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Strategy Report on Woodlands Group
Client: Harry Symons, Managing Director of Woodlands Group
Project Done By: KAVIN KUMAR GANESHAN
201940158
201940158 Business Strategy I001_CWRK: Individual Report: 2590 words
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Contents Executive Summary: .......................................................................................................................... 3
Introduction ...................................................................................................................................... 4
Methodology ..................................................................................................................................... 4
STEP 1 Situation Mapping .............................................................................................................. 6
STEP 2 Review of Environment ...................................................................................................... 9
STEP 3 Internal Review of the Business ........................................................................................ 12
STEP 4 Assessment of Competitive Performance ......................................................................... 15
STEP 5 Project Output .................................................................................................................. 17
Final Remarks: ................................................................................................................................. 18
Appendices...................................................................................................................................... 19
Bibliography .................................................................................................................................... 24
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Executive Summary:
In this project, Wood manufacturing company Woodlands group is studied through various
business analysis tools to find the leading strategies that would best fit the company and
Harry Symons, managing director. Woodlands group has three separate firms which are
Albion mill, Bettafinish and Surface stockists. Each firm has their own management style and
the manager’s summary reports about the company is taken as the key information for this
project. The firms have made specific requests for new machineries and warehouse, which
has been discussed along with key issues of the company in this report.
A detailed five step method is used to analyse the Woodlands group, it contains business
analysis tools like Rich picturing, internal and external analysis, Business modelling,
Resource and competence analysis, Competitive performance analysis, PEST, SWOT analysis
and Porters five forces analysis. These provided critical insights of the Woodlands group that
had some major issues in management, production and infrastructure that needed
intervention.
The key findings of this project were that Woodlands group investing in new machineries
and warehouse is found non-essential instead it must function as one whole group and must
resolve its complications in Communication, Market Intelligence, Product innovation and
other internal problems. External factors like BREXIT and Environmental regulations are
found to have greater impact on the company. Based on this information, 3 Horizon
framework, LEAN Manufacturing, Block Chain Technology and SMART Manufacturing are
suggested.
These issues are discussed in detail and recommendations based on these findings from the
analysis tools is provided below.
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Introduction The Woodlands company was initially founded by Albion family after the Second World War and it is owned by Tyzacks ltd at present. It manufactures wooden board for household furniture business.
The group contains three semi-independent companies:
• Albion mill is owned by John Albion who is the previous owner of the group and now deals with production of wooden boards from Raw timber.
• Bettafinish was bought into the group in 2002 and is managed by Tony Thompson. This company coats the wooden boards with Vinyl plastic compounds.
• Surface Stockists was bought in 2009 and is owned by Daisy Elworthy, it stocks and delivers the finished wooden boards from Bettafinish to its customers with reliable delivery.
The purpose of this project is to formulate strategies that helps Managing Director Harry Symons to tackle the problems and financial difficulties faced by the Company. Each of the managers have stated their own views on the company’s future and their current problems in their summary reports. These three reports have been analysed in the perspective of Woodlands group as a whole business unit in favour of the client.
Albion mill and Bettafinish firms have made request for new light gauge machineries while Surface Stockist requires new warehouse. The need for these assets is discussed in this report below. Using the available business analysis tools, recommendations are provided to Harry Symons in this strategy report.
Methodology The method used in this report are to find the internal and external factors that should be considered in making short-term or long-term decisions for the business. The business analysis tools that are used in this project can help to identify those factors.
The project is approached in 5 steps:
1.Situation Mapping
2. Review of Environment
3. Internal Review
4.Assesment of Competitive Performance
5. Project Output
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STEP 1 Situation Mapping
• In this step, a rich picture is drawn to understand and express the situation of the company with its key issues
• A stakeholder analysis is performed to understand the client’s needs.
STEP 2 Review of Environment of the Business
• In this step, Opportunities and Threats are listed from the rich picture as part of External analysis
• PEST and Porters 5 forces are used to assess the wider environment and Industry
STEP 3 Internal Review of the Business
• In this step, Strength and Weaknesses are shown from the rich picture as part of Internal analysis
• Business model analysis and Resources/Competencies of the Business are made.
STEP 4 Assessment of Competitive Performance
• Steps 1-3 are reviewed to assess competitive performance
• Strategy Canvas Analysis is formulated
STEP 5 Project Output
• Steps 1-4 are reviewed, and recommendations based on the analysis are made for the business.
• Final Report is produced.
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STEP 1 Situation Mapping
Rich picturing:
The current situation of the company is drawn in this Rich picture.
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List of Key Issues is given below:
• Light gauge board is found to be weak as Fiberglass strengtheners is expensive.
• Younger staff are found not taking ethics and tradition of the wood producer seriously
• Brexit and Powerful Environmental regulations are implemented
• Lowering Consumer Confidence
• Bettafinish relationship with Surface Stockists as they cannot supply enough light gauge boards on time.
