LOADING

Define Mobile Menu

This paper on the Strategic business plan for the Barrier Reef Pools, BRP, would be evaluating the company, presenting alternative strategic plans based on different vision and mission statements, and finally proposing the most effective strategy. Barrier Reef Pools are Australian based pool manufacturers who specialize in fiberglass and in-ground swimming pools.

In this paper, first the company’s background and history will be given, and also its present vision and mission will be examined. This would be accompanied by a complete competition analysis for the business. After this an evaluation of the external environment will be done by identifying and analysing the external forces which affect the company’s business. Then, the internal environment would be evaluated by examining the organization’s strengths and weaknesses. Based on the above factors, various possible strategies would be proposed, satisfying different missions and objectives. Finally, a final strategy would be proposed which could aid the company in capturing the maximum possible market share of the fibreglass swimming pool industry.

Company Background

Barrier Reef Pools, BRP, a fibreglass swimming pools manufacturing company, is a 100 percent family owned Australian company, with over hundred years of combined pool construction experience. The company was originally established in Cairns over 20 years ago, but has since relocated to the more central location of Beaudesert. Barrier Reef Pools has grown over the last six years to become Australia’s largest fiberglass pool manufacturer and distributor.

The new manufacturing unit in Beaudesert has been established on fifteen acres with factory space to produce over 4,000 pool shells per year, employing over 100 people. Due to the use of the most modern production techniques and excellent production standards, BRP’s pools are sought worldwide in several countries like US, New Zealand, Singapore, Thailand, Philippines, India, countries in Middle East etc. The company also has more than fifty agents Australia wide catering to the local market.
Vision and Mission

BRP’s combined vision and mission statement is -: “As a team, we will maintain manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available. To continue to grow our support network of distributors, building stronger and lasting alliances with them and remain committed to providing only the best service and quality product to our clients”.

External Environment Analysis

The analysis of the external environment gives the opportunities available to the company and threats faced by it due to various factors.

Opportunities

There has been an increased for lap pools in recent times. The situation has presented itself due to the increasing health consciousness among the people, who wish to maintain or increase their fitness levels and overall heath. This has an obvious direct impact on BRP, as an opportunity to sell more pools.  Also, people are becoming more quality conscious and always go in for a reputed company with a proven track record, when making expensive purchases. An indirect opportunity which the company could use, is the usually dismal after-sales service offered by other pool manufacturers, making the prospective customers tend towards a company offering good after-sales service.

The sudden boom in property prices in certain areas of Australia could be an opportunity, as this allows people to go in for refinancing their loans, hence giving them surplus capital for additional fixtures in their existing houses.

The company can also take advantage of certain International opportunities. For instance, in USA the focus is on outsourcing for their needs, as the manufacturers cannot presently keep up with demand for swimming pool shells. Again, in countries like Fiji and Singapore, a predominantly hot and humid climate means that customers tend to swim all year round. This means the sale of the pools would be more or less, throughout the year, giving newer markets for the company in the erstwhile slack-season.

Finally, the tendency of the consumers to buy fibreglass pool is becoming more as compared to the concrete pools. For instance last year statistics show that 56% of customers installed a fibreglass pool, whereas only 44% installed a concrete swimming pool. This could also be taken as a positive sign.

Threats

Some of the advantages mentioned above also have certain problems, which could threaten the company’s sales either directly or indirectly. For instance, in case of international customers like Fiji, Singapore, Thailand and US, the cost of exporting pool shells is extremely high, leading to higher cost of pools for the customers. One problem with the pools presently exported to the US, is that they do not meet the safety requirements set by the American legislation. This means customized pools for the US market, which is not very easy from the manufacturing point of view. The statistics of people buying different varieties of pools could be a warning too, as 44% of customers did choose to install a concrete pool last year. This means, there are many people who are still ignorant about the many benefits of a fibreglass pool.

In addition there are additional factors like the severe water crisis in many parts of Australia – a direct threat to the pool sales in these areas. Also, the construction of fibreglass swimming pool shells is governed by governed by Australian Standard AS/NZS 1839:1994, which specifies the thickness required for swimming pool shells – more thickness means higher cost for manufacturing of the fibreglass pools.

The threat from fellow competitors comes in two ways. First, they could catch up with any new technology that BRP may come up with, including copying the shapes and colours, and offer it at competitive price. A second threat comes from companies like, Compass Pools, the first fibreglass pool manufacturer to offer an in-floor cleaning system, which reduced the sales of BRP, due to people going in for the newer technology version.
Internal Environmental Analysis

This section of the business plan identifies the internal strengths and weaknesses of BRP. This is an area that management has a far greater influence over, as after identifying internal weakness, the company can devise strategies to overcome these factors.

