Business Executive Brief
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Kingfisher Plc. is a multinational corporation that is headquartered in London and has a strong focus on home and family products. It is one of the obvious market leaders in its sphere of operation in Europe, and is constantly taking over the markets of developing countries too. The purpose of this Executive Brief is to analyse the strategic position of Kingfisher Plc. at the market, evaluate it, using the critical approach, and then develop corresponding recommendations on how strategic management may be changed. Kingfisher Plc. was established in 1982, and therefore, has an impressive history of meeting the changing demands and needs of the customers in the field of home & family products. Kingfisher’s employees work in Turkey, Canada, Brazil and China as well, in spite of the high workforce concentration in European countries. Kingfisher Plc. is related to many other companies in the world that deal in the same branch of industry, including German and Turkish representatives. The foremost mission of the company is to ensure that their customers enjoy the most high-quality home and lifestyle particulars. There are four major brands representing the company including B&Q, Brico Depot, Screwfix, Hornbach, Koctas and Castorama (Osborne 2001). The products with these brands labels are sold in more than 900 stores all over the world. One of the peculiarities of Kingfisher Plc. is the constant attempt to diversify the assortment of products available to the customers. The range of offered goods include wall papers, shutters, vacuum cleaners, basin mixers, bathroom and kitchen accessories, furniture pieces, outdoor light switchers, shower enclosures and many other options. Kingfisher Plc. is a significant competitor and a market leader for home and family industry branch, but there are still some issues including the low margins, low market share, innovation threats, and others. Many of the obstacles may be resolved with a convenient revision of the strategic position, taken by Kingfisher Plc. Company (Kingfisher 2009). The report is going to focus on such Kingfisher Plc. Company particulars as high diversification of the product assortment, innovation management, human resource management, intercultural clashes, customer approach and the opportunities of e-commerce. The relevant arguments will include the marketing trends, technological trends, customer expectations and laws of market share takeovers.
Kingfisher Plc. Company’s Strategic Position, Its Relevant Characteristics and Features
Kingfisher has become a large-scale DIY (do-it-yourself) retailer of home improvement. The strategic goals that the company’s executives set in front of themselves include becoming market leaders in local home improvement industry branch, adapting to the anticipated changes in customer needs, improving the delivery and product quality at a lower price level, improving the level of e-business incorporation, following eco-friendly trends in home décor, and expanding the ways of shopping for the customers. Kingship Plc. is also determined to develop common brands, improve direct sourcing, extend the markets in developing countries and introduce innovations for both new and old products. One of the obvious advantages of Kingfisher Plc. Company is that it offers do-it-yourself products along with the information base that is easily accessible for the customers. This is a unique opportunity that can also be supplemented by the installation, provided by the company employees if the customer is not ready to do everything himself. The strategy of Kingfisher embraces the opportunities to involve maximum effectiveness in every sphere of operating such as enhancing supply chain performance, developing IT software that is tuned up to the tactic and strategic goals of the company, launching eco-friendly product lines, simplifying the process of shopping and using the purchased goods, enlarging the information and education base for customers, and streamlining in-store working processes (Kingfisher 2010).
Kingfisher Plc. also has several ambitions and goals, set in the sphere of company expansion (NY Times 1998). They include opening new stores worldwide and developing store formats by revamping the old buildings or incorporating absolutely new ones. The traditional store format for Kingfisher Plc. is a warehouse. Kingfisher is also on good terms with online customers as it is one of the biggest European direct suppliers of tools and home accessories. Another branch of goods, offered by Kingfisher, are electric devices for home usage such as vacuum cleaners and basin mixers. The brands that are represented in the company’s portfolio are well-known partially due to the effective advertisement, and partially due to some sufficient experience that the company has been acquiring since 1982 (Kingfisher 2010). Kingfisher relies greatly on the markets of developing countries and its loyal customers. It is essential for Kingfisher not to lose the market share (or better to expand it) in the existing markets as well. This is the reason why the company is going to conduct some test “do-it-for-me” stores to evaluate the opportunities of trade in each particular region and take a final decision about the most beneficial format, required by the customers (Kingfisher 2009).
The activities of Kingfisher Plc. Company are not limited by financial operations and trading (Offshore Challenges Media 2002). They are constantly working over the education database for those customers who are willing to learn how to mount and install home accessories all by themselves. Kingfisher Plc. is interested in connecting leaders and groups from all over the world in order to improve engagement scores. Kingfisher Academy and cross group networks are going to implement to the development of communication in business. The leaders will be “grown” within the bounds of this particular company, and this specific orientation will make their performance extremely efficient in the future. Kingfisher Plc. Company also has an intention to create a “Net Positive” scorecard, embracing the issues of community integration, energy saving, innovations and timber. The methods that are used by Kingship Plc. Company in order to achieve strategic objectives include incorporating IT technologies, innovations, expanding the market bounds, creating non-commercial organisations for stronger team building, stating a social responsibility mission within eco-friendly programmes, and building up customers’ trust with reliable information systems. The strategic path, taken by Kingfisher Plc. Company, is quite suitable and goes with contemporary market trends. This is especially true, when it comes to applying todays’ IT technologies, Kingfisher Plc. Company is determined to attract more online customers by improving online ordering and distant education for those who are eager to learn how to do things by oneself.
