Sunday, 18 November 2012

Strategic Analysis of Burberry

Introduction

Strategic development is concerned with the direction and scope of an organization over the long term, which involves the development and deployment of its resources and competencies, through which it achieves competitive advantage in a changing environment. All organizations, whether big or small and regardless of their field of business, are faced with the challenge of strategic development. The challenge can come up from a desire to grasp new opportunities or to overcome significant problems (Johnson, 2008). This essay deals with the strategic development of Burberry, a UK designer brand that was close to being consigned to history a few years ago, to becoming popular fashion brand in the world. Burberry currently ranks at 51st in FTSE 100 index with a market capitalization of over £6.5bn (Stocks Challenge, 2012). The essay will analyze the company’s corporate and business level strategy using the market and resource based view – highlighting which one of these, should the company focus on in order to compete effectively within its current market.

Background

Burberry is an iconic British brand established since 1856 and has been in international business since 1910, having presence in US, Asia, and mainland Europe. In late 1990s, the company was tumbling due to lack of good strategic direction, and at the end of 1998′s financial year Burberry saw its annual profits reduced from £62 million to £25 million. The company desperately needed strategic redirection to regain its iconic status. The company restructured its business model in terms of product development, manufacturing, distribution, and market communications. By the end of year 2011, the company’s profit rose to £295.7 million and £1.5bn in revenues (The Telegraph, 2011).

Overview of Burberry’s Corporate and Business Level Strategies

Corporate level strategy deals with the mission and scope of an organization and determines how value can be added to a business (Johnson et al 2006). In the past decade, Burberry has reinvented itself from being a manufacturer of outerwear apparels into a luxurious, stylish and inspirational lifestyle brand. The company started offering trendy fashion goods along with its regular products. In addition to its strategic repositioning, Burberry underwent expansion through opening of new stores in the current markets as well as international expansion in Mid East, Asia Pacific, Americas, and South Asia (Moore and Birtwistle, 2004).

Business level strategy focuses on competing in particular markets (Johnson et al 2006). At a business level, Burberry adopted the strategy of intensifying its non apparel product lines and accelerated its retail led growth. Burberry started to live-stream a fashion show through which it allowed customers to purchase products straight from the catwalk. A social networking site was introduced as part of the company’s marketing communication to deepen the relationship with customers and attract new ones (Design Council, 2012).

Burberry’s Resources

Burberry’s unique resources include its high brand equity, its popular trench coat product and its signature check design. Burberry, having a long history of establishment, has acquired great brand equity. The brand was commissioned to serve the soldiers in World War 1 to adapt officers’ coats for conditions of contemporary warfare in trenches. Burberry has twice received a Royal warrant; once by Queen Elizabeth II and once by Prince Charles, which means that the company can publicize that they are the supplier of products to the royal family (Instyle, 2012). These historic accomplishments have added great value to the brand.

Burberry has a very popular trench coat product line which also serves as its unique resource. The origin of this product dates back to World War I when the company produced trench coats for soldiers. The trench coat accounts for 30% of all the company’s sale (The Telegraph, 2011). Burberry has set up a dedicated social networking site called ‘The art of Trench’ over which it shares images of people wearing Burberry trench coats. The website showcases images from professional photographers and is partly user generated. The website has a fan following of more than 7 million users (Design Counsil, 2012). The website is part of the company’s marketing communication campaign dedicated for its trench coat product line. In addition to that, the company has a signature check design which is recognized globally. Burberry has a huge base of loyal customers who love its products for its prevalent design aspects. Over the years, Burberry’s check design has become prestigious, serving as an icon of status, class, tradition, and luxury.

Market Positioning

The characteristics of a market are assessed through various models such as analysis of Porter’s five forces of competitors’ analysis. Here, we view Burberry’s market positioning through its competitors analysis. Burberry’s products include ‘continuity products’ which have a product life cycle of a few years, and ‘fashion products’ which are designed to respond to a fashion trend. Therefore, the market positioning of the Burberry is unique and varies as it targets trendy as well as classic customers. Burberry targets all its customers through a common theme of ‘functional luxury’. Burberry’s main competitors include Coach, Armani, Gucci, and Polo, all of which are among top fashion brands in UK and globally. Coach and Gucci, both are more focused towards fashion accessories while Polo and Armani are more focused towards apparels; although all have a range of products in both apparel and accessory categories.

Strategic Management

The resource base view of strategy emphasizes upon a company’s internal capabilities in formulating strategies to achieve a sustainable competitive advantage in its market (Prahalad and Hamel, 1990). It also deals with the competitive environment faced by an organization, but from an inside-out approach which implies that the strategy’s starting point is the internal environment. On the other hand, the market-based view emphasizes upon strategy being based on the market positioning of a company (Rumelt, 1991). In order to sustain the company’s current success and maintain its competitive advantage, Burberry should focus on a resource based strategy. It implies that Burberry should continue its effort in maintaining its iconic luxury brand status and built upon its brand equity. The company has a history of more than 150 years of establishment, with having served the British soldiers in the World War I, and having received two Royal Warrants; all of which attach a strong sense of ‘Britishness’ with the brand. In addition to its brand equity, the company has a unique resource in terms of a specialized product line i.e. its iconic ‘trench coat’ with a unique complementary social media marketing communication platform. Additionally, the company has initiated a unique way of promoting its brand through fashion shows which serves not only as a marketing but a sales channel as well. Burberry should keep up its efforts for continuous innovation and promotion for its product. Furthermore, the company has a signature check design that symbolizes Burberry’s status of a classic and luxurious brand. The company should hold on to its signature check design, and apply it to its new product lines.

Conclusion

Burberry should deploy and develop these unique resources to compete effectively within its current market. Burberry should capitalize upon its high brand equity to develop and enhance new product lines such as home décor, children’s wear, cosmetics and perfumes, all of which are currently being offered by its competitors in its existing market. With Burberry having a foothold in both, apparels and accessories product categories, a further diversification of its products portfolio would put the company in a better position to grab a bigger market share against its competitors. Although Burberry’s expansion into current and new markets over the years has affected the company’s growth and profitability, the company’s success can be largely attributed to its unique resources and capabilities. These unique resources coupled with other managerial, production and distribution capabilities, have served as the company’s’ underlying success factors and should be continually utilized for its future strategic development.


References

Design Counsil (2012) Christopher Bailey: The Art of The Trench. {online} http://www.designcouncil.org.uk/about-design/Types-of-design/Fashion-and-textile-design/Burberry/ (cited on 22nd April, 2012)

Instyle. (2012) Burberry {online} http://www.instyle.com/instyle/fashiondesigners/keymoments/0,,20226013_burberry_20236334,00.html (cited on 22nd April, 2012)

Johnson, G. (2008) Exploring Corporate Strategy. Pearson Education India

Johnson, G., Scholes, K. and Whittington, R. (2006). “The Environment”, Exploring Corporate Strategy, 7th edition. Prentice Hall: United Kingdom.

Prahalad, K. and Hamel, G. (1990) The Core Competence of Organization. Harvard Business Review. 68(3), 79-91.

Moore, C. and Birtwistle, G. (2004) Creating an international luxury fashion brand International Journal of Retail & Distribution Management, 32 (8), pp. 412-422

Rumelt, R. P. (1991). How much does industry matter? Strategic Management Journal, 12(3): 167-185.

