Ratner Signet Group's Customer's Value example essay topic

EXECUTIVE SUMMARY This report is about the crisis of Ratner / signets group plc. The report analysis how the company got started hoe it managed to be successful and why it started to encounter problems The report starts by giving a brief about the case. It further gives the financial position of Ratner / signets group plc The report shows how Ratner / signets group plc satisfy its customers and what the company should do to improve its performance. It then analysis the internal current performance of the company and inter long-term development of Ratner / signets group plc. The report further analysis the internal and the external environments for Ratner / signets group plc, which led to a swot analysis of the company. After the swot analysis a tows analysis is done to generate strategies to improve Ratner / signets group plc's performance Lastly the report gives the strategies, which Ratner / signets group plc should avoid to avoid loss.

This report will enable Ratner / signets group plc top management to know the strategies to implement in order to make Ratner / signets group plc more competitive in the global market INTRODUCTION Ratner / signet group was started by Leslie Ratner's father with one shop in 1949. in 1984 Gerald took over as the managing director, at that time it had 130 stores in a fragment retail market, trading under the Ratner name. His initial vision was to expand the retail market for jewellery, and gain a 50% share within a few years. Ratner's share was estimated to 23%. by the time his vision had expanded to embrace the USA, where the aim was to obtain a 10% share of the US market over a 5- 10 year period. This would have made Ratner the largest chain in the US market, and required a build up to about 1500 shops. The acquisition of Kays which was not performing well with poor quality and bad debts was to use sterling system for it to improve. The group reached the peak of its growth by 1990 with a very high return on investment. (R.O. I) for the shareholders but there is a drawback where the group does not reach maturity and instead start to go into decline stage at once since in 1991 the profit drop by 7 millions pounds the US market share drop to 3.6%. this was due to the comments Ratner made when in a meeting at the institute of directors he said. ".. we sell a pair of earring for under | 1, which is cheaper than than a prawn sandwich... ' '. this statement made customers to lose confidence in the company where they stop buying their products leading to huge losses.

When the company started making losses investor started loosing confidence with Ratner. So he stepped down as M. D for McAdam. Mc adam vision was to introduce a new strategy of cost reduction by single management of all activities in U. K, differentiate the stores by segmenting their operation jurisdiction where Ratner was to be on the low price segment Samuel on the middle and Jones on the upper. He was to use different promotion for each group and a reduced marketing budget. During McAdam's leadership the company's name was changed to Signet but Ratner chain continued with the same name.

Financial Performance Financial Ratios Net Profit Margins 1994 to 1998 Net Profit Margin shows how much after tax profits are generated by each dollar of sales and is got by dividing Net Profit after tax by Net sales and is expressed as a percentage. Subtracting the cost of sales from the sales and dividing the answer by the total sales revenue gives the GPM. It is expressed as a percentage. If performance matches expectations, the customer is satisfied. If it exceeds expectations, the customer is highly satisfied or delighted (Armstrong and Kotler 2005 p. 17). Companies need to study 5 types of customer markets so as to determine the market that has a fit with customer needs.

These types of customers are: a) Consumer markets - they involve individuals and households that buy goods and services for personal consumption. b) Business markets - these are customers that buy goods or services for further processing or use in their production process. c) Reseller markets - they buy goods to sell at a profit. d) Government markets - these are government agencies that buy goods or services to produce public services or transfer the goods / services to those who need them. e) International markets - they include consumers in other countries including producers, resellers, governments and others (Armstrong and Kotler 2005 p. 72). Ratner / signet group plc's customers are not mentioned in detail in the case and where mentioned, the level of their satisfaction cannot be determined. However, it can be implied that their customers were generally satisfied; this could be attributed to the fact that over the years Ratner / signet group plc continued to record astonishing sales volumes amidst stiff competition. How Ratner / signet group plc is placed to meet Customer Needs / satisfaction Businesses survive because they have customers that are willing to buy their product or service. However, many times businesses fail to 'check in' with their customers to determine whether they are happy or not and what it will take to make or keep them happy. Customer satisfaction can be defined as the degree to which a customer's expectations of a product or service are in line with what the product provides.

