5 Year Plan Essay, Research Paper
Table of Contents
Mission Statement
Company Objectives
Company Overview
1.Historical Outline
2.Products and Services
3.Financial Statements
SWOT Analysis
?An analysis of company?s strengths
?An analysis of company?s weaknesses
?An analysis of company?s opportunities
?An analysis of company?s threats
Business Strategy
Marketing Mix
?Product
?Pricing
?Place
?Promotion
Analysis of Major Competitors in the Field
?Kenmore
?Whirlpool
?Kirby
?Maytag
?GE
International Expansion
1.Hungary
?External Environment
?Industry Analysis
?Recommended Entry Mode
2.Japan
?External Environment
?Industry Analysis
?Expansion Strategy for the Future Five Years
4.Canada
?External Environment
?Expansion Strategy for the Future Five Years
5.Mexico
?External Environment
?Industry Analysis
?Expansion Strategy for the Future Five Years
Growth Forecasts for Years 2000, 2001, 2002, 2003, 2004
Implementation
The View Ahead
Star Appliances Inc.
Mission Statement
Quality
For over thirty years, Star Appliances Inc. has been helping people to manage their homes. Today, Star Appliances Inc. is one of the major competitors in the household industry and one of the most selling brand in America.
Star Appliances Inc. Mission is to:
?Achieve technology excellence in current and future generations of products, processes, and services.
?Develop innovations by creating entirely new business opportunities.
?Help solve critical technical challenges.
?Attract and develop new technical leaders.
?Ensure leadership technology in all departments of Star Appliances.
?Drive corporate initiatives across Star Appliances.
?Expand its market by exploring a global economy
Satisfaction
All Star Appliances products contain proper warranty information. Each appliance comes with a pledge of Satisfaction Guaranteed or your money back. Star Appliances offers maintenance agreements and annual check-ups to keep your appliances running right. And should anything ever go wrong with your Star appliance (and we hope it never does), we offer a nationwide network of service technicians to make sure it gets fixed fast and fixed right.
Value
When you compare feature-for-feature, you?ll find that Star Appliances offers more for the money than any other brand. Maybe that?s why s leading consumer magazine recently ranked Star?s washers, dryers, and vacuums NUMBER ONE in their respective categories.
Have questions or need more information about new Star products?
Call 1-888-1ST-STAR or speak to a Customer Service Representative
For service information or to schedule a service, call 1-800-4MY-STAR.
Star Appliances Inc.
Company Objectives
Integrity
Integrity is an uncompromising characteristic for all Star Appliances employees. It is an implicit factor in customer relationships and the cornerstone of all Star Appliances business activities. Along with the company’s reputation for innovation, growth and success, we value integrity among the essential and critical elements in our employees. It is the baseline by which we measure everything else and from which we never compromise.
Creativity
Star?s continued success is the result of its employees? creativity. Every day, teams of Star Appliances people push the frontiers, developing new products and services to serve their customers. Focusing on highly specialized financial services segments, our people develop a unique understanding of customer requirements as they apply their collective talents to solving industry challenges.
Intellect
At Star, we’ve never separated ideas from actions?both are essential elements of the competitive equation. Developing the most advanced financial product or innovative service is meaningless if you don’t move quickly to get it to market and delivered to customers. The people from Star understand the importance of both ideas and action to maintain the company’s position as one of the leaders in the market.
Quality as a corporate objective:
Company-wide Quality, as a corporate objective, means attaining a level of overall performance and attitude that makes Star Appliances the natural choice of customers and earns the respect of all those affected by the Company’s activities. Company-wide Quality, as an individual objective, is achieved by employees who aspire to be better than the best.
Star Appliances is committed to providing flexibility in the design, calibration, repair, and testing services to customers while maintaining a consistent, optimum level of quality. The services we offer include standard service packages as well as customized service capabilities to accommodate unique customer requirements. Our business-wide commitment to meet the needs of customers is the foundation for the Quality System.
Star Appliances is dedicated to maintaining close relationships with our suppliers. The overall objective is to make certain that we exceed our customer’s expectations.
Company Profile
qHistorical Outline
Star Appliances Inc. designs, manufactures, sells and supports a line of household appliances. The company was started in 1970 and has grown steadily to its current size. Star Appliances has its head office in Bridgeport, CT and about 8 domestic branch offices. The two major factories are located in Iowa and Texas. Star Appliances Inc employs approximately 500 personnel. The company went public in 1984. Today, Star Appliances Inc has taken around 15% of the U.S. household appliances industry. Star Appliances Inc. has international markets, including Canada, Japan, and Mexico.
vFocused Management
With premium business management teams, we can provide our customer better service, sharpen our product focus and increase the efficiency of our own personnel.
vAccelerated Sales
By consistently creating the leading products in our respective markets, Star Appliances Inc. has developed valuable brand equity and an enviable record of sales growth. The increased breadth of our product line, the organization of our sales and marketing, the diversity of our complementary markets and our refocused R&D all work to enhance Star?s sales potential.
