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International Business Challenge Assignment Help
In this study, CSR (Corporate Social Responsibility) activities of an organisation have been discussed with the business opportunity of this organisation. In this study, a project proposal of CSR activities, marketing, financial and operational activities have been analysed with business need, vision, strategy and expected business benefits along with this, product's, estimate, cost, time and impact of such activities in the organisation. In business case scenario, the organisation needs to set a perfect goal, in this study, CSR activities, financial and marketing goals are associated with this.
2. Overview of business case
In this study, Somerfield, a retail chain organisation has been chosen. Somerfield, originally named as Gateway, actually has been working in the supermarket field. The organisation has understood that it is needed for being environmentally and socially conscious and they have to take the initiative of charitable or annual fundraisers (Pedersen, 2015, p.25). Most importantly, Somerfield has been organising charitable events for helping malnourished children. They support social causes and they provide a certain percentage of their sell to the poor section of the society.
Figure 1: Logo of Somerfield Supermarket
This retail organisation has been working in this field since 1875 and it has its headquarter in Bristol. Somerfield has bought Kwik Save in the year 1998 for the enlargement of the organisation. This organisation mainly works in the grocery and they have changed their business logo for the development of the market share. Then, in the year 2004, they have acquired Safeway Compact from Morrisons. Most interestingly, Co-operative Group took this organisation for 1.57 billion pounds (Grocery.com, 2016). As an autonomous element, Somerfield was the 6th biggest nourishment retailer in the UK, as indicated by TNS Worldpanel, taking after the offer of the Kwik Save unit and the conclusion or offer of unbeneficial stores, with 977 stores.
3. CSR elements and provide evidence of International Business focusing on Asian organisations
The organisations take the responsibilities of various social and environmental issues that contain a pyramid of top to bottom responsibilities of CSR activities. The four main activities of an organisation related to CSR are economic responsibilities, legal responsibilities, ethical responsibilities, and philanthropic responsibilities.
Tesco CSR activities:Tesco's ethical responsibilities for the employees and communities are related to creating wealth for utilising effective ways and giving useful substance to the society. In the year 1996, Tesco formulated Energy Awareness Campaign to save energy, fuel and water. Moreover, Tesco provides 1% pre-tax profit for the charity cause, employee’s gifts and donation. Tesco has given more than 2,000 employments in last 2 years.
Toyota CSR activities:Toyota provides the philosophy of innovation of cars that gives benefits to environment policy with quality products. Moreover, ‘customer first’ is the strategy to meet the demands of the organisation. Toyota gives equal opportunity for the employment case. Toyota Motor provides ‘traffic safety’ week with giving the education to the students. In the case of the global environment, Toyota manages a community for the benefits of the people. They provide a contribution to the sustainable development. In addition, risk management of the people is another responsibility of them.
Aldi CSR activities: Aldi's responsibilities towards the consumers are related to product safety, healthy lifestyles and responsible drinking. In the case of operation management, this organisation has been working on the continuous decrease of the carbon footprint with maximising the efficiency of energy in the business. Aldi is trying to reduce the use of refrigeration with recycling of the products that are wasted. In community benefits, Aldi does charity and financial donation. For the benefits of the employees, this organisation gives training programmes for their development and attractive remuneration.
Specific instances of different CSR activities of Somerfield
In the case of Somerfield, they provide the effectiveness of community improvement with citizenship and volunteerism. This policy provides environmental and social impact and performance diversity of the employees.
Employees are given labour rights, compensation, health and safety issues and training and development.
Day to day operations of the organisation is integrated to stakeholders and sustainable responsibility of the Somerfield understanding risks and liability.
Energy-efficient operations with the development of a strategy that can provide benefits to the environment are the main aims of the organisation focusing mainly reducing of future risks.
4. Main Aim of Business case
The main aim of the business case is to deliver developed social, economic and environmental performances of the organisation in gaining the vision of becoming a leading grocery retailer in the UK. CSR activities are important for Somerfield as their main aim is to provide performances and services to the customers in line with the welfare of the society.
5. Key objectives of business case
1. To improve the staffing of Somerfield Supermarket to meet the strategic goal of the organisation
The management of Somerfield supermarket can reduce the labour costs in order to increase the staffing.
This can be measured through improve in recruiting, avoiding overtime, expensive contract in case of labourers and employees, reducing turnover, shifting issues.
This can be achieved through hiring the experts of Human Resource Management in each of the retail sector of Somerfield.
This objective is quite relevant as Somerfield has been facing issues in employee management in the UK retail and service related problems from employees’ side.
This may take 6 months to bring the change in Summerfield retails by implementing training to the existing staffs.
Table 1: SMART Objective
2. To increase the revenue of the company within 3 years
Management of Somerfield should provide emphasis on marketing and sales activities in each of the retail in the UK as it is related to the top-line earnings.
This can be measured in terms of percentage of sales of the organisation after the specific time rather than the amount of pound.
