This assignment provides you with an opportunity to apply your strategic management accounting skills to the case firm, the Breville Group.
The Breville Group is a large Australian provider of small electrical appliances. The firm’s brands include Breville, Sage, Kambrook and Ronson.
Q 1 – Strategic And Knowledge Management
You have been asked to prepare a report for the senior management team of the Breville Group on the future strategic positioning of the firm. You need to present a response at the next board meeting.
Areas you need to address include:
- The Breville Group’s competitive advantage
- Four strengths, four weakness, four opportunities and four threats for the Breville Group
- Using Porter’s generic strategies, what strategy would you recommend for the Breville Group
- Potential measures the Breville Group could use to evaluate the success of your recommended strategy
This report must be supported by reference to a range of relevant academic and other research sources.
Q 4 – Sustainability
Prepare a report which identifies and summarises the key environmental and social concerns relating to the Breville Group’s operations. As part of your report, suggest three potential objectives relating to the environmental sustainability of the Breville Group’s manufacturing operations and three potential objectives relating to the firm’s commitment towards responsible supply chain management. For each of these objectives, identify at least two measures that could be used as part of the firm’s management accounting system to measure the firm’s progress towards achieving these objectives
The report is prepared for the senior management team of the Breville Group for the future strategic positioning of the firm. Furthermore, the report highlights the key environmental and the social concerns related to the Breville Group operations. The report shows the three potential objectives related to the environmental sustainability and firms commitment towards responsible supply chain management.
1. Strategic And Knowledge Management
The company is an Australian Publicly listed and leading provider of the small electrical appliances. The company came into the existence in the year 1957 as a small importer of the homewares items (Breville Group, 2017).Competitive advantage
The competitive advantage refers to as an advantage that the company maintains over its competitors to attain the greater amount of sales and profit. Breville Group Limited is not only having the competitive advantage of long-term profitability but also the company offers the innovative products. The products offered by the company are designed and developed which is one of the advantages and the company offers these innovative products in numerous markets. In Australia and New Zealand, the company is focused on the premium kitchen appliances. In North America, Breville Group is having their online retailing platform. The company is having the operation in other areas of the world and at these places, the company is using third-party distributors to maintain the supply of the products (Breville Group, 2017).
The main purpose of the SWOT analysis is to identify the strategies that can be used to exploit opportunities of the company, counter threats and build on and shield the strength of Breville Group Limited and remove its weaknesses (David, David & David, 2017).
- Healthy returns on capital expenditure- The Breville Group Limited achieve the success when the company executes the new project and this can be measured through the returns on the capital expenditure.
- Skilled Workforce- Company is having the skilled and trained workforce; Breville Group Limited is investing the amount in the development and training of the employees. The company hire the skilled employees but still, the company believes in motivating the employees by providing them the required training and by boosting their confidence (Fern Fort University, 2017).
- Reliable suppliers- The reliable supplier of the company is a strength as the company is able to maintain the strong base of a reliable supplier. This also helps the company in overcoming the supply chain bottlenecks.
- The successful record of developing new products- The product introduced by the company was successful so the company is able to maintain the track record of the successful developing new and innovative products which is one of the strengths of the company.
- Automation of products- Company is able to maintain the consistency of quality in products with the help of the automation, this automation helps the company to scale up and scale down considering the demand of the products in the market.
- Research and development- The investment in the research and development done by the Breville Group Limited is less and this is becoming the weakness of the company. To face the competition in the industry company should invest the amount in research and development so that company can bring the innovative products to the market.
- Limited success outside the main business activity- The Breville group limited is growing and leading company in the industry, being a leading company it has faced challenges while entering into the different product segments with the current culture of the company.
- Demand forecasting- The demand forecasting is required for every industry but over here the Breville Group Limited is not able to forecast the demand for products which is a weakness. Hence, this affects the company’s left out products and leads to loss of products.
