Performance Measurement

Running Head: Performance Measurement: Case Study of Jengo Fashions Limited

Performance Measurement: Case Study of Jengo Fashions Limited

Name University Course Instructor Date

Performance Measurement Introduction

The nature and use of SWOT and Porters Five Forces analysis in forecasting in the context of ladies fashion retailing SWOT analysis Broadly speaking, SWOT analysis has been used to evaluate and identify a number of areas in project formulation, and strategic plans, including Banks and their operations (Bohm, 2008:3). Just like Bohm notes, SWOT analysis should be used in mapping an organizations Strengths and Weaknesses of the products and services and assess the extent to which they are in tandem and how they could possibly be improved. (Bohm, 2008:3). Beyond this, the SWOT analysis will be used to reflect and project on the Opportunities and Threats exposed by information accrued usually through an evaluation research, the outside environment and by means of comparative studies. (Bohm, 2008:3, Fox 2000:37-40) Porters Five Forces Analysis of Jengo This framework was developed by Michael Porter. The tool essentially enables business to deal with the dynamics of market, cite the companys competitive position, and make decision of entering a market successfully. Further it enables one to identify thee partner as well as the implications that exist in the market. This is done by evaluating the following 5 key areas as espoused by Porter: New Entrants-at the moment for Jengo there seems to be many potential businesses that may want to venture in clothing, fashion and design

Performance Measurement Buyers Power-The buyers that Jengo have seem to be solid. However they seem to complain of pricing, and som should alternatives be provided, they may change their loyalty. Substitute Products and Services: Certainly there are alternatives to what Jengo does and this may invite donors to look elsewhere Power of Suppliers; the supplier for Jengo are few and this means that if Jengo fails to be complaint then they may screw up their market to other importers. Current Competitor; Competition does exist

Six main factors that Jengo Ltd should investigate when preparing forecasts for the year ended 30 June 2012 The six factors should be examined in relation to the PESTEL analysis. Overall, PESTEL analysis is a model guideline for evaluating the holistic macro environment of a business entity or an organization. In so doing, the Political, Economic, SocialDemographic, Technological, Environmental and Legal-Regulatory are examined to give the company a framework of understanding what is happening to it. For Jengo, Ladies Fashions, the examination should be as follows: Politically, the environment of operation is within the United Kingdom, which is at the moment experiencing sound political stability. The most influential actors are the Local Authority who regulates businesses in the United Kingdom. In the Economic variance, regardless of the fact that 2011 ongoing will still the suffering the world recession period, the information given is that it is financially sound. However, it seems to be facing stiff competition in the likelihood that a number of companies are getting into the business, and its strength is much pegged on it offering clothes which are

Performance Measurement regarded by consumers as durable, fashionable and responds to current manufacturing design fashions. Besides, the clothes are made in low cost countries and thus importing them is not necessarily expensive. Socio-demographically, the business is situated in population rich regions for its market. Birmingham where one of its branches is situated is densely populated with consumption patterns of clothes characteristically responsive to income disparities. Overall, there seems to be no major socio-demographical shifts in the consumer attitudes that may affect Jengo as a business entity. However, with population growth in the United Kingdom an the world over changing, and coupled with migration especially of students from the developing world seeking higher education, there is a likelihood of increased consumption of Jengos products. Further, there is a growing sense of dress sense among the youth today and Jengo may be cognizant of this. Technologically, Jengo seems to be lagging behind because it is yet to start an online shop, regardless of the fact online marketing is the norm rather than the exception for many clothing lines according to Jackson (2003) The only technological advantage it enjoys is that the seems manufacturers are technologically responsive. Environmentally, Jengo should consider the rate at which raw materials for the production of clothes are likely to take in the coming year. Legally, the operating environment for clothing business is overregulated by the government, and the organization ought to watch out for any likely legal policy interventions is the House of Commons and the Local Government likely to take in regard to clothing business and business in the United Kingdom generally. Will there be bottlenecks or incentives offered.

Performance Measurement

Bradford, R and Duncan, P. simplified Strategic Planning: The No Nonsense Guide for Busy People Who Wants Results Fast, Chanlder House Press, 1999

Although Jengo Ltd is not a large company and is operating in a very competitive market, it is highly regarded by consumers as offering long-lasting, fashionable clothes by a variety of established designers/manufacturers that represent good value, even though the retail prices are high. Jengo Ltd employs between four and eight well-qualified staff in each shop. At its head office there are five employees who are primarily involved in procurement and marketing. All the clothes are made in lowcost countries and are delivered straight to the shops by the manufacturers. Jengo Ltd has supplied Palisade plc with financial statements for each of its five years of trading, and Palisade plc is satisfied that its financial performance has been excellent for the last three years and that its financial position is currently sound. Jengo Ltd has stated its strategy, using funds supplied by Palisade plc, is to expand its shop portfolio over the next year at three times the previous rate, and to start an online shop. Palisade plc is concerned however that, Jengo Ltd has prepared neither forecasts nor budgets for the trading period. Palisade plcs

