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There is no doubt that small businesses have some development peculiarities that differ considerably from large corporate and multinational companies. Small businesses require less financial capital, human resources and operations. However, at the same time they require considerable owner’s participation and control over all manufacturing, serving and marketing processes. In regard to importance to government, even though small businesses contribute less taxes and social responsibility, it is a basic element of a country’s stable economy. Small businesses should be well-protected and stimulated in each country in order to avoid monopolies and lobbying.
At the same time, it is important to underline the fact that running a small business has many challenges and problems. It has to compete with well-known corporations when offering products and/or services. In addition, with the rapid globalization process, e-commerce is increasing the competition level for small local companies, because people prefer ordering goods via the Internet. That is why small companies are trying to improve their position in the market and increase their level of competitiveness. Comprehensive training is one of the effective ways in which such goals can be accomplished.
Al's Stereo and Electronics Store is one of small businesses operating in the stereo and electronics market. It is a small organization selling electronic and stereo devices to local customers. The company is located in Wisconsin, USA (Facebook, n. d.). Thus, the paper is aimed at developing a strategy to improve the company`s business model through comprehensive training proposal in order to increase its competitiveness in the market.
The Al's Stereo and Electronics Store has many challenges related to its performance that should be predicted in order to ensure a stable and sustainable development of the company in future. One of the main challenges that small companies, including the Al's Stereo and Electronics Store, are facing is an increased level of competition. The main competitors of the Al's Stereo and Electronics Store are large consumer electronics stores. They have a wide range of audio/ stereo, video, mobile and other equipment. Usually such large stores have lower prices and a differentiated range of products. In addition, the Al's Stereo and Electronics Company is competing with internet companies that are located all over the world and can make sales using an e-commerce platform. Considerable competition in the market is created by Amazon and eBay, companies operating on the Internet. They are known all over the world, have high level of goodwill and customers loyalty thus having a large market share in the industry. That is why the core challenge for the company is to increase its level of competitiveness.
Another important fact that should be taken into consideration is an increased popularity of e-commerce. More and more customers prefer buying goods online and have them delivered directly to their homes. That is why another challenge the Al's Stereo and Electronics Store has to face is to follow the market trends and implement e-commerce to target a wide range of customers.
The third challenge is related to macro-economic conditions of the country; it is the interest rate increase. According to the latest survey of the 2017 TD Bank Small Business, small businesses consider the interest rate increase as the most serious challenge in their sphere (Beattie, n. d.). The Al's Stereo and Electronics Store is not an exception. Due to the fact that it is has a low amount of its own financial resources and monetary capital, it is very dependent on the external economic conditions. Thus, the considerable challenge for the Al's Stereo and Electronics Store is interest rate increase in the country.
Another important challenge faced by the Al's Stereo and Electronics Store is the changes in the health care system. With the change of political sources in the United States after the presidential elections, small businesses have to adapt and make the business flexible to the new health care regulations (Beattie, n. d.). There is no doubt that healthcare costs as well as regulation changes have a considerable impact on business entities. That is why the changes in the system are challenging for the Al's Stereo and Electronics Store.
Gaps in Business, Their Effects and Solution
In order to develop an effective strategy aimed at improvement, it is important to identify the reason and character of a challenge. However, the main reason for any challenge a company can face is the development gap or weak side of the business entity. The first challenge is related to a high level of competition in regard to capturing the potential target market and decrease of market share. As a result, profitability of small businesses is rather low. It is important to emphasize that it is rather hard to eliminate the competition; however, it is possible to avoid it. The Al's Stereo and Electronics Store should create as many competitive advantages as possible. In addition, the company should develop unique business characteristics that would differentiate it from its competitors. For example, the Al's Stereo and Electronics Store may choose the strategy of providing a wide range of presales and aftersales services. The company has an opportunity of becoming more competitive if it provides additional services while selling video and stereo equipment. In such a way the Al's Stereo and Electronics Store will have competitive advantage and an opportunity to get higher market share.
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In regard to the e-commerce challenge, it is a very considerable gap. Most of the companies, providing traditional in-store selling, are also selling online through an e-commerce store. In such a way they have an opportunity to widen their target audience and increase the sales. On the contrary, the researched company (the Al's Stereo and Electronics Store) does not have an informative web-site. In such a way, the company is losing a possible market share. That is why the Al's Stereo and Electronics Store should develop and implement an effective, interesting and functional web-site that would give an opportunity to work on the e-commerce basis as well. Moreover, the organization has to employ high tech software and professional e-commerce employees. This measure will provide the company with an opportunity to increase its target audience, market share as well as profitability of the company.
