Identify a strategic project initiative that you wish to implement in your current or future employment setting. Write a formal APA 6th ed formatted paper which includes the following components:
Adapted from GDS: Resource 1: “Finalizing the Report” (pp. 431-443)
- Executive Summary – Concisely highlight the purpose of the project and what is really important. Address the primary issue with justification, recommended strategies, objectives; timeline, funding source, and a budget estimate of costs (what the CEO would want to know). Identify the roles and responsibilities of the project manager and key personnel involved in the project. Identify stakeholders (internal and external). Use appendices as needed, formatted in APA 6th ed.) for tables, graphs, etc. Within the text narrative, refer the reader to tables, graphs, etc., in the appendices, ie, (refer to Table 1, p. x) or (refer to Appendix A, p. x).
- With the exception of your name, use fictitious names for individuals and places, ie, the specific organization identified in the report.
- Body of the Report
- Key Issues: with the rationale for focusing on them.
- Situational Analysis: results of the external analysis, service area competitor analysis, and internal analysis, as well as analysis of the directional strategies.
- Strategy Formulation: feasible alternatives for directional, adaptive, market entry/exit, and competitive strategies.
- Recommendation: analysis of the feasible alternatives and which one or ones is/are recommended.
- Implementation Strategies: service delivery and support strategies with linkage to the directional, adaptive, market entry/exit, and competitive strategies.
- Benchmarks for Success and Contingency Plans: measures of success for the strategy and alternative plans if a major opportunity or threat is subject to change in the short run (contingency plan).
Expert Answer and Explanation
Strategic Project Initiative
The retail industry has been experiencing an influx of new entrants thus forcing our business to make drastic changes that will boost our competitive advantage. The current competitive approaches of the company have been performing exemplary, with this fact clear with the brand positioning and revenue generated in the last five financial years. However, with the additional threat introduced with the entrants of new business rivals, it will be prudent to introduce new competitive techniques that will help Dotes Stores maintain its market share, in addition to attracting new customers. The available strategies for introduction include acquisition of potential suppliers, renegotiation of terms with our suppliers, and opening more outlets. The selected competitive approach will be implemented in the next six months after the commencement of the introduction.
The company identifies two potential approaches to raise cash for the initiative: additional equity financing and long-term bank loan. The use of both sources of funding is when the business will decide to acquire the supplier or when it intends to open additional outlets. The use of long-term loans alone is when the business will renegotiate terms with existing suppliers. The need for commitment will demand the use of cash to tie down the contract.
The budget of each of the available options will vary. The table below represents the estimated budget for each alternative [see the appendix].
Roles and Responsibilities of Project Manager
The project manager will undertake diverse roles as part of the planning and implementation of the strategic initiative. The first role will include activity and resources planning. The official will determine the entire action needed to make the initiative successful. Besides, the official will liaise with the financial department to ensure the proper distribution of resources. Additionally, the project manager will be responsible for time management to ensure the project will be completed on time. In continuation, the project manager will take the role of cost estimating and development of the budget with the help of the financial controller. Moreover, the project manager will be responsible for the analysis and management of risks.
The project will involve both internal and external stakeholders. The internal stakeholders of the initiative will include human resources, the project committee and the executives. The junior workers will be responsible for the implementation of the project. The management will furnish the group with the entire information to reduce the risk of resistance to change once the project rolls on (Kasemsap, 2017). The project committee will be responsible for coming up with initiatives and plans for the execution of the program. Lastly, the executives are responsible for the strategies that would assist with the attainment of the goals of the business.
Conversely, the external stakeholders of the business will include customers, suppliers, financial institutions and the government. Customers will be helpful with their comments about the possible improvements needed in the products and services of the business (Xu et al., 2017). On the other hand, this initiative will borrow the ideas of suppliers before deciding to either acquire or amalgamate them. Besides, financial institutions will check the ability of the business to repay its loans before forwarding the amounts. Lastly, the government will be an interesting party because of the acquisition or amalgamation strategies. The transactions will require the firm to align with the guidelines provided in the company’s law.
The primary issue facing the company is the threat from new entrants, the need to improve competitive advantage and the opportunity present in the supplier area.
Threats of New Entrants
For a start, the retail industry has been experiencing an influx of new entrance because of the lucrative nature of the industry. For instance, according to Attaran and Deb (2018) Amazon Inc. has been recording massive growths in recent years to a point of becoming one of the most valuable businesses. Besides, the business is now a dominant force in the retail sector because of its innovative approaches. As a result, established players such as Walmart has been copying some of the strategies of the industry leader and incorporating them in its operations (Lawrence, 2020). Dotes Store has also been registering good performances over the years. The business has been expanding its stores in various areas of the State of California. These are some of the features that have been attracting new entrants to enter the market and benefit from the profits and revenues generated.
