The following example essay on “Environmental Analysis Of Landis Lund” is an analysis of a firm’s performance that includes an analysis of costs, relationships with suppliers and employees.
The basic stakeholder objectives of any supplier are to be paid for providing a product or service, but the objectives are usually more complex than this. Our suppliers can be categorised into suppliers that serve the business needs (paper, stationary, car hire), and those that serve the product (grinding wheels, gauges, sensors).
The suppliers we use for the business don’t really get changed that often as we generally use standard products. Unless the supplier introduces an unjustified price increase, we will remain with that supplier.
With the advent of the Internet I feel we could reduce costs if consumables within Landis Lund. As well as there being many price comparison websites, that allow you to choose, there are also sites that are basically mail order via the web, they don’t incur high labour costs as they don’t have any high street shops to finance.
This approach has been mentioned to senior management but they feel, at this moment in time, the administrative costs to Landis Lund to setup an new supplier account, set up payment terms etc, do not justify the time spent searching for a cheaper alternative than what we already use.
The objectives then of our business suppliers are to receive regular business from Landis Lund as we stay in business, the amount of revenue they will generate is not really dependant on busy we are, just as long as we are in business.
The business objectives of the product based suppliers differ in the fact that the more machines we produce, the more business they will receive from us. Their objectives are to produce reliable goods for Landis Lund so we will continue to use their product. We have very few reliability problems with suppliers as they are also providing complex equipment, so the investment and research into these products is of a very high standard.
Our product dependant suppliers are either chosen by our engineers or chosen by our customers. As machines are always variations on a theme, the knowledge of supplier’s components is high so our engineers can design assemblies using products they know. Headaches can occur when a new supplier insists we use their preferred supplier that we have never used before. The functions of the components this new supplier provides will usually be the same, but if they are cosmetically different then some reengineering has to be done.
Landis Lund has in the region of six hundred and fifty, but only around fifty are vital to the company. These fifty are responsible for supplying the key equipment for our machines, equipment that has had huge investments in the form of R&D. Over the years we have built up excellent partnerships with our main suppliers and we both benefit from them prototyping their products on our machines.
The prototyping allows the suppliers to recreate real life scenarios, in which to evaluate their products. These suppliers are market leaders in their industries, allowing Landis Lund to capitalise on being the first users of such products and maintain our technological advantage.
Unfortunately the budget for R&D has been slashed in order to reduce costs, while we are still out in front in terms of technical superiority we are losing orders to low bid. The reduction in our R&D budget has meant that the prototyping has to be done on “live” projects, resulting in some embarrassing longevity problems once the machines are out in the field. While the majority of these live tests are serving us well, it may only be a matter of time until they cause a serious headache for the customer and ultimately a loss of future orders.
The supplier payment process has recently been changed as well. What was happening was that the Financial Director was only allowing a fixed amount per month to be allocated to supplier invoices. The purchase clerk always sorted invoices into supplier name order, and worked through the invoices until the allocated amount had been reached resulting in suppliers starting A, B, C etc getting paid every month. This process continued until we got put on stop from some major suppliers with company names lower down the alphabet.
While some suppliers are chosen for us through customer specifications, our continued collaboration with our preferred suppliers is vital for Landis Lund’s survival. Stakeholder analysis of employees. While our partnership with major suppliers is vital to our technological leadership, it’s the employees within Landis Lund that enable this synergy to be created. The objectives of Landis Lund employees is the same of a supplier; they expect to be paid for the service they provide to the company.
Again, this needs to be expanded. Different employees have different objectives: Some employees want to do as little as possible, go through the day doing only what is asked of them, and at the end of the week collect their wage. Others feel like they have more to offer and a better work ethic, they seek ways in which to improve the company, they understand that if they can be more efficient and productive, the company will become more efficient and productive, while very few see Landis Lund as a stepping stone to greater things, using Landis Lund to gain experience and knowledge that they will use elsewhere.
