Identify strategic options and produce a strategic plan for an organisation INTRODUCTION Contact Energy is New Zealand electricity generator and was established in 1996. the headquarter of the company is in wellington, New Zealand. Contact Energy is second of the country’s largest electricity and gas retailers, serving about 23 per cent of New Zealand’s retail market. This is New Zealand owned Power Company. Contact Energy has 1160 employees in New Zealand and supply power to New Zealand homes and business across the country. Contact Energy is generating 10% energy of the total production of power in New Zealand. Our company committed to offering their customers a good range of services that make managing their power needs as easy and convenient as possible. In 2008, due to financial crisis it lost the 40,000 customers in six months that is 10% of the total customers. On that time the company was lost the profit by half. Contact Energy has 12 stations all over the New Zealand. In Clyde and Roxburgh the power generation are based on hydroelectric fuel and the stations which are in Ohaaki, poihipi, Te Huka, TE Mihi and Wairakei are based on geothermal fuel and Otahuhu B, Stratford,Te Rapa are based on the Gas fuels, Whirinaki station is based on the diesel fuel. Identify a strategic option for an organisation. Three proposed organizational goals for the strategic plan: GOALS To increase the number of sales from 23 to 26 for every sales representative in every week. To reduce the customer complaints to 50% every month, we are getting 250 to 300 complaints every four weeks. To increase the number of sales employee from 100 to 120 in a four weeks. Stakeholders Owners– Owners need is to explore the business and to beat ever company in a whole power market. Managers– Every manager want more and more sales from their employees every week. Employees– Employees need more commission on every sale. Customers– Every customer wants electricity at cheaper rates. 2. Identify at least three strategic options through results of an environmental analysis that are consistent with the organisations purpose, direction and values. Strategy for Increase the number of sales- To enlarge the sale we make better displays and by giving promotion using electronic media. In this way we can easily attract our consumers to buy our service which results in increasing number of sales. Strategy for reducing customer complaints– When we provide our service, after some time mainly customer complaints of our high-priced facility and after observing complaints we change their service plan to cheapest plan according to the requirements of customer in this way we can overcome the customer complaints. Presently we are giving $45 welcome discount on first bill to our customer and we can increase this discount from $45 to $50 on first bill. Strategy for increasing the number of sales employee– Presently we have 110 sales employee in our organisation and we want to increase this number from 110 to 125 in a four weeks. We give $40 for one power connection to our sales employee and we can increase this rate by $44 to attract more sales employee for our organisation. SWOT ANALYSIS SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in Contact Energy. Strengths and Weaknesses give us the information about the internal environment and the situation inside our organization. Opportunities and Threats provide us the information about the external environment and the situation outside our company. Strength: Contact Energy relations with our customers continue to go from strength to strength: We have built positive relationships within the community and with social agencies. We can provide collaborative assistance to our customers who at times struggle to manage their energy budget. Weakness: Weakness of our organisation is that we got many complaints regarding bills. Sometimes we will charge bill for a customer for 36 days instead of one month and second reason for complaints is changing in service plan after certain period of time. Opportunity: An analysis of the power industry’s opportunities identifies features outside the industry. These features are representative of areas outside the control of the industry. For example, the power industry’s opportunities may include lifted bans on off-shore drilling; increased tax incentives for energy-efficient automobiles, newly laid natural gas pipelines and the seasonal increase in the number of days of sunlight. Threats: There is very big competition in a market between power companies. Genesis energy, Meridian energy are the other power companies and these are also big threats for our companies. But the main competitor of Contact Energy is the mercury Energy 3. Two most feasible options:
Increase the number of sales
This can be done with the help of displaying posters, Banners and also through websites and T.V advertisement and every week company spend $50,000 on advertisement.
Currently our organisation earns $250,000 every week and by advertisement, we are able to increase our weekly sales from $5,000 to $6,000.
The big risk is money and time spending on these advertisements by our marketing department. Time spend is 35 to 40 hours per week and money spend is $50,000 every week.
Reducing customer complaints
To lessen the customer complaints for our costly service we change the plan of customer to cheaper plan plus adding some more welcome discount from $50 to $55 and also we give full authority to our customer to give reading of their meter by self and then we charge the bill according to that reading which is provided by the customer and in this way we can reduce the customer complaints.
By providing cheaper plan to the customer we are able to decrease our customer complaints from 300 to 120. We are able to solve 60% customer complaints.
The main risk in this is when we give full authority to our customer to give reading of their meter by self, and then there is risk of giving wrong meter reading by customer to our department.
