Strategic Management: Handling Budget Shortfalls and Achieving Goals

This presentation addresses the critical issue of budget deficiencies within a business organization, specifically focusing on a store trading significantly behind budget. It highlights deficiencies in sales, year-over-year trading, and conversion rates, emphasizing the need for immediate and effective strategic interventions. The presentation proposes actionable steps to drive top-line sales, including improving product quality, attracting customers with offers, and aggressive marketing. It also suggests changes in business strategy to enhance service proposals by adding new services and products. Key Performance Indicators (KPIs) such as trading revenue, operating profit, net profit, conversion rate, Average Transaction Value (ATV), and Units Per Transaction (UPT) are identified as crucial metrics to manage. The presentation concludes by stressing the importance of an effective business strategy, resource utilization, quality control, qualified personnel, and regular performance appraisals to overcome budget deficiencies and achieve organizational objectives. Desklib provides students access to similar solved assignments and resources.

Strategic
Management
Dealing with deficiencies in budget and other
adverse situations in a business organization.

Inability to achieve organizational
objectives
• The store is trading behind the budget by -16%.
• The above suggests that the store has a deficient sales of 16%. A
16% deficiency in trading is a significant deficiency in the overall
trading of a store.
Trading
LY
0 20 40 60 80 100 120
Trading

Behind in LY and conversion
• The store is -15% behind in LY as compared to the
forecast with a further -9% deficiency in ability of the
store to convert its inventories into sales.
• As already visible in the previous slide (Diagram) that
there is a significant gap between actual and budgeted
trading. In addition the deficiency of -15% and -9% in LY
and conversion further paint a sorry picture for the store.

Efficiency diagram of the store
Trading LY Conversion
75
80
85
90
95
100
105
Efficeincy diiagram of the store
Budgeted Actual

Discussion on efficiency
• As is visible from the previous diagram that difference
between the Actual and budgeted performance of the
store is significantly large.
• The store manager must tae appropriate steps to improve
the performance of the store.
• Detailed discussion on such steps are made later in the
slides.

Drive top line sales and increase
service proposal.
Following steps shall be taken to drive top line sales for the
remaining part of the year:
• Improve the quality of products kept at the store.
• Attracting customers by using attractive offers.
• Promoting the products in aggressively in the market.
• Effective use of business strategy (Evans, 2017).

Driving top line sales
• Driving top line sales will help the store to increase
trading significantly in the future.
• The financial performance of the store will improve with
the increase in trading.
• Advertisements and promotional activities shall be helpful
in achieving the above objectives.

Change in business strategy
• In rest of the year the store manager must use different strategy to
drive the top line sale by taking one or more the proposed steps
mentioned inn previous slides.
• Increasing the service proposal would require the store manger to
add new services and products in the store.
• A significant change is to be made in the business strategy to
include new services and products to increase the service proposal
(Christina, Dainty, Daniels, Tregaskis & Waterson, 2017).

Key Performance Indicators
(KPIs)
KPIs include the following:
• Trading revenue.
• Operating profit.
• Net profit.
• Conversion rate.
• Average Transaction Value (ATV).
• Units Per Transaction (UPT)

Managing KPIs
• An effective business strategy shall be in place.
• The strategy shall be implemented within the organization effectively.
• Effective use of business resources of the store.
• Use of proper quality of raw materials and products in business
operations.
• Recruitment of qualified personnel to discharge appropriate functions
within the store.
• Regular appraisal of performance.

References
• Boyd, C. M., Tuckey, M. R., & Winefield, A. H. (2014).
Perceived effects of organizational downsizing and staff
cuts on the stress experience: The role of
resources. Stress and Health, 30(1), 53-64.
• Christina, S., Dainty, A., Daniels, K., Tregaskis, O., &
Waterson, P. (2017). Shut the fridge door! HRM alignment,
job redesign and energy performance. Human Resource
Management Journal, 27(3), 382-402.

Driving conversion
• In order to improve the conversion rate the store manager
must effectively use the inventories in the store.
• Aggressive advertisement strategy along with marketing
will help the store to make better use of its inventories.
• Penetration pricing strategy would help the store to
attract huge number of customers to drive conversion.