Analysis of Small Business Functions
Introduction
Silver Fashion is a high-end retail clothing business. The business was started officially in 1980 just as a mere retail clothing vendor, however, with time the business has undergone major changes to include diversification into the wholesale distribution of high-quality clothes. Following stiff competition from Chinese wholesale distributors, the business was forced to exit the wholesale market. The business has been able to weather turbulent times to include the devaluation of the Drachma. The company has also been able to withstand competition from already establishing multinational chain of stores. Following a deterioration of the economic conditions in Greece, the business stakeholders are planning to expand the operations of the business and diversifying its operations to cater to middle-income earners. This paper entails an analysis of the microenvironment, meso environment as well as lays out a hiring plan that can be used to hire a new sales assistant. The paper also sheds light on the pricing strategy of the company.
Every business is affected by a myriad of factors and just like other organizations, Silver fashion cannot operate in a vacuum. Silver fashion is part of a larger business environment that is divided into two; microenvironment, which are factors that impact the business internally while the meso environment is made up of factors that the business cannot respond to either directly or indirectly (Heckel, et al., 2008). While evaluating the microenvironment of a business it is important to examine factors including the suppliers, competing organizations as well as the customers. Silver fashion is in the high-end fashion retail business. With reference to competition, Silver Fashion is operating in a highly competitive market. When Silver Fashion was beginning its wholesale business, it procured high-quality merchandise at slightly high prices, favorable prices increased the businesses market shares with customers preferring Silver Fashion over other high-end clothes wholesale dealers. In an attempt to sabotage Silver fashion, competitors delayed their deliveries and distributions. The arrival of the Chinese clothing manufacturers brought about unmatched competition for the business and as a result Silver fashion was forced to exit this market. Also, the retail side of the business was defined by intense competition as a result of the introduction of large multinational retail chains, Silver fashion was competing with these businesses on the basis of quality and prices.
Suppliers are part of the microenvironment and are vital for the success of the business. Suppliers are responsible for providing materials that are needed to successfully execute business functions (Heckel, et al., 2008). For a business to thrive there has to be a constant supply of resources. The constant supply of high-quality clothes has ensured the success of this business. In 1987 the business’ wholesale operations were making large profits by supplying to approximately 400 customers, making Silver Fashion worth 80 million Drachmas in financial assets. The availability of supplies at a lower price is also responsible for giving Silver Fashion a competitive advantage over other retailers. Silver Fashion has a constant supply of high-quality clothes at a relatively low price, they consequently sell their clothes at low prices. The availability of supply plays an integral part in assisting Silver fashion to compete with large multinational retail stores. However, supply is not constant and is affected by factors to include unfavorable government policies and economic changes (Heckel, et al., 2008). Particularly, high importation tariffs imposed on supplies procured outside Greece limited the number of supplies the company was importing. Unavailability of supplies threatens the success of any business.
The customer base of a business can either be B2C and B2B. Factors to include the competition, stability of the demand, and business profitability are related to customers (Heckel, et al., 2008). Currently, the major operations of Silver Fashion are B2C, however, the shut wholesale business dealt with B2B. The company targets high-end consumers; therefore, the customer base of the business is made up of one segment. Following recent economic changes, the business plans on expanding its customer base to include medium-class customers to maximize profits. Also, if the business is to diversify with a focus on increasing its customer base it could opt to open an online retailing store that attracts young customers, thus creating a new customer segment.
The meso environment of a business is often analyzed to identify threats and opportunities. A business cannot be able to respond to the meso-environment either directly or indirectly. The meso environment of a business shapes the framework of business, factors that define this environment include competition, demand, and the distribution channel (Mason, et al., 2006). The fashion industry is highly competitive. Competition from large multinational retailers and online retailers is a threat to the profitability and continuity of the business. Following the recent economic crises in the country, businesses have been affected and the demand of products has fallen drastically, low demand for high-end retail clothes threatens the success of Silver Fashion that has majored in the retail distribution of high-quality clothes for relatively high prices. While distributing goods Silver Fashion has used methods to include door to door policy to ensure the delivery of high-quality services to customers, the use of new distribution channels presents the business with a new business opportunity that can be exploited to increase the preferability of the business (Mason, et al., 2006). These methods might include free deliveries for clients who purchase more and reduced delivery fees.