We are rising out discount from $50 to $55 means $5 extra for customers having complaints. We want to decrease complaints from 300 to 120 every month. For 120 customers the cost is $600 in a month. This is not big cost for us because we have a margin in every sale and we are more in maintaining kindness with our old customer. 4. Preferred strategic option My strategic option for the organisation is to increase the number of sales. Organisational purpose: Organisational purpose of our company is to increase the number of sales and to attract more and more customer by providing power at cheaper rates. We are giving $50 discount to every customer who buys our service and another way to attract people towards our service is to provide the good stuff that people do everyday. When we take the discounts to the customers we see after that our sale is increased. Organisational direction: To attract customer our organisation give surplus to every customer depending upon profit of our organisation every year. To achieve our goal of sales we have to attract customer towards our service. In this year our organisation got a profit of $4 million and our company give $330 to every customer. Another way to give good direction to our organisation is to provide good quality of service. We launch GEM for our customers to save energy. The Good Energy Monitor(GEM) – a suite of online tools that help put you in control of your home’s power usage by giving you the information you need to track how and when you use power. Organisational values: Our organisation has partnership with Hikurangi Foundation. Hikurangi Foundation funding $1.27 million over the two years Our organisation give best price to the members of these companies as no other power companies can give best price then Contact energy. Contact energy also announces support from kiwi enterprises. Part –B
Following are the necessary actions required to implement the preferred strategic option:
Resources: To increase the number of sales and to do this we need to display posters, banners and also through websites and T.V advertisement.
There are following resources required:
Financial Resources– To achieve our goal we require $50,000 every week to advertising which results in to increase in sales. We can provide combined assistance to our customers who at times struggle to manage their energy budget which in results helps in making loyal customers. From this strength we can also collect some financial help from our customer as reliable customer makes business strong.
Human Resources– We also need staff to makes more sales in a day. Means in other words we have to hire 20 sales representative in a month and one representative should sign up at least 4 sales for which we have to give training to our staff to make them more potential to work in a power market. We need $600 for one sales representative in a month which also includes training.
Physical Resources– We also need IT systems which helps in building striking flyers and T.V advertisement and for that we have to spend money on advertisement. We need $50000p.a to spend on these resources so that we can achieve our objective.
Intangible Resources– As we know Contact Energy has many power stations of hydro energy which generate power from renewable and non-renewable sources of energy. These qualities make Contact Energy a good power brand in a market.
Critical outcomes: These include the goals that are most important to achieve for our organisation and the outcomes after achieving our target.
Critical: The most important thing for our company is to increase profit which can be done by achieving our target of $6,000 in a week. Outcome: With the help of my strategy our organisation is achieving his goal and we are able to increase our weekly sales from $5,000 to $6,000. In this year our company earn a profit of $4 million and our company give $330 to every customer.
Timescales and Milestone–To attain this target of increasing sales our organisation need one month time. To hire more sales employee and to provide iPod to each sales employee so that our organisation can achieve goal of increasing sales.
What needs to be done – To give our company a profit in a month which can be done to increase number of sales and for which we need to hire a staff, give them training so that they can do well in field. When– We have to achieve this target of sales in one month and after that we should need to complete this target in every month. Who – All the sales manager, sales representative and IT department. These are the main entities to be contributing in our strategic plan. Week1- I discuss my strategy with my business manager to increase sales and my manager organise a meeting with our other employee and discuss this strategy after that Our company released advertisement in a local newspaper to hire 20 sales representative in a week.. Week2- Company appoint all the staff and take their interview after that training is given to all the sales representative about the price and planning of all the deals to sign up with customers. Week 3- Our IT department deals with iPod process and they buy 20 iPods’ for our new sales representative and done all the programming of iPods’ for our new staff. Week 4- Our IT department again give them training for how to operate iPod while signing up with customers. And in fifth week all the representative reported in the field to stat their work. In a next month we are able to achieved our target of sales
Contingency planning: If my strategy doesn’t work then I have an alternative strategy to achieve the goal, which is to hire more experienced sales representative because we don’t need to provide training to our experienced staff and for this we have attractive plan for our sales representative.
Currently our company give $50 commission for one sale and we need to increase rate of one sale from $50 to $55. In this way we can easily attract more sales employees towards our company. In this way we can maintain our goal in a definite time period.
Documented and authorised
From the beginning of my strategy I discuss with my department manager about to increase in sales and profit of the company. And after that we discuss my strategy with the whole department and also notice the comments of the employers towards my strategy. Then we survey about the whole cost and also I tell about employees which we have to hire. Then we approach to our store manager for this new strategy and discuss about the strategy with him to increase about the sales and profit. After this discussion I take a document to my store manager for the approval. References: www.contactenergy.co.nz www.google.com www.wiki.org