Final_Strategic_Paper_Bus475

Final Strategic Paper Many different aspects go into opening and running a business, including the type of business to start, the type of prospects you are trying to attract, advertising and promoting a business, and actually running it on a day to day basis. Three main things to consider before opening up a business are the vision statements, mission statements, and guiding principles and values that will go into your intentions of the business. Not only are these things imperative to starting a business, they will be a guide to operations and the strategic direction of the business. Company Overview Folchi’s Furniture is a business originated from just outside of Memphis, TN and is a leader of upscale furniture, carrying brand names such as, Thomasville, Broyhill, Ashley, and Hooker furniture, just to name a few. With the correct market analysis and planning, Folchi’s Furniture is planning to open their first store in July of 2010. This furniture store will offer a variety of furniture to choose from, including bedroom, living room, office, dining room, mattresses, entertainment, and accessories. Folchi’s Furniture will also provide people with the best possible customer service anyone could ask for. Our organization is composed of an extremely talented, visionary group of design professionals who foster their creativity in an environment of strong client relationships. Top performing on-site management and design teams create strategic marketing plans put in place for promotional and advertising purposes. There will be a total of twenty employees working inside Folchi’s Furniture, including two people in the HR/Payroll department who will be responsible for hiring, benefits paperwork, payroll, and training of new associates. There will be two people over the advertising and marketing department who will be responsible for television, radio, and signage advertising of the store. They will also handle promotions, including a “buy-one-get-one-free accessory day”, a “no interest for 24 months weekend,” as well as a referral program for our prospective clients. There will be an office manager and two other office staff personnel to handle the bookkeeping, special orders, back orders, and delivery reports, as well as answering the telephones and delegating the sales people online orders. One person will be responsible for the design team and the sales floor. This person will also have the knowledge to set up appointments with certain prospects to go to their homes and give them design advice. There will be one manager over the sales people who will be responsible for setting up appointments with furniture reps to have additional training and weekly meetings on the status of their specific furniture company. The store manager will also manage the weekly schedule and oversee day to day operations. The other twelve people will be responsible for working on the sales floor, working 40 to 45 hours per week and making hourly plus commission. Their hourly rate will be determined based on what commission is made by each salesperson each week. Mission Statement A mission statement is a clear and succinct representation of the company’s purpose for existence. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products and services, geographic domain, and expectations of growth and responsibility (BRS, 2009). The mission statement for Folchi’s Furniture is as follows: We will strive to be in the forefront of contemporary furniture industry online as well as our state of the art and inspired online furniture store. Know that you are in good hands when you are shopping for any type of custom furniture. We are dedicated to our client’s experience to be enjoyable, memorable, and unique. This mission statement states that Folchi’s Furniture’s main interest is providing our customers with the best customer service and most memorable experience of a lifetime. Customer service is one of the most important aspects to a business. If a customer enjoys their visit the first time they enter the store or shop online, they will continue to come back as long as they enjoy the product being offered. Since there are so many different types of furniture being sold at Folchi’s, on top of all the custom items you can order, each customer can be taken care of and find what they need even if they have a different preference in what they are looking for. Vision Statement A vision statement is sometimes called a picture of your company in the future but it is so much more than that. Your vision statement is the inspiration, and framework for all of your company’s strategic planning. When a vision statement is being written, it is articulating the dreams and hopes of what you hope your business will become. While a vision statement doesn’t tell someone how your company is going to get there, it will set the direction for your business planning (Ward, 2009). Within the first five years of operating business, Folchi’s Furniture plans and hopes to become one of the top furniture stores in the heart of downtown Memphis as well as online sales with their sophisticated design and endless possibilities for design types. This vision statement shows how Folchi’s Furniture plans to become something so big and in such high demand that they will eventually be one of the top furniture stores in the Memphis area. With over half a million people living in Memphis, Folchi’s wide range of designs and special order furniture that is available, they can relate to anyone’s sense of creativity. Value Statement Since the mission statement describes the overall purpose of