Tim-BR-Marts Limited Strategic Management - Case Study Example

? Tim-BR-Marts Limited Case Analysis Tim-BR-Marts facing great challenge, in the fall of 1993, there were indication that many powerful competitors were preparing to move into western Canada. Home Depot with the sales over U.S.$7 billion and profits of about U.S.$363 million, had announced a plan to open several stores in the Vancouver area. Home Depot has goal to have large share of the market by providing customers with the best service, widest production selection, and lowest prices. Also, Aikenhead’s Home Improvement Warehouse Inc. was planning to build stores in Vancouver. Edmonton has ten stores in Toronto area. Tim-BR-Marts need to develop a combative strategy and develop it fast. Any company do not have a strong strategy will lose the competition. To start the planning the analysis of the problem is most vital way to solve it. Management Processes: Tim-BR-Marts Ltd has management process, which is a process of planning and controlling the performance or execution of their business. This include: 1. Decision making processes A decision-making arises in Tim-BR-Marts because a manager is faced with a problem and another courses of action are available. So manager do study the following: a. Type of information used in decision making In deciding which option to choose, the information is very important to choose which decision to fallow. Also manager do have information relevant to his decision, and manager must have some principle on the basis of which he can choose the best alternative. Tim-BR-Marts know how many competitors are there in the market? What are the strong properties and what weak area that they have? 1. Firm overhead Time-BR-Marts managers know overhead which all non-labor expenses require to operating such business. How many stores, electricity bills, and phone bills. All these expenses are knew by the manger. 2. Negotiation prices Negotiating on price became a factor in getting the scene to agree to deals. Tim-BR-Mats have competitive advantage of negotiation price. 3. The North American Free Trade Agreement (NAFTA). This agreement gives good advantage to all component of lumber market. 4. Tim-BR-Marts has defensive strategy Defensive marketing warfare strategies are a type of marketing warfare strategy designed to protect a company's market share, profitability, product positioning, or mind share. Many companies in Tim-BR-Marts territory have attacked Tim-BR-Marts. There is many ways that Tim-BR-Marts to defend their market by principles involved: Always secure an attack with equal or greater force. If Tim-BR-Marts competitor plans to open more stores, Tim-BR should find better places to open new stores. Defend every important market. Be forever vigilant in scanning for potential attackers. Assess the strength of the competitor. Consider the amount of support that the attacker might muster from allies. The best defense is to attack you. Attack your weak spots and rebuild yourself anew. Defensive strategies should be the exclusive domain of the market leader. 5. Market Share Market share analysis is an important part of market analysis and indicates how well Tim-BR-Mart is doing in the marketplace compared to its competitors. b. Decision time frame Competitors are expanding quickly into Canada market. Price negotiated yearly. c. Level of inclusiveness in process autocratic Reduce the stress among managers and employees A more productive group while the leader is watching the growth. 3.Tim-BR-Marts has only two who make the decision. 4. Employees need quick and accurate action instead of obstacles and delays and wait only for two managers to make decision. 5. Employees with decision-making permission, save company time and increase client satisfaction. To solve that by 1. Local meetings 2. Business and the mission need of inclusiveness, employees help to achieve the mission, all member of the firm should adapt to the changing. E. Bounded rational model Use the knowledge that they have to the best of their abilities. Define the situation/decision to be made Identify the important criteria for the process and the result Consider all possible solutions a. Decision making model? 1. Identify the decision to be made. Barrie Sali should go through an internal process of trying to define clearly the nature of the decision that you must make. This first step is a very important one. Also the company should know what direction is going. Tim-BR-Marts realize that a decision must be made to improve the market share and open more stores to compete with competitors.   2. Gather relevant information. To have good decisions it requires collecting related information. Tim-BR-Mart has most data. They have the company detail information and also the competitors. They know how many stores they will open and where the stores are going to be located. They know most accounting and financial status. The real trick in this step is to know what information is needed, the best sources of this information, and how to go about getting it. There is very important point, that Tim-BR has information about their self, by a process of self-assessment; other information must be sought from outside yourself-from books, people, and a variety of other sources. This step, therefore, involves both internal and external work.   3. Identify alternatives. Through the process of collecting information Tim-BR manager, Barrie Sali, should identify several possible paths of action, or alternatives. In this step of the decision-making process, manager will list all possible and desirable alternatives to compete with other companies such as Wal-Mart or Home Depot.   4. Weigh evidence. Manager should know his information and feelings to imagine what it would be like if you carried out each of the alternatives to the end. Manager must evaluate each choice and would be helped or solved through the use of each alternative. In going through this difficult internal process, manager begins to support certain alternatives, which seem to have higher potential for reaching the company goal.     5. Take action. Tim-BR manager should now take some positive action, which begins to implement the alternative he chose. If he choice to open new stores and lower the price he should go for it after he studied all the alternative decisions.   6. Review decision and values. In the last step Tim-BR manager experience the results of his decision and evaluate whether or not his decision the right decision or not. b. Strategic choice Good strategic choices must be challenging to retain ahead of competitors but also have to be realistic. Analysis has significant role in making strategic choice. 