Strategic Business Management And Planning Bentley Security Company Marketing Essay

Strategic caper Management And Planning Bentley Security high society marting Essay argumentation is a dynamic field, (education 1951) where things reassign fast way. If well-nighwhat comp each slays com re ber error in its decisions either short scathe or keen-sighted boundarys it is always on losing side, and whatsoevertimes there is no come coer from a dog plant in a dynamic trade. In this eccentric test we pull up stakes learn how process models and other(a) tools inspection and repair to hit the books the situation of any(prenominal) moving in and how companies asshole in effect engagement these compendium tools to help them in bad situation as in this case study Bentley Security corporation is facing.For answering the three questions of the case study we give go into compend of the situation using by use of process model analysis, porter quintuplet analyses and SWOT analysis, while answering to first question. We entrust also learn through the a nalysis of corporate finance, expansion matrix for family, its ingathering life cycle, its crop positioning, its comfort conca ten dollar billation and its war-ridden position. For answering second question we impart see why ac caller-out was wander to realize its core group competency cerebrate to its hold dear doings. In final question we will answer dismember the expected future meshwork as said by the chief executive officer of the telephoner that if they will be capable of overcoming the issue of bargain price, retrieve over equity, rising debts, changing protective wrap uping Inc into profit generating component of disdain and by gaining the confidence of the market .In the end we will think the study and will sum it up towards some concrete schooling knocked out(p)come, which skunk be practical in real business situations which we grass face as business strategist working with any company. We will see how any company which facing chores like Bent ley Security, hindquarters reach good strategic choices?1.1 Background of the studyBentley is a Security Company that has been trading in Gotham City for twenty phoebe bird years. Recently, the senior prudence team up met to re gull progress.Finance Director I am refer about our recent financial performance and it seems to me that we are in risk of exposure of being taken over at a bargain price. Our give way on featureers equity is 2% on a lower floor the indus testify average and we urinate under ones skin a large debt arising from the leverage obtain of Security Services Inc. What we understructure do to improve our financial results as soon as manageable and, at the same time, convince the market that we arrive a farsighted term viable future?Marketing Manager In my view we have an excellent portfolio and our problem are mainly due to distressing embody control. We progressed from our base in producing domesticated scandalise systems into commercial systems a nd because acquired Security Services Inc which provides guard and watch services for commercial premise that capitalized on our core skills at each storey. We defined into diversify because the domestic market was saturated and there have been large increases in the bout of suppliers because it is now an easy business to induce into as the engineering has require standardized. The commercial sector was growing due to the current economic bonanza tho we have been stuck at 12% market component in the commercial systems market and while Security Services Inc had over three hundred service contracts when we acquired it, we have not yet been able to eviscerate any revolutionary customers.Human Resource Manager I should point out that I find it difficult dealing with earnest personnel and this could be one reason for the fact that we dont get along much profit on the tribute contracts.CEO If we address the short and long term issues mentioned by the finance learnor, the n we shall remove the incentive for anyone to take us over. however in the meantime, we should robeigate the possibility of undertaking a trouble buy-out (MBO).IssuesOthers companies have competing priceFinance situation is poor2% less(prenominal) profits /returns on investors equity change magnitude debtPoor exist controlIncreasing saturation in domestic marketGrowing juvenile rivalsNo new customer for security IncPoor performance of security facultyTurning pointBefore acquisition of Security Inc Bentley was performing comfortably in qui vives production, after acquisition of that company things went poor as Bentley was ineffective to win new customers.Accounts issues more(prenominal) expenses at corporate HQMore interest payments on debtsEffective use of product developmentless(prenominal) expenditure on marketingControl of cash flow that is nixControl of loaningCommercial alarms and security Inc required improvement reaping development required as more expenses and atte ntions on warranty demands equipment casualty is far less than market in commercial alarm its five hundred as canvass to 600 and in security individualized its 17000 as compare to 20000 per annumPlus Points25 years of experienceGood performance in domestic and commercial alarm productionsTar submitsNew targets that could look at Bentley again in growth can be its financial targets of increasing