the company, and the vision statement shows where a company intends to go over time, the value statement will represent the core priorities in the company’s culture, including what drives priorities and how they truly act in an organization. In order for Fochi’s Furniture to be successful, there must be a driving force to treat people as they are meant to be treated when purchasing furniture from us. Folchi’s value statement would be as follows: Fochi’s Furniture will do their best to provide each individual with the most memorable and unique experience possible. The employees at Folchi’s Furniture will strive to complete their clientele’s needs and visions with assisting them with making their homes feel like home sweet home. Folchi’s Furniture has based their value statement on what they envision how they want their customers to feel when furniture shopping. Strategic Direction People use furniture in their homes to express the way they feel. When people get off work and go home, they expect to go home to a place where they can sit back and relax. Folchi’s design team will allow that to happen by making their customer’s design dreams come true. With the combination of the mission, vision, and value statement, Folchi’s Furniture has made a distinct and detailed outline on how they envision their company to run. Legal and Regulatory Factors Folchi’s Furniture supplies financing for those who would like to take advantage of “buy now, pay later.” They offer anywhere from six months financing all the way to twenty-four months, depending on how much the total sale is. As a legal factor, Folchi’s is solely responsible for keeping all financing information strictly confidential. Once the sale is made and the furniture is delivered, the financing is out of the company’s hands and the customer must go to the financing company for any payments or issues. Some regulatory procedures concerning financing will be to perform a credit check for the customer associated with the approval process. When delivering furniture, the delivery staff also has regulatory procedures to keep in mind. They may not touch anything other than the furniture being delivered. If the delivery is cash on delivery (COD), they must first accept payment before the actual delivery. They will remove additional leftover bedding if asked prior to the delivery, and they may not lift any electronics, for the obvious sake of liability reasons. Economic Factors Folchi’s Furniture is hoping to have the success and the ability to move in the right direction with the respect of attitudes from society and their customers. Obviously some economic factors that will affect this business is income, inflation, recession, and interest rate of financing. Income could be considered an internal and an external factor, given the fact that the customers purchasing furniture have an income just like the employees working for Folchi’s. Considering the economic downfall our country is in right now may make things more difficult to get started. The interest rate of the financing starts off at zero percent, as long as the financing is paid off within the term agreed. If not, it will be based off the customer’s credit rating, and can range anywhere from eight percent to twenty percent. Technological Factors When having an online site, many technological factors go into the design and layout of the site. If purchasing online, the majority of the time, it will save the customer money because there is a discount offered to online purchases. The customer also has more of a selection to choose from when shopping online. One downfall to online purchases is that the customer will have to pay for the item to be delivered if they would like, but to send the item to the store for pick up is free to the customer. The website is updated weekly with the new items coming in, daily with the price changes that are set, and hourly with the updates in inventory. The online system is integrated to the software used in the store so it will show any changes in inventory status immediately. It becomes important to identify the internal factors that go into the success of this business, some of them including the strategy, goals set in place, culture of the people around, and leadership of the company. Strategy Factors Considering how many furniture stores are located in Memphis, TN it is very important to stand out from the rest. The best way that Folchi’s knows how to do so is to have the best prices for the most high quality furniture, and having customer service that will stand out among the rest. Selling brand names like Ashley, Broyhill, and Thomasville among many others, it is clear why Folchi’s considers themselves a high designer furniture store. When compared to other stores, Folchi’s does stand out in quality. This is among one of the many strategies they have set in place to become number one in sales in the Memphis area. Goals Obviously goals are going to be a part of strategic management, and as it states in the vision statement, Folchi’s plans to do what they can to become number one in sales throughout the store and throughout online purchases within the next five years. Many things go into planning this goal, including advertising, marketing, promotional marketing, customer service, having an intelligent design team, and management. Culture Just like different people like different types of things, Folchi’s has made a commitment to provide the most unique and different types of furniture that is available in today’s market. This includes contemporary, urban, chic, modern, antique-preserved, wrought iron, and traditional