Strategic Business Management And Planning Bentley Security Company Marketing Essay

Strategic Business Management And Planning Bentley Security participation marting EssayBusiness is a screwing-do field, (education 1951) where things flip fast way. If some(prenominal) caller- reveal makes mistake in its decisions either short bounds or gigantic cost it is always on losing side, and sometimes there is no come back from a dog position in a dynamic foodstuff. In this case see we result learn how process models and other(a) withalls help to analyze the situation of any business and how companies base effectively do these analysis tools to help them in bad situation as in this case study Bentley Security Company is facing.For state the three scruples of the case study we will go into analysis of the situation using by use of process model analysis, porter five analyses and SWOT analysis, while answering to branch question. We will also analyze through the analysis of corporate finance, expansion matrix for company, its merchandise life cycle, its prod uct positioning, its value filament and its competitive position. For answering second question we will analyze why company was fail to realize its core competency related to its value productions. In final question we will answer analyze the expected future profits as said by the chief executive officer of the company that if they will be capable of e trulyplacecoming the issuance of bargain charge, return oer equity, rising debts, changing security Inc into profit generating component of business and by gaining the confidence of the grocery .In the end we will conclude the study and will sum it up towards some concrete learning outcome, which stern be practical in real business situations which we mickle face as business strategist working with any company. We will see how any company which facing problems like Bentley Security, can make cheeseparing strategic choices?1.1 Background of the studyBentley is a Security Company that has been trading in Gotham City for twenty five years. Recently, the senior counselling team met to reappraisal progress.Finance Director I am concerned about our recent financial performance and it seems to me that we are in danger of being taken over at a bargain price. Our return on leters equity is 2% below the industry average and we fall in a large debt arising from the leverage obtain of Security Services Inc. What we can do to improve our financial results as soon as possible and, at the same time, convince the market that we gull a long term viable future?Marketing Manager In my view we stupefy an excellent portfolio and our problem are mainly out-of-pocket to poor follow control. We progressed from our base in producing domestic appall systems into commercial systems and then acquired Security Services Inc which provides guard and watch services for commercial premise that capitalized on our core skills at each stage. We decided into diversify because the domestic market was saturated and there suck be en large increases in the number of suppliers because it is right off an easy business to attain into as the technology has become standardized. The commercial sector was growing due to the current economic boom however we have been stuck at 12% market share in the commercial systems market and while Security Services Inc had over 300 service contracts when we acquired it, we have non yet been able to attract any tender customers.Human Resource Manager I should point out that I find it difficult traffic with security personnel and this could be one reason for the fact that we dont make much profit on the security contracts.CEO If we minimal brain dysfunctionress the short and long term issues mentioned by the finance director, then we shall remove the incentive for anyone to take us over. But in the meantime, we should sitigate the possibility of undertaking a perplexity buy-out (MBO).IssuesOthers companies have competing priceFinance situation is poor2% less profits /retur ns on investors equityincrease debtPoor make up controlIncreasing saturation in domestic marketGrowing refreshful rivalsNo parvenu customer for security IncPoor performance of security staff bit pointBefore acquisition of Security Inc Bentley was performing well in alarms production, subsequently acquisition of that company things went poor as Bentley was unable to win new customers.Accounts issuesMore expenses at corporate HQMore interest softenments on debtsEffective use of product developmentLess expenditure on marketControl of cash flow that is negativeControl of loaningCommercial alarms and security Inc required improvementProduct development required as to a greater extent(prenominal) expenses and attentions on warranty demandsPrice is far less than market in commercial alarm its 500 as compare to 600 and in security private its 17000 as compare to 20000 per annumPlus Points25 years of experienceGood performance in domestic and commercial alarm productionsTar suitsNew targets that could make Bentley over again in growth can be its financial targets of increasing the profits and reduction of debts and other costs.Further it also required to win investor confidence over its performance in the market.Suggestions by CEORemoval of incentives for competitorsManagement buy-out2 Question OneUse strategic models to identify the actions the management team qualification take to deal with Bentleys short term and long term problems.2 AnswerBentley is an ideal case study to see how a business that was fashioning progress in last twenty five years suddenly started a decline that brought management to sit and analyze the situation before it is too late. To make a demote analysis of situation and get solutions for Bentleys short term and long term problems we need to make following analysis2.1 corporal FinanceAs the study shows that Bentley is suffering from financial problems. So, Bentley management required urgent attention and for that there can be few s hort term and other long term strategies to control over the finance issues.Short Term ChoicesBentley should make right sizing at its head quarter as it has extra staffing on its head office.It should stop debt as its costing more(prenominal) than on payments.Bentley should adjust more on marketing their alarms.Long Term ChoicesBentley should get more investment than loan by developing its market position.It should localize some finance on product development.It should vomit up finance on marketing.It should invest more on its charitable resource to get competent staff for security Inc.It should utilize its assets and inventories more into alarm production.Expansion matrixAnsoffs Product and Market MatrixFigure 1 Ansoff MatrixMarket PenetrationAs it is the strength of the Bentley they must(prenominal) try to recapture and get advantage of the existing market by promoting their domestic alarms and commercial alarms and try to get some repositioning of the brand.Market penetrat ion for Bentley required covering of the four main objectivesMaintain