Every single manager apart form the Finance Director has completed a Landis Lund apprenticeship. This allows the continued evolution of grinding machine know-how to be passed down. The technical knowledge of our engineers has resulted in many machine tool related patents being accredited to Landis Lund. The excellent working conditions and wages that Landis Lund provides results in a very low rate of staff turnover. The highest rate of staff turnover is during the apprenticeship when you know one way or the other if a life of engineering is for you.
Landis Lund is always quick to implement any new legislation regarding employee welfare, this maybe to do with being influenced by our US parent company, where the blame culture there can result in employees suing their employers for failure to provide the latest safety equipment. Landis Lund provides free eye tests for VDU operators, free safety glasses, free protective clothing and footwear depending on risk.
While the current crop of managers and engineers will stand Landis Lund in good stead for at least a generation, the recruitment of apprentices whose passion is engineering is slowly declining. Indeed we have lost several key apprentices lately who wanted to pursue a university degree as well as still working at Landis Lund. But in their wisdom senior management failed to see the value add that this extra knowledge can provide and made them choose, hardly surprising that they opted for university.
Apprentices are usually split into craft and technicians, craft apprentices are trained up to work in the machine shop, while technicians are trained up to work as service engineers or in the drawing office. If the UK manufacturing industry keeps reducing the way it is, both types of apprentice could become scarce. The craft through outsourcing to low labour countries and the technicians could not be as high calibre as is required.
Landis Lund employees objectives are fulfilled across the workforce, for those that are here just to get paid, providing they complete what is asked of them, they are OK. If you want to better yourself and the company, training is available where appropriate (workers in the machine shop do not get funding for IT courses and accounts staff don’t get trained on the fork lift truck).
Stakeholder analysis of Overseas Sales agents. Agents play a pivotal role in the customer relations process. They are mainly used in countries where English is not the primary language. We have long standing partnerships with many agents in different countries. This has allowed the agent to become very familiar with Landis Lund machines so explaining the specifications to a potential customer is easier.
The objective of a Landis Lund overseas sales agent is to get paid for a service he provides. The service he provides is to be a link between the customer and Landis Lund. The agent is tasked with chasing the customer for outstanding items and to act as mediator in any dispute. We let the agent front any contact with the customer, this is to allow then to communicate effectively what we are trying to achieve.
Our philosophy is to use one agent per country within the EU. We have agents in France, Germany, Spain and Italy. The same agent can be used in different countries, Polack for example are our German agents as well as our Swedish agents.
As well acting in a sales capacity, some agents also work as service engineers. The agents come to Landis Lund for their service engineering training. This liaison allows the agent full cycle involvement; From the quotation and sale of the machine, through machine build and acceptance and then installation. As agents are on commission it is in their interest for Landis Lund to be successful, it also allows a more aggressive form of sales within the agents country.
Unfortunately due to this commission (usually 3%), then this is obviously a loss in profits for Landis Lund. But for this 3% they do provide an excellent service, a service that we would find very hard to replace with our long established agents. Not only do they have tacit knowledge of our products, but the customer relation’s skills they have maybe hard to instil in a Landis Lund employee. While it has been suggested that we try and phase out agents in favour of training up our service engineers to speak another language, the risk in a loss of customer relations is too high to take.
Our recent penetration into China has reversed our agent’s philosophy. We are trying to use as many agents as we can to spread ourselves further and hopefully increase awareness of Landis Lund’s products. At each end of the economic spectrum you have pure capitalism and socialism. Pure capitalism is only an economic theory and doesn’t actually exist in real life.
Also known as Free Market, in this market money is king, both to the consumer and to the supplier. Private investment and entrepreneurs are the norm. Companies sell products at the price they want, to who they want. The same goes for the consumer, they are free to spend their money on what they want. In capitalist societies there is little or no barriers to entry, anybody with an idea and some capital can start up a business. This is a huge benefit to consumers as the fierce competition between suppliers, forces down prices and increases quality. In a free market there is no involvement from the government, the State does not interfere in how businesses are run and regulated.
