Analysis Of Industry & Competitive Pressures: Case Studies Of High Flyers Limited, SCH, CIDesign - Essay.

Business environment incorporates several external and internal factors that can have huge influence on the business functions of an organization (Wilden and Gudergan 2015). This study will explore the issues facing industry and competitive pressure of High Flyers Limited (HFL) described in the case study. The study will also demonstrate the impact of external environmental factors on the business strategies of the organization.

PEST Analysis

PEST ANALYSIS OF HIGH FLYERS LIMITED (HFL)
Political Factor	·Increasing numbers of sports initiatives supported by UK Government is rising the sales volume of HFL in UK ·UK Government has decided to increase the level of VAT on  the sporting goods to 22% for raising the additional tax receipts ·Increasing VAT would definitely cause shrinking domestic sport market in UK by 5%
Economic Factor	·Declining economic condition of UK has reduced the overall profit margin of the HFL ·The difference in the exchange rate of UK currency with USA and Canada also hampers the overall profit volume of HFL
Social Factor	·High inclination of the people towards being involved in different types of sports has increased the potentiality of sales volume of HFL ·The willingness of the customers to purchase high quality and personalized sports costumes also increases the sales volume of the organization
Technological Factor	·HFL has invested a lot in technology for automating some of the initial cutting and labor intensive process ·The organization has also introduced some new initiatives like custom design websites, where the sports club can draw the design of bespoke items prior to submit it to the deign office

Table 1: Pest Analysis of High Flyers Limited (HFL)

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SWOT ANALYSIS OF HIGH FLYERS LIMITED (HFL)
Strengths	·       High qualities of handmade gymnastics wear and associated products of HFL attract the customers ·       The scope of special order for personalized costume has increased the sales volume the organization ·       The costs of imported products have been increased with increased export demand from USA and Canada ·       Technological  advancement has automated some process of the organization ·       Very good supply chain of specialized gymnastic material in UK
Weaknesses	·       HFL is facing extreme difficulties in recruiting skilled designers for the needs of specialized skills ·       The gross profit margin to UK sport retailers is quite low
Opportunities	·       Increasing export demand from USA and Canada may increase the overall sales volume of HFL ·       Increasing numbers of sports initiatives by UK Government may increase the sales potentiality of the organization
Threats	·       Increasing VAT level to 22% to be imposed by UK Government may shrink the domestic market of the organization ·       HFL is facing tough competition from 6 other competitors and many hundreds competitors in low quality fashion market in UK

Table 2: SWOT Analysis of HFL

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From the analysis of PEST and SWOT factor of HFL, it is evident that declining profit margin in UK market is a major threat of the organization. Increasing VAT level by 22% to be imposed by UK Government can also lead to shrinking domestic market for the organization. The organization is facing extreme pressure from 6 other competitors and hundreds of companies in low quality fashion market. It is also affecting the overall profit level of the organization in UK market. On the other hand, HFL is facing the issue of recruiting highly skilled employees for designing best quality gymnastic wear.

PORTER FIVE FORCE OF HIGH FLYERS LIMITED (HFL)
Threats of New Entrants	·       There are hundreds of new companies in UK market offering gymnastic wears (Beharry and Gibbons 2016) ·       HFL is facing high threats of entry from the new entrants in UK market
Threats of Substitutes	·       HFL is facing threats from the companies in low quality fashion market in UK ·       However, the qualities of the products of the substitutes are not up to the level of HFL ·       HFL is facing moderate threats of substitutes
Competitive Rivalry	·       There is high competitive rivalry among the players of gymnastic wear companies in UK (Blázquez 2014) ·       HFL is facing tough competition from 6 other competitors in UK market ·       The competitors are offering similar products same lower price
Bargaining Power of Suppliers	·       There are wide ranges of suppliers in UK markets for supplying high quality gymnastic wear materials (Medina Munro and Belanger 2017) ·       The organization can easily switch to other supplier for getting better benefit ·       Suppliers have less bargaining power with HFL
Bargaining Power of Buyers	·       HFL is highly popular for offering high quality gymnastic wear ·       However, the competitors companies are also offering the same products with less price, though their quality of products are not standard ·       HFL is facing moderate threat bargaining power of buyers

