Andrews Electronics: Developing Strategic Plan

Today’s businesses face numerous challenges and developing a customized strategic plan places an organization at an advantage over the other similar firms. A strategic plan aims at communicating the organization targets and informing the management concerning the necessary decision for achieving the goals (Shu-Hsiang, Jaitip & Ana, 2015). The strategic plan an organization inculcates has to foster the globalization efforts and understand the customer needs and desires. Research is undertaken to identify the firm’s competitive edge and sections that need to be improved. The paper will outline the development of a strategic plan by utilizing sufficient time to understand the customers’ needs and habits better than the competitors and finally formulating cost-cutting measures.

Industry Analysis Using Porter’s 5 Forces 

The analysis aids the provision of valuable information to support strategic planning (“CGMA,” 2013). The firm faces stiff competition as the electrical industry has multiple firms which saturate the industry. The industry is characterized by a high number of companies which are very aggressive and strong and have a low cost of switching. Customer’s bargaining power influenced by the low cost of switching, multiple providers and high substitution threatens the business of the firm (“CGMA,” 2013). The threat is assessed by dealing with the demand and influence customers have and the impact of such decisions on the business. Substitution threatens the firm’s operation due to a huge number of firms offering different brands at varying lower costs (“CGMA,” 2013). The possibility of new entrance moderately affects the firm’s operations due to high entry capital in establishing and developing the brand. Suppliers bargaining power influences the firm’s production capability through the availability of raw material. The industry has numerous suppliers’ leading to high gross supply, reducing the effect as a result of an individual supplier.

Figure 1 . Porters Five Forces (“CGMA,” 2013) 

SWOT Analysis 

Andrews Electronics has desirable internal attributes forming its strengths which the management have control over. The firm also experiences some limitations which need to be improved for the firm to be fully competitive. Opportunities exist which are external factors the firm can exploit to realize the success of the operation (Phadermrod, Crowder & Wills, 2018). External factor exists of which some forms threats beyond the management control and requiring countermeasures (“Fern Fort University,” 2018).

Table 1 

A SWOT Analysis of the US Electronics Firms (“Fern Fort University,” 2018) 

PESTEL Analysis 

A PESTEL analysis outlines the firm’s external factors such as opportunities and threats affecting the firm’s operations (Khan, Alam & Alam, 2015). In handling the external factors demand that the firm utilize competitive and growth strategies for alignment purpose. Table 2 outlines the factors that the firm management should consider.

Table 2 

PESTEL Analysis of Andrews Electronics 

SOAR Analysis 

SOAR analysis facilitates the efforts of an organization on current opportunities and strengths in the creation of future aspiration and the expected results (Deveau, 2015). The model focuses on appreciative parameters aimed at identifying what works rather than weaknesses. It brings together the stakeholders and creates a shared vision for the future.

Table 3 

SOAR Analysis 

Pareto Analysis 

The Pareto analysis is a decision-making technique applying statistics by using the 80/20 rule. The model is based on the principle that by doing 20 percent of the task, one can realize 80 percent of the benefit of handling the entire task ( Pareto C hart and Analysi s, 2018 ) .

Figure 2 : Pareto chart on customer service influence on customer satisfaction (Pareto chart and Analysis, 2018). 

From the chart, it is evident that 79% of the inconveniences result from two of the six factors analyzed. Solving the two factors will result in the 80/20 principle as they will yield more gain.

Gap Analysis 

A strategic gap analysis entails an evaluation of the variation between the actual outcome of a strategy and its desired outcome. The analysis also outlines the measures that the management should undertake to minimize the difference (Wolf & Floyd, 2017). Table 4 shows a summary of the strategic gap analysis concerning the pro-forma report and the Capsim Core Reports.

Table 4 

Gap Analysis for Andrews Electronics 

Decision Tree Analysis 

A decision tree is critical when assessing the viability of the strategic positions that the company should undertake. The decision tree outlines the possible outcomes of each option. Figure 3 shows a decision tree in which the viability of manufacturing own electronics and appliance as compared with buying finished products from manufacturers and selling to consumers.

Figure 3 : Decision tree for manufacturing or buying electronics and appliances decision. 

The company primarily supplies electronics to consumers within and outside the united states ( Andrews Electronics, 2018 ). Thus, the sales from these company encompass a large portion of goods bought from manufacturers. Expansion and increasing profits, which are principal among the company’s goals and objectives, require efficient sales management. The decision to buy from manufacturers has its advantages and disadvantages, which is also the case with that of manufacturing.

Enterprise Level Strategic Framework 

A strategic framework encompasses predetermined goals and objectives that an entity aims at achieving through decision-making and combination of various resources (Shu-Hsiang, Jaitip & Ana, 2015). The management has the mandate of institutionalizing a set of parameters against which progress will be assessed and reviewed (Smallbone & Welter, 2017). Andrews can adopt the following components in its strategic framework to facilitate growth and profitability in the long run.

