For Ann Harris

Report for ToolsCorp Corporation

Ayinde Avery

American InterContinental University

Abstract

The report focuses on the discussion of the ToolsCorp Corporation, a company that has its headquarters in Tennessee, the United States of America. It discusses its operational environment and how it affects its growth and development. The report also focuses on the strategic plan employed by the company to enhance future growth and development. It touches on the expansion of the company to other global markets.

Report for ToolsCorp Corporation

Introduction

Both the domestic and international markets experience a lot of change that influences companies to compete using several competencies and resources to attract a huge clientele (Lam, Shankar, Erramilli, & Murthy, 2004). The report tries to bring out a strategic approach that the company needs to undertake to enable it acquires a global standard. The report defines the background information of the company in relation to its market share, customer target, operational standards, and revenues since its establishment. It also focuses on the competition it receives from other companies wanting the same market share as the ToolsCorp Corporation. Based on the report it is important for managers to comprehend the company’s need and to define the strategic direction of the company. ToolsCorp Corporation as a company has the aspect of strategic management playing an integral part when it comes to the overall corporate plan. The report shows an effective status of the company’s operation that allows ToolsCorp Corporation to communicate the products and services it offers to the market. The report focuses on the general business structure to attract both the potential customers and investors.

According to the analysis made in any operational market, ToolsCorp Corporation needs to identify the available opportunities through the identification of both strengths and weaknesses in its corporate environment. The analysis should also be made in its external corporate environments to evaluate its competitive status in the market (Dahlsrud, 2008). The customers and other stakeholders of ToolsCorp Corporation need to understand that the report will comprise of the mission statement, segments comprising of value propositions, and the necessary technology to be employed to enhance development. It also mentions the various steps and techniques employed to accommodate the company’s strategic objectives.

Background Information on ToolsCorp Corporation

ToolsCorp Corporation is a company that has its headquarters located in Tennessee focusing on the building of items such as microwaves, ranges, lawn furniture, lawn mowers, and power tools. ToolsCorp Corporation does not directly engage its operations with the market. As a full production company, the management ensures that it works in collaboration with huge retailers such as Best Buy, Wal-Mart, and Sears when it comes to selling its products in the market. The company has been operational for a long period and wants to venture into the global marketplace, which is a major step after it has acquired a huge share of the market in Canada and the United States.

The company has acquired a huge improvement in terms of its operational status and market share which has made it be seen as a potential platform for investors to put their money. It is one of the highest grossing companies in its industry; a factor that makes it beat the competition and remains a top priority for most customers seeking its products. ToolsCorp Corporations went through a number of challenges for it to motivate an influential strategic plan to enhance growth and development. The company survived the recent Great Recession while some of its other competitors filed for bankruptcy. ToolsCorp Corporation was able to turn its business around through an impressive technique that aligned its business structure, objectives, and employees/management with the needs and interests of the markets where it has its operations.

The company has ensured that it remains at the top of the market chain through an effective network that allows it to deliver its high-quality products and services to the markets. ToolsCorp Corporation has experienced economic growth via its strategic plans that work to ensure energy and infrastructural development. The services that are offered by the company provide solutions to communities around the United States, Canada, and now its new markets. It is the first objective for the company to protect the planet through friendly products and services. The strategic direction for ToolsCorp Corporation works in stages and it is detailed through its vision 2020.

Mission and Vision Statement of ToolsCorp Corporation

ToolsCorp Corporation places its customers ahead of each and every part of its operation. The company ensures that the quality of products is focused on building loyalty among its customers. The vision of the company is to focus on creating a strategic plan that will influence it to become a highly competitive firm in the coming years. The mission statements entail investing in positive strategies that increase development while satisfying the needs of the customers at the same time. ToolsCorp is focused on creating a huge environment where both the products and customers integrate to achieve a common satisfactory status.

Vision 2020 for ToolsCorp Corporation

For any company to operate well, its strategic vision plays a significant role in motivating positive techniques and approaches that enhance development (Testa, Iraldo, Vaccari, & Ferrari, 2015). In the case of ToolsCorp Corporation, the vision 2020 has taken a central stage in the management of its operations. The company wants to acquire a huge financial basis from the products and the services it offers the markets. It also plans to acquire the first position in the global market in the industry where it operates. As a home appliance’ manufacturers, ToolsCorp Corporation has a huge number of competing companies who serve as a threat to its market position. The management ensures that the strategic plan goes ahead to enable it to become an industry leader (Jung, 2014). The above factor has influenced it to establish the best team comprising of the best skills and knowledge through its networks, management, shareholders, employees, and the general international community.