As customer satisfaction is a function of the customer's attitude, it is a very hard concept to measure. One way of measuring customer satisfaction is to get customer input from various channels, such as focus strategies, or customer complaints, feedback and combine this information in an attempt to get an accurate measure of customer satisfaction. Customer Feedback Customer feedback is a very important tool for the success of a Ratner / signet group. Once the customer feedback is retrieved, the input provided by the customers should be carefully evaluated and used to improve the overall satisfaction level of all customers. Focus Strategy In the case Ratner / Signet group Focus strategy could be used to get customer satisfaction level this could be done by grouping users who evaluate the product at the development stage of a product that is a new jewellery or when an improvement is planned for an existing product by doing this Group members provide feedback and Ratner / Signet group would be able to know what the consumers expect from the product. Although this would not be an accurate analysis but will give Ratner / Signet group a rough idea where the product is going wrong.

Customer Complaints Another important indicator of customer satisfaction levels for Ratner / Signet group are customer complaints. Customers who are not happy with the products or services they purchased generally communicate their dissatisfaction to the company. This information is very valuable for Ratner / Signet group to take under consideration because it is initiated by the customer. The disadvantage of this is that customer complaints generally appear in a random fashion, with no predictable time or nature, which makes them hard to collect and organize.

Also, it is important to note that, unlike dissatisfied customers, satisfied ones do not generally provide any feedback. So the information gained from the customer complaints have a negative bias, which should be taken into consideration during the analysis. HOW RATNER / SIGNET GROUP CAN IMPROVE CUSTOMER SATISFACTION Knowing Customers Understand what Ratner / signet group's customer's value, and how they are of value to Ratner / signet group. Customer needs change constantly throughout their life cycle. From these changes, Ratner / Signet group should learn which products to offer. Know the profitability of each customer segment as well.

Use this information to identify characteristics of highly profitable customers, target like customers in medium-profitability tiers and migrate them to higher profitability, and decide the most economical way to serve each segment. Making sure customers know Ratner / signet group Ratner / Signet group can do this by setting specific expectations for their customers. If customer is allowed to invent their own expectations about Ratner / signet group's products and services, customers will be dissatisfied when you don't meet them. Ratner / Signet group should not fall into the trap of trying to be everything to everyone, no company can do that, but to focus on what your customers value most. Knowing how well the product perform Ratner / Signet group should look beyond traditional indicators like market share, number of customers, and number of employees to uncover the real determinants of how well you satisfy their customers, like customer retention, number of repeat customer visits, customer comments, and employee retention and satisfaction. The information you need to improve customer satisfaction and the key to building unshakeable customer relationships is in the above details.

MARKET ANALYSIS Market Analysis market is defined by Kotler, Armstrong, Brown and Adam (1998 p. 265) as being the set of all actual and potential buyers of a product in a particular industry. An industry on the other hand is a group of firms that offer a product or class of products that are close substitutes for each other i.e. the set of all sellers of a product. A market analysis involves variables such as attractiveness of the market, forces reducing profitability, entry and exit barriers and growth projections. INTERNAL CURRENT PERFORMANCE To study the Internet current performance of Ratner / signet group, below we have the internal factor evaluation (IFE) matrix to gauge the performance of the company in regard to its internal strength and weakness. THE INTERNAL FACTOR EVALUTION (IFE) MATRIX (INTERNAL CURRENT PERFORMANCE) Key internal factors Weight Weighted score Internal Strengths 1. Strong market share 0.2 4 0.82.

A pace setting or distinctive strategy that is heard for rival to copy or match 0.1 3 0.33. A better known brand 0.05 4 0.24. Growing customer base and customer loyalty 0.05 2 0.15. Cost advantage 0.2 3 0.66. Above average profit margins 0.1 2 0.2 Internal weakness 1. Short on financial resources to pursue new opportunities 0.5 4 0.22.

Weaker brand name of computers 0.2 2 0.43. Lacking skills, resources, and competitive capabilities in key area 0.05 3 0.15 Total 1.00 2.95: Source: Fred R. David Strategic management concept 9th edition) by Pearson education. Inc. upper saddle river, New Jersey. From the table we can see that the company's major strengths are strong market share, better known brands, cost advantage as indicated by rating 4 & 3 respectively. The major weaknesses a short on financial resources, and lacking skills, resources and competitive capabilities.