Conclusions and Recommendations: possible strategic directions of Kingfisher Plc.
Some of the problems that Kingfisher officers have to face are the remaining low market share, low margins, and weak returns. These are economic and financial problems of Kingfisher Plc. that may seem to be strange as the company experienced great success in all the fields of operations. Having a deeper insight, the researcher has to admit that one of the reasons for this is low specialisation of the company. Looking at the variety of products available, the researcher may see how splitting and different all these products are. The materials for producing them are also very diverse. Although these items all relate to home and family improvement sphere, their production may be heavy upon the company. Stepping into the store, the customer sees everything he or she would like to purchase but the return on this is low for the company. That is the reason why the Board of Directors in Kingfisher Plc. may revise the strategic policy for such a variety of goods offered. A tighter specialisation may be introduced into the system (Njuguna 2009). There are several benefits that may be derived from this measure, including higher cost-effectiveness, more manufacturing accuracy, waste cost reduction, more time and work efficiency. It means that there are several more decisions to make: which products have to be emphasised and which should be deducted from the agenda. The Board of Directors has to use analytical information from the marketing department to find out what kind of product brings the highest profits. One of the suggested products to neglect would be those goods that are represented in the assortment of the company’s major competitors. For instance, it can be vacuum cleaners and basin mixers as these products are provided by different companies and the raw-materials base, used for their production, is very different form the rest of the products. In some cases, neglecting one of the product lines will not be efficient even in the case of negative profits because the overall picture may show that some products simply cover the expenses. In this case, the production has to be centralised and more focused. Setting up project teams within a matrix management system will help the company to concentrate the efforts on each product line and make sure all of them are delivered with maximum quality and cost efficiency (Njuguna 2009). This is also very useful for the qualification of the employees as they will get more skilful at conducting several operations instead of having to deal with dozens of them. Professionals will know as much as possible about the characteristics of each product in the assortment.
Weak management has to be dealt with separately because it is not related to financial side of the problem. Human resource management is essential for conducting any kind of business. Kingfisher has some additional issues to cope with because it is an international corporation. The improvement of team management in all target countries will definitely enhance the market position of Kingfisher Company. The measures offered include:
- Hiring highly qualified overseas officers that have relevant experience in working with a particular target country (for example, this person should have some background of working in Russian, Chinese or Turkish environment). This officer has to be aware of the goals that the company has and try to deliver undistorted messages on both sides of communication line. At the same time, the officer has to find a particular approach to the team member of each foreign country, considering cultural differences and peculiarities that every country has. It would be very efficient to get familiar with the cultural classifications provided by Geert Hofstede (2001). He divided the cultures according to the following criteria: masculinity rate, individualism/collectivism rate, power distance rate, uncertainty avoidance and long-term orientation. Masculinity rate stands for the definition of gender roles in the society. Individualism or collectivism rates reflect on how much the individual is dependent on the interest and viewpoint of the group. Power distance stands for the level of equality adapted among different social classes in the society or the boss and the employees. Uncertainty avoidance reflects on how each culture representative is ready to take risks and overcome hierarchy obstacles. Long-term orientation is especially relevant for Asian cultures and stands for the ability to wait and to have a deep insight into the future (Hofstede 2010).
- When it comes to existing teams in European countries and in the UK, it is also crucial to improve motivation and devotion creating a team of “loyal” professionals. It means that the people with high qualification need to be constantly retrained and re-educated. Each organisational level should be given as much authority as possible so that their capability to achieve maximum customer satisfaction is not restricted by anything. This empowering will also imply providing employees with the necessary resources and instruments in case of emergency or unforeseen circumstances. The employees have to be informed about the objectives of the company, and tuning those goals with the personal interest will be effective. For example, the company may introduce a bonus system for all the staff members in case the financial indicators exceed the desired percentage level but this should definitely not be tied to the individual performance. All organisational levels should enjoy a constant flow of information with no restrictions. This is another way of empowerment and letting the staff know where Kingfisher Plc. Company is heading. There are still many factors that are out of reach for a regular employee. The lack of motivation may also be the result of poor insurance as the employees who know they are not protected in any way feel unmotivated.
Another suggested enhancement will be related to IT technologies and the development of mobile commerce (Porter 2001). Although Kingfisher Plc. has done well with the website selling tools via Internet, it would be very efficient to introduce a mobile commerce version for those customers who are always on the move or don’t have computer access at the moment.
The strategy of Kingfisher Plc. is quite suitable and efficient but it needs to get even more flexible. It is not always feasible to satisfy all customer needs imaginable – this rush actually resulted in lower market share, lower margins and weak returns. The expansion, customer-oriented approach and technological enhancements are all very efficient steps to take but the company has to consider economic factors too.