Big Bark Toys is a newly established business that prides itself in providing fun but safe toys for our furry loved ones. Big Bark Toys' mission statement is to provide toys that are durable, fun, and safe for an affordable price while being open minded for advice from employees, shareholders, and our customers. We all love our animals but know it can be expensive at times, and we want to take toys off that list. We have decided to let our Human Resources to conduct a type of survey to receive feedback from our customers, employees, and shareholders on improvements we can make to go green and cut cost. The advice given can be from the suppliers we use to the production line to the customer. One employee stated on their feedback that stuffing could be a pain to clean up, why not use recycled plastic bottles as a substitute. The plastic bottles make noise to excite the dog and can be durable. We will also be laying out a strategic plan on; where our product will come from, where we will make and store it after completion. As we begin to do our research to find the right supplier and location for our company, we want to make sure that we understand and respect those places and that they will do the same for us as we build our relationship. The focus is on the safety of our animals, so finding a supplier and a location that has similar views is very important. Making our furry friends safe and happy at an affordable price is our number one goal.
With the shareholders asking Big Bark Toys to increase revenue by cutting cost. Big Bark Toys had to perform a SWOT analysis to assess where we currently are and to help us come up with a new strategic plan to get where we need to go. Our first step would be put a committee together to go over the SWOT analysis and set up the steps in the strategic plan and go over the information being gathered. In our next step in our strategic plan would be to do a SWOT analysis on Big Bark Toys. Gathering current information will help us determine where we need to go to cut cost. It is important during our SWOT analysis and doing our strategic planning is to make sure we need to consider our companies' vision and mission. In our SWOT analysis, we figured out that we could get cheaper dog toys from manufacturers in China than to keep buying in America. This would make our next step doing more research into which manufacturers are will be the best ones to buy from. We are going to have to make criteria of what is important to us from our new manufacturer and visit different manufacturers of the toys to get the toys we can at the prices we need. Part researching the Chinese manufacturer would also be to research their culture there. We need to know how the quality of their work is, what their working environment is like, the hours they work and raw materials they access to. The next step in our strategic plan is to pick a new manufacturer. This will involve negotiating pricing and shipping; followed by running the numbers past the committee for approval. Once the committee approves the manufacturer, we start with the best way to ship the products from China. We will be researching different third-party transportation companies to find the best rates, insurance, on-time performance, and technology to track and transport.
Big Bark Toys is hoping to have this strategic plan done within six months. You might ask why so long? Implementation of such a shift in the philosophy of now purchasing from overseas takes time. We cannot rush our strategic plan. We need to make sure our research is correct, and we are getting the best products for our customers who want the best for their animals. We hope to roll out the new toys in waves.
There a multiple competitive advantage strategy out there for a company such as Big Bark Toys to look at. There is a price, differentiation, innovation, operational effectiveness, technology-based, adaptability, and information. After Big Bark Toys did a SWOT analysis, we were able to find out a competitive advantage in the dog toy market. One of the strengths of Big Bark Toys is our customers love for their dogs. We will be using that as one of our advantages. By purchasing our toys from a manufacturer in China, we will be able to price our toys competitively with our competition. With changing manufacturers, we will allow those customers by fun, good for their dog toys at a great price.
I understand what you shareholders are thinking does just the price of the newly manufactured toys gives us an advantage? Well not only by itself is the answer. Since we know that our customers truly love their pets a little extra we had to come up with another competitive advantage to give Big Bark Toys that little extra. Instead of using stuffing that makes a mess when a dog rips or tears the toy open. We are going to use recycled plastic soda bottles. This will create no mess for the dog's parent to clean up when the toy gets destroyed. Also, it will be safer for the dogs because there is no stuffing for them to eat possibly. We have done the research and found out that the dogs love the crinkle and other sounds. Letting our customers know that we are using recycled parts to make their new favourite dog toys will show them that our company is not only innovating dog toys but also, as a company we care. As a company, we are trying to adapt to a new culture of buyers also that want to see the company they are buying from using recycled parts and become more sustainable in the environment.
Big Bark Toys believes that using these three advantages of price, innovation and adaptability of the company will give us a significant competitive advantage in a very aggressive dog toy market.
Moving from Manufacturing to Outsourcing
Big Bark Toys needs to lower costs by making smarter procurement choices. Currently, our company is making all of its dog toys. This requires ordering everything necessary to make the toys and retaining employees to build several different types of toys.
Making the toys gives us the freedom to design and sell the things we dream of, but there is a high cost. For example, between March 2016 and June 2018, the cost of cotton has increased by 67% (Cotton, 2018). Denim costs an average of $3.00 a yard (Denim Fabric Prices Wholesale, 2018). Silicone can cost upwards of $1000.00 per ton (Silicon Pellet Wholesale, 2018). Pricing is volatile and requires us to shop for suppliers regularly. Operating our manufacturing machines is our most significant cost to Big Bark Toys. Because of the high cost of maintaining OSHA compliance as well as wages and benefits of our employees we estimate we will be able to save between $40,000 and $70,000 per employee (Hadzima, 2018).
Our solution is to no longer manufacture our dog toys. By making a move from manufacturing to purchasing what we sell we solve two of our most significant problems. We will be able to buy completed dog toys for much cheaper than what we can make them for, and we will have access to a much larger selection of toys that we did not previously have. A chief complaint with our product is that once a dog tears open a toy that we manufactured the cotton stuffing creates a choking hazard and is difficult to clean up. We were reluctant to change the toy because of retooling costs.
Big Bark Toys has selected several manufacturers located in China to stock our shelves. There are common challenges with using these suppliers. One is that they have large minimum orders and lead times are less predictable than when we were making the toys ourselves. Given the large selection that we can choose from and the fact that most of the toys cost between $0.50 and $3.00 to purchase the minimum purchases are still a better deal to our company.
As a newly established entity, we conducted an external analysis to determine the strategies relevant in meeting the Big Bark Toys mission of providing durable, fun, and price friendly toys. After conducting the SWOT analysis, we were able to identify the key strengths and opportunities that can help in meeting the requirements of the strategic plan. For instance, we identified that it would be cost effective to purchase the toys from China than depending on the American market. For this reason, it makes it possible to provide friendly prices since buying from China is cheaper as compared to purchasing from American manufacturers. This will help create a competitive advantage by offering competitive prices in the highly competitive market. Other strategies to enhance our competitive advantage include adopting technology-based products and services, embracing differentiation, and being open-minded to any ideas from customers and other shareholders. More importantly, we aim to shift from manufacturing to outsourcing to enhance the organizational efficiency.
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Cotton - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi. (2018). Retrieved from https://www.indexmundi.com/commodities/?commodity=cotton&months=60
Denim Fabric Prices Wholesale, Denim Suppliers - Alibaba. (2018). Retrieved from https://www.alibaba.com/showroom/denim-fabric-prices.html
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