Vision Statement 

Andrews Electronics offers a variety of electronics parts to various servicers all around the United States and other parts of the world. A compelling vision statement should be:

To be the most innovative, environmental-friendly and customer-engaging electronics supplier in the United States. 

Mission Statement 

The company has in the past engaged with manufacturers by linking them to services located in several parts of the U.S. ( Andrews Electronics, 2018 ). Such engagements are essential to the future growth of the company and its business. Therefore, the following proposed mission statement will be efficacious in securing the future existence and growth of Andrews Electronics.

To create an active interaction between high-tech manufactures of electronics and various servicers in the U.S. and other regions globally, which will facilitate the supply of state-of-the-art parts that meet customers’ satisfaction and exact needs. 

Purpose Statement 

The company was established to make it easier for servicers to obtain high-tech electronics produced by a variety of manufacturers around the globe.

Philosophy 

Andrews Electronics Company’s operations are governed by a set of principles and ethical perspectives as well as value systems, which determine the depths and extents of its culture. First, Andrew Company offers commodities that are highly technology-dependent, and should, therefore, focus on providing goods that are high-quality while observing the environmental requirements ( Andrews Electronics, 2018 ). Environmental-friendly commodities may take the form of green products, in which case the company should only procure its goods from manufacturers offering such goods. Second, the company values honesty and timeliness of delivery. Most deficiencies observed in the ordinary course of business is non-promptness of delivery. Thus, the company ensures timely delivery of electronics upon receiving orders from servicers and customers designated in various areas ( Andrews Electronics, 2018 ). Lastly, the company values customer feedback and has thus established a functional customer feedback department which takes in all compliments, comments, complaints, and suggestions pointed out by customers at various levels and departments. In effect, the customer services department compiles the feedback received at diverse points of service delivery such as communications, sale, and supply ( Andrews Electronics, 2018 ).

Long-Term Goals and Objectives 

Every activity and a transaction that the company engages in must be in-line with the predetermined goals and objectives. The SMART goals approach provides a firm basis upon which the management develops its goals and objectives in the long-run. The suggested long-term goals for Andrews Electronics include the following:

To increase the company’s returns by 4.5 percent annually by increasing the sale revenues. 

To improve customer relations by institutionalizing prompt and efficient customer feedback. 

To expand the business’s operations by opening more branches in the U.S. and overseas. 

To improve the quality of products and services by conducting continuous customer satisfaction analysis and market surveys. 

To provide high-tech electronics through collaboration with manufacturers and suggesting various innovative approaches and designs. 

To create a cordial relationship between suppliers and service providers through benchmarking and offering an active communication channel that links them. 

Consumer Segments 

Andrews Electronics offers a variety of electronics, computer parts, and home and commercial appliance to servicers located in several parts in the U.S. These parts reach consumers through shipping or vehicle delivery which commences as soon as the orders are received and processed. Also, the company offers its products to individual consumers who usually require them in bulk. The firm provides research services to its esteemed consumers whereby the management team provides sufficient information on the trending commodities, new products, and models as well the best manufacturers in the industry.

Competitive Advantages 

Andrews Company portrays several characteristics that make it more competitive than other players in the electronics industry. First, the company offers not only convenient delivery of goods as its after-sale services but also research to consumers on commodities they find difficult to find or locate ( Andrews Electronics, 2018 ). Such services also include free consultancy on the latest and most appropriate models as well as high-quality, compatible parts and appliance. Second, Andrews offers parts that are profoundly genuine and with a 20 to 50 percent cut on the cost as compared to the prevailing market prices. Andrews is considerate of all consumers regardless of their levels of income or spending plans. The company offers alternative parts for those that cannot afford parts with an expensive brand name ( Andrews Electronics, 2018 ). These alternatives are equally high-quality and will deliver the intended services as would other parts.

Further, the company’s products have a 90-day warranty which it handles fully ( Andrews Electronics, 2018 ). Andrews Electronics has a technical team that facilitates quick repair and replacement services in case of warranty claims for default electronics. Also, the company has made significant attempts over the past years to improve its promptness in delivery which has been achieved. Today, the company ships most of its orders the same day it receives them. Order accuracy is a point of strength of the company with minimal claims of mismatch or dissatisfaction. Moreover, Andrews has tremendously embraced technology by continuously implementing trending and practical solutions. In effect, the technological advantages are passed down to the company’s customers.

Organizational Design 

Organizational design is paramount in achieving the objectives of an entity in that it determines the departmental goals of a company ( Dunne, 2018 ). Each of these objectives must be in line with the overall goals. Thus, the heads of these departments must ensure that their activities are capable of putting the company in its desired state as predetermined by the management. Andrews’s organizational design integrates the people as the major stakeholders, with the systems and technology ( Andrews Electronics, 2018 ). Figure 3 shows a post-design workflow that Andrews Electronics adopts in its day-to-day activities.

