PPMP 20009 Leading Lean Project: AEW Profitability & Risk Management

This report identifies the factors contributing to AEW's diminishing profitability due to increased market competition and customer switching preferences. It employs various tools like the PDCA cycle, Fishbone diagram, Pareto analysis, cause and effect analysis, scatter diagrams, control charts, and VOC tool to determine the root causes, including new market entrants, penetration pricing strategies, and high staff turnover. A risk management plan is developed to address these issues, and recommendations for appropriate leadership styles are provided to support sustainable business objectives. The analysis aims to assist AEW in regaining its competitive edge and ensuring long-term sustainability by focusing on customer retention and process improvement.

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Executive summary
The study will be identifying the different factors relating to the enhanced competitiveness in the
different industries and the manner in which it affected customer loyalty. The profitability of the
organization is often affected through the switching preferences of the customers. The decrease
in the profitability of the businesses has affected the sustainable approach of the same. The report
will identify the different issues that are faced by AEW through the utilization of different tools.
The report will also develop a risk management plan for mitigating the risks. The leadership
roles played by the administrators helps an organization in upholding the competitive edge of the
same while operating in diverse global economies. Therefore, the research will anticipate the
different leadership roles that might be implemented in order to bring forth sustainable changes
in the organization.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Question1. Identification of the root cause(s) of the problems...................................................3
PDCA Cycle............................................................................................................................4
Fishbone diagram for cause analysis.......................................................................................6
Pareto Analysis........................................................................................................................7
Cause and effect analysis.........................................................................................................7
Scatter diagram........................................................................................................................8
Control charts...........................................................................................................................8
VOC tool..................................................................................................................................9
Question 2: Develop a risk management plan by ensuring the identified problem solutions.....9
Question 3: In your opinion what leadership style should be adopted......................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................14

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Introduction
Organizations undertake an assessment of the different risks that are faced by the same in
order to mitigate the same as per the objectives of sustainable growth. Hammer (2015) stated that
the different modifications that are undertaken by the organization are dependent on the
evaluation of the risk factors. The competitive business environment exposes an organization to
different challenges, which might affect the sustainable growth criteria of the same. The
identification of the root cause of the issue will be supporting the organizations in upholding
their proficiency while planning out the different strategies in order to mitigate the challenges
and barriers.
The purpose of undertaking the report is to identify the different emerging issues that are
encountered by AEW through the utilization of different tools and frameworks. The
identification of the issues will be followed by a risk management plan for providing different
recommendations as per the priorities faced by the venture. The study will conclude through the
identification of the leadership roles for supporting the sustainable objectives of the business.
The identification of the leadership style and the role of thesame in mitigating the risks will help
in aligning the idea of sustainability with the business.
Discussion
Question1. Identification of the root cause(s) of the problems
The concerned organization, AEW, face a significant threat due to the new entrants in the
market which provides the customers with an opportunity of switching from one brand to
another. The lucrative business environment has attracted the attention of most of the

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entrepreneurs who decided to enter the markets of the concerned business. On the other hand, the
concerned organization also faced issues in retaining the existing customer base as the
competitors and the new entrants proposed the offerings in a significantly lower price structures.
The penetration pricing strategy of the competitors maximized the competition in the market
which has affected the smooth functioning of the business and thereby retaining the customer
base for sustainability of the same. The enhanced competitiveness in the markets affected the
Revenue streams of AEW, which has enhanced the rate of staff turnover in the business. The
enhanced rate of staff turnover affected the smooth functioning of the processes in the
organization and thereby decreasing the productivity of the same.
PDCA Cycle
The PDCA cycle aims at bringing forth positive changes in the organizational situation and
position through the enumeration of different ways for facilitating the continuous improvement
process. The continuous improvement of the processes will be supporting the organization in
upholding the efficiency of the operations as per the objectives of holding on to sustainability.
Hibi et al. (2016) stated that the PDCA cycle plays an important role in analysing the data
collection process and while assisting the firms in undertaking the new projects. The first stage
of the cycle focuses on identifying the 5 whys’. As per the case of AEW, the 5 whys are:
 Why is the production process of AEW delayed?
 Why is the management compromising the rate of profitability of the firm?
 Why AEW is facing issues in coping up with the competitive business markets?
 Why the new entrants are producing substitute products in the lower ranges?

