Sun
Products Company: Business Plan
Executive summary
The Sun Products company engages in the production
of various fabric care products, which it markets globally. While the company
has some strong brands, which have gained great market share, most of its
brands are still unrecognized globally. In fact, the brands that have gained
global awareness are those adapted from Unilever. It is therefore essential for
the company to apply the ERRC strategy for improved performance.
Business description
The Sun Products Company is one of the leading
companies in the US in the provision of fabric care products. The company’s products
include fabric softeners, laundry detergents and dish detergents. The company’s
products are sold under well-recognized product brands such as Sunlight, Cuddlesoft
and Snuggle. (Sun Products Corporation par. 1) Although the company is relatively
young, it has a legacy of innovation driven product development. Some of the company’s
brands were adapted from Unilever in 2008. This has given the company a high standing
when it comes to brand recognition (Sun Products Corporation par. 2). The company
delights in the excitation of customers through its range of fabric products and
takes this as its operation mission. In its business, the company places value on
the people, integrity, humility, passion for success and commitment (Sun Products
Corporation par. 2). The company has a well
laid down operations structure, which aims at conduct that is favorable to the growth
of the business.
The Value Curve
The firm’s current value proposition centers
more on the products themselves than on the firm and its role in the society. The
firm’s value curve therefore depicts high ratings on the product features and slightly
lower ratings on the social responsibility and public awareness. The products offered
by the company are for common use and have several competitors from different parts
of the world. The major competitors about the company’s current fabric care products
include Unilever, and Procter & Gamble. While Sun Products provides the Sunlight
brand, which has gained immense global recognition, Unilever and Procter &
Gamble offer Omo and Ariel respectively. The features of the products that contribute
to the value proposition include product-pricing, distribution, customer awareness,
availability of the product, Effectiveness, safety, design, packaging, customer
satisfaction, and reputation (Yang 3). On the other hand, the company features that
contribute to the value proposition include participation in CSR, engagement of
local communities and environmental preservation.
Sun Products is still a relatively young
company in the market and its profitability is dependent on many factors. However,
since it has some of its strong brands obtained from Unilever, it has the potential
to use this opportunity as a marketing platform for its products. The firm prefers
to use the customer growth matrix in product and market expansion. In order for
Sun Products to make its profits effectively, the company should be capable of engaging
in effective customer service for the improvement of the company reputation. Part
of the growth matrix involves the application of strategies such as innovation for
the development of products in accordance to customer needs, expansion of existing
markets through intensive marketing strategies and the development of the company
image through CSR activities (Chan and Mauborgne 3). These practices focus on the
product, the market and the company respectively. The increment of profitability
in the company requires the application of eliminating, reducing, raising and creating
strategy (ERRC) for the product components. Besides expanding the company’s market
share through this strategy, the company also creates market entrance barriers by
product differentiation and quality improvement. The present value proposition for
the company is represented by the value curve below.
Application of ERRC
Elimination, reduction, raising and creation
strategies thrive on innovation through effective research and development. Currently,
the company depends more on the revenue from the adopted brands than from self-developed
brands. In order to improve its position in the market and to improve the reputation
of its products, the company should first eliminate the desire to diversify its
product range. The objective of doing this would be to create a niche market for
the presently existing products and to create awareness of the company’s existing
products (Kumar 12). The development of new products in a new market can lead to
ineffective market entrance and subsequently loss. By using the existing brands
to create awareness of the company, customer loyalty can be achieved prior to venturing
into new markets. Moreover, the company should also eliminate diverse product ranges
with the same purpose. This means that for instance, the company should only market
a single fabric detergent to avoid in-competition and thus to achieve customer loyalty.
Secondly, Sun Products should reduce their
expenditure on the advertisement of known products and instead focus on improving
its public image and creating awareness of its other product brands. For instance,
products such as Sunlight and Wicks, which were obtained from Unilever already,
have immense market share and customer awareness. It would thus be unreasonable
to spend more on marketing them at the expense of other products such as Snuggle
and Surf which both have lower recognition in the market. Moreover, the company
may also reduce the product prices through reduction of expenditure (Chan and Mauborgne
77). The overall impact would be a significant increase in the market share. Another
area that could benefit from a reduction is the energy consumed in the product manufacture.