Strengths

The success of the company can be attributed to a great extent to the excellent management, which has led the company to become the largest pool manufacturer and exporter in the Southern hemisphere. Excellent customer service is the motto which the management follows, leading to a greater customer loyalty. In addition, the management has divided various functional areas of the business into departments with clearly defined roles and responsibilities. This avoids the confusion which is the hallmark for many family owned businesses. This clear division is extended downward to each employee, who has a very good idea of the job he has to do and the standards he has to follow. The company also regards the whole organization as a team which is evident from its mission and vision statement. All of this has led to the company having a very good staff retention rate. Many of the employees of the company are there since the time of inception.

This good retention rate translates to large number of skilled employees in the company, who are cognizant of the company’s high quality standards and work accordingly. It also means good working relations with the customers and supplies, who would be very familiar and comfortable in dealing with the staff of the company. This ensures a high level of customer service from all the departments of the company.

The company has a policy of maintaining nil inventories which means – no sales of outdated products. This is backed by continual R&D by FGI, which has a commitment to spend over $1 million per annum on the R&D to keep the products up to the highest standards. The information sent by the customers or to them is also very secure with only authorised-password entry being possible into the Information system.

Weakness

The company’s steady policy of growth also means no imaginative improvements being done in the product design. While the quality standards are very high, addition of newer features is also an area where the company needs to focus its immediate attention.

The above weakness can also be interpreted as a lack of market research done by the company, who just reacts to threats instead on actively getting involved in finding the pulse of the customers. This translates to the company having no particular technical advantage over its competitors who also offer the same or at times better features.

The company’s single production unit could be a problem when it plans to diversify into wider areas. While the present location might be good for Australian distribution, the same cannot be said when the company wishes to sell its products internationally.

Last but not the least, the familiarity with the customers has also led to the high number of debtors who owe large amounts to be paid, which in many cases have even lead to companies getting into losses despite good sales of products.

 

Possible Alternative Strategies

From the company’s background and its internal, external and competitive analysis, it is clear that while the company is the market leader in both domestic and international segments; its competitors are fast catching up. The company is needs to re-strategize its business. Four possible alternative strategies are presented in this section.

I

Following is the present mission statement of the company, as is already given in the introduction: “As a team, we will maintain manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available. To continue to grow our support network of distributors, building stronger and lasting alliances with them and remain committed to providing only the best service and quality product to our clients”

The statement clearly talks about continual improvement and maintaining of standards.

One of the options could be maintaining the same mission & vision statement for the company. The company could still leverage a lot from the present statement. This is because there are many uncharted international markets, where the company could focus its attention on. The company would gain a lot of mileage by leveraging its leadership status in the market. There are many new countries chiefly in Europe, Asia and South America, where newer markets could be developed. This would mean a very efficient distribution network, which forms the second part of the statement above. The company could establish tie-ups with existing transport facilities, instead of always using its own transport facilities, which would mean lesser costs and more flexibility of transportation, and would be advantageous in case of new markets. With this strategy, the problem of continued market leadership still remains, as the present competitors would try to catch up and the local competition too would increase in the respective areas.

II

“Barrier Reef Pools group will maintain the highest quality standard in manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available. To continue to grow our network, building stronger and lasting alliances, and remain committed to providing only the best service and quality product to our clients”

The above statement could be used if the company decides to go in for multiple acquisitions of local companies to expand its reach to various countries. This would be useful in two ways. First the company gets to have multiple manufacturing facilities which would give it a massive edge over its present competitors. Second, the local front provided by acquiring an already existing company would ensure its knowledge about maintaining standards and any other cultural preferences, and market its product accordingly.

There are a couple of problems in this strategy however. The company being an entirely family owned entity till this time with the manufacturing unit located at a single place, might not be ready management diversification. This would invariably happen when the company goes in for acquisitions, as the high product standards need to be maintained, and also the local people should be alleviated to higher positions, for showing that the company has an open policy – a fact which becomes very important when the company opens a local branch instead of just being an international supplier.

 

III

“As a team, we will maintain manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available To continue to grow our product line by continuous innovations, and growing the support network of distributors, we remain committed to providing only the best service and quality product to our clients”

While not perfectly worded, the above statement shows the intent of the company to diversify and grow its distribution network. The idea is to innovate on the product line by continuous R&D, and ensure that the product would be available to its customers without any delays.

The strategy needs the company to focus on its R&D as well as market research to find what the present need of the customers is and how best to satisfy it. The company has a track record of excellent customer service which could be a lot of help in this situation.

