An Opportunity for You to demonstrate your knowledge, Skills, Abilities and Other Characteristics (KSAOCS) Mr. John Francois, a very successful businessman is contemplating his next move at the age of seventy (70). As a young man at the age of sixteen (16), he dreamt of becoming a "businessman" and would go into stores in the city where he lived and observe how personnel operated. In his exploits, he became very friendly with many of the business owners in the city. As time passed, John Francois obtained four (4) Advanced Level subjects (Mathematics, Geography, English Literature and Spanish). He also enrolled in a Technical Vocational institution and pursued short courses in tiling, plumbing, masonry and electrical maintenance for which he gained certification. Through his qualifications, John was able to secure employment quite easily from the age of seventeen (17) years. Within a five (5) year period, John had worked at a large hardware store, then a small home branch of a large Bank, and a large successful insurance company. During that time, John was being very observant and was recognized by each of his employers as an asset. However, John was "hungry" and wanted to achieve his dream of becoming a "big businessman". Opportunity Ahead! Unfortunately, John Francois lost both his parents by the age of twenty-three (23), but he was left with a fortune. By the age of twenty-four (24) John decided to erect a four-story building on a piece of land which he had inherited in the city. He was focused on his goal of starting a business. He began reading autobiographies and other books about successful businessmen across the world. He also sought advice from the colleagues and mentors whom he had met along the way. He was 2 never afraid to seek advice. In 1977, at the age of twenty-six (26), John Francois had completed the large commercial building at the corner of French Street and John Street, the main street in the city and one of the busiest corners in the city of Timberland on the eastern part of the island of Carnibar. The building was painted in a bright fluorescent green and bordered with bright yellow. "My building must be a landmark in Timberland", he thought to himself. The people of Timberland were a diverse population in many ways and the building was a true reflection of Carnibar. Mr. Francois operated as a sole proprietorship for many years selling a variety of almost every item that a household could want as shown in Table #1 below. Table #1 - Variety of Items sold by John Francois Stores Cosmetics and related products for men and women. School items - copy books, pencils, pens rulers, etc. Basic food/grocery items - rice, flour, sugar, peas, salt, seasonings and other condiments Personal hygiene products Plumbing and electrical material A variety of snacks and soft drinks Perfumes/fragrances Small appliances Kitchen ware and Glassware Clothing and footwear for babies, and boys and girls Household items - batteries, glue, tacks, etc. A variety of gift items Ladies and gents' underwear and other everyday garments Household cleaning products Gardening tools/implements and hardware items Gym shoes and slippers for ladies and gents Sewing items A variety of handy man tools 3 The Early Years and Thinking Ahead John Francois Stores began with five (5) employees: a cashier, two store clerks, one driver and a cleaner. The store was well sectioned with the variety of items sold. The size of the building allowed Mr. Francois to offer for rental four (4) large offices on the third floor to two (2) lawyers and two (2) accounting firms. The fourth floor was reserved for rental for functions, parties and other activities by the citizens from all over Carnibar. To date, the rentals have been bringing in a hefty monthly income. John Francois Stores occupies the ground and 1st floors of the building. Orders are placed with wholesalers who would deliver the products on scheduled days. Mr. Francois remains a very organized individual. During the first two (2) years of operating in the city of Timberland, Mr. Francois observed that his customers comprised of citizens from all over the island. He began to plan. He thought of setting up branches in the west, north, south and central parts of Carnibar, but with the Timberland store remaining as the flagship branch. Clearly, Mr. Francois was an astute businessman who was always thinking of the next move to grow the business. He joined the local Chamber of Commerce, continued to read widely about what was happening locally, regionally and internationally, and made every effort to attend conferences and seminars which he thought would be beneficial. He was always thinking about growth and expansion. John Francois Stores became a known business even to those persons who had never patronized the store. In the midst of it all, Mr. Francois understood his corporate social responsibility and as such was respected highly by other businessmen and members of the community and country. There were a number of proud moments for Mr. Francois and employees when he was awarded the 4 Business Man of the Year Award on three (3) occasions as well as several other awards throughout the years of operations. He was recognized for his business acumen. The years flew by quickly. Mr. Francois participated in a number of short courses in management which helped to build his confidence. By the third year of operations, Mr. Francois got an idea - "I could go to the various parts of Carnibar, observe the needs of citizens and meet them at their point of needs, and market my products." He packed his large Toyota panel van and along with his driver, he put his plan into action by going to different areas in Carnibar on Saturdays and Sundays. Mr. Francois was successful with this venture and discovered that retirees, housewives and other persons did not leave their homes frequently, but needed his products. He began to go into more villages and towns at least two (2) days per week in addition to Saturdays and Sundays. Within ten (10) years, Mr. Francois had set up branches at strategic locations in the west, north, south and central parts of Carnibar. He achieved this by accessing low-interest loans from an established Credit Union and his bankers. He utilized and invested some of his savings to accomplish his ventures. There were now five (5) stores which were easily recognizable as they were painted in the same colours. On a Growth Path By 1987, Mr. Francois Mills the staff had increased and included the following senior members and who occupied offices at the main branch. These persons managed staff, some of whom were dispersed at the various branches as well as trained employees who were on the floor of the Stores. 