Due to its expansion plan, ToolsCorp Corporation has acquired approximately $ 160 billion from the production and selling of items in the household sector. The expansion plan through its vision 2020 strategy has enabled it to acquire good revenues from China, the European Union, and the American market in the following manner: $ 13 billion; $ 17 billion; and $ 18 billion respectively. As much as the company is doing well, it is not listed on the New York Stock Exchange just like some of its competitors in the international and domestic markets. The strategic vision of ToolsCorp Corporation has enabled the management to introduce large-scale methods and large-scale management in its industrial workforce. The above situation has been made possible through an elaborately engineered sequence of engineering that is typified by different production lines.

The company plans to participate in public trading through the New York Stock Exchange to motivate its expansion plan. ToolsCorp Corporation employs more than 50,000 employees in its fifteen plants in the domestic and international markets. The Chief Executive Officer, John McQueen, has ensured that the company will become the best household appliances company worldwide through the vision 2020 strategic plan.

Strength, Weakness, Opportunity, and Threat (SWOT) Analysis

ToolsCorp Corporation success in enabling a good market position as a home appliances company in the international market is based on its strategic ability to address the different concerns that are raised by the SWOT Analysis. The SWOT Analysis of the company tends to address the strengths that the management of ToolsCorp Corporation employs to overcome its operational weaknesses and exploit its opportunities. The same may be applied when it comes to evaluating the threats. The SWOT Analysis of ToolsCorp Corporation identifies and defines the key issues that the company should deal with to enable it to improve its performance in the market.

The analysis of the company through the SWOT entails the key issues that the management of the company needs to deal with to diversify its operations in the market and beat competition (Jackson, Joshi, & Erhardt, 2003). The company aims to become the global leader in the home appliance industry. To acquire the above goal, ToolsCorp Corporation should come up with a strategic process that includes the SWOT Analysis. When it comes to the SWOT Analysis of the ToolsCorp Corporation, it is important to consider the following descriptions:

Strengths of ToolsCorp Corporation

The strength of ToolsCorp Corporation focuses on its global operations; brand; Research and Development; diversified product development; balanced revenue streams; and a strong U.S manufacturing base. The other key strength includes the aspect of manufacturing highly innovative products and quality service provision. The above shows the organizational characteristics of ToolsCorp Corporation that create business effectiveness for the management. As one of the best firms in the industry, the company possesses a strong brand image that influences it to acquire product attractiveness and a high rate of customer loyalty from the global market (Sutton, Elvidge, & Ghosh, 2007). The home appliances market has experienced little success since its establishment more than a decade ago. It acts as a niche segment and may enjoy robust growth in the coming ten years.

However, with ToolsCorp Corporation being in the topmost position in the market, it is dealing with the different challenges that make other competitors close shop. ToolsCorp Corporation possesses a global supply chain that maintains and supports its operations in different parts of the world. It is easy for customers from any country in the world to make orders via the websites of its affiliated networks and acquire products within the shortest period possible. Innovation is the driving force for ToolsCorp Corporation. The company launches different categories of products each year to keep up with the changing trend of the market. The above situation influences the company to continue growing.

Weaknesses of ToolsCorp Corporation

The weakness of ToolsCorp Corporation has a relation to the limitations of the company as compared to its competitors. It refers to the inadequacies and constraints belonging to the company which acts as internal strategic factors that decrease the business potential of its operations. The known weaknesses of the company include a new status to foreign markets; cyclical industry; labor costs; expensive nature of manufacturing process; high product prices; and slow innovation processes among others. The limitation found in its production facilities serves as the key weakness limiting its networks. ToolsCorp Corporation experiences an expensive manufacturing process as compared to companies such as LGE and Samsung due to its limited operational and production facilities. The company has had an experience of closing down some of its production facilities in Canada and the United States for it to raise operational funds to motivate its expansion plan.

The above factor has weakened its market dominance because some of its competitors such as LGE and Samsung are busy acquiring its shares in the market. In relation to other competitors, the products manufactured by ToolsCorp Corporation are expensive in terms of their prices and costs. The above situation influences its customers to seek for alternative products from the competitors. It also experiences slow innovation process when it comes to responding to emerging trends as much as the management possesses an increased status of innovation effectiveness. The section of the SWOT Analysis shows that the company is weak in comparison with its competitors.