Stocks Challenge. (2012) UK StockChallenge {online} http://www.stockchallenge.co.uk/ (cited on 22nd April, 2012).

The Telegraph (2011) Burberry profits jump 40pc on emerging markets demand. {online} http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8537307/Burberry-profits-jump-40pc-on-emerging-markets-demand.html (cited on 22nd April, 2012)

Vodafone Group Plc Porters Five Forces

Vodafone Group Public Limited Company is the world’s leading mobile telecommunications company operating in more than five continents. The company runs its operations from two geo-regions: Europe, which includes Western Europe andGermany, and EMAPA, which includes Middle East, Africa,Asiaand the pacific. The European market is the largest accounting for close to 80 percent of the revenues as of 2009. However, the increasing partnerships with other mobile networks globally have seen revenues from regions outsideEuropeaccount for close to 40 percent as of 2011. The success story of Vodafone Group PLC revolves around the strategic competencies and acquisitions of other networks to become a powerful and leading mobile services provider. Strategic competencies and operations are well captured in the SWOT analysis, as well as the Porters five forces, which help give the position of the company and the challenges it encounters both within and without the organization.

Introduction and background information
Vodafone Group Public Limited Company is a global telecommunication company operating in various continents including Europe, Asia, Africa, Middle East, United Statesand the Pacific. Vodafone Group PLC has its headquarters in Newbury, United Kingdomand ranks among the leading global telecommunications providers. Listed on the London Stock Exchange, it is a part of the FTSE 100 Index with the largest revenue among the telecommunications companies. It ranks second behind China mobile in terms of worldwide subscribers, but leads the track in terms of revenues. Vodafone Group PLC ranks among the top 20 companies of the FTSE 100 Index coming in at position three based on statistics released on August 3 2012 (Financial Times, 2012).

The company has equity interests in over thirty countries globally with approximately forty partner networks. Vodafone has achieved this place through a process of competent acquisitions of communication networks in different countries, powerful organizational ability and efficient techniques that have permitted it to build out Wi-Fi systems, which are extremely competitive. The company also provides effective data services, which subscribers can access using the extremely progressed third-generation (3G) communications systems available to its markets globally. This analysis will look into factors that have propelled Vodafone to its position, how it markets and promotes itself in the competitive telecommunications market, and the competition it experiences in the telecommunications industry (MarketLine, 2012, p. 7). The internal and external environment explained using the SWOT and Porters 5 forces analysis will help provide a better market picture for Vodafone Group PLC.

Financial analysis
A report by Mintel released in 2010 indicates that Vodafone is the fastest growing mobile company globally with over sixteen million new subscribers each month (Mobile Network Providers, Mintel, 2012). This explains its huge turnovers and revenues attributed to the ever-growing number of subscribers as well as wireless and wire line networks across the world. For instance, the yearly revenues increased from £45.9 billion to £46.9 billion in the first quarter of 2012 (Vodafone Annual Report, 2012). A general observation and analysis of the financial report released in the first quarter of 2012 indicates that the results are negative, probably due to the Euro zone crisis, but the bottom line is that the revenues, especially from EMAPA have kept increasing as summarized in the tables below.

Source: http://www.vodafone.com/

Strengths

Vodafone’s major strengths are the reason behind its success in the global telecoms market. These strengths include

* Diversified and expanded geo-regions across the world divided into two:Europeand EMAPA. The diversification has strengthened its mobile network operations in these regions and accorded it more subscribers
* A strapping international presence and powerful brand image have made it the leading telecommunications company. According to a Mintel report released in 2010, Vodafone is the most trusted service brand owing to its excellent signal strength and efficient services (MarketLine, 2012, p. 5)
* Vodafone has well-defined cost reductions structures owing to the vibrant cost cutting initiatives, effective outsourcing and managed purchasing. This has improved the company’s revenues by reducing the operational costs
* An excellent network infrastructure with innovative services including 3G network and Wi-Fi systems
* An established presence in mature and emerging markets such as Africa andAsia, which have expanded its market share and revenues
* Vodafone’s major weaknesses include
* Uncertainty in the profits obtained from the HSDPA networks attributed to the slow consumer take-up of improved 3G networks services
* Vodafone’s return on assets is negative, which means that its competitors such as Deutsche Telecom and BT Group surpass it due to underperformance
* Over-reliance in the European market, which has seen its revenues and share decline due to the crisis in Europe(MarketLine, 2012, p. 6)
* Vodafone does not have network operations in rural areas
* Vodafone specializes in mobile services that lead to greater churn rates. The incapacity to offer bundled services due to specializations has compelled the company to compromise its prices
* The growing demand for 3G networking among businesses globally has seen Vodafone collaborate with leading laptop manufacturers to embed its SIM chip to allow for up selling of the broadband service
* Vodafone has also diversified its market share and EMAPA remains the leading target because of its potential. Indeed, recent statistics indicate that revenues from EMAPA have improved (MarketLine, 2012, p. 6)
* The strategy to drive higher voice usage acrossEuropehas spread to other locations implying that the company does not have to reduce prices to increase call time since the monthly bundle provides customers with enough voice time
* The telecommunications market is swiftly growing and becoming highly competitive with extremely high penetration rates in the European markets. Its major competitors includeChinamobile, Deutsch Telecom and BT Group
* Frequent tariff interventions and European Union policies on cross border mobile usage put pressure on its revenues
* Vodafone lags behind its major competitors inAmerica

Porter’s five forces
Buyer power

The bargaining power of buyers in the telecommunications industry is high due to the cutthroat competition and lack of differentiated products. The strong buyer power effectively reduces the cost prices in the industry though not to the level of its competitors. As such, Vodafone will keep making reasonable profits compared to its competitors.

Supplier power
Vodafone’s suppliers have a high bargaining power since the company operates with greater margins compared to its competitors. As a leader in the market, the market share is large meaning that it can easily absorb any price increments from the suppliers more than its competitors can. As such, Vodafone can easily maintain low prices from its suppliers and continue making profits (MarketLine, 2012, p. 9).

Threat of substitutes
Vodafone faces a considerable threat for products and services. The landline and CDMA services are fast declining while broadband services are fast becoming common. Video conferencing, VOPI such as Skype, Google Talk and Yahoo Messenger, email and social networking have emerged as substitutes to mobile services. However, due to the strong buyer power and effective economies of scale, Vodafone does not need to pass down the costs attributed to substitution to consumers (MarketLine, 2012, p. 8).


Threat of entrants
The threat of fresh market entrants is low because of barriers to entry. Companies wishing to enter the market must pay huge licensing fees coupled by spectrum availability and regulatory issues attached to the industry. Similarly, the costs of setting up network infrastructure are high, and the rapidly changing technology make is difficult for new entrants to cope. However, Vodafone can cope with this by maintaining high-level efficiency of its services to unrivaled heights.


Industry rivalry

Vodafone faces extremely high rivalry from its competitors due to the low call rate prices charged by its closest competitors. Similarly, the competitors constantly provide innovative products and services to the customers, which mean that Vodafone has to provide the same to its customers.


