Preparation of the Business Plan for a Company in the Power Tool Industry

In developing a business plan for company in the Power Tool Industry, we will need to develop a mission statement, operating principles, market analysis, company strengths and weaknesses analysis, strategic objects, sales forecasts, financial and operational objectives. In doing so, there are several issues that need to be addressed.

The first issue is to define the identity of this company. Thus, creating a mission statement is the first place to start. In order to create a mission statement, we can start by preparing a brainstorming session with key stakeholders of the corporation. The key stakeholders can include the board of directors and top management. Since most young business starting out is a family owned business; the first place to start a brainstorming session will be with the family owners. The idea is to get everyone's input on the purpose and values of the company. The next step in the process is as a team, rank the ideas that are brought to the table from this brain storming session. You then choose the top five to seven ideas and then discussing them as a group in greater detail. Using those ideas, we can then create a mission statement based upon those ideas and keep refining the mission statement until it is the teams "vision" of the identity of this company. Included in this vision for this company, will need to consider the corporate social responsibility and ethics. Commonly known as CSR, it is an obligation of organizational decision makers to make good decisions.

Value proposition is the description of the customer problem with this companies products and the solution that addresses the problem. Customer value proposition is about creating value to your customer. Competition is about the value to the customer, creating the value and then capturing it for the company. Since this company services both consumer and industrial power tools, their circular saw's has a very strong brand equity and loyalty among professionals and consumers. The problem is the rest of the product lines is only 3% and is considered low to moderate amongst end-users. Another key element of the value proposition is the cordless power tools vs. the cord power tools. The growth rate is the cordless power tools are dependent upon the battery technology. The solution is to be sure our engineering department is on top of the market trends in battery technology and to continue to improve our cordless line. Having this competitive advantage is what is going to sets this company apart from its competitors.

In order to accomplish our strategic objectives, we will need to determine which principle this company should use in formulating and implanting these strategies. The three views that provide clues to understanding the competitive advantage are Industrial Organization (I/O), Resource-Based (RBV), and the Guerrilla view. Industrial Organization deals with competitive environment of the company and how it influences its competitive advantage. The Resources-based view deal with the company's using the company's resources in order to maintain competitive advantage. Lastly, the Guerrilla view, which is best, suited for this company, looks at the market s continuously changing due to changing is technology or market instabilities. As the technology of power tools continues to grow and change, especially in the cordless power tool market, we can expect the market to be unstable and will need to grow and adapt as a corporation to these changes. This company must rapidly adept to these changes in the market. Another issue that this company must concern themselves with is the growth of large retailers that offer both industrial and consumer power tools to the masses. Having these large retailers with established distribution channels to keep the cost of professional power tools down to the everyday consumers will allow for the consumer market to grow into more professional type power tools. The industrial channels are declining at a rate of 5% per year where as the consumer channels are experiencing tremendous grown at a rate of 20% per year.

In order to implement our strategic objectives we will need to be sure that company resources are set aside to include proper research and development and design for the cordless power tool market. Considering that the cordless power drill segment is the faster growing at a rate of 10% versus only a 3% growth rate for the corded power tool market. Furthermore, as the battery technology becomes more efficient and smaller we can continue to improve the design of our cordless power tools.

In order to improve and refine the strategic objectives, we will need to improvement feedback mechanisms to evaluate the effectiveness. Such feedback mechanisms will include customer surveys and professional development surveys, which we will include in each power tool sale. We can measure this feedback based upon the positive and negative feedback from the customer. A good time to do this is during the registration of the warranty for the power tools. Given the nature of our tools, customer demonstration in major consumer distribution channels giving our sales force the opportunity to speak directly with customers about their needs and wants in power tools is another good way to obtain feedback. Internal feedback will be sought after though the use of regular meetings with departments and department heads to ensure that the vision of our company is implemented.

Another approach is to use a 360 Degree review. The advantage to this type of review is it "Provides well-rounded feedback from peers, reporting staff, co-workers, and supervisors. This can be a definite improvement over feedback from a single individual." (Heathfield, 2006, pg 2)

During the continuing process of strategic management process, we will need to isolate each step individually in order to study the effectiveness of the process. It will be an ongoing process whereby we have the formulation, implementation and evaluation. It will be a constant growing evolution process.

I foresee a conceptualized vision of the company as one that is focused on developing and bring the best quality power tools to the market. In addition, as we grow from a family owned and operated company to a foreign conglomerate; we provide a smooth change for its employee's along with value to the stakeholders of the company. All employees will implement the vision of the company.

References:

Franklin Recovery Mission Statement Builder, 2006, accessed on July 7, 2006 from http://www.franklincovey.com/missionbuilder/index.html?c=Keyword-Overture&n=missionstatement

Hammonds, Keith, July 2000, Issue 37, Page 274, Fast Company, "Value Propositions The five propositions that strategists David Bovet and Joseph Martha say help companies create value for their customers." [Electronic Version] Retrieved on July 7, 2006 from http://www.fastcompany.com/magazine/37/ideazone.html

CTU, Phase 1 Business Strategy, http://www.campus.ctuonline.edu

Heathfield, Susan M., 2006, "360 Degree Feedback: The Good, the Bad, and the Ugly" [Electronic Version] retrieved on July 7, 2006 from http://humanresources.about.com/cs/360feedback/l/aa042501a.htm