Running Head: Spartan Inc.

Change of Strategy

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Running Head: Spartan Inc. Change of Strategy

Spartan Inc. Change of Strategy

Strategy basically means the overreaching long-term or short-term plans set in place by a

company’s management to accomplish its objectives and goals. It is normally the main determinant

of what activities a company engages itself in, the customers it targets and how they will be served.

Companies usually run on long-term strategies that are with time, assimilated into the

organization’s culture. Consequently, changing them might and indeed have proved to be a

difficult task. However, when such changes are prompted by external forces in the market and

especially as a measure aimed at countering competition to ensure the company remains a going

concern, then they really are fundamental (Aksoy & Marshal, 2012).

While it is difficult to predict the exact implications of a change in strategy, there are a

number of common negative and positive results that companies always experience and in the case

of Spartan, they have manifested. First, this change in strategy will help Spartan adapt to the

changes in the market. Competition has risen as we have seen and customers have seemingly

becoming more price sensitive. With the current strategy, it will be difficult for Spartan to compete

on prices and lead time. The new strategy will also enable Spartan to operate and compete

favorably through efficient and cost effective methods. As we have seen, customers are moving

away from the old appetite for customized products that cost extra to quality standardized products

at lower prices. Additionally, the strategy will help with customer retention, reclaim those already

lost to competitors and possibly attract new ones.

The changes will not be exactly easy to implement considering it overhauls the operations

significantly. However, having operated with a more complex strategy that required customizing

customers’ products based on their needs, the new strategy should be easy to implement.
Running Head: Spartan Inc. Change of Strategy

The new strategy requires a continuous flow of operations as opposed to the current job shop

operation system. A shift will obviously imply a sharp increase in material supply to meet the

continuous flow of operations. With customization of products out of the picture, a number of

changes must be made (Gupta, 2009). The over 350 vendors who supplied the company with raw

materials will have to be reduced. This is because the company will no longer require a wide range

of raw materials to meet customization demands. The number of staff in the materials section will

also need to be increased in order to deal with the increased flow of inventory.

It is reasonable to expect an increase in inventory turns from 4 times to 20 times considering

the new strategy in the pipeline. This will be achieved through the flow operations adopted in the

new strategy that requires constant supply of raw materials which in turn releases a high output to

meet the new target. With regards to reduction of the cost of raw materials from suppliers by 10%,

it is actually very achievable. With inventory levels expected to grow by over 500%, raw materials

will be purchased in bulk making use of economies of scale. With economies of scale, prices of

these commodities will conversely reduce with a reciprocal percentage (Gaur et. al. 2015).

Lastly, it goes without say that the lead time in the new strategy will reduce significantly.

The new strategy seeks to cut the lead time by more than half from 14 weeks to 6 weeks.

Standardization is the main idea behind this. The lead time in the old strategy was high because of

the various customization demands by customers. With a standardized continuous flowing

operation, the period taken to make these products will be shorter (Jáč et. al. 2013).
Running Head: Spartan Inc. Change of Strategy

References

Aksoy, A., & Marshall, N. (2012). The changing corporate strategy and its spatial implications.

Regional Studies, 26(2), 149-162.

Gaur, V., Fisher, M. L., & Raman, A. (2015). An econometric analysis of inventory turnover

performance in retail services. Management science, 51(2), 181-194.

Gupta, A. K., & Govindarajan, V. (2009). Business unit strategy, managerial characteristics, and

business unit effectiveness at strategy implementation. Academy of Management journal,

27(1), 25-41.

Jáč, I., Sedlář, J., Zaytsev, A. A., & Zaytsev, A. V. (2013). Principles of creating a cost-cutting

strategy at an enterprise by means of the lean production concept.