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!

Question 3(b):

As a forward-thinking entrepreneur, Mr. Owen Mills is pondering going into manufacturing something, but he has to think carefully about the product to be manufactured. Therefore, he needs to understand what the Value Chain is about as well as the types of strategies that he could utilize to gain a competitive advantage.

What information would you provide to Mr. Mills and his family regarding the Value Chain as they think seriously about going into the manufacturing sector?

Also, what are the possible strategies that could be utilized once the Manufacturing company becomes established?   Provide justification for your advice.

Discuss the strategic role of employee training from the perspective of the organization and the employee.

Answer 1

Answer:-

3(b)

Significance of Value Chain

The value chain is a procedure with which an association distinguishes the exercises that increase the value of the completed item and examine these procedure to decrease cost or to made separation. The value chain assists with bringing various advantages including the improved progression of items just as materials, better administration of accounts and simple progression of information

Strategies To Gain a Competitive Advantage

Separation: In this system, the company fabricate an unexpected item in comparison to its rivals with new item includes

Cost Leadership Strategy:- Companies can develop quick by giving items at low ost than its rivals

Operational Effectiveness Strategy:- Companies can perform better than others by having operational gauges superior to the contenders

Imaginative strategies: Company can push forward if the company can get things done in another and distinctive manner.

Strategies for Manufacturing Company

Continuously recall the client is the ruler

Continuously attempt to improve the procedure

Decrease squander

Attempt to be the market head in a specialty showcase rather than a little fish in a major market

Make an inventive work culture inside the company

The Strategic Role of Employee Training

Expanded Productivity:

Training improves profitability and effectiveness of the employees

Less Supervision:

An all around prepared employee needs just less oversight

Improves Morale:

Training assists with improving the confidence and occupation fulfillment of the employee

Expanded Employee Retention:

Recruiting and onboarding forms are expensive and often tedious. Training assists with making the employee increasingly faithful to the company

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