The total weighted score of 2.95 indicates that Ratner / signet group is above average in the overall internal strength. Organizational Efficiency Performance efficiency is a measure of the resource cost associated with goal accomplishment. Common efficiency measures include cost of labour, equipment utilization, facility maintenance and returns on capital investment (Schermerhorn, Campling, Poole, and Weisner 2004 p. 13). Ratner / signet group plc could be said to have been relatively efficient in its operations. it is seen that Ratner / signet group plc efficiently filled the gaps that competitors could not fill.

The returns recorded by Ratner / signet group plc in its fist year of operation set a record never witnessed before in any industry. This clearly shows that Ratner / signet group plc was highly efficient. Level of Productivity / Effectiveness Performance effectiveness is a measure of task output or goal accomplishment e.g. meeting a daily production target in terms of quantity and quality (Schermerhorn et al 2004 p. 13). Since the first years of operations, Ratner / signet group plc has continued in the path of high productivity and growth.

Effective but not EfficientSS Goals AchievedSS Resources Wasted Effective and EfficientSS Goals AchievedSS Resources well utilized Neither Effective nor EfficientSS Goals not AchievedSS Resources Wasted Efficient but not Effective SS Goals not AchievedSS No wasted resources Productivity and the Dimensions of Organisational PerformanceHighGOAL ATTAINMENT Low Poor Good RESOURCE UTILIZATION Source: (Schermerhorn et al 2004 p. 13) Resources were also well utilized thus bringing positive profit margins and high growth rates portrayed in the market share. Internal Long-term Development Competitive Intelligence This involves the gathering of information about competitors and includes quizzing the company's own employees, researching the Internet, lurking around trade shows and rooting through rivals' trash bins. Much intelligence however, can be collected from people inside the rival companies. Suppliers, resellers, key customers and online databases are also a source of information. The case does not outline any particular scenario when Ratner / Signet group engaged in this practice.

ENVIRONMENTAL ANALYSIS Internal Environment Sustainable Competitive Advantage Competitive advantage is the use of a core competency or competencies that clearly sets an organization apart from its competitors. It allows an organization to deal with market and environmental factors better than its competitors (Schermerhorn et al 2004 p. 36). A competitive advantage that is successful over time possesses the following attributes: a) Basis of competition - the strategy the firm uses needs to be based on a set of assets and competencies i.e. the organization has to have the capacity to pursue a strategy e.g. the right people and culture (Aaker 2001 p. 134). Ratner / Signet group seemed to have been relying on their CEO's capabilities to lead in the implementation of strategies. b) Where to compete - the choice of the target product market is important in determining sustainable competitive advantage. A strategy and its assets and competencies should involve something valued by the market (Aaker 2001 p. 135). c) Whom to compete against - it is vital to assess whether competitors are weak, adequate or strong with respect to assets and competencies. The goal is to engage in a strategy that will match up with competitors' lack of strength in relevant assets and competencies (Aaker 2001 p. 135).

The Sustainable Competitive Advantage Source: (Aaker D. 2001 p. 134) Ratner / signet group's general sustainable competitive advantage relied on the following factors: a) Brand recognition- Ratner / Signet group became known by customers by virtue of its large market share) Segmentation) Low price Value Chain Analysis This is a systematic approach to examining the development of competitive advantage. The chain consists of a series of activities that create and build value, which then culminates in the total value delivered by an organization. It helps pinpoint the particular capabilities and assets that are important to an organization and show precisely how they are being applied (Haberberg and Rieple 2001 p. 263). The chain classifies a firm's activities into two broad categories: i) Primary activities i.e. activities that relate directly to the actual creation, manufacture, movement and sale of the product to the customer. ii) Support activities i.e. tasks that contribute or assist the firm's primary activities (Pitts and Lei 1996 p. 64). The Value Chain Analysis SUPPORT ACTIVITIES Infrastructure Obtain funds / resources and carry out other administrative tasks for each activity. HumanResourceManagement Supervise truck drivers and warehouse staff Supervise and train assembly staff (Same as inbound logistics) Supervise advertising agents and sales personnel Supervise and train support staff Technology Development Improve trucks capacity and warehouse space Improve product design and features (Same as inbound logistics) Improve or increase resellers Improve maintenance equipment Procurement Buy trucks and rent or buy a warehouse Buy accessories and other equipment (Same as inbound logistics) Engage advertising agency or buy media time Purchase equipment and tools for the support staffPRIMARYACTIVITIES Transport parts and accessories to assembly line Make and assemble parts and accessories in Transport to resellers or dealers Advertise, promote and sell Service and maintain Inbound Operations Outbound Marketing / Service Logistics logistics Sales Source: (Pitts and Lei 1996, p. 64.) Organisational Structure This refers to the division of labour as well as the patterns of coordination, communication, workflow, and formal power that direct organisational activities (Wood, Wallace, Zeffane, Schermerhorn, Hunt and Osborne 2001).

