Where Next For Grant Garden Centers?
Word count: 2043
Where Next For Grant Garden Centers
The garden centre sector has growing rapidly over the years. There has been a steady increase in the demand for garden products for various reasons such as the fact that gardening has become a very popular leisure activity, greater awareness of healthy food which has created interest in home grown vegetables and demand for green and eco friendly products. This sector mainly consists of small independents but is quickly being dominated by larger outlets running national garden sector chains. This is one of the many emerging trends in this sector which are aimed at improving its profitability and drawing it away from the traditional approach it has always adopted. Grant garden sector is one of the many centers in this sector which has held on to its traditional of concentrating on plants. Although so many garden centers are diversifying into other businesses, Grant garden centre has remained adamant, continuing to focus on vegetables.
However a lot of aspects in this particular business are contributing to its lack of prosperity and ways of improving it have to be adopted. Two ideas regarding the future of the Grant garden centre have been proposed by Malcolm and Jane, children of the owner. Both have conflicting proposals which if implemented would foster a way forward for the business. However, only one of them can be adopted and the aim of this report is to provide the ultimate solution to the problem which the two are facing. From the evaluation of the business, Grant garden Centre has a potential for revival and survival. However, this can only be achieved if certain recommendations are adhered to. This report is based on the assessment and solutions of the management consultant hired to help Grant Garden Centre. It answers the question of what is next for Grant Garden Centers.
Macro environmental factors affecting the garden centre sector
From the PESTEL framework, the two main factors that affect the garden centre sector in the macro environment are technological and those from the physical environment. These factors can both pose a threat or provide opportunities for growth for businesses in the garden centre sector. The PESTEL framework is designed to provide analysis of the different environmental factors may influence business performance. Technological factors are part of these and include the daily operations of the business (Witcher et al, 2010). These factors do not always function independently and one may influence the other. Technological factors include new innovations and discoveries, the pace with which they advance and the pace of obsolescence.
In this case, advances in technology used in the garden centre sector would increase its productivity. The garden centre sector could use automation to replace manual labour and also work on cutting costs. For instance, Grant Garden Centre had high labor turnover due to various reasons and automation could help turn it around. Embracing new technology in gardening methods could also help increase productivity. Additionally, the methods of handling the rest of the business operations also need to incorporate modern technology for better management of the business. Technological advances aid in cutting costs which would otherwise be elevated by using traditional methods (Henry, 2008). These costs could then be channeled into other areas of the business. The disadvantage of technological factors in the garden centre sector is that new innovations may require extra costs to implement, a fact which affects economic environment of the business. Despite this, the garden centre sector could benefit more from enhancing and incorporating new technology in their businesses.
The physical environment is a major contributor to the performance of businesses in the garden centre sector. This is because such businesses focus on plants whose growth is heavily dependent on weather and climatic conditions. Additionally, they are affected by the demographic elements of any area they may want to expand to. Poor weather and climatic conditions negatively affect garden centers (Taylor, 2008). This is because most plants grown under this scheme are horticultural and require specific kinds of conditions. Furthermore they cannot just be reared anywhere, meaning that not all soils are suitable for these plants. In order for them to be grown large scale, a lot of research has to be put into place to ensure that all conditions are met as regards the physical environmental terms. Many businesses in this sector improve their performance by being keen on the requirements for each plant as not all of them grow successfully under the same conditions. Threats to performance arise when there is no adherence to this crucial factor while better opportunities for business growth arise when the opposite is true. The garden centre sector is particularly fragile when it comes to this environmental factor because of the many challenges that may arise from its mismanagement. Whenever a business in this sector realizes the growth potential of working with favorable physical environmental conditions, they are bound to witness more productivity. The opposite is true whereby working with unfavorable physical conditions prompts low productivity and resultant poor quality of garden centre products (Hartley, 2002).