5. Personnel Manager - was responsible for ensuring that human resource practices including health and safety procedures were adhered to. Accountant - responsible for ensuring that accounting standards are upheld. Also, the member was responsible for the cashiering function.. Procurement/Inventory Manager - responsible for ensuring that adequate stock is always available through the efficient and timely management of inventory. Marketing Manager - works alongside the Procurement/Inventory Manager to promote the organization, its products and seasonal promotions. Although Mr. Francois had spread his wings and continued to operate a successful and profitable business, he never stopped pondering his next move. By 2015, the total staff had grown to one hundred (100) persons which included cashiers, information technology personnel, supervisors, customer service staff, cleaners, drivers and his five (5) children as managers with one at each branch. The children had been educated up to the undergraduate level and had a fairly good understanding of business processes. Mr. Francois was the Chairman of the organization. In addition to the stores, Mr. Francois had invested in four (4) beach-front properties which were booked for at least 90% of the year. These properties were well kept and maintained. Much of the occupancy was gained via word of mouth although a website was developed. Regional and international tourists as well as local citizens made repeat visits, which demonstrated that the service received was excellent. Mr. Francois was proud of his achievements. 6 Mr. Francois began to think about succession for his business and the future for his children who had been supporting him throughout the years. In the midst of the initiatives undertaken, and continued success, Mr. Francois was very cognizant that the world of business was wrought with dynamism and uncertainty and that he and his family needed to understand what and how further strategic moves could be undertaken. He had been reading and trying to keep up to date with what was happening in the world of business. He and his family did not have a full grasp of the theoretical underpinnings to maneuver quickly out of any new challenges, and he understood very well that challenges can surface with expansion. Looking to the Future Undoubtedly, John Francois Stores has been a successful organization, but something was needed to take the organization onto the next wave. As a family, they looked at the financials very closely and recognized that while the company was still ahead of other similar establishments, with an influx of customers at all branches, the profits had been reducing in the three (3) years prior to 2019, though minimally. It was determined that there were several factors in the external environment that were impacting businesses generally. Mr. Francois and his family had their usual monthly meeting in December 2019 and you were invited to get a better understanding of the status of the organization. At the meeting, some points were noted in relation to the present status of the organization, namely a SWOT Analysis. Whist the SWOT Analysis was not fully articulated in terms of what the strengths can and have brought to the Company; how the weaknesses are impacting the Company; the possible outcomes from taking advantage of available opportunities; and the possible impact of threats, the brief notes are highlighted below: 7 Strengths: Committed employees and management Appropriate management style. Adequate financial and human resources wide variety of products Broad market coverage. Good financial management Brand name reputation. Excellent customer service skills. Some expertise in new venture management Weaknesses Lack of research and development skills Lack of understanding of strategic management and planning Opportunities. Exploit new market segments Move into new businesses, but how and what type Expand into foreign markets. Acquire a profitable acquisition Threats. Increase in competition, but where do we look New forms of competition. Changes in customer preferences. Rising costs of products and labour 8 Changes in demographic factors Changes in economic factors and down turn in the economy Slow growth in the market At the start of 2020, Mr. Francois and his family began to follow the news with respect to the deadly COVID-19 virus. Mr. Francois pondered "I wonder how this pandemic will affect our business. We sell mainly needs and some wants, so we could expect our customers to continue to patronize us. However, we cannot dismiss what the ultimate effects may be on the business" The business has been successful, but Mr. Francois and his family has recognized that things are changing in the environment and could have negative outcomes on the business. At the January 2020 monthly meeting, it was decided that the company should seek the services of a reputable and trusted person who can advise and assist the organization with getting a clear understanding of what strategic management and planning entails. Other matters discussed which the family agreed to pursue included embarking on a training initiative which would include staff at all levels as well as to create an awareness of the environmental factors that can affect the company. Mr. Francois and his family decided to hire you as a trust-worthy relative who he considered as intelligent and with an understanding of business strategies. The meeting ended with Mr. Francois thinking aloud that they should all read about what it means to be innovative. He indicated that at the next meeting, they will all come with their ideas of a plan that is different to what they are doing now and which can contribute to continued success. He was not sure what type of plan that would be. He has been following keenly the possible impact and negative fallout that the company could experience because of the COVID-19 virus. 9 However, as an astute businessman, Mr. Francois realized that there are capabilities within his organization which could be utilized and contribute to continued success. He would have to think a bit more about his next move. Mr. Francois stretched his imagination, "We had . better start thinking about starting a branch in another island some foreign country, or start to manufacture something that people will need." Then he pondered to himself, "I do not have all the knowledge about the intricacies of what I am thinking and the so-called strategies to continue to be a winner" Written by - Claudia Drakes (2021) Q2(a). Based on the information provided in the Case Study, you are required to do the following: a. Identify by name, three (3) strategies that were utilized by John Francois Stores, and for each strategy identified, provide a brief explanation of what the strategy means. (3 marks) 2 b. Provide three (3) reasons for each of the strategies identified regarding why Mr. Francois and John Francois Stores were successful with those initiatives. (9 marks) Q2(b). Based on the existing environment and the situation at John Francois Stores, and as the Consultant hired by the Company: a. Suggest three (3) strategies by name that the Company could undertake to maintain a competitive advantage, and provide a brief explanation of what each strategy means. (3 marks) b. Also, provide three (3) reasons/justifications for each of the strategies that you selected. (9 marks) Q2(c). What is the output that results from Strategy Formulation? (1 mark) (Total - 25 marks)