OPERATIONAL CHANGE

Introduction

This is a case study of a company that is involved in IT services. Its major business is providing telecommuting services for companies with individuals working at home. The telecommuting services are provided through virtual private networks (VPN), teleconferencing, Voice over IP (VOIP) and virtual call centers. The use of telecommuting services has been made possible as many individuals can access broadband connections from anywhere, also telecommuting services are efficient as they lower the cost of commuting to an office space and saves time. The company utilizes client server computing and local area networks that promotes the sharing of resources and decentralizes information. The IT Company itself has workers who are teleworkers/telecommuters who work from home or rather away from the office to increase the reach of the company’s services. The business operation areas of the company are; finance and accounts, human resource, production, Administration/IT support, customer services, marketing/sales, and research and development. Over the past few years there has been increase in the telecommuters and therefore the company need to upgrade their systems and technology in order to capture the growing market. Lately, the company has been having issues in its three operational areas; marketing/sales, research and development and human resource.

In the human resource area of operation, there is resistance to change because the organization needs to expand its operations therefore it has resulted into reduce the working hours to give space for the expansion of a new infrastructural framework that will accommodate the increasing demand in telecommuting. The reduction of hours means the reduction in remuneration as well. This has irked most of the employees who think that they have been alienated in decision making process. Many of the employees think that their wellbeing is not being considered because all what the organization thinks of is the end profits but not the welfare of their employees; this is a best case scenario where a means justifies an end. The worst hit by this expansion is the employees who work from home as their services have been terminated indefinitely. The employees are resistant to the new changes and they have resolved that if this is executed, then they will take an industrial action. The threats by the employees have halted the efforts of the organization as they deliberate on the matter further.

The research and development area of operation is responsible for innovation and creation of new products as well as scientific or any other research that may lead to future product development.  This is an important division in the company considering that it is an IT company that should invest heavily in innovative ways and products. The all over sudden need to improve the infrastructure is because the research and department did not adapt to the processes of local and international markets to view that the market was growing. The products/services offered by the company have also fallen out of client’s tastes and specifications. A survey carried out by the company indicated that most of the clients who terminated their contracts with the company were because the services were not tailor made to suit the customers with the emerging trends; others noted that some of the services were outdated. What this basically means that the research and development team has been sleeping on the job. If the technology of an organization is changing slowly and the market is growing fast, then there is not enough time for in-house development.

The marketing and sales division is responsible for identifying and luring potential customers in order to increase the sales. The department should work hand in hand with the research and development department in order to identify the needs of the customers and satisfy their needs. The company has been using the same infrastructure since its inception eleven years ago. The marketing department has spent their time in advertising and publicizing the same old product over the years, this has taken their years of the goal which is to be dynamic. They have spent a lot of time marketing the same product making the company struggle in planning new products (Park, 2014). The company is less market and client driven because they have spent quite a considerable amount of energy in trying to improve the sales of the same product for eleven years now. The employees are spending more time in developing the same product not enough time to bolster sales. The sales representatives have run out of leads, therefore they spend much of the time cold calling. The marketing group is disorganized thus the company is not getting the most out of investing in marketing.

The marketing and sales department is important in identifying potential clients and luring them to purchase the products of a company as stated earlier. The company faces challenges in their marketing department and they need to improve this that’s why the need to adopt market strategies. Some of the market strategies that are available that can be used to increase sales can be categorized into; market introduction strategies, market growth strategies, market maturity strategies and market decline strategies.

 During the introduction stage of a product, the sales are usually relatively low because of; clients taking time to accept the product, lack of established distribution channels and technical problems that are associated with new products. Any business that is propelling a new item needs to value that this beginning stage could require noteworthy speculation. This isn’t to say that spending a great deal of cash at this stage will promise the item’s prosperity. Any interest in exploration and new item improvement must be weighed up against the probable returns from the new item, and a powerful advertising arrangement should be created, keeping in mind the end goal to give the new item the most obvious opportunity with regards to accomplishing this arrival. Difficulties of the Introduction Stage; firstly, little or no product market: When a new item is dispatched, there is commonly no market for it, or if a business does exist it is liable to be little. Actually this implies that sales will be low to begin off with. There will be events where an extraordinary new item or incredible advertising crusade will make such a buzz, to the point that business take off straight away, yet these are by and large unique cases, and it frequently requires significant investment and exertion before most items accomplish this sort of energy. Secondly, high expenses: Very couple of items are made without some innovative work, and once they are made, numerous producers should put resources into showcasing and advancement so as to accomplish the sort of interest that will make their new item a winner. Both of these can cost a great deal of cash, and on account of a few markets these expenses could keep running into numerous a great many dollars. Thirdly, lack of profits: With every one of the expenses of getting new product to showcase, most organizations will see negative benefits for a period of the initial Stage of the item life cycle, in spite of the fact that the sum and length of time of these negative benefits does vary starting with different markets. A few producers could begin obtaining benefit rapidly; while for organizations in different parts it could take years. The marketing strategies that can be used during the introduction stage include; rapid skimming, slow skimming, rapid penetration and slow penetration strategies. In rapid skimming strategies, products are introduced with a high price and a high promotion level, this type of strategy is used for products that are new and don’t have a brand in the market. The slow skimming strategy is for the new products which already have a well-known brand in the market thus are introduced with a high price but at a low promotion level.  In rapid penetration strategy, a new product is launched with a low price and a high promotion level, this is used where the market is large, customers are price sensitive and the market competition is high. Slow penetration strategy introduces a new product in the market with a low price and a low promotion level, this strategy is used when the market is large, the market is price sensitive and the market is highly aware of the product.