Strengths and weaknesses of Grant Garden Centers
Grant Garden Centre has had to hire the services of a management consultant to help revamp its performance. In order to do so, there is need for an assessment of its strengths and weaknesses which will subsequently aid in providing the best solutions. This analysis is based on the four functions of business, marketing, human resource, operations and finance. A look at the business’s marketing department reveals major flaws. For years, the business owner, John has employed use of billboards and radio advertising to reach its target audience. This notwithstanding, the advertisements are mainly about opening hours of the business and special offers at the centers. Word of mouth was John’s preferred mode of marketing and there is no room for incorporation of corporate social responsibility (Hunnicutt, 2009). Although these methods are cheap, they do not achieve their intended purpose. Despite this lack of more modern methods of marketing, the small number of customers that flock the business do so through the word of mouth method of advertising. This is helpful, though it is still not a strength as far as marketing the garden centers is concerned.
Human resource at Grant Garden Centre also has many weaknesses. The culture of labor in this business needs improvement. The business experiences a high labor turnover, one which continues to grow annually. Although this is partly attributed to the high number of part time and temporary staff, a lot of it is influenced by lack of satisfaction among employees. Many of them leave their jobs with complaints about poor management (Cornelius, 2001). This leads to the issue of structure whereby it is notable that there is no proper structure of labor and management. Employees are not involved in decision making which is always made by John. The business lacks growth potential as far as employee needs are concerned and complaints have been made of promotions being based on friendly rather than qualifications basis. Recruitment for staff is also not done through the correct professional channels meaning that most of the labor acquired is unskilled. Furthermore the communication between management and employees is poor given that there is no clear devolution between the two in terms of structure (Guffey, 2000). All communication comes from John who does not let his workers do their jobs effectively. It is definite that Grant Garden Centre has a poor working environment, one that ultimately affects its productivity.
There is no clear manual that dictates how operations at the business should be handled. This is one of the weaknesses of the business. There are no rules and regulations put in place by the proprietor to ensure that operations run smoothly. This is partly reflected in the way all communication and decision making is done by one person (Davis, 2003). No one else contributes in running the garden centre, a factor that is proving to be detrimental to the productivity of the business. Operations are further derailed by the lack of adoption of modern techniques of managing stock turnover. Job descriptions are not clearly defined which causes an overlap in the functions carried out by employees at the centers.
For the past ten years, Grant Garden Centre has had an average of 4% as return on capital employed. This is way below a healthy percentage of returns. This is an indicator of poor financial functionality in the business. Financial management at the business is hindered by poor IT systems making it difficult to asses the financial performance of the business (Ranchhod et al, 2007). This situation is worsened by price cuts on garden centre products and the numerous special offers from the business. This implies that the business hardly makes any meaningful financial progress and is barely surviving on the little returns they make. Financial problems have been made worse by the new opening of a larger centre, one which consumed a lot of money.
From the above analysis it is obvious that Grant Garden Centers has more weaknesses than strengths. Despite this fact, as a management consultant, I think the business can still be revamped and led to prosperity (International Conference on Business, Economics, and Financial Sciences, Management et al, 2012). The business has massive growth potential and the following recommendations could help in steering in the direction of better performance. Inclusive are the actions that need to be taken over the next few years to improve the business.
Marketing is one of the strategic areas of the business that need improvement (Srivastava et al, 2002). I think that Jane’s propositions should be implemented to help the business reach out to more people. The aspect of corporate social responsibility is one that is currently implemented in many businesses worldwide (Kotler, 2005). This initiative involves both the community and stakeholders in the affairs of the business. Its adoption would impact positively on the business and help it to attract more customers. Through this initiative, the community would be educated on the benefits of garden products. Additionally, the business could target younger customers and also expand into more areas. Websites are a good way of reaching out to people, more so young customers (Abrams, 2003).
The financial status of the business would require a boost, in terms of more capital investment (Perman et al, 2009). Attention should be transferred to searching for persons to inject more money into the business to guarantee its sustainability (Nieuwenhuizen et al, 2008). Other than investors the business could also secure financial loans which they would then pay over time. Another option would be to enlist in the stock exchange. Operational costs need to be cut and more emphasis placed on modern technology. This would help in management and control of stock turnover. The business should consider, cutting off the constant special offers it has been surviving on as they eat into the profit. This is the same for price cuts which bring down the value of sales (Myddelton. 2000).
