Riordan Global: Strategic Management

Introduction

Riordan global organization is a plastic manufacturer that produces and distributes plastic materials all over the world. It employs more than five hundred employees and has estimated annual earnings of over forty six million dollars. Riordan manufacturing plants are located in Georgia, Michigan, Albany, China, among others countries. It markets most of its products over the internet (e-business) which has contributed to its rapid growth. Purchases are done electronically, orders are processed electronically and services such as customer handling, and management of supply chain are also done through e-business. E-Business is taking new faces to accommodate the changes in technology and make marketing more easy and accessible by many. However, the increase in e-business operations is likely to bring many risks among them being the protection of intellectual property. This includes copyrights, trade names and patents which forms important assets to a business.

Riordan is one of the leading plastic manufacturers in the world. It is innovative and produces plastics with the appropriate designs that have attracted the international market. However, in order to increase its productivity, it needs to devise other marketing strategies that will boast its product and earn a bigger market share both in its local manufacturing plants and in the international market. This paper will look at Riordan’s value chain, explore its proposed future strategies, give some of the considerations facing the organization, and give a proposed organizational structure for achieving its strategies.

Riordan Value Chain

Riordan has a strong and close relationship between its suppliers and distributors. It has expanded its markets in the social and cultural contexts and this has contributed to its success. Riordan global organization has been using high technology which has been rising over the years leading to success in all its activities. Most of its products are advertised over the internet making in easy for all people to access the information (Bryson, 2004:104). Riordan innovativeness is facilitated by the use of decentralized structures where managers are allowed to experiment new products. An effective procedure is followed in order to establish new and attractive ideas for the success of the organization. One of its weaknesses is that, it has only managed to venture in some of the developed countries and have ignored the developing ones. Some times it is not able to make the expected profit margins due to competition. It has an opportunity of merging with global retailers for expansion of its products. However, Riordan faces intense rivalry, price competition, and government regulations (Campbell & Craig, 2005: 125)

Proposed Strategies

  1. cost leadership strategy
  2. differentiation strategy
  3. more rewards to human resources

Cost Leadership Strategy

Riordan’s superior marketing strategy complements its mission statement and has seen its product being well positioned in the market. The company’s reputable brand name is a source of competitive advantage as it lures customer traffic. However, Riordan needs to introduce a low cost strategy to make marketing more effective. Pricing appears to be the key element of Riordan marketing mix as seen by its high turnover growth. The most effective marketing strategy is the cost leadership strategy. Each producer in the industry aims at being the lowest producer at a given level of quality. Products are sold at an average price so as to attract a big market share and earn high profits. Most customers tend to prefer the low priced products if they guarantee them of quality (Hill & Jones, 2009:54).

Differentiation Strategy

Another strategy that I can recommend to be used by Riordan global organization is the differentiation strategy. This is the use of a set of incorporated actions that are intended to improve the production and delivery of goods and services and customers are expected to recognize these goods and services as having different and unique importance. Riordan is one of the organizations that need to use the differentiation strategy for effective production. This strategy will ensure increased production of its products as well as profitability

More Rewards to Human Resources

Bratton & Gold (2001:238) observes that, as the employees meet the organization’s expectations, it is important for the organization to realize that the employees also have their targets that they want to be met. The employee must be appraised appropriately to enable the human resources department recognize the areas that need to be improved. Those who have attained the expectations of the management should be rewarded accordingly. A reward system has to be effective and be able to instill the desired behavior for efficient performance. The reward system can either use financial mechanism or non-financial (Anon. 2010:2)

Considerations facing Riordan organizations if it expands globally

Structural considerations

Return/risk Stakeholder reactions
1 Expanding of services could increase its profits Favorable response from existing customers
2 Geographical expansion could lead to increased demand Other firms and the government might resist
3 Could lead to increase in its international profits Could face entry barriers from other countries
4 Could improve the companies portfolio and productivity Employees could respond positively to the change

SWOT Considerations

strengths weaknesses opportunities threats
1 A domestically recognized brand name Too customer-centric Emerging markets Intense rivalry
2 Strategic expansion through customer innovations Low profits margins Emerging markets Government regulation
3 An internationally recognized brand name Dependence on other industries Increasing international trade Entry barriers
4 Tactical leadership and effective management Low profit margins Expanding market Effects of economic recession

Marketing and Operational Tactics

Strategies Resource deployment
1 Requires additional human resource
Existing marketing strategy
Additional working capital costs
More research and development
2 Additional working capital
More human resource
Increased overhead costs
3 Sophisticated technology infrastructure
More skilled labor force
More innovative capacity

Proposed Organizational Structure

Proposed Organizational Structure

Source: Web.

Conclusion

Riordan’s use of the different marketing strategies will ensure continued success in its operations. These are cost leadership strategy, product differentiation, and more rewards to the human resources. Riordan has realized a high turnover growth which offsets its low profit margins and enables sustainability of the organization’s price-based competitive advantage. It has strong brand name and a value chain which has contributed to its success in the global market. However, to achieve the proposed strategies it has to put into consideration its cultural, structural, and leadership issues that it faces.

References

Anon. (2010). Business Organizational chart. Edraw Orgchart. Web.

Bratton, J. & Gold, J. (2001). Human Resource Management: Theory and Practice. London: Routledge

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

Campbell, D. J. & Craig, T. (2005). Organizations and the business environment. New York: Butterworth-Heinemann

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