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Proposed JPT’s Strategic Plan, Their Potential Risks and Recommendations

Strategic risks are inherent risks that organizations take to expand and exploit the opportunities that are available in the market. Companies take risks that are related to the development of new products while technological advancement and application may be uncertain while competition that companies face may limit a company’s sales severely. Strategic plans seek to avoid some business opportunities while accepting others. This paper explains the risks involved on the respective company’s proposed plan including business and non-business risks. The impacts of the risks and recommendations have been discussed on how the strategic plan should be implemented considering the risks involved. Strategic management involves comprehensive collection of all the organization’s activities and respective processes and aligning them with the company’s corporate goals having in mind the company’s vision, mission and the resources available.

Strategic Risks

Strategic risks refer to those risks that emanate from fundamental decisions that have been made by the directors of a company and are hinged on the attainment of organizations objectives (Strategic Management Group, 2017). Strategic risks are essentially the failure of the organizations to achieve its business objectives. These risks can be divided into two major categories; business risks and non-business risks. Business risks that stem from the company’s business objectives. Business risks are about the decisions that the company board has made about the organizations products or services (ACCA, n, d). For example JPT closure of existing offices and relocation to the city may affect their business, the new customer relationship management system (CRM) may not work as expected in fact in can fail, the comprehensive rebranding may backfire (ACCA, n, d). Non Business Risks are not connected to the company’s products or services. For example, risks that is associated with funding the business like long term financing. Other strategic risks are influenced by how the business has positioned itself in relation to the industry’s environment and the not solely by the directors decisions. The actions of competitors in the market affect the company’s risk levels in the industry, product market together with the technological advancement and developments. For example, new innovations may quickly become obsolete depending on the nature of the industry (ACCA, n, d).

Significant Risks Arising from JPT’s Limited Strategic Plan

a). Loses due to ineffective rebranding: JPT may lose some of its businesses due to ineffective  rebranding of the business and the establishment of the new brand. Customers may also fail recognize the new JPT’’s brand as some of the old customers may not be aware of the new changes especially change of brand.

b). Higher costs than anticipated due to relocation: the relocation of the business premises to the city would certainly cost more than initially anticipated.  This is because of hidden costs that are associated with operations in the city while some customers would be affected by the relocation of business.

c). Failure of Customer Relationship Management System: The new CRM system that the company has purchased may fail to meet company expectations due to wrong choice of recruited personnel or weak customer relationships.

The impact of rebranding

Rebranding requires a detailed process that has been carefully planned. Unplanned rebranding strategies may end up with wrong messages that have stemmed from wrong goals and objectives.

Changing the brand of a product may end up causing a lot of harm to the company than good. The extent of rebranding risks depends solely on the scale of rebranding that is, whether the company is rebranding fully or just changing some colors or business slogan.  Risks are higher if the company is adopting a new image with different colors and logo (Slyusareva, 2018). All changes are associated with some kinds of risks. The following are the risks that accompany rebranding.

Diminishing of the company’s brand awareness, high costs of advertising

Most customers associate particular products with certain brand names. Rebranding changes the brands associated with the original products’ and it would require a considerable sum of money to change from the old brand to the new one so as to inform the current and other customers about the new changes (Ernst & Young, 2016). The advertising strategy may involve the use of digital, internet, TV advertising, newsletters and other marketing strategies to communicate the changes. The rebranding strategy may cause result in decreased sales due to reduced company awareness as some customers may remain wondering what happened to their favorite brands especially if the communication strategy for the company was ineffective (Slyusareva, 2018).

Image or Message that is not popular or does not resonates with Customers

Very old logos do not augur well with the new generation. Companies are mostly compelled to rebrand their products ones in a while to remain competitive in the market and also to position their products strategically (Slyusareva, 2018). However, choosing or designing an image or logo that is not popular or one that does not resonate well with the public may be a disaster to the company’s marketing efforts and also may impact negatively on sales revenues. The logos or trademarks simply differentiate a company’s product from their competitors. New brands have to address such goals but it is common for companies to move ahead with rebranding strategies while the company is experiencing cash flow problems. As a result of limited resources, such companies fail to conduct adequate research and testing activities consequently the company ends up with a brand that fails to address the company’s needs and does not resonate well with the company’s current and potential customers. The company’s customers turn out to be confused and disoriented.

Infringing on intellectual property rights belonging to another company

Rebranding strategies that are not detailed and which have not been thoroughly and carefully planned may end up designing and registering a trademark that has not gone through a trademark search to assess similarities in order to avoid intellectual property rights violations (Slyusareva, 2018). The company would be compelled to spend substantial amounts of money to settle legal disputes on copyright violations (Slyusareva, 2018).

Selecting a Slogan, Brand name or Design that is offensive to other cultures

Companies may adopt some slogans, logos or brand names that are offensive or morally wrong in some cultures (Slyusareva, 2018). Some slogans may sound well and resonate with certain cultures and nationalities but would be totally unacceptable in some cultures. Such a mistake may be costly to correct and may damage the company’s reputation besides the risks of expensive litigation processes.