Somerfield can achieve this through an increase in marketing and enhance in expenses of planning, researching of the market. Somerfield needs to take effective care of the pricing strategies too.
The objective is quite relevant as Somerfield has been facing issues of revenue growth in recent time as the competition is increasing day by day in the UK market. Other companies try to diversify the offerings and Somerfield is needed to do the same
This may take 3 years (36 months) through applying relationship to the consumers and spend money on increasing the sales and marketing. The organisation needs to target a customer segment properly and they can increase the cross promotion.
Table 2: SMART Objective
3. To enhance the market share in the UK retail market within 2 years
The management of Somerfield needs to specify the marketing criteria in order to increase the sale. Marketing of an organisation provides the return on investment and it gives the better market share.
This can be achieved through market analysis and market research of the organisation. In addition, management of Somerfield can be measured the enhancement of market share by applying various marketing modes like product awareness, brand recognition, establishing names in the industry etc.
This can be achieved through innovation of marketing in the industry, making good customer relationship and most importantly hiring smart employees to the organisation. In addition, understanding the competitors in the market can provide good market share.
This objective is quite relevant for the organisation as Somerfield is now in the sixth position and its market share in the industry in degrading for last three years. Percentage control of the market share needs to understand.
This can be achieved within 2 years with implementing marketing activities like social media campaigns, email campaigns, billboards, adverts etc.
Table 3: SMART Objective
4. To make understand to the consumers that the organisation feels responsible for environment and they are active in improvement of community life
The management of Somerfield should not use harmful packaging as these can impact on environmental consequences and most importantly, they need to engage themselves in community life. Giving benefits to the current stakeholders and taking initiatives for improving the community is needed.
This can be measured through the performance of the management and the target of the organisation regarding CSR techniques.
This can be achieved through regularly reviewing of the CSR activities and the process of understanding the advantages of the current market scenario. The management can enforce a performance measurement system with ‘CR Index’.
This objective is relevant as CSR provides good reputation to the community and it helps to retain staffs. Somerfield needs to increase the CSR activities as it provides press coverage and staff productivity, most importantly, save money.
This may achieve within 2 years as the process of CSR takes planning, implementation, monitoring and documenting with the help of CSR experts.
Table 4: SMART Objective
6. Feasibility Analysis
Somerfield Supermarket is currently working in the UK market and it has been working in the retail sector, especially in groceries. Somerfield has several stores in entire UK, Dudley, Halesowen, Swanage, Gornal etc. (Aguinis and Glavas, 2012, p.933). UK retail sector is approximately estimated 339 billion pounds and it is the gross value of the retail market. It is clear that retail market has the potential opportunity. In the retail market, 2.8 million of employees are currently working. In Somerfield supermarket, more than 50,000 people are working in the entire UK. The main four have specialities in bigger superstores, while the Co-operation has turned into the biggest group retailer, with specialities in accommodation stores and littler grocery stores. At a certain point in mid-2007, Somerfield was likewise quickly surpassed in size by Waitrose, and the free food merchants' wholesaler, Nisa, is practically identical in size. As stated by Glavas and Godwin, 2013, p.22), for Somerfield, the main competition comes from Tesco, Aldi, Asda, Marks & Spencer, Argos and Amazon. In the retail market, demographic influences do not provide the large key player, however, all income group visit retail sector in the UK. Moreover, new generations are now the major source of income for the retail sectors. UK’s multicultural puts impact on the retail sector as well.
In the retail sector, it is forecasted that the market would increase by 1.9% and it may enhance to 1.7% by the end of 2017. The UK government has taken some economic policies to increase the retail market’s profit (Herbetet al.2014, p.240). The retail sector has seen the boom since the time of 2013.
Growth in sales (retail)
Growth in sales (food)
Growth in sales (Non-food)
Table 5: Market analysis of retail industry in the UK
In grocery retail, potential customers are not specific, however, all age-group do visit in the retail actors. The suppliers of the grocery retailers are wide and they play important role in supermarket. In this industry, government plays important role and suppliers’ related payment. Somerfield argued in this study, which secured a little more than 750 producers altogether, was a preview of its business accomplices' perspectives, given that the market has 2,000 UK suppliers.
Somerfield organisation gives top to bottom investigation of the most recent retail information and customer patterns influencing the classification. This report of the retail industry, which incorporates investigation on retail deals development by area, district and classification particular monetary understanding, will keep side by side of the need-to-know patterns inside the business. This is vital for settling on educated business choices. As opined by Zott and Amit (2013, p.405), piece of the overall industry information is accommodated the main ten Food and Grocery retailers in the UK notwithstanding market size assessments for Fresh and Chilled, Ambient, Alcohol and Tobacco, Non-Alcoholic and Frozen parts. Estimates for the Food and Grocery business sector are given to 2016 to 2020.