Several barriers to entry have been preventing these companies from entering the retail market, but they have come up with approaches that have allowed them entry into the industry. The potential barriers to entry, which Dotes Stores faced before penetrating the market, included massive working capital, brand issues, absolute cost advantage and stiff competition from the established players. Brown (2019) insisted the massive working capital needed has been the most significant issue, which has been preventing new entrants. However, these companies are now having good capital structures and strategies that have been instrumental in making them generate the required capital to enter the retail market. Brand loyalty has been a significant problem preventing these businesses from penetrating the tough market. Rubio, Villaseñor, and Yagüe (2017) insisted it is costly for new brands to penetrate the market because of brand loyalty. Further, the absolute cost advantage means that the unique products of a retailer like Walmart cannot be imitated (Sugiyarti et al., 2018; Mietrhlich & Oldenburg, 2019). In continuation, the fierce resistance of established industry players like Dotes Stores has been preventing new entrants from entering the retail industry.
However, these advantages are likely to change in the future because of the innovativeness and the strategies of these new entrants. Majorities of these companies are now entering the market as e-commerce businesses. This is a perfect approach that will eliminate factors such as the need for huge working capital and brand loyalty. Besides, these companies are also aware of the importance of suppliers to their performance and profitability. Accordingly, they have been coming up will approaches that will boost the association with the stakeholder.
The company has to focus on this primary issue since it will impact its performance and profitability. New entrants tend to increase competition and weakening of market share. Therefore, the influx of new entrants would demand new strategies that will ensure the business performs exemplary and is attaining the return on investment.
The Need to Improve Existing Competitive Advantage
Dotes Stores need to make efforts and improve its competitive strategies. The company has been performing exemplary in the past five years in the areas of revenue generation, revenue collections, product positioning and brand positioning. The good performances have been attributable to the existing strategic competitive advantage. However, with the increase in the number of business rivals, it is prudent for the business to make drastic changes to the present techniques or risks displacement by forces such as new entrants and established industry players. Accordingly, there is the need for a new strategic competitive approach to address the impending threats.
New Opportunity in the Supplier Area
The Dotes Stores integrated diverse competitive approaches and it aims to introduce others to improve its competitive advantage. The primary strategic approach of the business has been pricing approaches. The techniques are working but could present a big problem if more cost-friendly retailers will enter the market. Primarily, Dotes Stores risk profit plunge because of constant reduction of commodity prices as part of the competitive technique. The business has also been stocking organic products to attract health-conscious customers. This strategy is being adopted by other players to a point of becoming an industry standard. But, still, it is one of the working strategies of the company.
However, the business identifies supplier area to be the most critical competitive approach. This claim is because supplier power in the sector is high, especially organic vendors. These individuals can control the prices established by the retailers and the flow of products. Besides, the best and large suppliers have their designated customers meaning that Dotes Stores will have to work with less prominent vendors, with quality being a massive issue. Additionally, majorities of big suppliers prefer dealing with established players in the market (Gallo et al.,2018; Sohaib & Jamil, 2017; Yawar & Seuring, 2018). These features of suppliers have a crucial effect on Dotes Stores. Therefore, the introduction of new approaches is necessary. Vendors still produce these approaches that would improve the competitive advantage of the business. For instance, the new strategies focus on the acquisition of prominent suppliers or amalgamating with top vendors to ensure a constant flow of quality products to the business. The two strategies techniques are unique and would help the business eliminate supplier problems, in the process strengthening competitive advantage.
Results of External Analysis
The business is facing threats and opportunities, which the management must be aware of to make necessary changes. The opportunity available to the firm is the recovery of the economy. The industry was not badly affected by COVID-19 disruption, but the purchasing power of customers was reduced. With the vaccination of a significant percentage of the population, places of work and new jobs are accelerating economic recovery. For this reason, Dotes Stores is set to benefit. The other opportunity for the business is an online retail platform. The sub-sector is still in the development stages and with few players thus it presents an opportunity for the business.
Conversely, the number of new entrants is increasing thus the level of competition is growing. As mentioned in the above section, new entrants are coming up with new approaches that are threatening the competitive advantage of the business. Separately, the industry is still dominated by companies such as Walmart Inc., Amazon.com Inc., The Kroger Co, The Home Depot Inc., and Best Buy Co. Inc (Wells et al., 2018). This dominance is in areas like suppliers, loyal customers and several stores. Consequently, it stifles the plans of the business to expand rapidly.
Service Area Competitive Analysis
Dotes Stores is not the only retail store operating in its service area. The business is competing with national, regional and local stores. The company’s strategy of locating areas with needs have been instrumental in minimizing direct competition. Nonetheless, some businesses have been imitating our approaches thus they provide direct competition in these service areas. Accordingly, the levels of competition in these service areas have been growing daily.
The company has some strengths and weaknesses clear with the management. The strengths of the company include growth in revenue generation in the last five years, skilled and friendly human resources, and a strong brand reputation. In opposition, the business has been facing weaknesses such as human resources strikes, low motivation among workers and some customer care complaints. The management has been working towards new strategies to address these weaknesses.
The primary directional strategies of the business include addressing the problems of suppliers, dealing with workers’ morale issues and opening additional outlets. The primary intention is to boost the volume of customers to the store.