This could be with renewable energy sources instead of the conventional power sources
that are currently in use. The impacts of this on the company’s expenditure will
also contrib.ute to a reduction in the overall product price in the company.
In applying the raise strategy, the company
should engage in the raise of product distribution network to ensure that all products
are accessible in every area. One of the factors that have contributed to the present
value curve is that the company has distributed some of its products largely than
it has distributed others. For instance, while Sunlight is accessible worldwide,
the same cannot be said of the other brands marketed by the company. Raising the
level of advertisement with respect to these brands can help the company to improve
the value of the products it has. The company should also raise the level of customer
service quality. While customer service has nothing to do with the organization’s
products, it influences the ability of the company to retain its customers. Moreover,
the company should raise the use of recyclable materials, especially in the production
of product packaging materials. This indicates environmental concern and may play
an important role in ensuring the company has greater reputation in terms of environmental
management. Sun products should also raise its participation in CSR activities.
This can help to maintain a high public image of the company and thus enhance
its capability to access a greater market share.
In the application of the creation element
in this strategy, the company should introduce customer incentives in the promotion
of its products to ensure that the customers are identified and that they can feel
free to give their feedback regarding the company products. As it is, the customer
feedback is essential in the company as it can help in aligning the product qualities
with the customer requirements.
After the application of the ERRC strategy,
the resultant value curve is shown below.
A comparison of the value
proposition at Sun Products before and after application of ERRC indicates that
while the present proposition is lower in rating in comparison to unilever, the
rating after ERRC is comparable to that of Unilever. ERRC has the potential of adding
value to the company’s deliverables to match the needs of the customers. From the
proposed ERRC strategies, the customers will be able to gain in terms of better
pricing, better satisfaction, and higher product effectiveness. The implication
of this is an increase in the company’s profitability due to the potential for
increased purchases.
Sustainability
The business operated by Sun Products is
sustainable since it deals with the manufacture and distribution of daily use products.
With the current market share owned by the company and its partnership with firms
such as Unilever, the company is operating a very sustainable business. Moreover,
the need for fabric care products is endless among customers. Thus, with an effective
strategic plan, the company has the potential to grow without bounds. The major
challenges to organizational growth however include competition and less product
diversity. The major objective of Sum Products is to satisfy customer needs through
its wide range of products. Consequently, the company business can be concluded
to be sustainable. With the reduction of energy consumption and increment of CSR,
the company is bound to improve it terms of operational sustainability (KPMG par.
30).
Marketing
The company currently has a marketing plan,
which includes the use of various promotional strategies. First, the company spends
a significant amount of finances on the promotion of products through conventional
modern methods such as the use of telecommunications media (Whalley 110). In
addition, the company spends some funds on traditional advertisement strategies
such as the use of posters. The social media has also played a great role in the
company’s marketing strategy, with the result of improved sales. While the efforts
put by the company in marketing its products are currently diverse, the company
still needs to do more in terms of its product promotion efforts. For instance,
the use of promotional strategies such as direct sales and provision of customer
incentives has not been applied effectively in the company (Haydu and Hodges 2).
Besides the conventional marketing and promotion strategies, the firm can also engage
the blue ocean strategy, which aims at accessing the three tiers of non-customers
(Ajay 4). In its advertisement strategies, the company targets the mass market since
its products are also meant for mass home application.
Operations
The company’s operation is based on taking
advantage of strategic partnerships for the purpose of product distribution and
brand building. Based on this strategy the supply chain management team works in
collaboration with the logistics department with the objective of ensuring operational
effectiveness. The product distribution strategy is based on the in- time basis,
where the company produces products prior to the need for distribution. After the
production process, the products are kept within the company’s warehouses awaiting
distribution. As the time approaches when the potential customers need them, the
products are released to be distributed to the customer’s location so that the customer
does not incur storage costs for finished products (Bingiorni 3). The company also
has sufficient storage space to cater for the storage of raw materials since these
cannot be delivered on a just-on-time basis, as the company’s operations have to
be continuous.