vScale
Star Appliances Inc. has nearly doubled the number of our facilities, greatly increasing our capacity and resources. We, a large size company, enable us to successfully complete and fulfill significantly larger orders, increase the comfort large customers have in doing business with us and provide opportunities in the future further development of our company.
qFinancial Statements
SWOT Analysis
Strengths?Complete product line?Good reputation?Customer loyalty ?Employees? creativity?Being in business nearly thirty years.?High quality products?Excellent after-sale services?Experienced management teams?Experience in foreign exporting?Excellent performance in foreign markets ?Sufficient capital resources to support expansion.?Sales increasing steadily ?Well-trained repair technicians
Weaknesses?Unfamiliarity with foreign markets due to insufficient research?Small market shares in the U.S.?Infrequent participation in exhibitions, thus, lack of exposure to potential buyers?Minimal advertising and weak promotion ?Infrequent participation in exhibitions, thus, lack of exposure to potential buyers
Opportunities?International Expansion ?Innovative R&D ?Further developments in unsaturated markets of Japan, Canada, and Mexico?Developing online interactions with customers in Japan, Canada, and Mexico?Relatively less American competitors in Hungary?Hungarian standards of living are fast growing
Threats?Intense competitions?New competitors in the same industry
Business Strategy
Business Strategy
?Product niche;
?Price competitiveness;
?Appropriate after-sales service;
?Right Voltage (220 not 110) ? Hungary
Marketing Mix
?Product ? Star Appliances produces complete lines of basic and major household appliances. Household electrical appliances include housekeeping appliances (washing machines, vacuum cleaners, electric irons), cooking and kitchen appliances (refrigerators, microwaves ovens, toasters), air conditioning equipment (air conditioners, fans, air purifiers).
We are going to promote three different categories of our products, which are washer, dryer, and vacuum cleaner, in our new market Hungary. We select seven kinds of products from those three categories to enter the foreign markets first. While in Mexico, Japan, and Canada, which are our existing markets, Star Appliances, Inc will keep the same product categories and introduce innovative small appliances to those markets.
By setting up the manufacturing plant in Mexico, Star Appliances, Inc will manufacture the whole lines of household appliances. Total output will depend on production capacity, demand forecast, quarterly financial planning and other related cost. Output of each line of appliances will mainly depend on estimated demand and inventory level. According to industrial needs and upon customer?s request, Star Appliances, Inc will make certain customization while maintain our quality standards.
?Price ? As of the Hungarian Market, reliability and appropriate credit, guarantee and servicing terms are all those factors which are taken into account by the Hungarian end-users and distributors in the purchase decisions. Home delivery is an attracting factor used by many retailers over a certain purchase value mostly above HUF 50,000 (USD 240) and after-sales services are also essential because Star Appliances, Inc is determined to establish a significant long-term presence in Hungary. Star Appliances, Inc. will offer competitive prices compared to our competitors. Star Appliances, Inc. provides two-year warranty for washing machines dryers, and vacuum cleaners, which is double the warranty time than other suppliers.
?Place – Foreign brands distributors have either established their own distribution operations and exclusive product showrooms in major Hungarian cities or find it easier and more convenient to appoint a local agent / distributor who acts on a commission basis while distributing their products. Star Appliances, Inc will find a local distributor in the capital city, Budapest, to distribute our products.
The local partner should be capable of waging promotional campaigns, maintaining spare parts and accessories and carrying sufficient stocks. Reliability, timely deliveries and efficient, low-cost, and after-sale service capabilities are key factors in Hungary. Since Hungary is a sophisticated but relatively small market, it is advisable to negotiate an exclusive distribution arrangement when the right company is located.
?Promotion ? Star Appliances, Inc. wishes to market our household appliances to Hungary and wants to appoint an exclusive local agent/distributor who acts on a commission basis. The representative should be able to set up promotional campaigns with the financial help of Star Appliances, Inc. and maintain an extensive household appliance inventory carrying a large range of stock kept in a bonded warehouse.
There is a wide range of commercial television, radio, newspapers and magazines advertisements as well as direct mail services. We decide to use television advertising, because it can reach more than 80 percent of Hungarians. A single showing of a 30-seconds commercial in Hungarian costs between USD 5,000-8,000 depending upon program ratings and timings. A 30-second radio advertising at a national commercial radio station would cost around USD 600. We will also look into other promotional methods such as participation in international trade fairs, exhibitions and business to business promotions.
Analysis of Major Competitors in Household Appliance Industry
?Kenmore – The Kenmore company has been on the market for over 70 years. Today, it is one of the best selling brands of home appliances in America.
Kenmore sells its products through Sears, a large appliance retail chain. Every Kenmore appliance comes with Sears pledge of Satisfaction Guaranteed or person?s money back. Sears offers maintenance agreements and annual check-ups to keep the appliances running right. Sears offers a nationwide network of technicians to make sure that their products get fixed fast and fixed right.
