(Solution) CIPS Advanced Level Commercial Management Assessment

  • In summary, this business report has evaluated the global commercial strategy within Eco2Solar organisation. As a best practice of leveraging on competitive advantage and market dominance, organisation strategy has been identified as instrumental.
  • The findings of this report indicate that there exist a direct relationship between the strategy and corporate, business, functional structures. This is with various methods which include predictive and descriptive approaches used in the analysis of supply chain.
  • By leveraging on various tools such as Pestle generic strategies, Mendelow stakeholders’ analysis and risk register, the need for resources and also stakeholders’ involvement in the commercial strategy has been evaluated.
  • This is while managing costs overruns and supply chains managed appropriately.

New User Gifts

First Order Deal get Ksh 200 Off.

KaribuCustomer

Original price was: $30.00.Current price is: $10.00.

Payment Methods:

Description

Solution

Executive Summary

This business report focuses on evaluating the global commercial strategy within Eco2Solar organisation. As a best practice of leveraging on competitive advantage and market dominance, organisation strategy has been identified as instrumental. The findings of this report indicate that there exist a direct relationship between the strategy and corporate, business, functional structures. This is with various methods which include predictive and descriptive approaches used in the analysis of supply chain. By leveraging on various tools such as Pestle generic strategies, Mendelow stakeholders’ analysis and risk register, the need for resources and also stakeholders’ involvement in the commercial strategy has been evaluated. This is while managing costs overruns and supply chains managed appropriately.

The development of a future global corporate strategy has been identified to be effective for reducing cost-overruns, improving their business operations and market dominance. This has been identified by evaluating the set of Key Performance Indicators (KPIs) which influence the organisation contract management and supply chain volatility.

Lastly, informed by identified gaps, various recommendations can be developed which include;

  • The organisation can invest on modern technologies such as artificial intelligence, blockchain and machine learning for enhancing their operations
  • Eco2Solar can use flexible and open book pricing which could influence development of collaborative and partnership suppliers’ relations which would be of immense benefits to their operations
  • As a best practice in future, they need to involve the SCM since they play an instrumental role in predicting and satisfying end customers’ demands back through
  • There is a need to consistently update their supply chain to identify both the possible internal and external risks. This is since risks are continuously evolving and as such informing need to either tolerate, treat, transfer or terminate

 

 

Table of Contents

1.0 Introduction. 3

1.1 Organisation Background. 3

2.0 Strategy relationship with corporate, business, and functional structures. 4

2.1 Eco2Solar Organisation Structure. 5

2.2 Organisation Corporate Strategy influence and impact on Corporate, Business and Functional Structures. 6

2.3 Strengths and Weaknesses of Current Structure. 8

3.0 Methods of Analysing the Supply Chain. 9

4.0 Management of Resources for Supporting Development and Implementation of Strategy. 14

4.1 Stakeholders Involved in Corporate Strategy. 16

4.2 External Factors impacting Organisation Strategic Aims. 18

5.0 Costs and Finance Impact on Supply Chains. 19

6.0 Conclusion and Recommendations. 21

References. 23

Figure 1:Eco2Solar Customers 5

Figure 2:Strategy Pyramid. 6

Figure 3:Eco2Solar Organisation Structure. 6

Figure 4:Red and Blue Ocean Strategy. 8

Figure 5:Analysis of Eco2Solar Supply Chain. 10

Figure 6:Eco2Solar Descriptive Analysis of Supply Chain. 11

Figure 7:Steps of measurable outcomes of success 12

Figure 8: Components of CIPS Resilience Assessment Model 13

Figure 9:Summary of Supply Chain Linkage with Corporate Strategic Aims 15

Figure 10:Sources of Competitive Advantage and People as a Resource. 16

Figure 11:MIS system use. 17

Figure 12: Stakeholders Categories. 18

Figure 13:Mendelow Stakeholders Matrix Analysis. 18

Figure 14:Summary of Pricing arrangements 21

Figure 15:Causes of Volatility. 22

Table 1:Summary of Eco2Solar Organisation Structure SWOT Analysis. 9

Table 2:Risk Register 13

Table 3:STEEPLED Analysis Summary. 20

 

 

 