Ratner / signet group's structure was highly centralized whereby formal decision authority was bestowed on those at the top of the organisational hierarchy. The giving of discounts shows the high degree of centralization at Ratner / signet group. Organisational Culture This is the basic pattern of shared assumptions, values, and beliefs governing the way employees within an organization think about and acts on problems and opportunities. It acts as the 'social glue' that bonds people together and makes them feel part of the organisational experience. The corporate culture also helps employees make sense of the workplace (Wood, Wallace, Zeffane, Schermerhorn, Hunt and Osborne 2001). There seems not to a clear picture of Ratner / signet group's true corporate culture.

Ratner / signet group's ignorance of knowing different cultures can results in barriers to communication, lack of co-ordination, and inability to adapt to changing conditions. Internal strengths and weaknesses associated with Ratner / signets group plc's culture sometimes are overlooked. It is important therefore, for Ratner / signets group plc to understand their firm's cultures and strategies. Finally for Ratner / signets group plc to to compete in world markets Ratner / signets group plc must obtain a better knowledge of historical, cultural, and religious forces that will motivate employees and consumers in other countries. External Environment The Macro-Environment Political-Legal Factors The government's role is not visible in the case but it can be implied that all legal procedures were adhered to when signing contracts, merging and acquiring other companies. This is evidenced by the fact that these transactions were concluded successfully.

It can also be implied that there was political stability in the USA and Europe and hence the conducive environment in which all the above transactions were carried out. Technological Factors Ratner / Signet group relied on technological capabilities to achieve competitive advantage. Ratner / signets group plc needs to change its product with the technological advancement from time to time, which Ratner / signets group plc is doing as seen from the case. Ratner / signets group plus advancement in technology. As seen from the case is improving its customer services, accelerating turnaround time, and reducing Ratner / signets group plc's inventory cost. Ratner / signets group plc's technological development represents a real opportunity for its consumers.

The Task Environment This consists of the actors close to the company that affect its ability to serve its customers and includes: The Company The different departments within an organization must work closely with one another in harmony to provide superior customer value and satisfaction. Not many departments have been outlined in this case but there is evidence of the service and support professionals working with other departments thereby knowing the customers needing their services. Suppliers They provide resources needed by the company so as to provide its goods / services. The company should watch supply availability i.e. shortages, delays Ratner / signets group plc. Price trends should also be monitored since increased supply costs means increased prices. Companies should treat suppliers as partners in creating and delivering customer value (Armstrong and Kotler 2005 p. 70).

Competitors For success, companies must provide greater customer value than its competitors do. Competitor analysis is done by identifying major competitors, assessing their objectives, identifying their strategies, assessing their strengths and weaknesses, estimating their reactions, and selecting competitors to attack or avoid. The company will then need to constantly compare its products, prices, demands and promotions with those of competitors (Haberberg and Rieple 2001 p. 712). Ratner / Signet group to some extent analyzed its competitors. This is seen when it introduced low-cost Jewllerys. Industry Analysis This section entails an analysis of Michael Porter's 5 competitive forces.

The Threat of New Entrants The easier it is for new companies to enter the industry, the stiffer the competition will be. Factors that limit the threat of new entrant are called barriers and include brand loyalty, scarcity of resources, high switching costs and government legislation (Viljoen and Dann 2003 p. 135). The jewellery market, in which Ratner / Signet group was in, was very competitive due to the many players. This is therefore an indicator that there were no strict barriers or restrictions to entry.

The Power of Buyers This is how much pressure customers can place on a business. If the customer has a large enough impact to affect a company's margins and volumes, then they hold substantial power (web). In this case, customers had power by virtue of low switching costs. Since there were many players in the market offering almost the similar products, the customer could shift from one company to the other. This was the driving force behind Ratner / signet group's low-cost strategy, which aimed to entice the customers to buy from them.

