EDUDORM ACADEMIC SERVICES

South Texas Works Incorporation is a steel and iron exporting company that will be located in Houston, Texas southeastern metropolis. Precisely, the company will be dealing with iron and steel exports to Asia particularly in countries such as Japan and China.The company will site its production area near Houston port where iron and steel products will be shipped to selected Asian markets. South Texas Works Inc. will be exporting iron and steel products in different forms and designs with regard to the demands of the potential dealers in the target market. The company will be headquartered in Sunnyside, Houston. Furthermore, South Texas Works Inc. will embrace different modes of transport for the products which will include air carriers, railroads, motor, and ocean carriers. However, the major transport mode that will be used by the company frequently will be ocean carriers.

Mission of the Company

The mission of the company is to dominate iron and steel exporting market and extending to other international markets apart from Asian markets.

One of the objectives of the company include providing large scale iron and steel products to the target market with different forms and sizes that are compatible with the demands of the targeted markets. The other objective is to make more than 100 alliances with dealers across the world which will help the company venture in other international markets.

Keys to Success

Controlling prices at all times and employ a conservative strategy to growth policy. This will help retain the competitive advantage of the business using the pricing model and organizational culture that promotes growth and development of the company.
Providing unique and satisfactory services and products to the potential dealers to enhance brand recognition and attraction of new customers.
Embracing corporate social responsibility by making sure that the company is contributing to the society and ensuring sustainable energy consumption together with environmental conservation.

COMPANY SUMMARY

Production of iron and steel in United States can be cited back in the early 19^th century when the country switched from charcoal mining to coke smelting. Production of iron and steel started in Phoenixville, Pennsylvania back in 1827 when coal which was used as the reducing agent was replaced by coke (Hillstrom&Hillstrom, 2005). The reason why coal was replaced with coke is because it had a lower crushing strength than coke which made coke potential for promoting bulky smelting furnaces. Since then, the industry has developed significantly, until 2014 when iron and steel industry in U.S was announced to be the one of the most dominating industries in the global market. Precisely, the industry was number three after Japan and China in terms of iron and steel production in the global market. United States produced approximately more than 28 million tons of pig iron and more than 87 million tons of steel (Hillstrom&Hillstrom, 2005). However, it is exhibited that unlike in other countries that produce iron and steel, much of the U.S iron and steel is obtained from scrap instead of being extracted from iron ore. This makes united states the dominating importer and exporter of iron and steel and their products. Citing from the year 2014, the iron and steel industry produced products worth approximately $113 billion (IBISWorld, 2014). Some of the major companies in the market include AK Steel, Nucor, Steel Dynamics and Carpenter Technology.

It is perceptible that Houston is one of the places that record huge production of iron and steel products which makeplace a convenient location for South Texas Works Inc.operations. This means that production of iron and steel products will be enhanced by the availability of both raw materials and manpower in Houston which will help the company satisfy the demands of the target market. The reason why the company targets Asian countries such as China and Japan is because due to their domination in the steel and iron export and import market, they exhibit high demands on iron and steel products. Thus, the only concern for the company is to be able to satisfy the demands in these markets. Additionally, in consideration of other potential exporters, the company is not much concerned about limiting factors on the products to be exported since the tariff measures and other trade restrictions will be taken care of.

Products and Services

As asserted earlier, South Texas Works Inc. will be steel and iron production company that will focus on exporting products to Asian countries such as China and Japan. After the products are shipped to Japan and China, they will be distributed to selected dealers in the markets. Some of the potential dealers include as Japan Steel Works Limited and Nippon Steel & Sumitomo Metal Corporation (NSSMC).

