. This is a very potent threat and this could really damage the already-narrow profit margins held by the craft breweries. The bigger companies would not be so much affected, but the smaller companies would really take the most of the brunt (Isom et al p. 24)
3. Distribution Problems – As mentioned earlier, the distribution network is a problem with the beer industry.
4. The lack of willing carriers is one such problem which the distributors face which in turn translates as problems for the parent company (Isom et al p. 24)
5. Counter Advertisements – There have been major advertising campaigns by macro-breweries targeting the micro-breweries specifically the Boston Beer Co. This does not necessarily damage the markets outright, but the outright defense again the company by the other major companies might prove to be a problem (Isom et al p. 24)

Current Strategies of the Boston Beer Company Initially the strategy of the Boston Beer Company was based on growth. The strategy helped it immensely to gain a fair share of the national market and entry into the international market. At the time of expansion, the company emphasized on the superior quality of beer it made and as there were fewer companies catering to this segment. It gained an enviable growth rate. To maintain this growth rate in the later year the company’s next strategy was to increase the demand for craft beer. This led to large scale advertising, the most significant step being the introduction of light beer bringing in the light beer drinker towards its segment.

This enabled it to become one of the leading companies in the beer business. The present strategy of the company is to give more emphasis on the growth of the Sam Adams Lager product family. The company is concentrating its efforts to push the entire family on products by focusing on the brand reputation of its one major brand. This is reverse of what it had done in its earlier years, focusing on making newer brands to promote the Sam Adams brand. The company thinks that it is necessary to give a push to all its products so that they achieve the best possible market expansion.

The overall aim to do this is to increase the sales figures of the company by getting revenues from all the products in the family. They also plan to make an overall cut in advertising and other expenditures in promotion to drive the expenses down which would leave a more opportunity for increasing the profitability of the company .

Core Issues

The major problem faced by Boston Beer Company is the competition and high production costs. The company must cut down on its production costs. In addition the company needs to be streamlined and also downsize the product line. The dominant product line should be used so that its market positioned is strengthened. In addition it also should be able to counter the competition it faces from both national and international companies. The market share needs to be increased along with the profit amount (Isom et al p. 20)

Recommendations

At one look Boston Beer might be said to have major problems in sustaining and marinating growth. However, there is one major advantage. The company has achieved its growth without really trying to incorporate major business strategy decision.

The focus was merely on product innovation, distribution and advertising, and the high-end quality of the product. Hence there is wide scope of increasing the market share using better strategies (Isom et al. p 29) The first measure which the company should take is to streamline its product line. For promoting the Sam Adams Lager product family, there were many product innovations done. The company should focus on only those products that have a market and stop the production of the others. Having a good distributor network will help the company considerably in this.

A survey carried out can really help the company to find the taste of the customers and focus its products in the area. This will also significantly lower the production costs. The streamlining products and survey will tell the company, the present taste choices. After this the company can focus its attention on strategically buying the other craft breweries that sell products in this area. This will give the company a better market share and also more controlling power in the market.

The production facilities of the newer breweries will be an additional advantage which will in turn reduce the production costs, by cutting down on the contracted breweries. Apart from this the company should seriously focus its attention on the international market. Leveraging on the number of award the company has received and using the strategy of bringing the light beer drinkers to the unique taste of Sam Adams brand could again prove as the winning hand in the international ventures also.

The light beer industry is experiencing a high growth rate, another factor which could be taken into consideration which international marketing.  An additional influx of money should be planned for the international venture, so the company can take help from a venture capitalist instead of tying up with the larger beer companies. This is because the company is fairly free to pursue its own venture ideas and also there is no danger of the market strategies being usurped. For gaining a better coverage on the national front the company could tie up with restaurant chains or pub chains.

These would bring added markets and also increase visibility. The option seems to be a necessity now that the company plans to reduce its advertising costs. Offering package deal with the existing restaurant products will be a very good strategy for achieving increased sales. To increase the sales of seasonal drinks the company can plan beer-drinking events. The event could be based in different cities, and would help both in the sales and the advertisement of the brand. Finally the research and innovation of the products should be continued band should be combined with market researches to get an idea of the customer tastes. These could be segmented into either age or cultural or gender basis, which would help in both product innovation and product marketing.