The Power of Suppliers This is how much pressure suppliers can place on a business. If the supplier has a large enough impact to affect a company's margins and volumes, then they hold substantial power (web). The Threat of Substitutes If the costs of switching from one competitive product to the other are low, then a serious threat is posed. In the jewellery market, switching costs are relatively low considering the many companies offering similar. It is because of this that Ratner / Signet group added value to their and also emphasizing a more for less value proposition. Competitive Rivalry This describes the intensity of competition between existing firms in an industry.

It rests from many players of about the same size, little differentiation between competitors' products Ratner / signets group plc. This is most likely where entry is not restricted and there is the threat of substitutes. In Ratner / signet group plc's case, the degree of rivalry was relatively high considering the many players in the market. THE EXTERNAL FACTOR EVALUTION (EFE) MATRIX Key external factors Weight Weighted score Opportunities 1. Expanding the company's product line to meet a broader range of customer needs. 0.3 2 0.62.

Using the Internet and e- commerce technologies to dramatically cut costs and / or to pursue new sales growth opportunities. 0.2 3 0.63. Acquisition of rival firms or companies with attractive technological expertise 0.05 4 0.24. Opening to exploit emerging new technologies 0.05 2 0.1 Threats 1. Loss of sales to substitute products 0.05 4 0.22. Increasing intensity of competition among industry rivals, may cause squeeze on profit margins 0.3 3 0.93.

Acquisition of rival firms or companies with attractive technological expertise 0.05 3 0.15 Total 1.00 2.75: Source: Fred R. David Strategic management concept 9th edition) by Pearson education. From the table we can see that the Ratner / signets group plc's major opportunities are e- commerce technologies to dramatically cut costs and / to pursue new sales growth opportunities. Ratner / signets group plc's major threat is increasing intensity of competition among industry rivals, may cause squeeze on profit margins. The total score of 2.75 indicates that Ratner / signets group plc is slightly above average in its opportunities and threats.

Recommendations From all the issues and facts concerning Ratner / signet group plc, as outlined throughout this report, the following considerations if put in place, could lead to Ratner / signet group plc's long-term success as well as be in a position to better manage its operations. For Ratner / Signet group to sustain a competitive advantage, it should position itself in consumers' minds as a company providing superior value as compared to competitors. However, such a positioning strategy has to begin with first differentiating the company's products. Ratner / Signet group can consider using either or all of the following differentiation strategies. By choosing product differentiation, Ratner / Signet group could emphasize on product attributes such as jewellery features e.g. non rust, sterilized... Ratner / Signet group should qualified employees and continuously trains them so that they fit in the dynamic.

Such a move would assure customers that Ratner / Signet group is in a position to deliver standard jewellery. The last differentiation strategy that could be used is image differentiation where Ratner / Signet group could use its strong brand name to convey products' distinctive features e.g. fast to remove and wear. However what the image portrays must be seen to be accomplished that is the product has to be effective in what it presupposes to do. For the differentiation strategy adopted to be a success, Ratner / Signet group has to make sure that it is clearly distinct from what competitors are offering. Ratner / Signet group should consider the creation of a Marketing Information System (MIS) i.e. consisting of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to decision makers.

The process of MIS at Ratner / Signet group could include an interaction with information users like research and development personnel so as to assess their information needs. The next step is to develop needed information from sources such as internal company databases, marketing intelligence activities and marketing research. The final step is to distribute the information obtained to the decision makers. The MIS after being fully established will also be a source of information to external partners such as suppliers. These people will get information as regards customer buying patterns and trends among other things. Ratner / Signet group could also allow important customer's access to the MIS.

Ratner / Signet group should also actively engage in marketing intelligence i.e. systematically collecting and analyzing publicly available information about competitors and other environmental developments. Such information can be obtained from newspapers, magazines, company brochures and reports e. t. c. Information obtained could be used to improve decision-making at Ratner / Signet group as well as closely assess and track competitors. The information obtained would also help Ratner / Signet group in analyzing its opportunities and threats.

Continuous marketing research involving the design, collection, analysis and reporting of data should also be one of Ratner / Signet group primary activities in its quest for growth and stability. The data obtained from marketing research will assist Ratner / Signet group in understanding issues such as customer satisfaction and also purchase behaviors. The data will also help Ratner / Signet group in assessing its market potential and determine its market share. The effectiveness of Ratner / signet group plc's pricing, distribution and promotional strategies could also be measured by the use of marketing research.