Table 3: Porters Five Force of HFL

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Influence of PEST Factors on HFL

Political Factors is always associated with the policies and regulations of government that can have huge impact on the business current as well as future business strategies (Aguilera et al. 2015). Increasing support of UK Government for more sports activities can increase the sales potentiality of HFL. However, increasing VAT level by 22% imposed by UK Government can hamper the sales volume and pricing strategy of the organization. Different currency rates of UK currency with USA and Canadian currencies can hamper the export strategies and profit volume of the organization. However, increasing export demands from USA and Canada has increased overall sales volume of the organization. Involvement of advanced technology has automated the process of the organization leading to further business progress.

SWOT factors reveal the internal strengths and weaknesses and external threats and opportunities associated with an organization (Paillé et al. 2014). In case of HFL, the quality of handmade gymnastic wears has increased the attractiveness of the products to the customers. Lack of highly skilled employees in HFL can hamper its process of producing uniquely designed gymnastic wears. Increasing export demands from USA and Canada have increased the overall sales volume of the organization. Increasing VAT level of the organization can hamper the potential profit level of the organization. 

PEST Analysis of High Flyers Limited (HFL)

Critical perspective of business reflects the severe impact of the external factors on the business processes (Dyllick and Muff 2016). In case of HFL, increasing VAT on sports goods to 22% can have critical impact on the overall business cost and profit volume of the organization. Apart from that, declining economic condition of UK has reduced the return on investment for the business of the organization. The declining economic condition of UK has also reduced the spending power of the people leading to reduced sales potentiality for the organization. Lack of properly skilled employees may also limit the unique designing of gymnastic wears of the organization.

Conclusion

While concluding the case scenario, it can be said that declining profit margin of the organization in UK market is leading to declining business progress for HFL. However, increasing involvement of UK government in sports activities is leading to increased sales potentially for the gymnastic wears of HFL. On the other hand, increasing VAT by 22% imposed by UK Government can hamper the profit level of the organization.

Introduction

Strategic position of an organization defines its relative positive in the industry as opposed to its business environment (Ethiraj, Gambardella and Helfat 2018). Strategic options are the strategic alternatives chosen by an organization towards responding to the external environment (Bettis et al. 2015). The study will discuss strategic position and key challenges of SCH. The study will also analyze the opportunities for the organization through Ansoff Growth Matrix and assess those alternatives through Johnson, Scholes and Whittington's framework. Based on this analysis, the study will provide suitable recommendation to the organization for its business growth.  

Strategic Position

PEST ANALYSIS OF SCH (STRATEGIC POSITION)
Political Factor	·       SCH can get the support of UK government for its community care service ·       However, the government funded local authority has become the competitor for the organization ·       Reduction in hospital funding has increased the business scope of the organization
Economic Factor	·       Declining economic condition of UK can force the organization to reduce its charges for care service
Social Factor	·       Increasing numbers of older people in the population of England has increased the business scope SCH ·       New service demand for routine treatment at home can hamper the business success of the organization ·       The referral tendencies of the customers has increased the customer volume of the organization
Technology	·       The organization has lack of proper medical equipments and training ·       It has prevented the organization to offer routine treatment to the customers at their homes

Table 1: Strategic Position of SHC

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New Demands in Market

Changing and unique demands of the customers are always likely to create challenge for the business organizations. Moreover, the changing requirements and needs in the market force the organizations towards making changes in the business process and even in the product or service offerings (Bettis et al. 2016). In case of SCH, the organization is facing the challenge of new market needs, where customers are demanding for family care service. Moreover, till now, the organization has been providing care service to only elder people, but now, the customers have started to demand for care service to families for short term respites. In such service, any particular family member wants to get 24 hours care. Hence, lack is such service can make the customers disappointed, which can ultimately hamper the business success of the organization.