The growth stage is associated with high sales volumes. The high profits are as a result of low production costs and low production cost as the product is spread over a large volume of products.  The Growth stage is the second of stages in the product life cycle, and for some producers this is the key stage for setting up an item’s position in a business sector, expanding sales, and enhancing overall revenues. This is accomplished by the proceeded with improvement of customer request through the utilization of advertising and limited time movement, consolidated with the diminishment of production costs. The pace at which a product moves from the introduction stage to the growth stage, and how quickly sales increase, can differ from one business to another. Difficulties of the Growth Stage include; Expanding Competition: When an organization is the first to bring an item into the business sector, they have the advantage of practically no rival. Notwithstanding, when the interest for their item begins to rise, and the organization moves into the growth period of the item life cycle, they are prone to face expanded rivalry as new producers hope to profit by another, creating business sector. Secondly, lower Prices: During the Introduction stage, organizations can frequently charge early adopters a premium cost for another item. On the other hand, in light of the developing number of contenders that are prone to enter the business amid the growth stage, producers may need to bring down their costs keeping in mind the end goal to accomplish is increasing sales (Fildes and Lofthouse, 1975). Thirdly, diverse Marketing approach: Marketing promotions amid the Introduction stage have a tendency to profit by all the buzz and buildup that encompasses the dispatch of a new item. Be that as it may, once the item gets to be built up and is no more ‘new’, a more advanced advertising methodology is prone to be required with a specific end goal to capitalize on the development capability of this stage. The strategies used by companies during the growth stage include; conducting surveys to get feedback from the clients, offer better after sale services, reducing prices to attract more customers, increase advertising, and add new features/qualities to the existing product line (Kotler and Armstrong, 2006).

 The maturity phase is characterized with stable sales that might either increase or decrease by a very small margin; this is caused by availability of new products in the market and new entrants in the market causing customers to switch to other substitutes. After the introduction and growth stages, an item goes into the maturity stage. The third stage of the item life cycle stages can be very much a testing time for producers. In the initial two stages organizations attempt to set up a business sector and after that develop offers of their item to accomplish as extensive an offer of that market as could reasonably be expected. Then again, amid the maturity stage, the essential center for most organizations will be keeping up their piece of the pie even with various distinctive difficulties. Difficulties of the maturity Stage; peak in sales volume: after the enduring increment in sales amid the growth stage, the business sector begins to wind up soaked as there are less new clients. Most of the customers who are continually going to buy the item have officially done as such. The second difficulty is diminishing market share: Another issue for the maturity stage is the expansive volume of producers who are all going after an offer of the business. With this phase of the item life cycle regularly seeing the largest amounts of rivalry, it turns out to be progressively trying for organizations to keep up their piece of the pie. The third difficulty is profits start to decrease: while this stage may be the point at which the business sector overall makes the most benefit, it is frequently the piece of the item life cycle where a considerable measure of producers can begin to see their benefits diminish. Benefits will be shared amongst the greater part of the rivals in the business, and with sales liable to top amid this stage, any producer that loses piece of the overall industry, and encounters a fall in sales, is liable to see a resulting fall in benefits. This reduction in benefits could be intensified by the falling costs that are frequently seen when the sheer number of contenders drives some of them to have a go at pulling in more clients by contending on cost. The three main strategies used in this stage include; market modification, market-mix modification and product modification. Market modification is an attempt by an organization to increase the lifecycle of a product by making small or big changes to a product, this include; find new users, find new uses, increase the frequency of usage and change the product packaging. Market mix modification launching survival tactics like cutting prices to lure customers, better advertisements, use improved services and use better channels of distribution. Product modification is the change or adjustment of an existing product for a better attraction e.g. changing the shape, packaging.  