Legal Form of Ownership

The legal form of South Texas Works Inc. will be corporation owned by a group of ten shareholders. The ten members will provide the startup capital for the company and other required funds for the operation. The head office of South Texas Works Inc. will be located at Sunnyside, Houston. Apart from exporting iron and steel products, the company will deliver different forms of the products with regard to the demands of the dealers in the target market. The shipping of these products will be conducted through different transport modes which include railroads, ocean, motor and air carriers. Thus, citing from the fact that products will be exported out of the country, the major mode of transport that the company will adhere to is ocean transport. Generally, for the successful operation of the company,the required resources included a wide production site/warehouse with the number of employees adding up to more than 300. Other requirements include effective road transport, coordination with railway transport organization, and sufficient capital for ocean and air transport. Precisely, for ocean the requirements encompass legal documents such as bill of landing, air bill, dock receipt, shippers export declaration, and statement of origin among others. For the road transport, the company will have tp0 purchase several trucks that will transport products to different destinations. However, it is noteworthy that the company will make alliances with local companies that deal with iron and steel products which means that South Texas Works Inc. will not basically focus on export markets but also in local markets.

Management Structure

The management structure of a corporation is composed of the management team that focuses on controlling and supervising daily operations of the organization. Therefore, the management structure of South Texas Works Inc. will include the following positions;

Chief Executive Officer (CEO)

The CEO is basically the top manager of the company who deals with the general operations of the organization and makes the required reports to the board of directors directly. Thus, the major responsibility of the CEO is to make sure that the initiatives and ideas of the board members are implemented in the operations of the business. As one of the board members, the CEO takes part in decision making together with raising ideas regarding the strategies that should be executed for the competitive advantage of the company.Thus, in this case responsibilities of South Texas Works Inc. CEO will be to control and supervise general operation of the company while making strategic implementations at the corporate level.

Chief Operations Officer (COO)

The major responsibility of the COO is to supervise the operations of the organizations with regard to sales, production and marketing. Unlike the CEO, COO is closer to the company’s operations and gives the feedback to the CEO for the evaluation. This means thatCOO acts as a management assistant to the CEO. In this case, COO of South Texas Works Inc. will focus on field operations of the company and give feedback to the CEO.

Chief Financial Officer (CFO)

As the title indicates, the responsibility of the CFO is to analyze and review financial performance and activities of the company and make direct reports to the CEO. Some of the tasks of CFO include budgeting, financial performance reporting and monitoring cash flow in the organization. In South Texas Works Inc., CFO will be required to make financial reports directly to the board of directors that indicate the financial performance of the corporation. Additionally, CFO will be obligated to make financial reports to the shareholders and to theSecurities and Exchange Commission (SEC).

MARKET ANALYSIS

Industry Analysis

Citing from the rapidly growing construction and transportation sector, it is perceptible that demand for iron and steel products has witnessed tremendous increase. Furthermore, rapid urbanization and industrialization in places such as Asia has contributed to the increase in demand of iron and steel products. In the United States market, the annual revenue for the iron and steel industry has been not less than $79 billion for the past 5 fiscal years (IBISWorld, 2014).However, the annual growth has decreased slightly over the past five years recording approximately 8.6% decrease (IBISWorld, 2014).

Target Market

For China and Japan, which are the major players in iron and steel market in Asia, the development and demand it the industry is higher than in U.S because of the robust encroachment of different sectors such as automotive, construction and consumer durables among others. The reason for the increasing demand in these Asian countries can be cited from the decrease in iron and steel production in these markets. For example, back in 2005, Japan produced more than 78% of the global iron and steel products (IBISWorld, 2014). However, in the contemporary global market, the production has decreased to up to 43% which means that iron and steel products are in high demand to satisfy their increasing uses.

SWOT Analysis

Strengths

Citing from the use of ships for transportation, it is perceptible that Japan’s coastline in the Pacific Ocean offers accessible shipping routes running from the west coast of U.S (Japan shipping report, 2015).

In the modern-day globalized world, Japan and China arerecognized to be the leading creditor economies which have recorded years of current account surplus which has augmentedtheir foreign assets and reserves (Japan shipping report, 2015).

Lastly, Japan and China havedeveloped technology applied in manufacturing and services sectors thus acting as an added advantage to sectors such as heavy engineering industry which purposely deal with iron and steel products.

Weaknesses

The ship building sector in Japan and China has been enduring stiff competition from their equivalents fromother nations. Therefore, this might pose a considerable effect to the shipping while resulting toconsequent competition from the other equivalents of South Texas Works Inc. from China.