Silver Fashion is defined by a great team environment. Team members are responsible for assisting each other to succeed and achieve business objectives and goals. Team members also provide each other with expertise on different projects and duties (Yang, et al., 1998). From the moment Silver Fashion was established it has been defined by division and specialization of labor. The first division and specialization of labor was between Michael sand Afrodite, the first two business partners. They divided roles and specialized in different business functions. When the demand for more employees rose, more employees were brought on board. Two employees were tasked with managing the retail stores, one more employee was tasked with managing wholesale business operations. Afrodite one of the partners was solemnly in-charge of personnel and fiancé management. Division and specialization of labor have been an integral part of the success of the business.
To successfully hire a new sales assistant for Silver Fashion it is important to have a recruitment process in place since the hiring of new employees requires a business or an organization to proceed through a step by step process to ensure that it has identified its needs and to ensure that the business hires the most qualified candidate (Gusdorf, 2008). To ensure that Silver Fashion hires a new sales assistant it is important to systematically follow a process. The first step should be to identify the hiring needs of Silver fashion. It will be important to identify why a new sales assistant is needed (Gusdorf, 2008). This new sales assistant might be needed to fill a vacant position, to assist in managing the workload as well as to assist in expanding the reach of organizational tasks. Job positions are either newly formed or vacated and in the history of Silver Fashion there is no mention of sales assistant, therefore, this is a newly formed job position.
The second step is to develop and implement a recruitment plan since the position of a sales assistant is a newly formed position, Silver Fashion should ensure that it identifies how the new job position aligns with its goals and business plan. The existing team of employees should also be informed of the new job position at all the hiring stages. (Gusdorf, 2008). An agreement is required among those involved in the hiring process and in the Silver Fashion case, there should be an agreement between Afrodite, George, and Angelos. These three also have to agree on clear communication channels to ensure effective coordination throughout the hiring process. The recruitment process also involves publicizing the new job position internally and externally (Gusdorf, 2008). The third step is developing a job description, this job description includes a list of job requirement, the special requirements that put an applicant in a position to get the job, the desired characteristics as well as the information on salary and employee benefits.
To successfully attract applicants the next step should be advertising the job position. Identifying a qualified candidate for the position is a process that begins internally, therefore the first step Silver Fashion should take is advertising the job position internally. External public methods that will be used to advertise the job opening will include the business’ website, newspaper advertisement as well as through the use of the local TV stations. Following advertisement, the next step is recruiting the position (Gusdorf, 2008). The Silver Fashion hiring team should also reach out to desirable candidates via LinkedIn and other methods to include job fairs. This process of recruitment will help in capturing the attention of the candidates who are not actively seeking employment but are qualified for the job position.
After recruiting the position, the next step is to review all the applications. In the quest to find a sales assistant for Silver Fashion, the hiring teams will review and eliminate any candidate who does not meet the job requirements. After careful selection, the hiring team will interview the candidates who meet the minimum requirements. Silver Fashion can reach out to the selected candidates and conduct phone interviews with a focus on determining if the applicants pose the needed skills. Phone interviews play an important role in helping to pare down the list of interviewees (Gusdorf, 2008). Conducting the actual interviews follow after phone interviews. After successful completion of interviews, the next step is conducting an applicant assessment (Gusdorf, 2008). Silver Fashion should proceed to conduct a background check on all the successful interviewees. Conducting a background check will involve reviewing applicants’ criminal records as well as verifying their employment eligibility and history (Gusdorf, 2008). The next step is making a decision that involves identifying the top and most qualified candidate, subsequently, the organization should discuss the initial offer to include salary, benefits, and all policies that employees should adhere to. The next step is officially hiring the identified candidate and lastly onboarding, which includes welcoming the new employee with a focus on integrating them into the business team (Gusdorf, 2008). To ensure that the selected employee is fully integrated into the Silver Fashion team it is important to assign the newly hired sales assistant a mentor.