1.0 Introduction

Adopting the definition of CIPS (2021), a commercial strategy is a practice of thinking on the entire approach for ensuring procurement and other commercial activities offer the results for all stakeholder’s gain. The outcome of establishing an appropriate global commercial strategy include an organisation being appropriately positioned to manage risks, organisation capacity and capability of responding to uncertainties. It is in this regard that Kendall et al. (2021) while evaluating how the COVID-19 pandemic has disrupted the global commercial strategies offered relevant insights. The authors noted that commercial strategies would need to evidence every commercial agreement aligning with broader strategic objectives and its reflection in management of commercial risks and incentives in the entire commercial lifecycle. Based on this background information, this business report evaluates on the global commercial strategy within Eco2Solar Organisation. This is by evaluating the strategy and corporate, business and functional structures relationship, methods of analysis of supply chain, management of resources for supporting development and implementation strategy. Also, the costs and finance impact on supply chains has been evaluated with recommendations for improvement suggested.

1.1 Organisation Background

The organisation of focus in this report is Eco2Solar which is the leading installer of solar PV and Green Technologies for the UK’s housebuilding sector. It has been in active operations since 2007 and has been intended to address the climate change issues. This is with CO2 emissions reduction and fuel shortage through a facilitation of the solar energy use. Eco2Solar has over the years been providing solar energy solutions for newly constructed homes and commercial installations. Their main customers are as illustrated in figure 1;

Figure 1:Eco2Solar Customers

For the organisation success, their main target sectors include health centers (40%), operations in schools (50%), care homes (30%) and large apartment installation (20%). Owing to its commercial success, their profits range upto £10 million which has informed by its latest investment on Worcestershire County Council and the Sanctuary Housing occupying 50% of their spend category. Through their global commercial strategy, the organisation has been in a position of attaining their entire objectives. Hence, owing to its positioning, global commercial strategy is relevant for the organisation and area of consideration in this report.

2.0 Strategy relationship with corporate, business, and functional structures

In any contemporary organisation, strategy is identified as anchoring all decisions which are made. As evidenced in CIPS (2022), a poorly selected decision has a significant issue on the employee’s success in all the organisation departments.  As shown in figure 2 strategy pyramid, it is inclusive of corporate, business and functional strategy.

Figure 2:Strategy Pyramid

2.1 Eco2Solar Organisation Structure

In Eco2Solar, a flat/horizontal organisation structure is in active operations. According to CIPS (2022a) this is an approach of managing individuals and departments into a whole and the scope of flexibility and autonomy people possess. The rationale of this is demonstrating the best practice in cultural values emphasis in such an entity. Eco2Solar organisation is as illustrated in figure 3;

Figure 3:Eco2Solar Organisation Structure

Considering Eco2Solar organisation, their corporate objectives include creating a solid reputation for consistent delivery of quality and cost-effective solar installations for all their customers. Also, as evidenced in Eco2Solar (2022) apart from gaining an increased profitability, the organisation intend to establish a viable, cost-effective approach for limiting implication of climatic changes and protecting planet for their future generation. Considering this, the flat organisation, Eco2Solar ensures that all the employee’s responsibilities in the organisation are elevated. This is while eliminating the excess management layers hence improving scope of coordination and communication. The organisation also leverage on an improved decision-making process while reducing their overall costs of operation as there is no need for a middle management.

As explained in Eco2Solar (2022), the main aim of Eco2Solar organisation is to ensure that the solar energy is offered to their customers. This is with an assurance of a pocket friendly and sustainable practices as they progress with their operations. The mission of the organisation is to drive change for a better, greener future by quality installation of energy technology to new build homes across the UK. This is similarly the organisation mission. Hence, as Law and Breznik (2018) recommend, an organisation strategic aim would need to be aligned with the mission and vision. For Eco2Solar organisation, their aim is used as a roadmap informing and guiding navigation to the mission and strategy.

