Innovative Organisation: Topp Tiles Plc - Assignment Example

Innovative Organisation Topp Tiles Plc. Submitted by Contents 3 Introduction. Topp Tiles Plc 4 1 History & Competitive strategy 4 1.2 Financial performance of Topp tiles : Year 2008 4 1.3 Future Challenges 4 2. Organisational Innovation 5 2.1 Operations management at Topp tiles 6 2.2 Innovative strategy at Topp tiles. 7 3. Discussion on marketing innovation by Topp tiles 7 4. Potential contribution. 9 5. Reference 10 Abstract Organisation innovation is very important process required for the continuous growth of all organisations. Different theories that support innovation have been proposed based on the specific business environment prevailing at different periods of time. The report presented here examines the detailed innovative practices adopted at Topp Tiles Plc, the leading building materials supplier in United Kingdom. In spite being the leading supplier of tiles in United Kingdom , the company needed more innovative strategies to maintain its sales both during the period of high growth in sales and also during the periods of recession. These policies have helped the industry to overcome the phases of poor business , even when the entire building industry was significantly affected. The innovative strategies adopted by Topp Tiles includes evolving appropriate marketing strategies, establishing excellent ,customer support and enhancing the online business operations. The study undertaken have given the wider perspective on the impact of the innovation that would help the organisations maintain the leadership in the market. The observations made from this study have helped to evolve a framework of practices that organisations could adopt to make them the most acceptable by the clients and also successful in business operations. 1. Introduction : Topp Tiles Plc. 1.1 History & Competitive strategy Top tiles are the most favoured brands in the floor tile segment across UK and other major European countries. Since opening of the first specialist tile centre in Manchester in the year 1963, Topp tiles were offering its customers high quality products. The reasons for its success during all through these years was due to the competitive strategy it had adopted by recruiting, training and retaining highly competitive staff who are knowledgeable, friendly to customers and also highly committed to the profession. The business strategy too is beyond the revenue and enhanced sales volume. They take extra care to see that their customers are able to complete the particular task for which the Topp tiles products were purchased. A DVD which explains "How to do it" clearly shows the commitment to the customer by explaining the process the customers must undergo to get the maximum benefit from the purchased products. Its these policies that have helped the Topp tiles to become the Britain's largest tile and wood flooring specialist with over 250 stores over U.K. and adding atleast 20 stores every year (Topp Tiles, n.d.). 1.2 Financial performance of Topp Tiles :Year 2008 (Topp Tiles,2008) * Total revenue increased by 0.1 % to 208.1 million. * Group gross margin is 61.8 % * Operating profit of 34.6 million and profit before tax reported as 27.7million. * Basic earning per share 11.16 p. 1.3 Future Challenges Till the end of the year 2008 the business was going well for the Topp tiles Plc. Having opened 10 new stores across different places in UK and trading from the centres being raised to over 300, the revenues reported have shown a marginal increase than that of the previous year (Topp Tiles, n.d.). Inspite of the prevalence of highly turbulent weather and reduced consumer spending, the company was able to wither the problems and maintain the required business by appropriately strategizing its marketing plan. The additional spending it had made on a national level TV advertisement campaign coupled with the inflationary trends have resulted in the increased gross expenditure of 43 percent of the total revenue, while it was only 41 percent the last year. The basic earning per share too showed a reduction of about 16.5 percent (Topp Tiles,n.d.). The prevailing economic climate forces the management to take a very cautious approach in the day-to-day operations of the business. The costs are being tightly controlled and thorough review on all the major suppliers are being undertaken. Still, the currency movements and the appreciation of Euro have indirectly influenced the margins generated from the business. Exploring the possibility of re-sourcing the materials and identifying the opportunities for better margin are underway against the backdrop of this situation. The board members don't expect a sudden change in the business climate but are confident that the robust model on which the Topp tiles operate would help to sail through the not-so-favourable period quite successfully. They are also optimistic that company could generate healthy return during the remaining period of the current year and also during early next year with the help of innovative strategies developed them (Topp Tiles,n.d.). 