Silver Fashion has been concerned with offering high-quality clothes at low prices but mostly targets high-end customers. Developing a suitable mission statement assists in the successful running of a business (Darbi, 2012). A suitable mission statement is an important part of a business strategy. Developing a company’s mission statement is an opportunity to define the company’s goals, ethics, norms, and decision making. A mission statement will go a long way in distinguishing Silver Fashion from competitors. A mission statement also plays the role of defining what the business does for its customers. Quality has been an integral part of the business; therefore, the mission statement should include the company’s desire to ensure the provision of high-quality goods. A business mission statement should include what the business does for its owners. A well-crafted business mission statement focuses on the employees and the target customer segment. A business should also ensure that its mission statement is short and concise.
“We are coloring the world of fashion by sourcing locally and internationally high-quality clothes at prices so low that many can afford them.” The mission statement suggested states what the main goal of the company is, the company has been focused on offering high-quality goods and affordable prices. The business serves to tell the customers why the business exists and what makes it different from the other businesses in the market (Darbi, 2012). The proposed mission statement of Fashion Silver outlines what makes the business stand out from competitors and emphasizes that Silver Fashion places a higher value on the quality of the materials sold.
Pricing strategies take into account various business factor to include the revenue goals, the target customer segment, marketing objectives as well as the product attributes. Factors to include consumer demand, competitor pricing the economic trends and the overall market influence the pricing strategy used by a business (Darbi, 2012). The best pricing strategy maximizes the profit and revenue of a business. Currently, the business is planning to introduce a new retail branch that deals with medium quality clothes; therefore, it would be advisable for the business to adopt the premium pricing strategy which is used when a company is introducing a new product in the market. Currently, Greece does not offer suitable condition that encourages business to thrive. Businesses are adapting to new pricing strategies to ensure that they survive hard economic times.
Before developing a pricing strategy, it is important to consider the selling channels that will be used to sell the products and the strategic location of the business. Silver Fashion is in the fashion industry, value-based pricing is mostly used in this sector, prices are set according to the perceived value of a product. Value-based pricing is used to increase the profits of business while maintaining the same volume of sales, However, throughout the history of the business, it has never used value-based pricing where they set the prices based on the perceived value the customers attach to the clothes. The method of pricing commonly used by Silver Fashion is competitive pricing since consumers in the fashion industry are willing to shop around for the best prices in the market (De Toni, et al., 2017). Throughout the history of the business, it has been concerned with sourcing supplies at relatively low prices with a focus on selling the same products at a relatively low price compared to their competitors. This pricing strategy has helped Silver Fashion to stay ahead of the competition.
Competitive pricing has made Silver Fashion stand out in the face of stiff competition from already established multinational retail stores. Pricing below competition means that the prices of the products are relatively low than those of the competitors. This pricing strategy works well for retailers who can source products at relatively low prices from suppliers and Silver Fashion has been able to buy supplies at lower prices. The new store that has been proposed is likely to be placed in a city’s shopping mall, then prestige pricing that is pricing above the competition can be used (Kienzler, et al., 2017). Silver Fashion might opt to use this pricing strategy if the new retail store is located at an exclusive location.
Silver Fashion is a high-end retail business that was founded in the 1980s. The business invested in the wholesale business but was later pushed to the point of exiting by stiff competition by manufacturers from China who had the advantage of acquiring high-quality clothes at relatively low cost as a result of low labor cost. Silver Fashion is affected by microenvironment factors to include suppliers and competition. The meso environment of a business is defined by factors to include demand, they are threats and opportunities facing the business. The company is defined by the division of labor and specialization and every team member plays an important role in ensuring the success of a business. To successfully hire a new sales assistant, it is important to develop and implement a hiring process. A mission statement plays an important role in outlining the business strategic objectives. The business utilizes competitive strategy by pricing its products below the prices of competitors. Since its establishment, the success of the business depends on strategic management. To continue thriving in an industry defined by the stiff competition it is advisable that the business diversifies and increases its customer base.
References
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