Conclusion and Recommendations

Vodafone has consistently outperformed its competitors despite the cutthroat competition in the industry. This notable performance and ability to diversify its products together with numerous acquisitions have seen it become a leading company in the industry. It financial position also continues to grow due to the innovativeness and ability to explore new markets in different geographical regions. Similarly, Vodafone has capitalized on its opportunities and worked on ways to eliminate the threats and improve on its weaknesses through various competitive strategies (MarketLine, 2012, p. 7). In recommending to Vodafone, the company must increase its GPRS subscriber base due to the high demand, deliberate more on value added services, introduce location-based services, diversify its broadband network by introducing voice over internet and finally tapping rural markets.

References

BBC, 2012. Vodafone agrees takeover of C&W Worldwide, 24 March 2012, viewed 14 August 2012

Financial Times, 2012. Vodafone confirms talks with C&WW. 14 February 2012, viewed 14 August 2012

Mobile Network Providers, 2012. Mintel. [Online] viewed 14 August 2012

MarketLine, 2012. Vodafone Group Public Limited Company, SWOT Analysis. Viewed 14 August 2012

Vodafone Group PLC, 2012, Vodafone Annual Report. 31 March 2012, viewed 14August 2012

Vodafone Group Market Analysis

This report examines the current market position of Vodafone, which is currently ranked second on the FTSE 100, and has a market capitalization of 84,991 Million GBP. The report undertakes a SWOT analysis to examine the main strengths and weaknesses of Vodafone. This is followed by a Porter’s five forces analysis of the industry structure. The main conclusion of this report is that Vodafone needs to change rapidly to meet the needs of the customers, and meet the changing demands in the industry. These include the changing nature of the mobile communication, and the dynamics of the digital economy, which have led to the changes in the market. Vodafone must therefore change its strategy to deal with these changes in the market.

1 Introduction
Vodafone is one of the largest telecommunications operators in Europe and around the world and provides mobile voice and data communications to consumers and the businesses (Daruwala, 2011, Mc, 2012). Vodafone is currently ranked second on the FTSE 100, and has a market capitalization of 84,991 Million GBP (FTSE, 2012). Vodafone group has recorded revenue of 45,884 million GBP during the fiscal year ended March 2011, and has an increase of around 3.2 percent over fiscal year 2010. This report examines the strengths and weaknesses of Vodafone to discuss the ways in which the company can improve its competitive position in the industry. One of the key recommendations of this report is that Vodafone needs to work more actively in developing data communications to counter the business risk in a volatile European market, which will help the organization to grow in the short and medium term. Vodafone also needs to develop mobile applications and new digital media to remain competitive in this market.

2 Market Analysis
A detailed analysis of the telecommunications sector shows that it is highly competitive today, as the different companies and their brands are continuing to introduce new and robust products to their customers (FEER, 1999). A SWOT analysis has been carried out for the Vodafone, which has highlighted a number of strengths and weaknesses of the organization. One of the key strengths of Vodafone is that it has a robust brand image, which has been developed over time and has a highly extensive market reach (Browning, 2011). The organization has also been able to develop a deeper understanding of the needs of its customers, which has allowed it to grow phenomenally, and has enabled the organization to develop a customer loyalty which is highly important for it (Datamonitor, 2012). For example, the annual BrandX Top 100 valuable global brands have ranked Vodafone as second highest brand and it is a top brand in UK. Similarly, Brand Finance has ranked Vodafone as the fifth most valuable brand in the world (Datamonitor, 2012). However, the weakness of the organization has been its inability to capture the brand loyalty and market share in terms of new customers. Vodafone has not been able to capture the level of customers in the new digital environment, and therefore the market growth has not been as phenomenal in UK (Anwar, 2003) as some other brands such as ‘Three’. Another weakness of Vodafone is its inability to capture the Third Generation signal market, which could have been a significant catapult for the organization.

However, the same weaknesses of Vodafone also is one of the key opportunities for the company, the mobile data market is exploding, with the use of smart phones and other wireless enabled devices increasing phenomenally (Savitz, 2012, Uzama, 2009, Mishra et al., 2010, Nayak and Pai, 2012). The ability of Vodafone to provide services to these services is one of the best opportunities in Europe. However, outside Europe, many other countries have not introduced a high speed mobile data service, and these are also expected to be a significant opportunity for these companies. In such a case, Vodafone can potentially have significant growth avenues, which can led to significant profits for the organization (Mishra et al., 2010, Nayak and Pai, 2012). These opportunities also present a number of threats to Vodafone. In this regard, the most significant threat is the increased use of VOIP services, which challenges the traditional model of mobile phone companies due to lost revenue and customers. However, the mobile companies can continue to provide wirelesses services to customers, which they can then use to generate other forms of revenue. Another threat to Vodafone is the mature European market, which has become highly competitive with lower margins for profits and could potentially be an issue for the organization (Grocott, 2010, Jankovic, 2010).

A Porters five forces analysis of the mobile industry also shows a number of issues for Vodafone, which needs consideration. One of the key aspects of the five forces model is that it enables the examination of the various forces which are exerted on an organization within the industry. In this regard, the buying power of the buyer has certainly increased (Glajchen, 2006), as they are no longer constrained by the mobile service providers. The buyers can choose other providers and VOIP based services (Hass, 2006), which is a key concern for Vodafone. Another concern is the potential competition between the companies, which is increasing due to the maturing of the mobile phone market. A third issue for Vodafone is the power of the suppliers such as Apple, who are able to dictate their terms on the use of services (Glajchen, 2006), and therefore a significant threat to the business of Vodafone. The threat of new entrants and new substitute products is also ever increasing in the mobile communications markets (Hass, 2006), as new digital products and services are continuously evolving which limits the use of mobile phone services by the consumer (Jung and Ibanez, 2010, Te-Yuan et al., 2010). These include VOIP based services such as Skype and Facetime, which have meant that some services such as video calls from mobile operators have been completely made redundant (Chang et al., 2010, Bodhani, 2011, Shin, 2012).

3 Conclusions & Recommendations
A number of conclusions can be drawn based on the SWOT and Porter analysis of Vodafone conducted as part of this essay. One of the key aspects of the future of Vodafone depends on its ability to harness the data communication, which will be the future of the company. Increasingly, innovative applications and products are being used by customers to communicate at a lower cost, and the role of the traditional mobile phone calls is increasingly being marginalized. Vodafone needs to realize the potential of data communication, and use new and innovative strategies to ensure that it can stay ahead of the competition and deliver groundbreaking and new services to its customers. The future of mobile telephony may depend on 4G connections, and Vodafone needs to ensure that it is fully ready to deal with the new challenges which it will face in the changing landscape of mobile communications. New services such as mobile payment and online communities are also significant new avenues for future growth, however proper planning is needed to meet these needs of the customer.

References
Anwar, S. T. (2003) Vodafone and the wireless industry: A case in market expansion and global strategy. Journal of Business & Industrial Marketing, 18(3), 270.

Bodhani, A. (2011) Voip – voicing concerns. Engineering & Technology (17509637), 6(7), 76-79.

Browning, J. (2011) Vodafone tears down its walled garden. Bloomberg Businessweek, 4257), 30-33.

Chang, L.-h., Sung, C.-h., Chiu, S.-y. & Lin, Y.-w. (2010) Design and realization of ad-hoc voip with embedded p-sip server. Journal of Systems & Software, 83(12), 2536-2555.

Daruwala, F. (2011) Vodafone revisited. International Financial Law Review, 30(5), 52-52.