Opportunities of ToolsCorp Corporation

The opportunities of the company have a connection to its growth and expansion. The focus of the opportunities is on the market, the industrial traits (factors related to external strategies) that enhance business development. The opportunities involve new emerging markets; product innovation; online market; increased demand for quality products; growth through acquisitions and product development; and cost reduction approaches through a global supply chain management. ToolsCorp Corporation possesses an opportunity to expand through penetrating to new markets. The above may be achieved via factors such as improved marketing and dealerships.

It also has the chance to influence product development through the high status of innovation to introduce new products that tend to satisfy environmental concerns. ToolsCorp Corporation possesses the opportunity to develop its financial standing s to achieve a positive status. This is through expanding its supply chain to enable it to acquire a better economy of scale and decreased production costs. The company also has the opportunity to expand through acquiring new companies and franchising its brand to reach new markets. The international market also demands home appliances due to increased population and stable economies (Mithas, Krishnan, & Fornell, 2005). This makes it possible for the company to achieve a high revenue status to support its growing operations.

Threats of ToolsCorp Corporation

The threats found on the company are based on the different changes that are taking place in the global market such as competition, economic crisis, volatile currencies, and mature markets. The above factors may reduce the effectiveness of the company if the management does not consider looking at them. ToolsCorp Corporations as stated above continues to experience the threat of competitors such as LGE and Samsung Electronics which have acquired a huge market share through innovative strategies and marketing approaches.

The Economic crisis in the developing and corrupt nations continue to act as a threat to the financial basis of the company as people struggle to fend for their daily needs as compared to purchasing home appliances. The currencies are also volatile such that their unstable status is making it hard for the company to operate efficiently through cost reduction initiatives. Mature markets are also acting as a threat for the company because of their rigid status of accepting new companies to enter and compete in their borders. The above threats may influence the business performance of the company to slow down.

The Proposed Business Plan for ToolsCorp Corporation

The key issues that have been highlighted with the evaluation of the ToolsCorp Corporation and the SWOT Analysis, we have found that the company has a number of limitations that need to be eliminated to meet its objectives. This section focuses on its production networks, speed of innovation, competition, and financial stability in its new markets. The section focuses on proposing new approaches that influence growth and development as a new entrant in the markets. In summary, ToolsCorp Corporation should improve investments in research and development for enabling a positive operational status. It should also invest in speeding innovation to address an aggressive competitive status while entering the new markets. The section discusses the proposed strategic initiatives through the following sections:

Market Analysis for the ToolsCorp Corporation

ToolsCorp Corporation as stated above has a good operational status in its market. Before we go forward to analyze the operational status of ToolsCorp Corporation, it is important to evaluate its market of operation, which is the home appliances market. The market tends to face a three-tiered problem. The first problem is the aspect of the changes in retailing that take place to Omni-channel from traditional formats (Jokela, 2004). The internet has had an important influence on the operations of the home appliances market through new sales channels and information platforms. The above factor has motivated ToolsCorp Corporation to have its sales networks such as Best Buy, Wal-Mart, and Sears. The above-stated companies work through a virtual platform that allows the products of ToolsCorp Corporation to reach the different customers in the market.

The second problem is the aspect of high innovation rates possessing multiple questions relating to trends including smart appliances and smart homes. The home appliances market is changing at a dynamic rate, which makes it hard for a company like ToolsCorp Corporation to become highly innovative in the manufacturing of its products. Products such as microwaves, ranges, lawn furniture, lawn mowers, and power tools need to be diversified in their production status to meet the changing trends of the market (Bonaglia & Goldstein, 2007). The last problem is the aspect of the performance of the small and major domestic appliances that are found in a progressive competitive market.

With the dynamic nature of the market, retailers and manufacturers of domestic appliances should understand the markets which remain constant and those that experience changes. They should also comprehend the consumer purchases found in those markets. The global home appliance market creates a Point of Sales (POS) tracking and motivates companies to undertake innovative research to strengthen operations. A company like ToolsCorp Corporation combines complex and multiple data sets from a global point of view. The management has ensured that it employs different insights in explaining every touch of point through which customers in the market experience the services, products, and brands of the company.

