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Strategic Plan Draft STR 581 March 19, 2012

STRATEGIC PLAN DRAFT Strategic Plan Draft Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a companys objectives, (Pearce

& Robinson, 2007). A thorough analysis of the external and internal environment was completed on Barnes Aerospace, a leading provider of superior manufacturing solutions and comprehensive component overhaul and repair services to the world's major turbine manufacturers, commercial airlines and the military (Barnes, 2012). An external and internal analysis was conducted which revealed opportunities and threats that are present in the environment and identified resources, capabilities, and skills, through a SWOT analysis. As a result, Barnes Aerospace must focus on enhancing the current products within the organization as well as attracting new customers and product opportunities, while increasing customer service and on-time delivery for current product lines. This paper will discuss implementation, strategic controls, and contingency for executing this plan at Barnes Aerospace. Implementation Plan Barnes Aerospace will be carrying on the extending of their company to realize goals of providing fresh tasty products to their customers with exceptional customer service to be a winning organization. Barnes Aerospace has the potential to let their products and service embrace the retail juice market and establishing advantageous modifications to be able to grow and expand locally and internationally. A step in the right direction to attaining this effect is to continue building a strong customer base and achieving utmost knowledge of the juice market. Objective Barnes Aerospace needs to eliminate any obstacles that hinder sales and to increase the satisfaction of the customers. The major obstacle at this time would be the collecting of data

STRATEGIC PLAN DRAFT from customers to be able to better understand the type of products that are needed in different environments or markets. With the aerospace industry becoming more interested in upgrading current fleets rather than refurbishing the current engines, there becomes a specific need to develop a newly designed engine. This leads Barnes Aerospace to be mindful of the type of products they manufacture to ensure that will meet the requirements of the customers and industry. With this said, they will need to ensure their products and overall operations have the capabilities to meet the demand and satisfy any regulatory requirements.

With Barnes Aerospace fulfilling a specialized need by manufacturing engine manifolds, they must be mindful of struggles they endured as they rose to the top in manufacturers. To further achieve their goals and mission, Barnes Aerospace has to now incorporate the power of this specialized manufacturing process and develop programs that entice new customers which will ultimately lead to increased visibility and increased profits. Through these pursuits Barnes Aerospace would maintain customer dedication which leads to an objective of the organization of having customer satisfaction. As customer satisfaction increases, it is proven that there is a positive impact to the organization through regular reordering, free personalized advertising and recommendations to potential customers. Although Barnes Aerospace is a relatively profitable organization, the focus on customer satisfaction cannot be ignored. They must continue to improve their relationships through communication and improved on time delivery. They would also benefit by staying on top of industry changes, changes in technology, and changes in the environmental changes that may impact relationships with customers. Functional Tactics Barnes Aerospace has excellent record regarding the past performances and has thus, properly planned for the functional tactics. The strategic plan and diversification strategy of the

STRATEGIC PLAN DRAFT company requires a team of professionals who are experienced within the various departments.

The company has recruited a team of professionals for effectively handling the financials and has allotted sufficient budget for the plan to successfully meet the high quality need for ensuring the product line research and customer satisfaction criteria align. Barnes Aerospace has also developed strategic plans for marketing the services that includes direct interaction with consumers, presentation at corporate, and advertisement in industry magazines and newspapers. The company would even use the approach of e-commerce for marketing the services. The company would recruit a team of highly qualified and skilled professionals for carrying out the business operations efficiently and effectively. Barnes Aerospace would also focus on using the advanced technologies that would include a proper e-business application. The model would help the company in meeting the need of efficiently handling and managing all the activities and departments. The implementation of the e-business application would help the company in providing solution to all the needs. The company would further have a highly qualified human resources team that would focus on properly recruiting, selecting and training the employees when in need. Thus, the effective handling of the functional tactics would help the company in achieving the desired objectives. Action Items Barnes Aerospace would begin by selecting the specific product line that will meet the need of the strategic plan. The action item would include a team of subject matter experts who can initiate the research with current customers and who can manage the day to day operations when that product has been identified. The company would further focus on aggressive marketing of the product to create awareness in the market and attract new consumers. The company would keep a proper check on the performance of the new product introduction team to

STRATEGIC PLAN DRAFT measure their effectiveness and capabilities. The action item would further focus on effective

handling of the technological area to prevent disturbances and to provide high quality services to the current and new customers. The daily operational needs would require proper planning and each team member would be allocated specific roles and responsibilities. Thus, the proper planning for the action items would be done at regular intervals for effectively handling the business operation. This would help the company in generating productive results and achieving the set goals. Milestones and Deadline Barnes Aerospace has strategically planned and identified for the milestones to be achieved. The milestones outlined in the plan include full implementation of the complete business operation, the purchasing of additional assets including lasers, weld booths etc., selecting highly qualified and skilled professionals, training of these individuals, and above all meeting the deadlines set forth at each of these milestones. The company properly defines the deadlines for the task that are to be strictly followed. Thus, the milestones of the company are fully planned and inflexible, whereas, the deadlines in this plan are flexible but strictly followed. Resource Allocation Barnes Aerospace has the added task of recruiting employees as the needs of the task increase. This need will also keep into consideration the staffing skills and experiences. The roles and responsibilities of the employees are properly defined as tasks are distributed among employees headed by an expert for proper management and control. The company will properly allocate resources for the plan which include a fully staffed team for the complete business operation for the new product lines. The needs and requirements are properly planned and all the resources required for carrying out the business operations effectively are defined. The plan