Datamonitor 2012. Datamonitor: Vodafone group public limited company. Datamonitor Plc.

FEER (1999) Britain’s vodafone. Far Eastern Economic Review, 162(42), 66.

FTSE. (2012) Ftse factsheet [Online]. London: FTSE. Available: http://www.ftse.com/Indices/UK_Indices/Downloads/UKX_20120430.pdf [Accessed 16 July 2012].

Glajchen, D. (2006) A comparative analysis of mobile phone-based payment services in the united states and south africa, London, Proquest.

Grocott, J. (2010) Tax authorities’ claim vodafone warned of $2 billion tax bill. International Tax Review, 21(6), 6-8.

Hass, M. (2006) Management of innovation in network industries: The mobile internet in japan and europe, Weisbaden, Deutscher Universitätsverlag.

Jankovic, M. (2010) Global communications newsletter. IEEE Communications Magazine, 48(11), 1-4.

Jung, Y. & Ibanez, A. A. (2010) Improving wireless voip quality by using adaptive packet coding. Electronics Letters, 46(6), 459-460.

Mc (2012) Vodafone becomes vodafone. Marketing (00253650), 11-11.

Mishra, G., Makkar, T., Gupta, A., Vaidyanathan, M., Sarin, S. & Bajaj, G. (2010) New media experiences: Dealing with the game changer. Vikalpa: The Journal for Decision Makers, 35(3), 91-97.

Nayak, R. & Pai, G. (2012) India: Sc rules in favour of vodafone. International Tax Review, 23(2), 51-51.

Savitz, E. (2012) Will verizon bid for vodafone? No, almost certainly not. Forbes.com, 49-49.

Shin, D.-H. (2012) What makes consumers use voip over mobile phones? Free riding or consumerization of new service. Telecommunications Policy, 36(4), 311-323.

Te-Yuan, H., Huang, P., Kuan-Ta, C. & Po-Jung, W. (2010) Could skype be more satisfying? A qoe-centric study of the fec mechanism in an internet-scale voip system. (cover story). IEEE Network, 24(2), 42-48.

Uzama, A. (2009) A critical review of market entry selection and expansion into
japan’s market. Journal of Global Marketing, 22(4), 279-298.

http://www.study-aids.co.uk

Vodafone Plc SWOT Analysis and Five Forces

Abstract

Aim: This essay aims to perform an analysis on the basis of integration of SWOT and Porter’s Five Forces frameworks. The key aim of this essay is to establish the reasons behind the success of Vodafone, which is ranked 3rd in FTSE100 Company ranking, and thereby represent the implications and recommendations.

Methodology: This paper is based on integration of the secondary research, which includes recent reports, books and journal articles.

Findings: The key findings indicate that Vodafone is a well – established global company with a highly successful internationalization strategy. This implies that Vodafone has a lot of opportunities to take advantage of, despite the recent economic adverse events.


1.0. Introduction

This paper aims to demonstrate an analytical essay on the company, which is FTSE100 Top 20 Company as of July, 2012. A chosen company for this report is Vodafone Group Plc, which is ranked third in FTSE100, with the market capitalization of $ 87.53 billion (Financial Times, 2012).


2.0. SWOT analysis

SWOT framework is utilized in order to evaluate the main strengths, weaknesses, opportunities and threats on a micro-level (Kotler and Armstrong, 2010)


2.1. Strengths

As the recent FTSE100 report demonstrates, Vodafone is ranked 3rd on the basis of market capitalization numbers. This suggests that Vodafone Company has a strong brand reputation in domestic (UK) and international markets. According to Brand Directory, (2011), Vodafone has increased the brand value by 6 % in 2011 (from $ 28,995 to $ 30,674 millions).

Vodafone has always followed an aggressive internationalization strategy, which has been supported by the recent investments in Australian and African markets (Brand Finance, 2011).


2.2. Weaknesses

Vodafone faces a tough competition in the domestic market from another mobile network leader – O2 and recently merged T-Mobile and Orange (BBC News, 2012). The rivalry is further intensified in the light of recently introduced high data excess charges by Vodafone (Guardian, 2011).

The primary emphasis is placed on domestic (UK) market, which in turn weakens Vodafone’s position in international markets (i.e. US)


2.3. Opportunities

The partnership between O2 and Vodafone may influence the enhancement of the certain services (4G services). This, in turn, would align with the recent trends in the technology area (BBC News, 2012).

Further aggressive expansion to the untapped markets (i.e. recent internationalization to Australia and Africa) may align well with the core strategy of Vodafone (Strategic Direction, 2002).

Constant increase in popularity of smartphones and tablets may also increase the revenue of Vodafone as a result of utilization of 3G data services (KPMG, 2012). Additionally, there is an opportunity for development of the new services and products that would align with the technological innovations.


2.4. Threats

New mobile market entrants and future strategic partnerships may become a threat to Vodafone.

Inability to satisfy the needs of the target markets, (i.e. students) may reduce the market share of Vodafone. This implies that there are a lot of international students, residing in UK whilst Vodafone tends to apply high charges for them, regardless the potential decrease of the demand for Vodafone services within this consumer group.

SWOT analysis has demonstrated that one of the main Vodafone’s problems is a tough competition and lack of focus on the presence in international markets versus domestic markets. In UK, one of the key threats is related to the company’s inability to meet consumer needs on the basis of service quality and price ratio. Additionally, some of the consumer groups are being disregarded (i.e. students).


3.0. Porter Five Forces

Porter’s Five Forces framework is utilized in order to evaluate the attractiveness of the particular industry on the basis of the measurement of the strengths of the following forces, namely power of buyers, power of suppliers, threat of new entrants, threat of substitutes and degree of rivalry (Kotler and Armstrong, 2010).


3.1. Power of Buyers

The power of buyers is low, due to the strong market presence in UK and internationally. Additionally, due to the complexity of the mobile market structure, products and services, it is difficult for buyers to implement backward integration. This suggests that the power of buyers is low.


3.2. Power of Suppliers

The power of suppliers is of medium strength. Vodafone has several main suppliers, with whom they tend to have long term relationships. Huawei is a one of Vodafone’s official suppliers since 2005 (Huawei Official Website, 2012). However, as the market research demonstrates, there are a lot of suppliers in the mobile market, which may substitute Huawei.


3.3. Threat of New Entrants

Threat of new entrants is low. The barriers for new entrants are relatively high due to the complexity of the mobile market structure and a need for a high degree of investments. Furthermore, given the current poor economic conditions, the risk of new mobile players’ entrance is decreased. It is also supported by the intense competition in UK mobile market, with such clear leaders as O2 and Vodafone (Independent, 2012).


3.4. Threat of Substitutes

Threat of substitutes is high. There are a lot of alternatives that may be utilized instead of the mobile phone, due to the rapid development of new technology, (Lane, 2010). The most popular are the landline phones and video conference. Additionally, VOIP services are quite popular now, due to the associated low costs of communication (i.e. Skype, Yahoo Messenger) (Tsai, Lo and Chou, 2009).


3.5. Degree of Rivalry

The degree of rivalry is high, since there are two mobile market leaders in UK, namely O2 and Vodafone. Additionally, the mobile companies tend to form the strategic alliances, as T-Mobile and Orange have done recently (BBC News, 2012). This, in turn, increases the competition.