Japan Fair Trade Commission (JFTC) has been engaging in a violation of antitrust law after it inflicted heavy charges on shipping companies such as Kawasaki Kisen Kaisha and Nippon Yusen Kabushiki Kaisha among others. This means that JFTC is not trustworthy and can pose a considerable effect to South Texas Works Inc. as anexporting organization (Japan shipping report, 2015).

Lastly, Japan’s populace is dominated by aged people thereby adding a huge bursary burden especially on the pension system. Therefore, South Texas Works Inc. will be forced to bring in a new pension program that will promote workforce retention in the shipping sites along the coastline thus making it uneconomical to trading costs (Japan shipping report, 2015).

Opportunities

Alluding to the fact that Japanese political system has shifted to the liberal democratic governance system and the New Komeitoalliance have got the majority on their side, it is undeniable that the government could be able to make economic reforms that will support revitalization of the private sector (Japan shipping report, 2015).

The Japanese and Chinese governments have been in the course of implementing new anti-piracy laws that was instigated back in 2013. Thus, this will lower probability of ship hijacking by banditsbecause this antipiracy decree will permit private armed guards in the cargo ships (Japan shipping report, 2015).

As aforesaid, Japanand China have been enjoying the benefitsof the rising demands from the emerging foreign market which is the reason behindtremendous increase in the general demand of the economies’ market thereby acting as reimbursement (Japan shipping report, 2015).

Threats

It is projected that if Japan embarks on the protectionist measures as that being embraced by South Korea, it might cause a considerable effect to the dry bulk operators and exporters to the economy (Japan shipping report, 2015).

China has been on political and business ties with Japan in the grabbing of Japanese cargo ships and this is anticipated to influence the general export of products in the economy since it is causing some sort of a pre-war debt.

The only present threat that is expected on the political environment is based on security matters and sovereignty conflict that are alarming between North Korea, and Russia,and Japan and South (Japan shipping report, 2015). This is going to have a significant effect on shipping of exports to Japan in the apprehension of insecurities and collateral loss of property.

S (Strengths)

1. Japan’s coastline in the Pacific Ocean offers accessible shipping routes running from the west coast of U.S

2. Japan and China (target markets) are recognized to be the leading creditor economies which have recorded years of current account surplus

3. Japan and China have been enjoying the benefits of the rising demands from the emerging foreign market

W (Weaknesses)

1. The ship building sector in Japan and China has been enduring stiff competition

2.Violation of antitrust law after heavy charges on shipping activities by Japan Fair Trade Commission (JFTC)

3. target markets’ populace is dominated by aged people thereby adding a huge bursary burden especially on the pension system

O (Opportunities)

1. Japanese democratic political systemsupports revitalization of the private sector

2. The new anti-piracy laws will reduce the risk of ship hijacking and other ocean related crimes

3. Rising demands from the emerging foreign market in the target markets

T (Threats)

1. Protectionist measures in japan might scare aware import trade

2.Political and business ties between china and japan might impede iron and steel exporting to the economies

3. Sovereignty conflict and security matters might affect shipping especially along the Asian coastline

MARKET STRATEGY

Four P’s of Marketing

Product

South Texas Works Inc. will be focusing on producing steel and iron products to the target dealers in China and Japan. Additionally, the company will be associating with local companies that deal with iron and steel products as raw materials. Precisely, some of the products that will be offered by South Texas Works Inc. include steel plates, steel sheets, structural steel and iron, pipes and tubes, automotive and railway machinery parts, stainless steel, titanium and steel slag. To start with, steel plates will be produced for companies that deal with heavy metal products such as ship building and power generation plants. Secondly, steel sheets will be produced for customers who deal with manufacture of housing materials, transformers and cans. Structural steel will be meant for construction projects for bridges, roads and buildings. Stainless steel will be meant for manufacturing steel foils, plates and clad steel sheets among others.

Price

Citing from the diversity of the products offered in the company’s product line it is factual that South Texas Works Inc. will offer different prices per unit of the products. Generally, South Texas Works Inc. will use pricing model as one of the competitive strategies in the export market. For instance, most countries offer stainless steel pipes for not less than $450 per ton. Therefore, for South Texas Works Inc. the price of the pipes per ton will be around $400. For billets and slabs, other companies offer them at an average price of $340 per ton. Thus, South Texas Works Inc. will offer them at around $300 per unit ton.