Management
The company operates under the management
of a board of directors. The board makes all the major decisions in the company
and receives reports from the managing director. The managing director acts as the
intermediary between the various sectional heads and the board of directors. The
organizational structure is such that decision making is bureaucratic, with all
employees allowed to contribute their opinions in the decision making process (Gonos
and Gallo 1). Principles of strategic management outlined by Henri Fayol such as
unity of purpose and unity of command are applied in the management of the company
(Rodriguez 881).
Financial
In the past years, the company has experienced
positive growth in its profit margins. This began from 2011 after the adaption of
some brands from Unilever. However, the company had a loss in the years 2010 and
2009. In 2011, the company registered profits of $2 billion (Forbes par. 2)
Critical Risks
The major risk that the company faces is
that of engaging in a multi-player industry. The company competes with so many large
companies although it has a narrow product range. In addition, the company depends
immensely on the already developed brands (Hutter and Jones 6). This is a risk as
the company risks developing only a few of its brands while ignoring other brands.
Consequently, only some of the brands will gain customer recognition while the others
will fail to be recognized (Miles 2).
Harvest Strategy
The company is currently operating on a limited
liability basis, with a similarly limited capital base. However, with the application
of the ERRC strategy and the effective management associated with the company, it
expands its potential for attracting potential partners, in terms of product marketing,
distribution and even community participation. Strategies such as the expansion
of its CSR capability will enable the company to create a better reputation hence
attracting more customers and other stake holders.
Milestones
The company schedules the release of new
products yearly, with the objective of gaining as much market share as possible.
The inclusion of several stakeholders also contributes to the reliability of the
company schedules through parallel planning. Moreover, the company also uses its
website and social media sites to strategize its plans and to publicize them to
gain as much public attention as possible.
Works Cited
Ajay, Kumar. “Blue Ocean Strategy”. Technopak Today.com 2012.
Bingiorni, Sara. “All in the timing”. The Greater Baton Business Report. 2004.
Chan, Kim and Renee Mauborgne. “Value Innovation: The
strategic logic of high growth”. Havard Business
Review. No date.
Chan, Kim and Renee Mauborgne. Blue Ocean strategy. Harvard Business Review. 81.(2004), 76-85.
Forbes. Sun Products Company. 2015. Retrieved from http://www.forbes.com/lists/2011/21/private-companies-11_Sun-Products_YPGF.html
Gonos, Jaroslav and Peter Gallo. “Model for leadership
style evaluation”. Journal of Management.
18.2(2013). 157-168.
Haydu, John and Allan Hodges. Basic marketing strategies
for improving business performance in the Turf and Lawncare Industry. Web. Retrieved
from http://edis.ifas.ufl.edu/pdffiles/FE/FE70900.pdf
Hutter, Bridget and Clive Jones. Business risk management
practices: the influence of state reregulatey agencies and non-state sources. The
Center for Analysis of Risk and Regulation. Discussion Paper 41. 2006.
KPMG. 20 issues on building a sustainable business.
[Slideshare]. 2011. Retrieved from http://www.slideshare.net/CharteredAccountants/20-issues-building-a-sustainable-business
Miles, Anthony. Risk factors and business models: understanding
the five forces of entrepreneurial risks and the causes of business failure. Dissertation. 2011
Rodriguez, Carl. “Fayol’s 14 principles of management
then and now: a framework for managing today’s organizations effectively”. Management Decision. 39. 10(2001). 880-889.
Sun Products Corporation. About us. 2015. Retrieved from
http://www.sunproductscorp.com/
Sun Products Corporation. Our brands, our history. Retrieved
from http://www.sunproductscorp.com/BrandsHistory.aspx
Whalley, Andrew. Strategic
Marketing. Ventus Publishing. 2010.
Yang, Byung-mo. Creative VE using value curve. Samsung
Electronics Co. Ltd. 2010.
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