The switching costs are low, especially on Pay as You Go basis, whereas the switching costs are more increased on a Pay Monthly contractual basis. It is further supported by the increased loyalty towards a particular mobile operator in case of the subscription to Pay Monthly contract.

The exit barriers are also high, due to the complexity of the mobile industry and its structure.

Porter’s Five Forces analysis has demonstrated that there are three forces with low and/or medium strength, which may be taken advantage of, namely power of buyers, power of suppliers and threat of new entrants.


4.0. Conclusion

It has been estimated as a result of SWOT analysis that Vodafone is a global, well-established competitive company with a lot of opportunities to take advantage. As a result of Porter’s Five Forces analysis, it is recommended for Vodafone to continue emerging into the new markets in order to align with the successful globalization strategy. Additionally, it is recommended to implement more personalized approach toward consumer groups. This implies that is advisable for Vodafone to establish the prices for the products that would be attractive for certain target groups in relation to their needs and profiles. This would increase the competitive advantage of Vodafone, thus differentiating this company in highly competitive UK market arena.


5.0. References

BBC News, (2012), “O2, Vodafone, and a 4G promise”, Available from: http://www.bbc.co.uk/news/technology-18355569 (Accessed on 26/07/2012)

Brand Directory, (2011), “Global 500 2011”, Available from: http://brandirectory.com/league_tables/table/global_500_2011 (Accessed on 26/07/2012)

Brand Finance, (2011), “Vodafone is the world’s most valuable Telecoms brand”, Available from: http://www.brandfinance.com/news/in_the_news/vodafone-is-the-worlds-most-valuable-telecoms-brand (Accessed on 26/07/2012)

Financial Times, (2012), “Vodafone Group Plc”, Available from: http://markets.ft.com/Research/Markets/Tearsheets/Summary?s=VOD:LSE (Accessed on 25/07/2012)

Guardian, (2011), “Vodafone price rises unleash customer fury”, Available from: http://www.guardian.co.uk/money/2011/sep/23/vodafone-price-rises-customer-fury (Accessed on 25/07/2012)

Huawei Official Website, (2012), Available from: http://www.huawei.com/en/ (Accessed on 25/07/2012)

Independent, (2012), “Vodafone and O2 to save ‘hundreds of millions of pounds’ by sharing networks”, Available from: http://www.independent.co.uk/news/business/news/vodafone-and-o2-to-save-hundreds-of-millions-of-pounds-by-sharing-networks-7827959.html (Accessed on 26/07/2012)

Kotler P., Armstrong G., (2010), “Principles of Marketing”, 13th ed., Pearson: USA

KPMG, (2012), “‘Smartphone and tablet popularity brings maturity to mobile payment marketplace’ says KPMG”, Available from: http://www.kpmg.com/uk/en/issuesandinsights/articlespublications/newsreleases/pages/%E2%80%98smart-phone-and-tablet-popularity-brings-maturity-to-mobile-payment-marketplace%E2%80%99-says-kpmg.aspx (Accessed on 25/07/2012)

Lane M., (2010), “Slash the Cost of Your Landline”, Available from: http://www.money.co.uk/article/1005940-slash-the-cost-of-your-landline.htm (Accessed on 25/07/2012)

Strategic Direction, (2002), “The phenomenal growth of Vodafone: Rapid rise through an aggressive leadership style”, Strategic Direction, Vol.19, Iss.7, pp. 25-26

Tsai W., Lo H., Chou W., (2009), “Evaluation of mobile services for the future of 3G operators”, International Journal of Mobile Communications, Vol.7, Iss.4, pp.470-493

SWOT Analysis and Porter’s 5 Forces analyses of John Lewis

Abstract

This paper looks at John Lewis, a top retailer in theUKand a very successful brand in the EU region as a whole. It scans the environment in which John Lewis operates while scrutinizing the attractiveness and competitiveness of the retailing industry in theUnited Kingdom(Porter’s Five Forces analysis). The SWOT analysis is done to bring in to light the retailer’s strengths and weaknesses and to expose any opportunities that it can capitalize on and the possible threats it may stumble upon in the process of further development.


Introduction

Since its inception in 1864, the John Lewis brand has grown in to one of theUK’s leading departmental stores and enduring brands. John Lewis boasts the only remaining traditionally English brand with a focus on quality, value-for-money and practicality (John Lewis, 2008). John Lewis specializes in selling food and drinks, clothes and household goods. In addition, John Lewis has recently diversified into financial services such as insurance and credit cards. During the early 2000’s, the company experienced serious financial crunches due to tribulations with its supply chain and poor product offerings with the worst time being at the year ending March 31, 2001 when its profits were recorded to be as low as £2.8m on revenue of more than £8bn (John Lewis, 2008).

However, the retailer managed to turn its fortunes in the preceding years following changes in the management and has since attained a remarkable growth in profits due to rigorous cost cutting, promotions, widespread store refurbishment and aggressive marketing (Economist, 2012). Thus, profit before tax (£997) and net profit (£860m) for the year ending March 31, 2011 were at their highest since 2001 (John Lewis, 2012). However, following the credit crisis in the US and the difficult trading environment in the UK over the 2010 Christmas period, the company’s sales growth saw a marked slow-down and its shares plummeted almost overnight (Economist, 2012). John Lewis has recently gained the title of “bell-weather” in theUKretailing industry, which means that if John Lewis is besieged, the whole sector is also struggling to stand on its feet. To this end, the SWOT analysis below looks at the environment in which John Lewis is operating, bringing in to light the company’s strengths and weaknesses while exposing the opportunities that the institution can capitalize on and the possible threats it may lurch in to in the process of further growth.


SWOT Analysis
Strengths

* John Lewis enjoys a strong brand of embodying qualities, practicality and value-for-money promoting its customer loyalty (John Lewis, 2012).
* John Lewis profits have been growing steadily since 2001 and the cash position was very strong as at the year ended 31 March 2011 marking a decade of enormous economic growth (M&S, 2011).
* The highly qualified management team has being greatly praised for having reversed John Lewis fortunes in the last decade.
* John Lewis aggressively markets itself and has recently used celebrities like as their brand ambassadors (John Lewis, 2012).


Weaknesses

* John Lewis performance slipped over the 2010 Christmas period. While all retailers practically underperformed during this time, John Lewis was the most exposed. At the time of writing, the share price was 361p with the 52-week low of 367p and high of 759p, which means that John Lewis M&S had lost more than 50% of its value during the year (Sunday Times, 2011).
* Similarly, the price/earnings ratio of 9.4 is very low as compared to that of its competitor’s i.e Mark and Spenser. The price/earnings ratio is the key indicator of investor assurance in a company (Arnold, 2002).
* John Lewis has recently started cutting prices to match up the ever increasing competition. This may devalue the brand (The Economist, 2012).
* The company has been recently criticized for fuelling accusations of poor managerial incompetence, corporate governance and lack of transparency infuriating many large investors (Nugent and Hawkes, 2012).


Opportunities

* The idea of developing markets to Asiapresents large opportunities for John Lewis.
* Designing of trendier clothes would attract young and potential customers to its stores.
* Online sales provide a great opportunity since online margins are higher citing extensive growth from online companies like eBay (John Lewis, 2011).
* The adoption of healthy lifestyles by customers presents an opportunity to sell healthy foods and sports gear.
* Growing insurance and credit card industry. The industry has been on an upward trend over the past decade. Considering that John Lewis has a division that contributes over 23% of its total revenue dedicated to this segment, it is likely to reap significant benefits if this opportunity is fully utilized.