Figure 4 : Organizational design applied in the workflow of Andrews Electronics 

The company considers consumers as one of its most important stakeholders. Customers are either individuals who need appliances or electronics for use or resale or servicers working in several stalls, garages or supply points in the U.S. and overseas. Customers. The tech-support and manufacturing and shipping are all cross-functional. Customers get in contact with the company’s designated sales agents who process orders. Order processing involves planning and preparation as shown in figure 3 above. The tech-support gathers information on the latest models and trends in the market, the information with which it uses to advise customers on the most appropriate, cost-effective parts to purchase. Shipping commences as soon as the orders have been processed, whereby the amount and type of parts are known as well as the destination of the ordered goods.

Corporate Level Strategic Framework 

The department selected for this part is Finance. Every organization, regardless of the sector within which it operates, has a finance department. This department assesses the monetary value of the various undertakings of the company and the returns derived thereof.

Long-Term Goals 

To increase the company’s net profit margin by 5.5 percent in the next ten years. 

To minimize operational costs and seek alternative cost-effective approaches to fixed costs. 

To increase the company’s investment portfolio by 10 percent in the next five years through investments in the form of preference shares and offering bonds. 

Year-Based Objectives 

To increase the company’s net profit margin by 1.1 percent in the next year. 

To open two branches and delivery points in the U.S. in 2019. 

To facilitate the agency of the company in other countries in 2019. 

To purchase the company’s delivery ferry that will facilitate faster delivery of ordered goods in 2012. 

To conduct continuous (monthly and annual) customer satisfaction assessments. 

Strategic Initiatives 

The identification of crucial players and stakeholders; 

Continuous reassessment of milestones and achieved projects; 

Effective internal and external communication; 

Constant evaluation of customer needs; and 

Revaluation of the current information systems and technology. 

Key Policies and Procedures to Assess Outcomes of Strategic Initiatives 

The company’s progress will be weighed against several factors, which will go a long way to shed more light on the practicality and effectiveness of strategies. Andrews will adopt two major outcome assessment approaches; 

Critical Success Factors: people, operations, strategic focus and financial considerations such as profitability. 

Key Performance Indicators: Marketing KPIs, Sales KPIs, and Social Media KPIs. 

Conclusion 

The continuing complexities in the economics of the country necessitate the development of business units that can survive in harsh business conditions. The management team should restore and develop a competitive plan based on substantive research as well as operational execution. Planning and execution should be flexible, creative and consistent to ensure the firm is in a strategic position to face stiff industrial competition. The plan has to demonstrate the managerial attitudes to provide a crystal clear direction for the organization. Communication channels also facilitate the efforts of a competitive strategy by establishing the interconnection between the establishment of the plan and its efficiency. The firm’s goodwill should also be maintained and developed through the development of happy leavers including customers and employees. Negative publicity is discouraged by the plan and any industrial action that might have adverse effects regarding cost or future revenues on the firm mitigated.

References

Andrews Electronics . (2018).  Andrewselectronics.com . Retrieved 26 December 2018, from http://www.andrewselectronics.com/company.aspx 

CGMA. (2013). Porter’s Five Forces of Competitive Position Analysis. Cgma.org. Retrieved 26 December 2018, from https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html 

Deveau, B. J. (2015).  SWOT  (Doctoral dissertation, University of Prince Edward Island).

Dunne, D. (2018). Implementing design thinking in organizations: an exploratory study.  Journal Of Organization Design ,  7 (1). doi:10.1186/s41469-018-0040-7 

Fern Fort University. (2018). Universal Electronics Inc. SWOT Analysis / Matrix. Retrieved 26 December 2018, from http://fernfortuniversity.com/term-papers/swot/nyse/869-universal-electronics-inc-.php 

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc.  International Journal of Economics, Commerce and Management ,  3 (6), 955-961.

Pareto Chart and Analysis. (2018). Pareto Chart. Retrieved 26 December 2018, from http://www.pareto-chart.com/ 

Phadermrod, B., Crowder, R. M., & Wills, G. B. (2018). Importance-performance analysis based SWOT analysis.  International Journal of Information Management ,  44 , 194-203.

Shu-Hsiang, C., Jaitip, N., & Ana, D. J. (2015). From vision to action–a strategic planning process model for open educational resources.  Procedia-Social and Behavioral Sciences ,  174 , 3707-3714.

Smallbone, D., & Welter, F. (2017). Entrepreneurship and enterprise strategies in transition economies: an institutional perspective. In  Small Firms and Economic Development in Developed and Transition Economies: A Reader  (pp. 107-126). Routledge.

Wolf, C., & Floyd, S. W. (2017). Strategic planning research: Toward a theory-driven agenda.  Journal of Management ,  43 (6), 1754-1788.