Cojocareanu Raluca

Group 133
Fabiz
Report on Pasarea Phoenix quality and performance

Company description

Pasarea Phoenix is a home improvement supplies retailing firm that sells tools for construction .
Pasarea Phoenix.SRL is a firm headquartered in Giurgiu and having as main field activity selling
building materials. The business opened in 200x selling adhesive products. With time the
company started to develop and started to expand. Now the company sells a wide range of
materials, being consider the leading construction materials provider in Giurgiu. Pasarea
Phoenix is the main provider of: cement, plasterboard, adhesives, paints, parquet, hone and many
others. The business increased its number of employees, nowadays having a number of 12
employees. The stores is organized in a warehouse-style, stocking a large range of supplies.
Pasarea Phoenix is a sole associate limited liability company, the main administrative functions
being handled by the associate and the administrator of the company.

Key Products and services:

Pasarea Phoenix sells mainly products for raw building purposes. Adhesive products for
tiles( CM11, CM9), an insulating easy to use for all types of masonry: bearing, stuffing, walls.
Concrete, for plain and reinforced concrete, freeze-thaw resistant, with application areas such as:
foundations, columns, beams, floors, stairs, belts, equalization, pavements, cladding. Reinforcing
elements like wires, for reinforcement, agriculture, fencing, household appliances and various
braids; nails made of steel wire, general purpose for building; profiled wire mesh , widely used in
construction (reinforcement) or metal fences. Plaster used to finish interior surfaces. Mortar used
in building up buildings with concrete blocks, bricks or concrete blocks easy

The business is a retail firm that sells directly to the customers building materials, also the
business offers transportation services having 2 trucks to deliver large amount of products to the
clients destination. Pasarea Phoenix is also an intermediary between customers and producers,
orders of specific products which cannot be found in the store, can be placed at the store. Also
the staff is offering assistance and product recommendations that best fit the customers needs

The business critical activities are to procure the stocks and negotiate good prices from the
suppliers. There is a large amount of various products which means a large amount of suppliers.
Each producer is to be carefully analyzed according to the quality of the products and also to the
quality of the services offered by that certain supplier. Also as a main activity Pasarea Phoenix
has to maintain a continous relationship with its customers by offering them good price deals and
a large range of products. It has to assure a friendly and welcoming appearance and also be
prepared for the technical issues regarding building and constructions of each client, to be able to
provide the proper information. It has to prepare an accurate inventory to be always up to the
customers needs.

Risks involved

Not having enough inventory means you might face the risk of losing sales, so the business rely
strongly on the availability of its products. One of the main risks the critical activities might face
is the postponement of the supply or even the cancelation of an order. Weather, production errors,
incapacity of the suppliers, can represent the factors that determine the risks the business can
face. Running out of stocks not only cost the business money from missed sales, they can also
make it lose valuable customers, as clients tend to search for alternatives somewhere where they
can satisfy their needs. This is why Pasarea Phoenix is ensuring an efficient inventory and makes
safe contracts with suppliers that have an accurate experience and offer good quality services.

Building materials have a expiration date and also need specific condition for storage. Thus the
risk of losses in stock due to negligence and improper condition might result in the loss of money
for the company. This provides a case of Overstock, and due to the expiration date the products
which are not sold in the limit are transferred into losses. The risk of overstock is very high, due
to the perishability of the products. Due to the differences in the volume of sells according to the
periods of the year, there is a fine limit between the overstock and understock which has to be
carefully taken into consideration.
Also, staff is a very important factor in the store. Employees are the ones interacting with clients,
the ones who offer transportation and load the merchandise. For an employee to handle to
amount of daily orders, a long-term training is required, so that he/she would know the prices,
the products sold, the types of products, their place in the store, etc. The absence of one key
employee might or the insufficient number of employees might result in the overstrain of the
other employees and even to errors and an inadequate activities regarding the selling process.

