Clarke Building and Supplies Limited new owner target is to ensure that the company remains a family-run business in the future. The company is facing significant challenges because of its difficulty in tackling its business inventories, the cost of monitoring its activities, and the collections in the company’s construction site because their branches are far wide apart from each other. However, the company has the potential of expansion as the former owner, Frank, had opened a second location that has good demand for good high-quality hardware. The company also has good potential for acquiring good construction and renovation cheaply.
Situation Analysis
The strengths of Clarke Building and Supplies Limited have been built on the different locations of distributions that the company has. This number of locations has facilitated the company to employ over 110 people, which has seen the company get to revenue of CA$12 million in the 2018 financial year. The establishment of the company in Newfoundlands which has a high population has contributed to the company’s increase in its retail sector, establishing its main retail section in the region. The diversification of the company’s location led to the opening in Spring dale location, which the company sold to contractors and renovators, leading to an increase in sales of the hardware material.
The company has opened a secondary location that focuses on the company’s retail operation space. The company has managed to increase revenue by selling home supplies and tools. The company has relied on opening new stores that family members and close friends run to manage the pre-existing businesses. This strategy has left the company with the capacity to have control of the business over those years. The business is taking advantage of the population diversity and increased population of the target areas to access a variety of client bases. The sale of home construction and renovation tools has been imperative to the company’s growth.
The current issues that CBSL is acing are critical to ensure that they have a successful future in business. Having different locations has led to the company experiencing its current setbacks. In addition, the company’s new management comprising of having a new CEO who is not fully conversant of the running of the multiple chains of business and income streams is a critical challenge to the company. This is the most critical issue for the sustainability of Clarke Building and Supplies Limited. The CEO is aware that the company has dominated their target supply area, but there are rumors that national building supply chains have the area in their business intentions. This is a critical threat to the future sustainability of the company. The company’s retail operations are also at significant risk because of the company’s inability to sufficiently monitor the collections of the constructions sector, track their inventory, and monitor their general business operational costs. These challenges are caused by the fact that a new Chief executive officer is not well conversant with the nature of the business operations. Another imperative reason is the spread out of the business locations causing difficulty in the management of the business operations.
The external and internal environments of the business are critical for the sustainability of the business. The owner or manager of the company must have control of internal factors such as business accounts, the clientele base, the employees, and the suppliers (Shatilo, 2020). The external business environment involves the economic and political factors that affect the business the technological and competitive factors that affect the business (Shatilo, 2020). The CBSL owner must ensure control of the internal and business environment through involvement in decision-making and control of the economies of the business.
Decision Criteria
Developing a decision criterion is significant to ensure that the business variables are important to the company and that the decisions are made systematically. A business plan is an important tool for implementing decision criteria (Ciumara, 2010). Regarding CBSL, a business plan would be an effective decision criterion because it would describe the company’s external competitors, the marketing strategies, the manufacturing plans for the construction sector, the description of the markets, financial projections, and a contingency plan which will facilitate the effective running of the business in times of unpredicted times to minimize damage and loss from the potential business threats (Ciumara, 2010). The decision-maker shall ensure they effectively adhere to and implement the company’s decision plan.
Option analysis
CBSL should promote inclusive human resource management that will be essential to address the diversity of the different workplaces. In addition, the incoming CEO should ensure there are interactive communication channels that will promote effective and on-time reports of information. This would include social media channels, text messaging, emails, and live chat. Adoption of modern communication, human resource, and accounts technology would be essential in promoting effective human resource and account management.
Recommendation
The initial step that would be significant in solving the challenge that CBSL is facing is the adoption of contemporary human resource and communication technologies. These would be important to address the challenge of lack of communication among different locations. Communication is significant to address the lack of inclusive human resource management, which is not adequate at CBSL. In addition, the adoption of inclusive human resource strategies would be effective. Dependence on the family to run an entity would not be sufficient as talent and expertise would be essential, which would not be found among the family members. Therefore it is critical to recruit members and train them regarding the pertained work to achieve effective delivery. It is also important to promote staff motivation to promote effective organization productivity and sustainability.
Qualitative risk assessment is important to ensure productivity in the organization. Solving risks related to labor relations, such as conflicts and lack of honesty. Therefore, it is important for the management to devise methods and strategies that identify professionally ethical and reliable employees to promote effective functional responsibilities. If these strategies are implemented, CBSL is expected to have increased returns on all of the locations despite investing heavily in modern human resources and communication technologies.
Exhibits
SWOT analysis
References
Ciumara, Tudor. “IMPORTANCE OF BUSINESS PLANNING IN AN ENVIRONMENT LACKING ECONOMIC PREDICTABILITY.” RePEc, Jan. 2010,
Shatilo, O. (2020). The Impact of External and Internal Factors on Strategic Management of Innovation Processes at Company Level. Ekonomika, 98(2), 85-96. https://doi.org/10.15388/ekon.2019.2.6
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