Strategic Management the Author of This Response

Strategic Management

The author of this response is asked to answer three major questions about growth strategies and profit gain/losses and the causes therein. The first question asks for three growth strategies that can be offered to Mr. Wilson. The second question asks for possible causes of the company's decline. The final question asks about recommendations to handle a downsizing.

Growth Strategies

There are several growth strategies that the author of this report can offer and all of them are based on the general approach that is undertaken by a store to stop falling sales or improve strong sales even more. The first strategy is a broad-based approach where selection and options are given to the customer in the form of a wide array of styles and/or a wide array of prices. In the case of an Italian furniture importer, the focus would probably be on selection and bargain-seeking customers aren't likely to traipse into the store all that often (GSP, 2013).

A second growth strategy is finding a niche of high-end, high profit furniture and it helps of this niche is not occupied by anyone else in the immediate area or the competition will be much thicker. Such a strategy can make the store a "go-to" place for customers seeking a certain type of good and as long as the reputation is backed up by service, then the outcomes should be good (Traxler, 2012). This touches on another growth strategy and that is a major focus on quality and outstanding customer service. Even if the goods are not the best in the business and even if the prices are not the best for the same goods as compared to other stores, people will pay more for good service because the buying experience is all the more better and any issues that do come up are easily dealt with and with no begging on the part of the customer (Liabotis, 2013).

Decline Causes & Downsize Handling

There are a number of reasons why a decline in sales may be happening. One reason is non-competitive prices due to the same goods being available other places at the same or lesser prices or very complementary goods (e.g. Spanish furniture) being sold at similar or lower prices. Another reason for a decline is that Italian furniture to many people would be a luxury and if economic times are tough (such as they were in 2007-2009 for much of the world), then people will ramp down their discretionary purchase a great deal. A third reason why a company's sales may decline is waning quality in the customer service that is rendered by the staff on hand. This can be due to poorly trained people, lack of people in the first place and/or poor morale (Gandolfi, 2008).

Recommendations for handling a downsizing include figuring out who is essential for ongoing operations, what amount of headcount can be reasonably afforded based on the revenues and sales volume and who will be the first to go if layoffs are necessary. The usual way to figure this out is by looking at the tenure of the employees involved. Another recommendation is to not go too far in cutting payroll and headcount because going too far can hurt the service quality enough that the sales hemorrhaging will get worse, not better (Gandolfi, 2008).