2.2 Organisation Corporate Strategy influence and impact on Corporate, Business and Functional Structures

Corporate

According to Danso et al. (2021), a corporate structure is the organisation of various departments or business units within an organisation. Considering this definition, in Eco2Solar, their corporate structure is inclusive of the directors, commercial team and supply chain and logistics. In this case, as explained in the case study, the organisation strategy is required to be in alignment with the structure of the supply chain and also the corporate structure. For the corporate strategy of coming up with renewable energy, the organisation ensure that the operation of the corporate structure mirrors this strategy. This is with an active collaboration of all the players in the process.  This has a direct impact on ensuring the supply chain success while benefiting on structure alignment.

Business

In Eco2solar, this is the structure which influence how the organisation compete and gain competitive advantage against their rivals. As evidenced in the notes, to evidence the scope of influence of the corporate objectives to Eco2Solar organisation business structure, the evaluation of business and its external environment is essential. As evidenced in CIPS (2021a), the corporate strategy impact to the business structure in Eco2Solar impact their approach of using the Blue Ocean Strategy/Red Ocean Strategy (see figure 4);

Figure 4:Red and Blue Ocean Strategy

As illustrated in figure 4, Eco2Solar adopts the blue ocean strategy as it enables the corporate strategy to entail creation of uncontested marketplace apart from the existing marketplace. This is while creating and capturing new demand and breaking the value-cost trade-offs. The advantages of this is that the organisation does not exploit only the existing demand and competing in existing marketplace.

Functional

In Eco2Solar, the functional structure is comprised of the marketing, HR, Production and R&D departments. The corporate strategy of the organisation impact how these departments operate to improve the organisation operations effectiveness in these department. According to Atulkar (2019), in such an arrangement, the corporate objectives influence how products are offered to their right audience while pursuing appropriate marketing approaches to ensure the organisation products and services are broadly accepted. The decisions made on pursuing their corporate strategy is hence operational and not distinct.

2.3 Strengths and Weaknesses of Current Structure

In order to evaluate the current structure strengths and weaknesses, SWOT analysis is applicable (CIPS, 2021b). This model is used in evaluating the strengths, weaknesses, opportunities and threats. For the current organisation structure, strengths and weaknesses would impact the internal of the organisation with the opportunities and threats being their external organisation. For the Eco2solar horizontal organisation structure, a summary of the analysis is shown in table 1;

Table 1:Summary of Eco2Solar Organisation Structure SWOT Analysis

Strengths

·      Low costs of operations

·      Prompt communication

·      High-level collaboration among different stakeholders

Weaknesses

·      Not suitable for conglomerates

·      Limit an increased staff retention

·      Contributing to power struggles

Opportunities

·      Elevation of employee’s scope of responsibility in an organisation

·      Improving coordination of all stakeholders

·      Easier to make the decisions and progress

Threats

·      Reduced levels in the structure

·      Risk of generalisation and confusion

As evidenced in table 1, by use of flat organisation structure, more opportunities are offered for prompt decision making. According to Turi and Sorooshian (2019) a flat organisation structure do not have a mid-level management. This is the case in Eco2Solar whose structure saves the organisation immense resources on wages. This is with their communication being prompt across the chains. For instance, in authors positioning in the procurement department, any communication shared along the hierarchy is prompt and efficient with no possibility of distortion. Further, Eco2Solar employee’s collaboration increases on their motivation and satisfaction. In long run, Graham et al. (2018) note that this increases the overall morale and productivity with organisation turnover lowered. Conversely, since Eco2Solar is a rapidly growing organisation currently serving an upward of 50 customers, this structure is increasingly becoming ineffective. This is since as Vera (2020) observed, this structure is most suitable for lower organisations. Also, the retention rates for the senior managers and directors in Eco2Solar has declined as there is no possibility of the employees increasing in the ladder of management.

To ensure that the flat organisation structure in Eco2Solar organisation is improved, the CIPS notes recommendation which note that simple structures can evolve into complex structures (CIPS, 2021). By allowing a natural evolving of their structure, this would mean that it is aligned with their corporate objectives and also supply chain.

3.0 Methods of Analysing the Supply Chain

Supply chain visibility note on the capacity of parts, components or products in transit being tracked from manufacturer to their final destination. As evidenced in CIPS (2021c), the rationale of this is for improving and strengthening supply chain by guaranteeing data readily availability to ensure stakeholders particularly the clients. In Eco2Solar, despite of the supply chain having recently impacted by the COVID-19 pandemic, its visibility is still high. The rationale of this is that the organisation views their overall supply chain as being an extension of their individual service delivery and ensuring they engage appropriate service partners.