Rebranding is time consuming, expensive however it has a great potential of re-energizing and reinvigorating the competitiveness of a company’s products. To remain relevant in the ever changing world every brand has to evolve regularly. Change is constant and a brand that is not evolving with together with its clients, environment and competition the risk are that the company would be left behind. Brands that are old and misaligned may lead to confusion resulting in loss of customers and sales (Manternach, 2016). Rebranding is done due to many reasons. Before making the decision to rebrand the reasons should be articulate and the achievements defined (Manternach, 2016). The objectives of the brand should be able to address the changes that have taken place in the market, the problems that need to be solved, the competitive landscape, changes in customer’s tastes and the benefits anticipated from the new rebranding activities (Manternach, 2016).

The impact of relocation

Loss of Customers

Loss of customers due to the movement to new premises and other inconveniences are some of the negative impact of closing an existing business. The management may try to notify their customers about their relocation but some of the customers may still be affected due to other factors like shopping convenience, distance and the availability of alternative businesses.   

Extra Marketing Costs

It is very difficult for the management of a company to return the company where it was before it relocated in terms of marketing and advertising options. Establishing a business on a new location takes a lot of time and again involves financing the advertisement of the company’s products on designing new communication strategy would cost the company some money.

Reduced Morale

The movement would have a negative impact on the employees. After working hard to promote the products of the company, the employees would be discouraged to continue working for the company as the movement to new premises means starting all over again. Movement to new offices may also signal the signs of job losses leading to mental stresses and other health problems that may lead to chronic health conditions. Job losses means loss of steady paycheck and reduced standards of living besides it may also lead to employees losing their homes.

The risk of relocation a business premise should also be evaluated before the company decides to relocate. The goodwill that has been created over the years and the client base that has been developed should be considered before the company moves out of the business premises. The reasons for moving out should be clearly established and factored before the company decides to move out.

                                   The impact of Adopting CRM                            

All customer relationship management systems (CRM) are accompanied by a sizeable number of risks. Any software project has an inherent component of risk and it includes all the risks and uncertainties that may face the development and implementation of the software throughout its application processes. CRM remains a critical area of interest especially in contemporary management of projects due to its relative high failure rates. The high failure rates are associated with the number of the risk factors that face CRM project implementation such as unwillingness of potential customers to provide basic personal information.

Invalid Project Assumptions

 Invalid project assumptions may lead to wrong project input that would end up providing outputs that are different from stakeholder’s expectations. Wrong assumptions may lead to faulty project implementation of the CRM processes and it may lead to confusion, loss of customers and related sales (Online-CRM, 2018).

Project Planning Omissions

The other negative impact of introducing a new customer relationship management system (CRM) is that omissions may occur while planning the project (Online-CRM, 2018). Correcting the omissions may lead to delays in project completion. Significant delays may attract some penalties that would result in losses to the company.

CRM Failure

The major impact of the CRM risks would be the failure of CRM to adequately control customer’s relationships in may lead to inconsistencies and lack of continuity in businesses processes (Online-CRM, 2018). Such inconsistencies results in data conversion delays and CRM management failure. Customer dissatisfaction and loss of business would be the ultimate impact of the risks involved in CRM failure.

Other factors

The factors that can affect the success of CRM are mostly related to the company and are directly related to the CRM strategy. Lack of cohesion and understanding in company business operations may lead to failure of the CRM implementation. Clear CRM strategy stems from thorough understanding of the company’s business model with well-defined organization business practices. Without adequate strategy, CRM implementation would be a difficult task and may most likely fail. Companies that wholly believe that CRM software is entirely a customer relationship management would find it difficult to achieve the goals of CRM. It is software that is basically used as an enabler that is used to achieve CRM goals. The targets can also be affected by poor planning and can lead to very poor performance and in some cases lob losses (Papadopoulos, Ojiako, Chipulu and Lee, 2012). Strategic planning involves adequate CRM research work and adequate planning. Company cohesion and clear understanding of the company operations should be sought before the CRM strategic plan and execution is implemented.

Recommendations Based on Strategic Plan from a Risk Management Perspective

                                       Investment in Research

Before implementing the rebranding initiative, the company should invest in research. Customers’ perception is critical if the brand is to connect and resonate well with the customers. Most brands that fail to resonate with customers do not attract any attention and cannot successfully advertise the company’s products. For a brand to be successful, the company must undertake some research on the effect of the changes made (Manternach, 2016). The company must find out what the customer’s real interest is and what matters to them the most. The brand should have the qualities of a brand that is strategically evolving. The company needs to understand the elasticity of the product that is to be branded. Answers like why customers prefer the brand to other competitors should be effectively sought before any rebranding exercise starts. The relevance of the products in the market and the likelihood of customers recommending the product to other potential customers should also be determined (Manternach, 2016).