2. Organisational innovation The factors that promote the organizational innovation are behaviour of the individuals in the organization, internal characteristics of the organisation and also the market factors. The presence of participative and interactive leadership tends to spread high tolerance to ambiguity and uncertainty and hence create a fertile ground for innovative initiatives in the organisation (dnaglobal.com, n.d.). The important organisational characteristic is the establishing a pro-innovation culture within it. It could be by encouraging the large scale participation of its people, having freedom of expression and also establishing the performance standards. At the same time implementing centralised and formalisation of activities is found to retard the innovative initiatives within any working unit. Implementing specific norms for quality and quantity in connection with the organisational practices too could promote the innovation. The external factors like highly uncertain environment would demand dynamic attitude with in the organisation and hence lead to innovative practices in the organisation (dnaglobal.com, n.d.). Different type of models have been proposed to explain the innovations in the organisations. It varies from simplified linear model to complex staged or process models. The linear models primary has three stages namely discovery stage, development stage and deployment stage. All the three stages are linearly connection and one succeeds the other in the order (Read, n.d.). The stage models are similar to linear models but have the flexibility for feed back control. The different stages could be identified as strategic planning, concept planning, design and production and marketing etc. The research have confirmed that the continued organisational innovation is necessary to maintain sustained growth of organisations (Read, n.d). 2.1 Operations management at Topp tiles The entire operations at Topp tiles Plc is controlled by the Chief Executive Officer appointed by the Board of governance of the company. A team of next level of managers undertakes the direct monitoring of operations and also reports directly to the Chief Executive Officer. The important divisions of management are public relations division, financial management, facilities management, human resource management and marketing management. As the clients are mostly from United Kingdom and Holland, the public relations manager has diverse role to be undertaken to plan the marketing and sales activities. In addition it also has a chain of dealers and exclusive sales outlet to promote the tiles across these countries. The factory of the Topp tiles also has well trained team of facilities managers whose expertise could effectively ensure the proper upkeep and maintenance of all its production facilities. The facilities management team has managers, engineers, supervisors and operators to ensue the proper function without any disruption to its business activities. Health and safety aspect is another important segment that is given a serious attention. The health and safety manager ensures all the precautions are appropriately incorporated in the system in case an emergency arises. Drills are also exclusively undertaken for health and safety support team with causing any inconvenience to the occupants (ToppTiles, n.d. a). Thus the organisation has a very open environment which promotes proper transfer of information and also ensures effective feed back process. Thus both the customer and the employees are able to express their concerns and a solution is appropriately proposed. Thus entire team has a clear perception of the organisational mission and this have enabled to evolve innovative strategies that have helped them to maintain the leadership position. 2.2 Innovative strategy at Topp tiles. Based on the theories of innovation available, the organisational practices at Topp tiles clearly support the innovative practices. The strategy followed at the Topp tiles is to have a one stop shop for all their wall and floor finishes. This objective has been met by them by creating a highly flexible organization. The customer's needs were given the top priority and hence the freedom was given to the staff to perform their best to meet this objective. The customers too were not given just the products but the process pack. This included, say, the floor tiles, necessary adhesives and other materials that are needed to complete this task. This helps the customers to get relived of the stress in the material procurement. Further, the information pack available in the digital form too helps the customer in understanding the process better. The well trained staff members too add any missing components and ensures totally satisfied customer. It is certainly this innovative strategy of the organization that helps to expand the operations of Topp tiles continuously. 3. Discussion on marketing innovation by Topp tiles The primary approach to be adopted is to create a wide range of product choices that would make the customer with excellent choices at very competitive costs. Thus the business strategy proposed is to evolve plans that would stimulate large volume of sale of tiles and related products with the objective of making a buyers season during the period of recession. With increasing recession causing severe strains in the building technology business it become necessary to look for alternate solutions that would help the company sail smoothly during the troubled times. Innovative strategies are adopted for the effective marketing of the Topp tiles specifically across U K and Holland. Retention of customer base and also trying to have strengthen the dealer relationship is the one of the important initiatives considered. The emphasis would be on strengthening he the customer base at the existing locations and hence try to stabilize and maintain the leadership position in the tile segment. One of the important plans proposed is by promoting the concept of motivating a buyer to have more purchases during some specified period when the prevailing tendency among the customers is to reduce the choices to the most minimum levels. Hence, it is to be planned that every prospective customer need to be motivated to have a higher volume of choices which could