Promotion

Under promotion, South Texas Works Inc. will use different elements such as advertising, sales promotion, and personal selling. For advertising, the company will utilize both digital and traditional forms of advertisement. For digital advertising, South Texas Works Inc. will use social media and other internet sites. Under social media, different channels such as Facebook, twitter and Google+ will be utilized in order to reach out to the wider customer base in the target market. Additionally, the company will post Ads in different websites among them its own company website in order to enhance brand name recognition in the target market. Under traditional types of promotion, South Texas Works Inc. will utilize media such as print, radio and television. For print, the company will use newspapers and magazines that deal with advertising companies. On the other hand, South Texas Works Inc. will make use of radio and television channels both local and international channels. This will guarantee effective reach out of the targeted customer base. For sales promotion, some of the elements that will be used include customer promotions, trade and seminar promotions. Lastly, South Texas Works Inc. will implement personal selling in order to promote its products to potential dealers in the target markets.

Place

The place of distribution is Sunnyside, Houston citing from the fact that it is conveniently situated near the port of Houston. Citing from the fact that Texas is the second largest state, it is factual that port of Houston is one of the convenient ports for exports especially to Asia. As a matter of fact, the port is the second among 13 busiest ports in United States as it happens to coordinate most of the shipping activities. Thus, locating the place of distribution in Houston will effectuate distribution and transportation services.

Price List of the Products

Products	Prices Per Unit Ton
Steel plates	$300
Steel sheets	$300
Structural steel and iron	$500
Pipes and tubes	$400
Automotive and railway machinery parts	$250
Stainless steel	$300
Titanium	$500
Steel slag	$350

Promotional Strategy

Advertising

The goal of promotion is to mold the anticipated message to the target market as an approach of creating awareness and persuading the customers. Consequently, the company ought to use a media that exhibits a direct contact with the target market so as to convey the desiredinformation promptly and efficiently. The company will execute advertising within upon the startup date in order to create brand name recognition in the target markets.

Media Mix

There are several types of media that South Texas Works Inc. will use in the process of persuading their target clients in Japan. One of the advertisement media that the company will use is newspapers and magazines. Magazine will be the major focus of South Texas Works Inc. towards achieving its strategies on consumer persuasion.

The other means that will be used is radio and television channels. Both local and international radio and television channels will be used as a media for advertisement. Thorough assessment of the most popular and dominating channels of radio and television will be done in order to make an appropriate selection of channels to use.

The last media of advertisement will be social media and the general internet. It is palpably factual that social media has become the keystone of the marketing strategy in the contemporary world. Therefore, South Texas Works Inc. will use different social media channels such as Twitter, Facebook, Google+, and LinkedIn among others in order to reach the target market. The company will post Ads to the websites and pages of the targeted clients so as to create awareness on the existence of South Texas Works Inc. in the iron and steel export market.

Sales Promotion

Citing from the delineation of sales promotion, the objectives of South Texas Works Inc. is to persuade the targeted clients with a series of incentives and activities which will promote purchase of the products being exported. Additionally, the company objects to congregate different customers of Iron and steel from Japan who will act as the associates of the company on the imported products once they reach the market.

Consumer Promotions

Some of the activities that will take place at the level of consumer promotion will include, competitions, sweepstakes, coupons, point of sale display material, loyalty remuneration programs, on-pack offers, in-store demonstrations, multi-packs and bonuses among others. These activities will help retain and gather more clients by making sure that they enjoy purchasing our products at discounted and rewarded prices (Cook, Alston &Raia, 2012).

Trade Promotions

At this level, activities such as reward incentives with regard to purchases or sales made will be used as a strategic approach of consumer persuasion. Other promotions such as competitions, corporate entertainment, reseller workforce incentives and bonus stock will be applied at this stage.

Seminar Promotions

This level of sales promotion will include activities such as seminars, conference presentations, newsletters distribution, workshops, trade show displays and events sponsorships among others (Katzman, 2011). These promotion activities are meant for the business level advertising where clients from the target market are familiarized with the operations of the company and who they will benefit from the trade.

