Riordan Company’s Strategic Plan

Executive Summary

Riordan Company is well known for its plastic production which is distributed in major industries such as the aviation industry, automobile industry, and the bottlers of soft drinks. Over the past one and a half decade, there has been rapid globalization in businesses mostly led by the advanced technology especially the use of internet. Now, companies can market their products on-line to many parts of the world. Riordan manufacturing company has not been left behind in terms of technology (Bryson, 2004). The executives and managers of the company have been doing all that is within their power to ensure that the company maintains it market share.

Riordan is among the leading global plastic manufacturers. This has been facilitated by the creativity and innovativeness of its work force that have been able to produce plastics products with different designs that attract a bigger market. However, this alone cannot guarantee the company an increase in its revenue. It therefore needs to embrace other marketing strategies. For instance, the company has to work on its value chain.

It is true that, the company has a strong relationship between its suppliers and distributors but this can be harnessed through the inclusion of the consumers. Most of the products are advertised over the internet giving consumers equal chances of accessing information. In order to enhance its uniqueness and competitive advantage, Riordan needs to reconfigure its value chain through horizontal and vertical integration. For instance, direct purchasing from manufacturers is a successful cost reduction measure.

The company has been considering expanding into other international markets for instance Chile and Germany.

  • Germany is among the most innovative nations and the fifth richest in the world. It has an estimated GDP of 2.8 trillion dollars and a per capita of 34, 800 dollars. An expansion into the German market may result in the introduction of new techniques and technologies that would give Riordan’s products a greater competitive advantage over its rivals.
  • Chile is the most economically and politically stable country in South America. By expanding its market to Chile, Riordan Company stands to gain access to the Chilean consumers with very minimal capital expenditure. Also due to Chile’s stability, it can act as a base for further expansion into other South American countries (Central Intelligence Agency 2010).

Before the company considers global expansion, certain things have to be put into place. International expansion is a good strategy but it cannot be effective if the company has to been able to utilize its local resources. The following is a list of the proposed strategies that the company should consider before undertaking the global expansion:

  1. Marketing strategy
  2. Personnel

Riordan Company has a reputable brand name that gives it a competitive advantage over its rivals. A low cost strategy would complement its reputable brand name and make marketing more effective (Hill & Jones, 2009). On the other hand, the use of a set of incorporated actions for differentiating Riordan’s products would ensure that, these products are produced with unique qualities that attract different groups of people.

Currently, the company employs 550 employees who have not been rewarded appropriately. A reward system has to be put in place that is effective and is able to instill the desired behavior for efficient performance. The reward system can either use financial mechanism or non-financial mechanism. Everyone needs to be appreciated if he does something good, this does not only mean monetary appreciation but also use of words or promotion. The following chart

The success or failure of any business or organization depends on the organizational behavior perceptions. The way the management team together with the employees handles these perceptions determines whether the organization will close its operations or if it will continue. This is because management and employees are responsible for the future development of the organization. This is done through motivation, communication, politics, and power.

By efficiently controlling its cost drivers, Riordan can develop a cost and differentiation advantage over its competitors through:

  • A high degree of technological innovativeness
  • Economies of scale and scope in ability to reach customers
  • Maximization of resources and capacity
  • Linkages between value chain activities
  • Interrelated business units
  • Vertical integration
  • Geographical diversification
  • Introduction of cost discipline
  • Institutional factors such as frugality

The following chart shows work breakdown chart for both Germany and Chile

Work breakdown chart for both Germany and Chile

Other things that have to be considered/the critical success factors include:

  1. Customer satisfaction
  2. Government regulation
  3. Competition from other firms
  4. Capital requirement
  5. Employee’s response
  6. Internal environment

Analysis of internal environment

The following table gives a summary of the internal analysis of Riordan Company

strengths weaknesses opportunities threats
  • A domestically recognized brand name
  • Strategic expansion through customer innovations
  • An internationally recognized brand name
  • Effective management
  • Too customer-centric
  • Dependence on other industries
  • Emerging markets
  • Increasing international trade
  • Intense rivalry
  • Government regulation
  • Entry barriers

Reference List

Bryson, M. J. (2004). Strategic planning for public and nonprofit organizations: a guide to strengthening and sustaining organizational achievement jossey bass public administration series Volume 5 of Bryson on Strategic Planning. Australia: John Wiley and Sons.

Central Intelligence Agency. (2010). The World Factbook. Web.

Hill, C. & Jones, G. (2009) Strategic Management Theory: An Integrated Approach. London: Cengage Learning.