Question

In: Operations Management

Owen Mills Limited began its operations on Trumpet Land, a beautiful island in the Caribbean with...

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.
2
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.

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.

1.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?

Solutions

Expert Solution

Importance of Value Chain

The value chain is a process with which an organization identifies the activities that add value to the finished product and analyze these process to reduce cost or to created differentiation. The value chain helps to bring numerous benefits including the improved flow of products as well as materials, better management of finances and easy flow of information

Strategies To Gain a Competitive Advantage

  • Differentiation: In this strategy, the company build a different product than its competitors with new product features
  • Cost Leadership Strategy:- Companies can grow fast by providing products at low ost than its competitors
  • Operational Effectiveness Strategy:- Companies can perform better than others by having operational standards better than the competitors
  • Innovative strategies: Company can move ahead if the company can do things in a new and different way.

Strategies for Manufacturing Company

  • Always remember the customer is the king
  • Always try to improve the process
  • Reduce waste
  • Try to be the market leader in a niche market rather than a small fish in a big market
  • Create an innovative work culture inside the company

The Strategic Role of Employee Training

  • Increased Productivity: Training improves productivity and efficiency of the employees
  • Less Supervision: A well-trained employee needs only less supervision
  • Improves Morale: Training helps to improve the morale and job satisfaction of the employee
  • Increased Employee Retention: Recruiting and onboarding processes are very costly and often time-consuming. Training helps to make the employee more loyal to the company

The idea of going into the manufacturing sector is right as per the value chain and business must change according to the changing demands of the environment as the Owen mills were into the trading business but due to changing conditions it was right decision to expand the business.

The possible strategies that could be taken once the manufacturing company becomes established are as follows-

1.the company must try to gain more knowledge about other high demand products so that they can be produced as per demands

2.the balanced investment approach must be taken so that more profit can be achieved in limited resources

3.the strong bonding and links with the market and clients must be maintained so that we can achieve more profit and get aware of the latest trends

4.the proper work must be provided to labour according to their effeciencies


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