The strategic formulation will involve the approaches of directional, adaptive, market entry competitive approaches. The directional approach of the business is to grow the volume of customers visiting Dotes Stores. The company will target growth in all the 40 outlets across California. The adaptive strategy will concentrate on expansion through market development in diverse centers across California. The company will seek a potential new location for the business before engaging in market development with the intention of expansion. The company identifies direct entry and acquisition as part of its penetration and quick growth. The business has been focusing on direct entry, where it identifies potential locations before setting a business. The store has also made several attempts to purchase some businesses as part of the market entry tactic.
The competitive strategies identified by the business include acquisition of major suppliers, amalgamation, and or opening of additional outlets. Dotes Stores is aiming at improving the flow of products to its shelves and avoiding stock-outs. From the above discussion on “New Opportunity in the Supplier Area,” it is clear that suppliers in the retail sector prefer to supply to the top players, in addition to being in partnership with some of these players. The company intends to purchase one of these primary suppliers as a solution to constant stock out and the preference of suppliers to take their products to specific customers. The management anticipates that some of the suppliers will be willing to be bought off because they are struggling financially.
The second option is amalgamating with its suppliers. The management identifies amalgamation as the other possible strategy that will guarantee the flow of customers and stock to the business. The manager will contact potential suppliers, and they will discuss the possibility of engaging in business as partners. The process will entail the purchase of the section of the business. According to the management, being a potential partner of the supplier will assist with the control of stock flow. The business identifies this as an alternative if they will not find a potential customer to purchase.
The third option is opening more outlets. California is expansive and the retail market is not yet saturated. The firm will consider opening more outlets in potential areas. The process will include identifying a vacant store or building, conducting market research on the characteristics of customers in the locality, and the possibility of setting a new store in the area. Each of the outlets opened must focus on the issues of location and other strategies of the business. The company will also consider the availability of workers that will operate the new outlet.
The recommendation process will involve the introduction of specific criteria. Proper scrutiny and evaluation of the approaches indicate that the acquisition of a supplier is the best option in this scenario. The management of Dotes Stores identifies its evaluation criteria to include cost, timeline, need, uniqueness and compatibility. The business insisted that the acquisition of a supplier be an expensive venture since it will involve the purchase of assets. However, the implementation committee is satisfied it could take six months to ensure the operations of the business are smooth. Besides, the need for this strategy is high as other approaches have become popular and business rivals might be using them to match the prowess of the business. The uniqueness of this approach is the fact that most industry players have been focusing on pricing strategies, shifting activities online and the introduction of their label. Concentration on suppliers is a new strategy that intends to increase the competitive advantage of the firm. The last evaluation element required by the management is compatibility. The subject of compatibility focuses on issues such as the ability of some of the current workers of the store working in the new venture. The fact that the business sources its products from the supplier, it would be easy to run both ventures concurrently. The firm will identify the new supplier section as the production unit.
The Dotes Stores works through the process of ensuring proper implementation of service delivery and support strategies with linkage to the directional, adaptive, market entry/exit, and competitive strategies. The business will concentrate on re-training its human resources, especially customer care to ensure they handle customers professionally to reduce instances of losses. Service delivery during the expansion process of the business will be through proper analysis of the geographical market, where the business is aiming at an additional investment. The management of the business recommends identifying two spots to support the other in case of failure. The market entry support processes will include having full information about the potential business for acquisition to ensure minimal cases of rejection. Lastly, there is a massive support structure to the competitive approaches of the business since there are three options. The management identifies the acquisition of suppliers as the most significant strategy of the business.
Benchmark for Success and Contingency Plans
The management of Dotes Stores identifies industry successes as the most significant point of reference when it selects to acquire the supplier and gauge its competitive advantage. Retail industry reports on the performances of suppliers, especially those acquired by industry players will help determine the position of the business. Besides, the industry’s competitive outlook will be crucial in establishing the power and position of the business in the sector. The management should also consider benchmarking against multinationals such as Walmart. The insight provided and the positioning will be critical in the determination of changes and alterations needed to boost the competitive advantage of the business.
Conversely, the management understands the risks of failure to the strategy of acquisition of suppliers. Accordingly, it will prepare against any eventualities by marking the potential supplier it will amalgamate with. This strategy includes offering the potential business the chance to be purchased wholly or Dotes Stores becoming a subsidiary.
This report focused on the introduction of a strategic project initiative by Dotes Stores. The management sought to address the competitive advantage issue concerning the business. The new initiative aimed at maintaining its market share, in addition to attracting new customers. The firm settled for acquisition of potential suppliers, renegotiation of terms with our suppliers, and opening more outlets. The management identified the three alternatives as significant to its goal of improvement of competitive advantage. The vital issues that arose because of the organizational needs and the prospective initiatives include New Opportunity in the Supplier Area, The Need to Improve Existing Competitive Advantage and the Threats of New Entrants. On the other hand, situational analysis indicated the business is facing stiff competition and the application of approaches that aims at dealing the problem. The study findings show that acquisition of potential suppliers is the most suitable initiative to address the issue at hand. The implementation process of the solution is through the benchmarking and setting a contingency plan in any case the primary initiative fails. The success of Dotes Stores is dependent on the approach it will utilize to boost its competitive advantage. In this case, the acquisition of potential suppliers is the most suitable initiative to deal with the problem.
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