MGT 498 Week 5 - Learning Team Paper - Riordan Strategic Plan Paper
MGT 498 Week 5 - Learning Team Paper - Riordan Strategic Plan Paper
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Date Created: 11/16/15
Running head: STRATEGIC PLAN 1 Strategic Plan Names University of Phoenix Strategic Management MGT/498 John Vincent Date STRATEGIC PLAN 2 Strategic Plan Riordan Manufacturing, Inc. is an industry leader in the field of plastic injection molding. With stateofthe art design capabilities, they create innovative plastic designs that have earned international acclaim (Riordan, 2011). As a fortune 1000 company, the organization is a forerunner when compared to businesses in the same industry. Being competitive in the present and remaining competitive in the future will require Riordan to develop a solid strategic plan. Team B will serve as consultants to Riordan’s management staff to assist them with brainstorming longterm objectives and how those objectives will be implemented. The first course of action will be to conduct an environmental scanning analysis on the internal environment and the external environment. The form of analysis is also referred to as a SWOT (strengths, weaknesses, opportunities and threats) analysis. Scanning the internal environment is important for exploiting strengths and weaknesses of human resources. The external environment is scanned for opportunities and threats. Strategy formulation will depend on Riordan’s current position in the market and where they plan to be within the next five years. Gathering statistical data of past sales, inventory spikes or plummets, and gross margin serves as a forecasting tool that will help determine how expenses need to be allocated. Organizational structure may have to be realigned to support the new strategy as well as optimize productivity. Prior to implementing the strategy, Team B will direct Riordan on what tasks needs to be performed and what materials are needed to get started. Strategy implementation is probably the most challenging step of any because changes are made that affect all levels of the organizations. Evaluation and control is the process of monitoring the effectiveness of the new strategy and management is able to determine if the strategy needs to be STRATEGIC PLAN 3 altered or changed altogether. The following paragraphs will discuss competitive advantage and how to implement new strategies. Riordan’s Need for a Strategic Plan For many years Riordan has operated from a status quo. The management team has noticed the company’s profits are uneven, and the ability to retain staff and the company’s sales revenue is rapidly declining. The company has enforced changes in the sales process to a consumer relationship management system in an effort to recover from the declining sales. The strategic change was implemented to increase financial stability that had an effect on employee morale. With the many changes implemented at Riordan, many issues and opportunities were created. A strategic plan is needed for Riordan Manufacturing to assist implementation. The strategic plan will allow the company to become aware to the environmental issues, and identifying Riordan’s strengths, weaknesses, opportunities, and threats is the first step to developing a strategic plan. Riordan Manufacturing needs a strategic plan to help assist with the following strategic goals; (Apollo Group, 2004) Riordan Manufacturing wants to become the best global plastic manufacturer Serve the market through top 15 customer clusters Strengthen Riordan brand name Gain competitive advantage Reduction in companies product cost Collaborating with Kudler’s Fine Foods and becoming the company’s number one partner. STRATEGIC PLAN 4 Riordan Manufacturing understands when developing their strategic plan they must maintain their social and ethical standards. The Role of Ethical and Social Responsibility “The concept of social responsibility proposes that a private corporation has responsibilities to society that extend beyond making a profit” (Wheelen & Hunger, 2008,). Ethical and social responsibility will play a vital role in Riordan’s manufacturing strategic management. “Ethical responsibilities of an organization’s management are to follow the generally held beliefs about behavior in society” (Wheelen & Hunger, 2008,). The management team at Riordan must consider social, ethical, economic, and legal responsibilities when implementing strategic plans. One strategic decision that the company has to make is relocating the China operations. Riordan must consider its responsibilities to the dislocated community and employees. Relocating would lower costs and improves the company’s market positions; the decision however, can negatively impact the community and local economy. Making the strategic decisions to lower cost, relocate, and outsourcing can cause communities to have a negative perception of Riordan’s Manufacturing beliefs, objectives, and mission. “Managers must be able to deal with these conflicting interests in an ethical manner,” (Wheelen & Hunger, 2008, p. 57). When the organization changes their ethical behavior can encourage more teamwork, dedication, and attract skilled employees to join the company. Competitive Advantages Since the founding of Riordan in 1991, the company has been a leader in the manufacturing field of plastic injectable molding. Cost leadership, differentiation, and focus are STRATEGIC PLAN 5 examples of strategies that can be implemented at Riordan to improve the organizations competitive advantage (University of Cambridge, 2011). With manufacturing operations in both the Unites States of America and in China the company can meet the needs of customers around the world. Riordan’s research and development team located in California continuously works to develop new product innovations to exceed the demands for its products. By diversifying its consumer market between the automotive and aircraft manufacturers, medical field, beverage