or increase the market share of current products this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal sellingIncrease usage by existing customers. For example by introducing loyalty schemes.Market DevelopmentThey can also go for new markets with the existing product course in these new markets. This means that the product will remains the same, but it is marketed to a new customers. Exporting the product, or marketing it in a new region.thither are many possible ways of approaching this strategy, includingNew geographical markets for example exporting the product to a new countryNew product dimensions or packaging for example, New distribution channelsNew pricing policies to attract different customers or create new market segmentProduct DevelopmentThis is a new product to be marketed to existing customers. Here the y can develop and bring in new product tenderings to replace existing ones. Such products are then marketed to our existing customers.DiversificationBentley can go for the diversification which can be obscure into horizontal and vertical.The horizontal diversification is the addition into the production program like new kind of alarms.The vertical diversification is at the sales stage where company needs to store products according to demand.Product Life CycleIf we compare the two alarms developed by the Bentley we can find that these products are on maturity date stage and looking towards a decline as Bentley fail to keep the innovation accordingly. They need more efforts to bring innovation changes and effectiveness of the products so they can put the product back on its growth.Figure 2 Bentley product life cycleSimilarly their door supervisors company or security Inc is hump in decline as they fail to generate new customers and now form here it seems total dog stage in a mar ket. close up they can either decide to keep it or they can go back to their core competencies of alarm production. If they indigence to retain it they need to redesign the human resource management which is completely fail to evoke any result since they acquired this company.Figure 3 PLC possibility for Bentley2.4 Value ChainWe can better encounter the actions of Bentley through it developed a competitive advantage and create shareholder value by a value chain analysis. In his 1985 book agonistical Advantage, Michael Porter introduced a generic value chain model (M. E. Porter 1998) that comprises a sequence of activities found to be common to a wide range of firms.The aim of these actions is to put forward to the customer a value of product that exceeds the cost of the process, and easily brings in a profit margin.As it can be analyze in value chain model that Bentley have some core competencies and the activities in which it can pursue a competitive advantage as followsCost a dvantage by better brain costs and squeezing them out of the value-adding activities.Differentiation by focusing on those activities associated with core competencies and capabilities in raise to perform them better than do competitors.Cost AdvantageA firm may create a cost advantage either by bring down the cost of individual value chain activities or by reconfiguring the value chain. As Porter identified ten cost drivers related to value chain activities, So Bentley can go through each and seek what is workable for them in this processEconomies of scale in production of alarmsCapacity utilization thats in alarm productionLinkages among activities at the companyInterrelationships among business units by aligning security inc with alarm businessInstitutional factors must be controlled especially in security Inc(regulation, union activity, taxes, etc.)At Bentley cost advantage also can be pursued by reconfiguring the value chain. Reconfiguration means structural changes such a new production process, new distribution channels, or a different sales approach. For example, FedEx structurally redefined express freight service by acquiring its own planes and pass alonging a hub and spoke system. (Fedex 1995-2000)DifferentiationBentley can achieve a differentiation advantage either by shifting individual value chain actions to add to distinctiveness in its alarms or it can get it by reconfiguring the value chain.It can go into forward integration in order to carry out some functions that were performed by its customers like categorization of its alarm systems and models according to customers need. It can adopt a backward integrate to manage over its inputs. It can implement new process technology or utilize a new supply channel.TechnologyBecause technology is in use to some degree in every value creating action, changes in technology can bring competitive advantage.Bentley is using various technologies in both primary activities and support activities as its w edded belowInbound Logistics TechnologiesTransportation of materials existent handling inside production placeMaterial storage at storesOperations TechnologiesProcess of production form tools used for production and handlingPackaging of the alarmsMaintenance of finished goodsTesting of alarmsBuilding design operationOutbound Logistics TechnologiesTransportation of alarms supply to supply storesMaterial handling inside storesPackaging for supplycommunications between all departments involvedMarketing and Sales TechnologiesMedia utilization ( Print/electronic/Audio/video)CommunicationsService TechnologiesTestingCommunicationsLinkages of ActivitiesBentley can redesign the alarms for with different shapes and qualities for different customers. This way even it can reduce manufacturing costs. If it is be able to reduce cost in one activity and as a result benefit from a cost reduction in another, from a design change and successfully reduces manufacturing costs and it also further impro ves due to this costs reduction. Thus it can such improvements the firm has the potential to develop a competitive advantage.Business Units Interrelationships perceptible interrelationships offer direct opportunities to create a synergy among business units. For example, Bentley can make its multiple units share whatever its possible among the business units to share for cost reduction. This sharing of the procurement activity can result in cost reduction.OutsourcingTo decide which activities to outsource, managers of Bentley must understand the firms strengths and weaknesses in each activity, both in terms of cost and capacity to differentiate. Managers may consider the following things when selecting activities to outsource.Competitive positionBentley has good track record of twenty five years in alarm business. It is one of good company in market. After it tried to expand its business into security provision (door supervisors) it facing more problem as this new acquisition is not performing well. If we closely analyze the investment situation it still putting les s on alarm business and getting more compare to its security personals business. Company is selling all its products on fair price as compare to market even if they decide