?Whirlpool – Whirlpool Corporation is the one of the world’s leading manufacturers and marketers of major home appliances. The company has principal manufacturing operations and marketing activities in North and South America, Europe, and Asia. Whirlpool’s primary brand names — KitchenAid, Roper, Bauknecht, Ignis, Brastemp, Consul and its global Whirlpool brand — are marketed in more than 170 countries worldwide. In North America, Whirlpool is the largest supplier of major appliances to Sears, Roebuck and Company under the Kenmore brand. Whirlpool manufactures and markets a full line of appliances in each market it serves worldwide: clothes, washers and dryers, refrigerators, freezers, dishwashers, ranges, compactors, room air conditioners and microwaves, together with portable appliances such as stand mixers, hand mixers and blenders.
?Kirby – The Kirby Company has been in the market for more than 85 years. As a Division of The Scott Fetzer Company, they have produced fine Home Care System in the world. Kirby focuses on providing quality, reliability and service. Although their prices are much higher than those of other vacuum cleaner producers they have enjoyed a steady flow of new customers who are more interested in quality. Kirby?s vacuum cleaners are designed for people who have higher income and who appreciate cleanliness. Kirby products are only sold though in-home demonstrations. Through their 85-year history, Kirby has shown that the in-home demonstration allows potential customers the chance to see how the system can meet their unique cleaning needs.
?Maytag – Maytag was founded in 1893. Maytag Corporation is a leading producer of home and commercial appliances. Its products are sold to customers throughout North America and in targeted international markets. Maytag also is the majority owner in a China joint venture with Hefei Rongshida, a leading washing machine company that is expanding into the refrigeration business. The company produces premium brand major appliances such as washers, dryers, dishwashers, cooking appliances, refrigerators, vacuum cleaners, extractors, commercial cooking, laundry, floor care equipment, and vending machines. In 1999 the company increased its sales to 4.3 billion dollars from 4.07 billion dollars in 1998. As a result of this, gross profits rose by 70 million. The company currently pays .72 dollars per share to its shareholders. Net income rose by 48 million dollars.
?GE – GE is a diversified services, technology and manufacturing company with a commitment to achieving customer success and worldwide leadership in each of its businesses. GE operates in more than 100 countries and employs nearly 340,000 people worldwide, including 197,000 in the United States. John F. Welch has been Chairman and Chief Executive Officer of GE since 1981. The Company traces its beginnings to Thomas A. Edison, who established Edison Electric Light Company in 1878. In 1892, a merger of Edison General Electric Company and Thomson-Houston Electric Company created General Electric Company. GE is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896. Revenues of the company for 1999 are $111.6 Billion. 1999 Net Earnings are $10.7 Billion and the number of shareowners is about 2.1 Million
International Expansion
1.External Environment
?Demographic ? The population was 10,208,127 (July 1998 est.) Age structure was as follows: 0-14 years: 18% (male 915,412; female 872,706) 15-64 years: 68% (male 3,413,170; female 3,533,085) 65 years and over: 14% (male 550,974; female 922,780) (July 1998 est.) The population growth rate was -0.23% (1998 est.) Ethnic groups are Hungarian 89.9%, Gypsy 4%, German 2.6%, Serb 2%, Slovak 0.8%, Romanian 0.7%. Hungarian is the major language. Other language speakers are only 1.8% of the population.
?Political/Legal – Country name in the conventional long form is Republic of Hungary, and in conventional short form is Hungary. The local long form is Magyar Koztarsasag and the local short form is Magyarorszag. The Government type is republic. The national capital is Budapest.
?Economic ? Hungary has consolidated its March 1995 stabilization program and undergone enough restructuring to become an established market economy. Consequently, Hungary’s economy has been growing rapidly over the last six years. Hungary has made significant progress in stabilizing inflation through effective implementation of monetary policy. In the early 1990s, Hungary’s economy experienced high rates of inflation, reaching a peak of 30 percent in 1992-93. With the help of market stabilizing efforts the inflation rate dropped to an annual 12 percent by the end of 1998. The targeted rate for 1999 is to reach single digits.
The government’s main economic priorities are to complete structural reforms, particularly the implementation of the 1997 pension reform act (the first in the region), taxation reform, and planning for comprehensive health care, local government finance reform, and the reform of education at all levels. Foreign investment has totaled more than $17 billion through 1997. In recognition of Hungary’s improved macro-economic situation, all major credit-rating agencies listed the country’s foreign currency debt issuances as investment grade in 1996. The current IMF stand-by arrangement expired in February 1998, and Budapest and the IMF agree that there is no need to renew it. The OECD welcomed Hungary as a member in May 1996, and in December 1997 the EU invited Hungary to begin the accession process. Forecasters expect 4%-5% growth in 1998.