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 Why the new suppliers are entering in the market?
Stage 2
Zhou, Cui and Huang (2017) stated that the second stage assists organizations in
undertaking evaluations of the root causes of the issues that are faced by the same. Evaluation of
the issues helps an organization in upholding the efficiency of the operations. As per the case of
AEW, the assessment of the root causes will be supporting the organization in identifying the
budgetary reforms that might be undertaken by the same in order to sustain in the competitive
markets. On the other hand, the assessment of the pricing structure followed by the competitors
will be supporting the organization in upholding the efficiency of the product offerings for
attracting the attention of the consumers.
Stage 3:
The stage enumerates the strategies that might be implemented by organizations in order
to cope up with the challenges that are encountered by the same. The key challenges that are
encountered by the concerned organization are dependent on the threat of new entrants in the
market and the penetration pricing strategy for attracting the attention of the customers.
Therefore, the concerned organization, AEW, must take steps to bring forth changes in the
processes and the pricing structure in order to enhance the competitive strength for sustaining the
markets.
Stage 4:
The fourth stages focus on the implementation of the strategy in the organizational
processes in order to facilitate the smooth functioning of the systems as per the objectives of

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sustenance. The fourth stage will be supporting the concerned organization in implementing the
relevant strategies in the organizational operations in order to gain a competitive edge. Hibi et al.
(2016) stated that the enumeration of the different risk factors and the implementation of the
strategies will assist organizations in upholdingcustomers retention.
Fishbone diagram for cause analysis
The fishbone analysis helps an organization in understanding the cause- effect relation
between the challenges that are faced by the same and the performance of the firm. It helps an
organization in upholding the efficiency of the operations through an assessment of the different
challenges that are faced by the same. Coccia (2018) stated that the utilization of fishbone
analysis helps an organization in upholding the efficiency of the operations through
brainstorming ideas for mitigating the challenges and barriers faced by the same in the markets.
As per the case of AEW, the fishbone diagram will be supporting the organization in upholding
the efficiency of the operations through an assessment of the potential causes for the challenges
faced by the firm. The utilization of the fishbone diagram on the case of AEW has helped the
organization in understanding the manner in which the increased number of suppliers enhanced
market competitiveness. Luo, Wu and Duan (2018) stated that the utilization of the fishbone
diagram wouldassist the organizations in identifying the root cause of the uncertainties and
enumerate strategies for mitigation. The maximum availability of the substitutes in the markets,
in the case of AEW, has affected customer loyalty towards the firm. On the other hand, the
increased opportunities relating to growth has supported the new entrants in affecting the overall
sales and market position of the concerned organization.

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Pareto Analysis
The Pareto Analysis tool helps an organization in identifying the benefitsand losses that
might be encountered by an organization while bringing forth modification in the existing line of
processes.AbTalib, Abdul Hamid and Ai Chin (2015) stated that the key changes in the
organizational operations are dependent on the collaborative functioning of the workforce. The
issues that are encountered by the concerned organization are dependent on thehigh rate of
turnover in the workforce, which has affected the productivity of the businesses. Hart et al.
(2015) stated in a research finding that the market position of a business is dependent on the rate
of profitability. In this relation, the enhanced competition in the markets affected the revenue
streams and profitability of the AEW, which resulted to higher rate of staff turnovers.
Maximization of the rate of staff turnovers in the market has affected the smooth functioning of
the processes while diminishing the competitive strength of the same. On the other hand, the
increasing rate of job opportunities in the competitive markets has affected the employees’
loyalty towards the concerned organization. Therefore, the lack of employee retention in the
organization affected their capability ofachieving the competitive edge.
Cause and effect analysis
The utilization of the cause and effect relationship analysis helps organizations in
identifying the root causes of a particular crisis and thereby facilitates strategies for supporting
the smooth functioning of the venture. Hartrell, Steeves and Hudis (2018) stated that the key
changes in the organization is dependent on the assessment of the cause and effect of the
strategies on the organizational performance. The utilization of mind map and brainstorming
tools will be supporting the concerned organization in establishing the effect of lower pricing
strategy of the competitors on the overall organizational competitive strength. As per the case of