References

1. Boston Beer Company, “About Us”, Website accessed on 25th June 2007, http://www. bostonbeer. com/phoenix. zhtml? c=69432&p=irol-overview
2. Cleary B, Luxenberg S, Seidel P, Van de Water B, “The Boston Beer Company”, 28th May 2004, Website accessed on 25th June 2007, http://www. mcafee. cc/Classes/BEM106/Papers/2004/SamAdams. pdf
3. Isom B, Beaman J, Cormier S, McMullen R, McKinney J, “The Boston Beer Company: Leading the Craft Brewing Revolution”, 30th April 2004, Website accessed on 25th June 2007, http://www. geocities. com/jeffbeaman/BostonBeerBusinessStrategy. pdf
4. Reuters, “Boston Beer Company Inc. SAM (NYSE)” http://stocks. us. reuters. com/stocks/fullDescription. asp? symbol=SAM&WTmodLOC=C5-Profile-1
5. Thomson & Gale, “BUSINESS & COMPANY RESOURCE CENTER CURRICULUM SUPPORT DEMONSTRATION”, 2006, Website accessed on

For the case of the Borouge company, since additive is a very delicate material to them, it will take at least some time to decide which supplier are they going to have. The company can have a series of test to see the competitiveness of the supplier by certain meetings, product agreements, product testing, payment processing and contract terms testing to see if the supplier is good to be a partner in business. Looking for a supplier is not easy. People may come in and out of the company saying the they are the best supplier that the company will have. So the Borouge company must be very careful.

How to change an existing supplier?

The first thing to consider is the contract of the existing supplier. The contract must be finished first before they officialy change their supplier. If the contract of the original supplier is over, it is much professional if the Borouge company will inform them that their contract with the company is finish and the company will not ask for an extension of another one year or term of supply from them. Since that the agreement between the customer and the original supplier is done, it is also a must that the Borouge company pay all of their existing payments to the supplier if there is any.

The Supply Chain: The Procedure workflow

Other critical area for additives business is through the use of the Supply Chain process. The Supply chain management is the coordination of production inventory, location and transportation among participants in a supply chain to archive best mix of response and efficiency for the market. Through the use of the supply chain management, the employees in the company will have a defined step by step of transaction while processing their data.

Since orderliness is a big part in maintaining a business, the writer believes that an organized supply chain management is a big help for the Borouge Company. There are many advantages that a supply management can bring to a company. It brings a procurement flow to be better understood by employees thus making their work easier and fast. It benefits both the customer and the company in making transactions. It also helps to improve customer service relationship, product development and marketing. Risk is always an issue in every management.

Implementation of a supply chain management is not an excuse for imperfection. Better risk management is recommended for business who use this kind of strategy because customers and employee demands always rise, so the top management must know how to take pressure and solve problems. Implementation of supply chain management involves a lot of patience and practice. Education and proper documentation should always be a part of every action that customers and employees should do to ensure all transactions are well understood so that every order is made and delivered on time.

One problem of supply chain management is that employees wait for each other before they act. Chain supply management sometimes encourage a step by step procedure which make people wait for some other employees to finish first before they do their job thus making the work flow slower. It can also result for downtime and stops multi-tasking among workers. Because of all the stated possible risk in implementing supply chain management, the top management should conduct proper audit among employees to ensure that they know their job schedules and responsibilities.

Report follow-up

Report follow-up is also recommended. Customers being one of the precious assets of the company must always be a top priority so they must be updated all the time about the company’s actions. Development must also be a part in the supply chain management. There should always be Integration and outsourcing, concentration and globalization, secure supply chain and more. Having the right knowledge and tools, there are different processes that the company can use to identify risks.

The company can have a flowchart of the overall supply chain and its sub process, identify a critical supply chain system, process and production activities, determine likelihood of risk events that may happen, know the sources of higher severity and determine all product life risk. Aside from the supply chain management, people of the company should be flexible enough to find sources for their needs. Sourcing strategy is another way that they can learn to venture more on the different ways of finding their needed materials. This can help the company to get more from their investments.

Different strategic sourcing services can be learned through different companies and some are through experience. There are three (3) Strategic Sourcing Services namely the Sourcing strategy, Organizational Improvement, IT Supply Management Tools Implementation, Communication and Education and Risk Management which are all important for a growth of any company. The Sourcing Strategy includes the Development and Measurement of the company’s employees that includes trainings, seminars, test and a series of audits to measure their different capabilities in their work.

