Business Strategy Assignment

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Case Study

Owen Mills Limited

We have all that you want!

Owen Mills Limited began its operations on Trumpet Land, a beautiful island in

the Caribbean with a very diverse population in terms of age, gender, ethnicity,

religion, disability, sexual orientation, education, and origin. In 1970, at the age of

twenty-eight (28), Owen Mills a progressive thinking young man decided to start

his own business. His father had worked as a Manager at a large department store

in the city of Trumpet Land for as long as Owen can remember, and his father

would share his daily experiences. The idea of operating his own business was

always at the forefront of Owen’s mind. After gaining four (4) Advanced Level

subjects (Mathematics, Geography, English Literature and Spanish), Owen got a

job at a large Credit Union where he moved up the ranks from a Customer Service

Clerk to Supervisory level within four (4) years and then onto being a Credit

Officer.

During his time at the Credit Union, Owen attended a number of short

management courses. This built his confidence that someday soon he will achieve

his dream of being a big business man. At age twenty-eight (28) Owen thought

that he had saved sufficient money along with his wife who worked at another

Credit Union, so that they could purchase a small one-story building in the heart of

the city. The building was at the corner of French Street and John Street, the main

street in the city. The building was refurbished and painted in bright red, and blue

to suit the liking of Mr. Mills. He thought to himself “No one could miss this

building” and he also thought of a tag line. Business started in February 1970.

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From the inception of the business to date, the tagline emblazoned at the front of

the store “We have all that you want!’ has remained.

The Early Years

Owen Mills Limited operated as a sole proprietorship for many years selling

almost every item that a household could want, staying true to his tagline. The

business began with five (5) employees: his wife serving as the cashier, two store

clerks, one driver and a cleaner. The store was well sectioned with a variety of

items as shown in Table #1 below.

Table #1 – Variety of Items sold by Owen Mills Limited

Cosmetics and related products for men and women.

School items – copy books, pencils, pens rulers, etc.

Basic food/grocery items – rice, flour, sugar, peas, salt, seasonings and other condiments

Personal hygiene products

Plumbing and electrical material

A variety of snacks and soft drinks

Perfumes/fragrances Small appliances Kitchen ware and Glassware

Clothing and footwear for babies, and boys and girls

Household items – batteries, glue, tacks, etc.

A variety of gift items

Ladies and gents’ underwear and other everyday garments

Household cleaning products

Gardening tools/implements and hardware items

Gym shoes and slippers for ladies and gents

Sewing items A variety of handy man tools

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Orders would be placed with wholesalers who would deliver the products on

scheduled days. Mr. Mills was very organized. During the first two (2) years of

operating in the city of Trumpet Land, Mr. Mills observed that his customers

comprised of citizens from all over the island. He got an idea, “I could go to the

outer area of the city with my products.” He started in October 1971 to pack his

Toyota panel van and leave with his driver on Saturdays and Sundays to the areas

bordering the city. Mr. Mills was successful with this venture and discovered that

there were retirees and housewives who were at home during the week, and he

began to go into those area at least two (2) days per week in addition to Saturdays

and Sundays.

Clearly, Mr. Mills was an astute businessman who was always thinking of the next

move to grow the business. He and his wife joined the Chamber of Commerce,

read widely about what was happening locally, regionally and internationally, and

made every effort to attend conferences and seminars which they thought would be

beneficial. He was always thinking about growth and expansion. Owen Mills

Limited became a known business even to those persons who had never patronized

the store. In the midst of it all, Mr. Mills understood his corporate social

responsibility and as such was respected highly by other businessmen and

members of the community and country. A proud moment for Mr. Mills, his

family and employees occurred when he was awarded Business Man of the Year

Award in 1999.

On a Growth Path

The years flew by very quickly and by 1995, Mr. Mills had added two (2) more

floors to the original building that he bought. He now had four (4) grown children

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(two (2) boys and two (2) girls) all in their twenties and who all showed an interest

in the business. Similar to their father, they had done very well at the secondary

school level and had aspirations of gaining a tertiary level education as well as

being a part of the business. They pondered their options of going to school full-

time or enrolling in an online programme, so that they could better manage their

time and fulfill their career objectives. The oldest son began to pursue the

Association of Chartered Certified Accountants (ACCA) Programme. He thought

that he can become the Accountant for Owen Mills Limited or open an accounting

firm in the next few years.

By the year 2000, Mr. Owen Mills had spread his wings to the eastern, southern

and western part of Trumpet Land. He was able to purchase within a five-year

period, three (3) large two-story buildings in each of the areas. The buildings were

painted in the same colors as the first one in the city in the north and carried the

well-known tagline - We have all that you want! The business incurred a

manageable mortgage loan, but that will be repaid in less than ten (10) years.

Mr. Mills began to think about succession for his business and the future of his

children who had been supporting him throughout the years. He held a family

meeting and it was decided that with the imminent opening of three (3) other

Branches, that each child would manage a branch and he will now be considered as

the Chairman.

In the midst of the initiatives being undertaken, Mr. Mills was very cognizant that

the world of business was wrought with dynamism and uncertainty and he and his

family needed to understand about strategic moves that could be undertaken. He

had been reading and trying to keep up to date with what was happening in the

world of business. He and his family did not have a full grasp of the theoretical

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underpinnings to maneuver quickly out of any new challenges, and he understood

very well that challenges can surface with expansion. By 2018, the total staff had

grown to eighty (80) persons which included cashiers, information technology

personnel, supervisors, customer service staff, cleaners, drivers and his four (4)

children as managers,

Looking to the Future

Undoubtedly, Owen Mills Limited has been a successful enterprise. However, Mr.

Mills and his eldest son, who had gained his ACCA qualification began to look at

the financials very closely. They recognized that while the company had repaid

the mortgage loans, and there was still an influx of customers at all branches, the

profits had been reducing in the three (3) years prior to 2020, though minimally.