The third and the fourth challenges are related to governmental issues that affect the company’s performance in the market. Increased interest rate and changes in the governmental policy related to healthcare have a considerable effect on the company’s performance. Small businesses need to increase expenditures on operational activities and human resource welfare. Considering the fact that small businesses have low amount of financial resources, such challenges are very hard to overcome. It is rather hard for small companies to increase the expenditures. However, such small businesses as the Al's Stereo and Electronics Store need to update their financial strategy and look for the opportunities to attract additional financial resources from outside sources.
Considering the fact that the Al's Stereo and Electronics Store has many challenges to be solved, there is a combination of training strategies that should be used. First of all, the company should use role-playing as it needs to open several new directions of activity. Pre-sales and after-sales services as well as e-commerce have to be implemented by the Company. That is why the employees that are already working in the company have to acquire new knowledge and skills in order to be able to perform their old and new duties as the company is going to perform new activities (e.g., online sales). They will have to learn the ways of effective communication with customers while providing sales services, helping customers make a choice, promoting online sales, insuring the chosen products are shipped and getting customer feedback in regard to services and goods. In the process of the role-playing training strategy, the employees will be able to acquire new knowledge and skills that will give them an opportunity to provide a more diversified range of product and services to customers.
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The most effective way to acquire new knowledge and skills is to implement an effective on-the-job training strategy. The workers of the Al's Stereo and Electronics Store Company may learn how to run an e-commerce business actually in the process of implementing various tasks at work. At the same time, experienced staff and trainers should provide guidance, supervision and tutoring to the company`s workers in case they have questions or misunderstand something (Hamel, n.d.). In such a way the company benefits greatly as the work is done and the training process is taking place. On–the-job training strategy is very beneficial for the Al's Stereo and Electronics Store as it can help the Company overcome its challenges.
The challenges related to high interest rate and changes in healthcare system need to be dealt with by the financial management of the company. That is why the company`s top management should have an adequate training from time to time. Financial literacy and education should be developed at the company’s owners and top-management level. Such measures are needed in order to develop an effective financial strategy aimed at acquiring financial resources. The combination of formal instruction and self-directed learning training methods should be used in order to provide the top management of the company with new knowledge (Hamel, n.d.). The increase of financial education of top management will solve the problems of additional financing.
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The last but not the least employee behavior training strategy should be implemented at the Al's Stereo and Electronics Store. There is no doubt that the company finds it rather complicated to overcome the existing challenges. That is why all employees should be open to changes and work hard to improve the company’s situation. The Employee behavior training will teach the employees how to accept the changes and overcome the challenges as an entire business entity. It is a type of corporate culture and effective thinking development among the employees. In spite of the fact that employee behavior training strategy is not aimed at solving any of the challenges, it helps the employees overcome each challenge while developing right attitude.
The training strategies offered to improve the market condition of the Al's Stereo and Electronics Store are highly effective and efficient. First of all, it is due to the fact that the offered strategies give an opportunity to solve the problems that occurred. The solution of the challenges gives an opportunity to increase the target audience, the market share, as well as the company’s profitability. On the other hand, the offered training strategies are not expensive for a small business to implement. Role playing, self-directed learning and employee behavior training strategies do not require experts and tutors from the outside. However, on-the-job training strategy will require expenses due to the fact that the outside professional help should be used. However, at the same time, the main work should be done during the implementation of on-the-job training strategy. Thus, the return on investment ratio of the offered training strategies for the Al's Stereo and Electronics Store will be rather high.
Taking everything into account, the conclusion can be made that the Al's Stereo and Electronics Store Company is a small business that is currently faced with many challenges. The main challenges that the company should overcome is high competition level, increased e-commerce popularity, raise of the interest rate and governmental healthcare policy. All of these challenges are rather risky and hard to overcome for the Al's Stereo and Electronics Store Company. In order to improve the market position of the company, it should launch an online store, develop pre- and after sales service and attract additional resources to make the company stable. The combination of such training strategies should be used by small business representative, namely on-the -job training, role playing, self-directed learning and employee behavior training should be used. All of these strategies will help the company create an effect of synergy for the better final result and considerably improve its market position.