External environment analysis:
External and internal both types of an environment of Somerfield Supermarket can be analysed through SWOT analysis.
Table 6: SWOT analysis of Somerfield
This analysis makes clear the opportunities of Somerfield supermarket. Somerfield has been working on the grocery and this provides opportunity for the future opportunity for the business. The employees of this organisation need to put the initiative in the employee engagement in order to provide better service to the customers and technological changes in the retail stores would provide better care to the customers. Technical professional can provide help in this case with managerial efforts. International environment growth with marketing sales provides opportunity for Somerfield with increase in market share. In addition, Somerfield may take advantage of the existing CSR activities and implement special care of social responsibility and this can provide marketing advantage of the company (Chatterjee et al. 2013, p.185). The CSR activities can be associated with strategic philanthropy and contribution of marketing and it is related to the cause marketing initiative with sponsors and events. Moreover, projection and innovation in case of community life and children can be included with this.
Moreover, lately, the expanded pace of mechanical change has empowered numerous associations to accomplish fast development utilising outsourcing and offshoring. Modifications in the structure of business sectors alongside changing social and way of life examples likewise give chances to development. Somerfield grocery stores can give an immeasurable scope of ordinary items from books to power devices. As stated by Lee et al.(2013, p.1719), another territory that can serve as a wellspring of crafty development is that of changes to government strategy or controls. For instance, In the UK the deregulation of utilities and CSR activities, for example, gas, power, and water empowered utility associations to have the flexibility to offer their customers any administration.
Operational and Logistical issues:
Operational issues that are faced by Somerfield supermarket are various like, competitive price, primary shoppers, value-based environment etc. The operational issue related to labour cost as the grocery sectors has low-profit margin. Moreover, inefficient process related to time wastage, strain of people and delivery routes are some of the operation issues in grocery. If the organisation contains more inventory, it is quite probable that it must incur higher cost value related to this. Extra inventory causes issues related to higher potential of product damage and theft.
Stock for retailers like Somerfield incorporates accessible items for every stock keeping unit the coming offers. As stores offer items, computerised stock projects lessen stock close by one unit. The association profits on overabundance stock that is put away in a stock room. All the more additional stock a retailer conveys, the more storage room it needs to keep additional stock available. According to Craig and Campbell (2012, p.36), over-stock likewise corresponds with the budgetary reality that the retailer is not viably offering its items or is erroneously requesting stock. This implies organisation purchasers need to re-examine their techniques and ways to deal with stock purchasing.
Somerfield must know the inventory and its related issues. The cost-effective programme, quantity of the expenses and size of the package box are some of the issues related to the logistics. Buy and sell of the products related to retail must have a good distribution channel with suppliers and warehouse. Supply chain cost needs to reduce in order to have a good profit margin. Execute the right Inventory Replenishment Model for your retail business (Wilkinson, 2013, p.26). All assets that touch stock from a distribution centre through to retail location operations need to comprehend the significance of overseeing stock and the part that they play all the while. Execute the right production network innovation that empowers ongoing linkages amongst sellers and key clients which will consider the exchange of data that drives the arranging procedures and upgrades inventory network execution.
Money related models are utilised to arrange gauges and spending plans; to survey conceivable subsidising necessities and to investigate the feasible monetary outcomes of option financing, advertising or operational methodologies (Simons, 2013, p.50). They can likewise be utilised for business strategy, raising account, speculation or subsidising evaluations, money related investigation, corporate arranging and so forth. Somerfield is going to take the initiative of the CSR activities. In this scenario, they need to incur financial burden for this.
Financial projection of income and expenditure:
£ 3 M
£ 5 M
£ 7 M
£ 4 M
£ 1.2 M
£ 1.5 M
£ 1.6 M
£ 16 M
£ 4 M
£ 6 M
£ 3 M
£ 4 M
£ 40.6 M
Table 7: Financial projection of income and expenditure
Utilised viable, a monetary model can forestall real arranging blunders; recognise or assess open doors; pull in outer subsidising; give vital direction; assess budgetarily and advancement choices; screen progress and so on. A Personal Computer with proper programming can plan money related projections. Finance office of the Somerfield needs to maintain the income from the CSR activities and overall business performance and this is the estimation of the money that the organisation spent and generated (Knights and Tinker, 2016, p.25).
Expenditure projection for Somerfield:
£ 23 M
£ 35.2 M
Table 8: Expenditure projection for Somerfield
Numerous organisations trust they have a duty to 'offer back' to society. This centre incorporates commitments of time and cash, an obligation to give earth cordial items and administrations, and a yearning to enhance the lives of people here and around the world. Moreover, Somerfield has been working with private IT manufacturing companies and federal organisations to review their services and products along with future planning for CSR activities. Such socially capable organisations see to it that this cognizance pervades all that they do. An organisation needs a business case in finding the business opportunity, risks, benefits, a cost that is including investment appraisal, time scale and impact on the organisation.
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