Mr. Mills and his family had their usual monthly meeting in December 2019. One

of the daughters took some points in relation to the present status of the Company.

It related to a SWOT Analysis. Whist the SWOT Analysis was not fully

articulated in terms of what the strengths can and have brought to the Company;

how the weaknesses are impacting the Company; the possible outcomes from

taking advantage of available opportunities; and the possible impact of threats, her

brief notes are highlighted below:

Strengths:

 Committed employees and management

 Appropriate management style

 Adequate financial and human resources

 Wide variety of products

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 Broad market coverage

 Good financial management

 Brand name reputation

 Excellent customer service skills

 Some expertise in new venture management

Weaknesses

 Lack of research and development skills

 Lack of understanding of strategic management and planning

Opportunities

 Exploit new market segments

 Move into new businesses, but how and what type

 Expand into foreign markets

 Acquire a profitable acquisition

Threats

 Increase in competition, but where do we look

 New forms of competition

 Changes in customer preferences

 Rising costs of products and labour

 Changes in demographic factors

 Changes in economic factors and down turn in the economy

 Slow growth in the market

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At the start of 2020, Mr. Mills and his family began to follow the news with

respect to the deadly COVID-19 virus. “This is a time for quick action” pondered

Mr. Mills. The business has been successful, but Mr. Mills and family has

recognized that things are changing in the environment and could have negatives

on the business. At the January 2020 monthly meeting, it was decided that the

company should seek the services of a reputable consultant who can advise and

assist the company with getting a clear understanding of what strategic

management and planning entails. Other matters discussed which the family

agreed to pursue, include embarking on a training initiative which would include

staff at all levels as well as to create an awareness of the environmental factors that

can affect the company. One member in the meeting raised the issue of how they

can determine with accuracy the financial situation at the company. She is aware

that ratios could be used, but that’s as much as she knows.

Mr. Mills stretched his imagination, “We had better start thinking about starting

a branch in some foreign country, or start to manufacture something that people

will need.” Then he pondered to himself, “I do not have all the knowledge about

the intricacies of manufacturing and so-called strategies to continue to be a

winner”

The meeting ended with Mr. Mills thinking aloud that they should all read up about

what it means to be innovative. He indicated that at the next meeting, they will all

come with their ideas of a plan that is different to what they are doing now and

which can contribute to continued success. He was not sure what type of plan that

would be. He has been following keenly the possible impact and negative fallout

that the company could experience because of the COVID-19 virus. However, the

astute businessman that Mr. Mills is, he purchased some cotton material, took

some elastic and thread from the store, and hired two (2) seamstresses to make

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protective masks. The masks have been a fast seller and is bringing a profit to the

store. Once more, Owen Mills Limited is living up to its tagline - We have all

that you want!

Case Study Questions

Graded Assignment #4

Answer all questions

Q1. Mr. Owen Mills, the owner of Owen Mills Limited has been operating a

successful business since 1970. However, he is not fully aware of what

strategic management and planning entails. You are hired as a consultant to

advise Mr. Mills, his family and selected members of the Company about

what strategic management and planning entails as well as how important it

is for the organization to engage in strategic management and planning.

What would you say to the members present at the meeting so that they can

have a very good understanding of what strategic management and planning

entails, and why they should engage in the process so as to maintain the

competitive advantage of Owen Mills Limited?

(Total - 25 marks)

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Q2(a). In the early years, Mr. Mills along with his driver went into the areas

bordering the city where his store was located.

Identify the type of strategy by name that was used by Mr. Mills in his

effort to capture additional sales. Also, provide a brief explanation for the

strategy identified as well as provide three (3) reasons why Mr. Mills was

successful with that initiative.

(2 marks)

Q2(b). With the emergence of COVID-19, Mr. Mills saw an opportunity to help

with protective gear, namely masks, as well as to make some money.

Identify the type of strategy by name that was used by Mr. Mills through

the initiative to make and sell masks. Also, provide a brief explanation for

the strategy identified as well as provide three (2) reasons why Mr. Mills

was successful with that initiative.

(2 marks)

Q2(c). Mr. Owen Mills is thinking about starting a branch in some foreign

country, but will need advice on the types of strategies that could be

adopted.

As the hired Consultant, how would you advise Mr. Mills and family

about the best approaches to entering a foreign market. Provide

justification for your advice.

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In addition, could you provide Mr. Mills and family about the types of

experiences that they may encounter, and which may not be always

positive. Based on your response, would you advise Mr. Mills to enter a

foreign market? Provide justification for your advice.

(11 marks)

Q3(a). Mr. Owen Mills and his family needs to understand how they can

determine with accuracy the financial situation at the company. One of his

daughters is aware that ratios could be used, but that is as much as she

knows.

As the hired consultant, how would you advise Mr. Owen Mills and his

family?

(2 marks)

Q3(b). As a forward-thinking entrepreneur, Mr. Owen Mills is pondering going into

manufacturing something, but he has to think carefully about the product to

be manufactured. Therefore, he needs to understand what the Value Chain

is about as well as the types of strategies that he could utilize to gain a

competitive advantage.

What information would you provide to Mr. Mills and his family regarding

the Value Chain as they think seriously about going into the manufacturing

sector?

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Also, what are the possible strategies that could be utilized once the

Manufacturing company becomes established? Provide justification for

your advice.

(6 marks)

Discuss the strategic role of employee training from the perspective of the

organization and the employee.

(5 marks)

Q3(c). Based on the existing situation at Owen Mills Limited, and as the Consultant

hired by the Company, suggest three (3) strategies that the Company could

undertake to maintain a competitive advantage. Provide justification for

your selected strategies.

(7 marks)