I did my attachment in a sugar factory called Mumias Sugar Company and supply chain being a combination of interrelated processes from the time of obtaining raw materials to the stage where consumers get to consume the final product, here the main processes included:

• Farmers obtain important information from researchers and biotechnologists.
• Farmers obtain input supplies from farmer’s co-operatives and then grow sugarcane which will then ripen,
• Harvesting and selling of sugarcane to Mumias Sugar Company.
• Inside the company, milling and refining takes place which will result into the main product and by-products. The main product being sugar while the by-products are molasses, bagasse, bio-gas and chemicals.
• Distribution then takes place where some of the sugar is sold in the local market while others would be exported to the neighboring countries. The local market involves selling to the wholesalers who will sell to the retailers and eventually sell to the consumers.

Basing on this organization’s supply chain, upstream exchanges involve co-operatives selling inputs to the farmers, researchers and biotechnologists supplying information to farmers and farmers supplying raw materials to the company while downstream involve marketing and distribution of the final product. However, the current issue that negatively impacts company’s “global” supply chain is information technology which ties together all the processes making up a supply chain.

Information technology is needed in managing all these processes, linking all employees communicating with customers, suppliers and even other businesses, processing of orders, accounting, inventory control and distribution. Therefore without information technology supply chain is negatively impacted.

References

1. South african reserve bank (2003). South African Reserve Bank Quarterly Bulletin, September 2003. Pretoria, South Africa.
2. Tomek, WG and Robinson, KL (1981). Agricultural Product Prices. Second Edition. Cornell University Press, Ithaca, New York, United States of America.
3. Kohls, R. L. and Uhl, J. N. (1998). Marketing of Agricultural Products. 8th Edition. Prentice Hall, Upper Saddle River, United States of America.
4. Christopher, M (1998). Logistics and supply chain management, 2nd ed. Upper saddle River, N. J. : Prentice hall.

Redesigning refers to as an improvement in the company’s approach that critically analyzes implements and examines the pre-designed business processes. The major objective of redesigning the business process is to achieve greater improvements in the areas dealing with the customers and other stakeholders. The process of redesigning can either be geared towards; Business process improvement (BPI) and Business process development (BPD). The redesigning business process mainly relies on IT (information technology) to achieve the desired breakthrough results. (Allen, 1994)

Thorough redesigning can only be possible through the process of effective planning. Planning refers to the process of laying down the procedures of how the set objectives are to be met and all the strategies to be followed. A plan should include a realistic view of the final expectations. A plan is based upon the activities of the organization and can therefore be long-term or short-term plans. A comprehensive plan always guarantees success whereas lack of a good plan, most of the times will certainly ensure failure. For an effective management, there must exist a comprehensive plan which minds the necessities of the entire organization.

The plan helps in clarification, focusing and researching on the organization’s projects developments. Therefore, this provides a logical framework on how things should follow. This means that planning and management will always go hand in hand so as to yield the expected results. However developing an effective management to deal with the specific challenges, for example, increase in productivity, is the primary concern of many organizations for the purposes of competition, in amidst of rapid changing of technology, which further translates to greater effectiveness and efficiency.

Having been hired by the CEO of Healthlite Yoghurt Company so as to work on their current information and business processes, I should provide an RFI (Request For Information) which includes a plan for effective management of data sources in the organization that evaluates the potential impact of technology and systems to support organizational initiatives. It suggests the areas that requires automation and which ones that doesn’t. An RFI is a document which serves to request information from the public in order to address or learn about a particular issue.

The effective management should take into consideration of the potential impact of technology, for example, the e-business and the e-commerce. E-business means to operate a business and servicing customers through internet. Therefore, planning for a business’s web strategy is something that is seen as unimportant but it is still the most important thing of online projects. This is done by trying to define the key customers, and identifying their needs and goals.

This task is more difficult although it is vital to manage the rising amount of information to be put online. E-business means using the advanced technology with the help of internet based technologies in stead of using the ordinary methods of information flow within the organization and outside the organization. E-business is a faster and cheap way of passing information and also aids in increasing the organization’s competitive advantage, unlike the ordinary or current information systems which are expensive and slow which leads to unsustainable costs.

