Strategic Plan for a Hypothetical Term Paper
- Length: 17 pages
- Subject: Business
- Type: Term Paper
- Paper: #27760254
Excerpt from Term Paper :
The fact that the Florida market (and, in fact, the overall market, since market designers can be hired over the Internet and this is, in fact, the type of activity that can pertain to online collaboration) has a reasonable number of marketing designers makes their power sensibly negligible in the equation.
The web hosting companies will be in charge with hosting the company's online website and, similar to the market designers, have a negligible power, since there is a sufficient number of web hosting companies to guarantee a certain level of competition between them that can eliminate pressure in the form of high prices or low quality services.
On the other hand, the staff that the company is going to have, in the form of individual providers (workforce can be identified as such), can exercise a certain amount of pressure. The first reason for this is that training and integrating an employee is an activity that requires a significant amount of time and money. On the other hand, this is an operation that will need to be repeated every time that an employee leaves and a new one has to be hired.
The company is likely to have significant rivalry on the market. First of all, there are the 319 identified companies in Florida that one will need to consider, but there are also additional areas where rivals can come from, such as Internet HR databases and job search engines. Companies with large HR departments and significant resources are also able to attract some of the candidates that Gekko Consulting and Recruiting would have otherwise placed elsewhere, thus decreasing the company's turnover.
There are two potential categories of buyers that need to be discussed here, each with a different power in this equation. First of all, there are the small and medium sized companies, normally those that don't have an HR department or have one that is not really sufficiently developed to be able to handle the entire recruitment process (it can also include companies that have judged that, in terms of their opportunity costs, it is simpler and cheaper for them to use a third company in the recruitment process). These are in larger number and have a lower negotiation power.
On the other hand, one can also consider the large companies that, because of the increasing demand of personnel, appeal to companies such as Gekko Consulting and Recruiting so as to complete their own HR recruitment capacities and bring in an extra provider. These companies have a greater power.
The Internet job search engines are important substitute products that can pose a significant threat to the company. Internet job searching is simple and at a low cost both for the job seekers and the company that seeks employees. It is often an alternative to go for this type of service, especially since you have additional facilities, such as the capacity of using a candidates database to facilitate the search.
The External Factor Evaluation (EFE) Matrix
1. Complementary activities
2. Local business environment
3. Job search engine
Complementary activities. Gekko Consulting and Recruiting could expand its services portfolio to complementary activities in the human resource area, such as: training, coaching and HR efficiency assessment. This could expand both the consumer basis and the potential to increase company revenues.
Job search engine opportunities. The company could set up an internet job search engine, which would allow companies that are looking for candidates to have access to a large virtual database in exchange for a given fee. This option involves low maintenance costs. Client companies would have the option of listing job offers in exchange for another fee.
The local business environment. Florida is going through a major economic growth period, which indirectly implies increased employment, increased job migration and fluctuation.
Competitors constitute a threat worth taken under consideration for any company. In Florida the number of companies with the same profile as Gekko Consulting and Recruiting is considerably high, and this makes competition quite tough.
Substitutes, such as internet job search engines, can be treated threats, not only as opportunities. They offer the possibility of incurring lower recruiting costs to companies that are looking for candidates to fill in their openings. If these engines grow up to gain a large part of the recruiting market share, they can take away from the company's potential customers.
The organizational structure proposed is sufficiently flat so as to promote a flexible approach to the decision making process during the first period of activity. The recruiting manager is the most important position, with the person hired for this job being in charge with both the external and internal recruiting process. This means that she will be coordinating the employee recruiting activity and their placement with the companies that have asked for them.
The sales and marketing manager will be in direct contact with client companies, but this person will also be in charge with determining the company's promotion campaigns, analyzing the market segmentation and deciding on clients to pursue.
Finally, the financial manager will be in charge of the company's monthly financials, but he will also approve budgets for various marketing and business development activities.
Market and Marketing Assessment
In order to be able to perform a proper marketing assessment, the targeted group of consumers needs to be first of all identified and characterized. As such, it is not the employees directly that are targeted customers, but the companies that will hire them.
The potential customers can be divided into 3 categories (see appendices 5 and 6 for market analysis figures and charts):
Small business - including businesses with 1 to 99 employees;
Medium business - including business with 100 to 499 employees;
Large business - including business with 500 and more employees.
The figures are conclusive in pointing towards the small business segment as the fastest growing and the largest in the market (97.5% of the entire Florida market). The company will thus focus its efforts on the small business segment, with the highest future potential and capacity of growth. There are also additional motivations for this choice, as small companies do not have a complex human resource department already available for recruitment and it is more likely for them to outsource this kind recruiting activity.
A search on Yellow Pages revealed the following results:
1. There were 9 business listings under the "Personnel Consultants" category. These companies are specialized in recruiting personnel for other corporations (e.g. Ambiance Personnel, Interim Personnel and Leading Edge Consulting Group).
2. There were 304 business listings under the "Human Resource Consultants" category. These companies cover a wide range of services, from recruiting to training and HR payroll benefits (e.g. Assessment Technologies Group, Dynamic Corp Solutions Inc. And Gevity HR Inc.).
3. There were 6 business listings under the "Hiring" category. These companies fall in the same category as the first ones (e.g. The Hiring Company and Adverb Hiring Agency).
Considering the increasing growth rate of business activity, in terms of employees and small businesses number, this is a good moment for a new recruiting company to enter the market.
There are two types of recruiting companies in the market: large ones and small ones. The large companies are recruiting for large corporations and their relationship with customers is established mainly through their notoriety in the market and size.
Small companies will resort either to their relation network or to direct marketing - phone, fax, letter or email to create service awareness. After the customer is contracted (i.e. The company looking to recruit), the recruiting company is listing the available jobs in newspapers, magazines or job search engines. Candidates are interviewed by the recruiting company and later are sent to the employer.
The marketing strategy will comprise the pricing, the promotion, the product and the placement strategies. The four strategies will outline the company's activities to achieve product awareness.
Given that Gekko Consulting and Recruiting will be a start-up business, the company will enter the market charging below the average adopted by most recruiting companies. Thus, most the commissions will be between 15% and 20% of the future employee annual base salary, whereas currently the market average is between 20% and 30% of the same salary. As a guarantee of high standard services, if the employee leaves in less than 90 days from the hiring date, the company will replace that same employee at no extra cost for the employer.
In terms of promotional activity, the following strategies will be used by Gekko Consulting and Recruiting to attract its customers:
1. Network's recommendations - using own network to recommend the company's services and…