- Lack of choices in product range- The products provided by the company to its customer left with fewer options which make the customers switch to the other company’s product.
- The openings in new markets- Breville Group Limited has an opportunity to enter into the new emerging markets with the help of the government free trade agreement.
- New technology- The new technology offers an opportunity to Breville Group Limited to practice the activity of the differentiated pricing strategy in the new market. This strategy is going to help the company to maintain its loyal customers.
- Stable free cash flow- The stable free cash flow provides an opportunity to the company to invest the amount in the adjacent product segments; the company has an opportunity to enhance its product categories.
- Use of the big data- Company is offering its products to the online customers and company is continuously investing the huge amount in the online channels, but to achieve the mission, it is required for the company to make use of the big data that helps the company in understanding the customer needs.
- Currency fluctuations- Company might face the threat of the currency fluctuations as this can affect the profit of the company. Breville Group Limited is having operations in many countries so the fluctuation in a currency of any country can create an impact.
- New regulations- The emergence of the new regulations can be a threat to the company, the new environmental regulations Under Paris agreement 2016 might lead to the threats for the existing and the new product categories for the company.
- Intense competition- The rise of the companies in the industry leads to the competition among the companies which might be a threat to the company and the profit of the company will decrease.
- Lack of the skilled labor- The lack of the skilled labor in the labor market might be a threat to the company, the reason being the company need the skilled labor to accomplish it’s operating.
Porter’s Generic Strategies
The porter’s generic strategies show how the company pursues the competitive advantage across its chosen market scope. There are in total four strategies (Cost leadership, differentiation, cost focus, differentiation focus) that can be followed by the company (Tanwar, 2013).
The appliances provided by the company are innovative and comes with the unique design which makes it differentiate from the competitor products. The company is investing the amount in the research and development so that company can provide the innovative products and this is the reason company charge slightly high price but affordable. The company keeps the price according to the product. Considering the company’s competitive advantage and the SWOT analysis, the company should bring the differentiation focus in the product.
Differentiation focus strategy of porters talks about the differentiation in the target market segment of the company (Moon, Hur, Yin & Helm, 2014). Breville Group Limited targets the customer looking for the kitchen appliances, as the company should extend its target market and should focus on the customers looking for the home appliances. This strategy is going to help the company in enhancing the sales of the company which ultimately increase profit. The company will be able to generate the competitive advantage as the competitors of the company are going to target to the people who are looking for the kitchen appliances rather than the home appliances.
Some of the potential measures that can be used by the company to evaluate the success of the Differentiation focus strategy are given below: –
- Profitability- Company decided to expand its target market, the expansion of the target market helps the company in generating the profit out of the products. If in case the profit of the company shows a rise from the previous year then the strategy adopted by the company is working and the company should continue with that strategy (Stem Innovation, 2016).
- Customer satisfaction- Customer satisfaction is a primary focus of the company; if the targeted customers of the company are satisfied with the products then the company can easily achieve the success in the near future. Different customers have different preferences for the products when the company fulfills the specific requirement of the customers then the company will be able to satisfy the needs of the customers (Goetsch, & Davis, 2014).
- A number of new customers- Increased in the number of the new customers shows that the company has achieved the success with the implementation of the differentiation focus strategy. The increased in the number of the customer shows the success of the strategy recommended to the Breville Group Limited.
- Business position- The increase in the position of the business is an appropriate way to evaluate the success of the strategy recommended to the Breville Group Limited. The needs of the customer will be satisfied and the demand for the products in the market will increase which shows the success of the strategy.