The e-business helps in the expansion of the market coverage. The e-business the removes the limitations of geographical (physical) and times zones, unlike the conventional markets. This means that the world market is available which is a 24 hours a day, which this is available due to the internet access which can be conducted either at a desk or off-site. This allows a wide network of reaching the customers. The e-business, on the good side makes attractive of the previously uneconomical markets.

This is because it helps in expansion in the number of customers who can deliver acceptable margins, thus turning the marginal segments profitable. Moreover, there is the creation of the market pull due to the presence of the internet. The internet for this reason can be used to select suppliers, pilot the products and at times directly purchase products. Further, the e-business helps in cost reduction. Cost reduction is achieved through changing the way the products and services are distributed to the customers.

Products that have already been produced and are known or require little experience in the market can be purchased by the customer on the internet and be delivered to the customers one to one even without with the help of the business intermediaries. It is universally known that, internet-based system of making purchases reduces the wastes encountered during the purchasing process, hence increasing the customers’ profitability, and competitiveness.

Generally, the web designed purchasing process aids in the following areas of concern; elimination of unwanted paper trail, vendor sourcing strategy support, easy, reliable and timely access to information and reduction in costs and errors through end to end process integration. E-business reduces the error of buying products from unauthorized and unqualified suppliers. E-business helps in establishing strong customer relationships. It worth noting that creation and maintaining of the customer is the primary objective of the organization.

No one would like to establish a weak relationship with his customers. Therefore the e-business creates a continuous support between the business and the customers. More precisely, e-business has the capability to link benefits that closely addresses on searching and maintenance of the customers, and by providing better purchasing experiences to the customers. This therefore implies that, the major reasons as to why e-business is important are that benefits can be narrowed down to three major areas of being faster, better, and being cheaper.

(Allen, 1994) Business support system and Management Information System (MIS) MIS refers to the systems that are used by the managers to make decisions for the success of the business, and they are composed of the computers, people, and modernized business procedures. These are useful for the purpose of supporting various services that are offered by an organization. This covers areas that include management of product, customer, revenue, and placing order. (Thomas, 1993)

Introduction

Motorola is known worldwide as a trendsetter and leader in broadband and wireless communication. Their services include designing, manufacturing, selling, installing service analog and digital two-way radio, as well as voice and communications product system. Their products and services comprise a wide array of technological innovations that connect people not only to information but to entertainment as well. At the range of their products and services, Motorola is a giant multinational company, which made them capable of monopolizing digital communication, digital information, and digital entertainment with an annual sale of more than twenty-eight billion dollars.  The introduction of six sigma provided growth in the company; but recent years proved the slow recovery of the company that caused remarkable decrease in its profits because the company neglected the six sigma.

Positive and Negative Aspect of Technology in this Organization

Based on the principles and visions of Motorola, this company centers their objectives on providing quality technology product, which makes things easier for today’s generation.

Motorola Company serves multiple clients.  It creates products used by the government, business establishments and even the public.  Products such as cell phones, laptops, communication devices, and computer processors are very efficient enough to maintain its clienteles such as Apple Macintosh, IBM, and many others.  It has diverse lines of products, which also includes satellite systems, cables, and modems.  For many years, it is dedicated to provide high-innovated technology with all its variations in order to be on top in terms of communication technology worldwide.

On the negative side, Warrior cited the abuse of military technology particularly biological warfare, which used as an agent of mass destruction. In a survey commissioned by Motorola in 1996, findings revealed that forty-nine percent of the public in Britain does not use computer, and forty three percent do not use any form of new technology. Mark J. calls this negative attitude as Technophobia. In most of the feedbacks from Motorola technology users, negative feed backs mostly comes from cell phone users particularly V 300 units, but these feed backs were only minor problems. Cases such as people having technophobia of the Motorola technology seemed to be not a problem with the company as most of their product have been patronized worldwide by the different sectors of the society.

Specific Example of Technological Innovations

One of the innovations of the Motorola Company is the project called “Race to Recycle in Chicago as part of the company’s partnership with the City. Race to Recycle is a fund raising project intended to connect community involvement, classroom experience, and environmental awareness. Race to Recycle is also a company effort to help scholastic activities raise money, thru collecting mobile phones that are no longer use. The company will buy each intact unit of cell phone at three dollars per unit. This innovation of the company of recycling retired mobile phones in an environmentally friendly mode provides opportunity for students to earn and at the same time helps the company fulfill its objectives of supporting scholastic activities.