2. Communication Communicating effectively helps group members build trust and respect, foster learning and accomplish goals. a. Vertical communication is followed up within the business organization of Tim-BR-Marts. Through effective vertical communication, comprehensive collaboration with the business entities is generated. The communication flows both in upward as well as downward direction. Thus, this business form adds value to the flow of information between the suppliers and the management, between suppliers and the member dealers and between the member dealers and the management. Effective flow of information is assured through vertical communication that also adds value to the quality of service provided by the company. Tim-BR manager does not have horizontal communication. Usually Tim-BR manager give order and enforce decision without negotiate with the employees. b. Barriers There are many barriers between employees and managers. 3. Change a. Change orientation of the organization Tim-BR has adapted one way of business, while the market change fast still Time-BR work and process as in 1967 when they started. The basic idea was very simple: several lumberyard-making purchases together could obtain a better purchase price than they could by buying alone. Change is very important to all kind of business, if the company change they will lose customers and lose market share. b. Communicated Tim-BR has luck of communication and that what make it hard for manager to take the right decision. Right now the company has only vertical communication. c. Disregard There is disregard toward employees from the manager and there is manage regard the market. d. Conversation to competitive advantage A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Tim-BR has competitive advantage because they are older in the Canadian market and have more relation with the supplier. e. Change The mission of Tim-BR-Marts was to purchase high-quantity products for dealers at the lowest possible prices. The company itself did not seek profit, but rather intended to improve the financial performance of the members though rebates from suppliers in return for volume purchasing. There was a strong desire to keep things informal and uncomplicated. This is not the way business, business is to gain more money and have more costumers. It is time to change because the way Tim-BR-Marts doing business will make them bankrupt. The most important tool to measure the success of business is the amount of the profit that they made not how many sales they do. To understand and measure where you are truly at, you need to find out what your profit is. Profit is more important than sales in sense that it is the percentage of the sale that you end up actually making. You can have a lot of sales with very little, and sometimes zero, profit. You can also have fewer sales, but a higher profit margin on each sale. There is no meaning that Tim-BR-Marts have a lot of members and little of profit. How to Determine Profit? Determining profit is not hard if you are keeping track of your numbers. Using good accounting employees. There are two primary profit percentages that Tim-BR-Marts should be interested in. They are gross profit and net profit. 4. Performance measurement Performance measurement is an essential aspect for the enhancement of business position within the industry. The core business function of Tim-BR-Marts is to operate in a financially viable way for the betterment of its members. The success of the company is dependent upon its operational efficiency and provision of quality services. For the purpose of generating quality service, it is required that ‘Tim-BR-Marts’ undertakes performance measurement sessions on a regular basis. Continuous review of performance would help the firm in identifying the areas that are required to be improved. Improvement of core areas would lead towards overall performance efficiency and develop strong implication for fulfilling objectives. The impact that business operations are generating upon the level of customer satisfaction is essential to be measured by Tim-BR-Marts. However, in the case of Tim-BR-Marts, measuring the satisfaction of its members is more important and thus the performance measurement tools should be aimed at assessment of members’ needs and demands. For successfully accomplishing tasks in line with the necessities of the members, the company should implement activities of receiving feedback from the members. This process would encourage involvement of the members that would boost up the feeling of ownership among them. The feeling of ownership among the members would definitely lead towards the improvement of the process of performance measurement. The measurement areas should be designed with regard to the fulfillment of organizational goals, vision and missions. 5. Vision, Mission, Goals and Objectives Tim-BR-Marts has strategic planning but need to rethink of their vision, mission, goal, and objective. Strategic planning determines where Tim-BR-Marts is going over the next year or more, how it's going to get there and how it'll know if it got there or not. Vision: A picture of the preferred future a statement that describes how the future will look if the organization achieves its ultimate aims. The vision of Tim-BR-Marts is excellent but need to be improving to be in the stage of 2011 not 1967. A vision statement is sometimes called a picture of the company in the future but it’s so much more than that. The vision statement is inspiration, the framework for all-strategic planning. If Tim-BR-Marts do not revise the vision it will lose in the competition. Tim-Br-Marts need to answer the questions, where do we want to go? Do we want to get benefit or just want to have more members? Mission: A statement of the overall purpose of an organization. It describes what you do, for whom you do it and the benefit. To provide consumers with high-quality, price-competitive widgets to meet their personal, business and recreational needs. Goals: Broad, long-term aims that define accomplishment of the mission. Grow profitability. Maximize net income by increasing revenues and controlling costs. Objectives: Specific, quantifiable, realistic targets that measures the accomplishment of a goal over a specified period of time. Increase revenues. Limit increases in overhead costs to. The management of Tim-BR-Marts follows a cohesive approach towards handling of issues related to members of the organization. To this note, it is worth mentioning that members receive high degree of support from Tim-BR-Marts top management personnel. The members are, however, not owed to the management for buying products from the selected suppliers of the firm. The member dealers of Tim-BR-Marts enjoy freedom of remaining independent businesses; while at the same time can continue to remain members of the firm. This indicates that if the member dealers wish to purchase products from any other suppliers other than the prescribed by Tim-BR-Marts, they are free to do so. The company proclaims that the feeling of togetherness among the member dealers and the management personnel is the fundamental foundation of purchasing power. The supportive and coordinated activities among the suppliers, the management and the member dealers have evolved as the most important determinant of buying power of Tim-BR-Marts. This management approach was the strongest base for the effective business process that the company follows. The cohesive and collaborative approach of the managerial levels with other business entities generates effectiveness towards the negotiation process which is the core competency of the business operations. 