STRATEGIC PLAN DRAFT includes installation of the latest technologies and software to carry out the operations effectively. Barnes Aerospace will also ensure recruitment of highly skilled professionals that fulfill all staffing requirements in this plan. Strategic Plan Barnes Aerospace should focus their plan to revolve around a new product line that would provide a completely new product to its current customers and would be the founding block for attracting new customers as well. If the plan is handled properly, by entering this new product segment, the company can grow and become known as an innovative supplier to the aerospace industry. The change should thus, be handled strategically and a proper image has to be established in the minds of the consumers regarding the new strategic plan. The proper

support from the current business operation and vast experience of the aerospace industry would both be key factors in propelling Barnes Aerospace in successfully implementing the strategic plan. A key point for the management is to identify capabilities to meet their customers needs. This along with the knowledge of the industry will be a good ingredient for success. As discussed earlier, key success factors of Barnes Aerospace includes the ability of the company to provide services at low costs and also able to differentiate its products from the other major and competitive suppliers in the industry. Key factors to the success of Barnes Aerospace will be determined by their budget, a forecast of the financials and the ability to meet and exceed their break-even point. Barnes Group Inc. expects 2012 revenue to grow 6% to 9% from 2011 and forecasts operating margins of approximately 12%. Earnings from continuing operations per diluted share are forecasted to be in the range of $1.78 to $1.93, up 9% to 18% from 2011 (Barnes, 2012). Our improved financial performance and generally favorable end-markets will allow us to invest further in our businesses. For 2012, we expect capital expenditures to increase

STRATEGIC PLAN DRAFT to a range of $45 to $50 million and cash conversion of greater than 90%, said Christopher J. Stephens, Jr., Senior Vice President, Finance and Chief Financial Officer, Barnes Group Inc. In

terms of a break-even point for Barnes Aerospace, the figures used are based upon the pricing of one full engine set. Total fixed cost (TFC) is $252,000, variable cost per unit (VCU) is $5,000 and sales price per unit (SPU) is $35,000. The formula to calculate the break even points in units (BEP (UNITS)) is TFC/(SPU-VCU) and break even dollars is BEP (UNITS)*SPU. Thus, the break-even point calculates as eight engine sets or $294,000. Contingency Plan Barnes Aerospace is dependent on returning customers and any cost linked to retaining said customers would be deemed as a long term investment. Given the nature of the business, drastic change is not necessary so the contingency plan would be basically an upgrade of technology, equipment, and enhancement of customer service. The key factor would be to find out the changing needs of the consumers and along attracting new customers this will augment the components to be profitable in an ever changing market place. To get the proper feed-back and attract new customers, there will be the need for evaluation of the scorecards received from current customers, market surveys of the aerospace industry giants and discussions with current customers. Barnes Aerospace needs to take advantage of their faithful and loyal customers being their primary concern for their business. As the company grows, more focus needs to be placed on improved systems technology, which will be a supplemental gain to advance efficiencies, process improvements and improve product flow through the manufacturing plant. Presently Barnes Aerospace hardly uses an outdated and antiquated MRP system but they are still able to function efficiently and profitably. This advance in systems technology can become a value

STRATEGIC PLAN DRAFT added to the company as the company grows and the demand increases above their current capacity. Risk Management Barnes Aerospace should further focus on properly identifying the risk involved in the project and focus on properly managing the risk. The project involves several risks as the

company is looking to expand from its core competencies and expanding into new product lines. To start, Barnes Aerospace will target current customers as this group will not focus solely on price but quality and value added service. The organization should plan to meet customer expectation and provide the consumer with high quality services by further assessing risk associated with updated technology and new product lines. Thus, a proper check and backup plan should always be ready to support it. The facilities should be set up to handle increased volume and ensure the systems are just as advanced as competitors. The company must also fight off competition and should plan for strategy that could help in sustaining in the market and overcoming competition. Conclusion If the proposed implementation, strategy, and contingency plans are followed, Barnes Aerospace will have continued success in the aerospace industry. Even with the downturn in the economy, Barnes Aerospace was able to maintain profit and growth using their current strategy and with minor adjustments they are certain to continue in the same mold. Therefore, they should carry out all the activities properly and should properly implement strategic plan for growth. Entering a new product segment would help the company in targeting new consumers and grabbing the opportunity of the untapped market. The company can easily establish themselves

STRATEGIC PLAN DRAFT in the market because of its high moral values, team of professionals, dedicated employees and innovative strategies.

STRATEGIC PLAN DRAFT Reference Barnes Aerospace. (2012). About. Retrieved from http://barnesaerospace.com/

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Pearce, J.A., II Robinson, R.B. (2011). Strategic management: formulation, implementation, and control. (12th ed.). Boston, MA: McGraw-Hill/Irwin.