Lastly, the company will offer commissions to its salesmen and associates as a strategic approach of attracting more sales and consumers in purchasing the imported products. As a result, South Texas Works Inc. will offer sales competition on prizes and rewards to the dominating client.

Personal Selling

Citing from the fact that South Texas Works Inc. will be a large-scale organization dealing with a wide range of customers, it will have to employ personal selling type of promotion where potential buyers will have to purchase the exported iron and steel within the departmental store (Cook, Alston &Raia, 2012). This will help create interactivity, high consumer attention and potential relationship with the clients.

Sales Forecast

Months	Monthly Profit and Loss
Month 1	$9 million
Month 2	$9 million
Month 3	$10 million
Month 4	$10 million
Month 5	$10 million
Month 6	$12 million
Month 7	$12 million
Month 8	$S12 million
Month 9	$13 million
Month 10	$13 million
Month 11	$14 million
Month 12	$15 million
Total	$0.139 billion

South Texas Works Inc. is anticipated to record sales of approximately $0.139 billion in the first fiscal year. This is based on the fact that demand of iron and steel products in Asian markets is increasing tremendously by up to 5.1% by 2017. In the past 5 years, the industry has experienced decrease in annual growth of up to 8.6%. Therefore, from -8.6% to 5.1% is a considerable annual growth which means that the company will benefit significantly. This is the reason why the company is not expecting any losses in the first fiscal year.

IMPLEMENTATION STRATEGY

Overall Strategy

To start with, strategy implementation can be delineated as a process of turning plans that the organization intends to achieve into actions. It is factual that implementing strategy is vital than the strategy being implemented. This is based on the fact that a strategy cannot be useful to the organization if it is not effectively implemented to achieve the desired organizational goals. Precisely, in order for strategy implementation to be effective, the organization ought to consider factors such as budgeting, employees’ incentives, and the overall strategy. Prior to implementation, the organization should conduct strategic planning which offers a roadmap that the business needs to take a strategic direction, deliver value to the customers and generally achieve the desired goals. Citing from the fact that this is just a plan, it is factual that the organization is not guaranteed successful performance after the implementation. Thus, in order to make sure that the planning does not lead to the pitfall of the business, it is worthwhile to make sure that the planning addresses all the details regarding the activities required in making an effective implementation. As a matter of fact, effective planning is crucial for both success during implementation and mostly for the competitive advantage of the company in the target market. Some of the approaches that can be used to avoid implementation pitfall include defining ownership of the plan, effective communication, breaking down the strategy, compatibility of the plan with organizational mission and vision, accountability, empowerment, and regular progress reporting. Precisely, when the ownership of the plan is defined, there will be no responsibility and stake in the plan which means that it might not be effective. When the plan has stake and responsibility, it is easier to follow up the mistakes that led to its ineffectiveness.

Generally, in this case, South Texas Works Inc. will implement a strategy that focuses on budgeting, employees’ incentives and the compatibility with the mission of the organization. Prior to making strategy implementation, the following are the assumptions made with regard to the company and the market served;

Iron and steel industry is under stiff competition especially in Asian markets
Potential customers in the target markets demand special products and services at affordable prices
The workforce is the pillar of the strategy implementation efficiency
The performance of the company will be slightly affected by the economy and environment in the target market

As a result, the strategy will encompass effective financial budgeting that will be conducted both monthly and annually. The main reason for budgeting monthly and annually is to detect any financial losses and control it before compiling them in the annual financial report. This will ensure that the company records anticipated profit at the end of the first fiscal year. The other element of the strategy that will be implemented in South Texas Works Inc. is employees’ empowerment and motivation. Under the fact that employees make the foundation of implementation efficiency, it is undeniable that strategic planning ought to consider factors that will motivate the workforce towards achieving the desired results. Therefore, South Texas Works Inc. will offer subsidies to the employees together with conducive working environment. The company will adhere strictly to applicable employment rules and regulations to make sure that employees are comfortable in their working places. The other element of the strategy is based on the competitive advantage of the business. The strategy will incorporate pricing model and unique products and services that the company will offer as an approach towards enhancing its competitive advantage in the target market. South Texas Works Inc. will offer its products at a slightly lower price than that of products offered by other companies in the market. This will promote brand name recognition and attraction of more customers. The product line of the company will be extended to offer variety of products to the potential customers which will not only satisfy market demands but also attract more customers from different market segments. The goals of making these implementations are to attract large number of potential customers, achieve competitive advantage and dominate both local and international market within 5 years of operation. Thus, in order to achieve these goals, the strategy implementation will have to be done just subsequent to the launching of the company.