Ratner / Signet group should engage in practices that will increase customer value and satisfaction leading to customer loyalty. Such practices could include adding financial benefits to the customer relationship an example would be to use frequency-marketing programs that reward customers who purchase frequently or in large proportions. Another value adding practice would be to add social benefits to its. An example would be through sponsorships in which a part of the money got from the sale of a jewellery goes to charity.

The other practice that Ratner / Signet group could increase customer satisfaction is by adding structural ties to its products Ratner / Signet group should also seriously consider adopting direct marketing i.e. directly communicating with its customers so as to obtain immediate responses and also cultivate lasting relationships. The communication should take the form of a one-to-one interactive exchange. Ratner / Signet group establishing a database containing customer details can make this possible. This database will then be used to inform customers of new products while on the other hand the customer provides feedback as regards product inefficiencies or what they would want. Ratner / Signet group should strive not at creating profitable customers but 'owning' them for life.

This can only be achieved through building customer loyalty that is got from high customer perceived value of the product. A segmentation strategy that fits with Ratner / signet group plc's capabilities should be adopted. Either or all of the following segmentation strategies could be adopted. Psycho graphic segmentation whereby Ratner / Signet group could decide to target a market in relation to lifestyle patterns, social classes, personalities e. t. c. The other segmentation strategy could be based on demographic variables such as age, income, occupation e. t. c... The other segmentation strategy is the geographic whereby Ratner / Signet group could decide to target consumers in a particular geographic region e.g. Africa, Asia e. t. c.

Ratner / Signet group should consider building brand equity i.e. the brand's value to the extent that it has high brand loyalty, name awareness, perceived quality and assets such as patents and trademarks. Brand equity building can be done through the following ways: Brand extension-where Ratner / Signet group launches a new product under its already successful name. Such a move ensures that the brand gets instant recognition and acceptance in the market. Line extensions also build brand equity and can occur when a successful brand name is used to introduce additional items in a brand category. Ratner / Signet group could introduce a new product under its already successful name. Multi-branding, the development of two or more brands in the same product category, also leads to brand equity.

Ratner / Signet group ought to consider moving away from its current push strategy and move to a pull strategy where it will spend resources on advertising and customer promotions to build consumer demand. Ratner / Signet group can either adopt informative, persuasive, comparison or reminder advertising modes. Ratner / Signet group should also consider applying partner relationship marketing i.e. working closely with its partners in other company departments as well as those outside the company so as to jointly bring customer value. Ratner / Signet group should therefore establish cordial relations with its suppliers, resellers and other stakeholders so as to remain effective and efficient in its operations.

Due to the increasing number of competitors in the market, Ratner / Signet group should take their employees for competitive intelligence training where they will be taught on how to protect and gather information regarding competitors. Ratner / Signet group should also form a cartel with major suppliers of jewellery parts so as to lock out the incoming entrants. Ratner / Signet group should engage in aggressive market penetration by increasing its promotions and also repositioning the products in the market. Ratner / Signet group should consider market development by marketing its in new markets like Australia, Africa e. t. c. Ratner / Signet group should consider product development measures by innovating new products.

The top management's actions should also communicate their vision for the future and explain the importance of the culture. They should also be seen to practice what they preach. SWOT ANALYSIS OF RATNER / SIGNETS GROUP PLC Strengths of Ratner / Signets group plc Ratner / signets group plc has a strong market share SS A pace setting or distinctive strategy that is hard for rivals to copy or to match Growing customer base and customer loyalty SS Cost advantage SS Above average profit margin Wide geographic coverage and / or strong l distribution capability. Weaknesses of Ratner / Signets Group plc Missing some key skills or competencies / lack of management depth / a deficiency of intellectual capital evaluate to lead rivals.

SS Plagued with internal operating problems Not attracting new customers as due to product attributes. Opportunities for Ratner / signets group plc Expanding the company's product line to meet a broader range of customer needs. SS Using the Internet and e- commerce technologies to dramatically cut costs and / or to pursue new sales growth opportunities. SS Acquisition of rival firms or companies with attractive technological expertise Opening to exploit emerging new technologies Market opening to extend the companies brand name or reputation to new geographic areas Threats for Ratner / signets group plc Loss of sales to substitute products SS Increasing intensity of competition among industry rivals, may cause squeeze on profit margins SS A shift in buyer needs and tastes away from the industry product JUSTIFICATIONS 3.2 Alternative Strategies using the TOWS Matrix SOUnder this, strategies that use strengths to take advantage of opportunities are developed.