Lack of specialized service often hampers the potentiality of competitive advantage for any business organization (Bettis et al. 2014). In case of SCH, the organization is quite efficient in providing care service to the older people of the community. However, the organization does not have any facilities and potable medical equipments for providing routine treatments to the customers. The customers need to go to local hospitals or GP surgeries for their routine treatment. In this way, the organization is facing extreme challenges in meeting the unique needs of getting routine treatment at their homes.

Strong competitive pressure hampers the potential business profitability of a business organization. In case of SCH, a new franchise home care operator is intending to provide home care service in South East area of England. Moreover, this franchise has quoted that it would provide competitive alternative to the local authority services. Hence, SCH is facing going to face high level of competitive threat from this franchise.

ANSOFF MATRIX FOR SCH
Market Penetration	·       Market penetration strategy calls for achieving business growth in existing market with existing product (Trigeorgis and Reuer 2017) ·       SCH can increase expects to increase its market share from its current 20% in South East area of England through using its spare capacity ·       Moreover, the organization can increase its market share in England with its existing home care service for older people
Market Development	·       Market Development strategy calls for seeking business growth through targeting new markets with existing products (Durand, Grant and Madsen 2017) ·       SCH can offer its products out of England for increasing its business growth ·       The organization can also offer its home care service to other cities of England apart from the South East area ·       The high quality and personalized care service would help the organization in increasing business growth in new markets
Product Development	·       Product development strategy calls for new products targeted to its existing market ·       SCH is being intended to offer routine treatment to the patients at their home in England ·       The strength and popularity of the organization would help its is gaining huge customer acceptance for new service ·       The organization can leverage its strength of existing service for gaining the success of new service towards leading high level of business growth
Diversification	·       In diversification strategy, the organizations can  gain business growth through diversifying its business for new markets (Mitchell and Leiponen 2016) ·       SCH can provide routine treatment service to patients at their home in the countries apart from England and other countries ·       However, the diversification strategy can be highly risky, if the new service is not accepted in new market

Table 4: Analysis of Opportunities

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EVALUATION OF OPPORTUNITIES FOR SCH
STRATEGIC OPPORTUNITIES	SUITABILITY	FEASIBILITY	ACCEPTABILITY
MARKET PENETRATION	Existing care service cannot meet the new market demand for routine treatment at home	SCH has adequate part time and full time employees for running its existing service in existing market	·       Having lack of routine treatment, the organization cannot have high financial gain with existing service ·       Existing service cannot be discomforting at any of the stakeholder
MARKET DEVELOPMENT	Existing care service in the new cities of England or new country cannot solve the new needs of customers in existing market	The organization can get support of government in funding themselves for expanding its market	·       Market expansion can enhance the customer volume of the organization leading to high financial gain ·       Adaptability of the employees in new cities or countries can be challenging for them
PRODUCT DEVELOPMENT	·       The service offerings of routine treatment would definitely meet the new demands of the customers ·       It will also help in beating the market competition	Lack of medical equipment and training provided to the staffs can hamper the success of this strategy	·       New service would enhance the customer volume leading to increasing financial gain ·       The new service and new training can be discomforting for the employees
DIVERSIFICATION	·       The offerings of routine treatment in the new market may not meet the new market demands of existing market and beat the domestic competition	The organization does not have adequate trained employees and advanced medical equipments to provide new service to new market	·       The strategy may lead to financial loss, if it is not accepted in new market

Table 5: Evaluation of Opportunities

Source: Created by Author

Service Development

From the key challenges of SCH, it is evident that the organization is being failed to meet the new market demands of routine treatment at the home. Hence, the organization should immediately focus on developing new service of offering routine treatment to the people at their homes. The organization can also develop the family care service for having competitive advantage in is business. Such unique service offerings would definitely help the organization to beat the market competition in England.