The disadvantage is of course the catching up being done on the behalf of the customers.

A newer but related strategy could be formed by changing the first line of the statement as “As a team, we will maintain manufacturing the highest quality of pools available in the marketplace, using the most superior materials available To continue to grow our product line by continuous innovations, and growing the support network of distributors, we remain committed to providing only the best service and quality product to our clients”

This shows the intent of the company to diversify into other business lines apart from just the fiberglass pools type. It has the advantage of getting larger market share, but has the disadvantage of, the company venturing into newer segments. This might have the company’s products competing against its own e.g. fiberglass against concrete. In addition the company would also face new competitors in the different segments, which might in the end add up to its problems.

IV

“We will work as a team, to maintain manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available. To continue to grow stronger and lasting network of distributors; to forge and maintain newer alliances focusing on continuous innovation; and always remain committed to providing only the best service and quality product to our clients”

The above statement of the company speaks of its intent to be as a team, yet maintain its discretion to expand; maintain the same product, yet go for innovation; maintain and grow distributor network, yet look for forming newer relations – all the while concentrating on giving the best service and quality products to the clients.

The strategy here is to be flexible, while maintaining the present strengths. The changes would not be abrupt, and they would always keep in mind the origins of the company and its commitment to customers.

As seen in the analysis section, the company faces multiple problems and also there are numerous new opportunities. This strategy leaves the company with a lot of leeway to experiment with the various issues it faces and the opportunities it can utilize. The problem is that the strategy might be considered be too ambiguous and hence not very effective as it could be interpreted in many ways; or ambitious and hence look as if the company would bite more than it can chew.

Recommended Strategy

Out of the various possible strategies mentioned, the strategy followed by the fourth mission statement would be the best in the writer’s opinion restated below:

“We will work as a team, to maintain manufacturing the highest quality fiberglass pool available in the marketplace, using the most superior materials available. To continue to grow stronger and lasting network of distributors; to forge and maintain newer alliances focusing on continuous innovation; and always remain committed to providing only the best service and quality product to our clients”

The main reason is the flexibility which this statement offers to the company. The ambiguity and ambitious nature can also be countered. This is because, the company being a steady family unit for a number of years, would surely not subscribe to continuously changing plans, and also the leadership of the company allows it make a couple of ambitious statements without sounding too arrogant.

The company in this case could go for a combination of plans. The strategy is as below:

The company needs to focus on multiple directions to take care of the situations around it. The main threats are the international markets. First, the cost of transportation and delivery is higher. The easiest way would be forging alliances with reputed liners, the mission statement means the company could go in for such alliances any time, so long as it is not compromising on core values. Another possible alliance could be with a market research firm. This is better than hiring a firm temporarily, because it would give the company a tool for keeping its finger on the pulse of both its customers and its competitors. The R&D could be also be streamlined with the market research firm for continual innovations.

The main stress is being given on the strategic alliances because such alliances allo a company could be diverse, all the while maintaining its core values. It also increases the network of the company by bringing in newer markets and also acts as an indirect referral in the newer markets. Joint venture is not offered as a choice, because it is seen that the company shows itself to be a family-run unit in every place where the company is mentioned. This might pose a conflict of interests with a newer company. Instead when the company allies itself with other companies having different businesses, the focus is on mutual benefits, and also loosens up the company to the possibility of a joint ownership or even go public.

One independent area where the company needs to focus on is the development of one or more manufacturing units, in addition to the present one. This could be either located in a different location in Australia or even better – at a central location in an Asian country. The idea is to segregate the domestic and international manufacturing location, so that the transportation issues are taken care of. Also, the newer unit could also make customized products for the US market as per their quality requirements and sell them in other companies with the same certificate. The other countries would also have a possible option of choosing the product they wish to have – the present one backed with the testimonials shows more than 20 years of quality, the newer one following the rigid US standards of quality. The problem of the newer location is mainly the management issues and quality standards, but this again would not be a big problem. First, a development unit in a country say in south-east Asia is fairly closer, and also takes care of the problems of the huge cost of transportation of finished pools to these countries. Further, the quality standards combined with the US legislation could be made as a completely new and separate unit, which would allay all the thoughts of quality as the products would be following different guidelines of quality altogether. This place could be further made as a centre for the newer innovative products.

This would take care of the majority of problems or the company without changing its present structure. Once this strategy is underway, problems like more number of debtors could be countered, by offering newer schemes of purchases like going easier on the payback if there are good referrals or a introducing a time limit to the final payments etc.

Further problem areas like water crisis and government regulations can be countered when the market base is big, and the company can afford to have a say in either the regulatory committee etc.