distribution, and other consumer products Riordan has created a wide variety of demand giving the company an advantage over other plastic injectable molding companies. The investment company provides customers with leading edge solutions in the field of polymer materials afford the company another advantage over its competitors. Riordan Manufacturing has many competitive advantages in common with companies researched last week such as WalMart, Sprint, Hewlett Packard, Amazon, Microsoft, Walgreens, and Apple. Riordan has products that many competitors do not have, or may have but are of less quality. Riordan has a competitive advantage as they have more ergonomic, cheaper, and better quality products than the oppositions. The same applies with companies such as WalMart and Apple; WalMart offers good quality products for “everyday low prices” and Apple provides electronic products that they are experts in generating. Riordan’s implementation of Six Sigma and the ISO 9000 accreditation of the company’s manufacturing process afford it another strategic advantage over its competition. Both of these programs help the company to manufacture product of the highest quality at the lowest cost. Six Sigma ensures that the company’s operations are operating at the lowest cost by eliminating STRATEGIC PLAN 6 waste from the development and manufacturing process. Riordan’s new product development strategy requires only a small amount of raw materials to produce the new medical products (University of Phoenix, 2008). The ISO 9000 accreditation requires that the manufacturing operations be documented and standardized across the organization to ensure that regardless of which manufacturing location a product is manufactured meets or exceeds customer’s specifications. Measurement Guidelines The measurement guidelines that Riordan should take to verify the effectiveness of the new strategy would be to rate overall performance of the plan that is currently in place as well as what will be in the future. Change is inevitable so monitoring the strategy periodically is a must. The strategic plan process Riordan went back to their mission and objectives. From there an environmental scan was performed through a SWOT. Once that was the SWOT was completed, the formulation and implementation were carried out. The final process was evaluation and control. Managers must monitor the progress made on the strategic objectives and the changes in the business environment. Periodic review of implementation plans is important to measure progress and maintain accountability. Periodic review answers questions for Riordan such as: Are we on pace to complete our implemented plans? Are the objectives still the best way to go or can we improve longterm prospects? Has something changed in the business environment internal or external that would force us to revise or change objectives? Riordan would benefit greatly by performing monthly reviews of action plans. If not monthly, indepth quarterly reviews of strategy STRATEGIC PLAN 7 formulation and implementation would suffice. Periodic reviews would keep plans moving forward and adjusting course would occur when change does. Periodic reviews would entail defining parameters that should be measured. Once that is accomplished Riordan would then need to define target values for those specific parameters. The next step would be to perform measurements and then to compare data recorded to pre defined standards. Last, is to apply necessary changes. If the strategic plan does not work, then the process would start over again. Internal dynamics and cultural and structural leadership considerations Internal dynamics are one of the biggest problems that arise when implementing new strategies. Developing conflicting and weak internal dynamics make the business itself the hindrance in achieving success with the implemented strategy (The IPOGroup, 2011). In this situation, the internal dynamics of Riordan Manufacturing are against it. For Riordan to implement successfully and maintain the new strategic plan, Riordan must change its internal dynamics. The change in the internal dynamics will conglomerate the disparate views on the strategy, change the organizational structure, and fix the leadership roles. Riordan currently has internal dynamics that runs with a matrix organization structure using 20 century information and management storage techniques. Thus, one of the key components of the internal dynamics that have to be fixed are the computerized management systems and the organization structure, otherwise the durability of the strategic plan is at risk. To fix the matrix organizational structure, certified hierarchal managers will see each level of the structure and the job requirements for each job will regulate the aptness of the employees. STRATEGIC PLAN 8 A new employee selection process will be formulated to change the organizational culture for the better. This new system will allow new, young, and fresh job hunters join the Riordan Manufacturing team and possibly replace older employees. This system will qualify a person for the job depending on the person’s credentials and schedule, not on the person’s permanency. This new structure will risk this system to gain young, bright, and innovative minds that can help Riordan succeed to the top. These new organizational structure will boost innovation through the educatedfirst system and will help constantly promote and grow the company rather than having the company on a fulcrum of the growth lever. The organizational or operational managers of each organizational level will need to change the business culture to fit the requirements for the implemented strategy. If the strategic plan and implementation plan do not fit, the managers will need to change the organizational culture but leave the strategic plan of the company unchanged. The organizational culture can change by planning the result of the change and reflecting it in the mission and vision