Dealing with New and Target Markets and Operational Principles

Based on the information acquired from the nature of the global home appliance markets, it is evident that the company may acquire a lot of complexity when entering other markets of the world. This is because the markets tend to possess unique policies, different purchasing power status, and competitors that serve as a threat to the growth of the company. However, there are a number of issues that need to be considered when dealing with the above issue. The first issue is to select the country through which the company wants to start its expansion plan. The second issue focuses on carrying out research on the nature of the new market and developing the right approaches to install the market entry. The proposed market for the ToolsCorp Corporation is the People’s Republic of China.

The home appliance market in China is expanding just like that of the Global markets. The market experiences more than $ RMB 100 Billion annually, as per the country’s economic reported established in 2016. Some of the products found in the market include gas stoves, water heaters, and rice cookers among others (Antkiewicz & Whalley, 2005). With increased urbanization rates, China may be a major problem for a company such as ToolsCorp Corporation which is used to the markets in the western world. With 57.4% growing rates of urbanization, China may offer a strong competitive environment for ToolsCorp Corporation to raise a lot of revenues to support its operations.

ToolsCorp Corporation Expansion into China and Strategies employed (The one-year, five-year, and ten-year strategic objectives)

As the brand awareness for consumers continues to increase, the company will work through a one year plan found its vision 2020 strategies to satisfy the needs of the customers found in its new market, China. ToolsCorp Corporation will have to identify the motivations that influence it to enter the marketplace in China. The above strategy means examining domestic marketing strategies that it has been employing and how it will be tailored to influence growth in the new markets. China is experiencing a boom due to the falling of commodity prices in the market (Morrison, 2012). The market is also experiencing a huge competitive status due to home appliances companies focusing to improve their functions and features, product designs, and marketing strategies. The medium to high-end products and services have become the mainstay of the market (Deng, 2009). The market is demanding for eco-friendly and energy-efficient commodities due to increasing status of environmental awareness by the consumers in the market.

The above will mean that ToolsCorp will have to focus on analyzing its existing business and develop some research to acquire gaps that limit its growth and development into the market in China. It will also have to think of the opportunities that avail themselves in China. ToolsCorp will have to focus on increasing the numbers of the production facilities to increase the number of home appliance products it manufacturers annually. This is because of the huge population in China and the high rate of urbanization which demands highly innovative products and services. The huge population serves as an opportunity for ToolsCorp Corporation due to its high purchasing power. The above means that the company needs to think of a good promotional and marketing strategy to raise awareness about its products. The company has already focused on selecting the right cities to establish operations and act as central points for selling and distributing its products. Among the cities include Beijing, Shanghai, Shenzhen, Tianjin, and Guangzhou. The above cities and their strategic positions may influence the effective distribution of products in the country. The management plans the first year of operation in China to acquire a penetration of about 2%.

The products will be sold both in a physical and virtual store across the country and the mentioned cities. The company will work with affiliated stores found in the urban areas and the growing rural locations. It will carry out campaigns on television, social media, and print media. ToolsCorp Corporation will also carry out events to sensitize and spread information about its home appliance products and their growing trend in China. Some of the social media and trading stores to be used will include Taobao, Alibaba, and MadeinChina among others. The above stores will influence the customers to have easy access to products belonging to the ToolsCorp Corporation. The management of ToolsCorp Corporation plans to establish over 300 stores through franchising and acquisition in different parts of China. The above strategy aims at cementing its operations in the new market. It has placed approximately $ 50 million to enable its expansion strategy to take place. The management believes that the customers occupy 2% of the market share which is good for business regarding a number of finances it has placed to enable its strategic expansion. The company will work with a development team comprising of highly skilled and dedicated individuals from China and its headquarters to run the expansion plans.

The five-year strategic objective will comprise of products such as cushions, complementary accessories, and lawn furniture. The above will be to enable the customers in the market to acquire a wide variety of options that tend to address different needs related to the changing trend of outdoor living. ToolsCorp Corporation will also expand its small appliances category by adding at least ten items in the market. Some of the items will include crock pots, electric skillets, and toaster ovens. The company will be introducing the products to facilitate easy, fast, and economic cooking among the customers purchasing its products. At the present, the company has only one existing category of small kitchen appliance in its product offerings, which is the microwave.

