Strategic HR approach for knowledge sharing environment
There must be continued investment towards product design and innovation to establish new trends in the market and organically grow the product portfolio, thereby presenting the company with new points of differentiation and revenue opportunities. Supply Chain Management To improve its competence in product sourcing and distribution, Billabong must align the four key stakeholders in the supply chain: suppliers, distributors, customers and employees.
Aligning these stakeholders will enable Billabong to better understand the individual needs/interests of its stakeholders, thus leading to the creation of supply chain efficiencies and the development of new products and potentially new market segments. For example, the power of distributors can be used to deliver their existing products to other market segments. Partner Relationship Management
Partner relationship management involves not only identifying organisations with suitable infrastructure, mapping out mutual objectives and needs, and agreeing on how to achieve these, but also ongoing compliance monitoring and adjustments where necessary. By continuing to refine their competence and performance in this area, Billabong will build a competitive advantage to help it achieve its ongoing growth targets. Enterprise-Wide Customer Focus
Billabong must revise its business strategy to reflect an enterprise-wide customer-centric focus. In many ways the organisation has developed core components necessary to create synergies between its brand and its customers. However, a customer-focused organisation requires top-down, bottom-up commitment to make the customer central to all business decisions. The end goal being a holistic approach to knowing, understanding and defining customers’ wants in shaping deliverables.
This is supported through continued investments in marketing solutions such as customer relationship management. As Billabong expands into new territories and develops new products in new markets it will need a much more disciplined approach in order to enhance its customer focus. A customer-centric focus will allow Billabong to tap into short term fads and shifts in market trends. Leadership Leadership sets the agenda for an organisation. Future growth strategies will be defined through acceptance by senior management across the organisation.
The importance of a knowledge-sharing environment is supported by ongoing training and development programs which stretch across the organisation, help to remove divisional silos, increases employee skill set to improve promotion from within and promote the cultural imperative of the company. Ranking the identified strategic options against key strategic factors derived from the SWOT analysis suggests that increasing market share and product/market diversification strategies would be most suitable as a short term strategy (Appendix 9).
Increasing market share through product/market diversification would be supported by Billabong’s existing distribution and licensee agreements and success in product sourcing, as would its strength in marketing and financial resources. When measured against these key strategic factors, backward integration, forward integration and entering into a strategic alliance with a competing firm would be deemed unsuitable.
These strategies, particularly forward integration involving the opening of additional wholly-owned retail outlets, would likely present unfavourable results for the organisation’s financial resources and obstruct its distribution and licensee agreements. Were Billabong to seek to increase market share and/or product/market diversification, a number of options within this growth strategy are available, as illustrated by the Billabong (McKinsey) Growth Pyramid (Appendix 10).
For each option there is a degree of risk to be considered; the lowest-risk option is to increase sales to the existing customer base through organic investment, which may entail more creative marketing, event sponsorship and tactics to maintain customer loyalty. Vertical integration would seemingly pose the greater risk, as the organisation would likely struggle to stretch its core competences across other unfamiliar industries.
Likewise, growth through consolidation and acquisition of lesser brands carries equal risk, as this tactic may taint the parent organisation or present the threat of strategic drift across the organisation. Developing new products would be yield ‘medium risk’, with support derived from the leveraging, or ‘stretching’, of existing core competences (e. g. brand equity) and value chain activities (e. g. procurement). The risk derived from this option would occur at various levels (e. g. distribution, marketing) however, Billabong’s brand equity – identified as a competitive advantage – would likely provide reduced risk.