statements. According to Heathfield, “The organization must plan where it wants to go before trying to make any changes in the organizational culture. With a clear picture of where the organization is currently, the organization can plan where it wants to be next. Mission, vision, and values: to provide a framework for the assessment and evaluation of the current organizational culture, your organization needs to develop a picture of its desired future”. The organizational change will be a success when it is planned out and an action plan is laid out. However, the organizational change must comply with the stakeholder also because a failure to change the organizational culture could halt, terminate, or fail the execution of the strategic plan. STRATEGIC PLAN 9 Riordan deals with plastics and makes injections molds for plastics. To help remain one of the stop companies in plastic injection molding, Riordan needs to set up some initial goals and have a feedback process in place to assess where it is and where it may want to go. When first starting the process, Riordan needs to look at what they want to address and ask themselves a series of key questions that will help them determine what they want to do. According to our week five reading some of the questions that can be asked are, “did existing strategies produce the desired results, were strategies poorly executed, and were results monitored and strategies revised as needed?” (Hunger & Wheelen pg.331) By following a process and seeking input on their questions, Riordan can remain competitive and find causes behind their success or failure. Since Riordan deals with plastic moldings, it wants to look at efficiency in its model and also defects. Riordan would take a random sampling of its finished product and compare it to what is considered acceptable standards. Since the company needs to take a look at stakeholder values and maximize shareholder profits, the metrics needed are more important for the company. If the company has a lot of waste and is inefficient in what it produces, shareholder value will go down. To look at efficiency, the company would want to plot the amount of defects in product during one hundred models. It would want something in the lines of one defect per one hundred products produced. The company would scatter plot and develop histograms to track. During the process; if the company noticed a higher defect rate or saw inefficiencies in what it is doing, then the company can stop the process and look at what needs to be done to correct. Riordan can ask questions during the process to find where the problem truly lies. STRATEGIC PLAN 10 Since one of the primary focuses would be efficiency and defect rates, a secondary goal would like at meeting the standards of different organizations and high standards that are out there. Riordan would want to fall inline with ISO9001 standards, have a Six Sigma model in place. By falling with these standards and practices, it will help Riordan remain competitive in the marketplace and be seen or continue to be seen as one of the top companies in plastics. Closing Remarks Team B presented some interesting facts about why Riordan would benefit from having a strategic plan. Developing longrange plans is best described as perplexing because there are so many moving components. Longterm strategies must be treated as a living thing because it will constantly change from the moment it was conceived. Timeliness, human resources and budget constraints are the underlying factors that determine whether a plan will succeed or fail. Continuing to assess human resources for core competencies is a competitive strategy that is relatively cheap. Promoting from the inside is recommended over recruiting from the outside because existing employees are familiar with the systems and company culture In closing, all organizations including Riordan need to understand the benefits ongoing learning and development. Management’s goal is to continue to reinvigorate the company through incremental innovation and product development. Tracking international developments with other firms and storing historical sales data are competitive advantages that cause Riordan Manufacturing to lead the manufacturing industry. Analyzing previous data pertaining to sales, profit margin increase or decrease, production, research, and development are some of the same competitive strategies used by Boeing and Apple, which discussed in last week’s readings. STRATEGIC PLAN 11 Riordan conducts environmental scanning analysis to assess the needs of their clients so they can be responsive to their demands. STRATEGIC PLAN 12 References Apollo Group, Incorporated. (2004). Riordan Manufacturing. Retrieved from University of Phoenix MGT/498 Strategic Management ecourse materials. Heathfield, S. M. (2011). How to change your culture: Organizational culture change. Retrieved from http://humanresources.about.com/od/organizationalculture/a/culture_change.htm Hunger, T. L., (2008). Ethics and Social Responsibility in Strategic Management. In T.L. Hunger, Concepts in Strategic Management and Business Policy, Eleventh Edition (pp.5657). Prentice Hall. Phoenix, U.O. (2005). Virtual Organizations, Riordan Manufacturing. Retrieved 06 07, 2011, from Finance and Accounting, Operating Cash Budgets: https://ecampus.phoenix.edu/secure/aapd/cist/vop/business/Riordan/RioFandA004.htm The IPOGroup. (2011). Understanding the internal corporate dynamics. Retrieved from http://www.ipogroup.com/Insights/Understanding_the_Internal_Dyn/understanding_the_i nternal_dyn.html University of Cambridge, I. F.(2011). Porter’s Generic Competitive Advantage (ways of competing). Retrieved 05 04, 2011, from Management Technology Policy: http://www.ifm.eng.cam.ac.uk/dstools/paradigm/genstrat.html Wheelen, T. L., & Hunger, J. D.(2008). Concepts in strategic management and business policy. (11th ed.). Upper Saddle River, NJ: Pearson Education
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