• Bettafinish has difficulties with the way Surface Stockists Order their boards
• Organising longer production runs is difficult for Bettafinish as order quantities are less
• Surface stockists doesn’t have the warehouse space to operate as heavy gauge requires more Warehouse space and orders in small quantities.
• No Standardised system of measurement and unclear profitability tables
• Supply of Boards from Albion and Orders from Surface Stockists
• Requires alternative materials and more designs for customers.
• Surface stockists finds difficulty to quote accurate delivery date information due to late deliveries from Bettafinish.
• Surface Stockists lacks in technical expertise to assess customer usage and buying behaviour pattern.
• Bettafinish (Tony) not looking into the development of Smart Manufacturing.
• There are changes in the market coming but the 3 companies are not reacting as a whole group.
• Delay in Fulfilling orders on time by Surface stockists.
• Supply Chain is not Efficient and Outdated Practices is followed.
• No response to Customers and Market Demand.
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Stakeholder Analysis:
There are number of stakeholders in Woodlands group who influence the company or get affected by it.
They are
• Customers
• Managers
• Employees
• Competitors
• Government
• Shareholders
• Managing director
These stakeholders are classified based on their power and interest in the Woodlands Group. The position of the stakeholders determines the effort and interactions made by the company to satisfy them.
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STEP 2 Review of Environment
There are many opportunities and threats for Woodlands Group that are found in the reports and shown in the Rich picture above.
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PEST Analysis:
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Porter’s Five Forces:
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STEP 3 Internal Review of the Business
Strengths and Weakness of Woodlands group is listed below:
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Business Model Canvas:
This strategic management tool helps to define business idea or concept of Woodlands Group in a simple diagram.
1
1 www.strategyzer.com
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Resources and Competencies:
The Company has some key resources as shown above and they are converted into customer value which gives the Woodlands group a competitive advantage over its competition.
These assets must be integrated together to gain maximum competitive advantage. There
are key weaknesses which has high strategic importance that Woodlands must focus to
deliver customer value and resources must be allocated efficiently to be more competitive.
The capacity of the Woodlands group to convert it resources into customer value will
determine its competence. Company must focus on delivering customer value than being
more competitive with Lavers.
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STEP 4 Assessment of Competitive Performance
Competitive Performance:
By reviewing Steps 1-3, the competitive performance of Woodlands group is assessed. From
the analysis, it is found Woodland needs to work on its weakness and problems to remain
competitive in the market.
Using Porter’s Three Generic strategies tool, the strategic position of Woodlands group can
be understood.
The information analysed from the reports show that the Woodlands group provide wooden
boards to 4 major customers which mark up 55% of its sales. This shows that the
competitive scope of Woodlands group is Narrow Target.
Further, customers have valued Woodlands more than its competitor Lavers for its price.
Therefore, the competitive advantage of Woodlands is its Lower Cost. This places
Woodlands in Cost focus.
The strategies that are formulated are divided into
• Long term strategies
• Short term strategies
Woodlands group should have its own set of fundamental goals for the organisation which
involves mission, vison and objectives. These will provide the scope of the organisation for
which strategic direction can be created for the long term and short term.
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Strategy Canvas
The strategy canvas compares with set of key factors that the customers value in choosing
Woodlands over its competitors.
The canvas shows the data for Woodlands group, Lavers and Industry average.
Both the companies are maintaining scores above the Industry average in most of the
factors.
• Woodlands group excels in Customer Service, Reputation, Price, Product
Availability and Delivery Performance.
• The company falls short against competition in Product innovation, Board quality
and Marketing.
This clearly shows the factors that customers value in Woodlands other than Lavers and
Industry. There are other factors in the market space which can be considered for
Woodlands group to differentiate from competition.
These are essential information that is used to create strategies and ideas of how
Woodlands group should pursue in the future with more market spaces. (Refer
Recommendations)
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STEP 5 Project Output
Recommendations:
Steps 1-4 are reviewed, and the results are noted to develop the following recommendations for Woodlands group
Firstly, the requests of each firm must be addressed.
• Albion Mill and Bettafinish have asked for new light gauge machines for more output which through analysis is found unnecessary as there is market intelligence from Surface Stockist stating that the demand for light gauge is dropping.
• Surface Stockist have requested for new warehouse as they have limited warehouse space. Through analysis, this issue can be solved by refining the order processing system that fulfils order quickly in Bettafinish and delivers to customers without having to stock them in warehouse for long period. Also, some warehouse space is used by Lavers which is not advisable at this point. Using LEAN manufacturing system* that helps to remove unwanted processes in storing boards instead of new warehouse is recommended. (Refer appendix).
• The company must focus on its long-term perspective using the 3 Horizon
framework*. (refer appendix*) That will help woodlands make strategic choices for
future and helps implementing growth strategies.