Integrated new products on virtual platforms such as Wal-Mart and Sears continue to operate on an international level. ToolsCorp Corporation will develop a huge retail network of stores in China. The company has already made plans with South American companies to provide 50% of its raw materials to drive the production process of the company in the lawn furniture luxury line. It will establish manufacturing factories in countries such as Australia and South America and develop farms that provide raw materials that are needed for its cushions and accessories. It has in place strategies that enable it to act as a good steward in eliminating any damages to the South American’s biodiversity. ToolsCorp will also provide a centrally placed warehouse possessing minimal stock and a showroom to link its products with both the Asian and European Markets. The European market possesses a sluggish status, a high demand, and order system that may have an economically feasible impact to the operations of the company (Delreux, 2008). ToolsCorp will continue to service the different Asian markets that are expanding. The management plans to expand its Tennessee factory to also service regions such as Asia, Europe, Africa, and North America.

The ten-year strategic objectives of ToolsCorp Corporation focus on the company acquiring a value chain of wind farms to enable it to acquire a lot of raw materials to support its expansion. The company plans to have a huge presence in the growing markets and to become a pioneer in the employment of green energy. In the recent decade, the capacity of wind generation in the international market has increased to approximately 100% while the United States almost doubling it, with a capacity of over 175% in the years starting from 2005.

Conclusion

The company has enough strength and networks to expand into any market of its choice. It shows a lot of strength as compared to weaknesses. The above means that it has enough financial and human resource to launch innovative products that influence development. The target market of ToolsCorp Corporation may range from quality construction products to durable frames and fabrications. ToolsCorp Corporation has the opportunity to overstretch its operational scope to meet its financial target (Muthuri, Matten, & Moon, 2009). The international market is highly dynamic to influence ToolsCorp Corporation to grow and meet the needs of the customers found in different parts of the global market. It is significant for the company’s management to focus on strengthening its production facilities, diversify its products, and invest in its employees to influence the desired results. Training and capacity building are some of the most significant tools that will enable ToolsCorp to acquire a competitive status as it will enable the employees to come up with products that possess high-quality status (Zhang, Ma, & Wang, 2012). The report has shown that ToolsCorp has a lot of power and strategies to eradicate any threats that reduce its market share and act as a barrier to the expansion of the company to foreign markets.

References

Antkiewicz, A., & Whalley, J. (2005). China's new regional trade agreements. The World Economy, 28(10), 1539-1557.

Bonaglia, F., & Goldstein, A. (2007). Strengthening productive capacities in emerging economies through internationalisation: evidence from the appliance industry. OECD Development Centre Working Papers, 262, 1.

Dahlsrud, A. (2008). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13.

Delreux, T. (2008). The EU as a negotiator in multilateral chemicals negotiations: multiple principals, different agents. Journal of European Public Policy, 15(7), 1069-1086.

Deng, P. (2009). Why do Chinese firms tend to acquire strategic assets in international expansion? Journal of World Business, 44(1), 74-84.

Jackson, S., Joshi, A., & Erhardt, N. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), 801-830.

Jokela, T. (2004). When good things happen to bad products: where are the benefits of usability in the consumer appliance market? Interactions, 11(6), 28-35.

Jung, S. (2014). The analysis of strategic management of samsung electronics company through the generic value chain model. International Journal of Software Engineering and Its Applications, 8(12), 133-142.

Lam, S., Shankar, V., Erramilli, M., & Murthy, B. (2004). Customer value, satisfaction, loyalty, and switching costs: an illustration from a business-to-business service context. Journal of the academy of marketing science, 32(3), 293-311.

Mithas, S., Krishnan, M., & Fornell, C. (2005). Why do customer relationship management applications affect customer satisfaction? Journal of Marketing, 69(4), 201-209.

Morrison, W. (2012). China's economic conditions. Current Politics and Economics of Northern and Western Asia, 21(3/4), 289.

Muthuri, J., Matten, D., & Moon, J. (2009). Employee volunteering and social capital: Contributions to corporate social responsibility. British Journal of Management, 20(1), 75-89.

Sutton, P., Elvidge, C., & Ghosh, T. (2007). Estimation of gross domestic product at sub-national scales using nighttime satellite imagery. International Journal of Ecological Economics & Statistics, 8(S07), 5-21.

Testa, F., Iraldo, F., Vaccari, A., & Ferrari, E. (2015). Why Eco‐labels can be Effective Marketing Tools: Evidence from a Study on Italian Consumers. Business Strategy and the Environment, 24(4), 252-265.

Zhang, X., Ma, X., & Wang, Y. (2012). Entrepreneurial orientation, social capital, and the internationalization of SMEs: Evidence from China. Thunderbird International Business Review, 54(2), 195-210.