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Strategy Formulation, Business Plan Example

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Introduction

Freight brokerage has been noted to be the middle-operation between the to-and-from of companies that are accustomed to the supplier-receiver relationship. So long as there are organizations that want to engage in this relationship instead of investing on their own personal delivery services, the freight brokerage industry is expected to be approaching its peak. Having a personal servicing operation does cost some investment, which means there are only a few numbers of companies consider obtaining such service. SAGA is assumed to take on a specific responsibility over covering the delivery needs of target clients. In this regard, it is expected that in the process of development, SAGA would be able to develop comprehensive operations that would make it one of the most sought after freight services in the industry. Presented below are the elements of Strategy Formulation that are expected to help the administrators of the business become more focused upon the desire to serve the clients and improve business reputation in the industry.

TOWS Matrix

Threats: It is basically expected that SAGA would cater to two particular markets in the building industry. With the concentration on the raw materials delivery, the business targets the manufacturers of raw materials and then its purchasers. This means that the business hopes to cater to both the to-and-from requests from several partners/clients in the business. Due to this fact, the business is expected to have a controlled pattern of growth and operation.

Opportunities: While the strict focus to a two-point market of the business is expected to pose a threat to its growth, it is also expected to give the administrators a chance to see through the viable procedures that could help them create more extensive ways of keeping their clients loyal to their service. Showing the clients how specialized the business is in providing top-of-the-line service compared to other freight brokers could allow them to keep clients and even add up more due to their increased level of recognition and reputation in the industry.

Weaknesses: Servicing within the United States only [as this is the only allowable range of operations available at the moment] could make the business start at the very bottom of the competition. Specifically, some freight brokers already have partners or even their own branches abroad that are able to provide international freight services which are among the most common operations in the industry of freight delivery services today. Another point of weakness posed in the business’ operation is the fact that the organization does not have its own unique carriers to support their proposed promise of service to the clients. Having the need to have temperature controlled vehicles for service and not having its own could be a disadvantage to the business.

Strengths: As mentioned earlier concentration on a specific market is expected to be its weakness. On the other hand though, this focused attention could also allow the business to put its attention towards the operation which it can be best at. Gaining loyalty from particular customers through performing well for them is the primary strength of the organization as its market is controlled so as the services it shall be providing to the clients.

Review of Strategic Posture

One of the most important strategies that SAGA imposes to be effective is that of its concentration on a small-sized range of market. It is expected by the business that this approach would create a more controlled environment for the organization. True to its sense, there are instances when offering too much service to a wide-range of market makes a particular business operation stagnant in one position and that is being the average service provider. This is the reason why SAGA opts to take the route less taken by freight brokers, to be focused on two target group of clients: the sellers of raw materials and their purchasers. This way the administration believes that they would be able to concentrate on their operations and further the process by which they deliver and respond to the specific requests of their clients.

It is also through this process that control of operations could be maintained. Keeping record of every operational mandate would be easier to handle. The weakness of having stagnant growth is perceived by the administrators to be effectively counteracted through efficiently providing service to regular clients hence retaining their loyalty and assuring their trust of the organization. This way it would be better for the business to focus on certain matters that are concerned in providing high quality operations and conceivably responding to the demands of the target customers. The matters discussed herein are further presented through the TOWS matrix table shown below:

External Opportunities
(O)1. Create strong reputation with clients compared with competitors in the industry.

2. Exploring much better procedures of operation and marketing online.

3. Creating a more realistic budget and utilizing excess cost to more refined ways of operating the business.

External Threats
(T)1. Facing up challenge with competitors that offer wider-range of services therefore serving a wider-market range.

2. Possible shift of loyal clients to better companies offering better services.

3. Competing with better contractors when it comes to getting the best delivery service from independent truck operators.

Internal Strengths
1. Focus on a small range of market makes the business specifically directed towards “besting” in their sector of operation2. Centralized system of operation3. Office-less operation that entails the avoidance of higher expense rate.