SCH is till now only limited within two cities of England in South East area. Such limited market is ultimately limiting the overall sales and profit volume of the organization. Moreover, the chance of market saturation is also quite highly in such limited markets. Hence, the organization should expand its markets beyond just the two cities of England in South East and move to other cities of England. The organization can also expand to global markets for enhancing the customer volumes. In this way, the organization can enhance its sales volume with broadening markets.

It is evident from the organizational analysis that SCH does not have highly skilled and trained staffs for providing advanced care service for routine treatment at homes. Hence, the organization should immediately focus on providing effective training to the employees for upgrading their skills and capabilities. Such training would definitely make the staffs ready for providing uniquely designed routine treatment service at the homes of the patients.

CIDesign: Business Report on Strategy Formulation

Conclusion

While concluding the study, it can be said that SCH is facing the challenge of meeting the new market demands of offering routine treatment to the patients at their homes. Apart from that, the organization is also lacking the service of providing family care service for 24 hours. The service offerings of the organization is only limited with the two cities of England. Hence, the organization should immediately offering the routine treatment service at the homes of the patients and expand its markets for gaining high level of competitive advantage.

Introduction

Change management is the way of managing the required changed in the organization for the purpose of business functions (Van der Voet 2014). The study will discuss the reason behind the resistance to changes in CIDesign and explored the change management processed adopted by the organization. Apart from that, the study will also suggest the strategies to DDesign for managing the changes for CIDesign. Lastly, the study will discuss the application of Lewin Three Stage Model for leading successful change in CIDesign.

a. 1. Meaning of Resistance to Change

Resistance to change is the negative response of the employees to the changes to be made in the organization for any business purpose (Hornstein 2015). It is the response of unwillingness of the employees to accept the organizational changes. The employees are often prone to resist the changes to be occurred in their organization and can show their resistance publicly, argumentatively or verbally. Resistance can strengthen the change initiatives, if it is properly handled by the change managers (Poghosyan and Aiken 2015). Moreover, the employees are mostly resistance to the organizational changes, as it moves them from their current status quo.

Fear of Job Loss and Low Trust

The employees are always resistant to the organizational changes for their fear for unknown (Nadel, Galliano and Orozco 2016). Likewise, the employees of CIDesign were quite afraid of the new changes for the takeover of the organization. Furthermore, there was also lack of trust of the employees on the management, as the organization was outsourcing some of their jobs to other countries. Hence, the employees were facing the fear of job loss, which was leading them to resist the changes in the organization.

Changes in the Status Quo

Resistance can also be raised from the perception of organizational changes that the employees hold in their minds (Petrou, Demerouti and Schaufeli 2015). In case of CIDesign, the employees are resistant to change, as the takeover process may lead to different changes in the organizational process. Such process will be quite new to them, which will force them to change their current status quo. The employees may also face changes in their job designation with the organizational changes. Hence, the employees of the organization were resistance to the new changes in the organization.

Exhaustion

The employees are often overwhelmed with the continuous changes occurred in the organization (Gnezdova et al. 2016). Likewise, the employees of CIDesign were quite frustrated with too many changes in the organization. They became overwhelmed with the frequent changes occurred in the organizational processes. Hence, they were resistant to the changes occurred in the organization.

Over the last year, CIDesign has been extremely managed and organized by DDesign due to the takeover effect. In the last year, workforce flexibility has been changed a lot as described by the existing employees. Earlier, flexible workforce arrangement was being followed by CIDesign and therefore employees were quite comfortable with the daily business operations, however later after takeover the entire flexibility has been reduced so that expenditure and resource consumption could have been reduced. According to Pascucci et al. (2015), change in workforce flexibility hampers the existing human resource comfort, which in turn results in high turnover rate due to dissatisfaction. This has been the same case with CIDesign after the takeover by DDesign. Moreover, it has been also found that DDesign is trying to focus more on cost cutting and for that they are reducing the advantages that were given to CIDesign staff. Such intention is completely unfavorable for the staff of CIDesign due to which they are resigning.