just to name a few. The great thing about Folchi’s Furniture is that there are over a hundred furniture stores to order from, including special orders from many of the stores, based on preference. If there is something a customer is looking for that is not inside or carried in the store, there is a comfortable seating area for the customer to view catalogues of different stores. The design team at Folchi’s has the experience and right mind to be able to point someone in the right direction. Leadership Leadership is considered an asset to the company because this is what will set them apart from any typical management. The management team at Folchi’s strives to provide leadership to their fellow coworkers and customers to achieve long term and short term goals that are set in place for the company. This leadership is displayed on a daily basis to serve the needs of the staff and customers. Adapting to Change The management at Folchi’s Furniture is aware of the economy at all times. Being able to have weekly meetings, they assess their goals weekly and implement any changes necessary to reach them. As for long term goals and the mission and vision statements, they stay in tact and do not change, and will not change unless an economic crisis takes place. There are weekly sales goals that are set in place for the sales team and online shopping. When these goals are not met, there are different ways to have a positive affect, including promotions, financing options, and a referral program for our new customers. Being able to adapt to change is something that a new company must do in order to maximize profits at the right time, and Folchi’s is in the process of doing so. Issues and Opportunities Being a new furniture store will open many doors to any opportunities present in the economy. The main opportunity for Folchi’s Furniture would be considered being the only furniture store that offers such a wide selection of the types of furniture being sold. This opportunity alone will affect different cultures and people seeking to buy a unique piece of furniture or accessory. Another opportunity is the state of the art website that has been built for customers to use a search engine to easily find what they are looking for, based on style, brand name, color, or furniture type. Some issues also may arise, when thinking about competition. Although Folchi’s provides a wide range of different styles, some people would rather pay less and get less quality items because of the lack of money to spend on something they really want. Another issue, as with any new company, is just getting the name out there and letting people know the furniture store is now open. Advertising is one of the most important ways to let your customers know you are present. One question that comes to mind is, “Who is going to want to spend the money to buy upscale furniture'” The main way to prevent these issues is just to have a target market and advertise more to the right kind of people. Obviously a college student will most likely not have the funds and extra money to shop at a designer furniture store, so Folchi’s must promote and advertise their items in certain parts of town, on certain radio and television stations, and across billboards on major interstates surrounding the area. Just like any other company, strategic management is something that everyone strives to have to be able to boost sales and earn more revenue. Although most businesses fail within the first five years, Folchi’s has what it takes to be successful. Being able to have an analysis on the organization gives Folchi’s a head start in doing what it takes to develop a strategic vision and plan and define how these plans will be implemented throughout the life of the business. |  |Strengths |Weaknesses |Opportunities |Threats |Trends | |Legal and Regulatory |Having an honest and |Not being able to |If they call in |Other furniture stores |Depending on what the | | |professional delivery|move old furniture |advance, we can arrange|who do move furniture |customer is | | |team |because of liability|to remove bedding | |purchasing, delivering| | | |reasons | | |different merchandise | | | | | | |and accessories | |Economic |Being able to have |recession, income |Inflation, people would|Recession, downfall in |Sales prices and | | |zero percent |levels dropping |purchase more |profits |promotions available | | |financing available | |merchandise | | | |Technological |Online shopping |Must pick up the |More options to choose |Competition of online |Availability to | | | |order if shopping |from online than in |shopping and their |purchase whatever | | | |online |store |promotions |style you'd want | |Strategy |Having goals set in |Competition |Implementing strategic |Competition |Depends on what the | | |place | |planning | |market and economy | | | | | | |does | |Goals |Mangement's help to |Changing of the |Help success of the |If something comes in |Depends on what the | | |achieve goals |economy |business |the way of the goal, |market and economy | | | | | |must change future |does | | | | | |planning | | |Culture |Having different |May not have what |Can expand store based |Recession, downfall in |May not have what | | |styles and brands to |someone is looking |on consumer wants |profits |someone is looking for| | |choose from |for | | | | |Leadership |Mangement's help to |if economy changes, |Opportunity to learn |Staff's ideas may not |Having two different | | |achieve goals |management must be |from a diverse staff |agree with management |managers to help | | | |willing to change | | |achieve goals | | | |goals | | | | Balanced Scorecard The balanced scorecard for Folchi’s Furniture is to be used as a guide for the next three years of operations in the financial, customer service, operations, and learning and growth fields. It is imperative to have a plan and to be able to carry out that plan for future reference to make the company stronger and grow at its best. Along with each area, there is a list of strategic objectives mentioned, the measure that needs to be taken, and the targets at which the company would like to reach each year. Along with the implementation of the mission and vision statement, these are the necessary arrangements that need to be made in order to have a successful three years in business. When the balanced scorecard is put into place and everyone works together as a team to reach the needed targets and everything, the business is sure to run smoothly and expectations are already known throughout the industry. Scorecard Four Balanced Areas for Measures |Strategic Objectives |Measure |Metric |Targets |  |  | |  |  |  |  |Year 1 |Year 2 |Year 3 | |Financial |Manage and control special orders |decrease number of cancellations, deposit is forfeited if cancelled |Decrease special orders by a percentage |20% |25% |35% | |  |Yearly Revenue |Create targets and supply initiatives for employees to achieve |Increase revenue a percentage each year |>6% |>7% |>8% | |  |Financial Leverage |Pay off liabilities and do not finance assets |Decrease the amount of financial leverage by a percentage each year |95% | |  |Present sales initiatives |Expand in sales force |Increase yearly sales amounts for each associate |>$100K in sales |>125K in sales |>135K in sales | |  |Inventory Management |Yearly inventory check |Decrease the amount of missing inventory |20% |15% |7% | |Learning and Growth |Increase customer service skills |Exceeding customer expectations through customer satisfaction |Increase the amount of positive feedback each year by a percentage |20% |20% |20% | |  |Advertising |Make more people aware of the business |Increase amount of traffic each year |>10% |>15% |>25% | |  |Technology |Stay up to date with online promotions and sales |Increase the amount of people who shop online each year |8% |8% |8% | |Financial Within the financial area, the company would like to manage and control special orders by being able to decrease the amount of special orders that are being cancelled. This costs the company a lot of money because once the special order is made, it must be paid for to the company making the product. It will then be shipped to the store after the item is complete, and in order to cut down on the costs, the customer will have to put up a 20% deposit on all special orders. If the order is then cancelled, the customer forfeits that deposit. Folchi’s Furniture is also looking to increase yearly revenue by placing special initiatives among the sales representatives to higher their targets of what they sell. Financial leverage is expected to decrease because the company would like to take its extra revenue to pay off debt accounts. Customer Within the customer service area, the amount of customers who come back for a second visit needs to be increased, and will do so by creating special promotions and advertisements throughout the store. Customer feedback is relevant to their personal experience which will in turn help with our day to day operations and increase the customer service aspect of things by providing customers with what they want out from their experience to our store. Folchi’s Furniture will also have a referral program where a previous customer will be redeemed a gift card for each referral, or new csutomer they send to the store. Internal Operations and Processes Internally, Folchi’s Furniture will have employee evaluations and expect to raise the percentage on each review each year. They will also have sales initiatives, where the sales representative will have a target they will need to reach each year, and be provided with a raise or gift card of their choice when the target is reached. With all the accessories that can potentially be stolen or misplaced, Fochi’s Furniture will have a yearly inventory count where everything inside the store is counted, and there will be training courses for all employees to take to decrease the number of missing items throughout the store. Learning and Growth In order for the store to grow, technology and advertisement must be present. In the technology department, it remains important to keep up with all online sales and promotions, as well as tracking inventory for customers’ orders. There will be additional promotions going on with the advertising section of the store, so that more people will become aware of the type of furniture that Folchi’s carries. Customer service skills need to be increased by increasing the amount of customer feedback each year. In conclusion, the balanced scorecard is something that has potential to have a positive affect on each and every single person involved with this store, from top management to customers that come in and shop for what they envision their dreams to become inside their home. As long as the targets are met each year, the business will become more and more stable. The balanced scorecard gives an extra insight of how Folchi’s Furniture intends to run their business for the next three years. References BRS, 2009. Mission Statement. Retrieved July 22, 2009. http:// www.businessplans. org/mission.html Ward, S. 2009. Vision Statement. Retrieved July 22, 2009. http:// sbinfocanada.about. com/od/businessplanning/g/visionstatement.htm#