SO
1. Posting ads through the internet to reach out to target market/clients in a maximized scope.2. Extending the capabilities of the business to operate on line especially in terms of marketing its services to the right market.3. Making good use of what is saved from not renting physical offices and offsetting the budget on bettering the service operations embraced by the organization.

ST
1. Keeping up the service operation to make sure the clients are satisfied therefore building up their trust and loyalty to the organization.2. Constant observation and survey on how the entire industry operates and how specific competitors operate as well.3. Close observation on how service contractors could be served best considering that they are to be recognized as business partners.

Internal Weaknesses (W)
1. Use of rented trucks for delivery due to the need of having unique carriers with temperature control to keep the products intact during the delivery process2. having no physical office of operation3. Too-small market to serve

WO
1. Creating good relationship with carrier partners hence improving the sense of understanding the administrators have in operating and maintaining the delivery carriers.2. Embracing a new and innovative way of tracking down delivery operations through a networked system that can be accessed by both administrators and clients.3. Creating possible programs that could lure more prospected clients to accept the services offered by the organization in the market.

WT
1. Establishing a clear contract with the owners of the carriers giving them particular benefits that other organizations hiring them or renting from them might not offer.2. Reflecting good and reliable service through accurate and on time delivery while allowing the clients to track down the route that their orders are taking from the point of placing the service order to the point of receiving it.3. Creating regular programs that could keep the clients interested and invite new ones to consider what the company offers.

Three Possible Corporate Strategies as Shown in the TOWS Matrix

Effective advertising: This strategy is particularly expected to expand the scope of invitation that business makes towards its target clients. Being an efficient and relatively cheap way of marketing, the internet could provide market familiarity and popularity for the organization to specifically meet the need of becoming known to those opting to use their service.

Establishing effective information system towards internal and external stakeholders : What makes freight customers satisfied is the fact that they gain an idea where their freight is and knowing specifically when it is going to arrive. Many business organizations today invest on IT programs that provide them with effective application on how to gain proper knowledge on their freight deliveries. This serves both the internal [employees and administrators] and external [clients and business partners] stakeholders of the organization.

Making Extensive Programs to Assure Client Loyalty: This approach shall be comprised of promotions, special offers, discounts and other marketing strategies that could build-up the loyalty of the clients hence discouraging them from opting to use other companies’ service delivery operations.

Decision Process

Gaining proper understanding on what particular environment that the business is expected to operate in and what particular challenges it is supposed to face gives an indicative presentation on how the organization is likely to progress in the industry. There are two particular matters to give attention to, increased reliability of service and improved trust and loyalty from the clients. It is expected that competitors, both the champions and challengers in the industry would also be aiming to gain the attention of the clients. In the course of providing personal strength to the business, it should perform effectively both within and outside its operative responsibilities which means it should serve both the values and concerns of its clients, its partners and of course its employees. Only through this shall it be able to assure competence in the industry that it hopes to enter.

In the process of advertising, reaching out to the primary clients is an operational must, however, extending the scope of effect in terms of marketing through the internet makes the process of inviting viable customers is indeed a good advantage in increasing profit rate of the business. Marketing is often considered as one of the most expensive expenses of business organizations. Nonetheless, it could be analyzed that with the effective control of situations and dependable development of strategies, businesses like SAGA would be able to gain an edge in defending its position in the industry.

Expansion and development of the business is expected to come in line with the assumed establishment of loyalty among the business’ clients. With the loyalty created and passed on to other individuals or organizations that might like to be served by SAGA, its operational development is expected to come through time. True, establishing its growth may not be that easy at first, however, once the reputation of the business has already been improved, it is expected that more clients would trust its operation and would opt to remain within the organization’s care when it comes to delivery services.

The creation of IT-innovated operations to impose better client communication and relationship would also be able to increase client trust. True, this could be considered as a form of investment for the organization but being able to comprehend with this need would surely make the organization a dependable source of service for most clients who opt to engage in such operational approach for their product-delivery needs.