6. Strategy Coherence The various strategies followed by the business entities within the organizational sphere of operations are essential to be made coherent for the purpose of ensuring competitive advantage within the industry. The exact level of coherence is acquired when comprehensive consistency is achieved among every business units and functional departments of the business. This indicates that the strategic objectives of Tim-BR-Marts’ management should be precisely in line with the business objectives of both the suppliers as well as member dealers. The objective of the suppliers is to provide rebate at such a rate that satisfies their business goals and also at the same time, becomes effective in maintaining sound relationship with the firm, i.e. Tim-BR-Marts. The strategic objective of the firm is to negotiate as much as possible with the suppliers for providing the most rebate percentage to their member dealers. The strategic objective of the member dealers is to obtain the best deal out of the firm. The outcome of these varied strategic objectives of the business entities would be the most appropriate rate of rebate to be provided by the suppliers to the firm’s member dealers and to be negotiated by the firm. 7. Competitive Congruence The strategic competitive position of Tim-BR-Marts in Canada can be termed as challenging with respect to the prevalence of a number of strong competitors such as that of Home Depot and Aikenhead’s. From the scenario presented in the case, it can be stated that the firm is in requirement of fast response to the prevailing competition. Apart from the two important competitors mentioned above, there is indication of lot many competitors to enter into the market of Western Canada. Thus, pertaining to the anticipated stiff competition, the industry dwellers should be prepared with strong strategies. As customers are the most important aspects of a market, the companies should built strategies through comprehensive focus upon needs and demands of the customers. 8. Strategic Choice Although for selecting strategies aimed at satisfying the customers’ needs, firms can find a number of strategic options, the strategy that best fits the firm’s infrastructure provides the best result. For Tim-BR-Marts, the most appropriate strategic option is to select a niche market and frame products’ features and qualities according to the necessities of that market. For effectively fulfilling the needs and demands of the niche market, the firm has to undertake market research which is the best possible technique of satisfying customers’ needs. Second most important strategic choice for the firm has to be development of the best possible medium to reach out to the consumers. However, test marketing would be a safe strategic move for implementing strategies aimed at satisfying customers’ needs and demands. 9. Organizational Inertia A. Value Chain Coordination: The coordination of secondary activities of Tim-BR-Marts such as that of technological development and infrastructure are required to be more inclined towards the primary activities. For satisfying the customers’ needs, greater coordination among the activities would provide more effective results. B. Accounting and Finance: The financial performances of Tim-BR-Marts are recorded accurately and on a regular basis. Accurate accounting techniques are followed for presenting data on the various financial statements such as balance sheets and income statements. Comprehensive, effective and precise accounting and financial statements are maintained so that the exact financial position of the firm can be recognized which is necessary for future moves. C. Organizational Structure: The organizational structure of the firm is specialized in division of departmental units whose leaders are liable to report to the President and the CEO. The various departmental units under the firm’s organizational structure are commercial, corporate development, finance, human resources, marketing, hardware procurement and sales and operations. There are respective leaders of each of the departmental units who are required to report to the President and the CEO about their respective departments’ performance. Due to this organizational structure, each department of the firm is adequately guided by experienced hands and their functioning results in minimum loopholes. D. Corporate Culture: The culture of the firm is well accustomed to the needs and demands of the various entities within the business operations. The various organizational units of the firms are cohesively organized for fulfilling ultimate objective of acquiring the most amount of rebate from the suppliers for the member dealers. The culture is well accustomed towards incorporation of changes required for staying updated with the demands of the customers within the industry. E. Process of Gaining, Maintaining and Using Financial Resources: As the firm is a service organization and acts as an intermediary between the suppliers and the member dealers, financial resources are obtained from the members in the form of participation fees. The resources are effectively maintained by trained personnel and the earnings generated from the servicing activities are allocated for other important breakthroughs of the company in varied directions. F. R&D Resources: Due to the service nature of the business undertaken by Tim-BR-Marts, secondary importance is provided to the development of R&D activities of the firm. But, for posing strongly against the future anticipated cut-throat competition, the company should also heavily focus upon the developmental activities in relation to R&D department. Technological aspects that can reduce the operational costs of the firm would be fruitful in this regard. G. Leadership: Leadership is the foremost requirement in generation of operational efficiency of the firm. For every departmental unit of the firm, a leader is appointed. The leader is bestowed with the power of taking proposed decision about the firm’s unit for its betterment. With due assessment of the proposed change or decision by the President and CEO, the change is implemented. Bibliography Schroeder, H., (1994). Tim-BR-Marts Limited. University of Lethbridge. Read More