BBB is a leading UK supplier of coffins and funerary goods. Established in 1954, the company proved to be very successful and the business grew to comprise 6 manufacturing sites supply coffins. By 1961 the business also supplied cremation urns and ornamental masonry and headstones and prided itself on being able to meet telephone orders within 48 hours. Its main form of marketing was a product catalog which was delivered twice yearly to funeral directors in the UK.
In 1970 an opportunity arose to acquire “F.A. Salt Funeral Directors” which operated in over 50 locations in the UK. BBB borrowed heavily to make this acquisition and did not become debt free until 1979. The acquisition allowed BBB to achieve a greater profit margin on its products and it became involved in organizing every aspect of funerals; arranging catering, burial plots, religious services etc. The extra profit was soon lost in the burden of clerical work and administration.
The business restructured over a five year period from 1985 to 1990. BBB invested in computer equipment to handle accounting and basic administration; and moved its manufacturing base to Eastern Europe where labour costs were much lower than the UK. Customer expectations increased over the same period and the funeral director premises were obliged to maintain their own display stock, customers also expected to have much more input to the funeral planning thus increasing the time demands on staff.
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The funeral business is unusual, there is a very short window of opportunity to provide the products and services required and a great deal of sensitivity is required when dealing with grieving relatives. Sometimes for religious reasons, burial must be completed within a very short space of time.
In 1998 BBB invested heavily in supply chain management (SCM) software to allow inventory tracking across the UK and this investment paid for itself in 5 years. In 2005 BBB started a new company called Twilight which specialized in prepaid funerals. The idea was that older people would pay a weekly fee, and upon their demise, their funeral expenses would be met in full. From its inception to date, BBB and Twilight have operated independently.
From 2000 to 2006 BBB experienced significant growth and acquired another chain of funeral directors. The SCM system was unable to cope with this growth well. The inability to source coffins and other goods quickly has led to managers maintaining a lot of floor stock thus tying up money in inventory. Because the existing SCM system is dated and difficult to use, managers have developed their own unofficial network. If a particular coffin is needed quickly, a manager might phone up to 12 other managers to see if the coffin can be sourced from floor stock rather than BBB warehouses. This increases shipping costs and means that the stock control is likely to be incorrect until inventory is reconciled at each financial quarter.
As the Global Financial Crisis has developed, BBB’s margins have dropped to the point at which it is barely profitable. BBB has over eight million pounds in reserve and its credit is good. However management are not sure how best to proceed from this point. Accordingly they have decided to bring in a consultant to help them.
1) How should BBB go about finding a suitable consultant? Are there any precautions that they should take?
2) Carry out a strategic analysis of BBB by discussing the internal and external business environments.
3) Formulate an IT strategic vision and areas of priority for BBB. Your analysis should be presented in the form of a business report* to the management of BBB. *A report differs from a theory paper in that it is structured under specific headings. Such reports comprise: cover page, table of content, executive summary, main recommendations, scope, approach, analysis, limitations, conclusions.
4) Now outline the processes you would follow to achieve (3) – e.g. Who would you involve and why? What methods would you use to ensure that your understanding was sufficiently complete?
Completing this assignment will primarily develop professional knowledge in IT
strategy analysis and formulation and information literacy. In addition, it develops problem
solving and decision making skills and communication abilities.
The report should be at least 2000 words and not more than 3000 words.
Concise, written answers to the analysis, demonstrating your understanding of business/IT strategy issues contained in the case, are required. In other words, marks will be awarded for work that demonstrates a clear understanding of the key issues contained in the case and the application of relevant knowledge.
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