Quantitative

Strategy

(advertising)

Strategy

(IS Operation)

Strategy

(Customer-Directed Programs)

Justification of Numbers

Profit

It is expected that the programs on customer-centered operations would increase client trust hence increase profit rate for the business.

Cost

-1

When it comes to the online advertising and IS operation, particular investment is needed that could be accounted for as an expense. Meanwhile customer-directed programs could be accounted for as investment.

R.O.I.

With practical use of the new operations being embraced by the business, return of investment is expected to increase;

Market Share

The proper use of the internet for market familiarity and popularity along with the collaboration of developmental IT operations is hoped to bring in a higher rate of market share for the business.

Capacity

The programs imposed are expected to increase the capacity of the business to render more service to a higher number of clients.

Delivery Time

With the improved IT operations that are linked with the online campaign of the business, delivery time is expected to become more efficient.

Risk

-1

The only risk that could be assumed is that of the process involving online operations because of the domain being open to the public.

Cash Flow

-1

With increased advertising procedures, monetary cash flow is expected to increase as well. The negative score on IS development and customer directed programs has been accounted for due to their need of being paid for.

Inventory Turn

-1

The IS and IT-advertising is assumed to have positive effects because of the fact that it provides the organization a visible reputation, while the customer-directed programs work behind; not directly affecting the perception of the market upon the organization.

Productivity

Productivity is expected to increase in line with the consideration of all three aspects of business program developments.

Staff Turnover

-1

It is expected that there would be a negative rate of staff turnover as the operation would be more efficient in serving both internal and external stakeholders of the organization.

Quality

It is expected that the quality of service offered by the organization shall be improved in line with the utilization of the three aspects of development.

Growth Rate

With the implementation of new systems of operation, growth is expected to happen.

SCORE

[9/13]=

0.69%

[5/13]=

0.38%

[5/13]=

0.38%

Qualitative

Criteria

Strategy

Competitive

Advantage

IS improvement; online marketing and client-centered programs are expected to define the competitive stance of the organization and recognize it to be in the proper position.

Ease of

Implementation

Online operations of marketing is expected to ease the operation of the business especially in gaining attention from the market with not much of a burden to the system it hopes to embrace.

Flexibility

No effects noted

Innovation

The application of the three strategies are highly innovative hence increasing the quality of service of the business directed towards its stakeholders.

Customer Satisfaction

With improved system of service, it is expected that the customers would become more satisfied.

Cultural Sensitivity

Since the operation is entailed to consider both local and international clients, the operations are grounded upon cultural balance.

Corporate Image

With improved ways of operation, the business is expected to gain better recognition from the market it serves.

Social Responsibility

IT and IS operations are noted to have a great impact on how the organization serves the community it hopes to engage in business with.

Environmental Impact

With less clutter on printed ads and less space taken into consideration by the organization, it does provide a more responsive way of balancing its impact to the environment.

Employee Morale

With good systems of operations, the employees would have a better way of defining their responsibilities in line with their roles as part of the organization.

Employee Safety

the presumed developments have no impact on improving employee safety.

SCORE

[9/11]=

0.82%

[8/11]=

0.73%

[5/11]=

0.45%

TOTAL SCORE

0.75%

0.54%

0.42%

Effects

+1 = Positive Effect

0 = Neutral or No Effect

-1 = Negative Effect

References

Chase, R. (2001). Operations Management for Competitive Advantage. Inventory Management Journal.

Hartness, J.(1999). The Human Factor in Works Management. New York and London: McGraw-Hill. Republished by Hive Publishing Co (Hive management history series, no. 46)

Pilkington, A. (1980-2006). The Evolution of the Intellectual Structure of Operations Management: A Citation/Co-Citation Analysis. Journal of Operations Management.

Wilson, J.M. (1995). A historical perspective on Operations Management. Production and Inventory Management Journal.