The company is now facing its greater risk because of possible competitors. For the moment, in
Giurgiu there are no, large companies of building materials like Dedeman, Hornbach, Brico
Depot, but only local stores, among which Pasarea Phoenix is the largest and owning most of the
sales. In the case of opening of one of these chains of stores in Giurgiu, Pasarea Phoenix might
face the loss of customers due to the larger range of products that these companies sell and the
also due to the advertising and popularity gained by these companies in Romania. Even though
Pasarea Phoenix would be able to keep the prices low as an advantage, the complexity of
logistics and services offered by other large retailers would represent a great danger.

The building materials sector is a field verified and controlled by the state institution in
Constructions inspectorate. Many inspections and examinations are being made each year by
professional controlling individuals, and with irregularities harsh fines and sanctions and being
given. The risk of paying money for large fines might come as considerable loss and decline for
the business. This why regular documentation and checks have to be made to make sure the
company is up to normative and standards to avoid such sanctions.

Pasarea Phoenix is accepting notes receivables as method of payment. In practice these methods
of payment are not so secure as in theory, and customers who make themselves gone after such a
transaction, might mean a case of criminal acts. The risk of customers not paying the
merchandise is very high, and the solution to these kinds of risks can be solved only in justice,
which might consume time, money and effort.

Recommendation for maintaining critical events

In the case a big retailer in the building sector is to set up his a store in Giurgiu, Pasarea Phoenix
would be put to face a serious problem regarding the maintenance of its competitive advantage
and develop new ones.

Pasarea Phoenix has as main strategy of gaining customers, the word of mouth and having the
right connections to grow sales. And while the business still has to focus on all these marketing
efforts, they wont sustain the business forever, nor will they offer the same results that they used
to, in face of great competition. In order to avoid losing the competitive advantage to big
building stores, Pasarea Phoenix has to develop an online connection with its clients beside the
offline connection and has to invest in an website updated daily with their products and services.
Nowadays consumers are becoming more and more dependent on digital information. Even if
most builders recommend the best store to the customers, the client is usually going to make first
an online research. This happens mainly as homeowners and end consumers have less access to
resources and knowledge about the building industry than other professionals. Many consumers
make a search online before heading into store to purchase.

The business has many loyal customers, among them a great amount are the professional
constructors that either buy by themselves for their clients, or make recommendations. In order
to be able to face the danger of bigger retailers, Pasarea Phoenix has to maintain a strong
relationship with the builders by offering good price deals.

Also they have to avoid focusing on competition and trying to win best prices and products, but
rather focus on customers and how to responds to their needs and egos as fast and well as
possible. This would represent a great advantage for small firms in comparison to the great ones
as they have the possibility to personally interact with customers and answer individually to their
needs. Thus in case of competition risks Pasarea Phoenix should focus mainly on their main
advantages, as their prices and loyal customers, and continue to improve them.

Also a second risk that might occur is losing a key employee in the summer period, when the
sales continuously high and customers demand of building materials is exceeding the regular
sales. Losing an employee during summer might mean a great problem by perturbing the whole
activity of the company. To avoid this risk, Pasarea Phoenix has to find ways to motivate its
employees to remain loyal to the company. There are several way of monetary compensation
methods that can be applied, like a performance-based technique by compensating the good
employees, or paying overtime when necessary but there are also some non-monetary
compensation methods that can be followed. These methods might include showing appreciation
to the employee or giving them more responsibility and recognition.

Conclusion

All in all Pasarea Phoenix is taking into consideration the propensity to risks seriously and is
adopting alternatives and safety measures to overcome possible risks. The inventory of the
business is carefully analyzed and recorded to periods and thus the danger of understocks and
overstocks is diminished through a considerate plan. This implies the relations with the suppliers
and the conditions of storage imposed by the control institutions. Also the risk of lacking the
experienced and needed employees is a delicate and subjective matter, as is it very hard to find
the proper manners to gain the loyalty of an employee, this being carefully taken care of through
means of motivation both financial and non-financial.