harrison company Harvard Case Solution & Analysis

Harrison company  Case Study Solution

Harrison Company is a mid-sized head of retailing stores. The company has been facing crises in the recession. Company holds 80 stores in seven regions of United States and Canada. As the stores are located in rural areas, the revenue generated is less than the industry and global trends. However, in three years, company is facing crises of decreasing profits, increasing costs, competitions and lack of skills in employees.

Therefore, the marketing analysis has recommended to increase marketing through social media and reduce traditional marketing as people spend more time on social media than televisions. The company should promote itself by shaking hands with different restaurants and game shows to provide discount to its customers.

The financial analysis has shown that company is overusing its assets to generate revenue. However, the operating cost and cost of goods sold is decreasing its profits. Therefore, company should immediately cut the unnecessary costs to maintain its profit and compete with the industry and global trends.

The operations analysis of the company recommended that company should cut its unnecessary costs by decreasing its number of suppliers, shutting its stores located in less populated areas, closing its unnecessary distribution centers and reduce its transportation costs by effective use of trucks and other transportation service.

To conclude, company should use low cost strategy to attract its customers, as well as use its resources effectively and efficiently to get higher profits and should give strong competition to existing competitors.

RUBRIC QUESTION NO 1:

The Harrison Company would be using a defensive strategy to protect itself from its competitors and to increase its value and brand image. The management of company would take decisions in order to attract customers by applying Walmart strategy that is selling products on competitive prices. In addition, company would cut its cost by decreasing its distribution centers, retail stores at less populated or less demanded locations as well as low transportation cost would enable company to participate in competition with major competitors. Moreover, expansion in product line, promotion by discount and loyalty cards would attract customers and will increase company’s profits.

The functional areas of management include the marketing department, which would help to increase the sales of company by promoting its products. The promotion will be done through social media platform, which will cost less to the company and will gain more promotion in less time. Finance department would help the company to decrease the unnecessary costs, as well as increase its profits. However, when the company would need financing, the finance department would help the company to take decision of financing through debt. Human resources department would help the company to hire an intelligent and effective employee that would not only help the company to grow, but also help the management to take favorable decisions for the company. Technology and equipment department would suggest company to install the latest technologies to get more focused and accurate decisions to be made, for example installation of inventory management system. Operations department would take effective decisions and supervise the activities happening in the company tobe in company’s favor.

The generic strategy that will be applied in Harrison Company would be the low cost strategy, inspired by Walmart low cost strategy. Thiswill attract the customers as well as discount cards and loyalty cards would help not only the existing, but also new customers to grow. Retrenchment strategy would be applied by the management to cut the unnecessary distribution, transportation and store costs.

 

RUBRIC QUESTION NO 2:

Harrison Company has been very active in playing its social and ethical responsibilities. However, in the period of recession, company is facing some difficulties in fulfilling its responsibility. As the large amount of charity that is being paid to a local charity of $1,000,000. In addition, company is also participating in other charity programs, such as sponsoring events, which costs approximately $25,000 per year. On the opposite side, company is not paying to their suppliers as per the contract, and paying them very lately, which is considered bad ethics for the company.

Company should take a moderate position while fulfilling its ethical and social responsibility. Therefore, company should charity less and pay to their suppliers on time. In the period of recession, charity a sponsorship of $500,000 is enough for company to providei.e. half to the local charity and half to local programs that company is supporting. The remaining amount should be used to pay their payables, pay to suppliers and work as per the contract is signed betweenboth the parties.

Various stakeholders will be affected by this strategy used. Especially the board of directors, who are very conservative and believe in charity as well as the consumers of the stores that are benefiting from the charity. Some of the employees and customers may also get affected while playing this aggressive strategy for company’s betterment.

As far as board of directors’ areconcerned, they believe on profitability. With an increase in profits, board of directors will be satisfied. Affected consumers, who are getting benefit from charity, will be facilitated by the discount or loyalty card provided to them as most of the employees are “yes boss” people, their effectiveness will not matter much.

This plan is equally ethical and social, as well as profitable for the company. But a little aggressiveness is being felt. However, to run the company well and make it profitable, come aggressive strategies have to be planned and payed.

RUBRIC QUESTION NO 3:

MARKETING:

Sales is forecasted for five years and following factors are the reasons for increase in sales:

  • Marketing strategy: as the company use traditional media for their marketing and sponsorship, company has now switched the marketing campaign to social media like Facebook, google+, twitter etc. as people spend more time on social media than on televisionsand other electronic media. This reason caused the increase in sales by 5% per year.
  • Competitive prices: working on the Walmart strategy, company has now made its prices a little lower to be competitive. Not as lower asWalmart, but a little reduction in prices have been done, that attracted customers. This strategy increases the sales by 8% per year.

These were the main reasons of increase in sales. Therefore, company’s sales have increased from 12% per year.

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