The individual or the company does their own planning, they are free to set their own agendas, create strategies and make plans that are tailored to suit their needs. Capitalism forces many different levels of personal wealth as companies and consumers are free to buy and sell at any price. Nearly every product has examples at either end of the price scale, from houses and cars, to clothes and electrical items.
In fact, if you’ve got the money, you can buy virtually anything you want. An excellent example of this is using the auction website eBay, where everything and anything is for sale. A quick search shows that I could purchase a $24,000 grinding machine!
Although capitalism promotes growth, competition and efficiency, there is also a downside. Companies and industries that are out to make a quick gain can end up making huge losses. In the search for profit, resources can quickly become scare, forcing the closure of factories and companies.
These closures can have a knock on effect on the local economy, businesses that were created to compliment these large industries may also have to close. Unemployment quickly gathers pace throughout the region. Outside investment ceases, businesses that were there due to high population relocate. No-one can afford to move house, and no-one wants to buy a house in these areas. Social standards can drop and crime levels increase.
The closest pure capitalist economy is considered to be America where people are able to buy and sell almost anything, resulting in wealth for some and poverty for others. This can be seen in the state of California, where the so called “Silicon Valley”, if treated as a separate economic market would be the worlds fifth largest, where as in the slums of Compton deaths by firearms are one of the highest in the world.
Where as Capitalism promotes business to be profit orientated, Socialism shares the wealth. The government runs socialist economies. It is they who decide what is to be made, who is to make it and with what. (Also known as Planned Economies).
Every citizen works for the country, there is no unemployment as there is always something to be done. The exclusive way in which the government controls the economy can cause great inefficiencies. It is perceived that the government are experts in business and therefore have the ability to make fundamental economic decisions. It is because of this central planning that socialist governments only produce a limited range of goods, goods whose production are easily managed. The businesses are usually entered around agriculture, raw materials and mass production of basic, low quality products. As there is little or no imports, if the product cannot be made from materials within the country, it isn’t usually made.
While pure capitalism is only a hypothetical economy, there are a number of socialist countries. Large, highly populated countries such as China and Russia, with an abundance of labour and materials are good examples. Although many westerners see socialism as an oppression or inefficient way to run an economy, it removes boom and bust cycles, the decomposition of social values in areas in areas of high unemployment and the corruption that can be created due to people’s obsession with money.
This isn’t to say that socialist countries are free from corruption; usually there is a strong black market in these countries for western products, such as Levi jeans. Black markets begin because the State controls the price of products, if they set the price artificially high, then the demand of getting these products at a cheaper value in created. The inefficiency of the import/export market of socialism also creates black markets for products as the government will not import goods that can be manufactured in its own country.
An economic system isn’t either capitalist or socialist. For non-socialist economies the economic system is said to be mixed. The mixture comes about by companies being free to run their businesses how they see fit, but the government provides the rules and regulations within which they operate. The government usually controls the businesses that are seen to be for the people; the trains, water, electricity, refuse collection.
For the U.K many of these people business were privatised under the Thatcher government, the privatisation was a process in which the government palmed off decaying infrastructures that needed heavy investment, allowing them to become more efficient through business savvy people running operations as opposed to politicians and also to generate extra funds for the government.
Workers in mixed economies also contribute to the countries welfare by paying taxes through their wages and purchases. It is in the government’s interest to create an economic system that allows businesses to flourish and keep people in jobs. The more workers, the more tax is paid through wages and the more disposable income citizens have, spending more and contributing more taxes, and the more workers there are, the less the government have to give back in the form of benefits.
The UK is an example of a mixed economy. It is within this mixed economy that Landis Lund operate. We also benefit from having the “capitalist” funding from our US parent company, as well as making inroads into socialist economies such as China.