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Strategic plan refers to the development blueprint drawn by the organizations to ensure that they meet the objectives. The strategic plan is drawn in line with the organization mission and it set the time limit in which the organization is to implement the strategic plan. The strategic plan involves identifying the resources that are available to the organization and how these resources could be employed optimally in the organization for it to meet its objectives.
Karaoke-Music Video abbreviated as KTV is a company that deals with offering services to the Chinese community and other Asian communities living in Arizona States in the United States. The company aims at expanding its operations in the market. In fact the company seeks to attain about 50% of its capacity in three months and at the end of the first year the company seeks to reach about 60% of it capacity. By the end of second year the company aspires to have attained 70% capacity. To ensure that the company can meet the expansion an activity, the company needs to draw the strategic plan that can be implemented within the stipulated timelines (Terziovski, 2007).
In drawing the strategic plan the company needs to identify its resources that can be utilized in order for the company to meet its objectives that include time and the employees. The company also needs to use SWOT to determine it strength, weaknesses, opportunities, and threats that face the organization. The strategic plan is to be guided by the aspirations of the organization as stated out rightly in the company's objectives and mission statement. The KTV mission is "...to offer the Phoenix area its first KTV and the best Karaoke experience." The objective of the organization used in developing the strategic plan is that of diversifying the operation of the company to other locations by offering franchising services to other people in the market (Martin, 1994).
The company also has various strategies that would apply to ensure that the services and products it offers to the market are acceptable to the customers. Therefore, these strategies would ensure that the company grows and therefore diversify its operations to other places. These strategies include differentiation, focus, and costs leadership. In order for KTV to draw its strategic plan that would be that would propel the company to grated heights in terms of profitability and growth, the company would analyze its business environment. The business environment refers to the factors that affect operation within the organization. The business environment is grouped into two; external business environment and internal business environment. Internal business environment refers to the factors that affect the operations of the organization and the organization has control over them. To elaborate the factors enshrined in internal business environment, two factors are considered; the employees of the company and the company's policies. On the other hand, external business environment refers to the factors that the organization has no control over. The organization has to conform to those factors for it to remain relevant in the market. The external business environment includes government legislations, the competitors, the suppliers, customers of the organization and the new entrants to the traditional market of the company (Martin, 1994).
Overview of the paper
Strategic plan is a tool of the strategic management that ensures that the resources of the company are utilized optimally for the company to meet its goals. The strategic planning helps the top management of the company to answer some of the questions in the organization. The Strategic planning helps the company identifies the position it want to attain in the future in terms of profitability and growth. KTV for instance aspires to attain the growth of 50% of current capacity the next three months, 50% in one-year and 60% after two years. The company also aspires to diversify the operation to other location both in the United States and outside. Another question that the strategic plan aims at answering is how the company would be able to attain the goals and the objectives it sets in the market. The company determines the available resources that the company has, which include the employees and the financial capability that the company has that would be important to ensure that the company attains its goals (Martin, 1994).
Another question that the strategic plan aims at answering is that what parameter be used to measure the outcome as a result of implementation of strategic plan in the organization. The parameters to measure the performance of the company varies from one company to the other but essentially the companies prepare financial statements at the end of the year. The discrepancy that exists between the outcome of the financial statement and the forecast makes helps the management in making decision. In event that the company did not meet the target in the current financial periods the management makes decisions aimed at turning around the state of affairs in the company. In event the company can meet the objectives that were outlined in the strategic plan, the management is faced with an uphill task of ensuring that the company maintain and even perform better in the coming periods.
Karaoke-Music-Video in short KTV is a company in service industry. The core business of the company involves offering Private-room Karaoke and serving drinks and snacks to its customers. The KTV is within the environs of Arizona-State University; 7th largest university in United States. The location of KTV is strategic as it has a wide market student's fraternity from Arizona-State University. The location also makes the management of the KTV to be faced with the strategic decision to make involving the prices to charge for their services and the products. Because the customer base is made up of people of low income; students, the company should charge a fair prices for the services and the products that would appeal to the target customers.
Management team at KTV is mandated with the responsibility of making and implementing the decisions in the company. The quality of the decisions that are made by the management depends with the skills and experience that is possessed by the members of the management team. The members of the management team ensure that the investors' confidence is won by the company. In case the management team at KTV is made by the members who are not experienced, the investors are most likely would shy away from investing in the company. The company would have high risks of making losses and therefore the investors would tend to keep away from investing in the company. The company therefore would have limited sources of finances to ensure that the strategic plan is implemented fully and thus realize its goals.
The management team of the KTV is made up of talented people who possess a wide knowledge having worked in services industry for a long time; it includes Weijia Gao and Zhaoxu Liu. Weijia Gao possesses the required expertise and the experience needed to steer the KTV to greater heights. He possesses a degree in accounting major and postgraduate qualifications in Business Administration. Weijia Gao possesses a wealth of the experience from the various management posts he has held previous both in China and in United States. He has ever served as executive assistant, executive-board member and operation manager in various institutions in service industry. This wealth of knowledge that he possess would enable the company raise to greater heights. Zhaoxu Liu is another member of management team in KTV. Zhaoxu Liu, like Weijia Gao has a wide experience in the management level of various organizations both in China and in United States. Zhaoxu Liu has served an executive-board-member in a company China called "Beijing Allove Culture Communication Co." Zhaoxu Liu has served in managerial positions in "Bamko Promotional items" a company situated in Los Angeles.
