Question

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. 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

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 4 (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 fulltime 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 5 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 6  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

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. Changes in demographic factors  Changes in economic factors and down turn in the economy  Slow growth in the market

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 8 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!

Question:

Q1 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.

Q1(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.

Q1(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.

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.

Answer 1

Answers-

answer-1-a)

The strategy identified was DOOR to DOOR marketing. Mr. Mills was an astute businessman who was always thinking of the following move to develop the business. Therfore he took this initiative and discovered that there were retirees and housewives who were at home during the week.

He was successful because -

I) He identifed that there were retirees who were at home and they can utilize the item which would lead to higher sales.

ii) He identified earlier that his customers were residents from all over the island.

iii) He checked everything himself and got himself engaged in increasing the sales and brand value of the item.

He didn't depended on anyone else and started converting his ideas into physical reality himself.

answer-1-b)

The strategy used by Mr Mills was Innovative strategy. Innovative strategy means taking right decision in business at the opportune time for the betterment of business.Mr mills had a foresight to perceive the demand for products for protective gears like Masks.

#He was successful around then because of the following reasons -

I) Masks and other Protective hardware was in demand at this point of time.

ii) Mr mills took right decision at correct time.

answer-1-c)

Because of the deadly infection COVID 19 many of the nations are affected and ofcourse there will ne negative impact on the business. According to the tagline of Owen Mills constrained "We have all that you want!" they should manufacture something which all the customers would jump at the chance to purchase at this point of time or is a need for them to purchase. Exactly what Mr mills thought about making Protective gears like masks , because there is a shortage of protective gears like masks in many parts of the world and this exactly would accommodate their tagline and would also satisfy their corporate social responsibilty, which ultimatel would increase their brand name and value globally.

Strategies or approaches that Mr Mill can utilize are as per the following-

I) Direct exporting - Direct exporting means that you are selling your item where you actually want to sell or target the market. For example - If Mr mills want to sell his item in spain , then he gets his item in the spanish market and stores and perceive how to item does there . This can be one of the approaches which they can utilize.

Justification - Provided that Mr slopes has acquired advanced level knowlede of spanish language and other subjects he can comfortably talk with the spanish locals.

ii) Franchising "OWEN MILLS LIMITED" - Undoubtedly, Owen Mills Limited has been a successful enterprise and being a succesful enterprise they can easily franchise their business in the target market. They can also adopt this strategy because in this season of COVID 19 it would be hard for him and his team to move out of the city and do sends out.

Justification - Franchsing could work because owen mills constrained has a brand name and value in Trumpet Land and Mr own mills was awarded Business Man of the Year Award in 1999. So definitely there would be investors who would want to purchase his franchise. This will also increase the brand name and value globally.

iii)Piggyback - By the year 2000, Mr. Owen Mills had spread his wings to the eastern, southern and western part of Trumpet Land. Mr mills and his company was already selling his item to other residential companies in the trumpet land. He can demand that local companies (on the off chance that they have international existences) to take his item to international agencies too.

Justification - Mr mills sells his item to eastern , southern and western part of trumpet island , on the basis of his existing business relationship he can attempt make it into international markets that way.

Types of experiences that they may encounter, and which may not be always positive-

On the off chance that they decide on the option of physically opening another branch in some foreign country , they may have faced -

I) Language barriers - We all realize that on the off chance that we dont speak the same language as our customers , communication will definitely be a challenge. And there will be customers who will pass judgment on you on the basis of your language which definitely is not a positive encounter.

ii) Local Competiton - Local comopetition is there in each and all aspects of the world. In the event that some other shops from foreign market goes to the place where the local markets sell their item , they will start making hindrances in selling of your item. This clearly may put the company at a disadvantage directly from the start.

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