Threats

* Currently, John Lewis target group are older customers usually over 45 years. This might pose as a risk in the future due to the fact that today’s 20-30 year olds will still stay trendy after 10-20 years and might be reluctant to shop in John Lewis, especially taking into consideration the desire for people to look younger nowadays (The Economist, 2012).
* Jeremy Paxman shaped a storm of negative publicity when he criticized John Lewis underwear due to lack of support (Nugent and Hawkes, 2012). Even though it is considered that every third woman and fifth man in the UKbuys John Lewis underwear, the publicity may have an adverse effect on sales (John Lewis, 2012).
* The stated poor corporate governance in the company might lead to a fall in the interest margins and reduced revenues accrued from the cash equity business. Such declines may lead to a situation whereby clients lose their confidence on the company’s ability to meet its financial obligations. In addition, a decline in returns indicates that the group lacks the ability to deploy its resources to profitable ventures.


Porter’s Five Forces
Level of competition

* Competition in the retail industry sector is extremely fierce. Predicament to this problem is exacerbated by the fact that institutions are diversifying into non-core turfs thus creating extra competition.
* John Lewis is particularly exposed to competition as it sells not only food and drinks but also apparel and household goods. This leaves it vulnerable to competition from giant supermarkets such as Tesco, Asda, Sainsbury’s and clothes retailers such as Next, Topshop, Marks & Spencer and Zara.
* Porter (1985) wrote that “companies pursue one of three generic strategies: low cost, differentiation or hybrid”. In this regard, John Lewis has long tried to distinguish itself from competition by placing itself as a higher quality value-for-money brand. However, this has being greatly affected by the cuttings in apparel prices which poses a risk of de-valuing the brand in the market and losing the scope of specialization (Arnold, 2012).
* However not a key business for John Lewis, the John Lewis credit cards and insurance face a lot of competition from banks and building societies.


Threat of Substitutes

* Apparently, there are no major substitutes to food and clothes. This makes the threat of substitutes relatively low.
* Notably, the key threat in substitutes in the food market is mainly Waitrose, while Peter Jones and Marks and Spencer offer high quality apparel. Asda and Tesco have also introduced less affordable alternatives and are even trading dinner jackets (Wilkes, 2012). In this regards, the threat of substitutes is relatively high.


Threat of New Entrants

* The threat of new entrants is relatively low. This is due to the massive capital investments required in setting up a successful chain store. Also, the retail industry is mature and a new entrant in the market would consider offering something radically new, which is quite difficult to do in cloth retailing.
* All key retailers have strong reputable brand names therefore benefits from customer loyalty, which becomes increasingly important in homogenous markets (Doyle, 2002).
* The existing retailers are firmly clenching on to their market shares and would use all available methods to counter any new entrants i.e. litigation.
* Importantly, the lack of market knowledge – particularly for foreign investors-possess as a barrier to new entrants.


Bargaining Power of Buyers

* Is relatively high. The buyer’s concentration is high giving them an advantage in dictating tastes and rules.
* The switching costs are low and there are plenty of alternatives.
* The UKeconomy is prospected to slow down by mid 2013 forcing retailers to cut down prices and focus more on customer needs (BBC, 2012).


Bargaining Power of Suppliers

* Is rather low. John Lewis being a large company listed with a huge turnover, suppliers always want their products on the retailer’s shelves in order to reach a large customer base enjoyed by John Lewis (Daveyand Laurance, 2008).
* Unlike other stores, John Lewis is not overly dependent on suppliers as it mainly sells own branded products. This means that it largely buys raw materials and not finished goods, which is favourable for margins (John Lewis, 2012).

Conclusion

Although John Lewis managed to conquer its financial crisis in the early 2000’s, it now faces a slowdown in its profit gains. This has being partly contributed by the past economic crunch in theUnited Stateswhich spread to Europe and to theUKmainly (ABC News, 2008). As the spending power of consumers decreases, customers get more cautious and start to shop around more for cheaper products (John Lewis, 2012). Even though John Lewis has a lot of strength to help maintain its leading position in the UK retail market, it should also be on the verge of managing its weaknesses and be particularly cautious with regard to any form of bad publicity that may tarnish its name. John Lewis should consider all possible means of maintaining investor relations and consider reforming its executive management to improve its corporate image. Developing in to other markets and online sales present great opportunities and John Lewis should not vacillate in embracing them (BBC, 2012).
References

ABC News (2008). Buffet: US essentially in recession. 3 March 2008. www.acnews.go.com (Accessed 31/07/2012)

Arnold, G. (2012). Corporate financial management. 3d. ed.Essex: Prentice Hall.

BBC (2012). Darling signals economic slowdown. 8 March 2012. www.news.bbc.co.uk (Accessed 31/07/2012)

Davey, J and Laurance, B (2008). John Lewis under fire: how the City turned against Rose. The Sunday Times. 16 March 2008, p.12-13

Dess, G.D., Lumpkin, G.T. andTaylor, M.L. (2004). Strategic Management: Creating Competitive Advantages. McGraw Hill Professional, p. 75

Doyle, P. (2012). Marketing Management and Strategy 3d ed., Pearson Education.

Financial Times (2012). Market data. Information on oil prices. 24 March 2012. www.ft.com (Accessed 31/07/2012)

Legal&Medical (2008). Man loses M&S grape case. 14 March 2008. www.legal-medical.co.uk (Accessed 31/07/2012)

John Lewis (2012). John Lewis Annual report 2011. www.johnlewis.com (Accessed 31/07/2012)

Nugent, H and Hawkes, S (2012). George follows Jeremy Paxman as John Lewis faces another brief challenge. 20 March 2012. www.timesonline.co.uk (Accessed 31/07/2012)

Porter, M. (1985) Competitive advantage: creating and sustaining superior performance.New York: Free Press

The Economist (2012). The world in figures: industries. The world in 2012. p124, 126

The Economist (2012). A Rose by any other name. A retailing star ticks off investors at an awkward time. 13 March 2012, p58-60

The Sunday Times (2012). Top 200 companies indices. 16 June 2012, p.19

Wilkes, D (2007). Asda launches £35 tuxedo in attempt to sew-up formal attire market. The Daily Mail. 14 November 2007. www.dailymail.co.uk (Accessed 31/07/2012)

Thursday, 8 November 2012

Quality Management Dissertation

Source: http://www.study-aids.co.uk

Summary
With the development of science and technology things have changed rapidly in the world. Development in telecommunications and transport has changed the world almost into a village and people have more information than they used to have a couple of years back. When they decide to have any product or services they have access to all the information about them including the availability of wide range in the market and their qualities. This has enhanced tremendous competition in the market and if quality of a product or service is not maintained it will not be able to compete in the market and obviously it will not sustain in the market.

To manage the quality of a product or a service managers have to be updated about the expectations of its users. Once they are aware about the expectations of the users they need to develop systems, regulations, standards or procedures to assure the satisfaction of the customer. If they fail to do so it will be considered as a flaw in the delivery system and they will not be able to live up to the expectations of the customer.

It may be difficult to develop specifications for quality because a service possess inherent characteristics but it is possible and mandatory also. Any product or service must have a system to guarantee quality service to match the expectations of the customer and sustain in the market.