- Employee’s satisfaction- The employee’s satisfaction is required for the company as the employees of the company is an asset of the Breville Group Limited (Topolosky, 2014). The strategy also impacts the employees as they have to work for the customers having different and specific demands for the products. If in case, there is high retention of the employees in the company then the employees of the company are not satisfied. To evaluate the success the company should keep checking the satisfaction of the employees.
|Dimension||Objective||Possible performance measures|
|Environmentally sustainable performance||a. Ethics and corporate social responsibility||1. Strong brand image2. Trust of the customer|
|b. Benefits to the society or community (Breville Group, 2017).||1. Sales2. Standard of living|
|c. Encouragement and awareness among the employees towards the suitability of the environment||1. Donation by employees2. Playing role in changing the face of the society.|
|Responsible supply chain management||a. Time management||1. On-time delivery of the products2. Grabbing the opportunity|
|b. Relationship between the intermediaries (Wisner, Tan & Leong, 2014)||1. Getting the raw material at low cost.2. Increase in number of retailers|
|c. Commitment to employees||3. Culture of the organization4. Retention of employees|
Environmentally Sustainable Performance
The company is concern for the environmentally sustainable performance this is the reason the company signatory to the Australian Packaging Covenant, an action plan was developed by the company in the year 2012 which was formed with the motive to reduce the amount of the product packaging that finishes up in landfill by designing better, longer lasting products and by using the packaging material that can either be recycled or reused (Breville Group, 2017). By doing so the company is able to perform the duty towards the benefits of the society, community, ethics, and CSR.
- Ethics and corporate social responsibility- Breville Group Limited believes that they have to fulfill the environment and social responsibility as it is their duty to conduct the sustainable environment across the business and society (Tai & Chuang, 2014). The performance can be measured through the brand image of a company in the market and trust of customers, as if the company is able to achieve the ethical and corporate social responsibility then the trust of the customer on the brand will enhance along with this the brand image or reputation in the market is going to increase.
- Benefits to the society or community- Breville Group Limited thinks for the society and the community benefits by providing them environment sustainability. The factor can be measured through the sales of the company and the living standard of the company (IBIS World, 2017). The facilities provided by the company is helpful in enhancing the living standard of people and sales, as this is the way through which the company can check the development is there or not.
- Encouragement and awareness among the employees towards the suitability of the environment- The employees of the company should be aware of the need for the welfare and their responsibility towards the society. The employees can bring the changes in the opinions of the society and the donation by the employees is the effective way to check the performance of the objective of the company.
Responsible Supply Chain Management
Breville Group Limited is responsible for the supply chain management. The company chooses its suppliers and partners with its ethical, social and sustainability commitments (Breville Group, 2013).
- Time management- Manager of the Breville Group Limited is responsible for the supply chain management, time can impact the other activities of the business, and hence, the management of the time plays a vital role in the business. To measure the objective of the time management the company should check the On-time delivery of the products as this is the effective way to check the time management (Christopher, 2016). Apart from this, with the time management in the supply chain, the company can grab the opportunity to fulfill the needs of the customers before the competitors.
- A relationship between the intermediaries- Manager of the company tries to form the relationship with the intermediaries that include partners and suppliers of the company. This relationship helps the company in getting the raw materials at the low cost which is because of the strong relationship (Monczka, Handfield, Giunipero, & Patterson, 2015). Relationship with the intermediaries helps the Breville Group Limited to increase the number of retailers or the distributors in different countries so that the company can easily make the product available to the customers. Hence, to check the effectiveness of the supply chain there is need of checking the prices of the raw material and the number of retailers and distributors.
- Commitment to employees- The commitment to employees helps the company to perform the smooth supply chain. The employees of the company play a vital role in the supply chain as they are the one who has to achieve the activities for the company. The operations of the company are performed by the employees and in return, the company provides the facilities to the employees. Performance of commitment to employees can be evaluated through the organizational culture of the company. The organizational culture of the company shows the fulfillment of the commitment towards the employees. The low retention of the employees reflects that the company is providing all the facilities to the employees.
The report includes the details related to the Breville Group Limited; the company is leading in the electronic appliances. The report shows the SWOT analysis, competitive advantage and some suggestions that help the company to enhance the profit. The sustainability of the Breville Group Limited has discussed above along with the potential performance measurements.
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