• Further, the firms do not work together as a whole group which needs to be considered as it could solve many of the problems within the company. For instance, Surface Stockist have information on Lavers product development and market demand, this information is not communicated to the group which is important for Albion mill and Bettafinish to allocate their resources.
• It is recommended to implement Block chain technology to regulate communication
and make it transactional within the group. In this technology, information is
distributed across the ledger in a form of block that every transaction is recorded
and is easy to access by everyone in the group. This allows the company to find
problems easily as every transaction is transparent and recorded.
• A unified system which uses standard measurement of profitability for each firm and the whole group is recommended as each firm is found using different forms of measuring. These will help to provide equal pricing and cost across the whole group.
• Board quality is found lower than the competition, this is due to the number of complaints from customers regarding the strength of the light gauge board. John Albion could find other ways through internet for the procurement of cheaper fibreglass strengthners and must increase the strength of the board while keeping the cost same.
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• Marketing is another key area where Woodlands group is failing against competition, this is due to the repetitive customer base that the company has, and the management didn’t want to fund on marketing. But it is important to market its product for new customer acquisition. As Lavers would gain new and more customers in the future than Woodlands. The company must continue to market for growth and to have longer product cycles. Ex: Advertising as Ethical wood producer.
• Lavers continue to experiment with new materials and designs, Woodlands does not
show any progress in this area. A dedicated research and development team is
suggested to innovate its products in line with the market trend and the
environmental regulations. This will help Woodlands move into more market spaces
and gain differentiation advantage. Blue ocean strategy must be considered here. As
it could explore more market spaces and create value. The company is advised to
offer more designs and options to customers.
• Environmental Regulations is found to affect the company significantly for which
Woodlands is suggested to create eco-friendly products that are recyclable and
disposable that supports the environment. It needs to capitalise on this by
advertising its support on environment.
• It is advisable for the company to train young workers to continue its traditional
infrastructure in the long run but to use modern methods like SMART
manufacturing* (refer appendix) to increase productivity and all stakeholder
feedbacks must be equally considered in decision making.
These recommendations must be carefully executed and implemented into the company for
these to be effective.
Final Remarks: Overall, Using the business analysis tools these are the recommendations and strategies
that are suggested to Harry Symons which must be considered in making decisions for the
company. Some of the important issues are identified and addressed in this report are
based on the information provided. However, these may differ in the real world.
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Appendices
References for some concepts are explained here.
3 Horizon Framework
The three-horizon framework helps in innovation and building growth strategies for a business.
There are three Horizons in this framework
Horizon 1
The business focusses on to defend its core business while finding ways to innovate its business by penetrating newer markets. T
Horizon 2
The business shifts to new market using the existing product. This new market will soon be its main source of revenue. Larger investments are made into marketing and distribution to have higher growth rate.
Horizon 3
This contains potential opportunities for new product in the future for which the business uses R&D to develop the product from a vision.
This tool will help Woodlands group to assess the prospects of its growth and opportunities in newer markets. This will help managers to create long term strategies for the company.
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Lean Manufacturing System
This is a type of methodology that focuses on minimizing waste within the manufacturing systems while maximizing the productivity simultaneously. This system is based on Toyota Production system
There are 5 major principles in Lean manufacturing
Identifying Value
• Value of the product in customer perspective is determined.
Mappin the Value Stream
• This involves identifying and analysing the flow of information or raw materials while finding waste and ways of improvement.
Creating Flow
• Barriers are eliminated and lead time is improved while creating a smooth process overall.
Establish a Pull system
• This means that work is started only when there is demand for it. No products are made in excess which leads to Inventory space and cost.
Pursuing Perfection
• Improvements are made continuously for perfection.
This system will help Woodlands group in managing their inventory space more efficiently.
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Block Chain technology
2
Using this technology, Woodlands group could make its communication between its firms more secure and transparent.
2 https://www.coinmama.com/guide/what-is-the-blockchain
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SMART Manufacturing
This is a technology based that used artificial intelligence as a core component in automating
machineries and monitor production. This involves use of sensors in machineries to retrieve
information from the production, then the information is processed, and actions are taken.
For instance, this system can order raw materials on its own without needing any human
intervention. This will increase productivity and efficiency. This will help Woodlands reduce their
cost of production and be more competitive.
3
3 https://internetofthingsagenda.techtarget.com/definition/smart-manufacturing-SM https://smartamerica.org/teams/smart-manufacturing/
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4
4 https://fourweekmba.com/blue-ocean-strategy/
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[Accessed 7 11 2019].
Johnson, G. et al., 2013. Exploring Strategy Text & Cases, 10th edition. [Online]
Available at: http://eureka.sbs.ox.ac.uk/4659
[Accessed 7 11 2019].
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Bureau of Economic Research, , (), p. .