the profits and decline of debts and other cost.Further it also required to win investor confidence over its performance in the market.Suggestions by CEORemoval of incentives for competitorsManagement buy-out2 Question OneUse strategic models to identify the actions the guidance team might take to deal with Bentleys short term and long term problems.2 AnswerBentley is an ideal case study to see how a business that was making progress in last twenty five years suddenly started a decline that brought management to sit and analyze the situation forwards it is too late. To make a better an alysis of situation and get solutions for Bentleys short term and long term problems we urgency to make hobby analysis2.1 Corporate FinanceAs the study shows that Bentley is suffering from financial problems. So, Bentley management required urgent attention and for that there can be few short term and other long term strategies to control over the finance issues.Short Term ChoicesBentley should make aright sizing at its head quarter as it has superfluous staffing on its head office.It should stop debt as its costing more on payments.Bentley should adjust more on marketing their alarms.Long Term ChoicesBentley should get more investment than loan by developing its market position.It should effect some finance on product development.It should put finance on marketing.It should invest more on its human resource to get effective staff for security Inc.It should utilize its as bandings and inventories more into alarm production.Expansion matrixAnsoffs harvest-festival and Market M atrixFigure 1 Ansoff MatrixMarket PenetrationAs it is the strength of the Bentley they must try to recapture and get wages of the be market by promoting their domestic alarms and commercial alarms and try to get some repositioning of the brand.Market penetration for Bentley required binding of the four main objectivesMaintain or increase the market share of current products this can be achieved by a combination of hawkish pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal exchangeIncrease usage by existing customers. For example by introducing commitment schemes.Market DevelopmentThey can also go for new markets with the existing product range in these new markets. This means that the product will remains the same, but it is marketed to a new customers. Exporting the product, or marketing it in a new region.There are umpteen possible ways of approaching this strategy, includingNew geographical markets for example exporting the product to a new countryNew product dimensions or packaging for example, New distribution channelsNew pricing policies to reap contrary customers or create new market segmentProduct DevelopmentThis is a new product to be marketed to existing customers. hither they can develop and innovate new product offerings to re come existing ones. Such products are then marketed to our existing customers.DiversificationBentley can go for the diversification which can be separated into horizontal and good.The horizontal diversification is the addition into the production program like new kind of alarms.The vertical diversification is at the sales stage where company needs to storage products according to demand.Product Life CycleIf we compare the two alarms actual by the Bentley we can find that these products are on maturity stage and looking towards a decline as Bentley fail to keep the designing accordingly. They need more efforts to bring innovation changes and effectiveness of the pr oducts so they can put the product back on its growth.Figure 2 Bentley product life cycleSimilarly their door supervisors company or security Inc is complete in decline as they fail to generate new customers and now form here it seems total dog stage in a market. Still they can either decide to keep it or they can go back to their core competencies of alarm production. If they want to withhold it they need to design the human resource management which is completely fail to produce any result since they acquired this company.Figure 3 PLC possibility for Bentley2.4 measure ChainWe can better understand the actions of Bentley through it developed a competitive gain and create shareholder look upon by a value chain analysis. In his 1985 book Competitive profit, Michael Porter introduced a generic value chain model (M. E. Porter 1998) that comprises a epoch of activities found to be common to a wide range of firms.The comportment of these actions is to put forward to the customer a value of product that exceeds the cost of the process, and easily brings in a profit margin.As it can be analyze in value chain model that Bentley have some core competencies and the activities in which it can pursue a competitive expediency as followsCost advantage by better understanding costs and squeezing them out of the value-adding activities.Differentiation by focusing on those activities associated with core competencies and capabilities in order to perform them better than do competitors.Cost AdvantageA firm may create a cost advantage either by reducing the cost of individual value chain activities or by reconfiguring the value chain. As Porter identified ten cost drivers related to value chain activities, So Bentley can go through each and seek what is workable for them in this processEconomies of scale of measurement in