Besides the customer’s perspective on the brand, company employees should also air their view on the performance of the brand and the need to rebrand it. Confidential employee research should be undertaken to create a clearer understanding of the products brand performance. Considerable insight on the nature of the brand and its performance should be thoroughly determined before the rebranding exercise is allowed to take place (Muller, n, d). The services of a professional marketer should be sought for brand research alongside other professionals for the process to be successful and also to minimize the time allowed for the exercise as well as to minimize risk and uncertainties in the processes.

Adequate research work should be conducted and the opinion of the company’s customer sought before the company opts to move out of its primary location. Research work would entail finding out the customer’s opinion on the current business location and the proposed new location. The answers and suggestions made should be incorporated on the strategic plan.

Choosing the wrong CRM strategy may result in erroneous or incomplete software customization. The impact of such errors may also result in longer implementation periods and other extra expenses. Adequate research and training on software as a service (SAAS) and other reasons that may cause insecure or unstable hardware systems should be investigated (Stoneburner, Goguen and Feringa, 2002).

The implementation of the CRM strategic plan would involve choosing the right CRM provider, with adequate expertise in the field. Research on customer relationships and CRM software application processes would ensure a smooth CRM strategy implementation plan.

Effective Communication Strategy

Change is usually hard and difficult to implement for any ongoing processes. Rebranding requires a lot of changes to be made and all the changes made must be strategically and effectively addressed. A clear and concise communication strategy must be designed to convince the public why the rebranding was necessary, its targets and overall effect.  The public should be provided with a personal sneak peek and assistance on how the customers input have shaped the brand evolution. The insight obtained from the brand research should be used in rebranding to ensure that customers understand that the evolved brand was necessary to meet their needs. The brand should be connected to what customers consider most important and also critically relevant on the evolved brand (Manternach, 2016).

The impact of the changes made must be analyzed and the necessary adjustments made. The collective targets of the evolved brand and the marketing strategy must first be communicated to the company staff while the rebranded must also be effectively advertised and marketed. The strategic plan should include comprehensive details on how customers would be informed about the new location and the reasons for movement. Customers are always sensitive to relocation issues and any inconveniences caused may result in loss of customers. The management should consider undertaking the strengths, weaknesses, opportunities and threats (SWOT) analysis for the project before they make the final decision.

CRM relationships should be explained to all the company staff associated with CRM department. The data captured should be in accordance to the customers’ wishes otherwise it would result in customer dissatisfaction (Stoneburner, Goguen and Feringa, 2002). About 61% of all organizations that utilize CRM have organization frameworks that are not well understood and which have not been completely defined resulting in defective software implementation (Sourizaei, Keikhayfarzaneh, Khalatbari and Keikhayfarzaneh, 2011). To effectively implement the CRM strategy, the company should ensure that the organizational structure is well understood and the CRM software is satisfactorily implemented.

Strategic planning is critical to the success of a company. Planning ensures that organizations remain relevant, responsive and meets all the management needs. Proper planning result in organizational stability, development and rapid growth (United Nations, n, d). The board finds it easy to make policies and targets that guide the organization to greater successes (World Bank, n, d).

It is that kind of planning where the organization leaders determine how and what they want the organization to achieve in a specified time period. Strategic planning describes the programs, tasks and timelines that it expects to achieve certain targets. For example, for the company to move out of its business premises, the company needs to research on the views of the customers and their opinion about the same. The same case applies to rebranding and CRM implementation. Expert advice should be sought before the activities are carried out. Strategic planning involves the determination of what should carried out immediately and what should be done later at a specified period of time (World Bank, n, d). The plans include measurable goals that are realistic as well as attainable.

Conclusion

Adequate research work should be conducted and the opinion of the company’s customer sought before major changes are adopted by the company. Research on new business location, effect of rebranding a product and adoption of CRM strategy should be carried out before major changes are instituted. Research work would entail finding out the customer’s opinion on the proposed changes and the effects evaluated on how the changes would impact the customer’s shopping behavior. The answers and suggestions made should be incorporated on the strategic plan. Rebranding is time consuming, expensive however it has a great potential of re-energizing and reinvigorating the competitiveness of a company’s products. To remain relevant in the ever changing world every brand has to evolve regularly. Change is constant and a brand that is not evolving with together with its clients, environment and competition the risk are that the company would be left behind. Choosing the wrong CRM strategy may result in erroneous or incomplete software customization. The impact of such errors may also result in longer implementation periods and other extra expenses. Adequate research and training on software as a service and other reasons that may cause insecure or unstable hardware systems should be investigated. To implement an effective strategic plan all the factors discussed above must be considered before the plan is executed or implemented. Without adequate strategy, CRM implementation would be a difficult to implement and may most likely fail. Companies that wholly believe that CRM software is entirely a customer relationship management strategy would find it difficult to achieve the goals of CRM as it is software that is mostly used as an enabler that is used to achieve CRM goals. The targets can also be affected by poor planning and can lead to very poor performance and in some cases lob losses. Strategic management plan involves comprehensive collection of all the organization’s activities and respective processes and aligning them with the company’s corporate goals while evaluating the customer’s needs having in mind the company’s vision, mission and the resources available.