This innovation also marks the company’s initiative to adapt an environmentally friendly technology as well as their vision of moving the needle technology in Chicago.

What is Working and Not Working for the Company

Motorola had experienced downfall during the past years when they suffered from a shortage of critical components. According to many industry analysts, Motorola Company along with other cell phones manufacturers had confronted similar problems due primarily from “poor planning and weak supply-chain management (Vesa, p. 33).  However, its decline in 1983 in its 16K DRAM (single power supply) technology was just a slight one although it fell to around seventy percent almost losing its market share.  It subsequently recovered until it became one of top four firms that dominated the market of technology in stage V emerging as one of the leading suppliers with more than fifty percent of the market in 1985 (Swan, 1993, p. 117).

According to Praveen Gupta, a former Motorola employee who turned writer, Motorola’s Chief Executive Officer Bob Galvin invented the Six Sigma in 1986 as a management strategy to improve performance, to renew the corporation, and to accelerate the improvement process. Over the past years, Motorola had been implementing new strategies on a trial and error manner in order to find out what strategy will work for the company. Gupta cited that “various initiatives were announced annually, but no body ever knew how well they worked” (p. 3) Gupta noted, during this time, Motorola had some improvement “but nothing appreciable” (p. 4). However, with the implementation of Six Sigma strategy, Motorola had experience an accelerated growth.

However, Motorola’s success once again altered by market decline despite the existing Six Sigma strategy. Gupta pointed out that such decline was due to changing market conditions, changes in leadership, strategic mistakes, and ignorance of Six Sigma as the source of Motorola’s woes. Mark A. Nash, Sheila R. Poling, and Sophronia Ward stated, the ultimate goal of Six Sigma was to “to achieve a significant reduction in the number of defects that fall outside six standard deviations of the upper or lower specification limit to 3.4 or less per million opportunities” (p. 39). According to them, the result of the implementation of the Six Sigma was “outstanding” as Motorola management realized that reducing this defect number to 3.4 DPMO “meant focusing the company’s efforts on the process not the individual defect” (p. 39).

There are at least two things evident in the “ups” and “downs” of the Motorola Company. First, it is quite evident the Motorola policies, which emphasized on individuals rather than on the process that worked well with them. Second, frequent changes of strategies and leadership have proven to yield only bad result. Read also emerging business opportunities at IBM case analysis

On the other hand, sustained policies or strategies that focused on the process are working well with the company. The initial implementation of the Six Sigma under the guidance of Bob Galvin produced an accelerated growth for the company on the ground that it was a sustained effort for several years. It works well with the company because employees became acquainted to the policy and learned to align themselves with it. Employees learned to avoid committing mistakes as the emphasis shifted from their individual mistakes, which could hardly be avoided, to the process, which may be a lot easier to remember to avoid mistake.

Reference

1. Gupta, Praveen (2004). The Six Sigma Performance Handbook: A Statistical Guide to Optimizing. USA: McGraw Hill.
2. Nash, M., Poling, S., & Ward, Sophronia (2006). Using Lean for Past Six Sigma Results: A Synchronized Approach.  USA: Productivity Press.
3. Swan, Peter & Gill, Jas (1993). Corporate Vision and Rapid Technological Change: The Evolution of Market Structure. USA: Routledge.
4. Vesa, Jarkko. (2005). Mobile Services in the Networked Economy. USA: IRM Press.
5. http://www.motorola.com/content.jsp?globalObjectId=5335
6. http://www.sawf.org/newedit/edit02212000/profile.asp
7. http://www.motorola.com/content.jsp?globalObjectId=5832

In this days all the countries try to capture the global market for their product and services. Every small market dominated by national and international dealers. Because of the demand, the product or service sometimes the market follow their customer to give service or by them they get good business. Now days the foreign markets move to 3rd world because of the cost reduction. In their countries they pay high wages and high tax for this reasons these markets targeting foreign markets. When a company try to sell it’s product or service they will face good responses and some difficulties so I am going to pointing the difficulties.

Success in Sri Lanka

Success in Sri Lanka will depend on the correct estimation of the country’s potential, underestimation of its complexity or overestimation of its possibilities can lead to failure. While calculating, due consideration should be given to the factor of the inherent difficulties and uncertainties of functioning in the Sri Lankan system. Entering Sri Llankan marketplace requires a well-designed plan backed by serious thought and careful research.