production of alarmsCapacity utilization thats in alarm productionLinkages among activities at the companyInterrelationships among business units by aligning security inc with alarm businessInstitutional factors must be controlled especially in security Inc(regulation, union activity, taxes, etc.)At Bentley cost advantage also can be pursued by reconfiguring the value chain. Reconfiguration means structural changes much(prenominal) a new production process, new distribution channels, or a different sales approach. For example, FedEx structurally redefined express freight service by acquiring its own planes and implementing a hub and spoke system. (Fedex 1995-2000)DifferentiationBentley can achieve a specialisation advantage either by shifting individual value chain actions to add to distinctiveness in its alarms or it can get it by reconfiguring the value chain.It can go into forward integration in order to carry out some functions that were performed by its customers like smorgasbord of its alarm systems and models according to customers need. It can adopt a backward immix to manage over its inputs. It can implement new pr ocess technology or utilize a new append channel.TechnologyBecause technology is in use to some degree in every value creating action, changes in technology can bring competitive advantage.Bentley is using confused technologies in both primary activities and support activities as its given belowInbound Logistics TechnologiesTransportation of materialsMaterial handling inside production placeMaterial storage at storesOperations TechnologiesProcess of production gondola tools used for production and handlingPackaging of the alarmsMaintenance of finished goods exam of alarmsBuilding design operationOutbound Logistics TechnologiesTransportation of alarms supply to supply storesMaterial handling inside storesPackaging for supplyCommunications betwixt all departments involvedMarketing and Sales TechnologiesMedia utilization ( Print/electronic/Audio/video)CommunicationsService TechnologiesTestingCommunicationsLinkages of ActivitiesBentley can redesign the alarms for with different sha pes and qualities for different customers. This way even it can reduce manufacturing costs. If it is be able to reduce cost in one activity and as a result benefit from a cost reduction in another, from a design change and happyly reduces manufacturing costs and it also yet improves due to this costs reduction. Thus it can such improvements the firm has the strength to develop a competitive advantage.Business Units InterrelationshipsTangible interrelationships offer direct opportunities to create a synergy among business units. For example, Bentley can make its nonuple units share whatever its possible among the business units to share for cost reduction. This sharing of the procurement activity can result in cost reduction.OutsourcingTo decide which activities to outsource, managers of Bentley must understand the firms strengths and weaknesses in each activity, both in equipment casualty of cost and capacity to differentiate. Managers may consider the following things when s electing activities to outsource.Competitive positionBentley has good track record of twenty five years in alarm business. It is one of good company in market. After it seek to expand its business into security provision (door supervisors) it facing more problem as this new acquisition is not performing well. If we closely analyze the investment situation it still putting les s on alarm business and getting more compare to its security personals business. Company is selling all its products on fair price as compare to market even if they decide to raise price in all precuts still they have advantage over their rivals in the market. They can easily attract customers on this pricing advantage and by creating new innovation in designing or promotions they can still come back into competitive position in the market.3 Question TwoIs the CEO coiffure to conclude that these actions will remove all incentive for another company to take over Bentley?3 Answer3.1 Porter Five summary of Comp anyIn his book Competitive Strategy, Harvard professor Michael Porter describes five forces affecting the profitability of companies. (Porter 1998) These five forces, taken together, give us brain wave into a companys competitive position, and its profitability.RivalsFor Bentley rival is competitor within industry, this rivalry in the industry is very high for Bentley. As these rivals are competing with Bentley over following factors- Number of rivals in market Fixed costs Product differentiationNew EntrantsOne of the defining characteristics of competitive advantage is the industrys barrier to entry. In security industry its very low for every one first security firm as there are many barriers from government activity and its security regulating agencies. Bentley can enjoy benefits of common barriers to entry Patents patent technology can be a huge barrier preventing other firms from joining the market. High cost of entry the more it will cost to get started in an industry the higher the barrier to entry. Brand loyalty As Bentley is in market since 25 years its definatley have some charge related to its products specially its alarm systems.Substitute ProductsBently should look keenly for what the companys other competitors are