Question

Case Study

Owen Mills Limited

We have all that you want!

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 (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 full-time 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 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
• 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
• Changes in demographic factors
• Changes in economic factors and down turn in the economy
• Slow growth in the market

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.

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 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!

Q1.      Mr. Owen Mills, the owner of Owen Mills Limited has been operating a successful business since 1970. However, he is not fully aware of what strategic management and planning entails. You are hired as a consultant to advise Mr. Mills, his family and selected members of the Company about what strategic management and planning entails as well as how important it is for the organization to engage in strategic management and planning.   

What would you say to the members present at the meeting so that they can have a very good understanding of what strategic management and planning entails, and why they should engage in the process so as to maintain the competitive advantage of Owen Mills Limited? (Total - 25 marks)

Answer 1

Every business organizations are attempting to prevail in the market and become the most predominant of all, yet not all business are getting the opportunity to be at that level. To accomplish the achievement in present world there are some idea which the business organizations ought to adjust and figure out how to execute, one of which is "Strategic Management". It is the energetically prescribed process so as to administer the business world; Strategic administration is only arranging, monitoring and breaking down all the vital resources of the organization which are required to accomplish the goals and goal of the business. The process encourages the organization to break down the current circumstance, articulate the systems, use them and screen the viable results of the equivalent. SWOT examination is one of the processes of strategic administration, this idea causes us to analyze the qualities and shortcoming of the business, and furthermore it encourages us to determine the adequacy of the assets and capacities of the organizations.

At the point when the process of strategic administration has finished then the process of strategic arranging comes into picture which encourages us to accomplish the long haul and momentary goals of the business. It is only the process of accomplishing the point and goals of strategic administration. This process comprise of following advances: 1) Determine the goals and target of the organization 2) Analysis of the information and information accessible to accomplish the goal 3) Formation of methodologies to achieve the goals 4) Implementation of the procedure shaped 5) Monitoring

These are the means to make a getting ready for strategic administration which is generally appropriate and powerful strategy to utilize and achieve the necessary goals. The significance of this technique is quite clear since when your business isn't running as indicated by you then there must exists a few escape clauses and these provisos can be figure from the equivalent and successful coordination of various offices by comprehend and applying the strategy for strategic administration. It will consistently give strong and away from of accomplishing the vision and strategic the business and make normalized ways to deal with be truly outstanding in the market.

Presently so as to address the individuals from the business organization to comprehend the idea of strategic administration, above all else it would be significant for them to realize what obligation they hold and how their duty is useful in accomplishing the ideal goals of the business. In the wake of deciding the obligations of every person of the group, they all ought to know about what the organizations' dreams and missions are?

The leading body of the company at the absolute starting point should set out the guidelines to address the group in which the overseeing chief should hold the spot for operational administration and supervision of the gathering. At that point the supervisory crew should express and examine the methodologies and yearly plans and furthermore the money related state of the organization. The company should direct the business meeting every week to look at the advancement of the implementation of the systems. So these are the thoughts the business ought to adjust so as to achieve the possibility of strategic administration. The business and its individuals ought to take part in this process with the goal that they can prepare themselves to turn into the best accessible asset for the organization.

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