Market potential

In Sri Lanka there is less market potential because in the subcontinent reign there are two big giant markets selling their product and service to Sri Lanka. They make very low cost product and they know very well about Sri Lankan taste of the people and their psychological metality. So they can easily capture the Sri Lankan market their one is china and other is India same time other cheap cost markets leaders like Korea and Japan also selling their products in Sri Lanka . So entering Into Sri Lankan market is high risk And not easy to dominate that market . Market size Sri Lanka is a small country with a 1. 5 kro this is very small population for investing big sum on it. Return will come very small.

Cost of living Sri Lankan middle class is large but they are getting very low wages and the product are getting high price . So the cost of living in Sri Lanka is high then the spending power is less people they don’t want to buy on luxury items . television is a luxury item in Sri Lanka. But in any other countries that is essential good for living .

Infrastructure hassles

Problems include power demand shortfall, port traffic capacity mismatch, poor road conditions (only half of the country’s roads are surfaced), low telephone penetration. And the war made the infrastructure damage .

Some parts of Sri Lanka we don’t have railway lines. This all looted by people for their own safety. Some part of Sri Lanka we don’t have electricity . This is draw back for the business. These are the things make problem in delivery. This make extra cost for the product. And high chance for damage of the product.

Ethnic problem

This is the most costing problem and damages the Sri Lankan economy this problem cost 64000 lives. And make phase in the state function. waste of the capital assets , reduction of monetary value against the global trade. Can’t do the trade all over island.

Government putting restriction on economic embargo on north and east side of the Island. People becoming poor and poor. This not good climate for doing business in Sri Lanka.

Economic policy

In Sri Lanka political situation is not stable . There are two major political parties involving in the politics. This parties policies contradiction each other. One following capitalism policy other one follows favour of socialism . this two contradict policy made worse economy in Sri Lanka. This not a stable condition for business . normally investors target their profit over a period of time .

With in one Government period time (5 years) they can make their return unless if it is very small target period time. Sri Llankan bureaucracy For the business Sri Lankan Government acting a business deal with an inefficient and some times very slow moving bureaucracy. for decision making this factor is very essential. When seasonal trade all the official work must be finish quickly other wise need to loose money . In this time if government take time to react will cost lost. And the government give full support to the own people who are producing product or service. Low and order

In Sri Lanka certain days you can’t do the certain business . you can’t sell any live or dead animals or can’t kill animals or meat or fish on Poya days(full moon)it is state offence They think that is the day lord Buddha’s special religious days. Selling school books by private people which is printed by government is a state offence. Because government giving that books to the students . and the education is totally free in Sri lanka . Fresh water fishing is banned in Sri Lanka Government sanctions In Sri Lanka producing ,selling ,importing genetically modified product is banned.

This new rule active from 2002. so any body can’t import GM product from foreign countries.

Piracy

This is big money earning illegal business in Sri Lanka . Down load music or film from inter net and they sell very cheep price to the market. So the genuine business by foreign traders loose business and they loose their money by this activities. Exchange rate When you see Sri Lankan exchange rate with other countries it is very low . the person who do the business in Sri Lanka will face big difficulty to send money to his country . He won’t make good profit when he send that money to his country .

And he have to pay more money to by materials or service which related to produce product or service. This situation makes him to think to close down his business or not to enter the business in Sri Lanka . Import tax Some of the product and services which are imported from foreign countries are highly tax charged by custom and excise because the Sri Lankan government want to help and develop his own local market.

Labour lows

In Sri Lanka lows for the labour is very old system there are not new lows are included in the legal system.

Perception

In Sri Lanka there are four types of religious communities are living. They have different perceptions among them. Hindu ladies never wore a white sari (dress) unless they are widow. Buddhist never wore a black sari unless they are widow. Cast In Sri Lanka people adept to casting system. Particular group of people doing particular job. Other people won’t to do that job. This makes no new technology entering in to that particular job. Still they are using old methods. we are 15 years back in new technology .

Lorillard, Inc. is weaker relative to two of its closest rivals and within the same level as another close rival. Large conglomerates control the United States tobacco industry. These major players sell various product lines and brands to gain as much market share as possible. The industry experience fierce competition because of the discretionary power of customers and the high saturation of the market (Hoovers, 2009a).