Introduction
The set of in-built or inherent characteristics of a product or a service to meet with the requirements, needs, expectations and obligations of its users is called quality. A high or excellent quality is achieved if the inherent characteristics are able to satisfy its users up to optimum level but it will be called a poor or low level of quality if they are not able to meet the expectations and requirements of the users. Quality can be measured in terms of degree and to understand it properly this should be analyzed that to what extent or to what degree the inherent or in-built features of the product or the service is compatible with the requirements or the expectations. In brief, the quality of a product or service depends on the ability of its inherent characteristics to comply with expectations and requirements of its users. It is a relative concept. In an organization, all the activities intended to control, direct and coordinate quality is termed as quality management and it includes formulation of quality policies, setting objectives of quality as per requirements, planning, implementation, improvement, assurance of quality and quality control also. Thus, quality control is regarded as a part only of quality management.

1.Concept of Quality Management
To control and direct the implementation of the quality policies and achievement of quality objectives a group of interacting or interrelated activities are used by organizations which is called quality management or quality management system. A process approach is used to manage, control and direct the implementation of the quality policies and achievement of quality objectives which is known as process-based QMS. For transforming inputs into outputs resources are used by each process and output of one process can be used as the input of other process, hence this output and input relationship makes the processes interactive and interrelated. Establishment of an effective and efficient QMS benefits an organization in many respects and is the milestone of the concept of the service provider and the customer working, for mutual benefit, together. The objective of QMS is to define, plan and implement quality processes, for the production of quality services and products and not to examine defects in services or products after production. The process of QMS should be completely documented to ensure the requirements of the customer and the organization. The consistent delivery of the desired service or product according to the requirement and expectation builds the confidence of the customer, can be termed as the requirement of the customer. The requirement of the organization is to provide quality service or product at a reasonable cost with optimum use of resources available like technology, materials, human and information. In short, a QMS is necessary to achieve targets set out in the strategy of an organization; it starts with the needs of the customer and ends with the fulfillment of their needs with satisfaction.

1.a. Quality in terms of businesses and services
The term business in general, means production and marketing of physical objects like tea, coffee, paper, TV, refrigerator, computers, books and many more things. But there are many businesses which exist without producing any goods rather what they produce is called services. These days contribution of this service industry to the GDP of any economy is increasing substantially. The service sector is developing day by day and a large number of business activities revolve around it.
The businesses activities are classified into three sectors:

Primary sector- This sector includes business activities like agriculture, fishing, mining, production of raw materials, etc. Secondary sector- This sector is related to manfacturing industry – production of machine, tools, steel, car, etc.

Tertiary sector- This sector includes all kinds of services provided to all including businesses as well as general public. These services are banking, insurance, transport, consultancy, etc. To compete and be successful in this competitive world of business, companies need to be efficient, responsive and produce and support quality products and services. The company with the best practices of quality control will have an advantage over others. And most importantly the secondary sector has to go hand in hand with the tertiary sector because services after sale is mandatory for many products and the quality of service determines the success or failure of those products.

1.b. Quality in terms of customer satisfaction
As discussed above the quality management starts with the needs of the customer and ends with the fulfillment of their needs with satisfaction. With the rapid changes in technology and market customer satisfaction has become a changing entity and there is a need of continuous improving process of quality management for customer satisfaction. Customer satisfaction can be ensured only if the attention is paid to their voice, needs, requirements and expectations. For this the customer should be encouraged for their voice and an effective complaint system should be established and the data should be documented, monitored and processed to reduce complains and ensure satisfaction to the customer. There should be a process of making regular contacts with the customer and conducting opinion surveys and the collected data should be used to plan a quality management to provide customer satisfaction.


1.c. Measurement of quality management
To determine the efficiency and effectiveness of different processes in achieving their objectives measurement is required to be carried out. The efficiency and effectiveness of quality management system for its contribution to the organization is measured by measuring completeness and reflection of the policies applied, deployment, business coverage, adaptability by staffs etc. Different aspects of quality can be measured by businesses by measuring rate of failure or rejection of a product or service, rate of return of products or services, number of complains registered by customers, level of satisfaction of customers and loyalty of customers as repetition or renewal of purchases. This is to keep in consideration that quality is abstract and subjective as it depends on personal opinion which may vary from person to person and tangibility of all the aspects of quality are not possible. Since everyday new and advanced technologies are emerging, quality of materials are changing, new techniques for manufacturing are being introduced and new competitors are the quality management system has to be evolving. Quality management is beneficial but it is a costly affair also and the managers have to evaluate the benefits over the cost.

2. Schemes for quality management
There are schemes in practice for quality management. Different organizations practice different quality management schemes. We are going to discuss four quality management schemes which seem more practical and common and its adaptability is without any doubt.

2.a. Four quality management schemes
I. Installation qualification scheme (IQS): The first scheme is installation qualification scheme which means that the quality of a product depends mostly on the installation of ancillary systems and process equipments so they should be installed in accordance to the specifications approved by the manufacturer and recommendations made by him are followed considerably.

II. Operational qualification scheme (OQS): The second scheme is operational qualification scheme which means that the quality of a product also depends on the operations to control the quality standards and level of actions taken to ensure the desired outcome.

III. Performance qualification scheme (PQS): The third scheme is performance qualification scheme which means that the quality of a product also depends on the level of performance under the anticipated or non-anticipated conditions to ensure the quality of the product which meets the desired requirements.

IV Process validation scheme: The fourth scheme is process validation scheme which means that the quality of a product also depends on the regular validation of the processes in the fast changing environment whether it is compatible enough to ensure the quality of the product or the services as per latest demands and requirements.
Besides these four schemes there is a protocol for process validation which means the process validating test of parameters, characteristics of product, condition of manufacturing machines and equipments and other similar factors. Then lastly comes the verification process to confirm by examination and objective evidences that the predetermined requirements has been achieved and the mission accomplished as per the expectations of the customer.

International ISO 9000 quality system is being used to ensure quality standards, cost efficiency and customer satisfaction. It sets the guidelines for maintaining through different model as ISO 9001, 9002, 9003 or 9004. The model selection varies according to the type of product or service, its process of production and above all the requirement of the customer.

ISO-9000 – Management and assurance of quality standards.
ISO-9001 – Quality standard for development, design, installation, service and production.
ISO – 9002 – Quality standard to detect and prevent any non-conformity during the process of installation, implementation and production.
ISO-9003 – Quality standard to control and detect, in contractual situation, the disposition of a product during test or inspection.
ISO-9004 – Quality standard for non-contractual situation describing elements required to develop and implement quality management.

2.b. The importance of communications and record keeping in quality management schemes
Communication plays a very important role in quality management system or in other words it is the integral part of this system. Communication within the organization and outside the organization is required for quality management. The quality management plan is processed within an organization with inclusion of the entire team and not only the managers. Proper communication with the entire team helps avoiding the general apathy among them. Each member of the team must be convinced about the benefits of quality control strategy and plan to implement it successfully. Similarly external communication, specially communication with the customer, is the base of quality management system. Communicating effectively with them only can provide the required information about the quality management. They are the only one who avail the product or the service and their satisfaction level is the key factor to determine the quality of the product and the service.