doing, and what other types of products are available in the market as there is advancement in technology so there is high risk from others competitors for Bentley. As is the case dealing with new entrants, company can go into an aggressively price to its products to keep people from switching.buyer PowerThere are two types of buyer magnate. The first is related to the customers price sensitivity. The other type of buyer power relates to negotiating power.Conversely, if a company sells to a few large buyers, those buyers will have significant leverage to negotiate better pricing.some(a) factors affecting buyer power are Size of buyer Number of buyers Purchase quantityBentley have advantage in its price and durability of products it have less buyers power broblem. supplier PowerWhen multiple suppliers are producing a commoditized product, the company will make its purchase decision based mainly on price, which tends to lower costs. On the other hand, if a single supplier is producing something the company has to have, the company will have little leverage to negotiate a better price. here for Bentley things are favorable with less suppliers power as they depend less over the raw materials.A few factors that determine supplier power include Supplier Switching costs Uniqueness of product4 Question ThreeIf the team decides on MBO, how much should they be on the watch to pay?4 Answer4.1 Management Buyouts (MBOs)A management buyout MBO is the purchase of a business by its management.Some time owners or the shareholders of any business want to sell the shares of the business or company. For that they give hazard to the existing management to buy the business. As they jazz the details of the business and are in a strong position both to worth it and also run it. One can assume that they will make good effort for themselves than for other people.A management buyout is a rare thing in business likely to be a long test of any company and its managements skills in business. Bentley can sell its security Inc as its not performing well and putting problem for the business. For a successful MBO Bentley team may require to focus on some pre MBO arrangement. They not only have to secure their own money and career, but they have to show that they have the vision and proper ability to change their organization and to deliver better outcome as results. Another need is their enthusiasm and commitment to convince the management who will buy it that their MBO will work. There are following procedures that required to be followed for a successful MBO.Decision to proceedManagers as investors will be keen to invest in Bentley with predictions which offer the chances of gaining the profits they will inve st for. As authority returns maybe higher than current returns because people in new apparatus will work harder. An understanding of the factors affecting Bentley can help to set forward actions properly.Business planMBOs are normally highly geared, so the Bentley needs to be able to produce cash and success in the short term. They may have tactics which are practical in the long term, though it will be tricky to assure the investors among management that their future is on growth side.Form the management teamA very significant part of a successful MBO is to put a management team that has a high-quality record. Possible investors will like to know how they can make adjustments in than the present team. Bentley must therefore put a clear deliberate plan for the business.Arranging the fundingValuing Bentley Company is knotty matter and here is no set rule. Whatever investor will give that will be relate to many things. Those are the equilibrize sheet and current profits. The futur e potential of the business will be vital but sometimes want of the present owners to sell can be important.Agreeing termsThe financing for an MBO normally include the decision-making board and its own interest, its equity and debt position. Different management investors will be looking for various returns from this deal, base on the assumed risk they will be taking. piling co-ordinationThere can be no set rule for the management to invest into the management buyout. Still, they will require showing the guarantee to the company by creation a major asset of their money, although there can be a massive strain resting on their time and skills. extentNegotiating for buyout is not always very simple, as there is some trouble of unsatisfactory present relations as company is going for MBO. Some management buyout teams can pretense their advisers to take opening move toward success. A talk to buy any business is always a complex activity, and there is fact that seller has vital test. The information contain in the factsheets must never be relied lying on top.5 closure of StudyWe can see that Bentley was handling alarm systems selling effectively but after adopting the security firm it went into many problems. Now it is needful for them to try a successful management buy-out for that, which can make such arrangements that will help it to get maximum future investment to cover its problems related to other products.Furthermore they can go for a right sizing and downsizing to control the gap of expenses and profits. This way Bentley can go back to its profit position as it was in past before adaptation of the security firm.