Lorillard holds the third position in the tobacco industry (Hoovers, 2009a) and developing its appropriate competitive strategy requires an understanding of its relative competitive strength and weaknesses. Philip Morris USA is stronger than Lorillard, Inc because it has more brands including a low-cost brand, which means the capability to attract different market segments worldwide, it has a wider distribution network, and it excels in advertising expressed by the very high market recognition of its brands, particularly Marlboro and Virginia Slims.

In addition, Philip Morris USA also experiences a good level of cost control because even if it spends a sizable amount for advertising, it also gains returns from sales. These make Philip Morris USA the top company in the industry. (Hoovers, 2009b) Although weaker than Philip Morris, Reynolds American also performs well in the areas of cost control by reaping the benefits of economies of scale, distribution network, and advertising. However, it has lesser number of brands and without a distinct low-cost brand. These place Reynolds American at second place.

(Hoovers, 2009c) Lorillard, Inc. is weaker relative to its two competitors because Newport is its sole top selling brand, with its other brands not experiencing a similar position. It also has a low-cost brand but with a lesser degree of market recognition and sales. It has an international distribution channel but the reach or spread depends on the brand, with Newport experiencing the widest distribution network. Its advertising also is most effective for its top brand. (Hoovers, 2009a) Commonwealth Brands is in the same position as Lorillard, Inc.

Although Commonwealth Brands caters to the discount or low-cost market, it performs better in controlling cost via economies of scale although it has a weaker performance in terms of clever advertising. (Hoovers, 2009d) Based on the relative position of Lorillard, Inc. , it faces a number of strategic issues, which are:  How to reduce operating cost and gain more from economies of scale? ? How to compete with the discounting strategy of Commonwealth Brands?  How to sustain its position with stronger demand for discounting brands?  Whether to expand its low-cost brands?

Whether to seek growth from the foreign market? The company needs to consider and prioritize these issues in determining its competitive strategy, particularly in light of the growing trend towards low-cost brands. Are the Company’s Prices and Costs Competitive? Apart from considering the relative strengths and weaknesses of Lorillard, Inc. , understanding its position or situation to support responsive and sound strategy development would also come from analyzing the value chain (David, 2008) of the company and the implications of prices and costs. The primary activities of Lorillard, Inc. are supply chain management in purchasing raw tobacco from farmers, product development coinciding with brand diversification to cater to different market segments, packaging as an important selling point, marketing to influence customers to purchase its brands instead of that of its competitors, and distribution to make its brands accessible to as many market segments as possible. (David, 2008) Product development and marketing are areas involving the highest cost because these activities determine the competitiveness of players in the tobacco industry.

These are also the determinants of the price of its brands since its Newport premium brand (Hoovers, 2009a) involves a high advertising cost. Its support activities include procurement as a necessary activity in supply chain management, human resource management to develop and harness creativity in packaging and promoting its brands, and a number of infrastructure support such as cost and quality control, administration or leadership, and finance planning (David, 2008). There is consistency in the prioritized support activities of Lorillard, Inc.

because human resource management and infrastructure support activities directly usher its product development and marketing activities. Thus, the prices and cost structure of Lorillard, Inc. find support in the link between its primary and support activities in creating value for customers. However, by using benchmarking analysis (David, 2008) to compare the prices and costs of Lorillard, Inc. with top performers in the industry, its pricing for its premium brand Newport is competitive but this cannot be concluded for its other brands.

Its cost is also competitive for its Newport brand but not necessarily so, for all its brands taken together since three closes, competitors fare better in cost control. Lorillard, Inc. has to consider the strategic issues identified as target options in developing its strategy.

References

1. David, F. (2008). Concept of strategic management (7th ed. ). New York: Prentice Hall. Hoovers. (2009a). Lorillard, Inc. Retrieved February 2, 2009, from http://www. hoovers. com/lorillard/–ID__55993,FRIC__256–/free-co-competition.xhtml
2. Hoovers. (2009b). Philip Morris USA. Retrieved February 2, 2009, from http://www. hoovers. com/philip-morris-usa/–ID__55933–/free-co-profile. xhtml
3. Hoovers. (2009c). Reynolds American Inc. Retrieved February 2, 2009, from http://www. hoovers. com/reynolds-american/–ID__55935–/free-co-profile. xhtml
4. Hoovers. (2009d). Commonwealth Brands. Retrieved February 2, 2009, from http://www. hoovers. com/commonwealth-brands/–ID__104160–/free-co-profile. xhtml