For analysis of the supply chain, Eco2Solar adopts the approaches as evidenced in figure 5;

Figure 5:Analysis of Eco2Solar Supply Chain

Descriptive Analysis– According to Bastas and Liyanage (2018), this approach of analysis is used to identify what is currently occurring. For Eco2Solar, this entail analysis of amount invested in inventory, customer service levels and fill rate and average supplier lead times. The rationale of using these statistics is to maintain the track of their operations particularly when noting the changes time to time. As evidenced in figure 6, in their solar panels category of spend, by use of descriptive analysis, accurate corporate data is achieved processed statistically.

Figure 6:Eco2Solar Descriptive Analysis of Supply Chain

As illustrated in figure 6, the performance metric used by the organisation include business reports, financial metrics (business performance, earnings per ratio, current ratio), customer social engagement (followers, media initiatives and revenues) and surveys (internal and external). The strengths of using this approach to Eco2Solar is what Oracle (2021) identify as the capacity of gaining insights on current business performance, historical trends, and noting on strengths and weaknesses in the organisation operations. In order to identify the performance indicators, the process followed in the supply chain analysis is as shown in figure 7;

Figure 7:Steps of measurable outcomes of success

Predictive Analysis -As UK Vision 2030 and Sustainable Development Goals (SDGs) nears, the demand for solar energy increases. Similarly, for Eco2Solar, they ensure that their growth is sequential and always track on their performance by forecasting their demand. Since the COVID-19 pandemic emerged, this analysis has been broken down to particular product specification (solar panels, batteries or fully installation), location (London, Nottingham, Newcastle) and customers (different companies). According to Brintrup et al. (2020), the importance of this is being able to track their production process, staffing and raw materials procurement for meeting the demand. The performance metrics which are used by the organisation include product demand as a trend, seasonality and regime change. This is while similarly integrating the operating costs in the process.

The outcomes from the supply chain by Eco2Solar offer relevant outcomes in identifying, assessing and managing of risks. This is in line with what CIPS (2021d) identify as the CIPS Risk and Resilience Assessment Model. This is used to note on the risks and assuming appropriate steps for their management (see figure 8);

Figure 8: Components of CIPS Resilience Assessment Model

Further, after identifying the sources of the risks from the results earlier obtained from the analysis, a risk register is developed. According to CIPS (2021e), this tool is used in identifying, evaluating and managing the potential and actual risks which could affect an organisation and its supply chain. For Eco2Solar, the decision to manage the risk is either tolerate, treat, transfer or terminate. In table 2, an example of Eco2Solar organisation risk register for solar panels installation is provided;

Table 2:Risk Register

ID Date raised Risk Description Likelihood of the risk occurring Impact if the risk occurs Severity Owner Mitigation Action
1 Aug The project purpose and clients’ needs inappropriately defined Medium High High Procurement team Tolerate
2 Sept Incomplete purchase process and incomplete definition Low High High Project sponsor Treat
3 Nov Procurement schedule not clearly identified to be understood Low Low High Procurement manager Transfer
4 Dec Timeline of the sourcing and procurement process incomplete Medium Medium Medium Procurement team Terminate

To identify the competition between the supply chain parties, the cycles of competition can be adopted (CIPS, 2021f). The model identify the competition to be classified into hypercompetitive industries, multi-point competition industries. This competition of the supply chain is identified as characterised by unsustainable competitive advantage in the market of operation. To improve the ability of Eco2Solar leverage on competitive advantage, improvement of supply chain analysis and management would be essential for the organisation achievement of their corporate objectives. As evidenced in Industry Week (2021), this is since the organisation would be successful in costs optimisation and inventory coming from lead-times, flexibility and risks management. Eco2Solar supply chain need to transition from being an absolute or designed independently in their corporate strategy (see figure 9);

Figure 9:Summary of Supply Chain Linkage with Corporate Strategic Aims

4.0 Management of Resources for Supporting Development and Implementation of Strategy…….

Please click the icon to access this project in full