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AEW, the competitors are providing the offerings at a lower cost due to the minimized cost of
raw materials. The penetration pricing strategy of the competitors has helped the same in
attracting the attention of most of the customers in the market. On the other hand, the slightly
high priced offerings of the concerned organization are encountering a diminishing sales volume,
which affected the revenue streams of AEW. It has also affected the profitability and the
competitive edge of the business in the markets.
Scatter diagram
Magota et al. (2018) stated that the Scatter diagram assists an organization in identifying
the qualitative relationship between two variables. As per the case of AEW, the variables that are
being considered is the impact of profitability on the overall growth and expansion of the
business in highly competitive markets. The strong connection between the organizational
profitability and growth denoted that the decreasing profitability of AEW has affected the
smooth functioning of the business in the competitive markets.
Control charts
The control charts helps an organization in monitoring, improving and controlling the
processes as per the priorities faced by the same. Gejdoš (2015) stated that the control chart helps
an organization in upholding the efficiency of the operations through enumeration and mitigation
of the risks. The concerned organization, AEW, faced challenges due to the new entrants in the
market. The utilization of the control charts will be supporting the concerned organization in re-
allocating the resources as per the needs of the business of coping up with the enhanced
competitive markets.

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VOC tool
Ansar et al. (2018) stated that the utilization of the VOC tool helps an organization in
identifying the needs and requirements of the customers. The identification of the Voice of the
Customers will be supporting the concerned organization in identifying the interests of the
customers while switching from their brand to the offerings of the new entrants. The
identification of the customer concerns will be supporting the organization in upholding the
efficiency of the operations as per the needs of the business. The utilization of the tool will be
supporting AEW in understanding the impact of the lower prices on the consumer buying
behaviour and thereby support the organizational redesigning procedures for attracting the
customer base.
Question 2: Develop a risk management plan by ensuring the identified problem
solutions
The assessment of the different challenges that are faced by the organizations affects the
objectives of sustainability. However, the concerned organization might undertake the different
activities for mitigating the uncertainties faced by the same.
Recruitment and selection process:
The Quality management initiatives of organizations are supported through the recruitment of
skilled employees who are aware of the quality standards that are to be adhered. The recruitment
of fresh talent ion the organizationwould help in improving the efficiency of the workforce. As
per the case,implementation of effective recruitment process will be supporting the business in
enhancing the productivity of the venture.
Improving the wages structure:

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Enhancementof wage structure will be assisting the business in decreasing the staff turnover
rates. Implementation of standardized wage structure will be supporting the concerned
organization in maximizing staff retention. Staff retention in the organization will help the same
inavoiding the costs of recruitment and retain the skilled workforce for supporting the smooth
operations.
Organizational culture development:
The development of the positive organizational culture will ebb helping the organization in
maximizing the productivity of the same. The implementation of positive workforce culture will
helps the concerned venture in motivating the employees and empowering the same to achieve
the collective goals of the business.
Training facilities for improving efficiency:
Training of the employees helps an organization in upholding the efficiency of the workforce
operations as per the objectives of the same. In order to sustain in the competitive business
environmentAEW must take steps to empower the employees through induction of proper
training to the workforce. Training of the employees would aim at enhancing the skills of the
employees for satisfying the needs of the customers.
Strategic marketing analysis:
The strategic marketing analysis helps an organization in enhancing the operations through an
assessment of the current market position of the business. As per the case of AEW, the
concerned company must undertakea marketing assessment in order to position their offerings as
per the needs of the customers. The suitable positioning of the propositions will be supporting
the organization in achieving the competitive edge. On the other hand, Hart et al. (2015) stated
that the marketing analysis initiatives of the organization help the same in identifying the

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strengths and weaknesses of the competitors for facilitating suitable developments. As per the
case, the marketing assessment that might be undertaken by AEW will be supporting the same in
identifying the capabilities and competencies of the competitors while making a market
expansion.
Public relations:
The public relations initiative of an organization helps in retaining the customer base as per the
priorities. Hart et al. (2015) stated that the different CSR activities undertaken by the
organization help a venture in upholding the efficiency of the operations. Therefore, the
concerned organization must take steps to develop suitable PR initiatives in order to maximize
customer and community engagements for rapid growth of the business.
Promotional activities:
Social media integration of an organization helps the same in supporting the smooth functioning
of the marketing initiatives. The promotional activities that are undertaken by the organizations
help the same in attracting the attention of the customers to the offerings made by the same.
Utilization of the social media will be supporting the concerned organization in attracting the
attention of large number of customers. On the other hand, the organization might also utilize
different promotional campaigns and celebrity endorsements in order to attract the attention of
majority of the customers in the competitive markets. As per the case of AEW, the developments
in the promotional aspects will be supporting the venture in upholding the efficiency of the
operations as per the objectives of attracting the attention of the customers.
Question 3: In your opinion what leadership style should be adopted
Leadership quality helps an organization in upholding the effectiveness of the operations as per
the needs of the business. As per the situation of AEW, the servant leadership quality will be