offset the reduced volume of sales. In the proposed plan, a cost effective seasonal offer that could combine an exclusive house pack which consists of all the tiles requirements - floors , walls or other finishing needs. As the tile required for floors and walls are different, for a specified floor area a correlative area for wall surface could be estimated and a bundle pack shall be proposed. Once a customer decides to accept such a combined offer a few selected bathroom fittings of specified class could also be given as bonus thus eliminating the customer to have a purchase for these items. Thus once customer decides to take the floor and wall finish choice, by the selectively providing the bathroom fitting at no cost would be a big attraction for the owners of newly constructing houses. Thus the sales volume of the tiles that would have been less as per the prevailing circumstances have now been rejuvenated due the proposed incentive for customer. Also to woo large builder and construction firms special offer for bulk purchases are also proposed. This is with the expectation that these business houses would invest in buying the building materials at a lesser cost now and would fetch them better returns when the business return to normal state in future. As significant number of the customers shows reduced spending behaviour it would be indeed be very difficult for the Topp tiles to motivate them for higher purchases . But , it would certainly be possible to maintain the earlier sales that were reported during the pre-slowdown period by exercising consumer friendly strategies. Extending the topps relationship for marketing to other segments of household accessories like lighting and illumination could also elevate the sales than the reported level in the previous period. The biggest advantage of such a relationship would be to offer the best output for the expectation of the customer . In the case of bathrooms, the inner experience of the bathrooms would certainly depend both on the wall and floor finish besides the illumination components provided. So exclusive bathroom packs could be promoted to have the best values for the customer money. This could also be packed in different price ranges and targeting different buyer groups. Also measures to motivate the customers shall also be included , like the free support to ensure the clean air in the bathrooms by the supplying a excellent exhaust air unit along with the combined business offer. Thus the customer who would buy tiles essentially as a necessity would now be stretched to extend his sales to meet all the other connected need through the same outlet. Thus this would help to retain the customer for further purchases as it is the shop that meets the purpose than just the product. Another major intervention is by creating a brand for environmental friendly tiles. As production tiles is highly energy intensive process and also involves consumption of large quantities of resources Topp tiles would use this period to intervene the market with a totally different product type. It would plan to set up a reuse tile production units , where the tile are produced from different materials from the construction demolition and reuse category. This would also bring down its resource pooling costs and thus able to reduce its production cost considerably. Thus Topp tiles could successfully release to market cost effective tiles that are environmental friendly while addressing the concerns of the clients of this segment. 4.0 Potential contributions The innovative marketing strategies are very essential for consistent organisational performance and also to attain the business objectives most efficiently. These approaches are applicable to any segment of business which have an organisational desire for growth. The case chosen here, Topp tiles have with consistent performance and marketing innovation continues to enjoy the prime position in the field of building material business. The innovative marketing strategies adopted by the organization have helped them to achieve this even during the periods of recession. The contributions that could be given to Topp tiles are numerous. The primary concern is the environment friendly and energy efficient products. The emphasis need to be given on energy efficiency on the production of tiles which would also result in the reduced cost of the product. Also energy efficient laying would also lead to lesser cost of fixing to customers thus resulting in significant savings to the customers. As the natural resource supply is dwindling, it becomes necessary to look for various other ways of resource substitution. It could be by exploring the reuse potential of materials or by increasing the local use of materials. 5. References Diagonal.com (n.d.), Factors promoting organisational innovation [Online] Available at http://www.dnaglobal.com/factors.htm [Accessed on 30 April 2009] Kotler P. and Armstrong G (2006) Principles of Marketing, 11th Ed, Pearson Prentice Hall Read, A (n.d.), Determinant of successful organisational innovation : A review of current research [Online] Available at http://www.usq.edu.au/extrafiles/business/journals/HRMJournal/Articles/Determinants%20of%20Successful%20Organisational%20Innovation.pdf [Accessed on 29 April 2009] Reich, A (1997) Marketing Management for Hospitality the Industry: A Strategic Approach, Wiley India. Topp Tiles (2008), Annual report and financial statements : 2008 [Online] Available at < http://miranda.hemscott.com/ir/tpt/download/pdf/ar-2008.pdf> [Accessed on 2 May 2008] ToppTiles (n.d.),[Online] Available at [2May 2009] Topp Tiles (n.d.,a) , About ToppTiles,[Online] Available at [Accessed on 2 May 2009] Read More