The decline stage is associated with decline in sales that are caused by increased competition, change in client tastes, increased price cutting and better substitutes. The decline stage in the item life cycle is the point at which an item breaks down as an aftereffect of diminished or negative development. The inception and development stages gave the quality to the accomplishment of the item to this point, and with most items the decline stage is an aftereffect of lower interest, which eventually comes about because of new innovations and innovation progressions. For the organization, gainfulness will reduce to a level at which it is no more sensible to create and appropriate the item and production activities will stop (Malshe and Sohi, 2009). For huge numbers of customers, this action offers a few advantages, since organizations that can’t keep up the item will slice the costs to dispense with inventories or stop the item by and large, which makes limited time deals and clearances for the purchasers. As rivalry in the business increases and numerous organizations begin to overwhelm the business sector, it is hard for the battling organizations to keep up satisfactory deals and development. Purchaser inclinations additionally change with the headways of new advances which at last may make items out of date. The strategies at this stage are; maintaining investments in research and development, dropping unprofitable products selectively, mergers or acquisitions, divesting the products.

In order to bring a change in the marketing and sales of the company then the company needs to concentrate on creating a new product that will need to utilize the inception stage strategies while at the same time improve on the existing products that have already attained the maturity stage.  A general marketing technique ought to incorporate four unique procedures: A business infiltration/penetration technique. This method for growing the organization may include: an interior technique, for example, how to expand the HR, a procurement methodology, for example, purchasing another business, an establishment system for spreading out, a flat procedure where the company would give the same kind of items to diverse clients, or a vertical method where the company would keep giving the same items yet would offer them at distinctive levels of the circulation chain (Glass, 1997). Decisions for appropriate channels of distribution could incorporate unique hardware producers, wholesalers, or retailers.  Communication with the customers is an important strategy in identifying what they require and what need to be improved.

There needs to be sales strategies that need to be included in the company in order to improve the operations. The first strategy suggests the use of both internal and external sales representatives. The company uses only internal representatives who have run out of leads, the external representatives will bring in dynamism and help the internal sales representatives refresh their skills. The second strategy calls for breaking down the sales strategy into activities, the company has to make a list of prospects and prioritize them (Cardone, 2010). The organization needs to identify the number of sale calls over a certain period and average calls to make per sale.

The continual improvement (Kaizen) can be defined as the actions that progressively improve the functions of all the employees in an organization. The continual improvement is a mode of change that requires employees, who detect a problem in a business area to stop production and make the necessary corrections: these methods of change calls for employees to improve the operations of an organization, have performance indicators, measure operations, standardize operations and activities and the cycle should be ad ifinitum (Kamińska, 2015). On the other hand, radical change is like a total overhaul of things where new systems are introduced radically. Radical change (kaikaku) is a large jiggle, like an earthquake, when it strikes; it can throw you to a totally different location (Bodek, 2004). The radical change majorly comes in when the continual improvement gets stuck, but this system of change is risky because it introduces a new system to an organization that may come with teething problems that are unique to an organization. Sometimes radical change is unavoidable if continual improvement is not working.

This company is at a critical stage where it has to improve its services on a very big scale in order to retain the existing clients and cajole new ones. Continuous improvement change cannot get the company there. The main thing to see about radical change is that the outside environment – innovation, regulation, rivalry, the economy – is constraining change upon the entity. The organization is a part of a bigger framework, and it must adjust its frameworks to the outside world. Now and then that outside environment requests fast change that may be uncomfortable for everybody. Second thing to know is that each entity is an entire framework. Lean administration, as continuous improvement change is referred, is everything from the authoritative structure, the data framework, the choice making procedures, the human asset frameworks, and so forth. 

 

Most organizations that have attempted to embrace continuous improvement change have disaggregated that entire framework and actualized a few bits of it. They have actualized work groups or critical thinking gatherings and have regularly experienced disappointment. The human body is an entire framework contained separate organs or sub-frameworks, and they fit together as bound together structural engineering. The heart depends on the lungs for oxygen, and they both depend on the digestive framework for food. On the off chance that you remove any of those sub-frameworks from the entire, that organ will rapidly fail. 

 

In the same path, bits of continuous improvement frequently kick the bucket like organs expelled from the body on the grounds that they rely on upon alternate organs for their survival. You can’t actualize an lean administration structure, with solid groups at each level, without changing the choice process, the data stream, and the prize frameworks. You can’t actualize in the nick of time work stream without changing the data stream, the choice making procedure and without reclassifying employments at the first level. What’s more, you can’t actualize continuous improvement without changing the capacities and structure of administration. These are all organs of the same body. 

 

Third thing to know: Sub-frameworks of the entire framework must be adjusted. When adopting a continuous improvement it consumes more time and money when adjusting. The adjustment involves training of new employees or the existing one to perform the new functions, the start can be very cumbersome and tedious. What many organizations don’t realize is that they will tend to ignore the risks of areas that work very well but may have future impacts.

In conclusion the company needs to keep up with the radical market that keeps changing very rapidly and a rapid solution is required, as much as it involves in getting the process right it may take a lot of time to implement it due to the lengthy process that may find the company in a more compromising situation that it is now. The radical change will enable the company to get back to it foot in a short span of time by implementing a total overhaul especially by bringing in a new infrastructure to accommodate the increasing number of telecommuters and updating the obsolete infrastructure.

 

Leave a Reply