Organizations communicate with their customers in various ways. Most effective way of communicating with them is to attend to their complains attentively. Another way is to conduct surveys among both users and non-users.

Record keeping is important for almost everything for an organization for its proper functioning and quality management is not an exception. The record of the information collected during both internal and external communication helps in formulating and implementing plans for quality control. Without recorded data it is quite impossible to take inferences for making plans for quality control.

2.c. Similarities and differences between quality management schemes
Quality management schemes are similar in their objectives because they all aim to control and improve quality. They all provide detailed guidelines for execution of quality control system and also mention the process of prevention and detection to check the quality of a product or a service. They differ in their respective enforcement field. One is meant to manage quality at the installation level while other is concerned with the production level of the quality. Next one provides guidelines for disposition and so on.

3. ODA and London Olympics 2012
Olympic games are being organized in London in 2012 which requires very high standards as it is an international event attracting the attention of entire globe. To ensure its success Olympic Delivery Authority (ODA) was established to ensure the delivery of the Olympic Games and Paralympics Games in London in the year 2006 by the London Olympic Games and Paralympics Games Act and a budget of £6.1 billion has been allocated to ODA for delivering the Games and other legacy benefits associated to it. Lately the chief executive of the ODA handed over the Olympic Park to the organizing committee of the London Games 2012. It is high time to evaluate the quality of its delivery of product and services. Though the ODA didn’t have any competitor to compare the quality of its products and services with, its own set targets and international standards are the parameters to evaluate the gaps in it.
The budget of £6.1 billion raised substantially to £7.1bn which is a considerable amount to declare it over budgeted. Secondly, the job is not completed on time and as the CEO declares himself that 95% work is done, it puts a big question mark with only few days left for the games to begin. Even 5% of the total work is a tremendous task to accomplish in time. Lack of proper planning and transparency and involved risks and challenge of timely completion of the project distracted contractors in the beginning and thanks to recession that the ODA could negotiate with them. Its venues like velodrome, main stadium, Zaha Hadid are controversial for its construction, design and cost. The ODA also compromised by ruling out some of the expensive designs planned in the beginning to save the cost. It also reduced the size of the some of the venues for the same. Its deal with many contractors collapsed for some or other reasons. The ODA is facing criticism for failing to achieve the target of sustainability and employment. The target of providing 20% of the required energy by renewable sources also failed when its strategy of wind energy collapsed. The delivery of the ODA also failed in providing transport in London and so critics define it a mess and its efficiency is left over the sensibility, patience and ability to follow the instructions, of the people.

3.a. The information made available to customers and the importance given to effective marketing – An assessment
As we see in the above example the ODA failed in attracting contractors in the beginning though it had a tremendous project involving billions of pounds mainly because of two reasons – firstly, the contractors could not get the sufficient information of the projects for its analysis in making a decision and coming to a conclusion and secondly, effective marketing was not done by the ODA to an extent to attract the interest of the contractors. It was quite surprising that an event like Olympic Games capable of influencing the GDP of the organizing nation failed to get prople associated to it.

3.b. The benefit of user and non-user surveys in determining customer needs – An evaluation
User surveys is conducted among the people who use a product or a service and it helps in understanding of the requirement, need and expectation of the valued customers. On the basis of these survey results quality management system is formulated to improve the existing facilities and services
Non User Survey is conducted among the people who don’t use a particular product or service to understand the reason of their avoidance so that quality management team could make a strategy to include new customers by making improvements in the product or service as per the desire, need and expectation of the non-users.

3.c. The methods of consultation employed to encourage participation by under-represented groups – An examination
To encourage participation of under-represented groups several methods can be used. Some od them are as follows :
Form surveys : Under-represented groups should be encouraged to participate in a form survey and the form should be designed to identify quickly the nature of their replies. Analysing these forms the problems, requirements, expectations can be revealed.

Telephone surveys: Telephone survey is another tool to measure the expectations and perceptions of under-represented groups.
Interviews: Personal interviews can also be conducted by selecting the interviewees from this group randomly.
Group interviews: Group interviews or group discussions can also be recognized to analyse the situation.
Mail surveys: Selecting sample from the target group a set of questions requiring short answers can be sent to them with pre-paid envelops for their response.
Electronic surveys: This technique is similar to the mail surveys, here the questionnaires are sent through e-mail.

3.d. The value of complaints procedures and analysis of how each is used to improve quality – An investigation
Organizations implement some or other complaints procedures to ensure satisfaction of customers about their product or service. This also gives them opportunity to know about the shortcomings of the product and the service. The rate of complaints registered against a particular product or a service gives the information about the quality of the product or the service. These data can be used for planning and implementing quality management processes.

4. Recommendations and implementation
On the basis of analysis and audit done for the quality management system implemented by the ODA following recommendations can be made and had they been implemented in time the result would have been different. Though the time has passed and the Olympic Park has already been handed over to Olympic organizing committee these recommendations can be valuable for any similar project of the same stature and importance.

4.a. The role of self assessment in order to determine an organization’s Quality management Systems
For achieving sustainable success an organization’s self assessment is regarded as a comprehensive process which requires systematic review. This is described according to ISO 9004. It is used to recognize and identify policies and practices valuable for the organization and also to encourage innovative ideas and improve delivery. The best part of self assessment practice is that they are inexpensive and easy to administer as well as give quick benefits. They also require comparatively less time. Hence the importance of self assessment in determining and formulating an organization’s quality management system is tremendous in comparison to its cost.

4.b. Explanation of the stages of staff consultation necessary for effective implementation of a quality scheme
Irrespective of the size or type of an organization people associated with it are required to talk with each other to exchange views and ideas, exchange instructions and discuss plans for growth and development. Communication and consultation with staffs can be considered as the lifeline of any organization for its success and also for implementation of any strategic plan including quality schemes. The communication and consultation should be encouraged at all levels and for proper implementation of quality management systems the senior managers should not hesitate consulting and communicating with a ground level staff because they are the people who will convert their vision into reality and they must be convinced for this not just ordered because this may lead to their apathy and the result may get affected.

4.c. Proposal for new systems or modifications to existing systems that could improve service quality
If we analyze the situation in context of the ODA it can be easily understood that the things could have been managed in a better manner to deliver quality to its users. Budget should have been managed in a proper manner and all the strategies could have been made to spare the project from being over budgeted. For attracting contractors and suppliers more information needed to be furnished and more transparency was required. The ODA should have manage to deliver all the venues as per its initial plans and not by changing the plans to reduce the budget. Above all timely completion of the project should have been given priority and id should have not been handed over with so called five percent finishing work left. The ODA had the opportunity to upgrade the transport system of London but on the contrary it landed up making it a mess. For the environment, it was planned to use twenty percent of the energy from the renewable resources but the ODA could not meet that target as well. Last but not the least the ODA must have achieved the target of employment and sustainability.

Conclusion
Summing up it can be is concluded that quality management system is the lifeline of any organization and it can sustain only if it achieved its predetermined targets. No any organization can survive without satisfying its customers and no any customer can be satisfied with inferior quality of a product or a service. For quality management system we can conclude it in the steps of The Plan, The Check and The Act. Plan includes policy, planning, design, development, provision to control product and service, etc. Check includes review, verification and validation of design and development, product and service validation, customer satisfaction, internal audit and data analysis. Act means to act with positivity to achieve the determined target of quality management system.