to raise price in all precuts still they have advantage over their rivals in the market. They can easily attract customers on this pricing advantage and by creating new innovation in designing or promotions they can still come back into competitive position in the market.3 Question TwoIs the CEO correct to conclude that these actions will remove all incentive for another company to take over Bentley?3 Answer3.1 Porter Five synopsis of CompanyIn his book Competitive Strategy, Harvard professor Michael Porter describes five forces affecting the profitability of companies. (Porter 1998) These five forces, taken together, give us insight into a companys competitive position, and its profitability.RivalsFor Bentley rival is competito r within industry, this rivalry in the industry is very high for Bentley. As these rivals are competing with Bentley over following factors- Number of rivals in market Fixed costs Product differentiationNew EntrantsOne of the defining characteristics of competitive advantage is the industrys barrier to entry. In security industry its very low for every one starting security firm as there are many barriers from government and its security regulating agencies. Bentley can delight in benefits of common barriers to entry Patents patented technology can be a huge barrier preventing other firms from joining the market. High cost of entry the more it will cost to get started in an industry the higher the barrier to entry. Brand loyalty As Bentley is in market since 25 years its definatley have some worth related to its products specially its alarm systems.Substitute ProductsBently should look keenly for what the companys other competitors are doing, and what other types of products are available in the market as there is advancement in technology so there is high risk from others competitors for Bentley. As is the case dealing with new entrants, company can go into an aggressively price to its products to keep people from switching.Buyer PowerThere are two types of buyer indicant. The first is related to the customers price sensitivity. The other type of buyer power relates to negotiating power.Conversely, if a company sells to a few large buyers, those buyers will have significant leverage to negotiate better pricing. whatsoever factors affecting buyer power are Size of buyer Number of buyers Purchase quantityBentley have advantage in its price and durability of products it have less buyers power broblem.Supplier PowerWhen multiple suppliers are producing a commoditized product, the company will make its purchase decision based mainly on price, which tends to lower costs. On the other hand, if a single supplier is producing something the company has to have, th e company will have little leverage to negotiate a better price. Here for Bentley things are favorable with less suppliers power as they depend less over the raw materials.A few factors that determine supplier power include Supplier Switching costs Uniqueness of product4 Question ThreeIf the team decides on MBO, how much should they be prepared to pay?4 Answer4.1 Management Buyouts (MBOs)A management buyout MBO is the purchase of a business by its management.Some time owners or the shareholders of any business want to sell the shares of the business or company. For that they give opportunity to the existing management to buy the business. As they know the details of the business and are in a strong position both to worth it and also run it. One can assume that they will make good effort for themselves than for other people.A management buyout is a rare thing in business likely to be a great test of any company and its managements skills in business. Bentley can sell its security Inc as its not performing well and putting problem for the business. For a successful MBO Bentley team may require to focus on some pre MBO arrangement. They not only have to secure their own money and career, but they have to show that they have the vision and proper ability to change their organization and to deliver better outcome as results. Another requirement is their enthusiasm and commitment to convince the management who will buy it that their MBO will work. There are following procedures that required to be followed for a successful MBO.Decision to proceedManagers as investors will be keen to invest in Bentley with predictions which offer the chances of gaining the profits they will invest for. As potential returns maybe higher than current returns because people in new setup will work harder. An understanding of the factors affecting Bentley can help to set forward actions properly.Business planMBOs are normally highly geared, so the Bentley needs to be able to produce cash and success in the short term. They may have tactics which are practical in the long term, though it will be glib to assure the investors among management that their future is on growth side.Form the management teamA very significant part of a successful MBO is to put a management team that has a high-quality record. Possible investors will like to know how they can make adjustments in than the present team. Bentley must therefore put a clear deliberate plan for the business.Arranging the fundingValuing Bentley Company is complex matter and here is no set rule. Whatever investor will give that will be relate to many things. Those are the balance sheet and current profits. The future potential of the business will be vital but sometimes want of the present owners to sell can be important.Agreeing termsThe financing for an MBO normally include the decision-making board and its own interest, its equity and debt position. Different management investors will be looking for diverse retur ns from this deal, base on the assumed risk they will be taking.Deal co-ordinationThere can be no set rule for the management to invest into the management buyout. Still, they will require showing the guarantee to the company by creation a major asset of their money, although there can be a massive strain resting on their time and skills.CompletionNegotiating for buyout is not always very simple, as there is some concern of unsatisfactory present relations as company is going for MBO. Some management buyout teams can pretense their advisers to take opening move toward success. A talk to buy any business is always a complex activity, and there is fact that seller has vital test. The information contain in the factsheets must never be relied lying on top.5 Conclusion of StudyWe can see that Bentley was handling alarm systems selling effectively but after adopting the security firm it went into many problems. Now it is necessary for them to try a successful management buy-out for that, which can make such arrangements that will help it to get maximum future investment to cover its problems related to other products.Furthermore they can go for a right sizing and downsizing to control the open of expenses and profits. This way Bentley can go back to its profit position as it was in past before adaptation of the security firm.