Ratner / signet group plc's growing customer base and wide geographic coverage should lead to forward integration where Ratner / Signet group could start distributing its directly to the customers. An advantage of this would be that it would enhance customer relationships, which if nurtured well could lead to customer value culminating in loyalty and finally repeat purchases. A disadvantage of this strategy is that it could lead to limited shelf space since resellers would no longer shelf Ratner / signet group plc's products as they could have before Ratner / Signet group decided to distribute on its own. This could therefore mean Ratner / Signet group opening up its stores or engaging in personal deliveries that could deplete resources. The joint ventures, alliances, mergers e. t. c. have brought to Ratner / Signet group technological capabilities that could be used to expand its product line e.g. into the networking business. An advantage of this is that it will lead to a competitive advantage gained through the skills and competencies form these different companies.

A disadvantage however is the different corporate culture that each company holds seem to be incompatible thereby leading to unsuccessful outcomes. Ratner / signet group plc's expertise and skill could be used to develop e-commerce technology. An advantage of this would be that it would reduce costs especially those associated with resellers and at the same time enhance customer relationships. A disadvantage is that it would be an expensive initiative to implement. ST These are strategies that use strengths to avoid threats. Ratner / Signet group by virtue of having a significant share of the market share could liaise with suppliers or dealers and sign contracts to restrict new entrants.

An advantage of this would be that it would at least lock out new entrants thereby limit competition intensity. A disadvantage is that there is the likelihood of these suppliers breaching the contract thereby leading to delays in orders which will in turn lead to customer dissatisfaction. Ratner / Signet group could use its strong brand name to emphasize low price and as a means to counter the increasing high quality and expensive. An advantage of this would be that it could lead to high consumer awareness and loyalty thereby building brand equity.

A disadvantage is that it is quite expensive to position a brand as superior. Ratner / Signet group would have to do better to explain a high price-high performance clause. WO These are strategies that take advantage of opportunities by overcoming weaknesses. The acquisitions could lead to the development of a new corporate culture that could probably promote decentralization and power dispersion. An advantage of this would be that it could enhance decision making at Ratner / signet group plc.

A disadvantage is that conflict could arise from employee diversity in terms of values and beliefs. WT These are strategies that minimize weaknesses and avoid threats. Ratner / Signet group should form clear rules and procedures that are well documented and communicated to all employees and stakeholders associated with Ratner / signet group plc. An advantage of this would be that no individual would assume unlimited power and control. A disadvantage is that these formal rules could lead to bureaucracies that could delay decision-making.

Ratner / Signet group should continuously engage in marketing research especially before venturing into a new market e.g. Australia. An advantage of this is that the data collected will give information on whether the market is favorable or not. A disadvantage is that the information generated might not be accurate and could therefore be misleading. Ratner / Signet group should establish different customer groups so as to determine the most profitable group and therefore invest and concentrate on them. Customer Relationship GroupsHighButterflies- Good fit between firm's offerings and customer needs- High profit potential True Friends- Good fit between firm's offerings and customer needs- Highest profit potential Strangers- Little fit between firm's offerings and customer needs- Lowest profit potential Barnacles- Limited fit between firm's offerings and customer needs- Low profit potentialProfitabilityPOTENTIALPROFITABILITYLowProfitability Short-term Long-term Customers PROJECTED Customers LOYALTY Source: (Armstrong and Kotler 2005, p. 25) If Ratner / Signet group establishes it has some customers who can be classified as strangers, the best strategy is not to invest anything in them.

If the customers are in the butterflies category, then Ratner / Signet group enjoy these customers for the short while that they " ll be around. Promotions are a good way to attract them. For those customers in the true friend's grid, Ratner / Signet group should strive at making continuous relationships with them. Ratner / Signet group should also invest in them to delight, nurture, retain and grow them. These customers are used to tell others about their good experiences with the company.

As for the barnacles, Ratner / Signet group could improve their profitability by selling to them more, raising their prices and reducing service to them. Tows analysis of Ratner / signets group plc Source: Fred R. David Strategic management concept 9th edition) by Pearson education. Internal factors External Factors STRENGHT S 1. Ratner / signets group plc has a strong market share 2.