Post-Launch Monitoring Plan

To evaluate the success of the strategy implementation, the company will observe several factors that revolve around performance in the market. Precisely, the performance of the business is based on financial impact, customer satisfaction and the overall quality of products and services. To start with, the follow up will start with evaluating financial impact of the strategy implementation. It is anticipated that for the first three months, the amount of sales should be not less than $90 million per month. Thus, if the strategy achieves that, it will be perceptible that it has effectively achieved the desired goals. On the other hand, customer satisfaction will be measured by both retention and attraction of new customers. For instance, the expected percentage growth of customers within the first year is not less than 25%. This means that the strategy should achieve the figure or even increase the number beyond the expected figure. Lastly, quality of the products and overall performance of the business will be evaluated using financial impact and customer satisfaction. This means that if the strategy effective with regard to financial impact and customer satisfaction, automatically the quality of the business performance is perfect.

FINANCIAL REPORT

Income Statement

Profit and loss statement is a financial record that highlights the financial performance of the business over a specified period of time. Therefore, in this case, the profit and loss statement for South Texas Works Inc. is for the year ended 2017 after one year of operation. In the first fiscal year, the business is projected to record gross sales of not less than $9 million. It is noteworthy that the business is not expected to record gross loss because of the expected increasing growth in the iron and steel industry. Therefore, South Texas Works Inc. is guaranteed persistent performance with an assumption that there will be no market changes to intervene the predicted market growth. After a period of 5 years, South Texas Works Inc. is expected to record gross profit of not less than $100 million per month. However, it is factual that the expenses in the first year are expected to be high since the business will be focusing on establishing itself in the market and enhance brand name recognition. For the above financial projections to be achieved, the following presumptions have been made;

The iron and steel industry will achieve an approximate growth of 5.1% by the year 2017
Demand will continue to increase in Asian market particularly in China and Japan
The economic statuses in the target markets will not affect the performance of the business negatively
Political environment in Japan and China will remain supportive to importing especially for iron and steel products
South Texas Works Inc. will adhere to corporate social responsibility and will not be affected by lawsuits and be the subject to government regulations

As a result, at the end of the first year of operation, South Texas Works Inc. is expected to have generated approximately $0.139 billion of sales. Precisely, the company is expected to record monthly gross sales of not less than $9 million if the performance is not affected by external forces. Currently, South Texas Works Inc. needs to generate revenue of not less than $100 million annually in order to be able to sustain itself. This means that the breakeven level of the company is $9 million per month and $100 million per annum. In future, the company needs to adopt market and technology trends together with making mergers and acquisitions to reach a wider customer base. For instance, South Texas Works Inc. will utilize information technology to make sure that customers can access the products and services directly instead of going to the internet for information. This will demand the company to launch a mobile app and other software applications that will shorten the gap between company and the customers.

Reference

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Hillstrom, K., &Hillstrom, L. C. (2005).Industrial revolution in America: Vol. 1. Santa Barbara, Calif. [u.a.: ABC-CLIO.

IBISWorld, (2011).Iron & Steel Manufacturing Market Research Report. Retrieved from http://www.ibisworld.com/industry/default.aspx?indid=569

JAPAN METALS REPORT. (2014). Japan Metals Report, 6(2), 1-53.

JAPAN SHIPPING REPORT. (2015). Japan Shipping Report, (3), 1-133.

Japanese steel demand soars in March. (2014). Metal Bulletin Daily, (416), 1.

Katzman, J., & United States. (2011). A basic guide to exporting: The official government resource for small- and medium-sized businesses. New York: Skyhorse Pub.

Steel Industry Profile: Japan. (2014). Steel Industry Profile: Japan, 1-35.

Weik, J. (2015). Japan's steel shipments suffer biggest fall since end-2009. Metal Bulletin Daily, 1.