Business environment refers to the factors that have effect in the operation of the company. Every business operation has unique business environment in which it operates. The business organization has to come up with the strategies to maximize the opportunities offered by the business environment and reduce the occurrence of losses posed by business environment in which the business operates. The business environment is grouped into two; external business environment and internal business environment. External business environment include the factors that business has no control over. The business thus should conform and adopt those factors in its strategic plan for it to remain relevant in the market. The factors in external business environment include the customers, government regulations, the suppliers, and the new entrants to the traditional markets. The factors in internal business environment include the employees of the company and the policies enacted within the organization (Blakemore, Nicholson & Clarke, 2002).
In determining the internal and external business environment that affects the operations of the KTV, SWOT analysis would come handy. The SWOT analysis helps the company to determine opportunities, strengths, weaknesses, and threats that the business faces in its environment. Analyzing the internal business environment of KTV will not only reveal the strengths and the opportunities that are available for the company but also will assist the management in formulating the management strategic plan. The SWOT analysis ensures that factors that the business has the capability of influencing are changed in order for the business to attain its goals and objectives as elaborated in mission statement. The SWOT analysis also ensure that the opportunities availed by the external business environment are harnessed for the organization to meet its goals.
KTV taps its biggest strength from the business environment from the fact that there is no direct competitor currently. The company enjoys 100% of the market share. The market has the opportunity to develop the market and therefore create strong market base that would be difficult for new companies to enter. The company therefore has to apply the strategies that are available to create a strong brand name that include product differentiating, focusing and low cost leadership. Another notable strength of KTV lies in the location that it offers it products. The company operates within the vicinity of Arizona State University. The location near ASU provides the ready market to the services that are offered by company; there about 1,000 Chinese students and the number grows by 13% per year if the trend experienced in the last two year is anything to go by. The company has also the opportunities to contend to ensure that the business meets its objectives. The KTV has the opportunity to expand its market. The opportunity arises a result of unsatisfied customer base grow daily. The company should target other groups apart from only emphasizing on the students. To satisfy the need of the growing market, the KTV has floated the idea of offering franchising opportunities to other traders who would be given the mandate to operate with the company's name (Robinson & Pearce, 2011).
Nevertheless, KTV has is faced with threats and weakness that it has to contend to ensure that it meets its objectives. Business would soon experience competition from new entrants to its traditional market. Because of lucrative profits that KTV is making in the market, it is a matter of time for competitors to start their operation in the market. In the near future it is expected that new businesses that offer competition to KTV so as to have a share of the profits would enter its traditional market. In the free market economy, the businesses are allowed to enter or leave the market at will. To avert competition, the KTV would need to focus on its market to provide services and products that are superior that what is would be offered by competitors. The company is advised to differentiate it product so that the customers in the market can identify the company with the specific product. Another threat that is faced by the KTV is the fact that the students break for summer holidays; the products offered by the company are not demanded during this season. To ensure that the products offered by the company are demanded all year round, the KTV should target the residents of town. There are weaknesses that KTV has to contend with include few numbers of private rooms, limited customer base and lack of a variety of drinks and snacks offered to the customers. The weaknesses can be solved by ensuring that the company build more private room and add more variety of drinks and snacks so that customers may have a wide range of foods to make choices from.
Best strategy to be adapted by the company
Various business strategies are available to the KTV that would ensure its growth. The strategies that are available to the company are cost leadership, focus, and product differentiation. The strategies that are most attractive to KTV are product differentiation and cost leadership (Robinson & Pearce, 2011).
Cost leadership strategy involves lowering the economic costs in the production and distribution of the product below what the competitors can attain. Ensuring that the company is able to reduce its operational costs with compromising on the quality of the products it offers to the market would help the company attain competitive advantage over its rivals. The low costs would be translated to low prices charged for the products in the market. The KTV has opportunities that it would utilize to reduce the costs of operation. Notably, the company is found next to ASU, therefore the company can engage student in part-time basis there reduce amount of wages it pays to its employees. Wage expenses is said to form more than 20% of the expenses incurred by the companies.
Another strategy that is available to the organization is the product differentiation strategy. The KTV entered the market that was saturated by the companies that were involved in offering similar products as those that are offered by the KTV. In order for the company to gain competitive advantage, it had to narrow its market segment to satisfy the need of a specific group. The KTV has differentiated its market as seen by the group of the customers it seeks to satisfy. The KTV target the student of Chinese origin and other Asian communities living around ASU. By targeting a specific market, the company can produce the product of superior quality thus convincing the customers to pay for those products. KTV therefore has a challenge to produce unique products that would appeal to the customers in the market Robinson & Pearce, 2011).
The strategic plan is not complete if the company has not implemented it into its core operations. While drawing the strategic plan the company should ensure that it involves the group of people who would engage in implementation of the strategic plan. The group of implementers would also be engaged in reviewing the plan to ensure that it caters for the changing business environment. The business should ensure that it implement one plan at a time; numerous plans can lead to no action taken in the organization. The company should adopt an implementation plan that attracts low costs and thus not to be a burden to the company in terms of costs and technical knowhow involved (Robinson & Pearce, 2011).
One of the strategies of implementing a strategic plan is the use of peer-coaching group. The employees of the company who would be engaged in implementing the strategic plan learn from each other in a group. This would help the company reduce the operations costs as there are no costs involved in training the employees the employees. The employees of the company are given time frame that the strategic plan need to be implemented say six months, a year, or a period of five years.