A pace setting or distinctive strategy that is hard for rivals to copy or to match 3. A better known computer 4. Growing customer base and customer loyalty 5. Cost advantage 6. Above average profit margin 7. Wide geographic coverage and strong global distribution capability.

WEAKNESS 1. Missing some key skills or competencies / lack of management depth / a deficiency of intellectual capital evaluate to lead rivals. 2. Plagued with internal operating problems 3. Not attracting new customers as rapidly as rivals due to ho / hum product attributes. OPPORTUNITIES 1. 2.

3. Acquisition of rival firms or companies with attractive technological expertise 4. Opening to exploit emerging new technologies 5. Market opening to extend the companies brand name or reputation to new geographic areas SO 1. Management development and training 2. Reduce dependence on one product and expand product line WO 1.

Reorganizing management team 2. Implementing strategy to attract more customer 3. Provide customer benefits e.g. after-sale service THREATS 1. Loss of sales to substitute products 2. Increasing intensity of competition ST 1. Recruiting in weak areas 2.

Imply cost reduction strategy WT 1. Find new marketing strategy 2. Transfer to other product line Strategic Implementation To position itself in the minds of consumers, Ratner / Signet group will need to aggressively advertise and promote itself. The products being advertised should also deliver what they promise. In the implementation of this strategy Ratner / Signet group will thus need to form a marketing department that will be in charge of these promotional campaigns. The problem of limited resources to oversee this activity may however be experienced.

To create a Marketing Information System, Ratner / Signet group should look for the services of a Database Management Information System specialist. The most likely problem to be faced here is difficulty in acquiring information and also the process is long and will therefore take a lot of time. For the collection of marketing intelligence, Ratner / Signet group will need to engage a researcher or researchers to gather and analyze information. This will also apply to the process of marketing research. Likely problems to be faced include limited resources and difficulty in gaining access to required information. For direct marketing, Ratner / Signet group should set up a customer relations department fully equipped with the necessary machinery.

A problem likely to be encountered in this activity is the high costs associated with the process of gathering customer information. So as to get the most suitable target market, Ratner / Signet group has to undertake research. This therefore means Ratner / Signet group should engage a researcher or researchers to find out market potentials. A problem that could arise from this is that the information obtained might not be sustainable since the market is ever changing. This could lead to inaccuracies and miscalculations that could lead in venturing into the wrong market.

The pull strategy should be forwarded to the marketing department who will promote to the customers. A problem likely to occur here is that of limited resources. For the partner relationships, Ratner / Signet group could establish a Human Resource department to deal with employee relations. A problem that could be encountered here is that of limited resources.

For market penetration, the marketing department could be in charge. The limited resources problem will once again affect this activity. As regards marketing development, Ratner / Signet group could form a Research and Development department that could be in charge of all product innovations and new processes. A problem that could face this strategy is the high level of uncertainty in the environment the product is about to be launched. Product development and related diversification could also fall under the Research and Development department with both strategies being faced by a likely problem of limited resources. In trying to merge the different corporate cultures, all the senior executives from these companies should try and develop a new exhaustive culture.

A problem would be conflict resulting from diverse backgrounds and beliefs. STRATEGIES RATNER / SIGNETS GROUP PLC SHOULD AVOID Follow the leader This is a strategy whereby a company follows what its competitors do to improve their performance. Ratner / signets group plc should not be using such strategy because this will ignore Ratner / signets group plc's particular strengths and weakness and the possibility of that the leader would be wrong. Hit another home run Ratner / signets group plc should avoid using this strategy because we can see from the case that Ratner / signets group plc is successful because it pioneered an extremely successful product that is the jewellery in such a case we can observe that Ratner / signets group plc is moving to another product lines like the networking and the hardware business, this may led to a result that customers don't react with the product same way as they did with jewellery and this should warn Ratner / signets group plc to be care full, go slow and evaluate the opportunities carefully before introducing new productCONCLUSIONIn this report all the aspects of Ratner / signets group plc have been analysis in depth to ensure that the reader can know where Ratner / signets group plc is going wrong and what Ratner / signets group plc should do to be competitive in the global market.

The report has given its opinion on what Ratner / signets group plc should do further to improve its performance and become more profitable.

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