To increase productivity, the workers need more motivation and enhancement of their working environment. They are highly responsible for turning around the business, especially because they can contribute to cost cutting (Sims, 2007). The business should evaluate factors that contribute to the situation of high labor turnover and work on them. From prior analysis of the business’s functionality, it was revealed that the human resources department has many weaknesses. The business should adopt a lean and effective workforce whom is easier to manage and cost efficient. The culture of human resource should incorporate better employee management, recruiting techniques, compensation while its structure should be well laid out to avoid overlapping of duties. Better communication will also be beneficial and can be achieved through structuring the workforce of the business (Hall, 2010). All the previous interference in operational matters by John should be stopped and every employee given specific tasks.
Operations as a function of business are in need of improvement. Definite guidelines on the procedures, rules and regulations of the business should be outlined (Andersen, 2007). Specificity on the kind of tasks allocated to each person should be put in place. Grant Garden Centre is currently not being run in a professional manner. There is need to address this because it affects the operations of the business. All the interference from John should be avoided and the business left to run on the guidelines of procedures outlined and documented in a manual for the business. Performance of the business would increase if a manual is drafted to effectively delegate tasks to everyone with regard to their capacity (Analoui et al, 2003). All the above would be crucial in helping to turn around the current situation of the business in terms of performance.
Abrams, R. M. (2003). The successful business plan: secrets & strategies. Palto Alto, Calif, Planning Shop.
Analoui, F., & Karami, A. (2003). Strategic management in small and medium enterprises. Australia, Thomson Learning.
Andersen, B. (2007). Business process improvement toolbox. Milwaukee, ASQ Quality Press.
Cornelius, N. (2001). Human resource management: a managerial perspective. London, International Thomson Business Press.
Davis, C. K. (2003). Technologies & methodologies for evaluating information technology in business. Hershey, PA, IRM Press. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=202716.
Guffey, M. E. (2000). Business communication: process and product. Cincinnati, South-Western College Pub.
Hall, D. (2010). Business studies. Harlow, Pearson Education.
Hartley, P., & Bruckmann, C. G. (2002). Business communication. London, Routledge. http://site.ebrary.com/id/10016928.
Henry, A. (2008). Understanding strategic management. Oxford, Oxford University Press.
Hunnicutt, S. (2009). Corporate social responsibility. Detroit, MI, Greenhaven Press.
International Conference on Business, Economics, and Financial Sciences, Management, & Zhu, M. (2012). Business, economics, financial sciences, and management. Berlin, Springer. http://dx.doi.org/10.1007/978-3-642-27966-9.
Kotler, P., & Lee, N. (2005). Corporate social responsibility: doing the most good for your company and your cause. Hoboken, N.J., Wiley.
Myddelton, D. R. (2000). Managing business finance. Harlow, England, Financial Times/Prentice Hall.
Nieuwenhuizen, C., Rossouw, D., & Badenhorst, J. A. (2008). Business management: a contemporary approach. Cape Town, South Africa, Juta.
Perman, R., & Scouller, J. (2009). Business economics. Oxford [etc.], Oxford University Press.
Ranchhod, A., & Gura?u, C. (2007). Marketing strategies: a contemporary approach. Harlow, Financial Times Prentice Hall.
Sims, R. R. (2007). Human resource management: contemporary issues, challenges, and opportunities. Charlotte, N.C., Information Age Pub.
Srivastava, R. P., & Mock, T. J. (2002). Belief functions in business decisions. Heidelberg, Physica-Verlag.
Taylor, L. (2008). A taste for gardening classed and gendered practices. Aldershot, England, Ashgate Pub. Co. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=438950.
Witcher, B., & Chau, V. S. (2010). Strategic management: principles and practice. Andover, Cengage.