After considering the viewpoints of existing employees of CIDesign, it has been understood that the staff are not satisfied with the new organizational culture. This is because until the takeover they were following the entrepreneurial culture where they were free to express, create and innovate. However, after the takeover, DDesign is focusing more on cost saving measures by outsourcing some of its design work to India and China. This has resulted in breaking the employee relationships and existing workforce culture because new employees from varying backgrounds are being brought under the same business umbrella. While considering the viewpoint of Deschamps et al. (2016), it can be said that when existing human resource base is modified through diversity inclusion along with international expansion, the staff fails to adhere and accept the new hybrid culture, which eventually results in high dissatisfaction among them. This has been the same with CIDesign. The employees are extremely dissatisfied and they are failing to accept the new workforce culture that DDesign is trying to exemplify.

In order to reduce further attrition CIDesign primarily needs to arrange a board meeting with DDesign. Since, CIDesign have already understood the reason of attrition, hence, they need to discuss the same with its parent company. They need to highlight the issue related to experienced staff attrition that might effect on design, creativity and innovation. Upon further discussion about the issue, they need to highlight some ways through which both cost cutting and employee retention can be kept under balance.

CIDesign needs to address the benefit that the organization will definitely make after such change management. Might be in long term but it will be the employees who will be benefitted when organization will expand. This is because until the takeover, CIDesign was limited to geography, innovation, infrastructure and talent. However, in future if the employees are able to accept the decisions taken by DDesign then they will be exposed to higher career and succession opportunities. As pointed out by Wincek et al. (2015), if an organization expands globally, then it can create new designations, positions, roles, responsibilities and career planning for its existing talent base. Same will be the opportunity for CIDesign staff in future as they will be offered higher ranks, promotions and fringe benefits in future.

CIDesign needs to arrange fringe benefits for its employees, which will act as the part of motivation and satisfaction. The share of such benefits will have to be equally managed by CIDesign and DDesign. At the same time, employee engagement activities will have to be introduced by DDesign, so that staffs feel their importance is being acknowledged. Finally, training and development activities, reward and recognition have to be introduced in future as these will indicate a sense of achievement among the employees, which will in turn increase employee retention.

Unfreeze

The first stage of Kurt Lewin’s Three Stage Model is associated with preparing the employees to accept the changes through breaking down their current status quo (Razi, Mohebbi and Rostam 2016). In this stage, CIDesign should assess the employees for understanding their resistance to change. The change managers should also explain the importance and competitive advantage behind the changes for encouraging the employees towards accepting the changes. Moreover, the change managers of the organization should proper communicate the importance of changes to the employees for encouraging them in accepting the changes.

Change is the process, where organizations actually move the new changes for leading successful organizational changes (Evans and Morton 2014). In case of CIDesign, the change managers should provide adequate time and proper resources to the employees for leading successful changes. Moreover, the change managers should always be supportive to the employees for helping them in overcoming any complexities in the organizational changes. The employees of the organization should also be provided with proper training for upgrading their skills in leading successful changes.

Refreezing stage is associated with solidifying and stabilizing the new changing state of organizations (Hornstein 2015). In case of CIDesign, the change manager should maintain a flexible organizational culture and acceptable way of thinking for encouraging the employees in maintaining their status quo. The change managers should also provide rewards to the employees for stabilizing the change process in the organization.

Conclusion

While concluding the study, it can be said that the employees of CIDesign were resistant to change in for their fear of job loss with the changed organizational process. CIDesign used to manage the change management process through maintaining flexible organizational culture and involving the employees in the changed organizational process. DDesign should also use flexible organizational structure for leading successful organizational change. The change mangers of the organization should use Lewin Three Stage Model for leading successful change management.

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