Components

CASE STUDY ASSIGNMENT 2 –In no more than 3,000 words please address and critically discuss the following questions and issues from the case study.

Case questions:

1. Identify the key external and internal strategic issues and forces impacting upon WGF.
2. How might the owner-manager effect a longer-term orientation to the management of WGF as a basis for sustainable development?
3. What entrepreneurial opportunities may exist in this sector and what marketing Strategies should be implemented to grasp these opportunities.

(Note; you can make some reasonable assumptions in your analysis such as WGF has only a basic informational website) The analysis should be considered in the present economic /external environment.

WILLIAMS GARDEN FURNITURE

Williams Garden Furniture (WGF) is a small business formed 20 years ago in the North of England, employing 40 people. Martin Williams has been owner-manager and managing director since the firm’s conception. WGF became well known in the Garden Furniture sector producing a variety of up market wood-based products (including garden benches, tables and chairs) which were sold on to department stores and quality garden centres.

The business had to fight very hard to establish a quality reputation and gain inroads into reputable retail outlets and the foundations of the firms early success was the build-up of a highly skilled craft workforce. However, a resultant high growth phase in the development of the business, some eight years after start-up, saw the owner-manager faced with complex problems which began to test his management capabilities. Functional activities of production, finance
and marketing had always been under the sole control of Martin Williams but the pace of growth had forced him to formalise the structure of the organisation and delegate day-to-day responsibility to three functional managers who he decided to recruit from outside of the business. Having given little thought to what might be the most effective way to organise the business to accommodate fast growth, Martin saw the firm gradually evolve into a rigid hierarchical structure. Workers who had previously conducted their daily activities within an informal and flexible climate were finding themselves clamped in by tight job descriptions and bureaucratic procedures. Moreover, the functional managers were being constantly confronted by the interference of Martin who insisted that decisions supposedly delegated to the managers be ultimately verified by him.

Over time the business witnessed a build up of discontent amongst the workforce and functional managers alike. High levels of sub-standard product returns, increasing evidence of raw material wastage and retail outlet complaints as to deterioration of quality had become common place. The very foundations of the firm’s previous success were being eroded by the actual growth process which those foundations had produced in the first place.

The unpredictability of the operating environment with which Martin Williams was struggling to cope was intensified by many forces which the firm was failing to pick up on. Competition from within the UK and from within Europe was impacting with the introduction of new areas of technology which allowed key competitors not only to reduce costs of production but also to maintain a ‘man-made craft appearance’ in the product, even though the furniture was machine-made – such competitors were thus able to reduce their reliance on human input. Meanwhile,
William’s workforce continued to complain about the dilapidated state of their outdated equipment and machinery.

The UK economy was also beginning to encounter upward pressure on domestic interest rates. Martin was aware of this but had been unable to work through the potential consequences for the firm if this upward trend persisted. The firm was already highly dependent on outside finance, relying on substantial levels of long-term loans and on a large overdraft. Moreover, 20% of the firm’s sales were in the form of exports into South East Asia.

In total, with the uncertain external environment and an ongoing inward focus resulting in a tendency to concentrate on day-to-day activities whilst key external forces unfolded and impacted on the development process of the firm. From a market and customer base standpoint, an apparently capable marketing manager had reflected on the firms external operating context and conveyed to Martin what he felt were key enabling and constraining forces and how the practices of marketing management could help reposition the firm and aid it in regaining its former ‘quality’ reputation. Martin’s reluctance to listen, to relinquish control and to truly delegate decision-making responsibility to capable staff below him confounded any possibility of introducing a marketing perspective to the firms management.

Indeed, the low level ability to communicate with the existing customer-base was further evidenced by recent customer legal action whereby one of William’s prime products had failed to live up to its advertised functional capabilities and thus to the expectations of the customer – the propounded ‘all weathers’ attribute of the ‘premium garden table and chairs’ failed to survive the severity of the British winter. The customer felt he had a genuine grievance under Civil or Criminal law. In turn, Martin was not familiar with such law and had sanctioned the advertising regardless.

Moreover, the advent of the Single European Market (EC 1992), whilst some years ago now, had failed to trigger closer attention from Martin as to the potential enabling and constraining forces which might be relevant to WGF, either in their domestic markets or in their exporting efforts. Martin continued to operate post EC 1992 in just the same ways he had prior to the liberalisation.

New market opportunities were, nevertheless, coming to the attention of Martin. One of the workforce whose background is steeped in ‘quality’ furniture provision has through an informal network of contacts, identified an opportunity to supply a local supermarket with kitchen furniture. The finance manager has worked alongside the production manager and costed up the project to demonstrate to Martin that the opportunity is viable. Both Martin and the marketing manager, however, are rejecting the option on the grounds that the resultant product demanded
by the supermarket is of a lower market segment quality level than levels normally addressed by WGF, and that this may dilute the firm’s current image. The debate and disagreement continues.

In the final analysis, Martin Williams is very unsure about the way forward for WGF. The whole situation is causing him many sleepless nights with new problems arising every day. The workforce are highly demotivated at seeing their quality reputation deteriorate and the potential for promotional opportunities lessens over each year of operation. Moreover, Martin knows that any new project, if it is to be maintained into the long term, will need to be underpinned by further external borrowings, but utilisation of existing business premises as security for borrowing is already at a maximum. Martin is no longer at ease with his business and has lost touch with most of the external forces impacting on the development of WGF. He feels he must seek advice if the firm is to survive into the future. The marketing manager who on the one hand appears to be one of the firm’s key assets in terms of ability, is, on the other hand, attempting to persuade Martin to shift out of his current fire-fighting oriented management approach to adopt a longer term perspective from a rational planning-based paradigm. Martin is finding the implications of such a management approach daunting and feels it is totally inappropriate for a business such as WGF.