Performance Measurement board of directors believes this indicates weak planning and control within the company, and is reconsidering the purchase How budgeting would benefit Jengo Ltds planning and control of its inventory, recruitment and cash management activities Budget has been defined as a financial or quantitative statement prepared and approved, prior to a defined period of time, of thee policy to be pursued during that period for the purpose of attaining given objectives. Overall, budgets are employed as used as tools of achieving planning and control objectives in businesses and companies. Budgeting and budgetary control is important component to a business in a number of ways and would certainly be beneficial to Jengo Limited. First it will help it in planning. Budgetary control begins with top management of an organization and for Jengo it would determine the nature and scale of activities which should be carried out. It will certainly enable the management to do plan its activities within the current capacities and capabilities of the company, and being cognizant of both the strength and the weaknesses that it is in. It will also facilitate decision on the nature of products it would venture into and even the work force. Moreover, it will be helpful in designing a framework of the entire corporate planning and the budgets that will follow thereafter. Besides it would be instrumental in also forecasting while being aware of external factors. Budgeting certainly for Jengo Limited will factor issues such taxation, the current inflation and other economic hurdles, technological factors such use of internet and social network sites as market and awareness creation tool in its planning. Overall, budgeting help in determining policy directions and interventions.

Performance Measurement In the end budgeting helps a company to prepare a business plan. Budget will establish and provide avenues for making a detailed business plan for the organization, both in terms the business ventures it wants to engage in and the long-term/short-term projects. Using the confines of its budget, Jengo will be enabled to determine the target groups for its plans, establish the requirements of the plan, map out the contents of the plan and the major details to be dealt with, including the financial ones. In recruitment, budgeting plays a pivotal role and will be instrumental in Jengos recruitment endeavors. Budget, especially a direct labor budget will be prepared out of the general budget in line with activities that the company will endeavor to achieve. In Jengo, this will follow a more accurate determination and forecasting of the expenditure that should be put on Labor. It should obviously be aware of the skilled, semi-skilled and skilled labor within to steer its operations and objectives. It may consider it also based on time that workers employ in their contribution and the quality of work done. In terms of inventory control, budgeting is significant as well and will also apply to Jengo Limited. Usually, out of budgeting the financial manager or director is facilitated to control companys cash flow, investments (long term and short term, as well as overseeing and controlling accounting and budgetary systems. This way budgeting will be crucial to Jengo, since generally it enables the company to have cash flow to support daily operational activities of the company as well enabling cash that is not required instantly or immediately is made useful for the company. Budgeting again helps in making short term arrangements and fixing funds needed for corporate responsibilities. Often times, through budgeting, the management accountant usually administers the budgetary control and costing system. In so doing, it will enable the company to

Performance Measurement plan it in advance, its profits or losses and thus establish its general financial standpoint. Further, this facilitates the business to take control as well as make reports of money spent on operations. Out of this a master budget is made, and this kind of budget is a summery of all the costs centers and companys departments. Additionally, inventory control would enable the company to carry out other accounting activities such as paying wages, salaries, depreciation of fixed assets, maintaining shareholder records, and paying shareholders dividends

How a balanced scorecard approach to measuring performance would benefit Jengo Ltd, identifying (with justification) two indicators from each of the quadrants of the scorecard that would be most relevant to Jengo Ltd. Originally founded by Kaplan and Norton in the year 1992 at the Harvard Business School, the balanced scorecard (BSC) is increasingly used in measuring business performance today. The advantage of using the balanced score card is that it measures performance from a wide range of perspectives when compared to the other types of measurements. This is certainly good for Jengo. The perspectives

1. ENVIRONMENTAL ANALYSIS 3.1 Environmental Analysis of India India is the second largest country in terms of population. As per the 2011 Census, the population is estimated at 1.21 billion. By the march India become the

Performance Measurement second country after china to cross the 1 billion mark (after china). The total Literacy level in India is estimated at 65. 38% (Indian Child, 2011) 3.1.2 Population dynamics India as country supports about 15% of the world population. 40% of the population is below 15years. Those living in villages and towns/cities occupy about 70% and 30% respectively. In terms of culture India has in recent years evolved to a significant cultural and racial cohabitation. 83% of Indians Hindus, with a significant other being Muslim and the rest Christians, Sikhs, Jains, Buddhists, and Parsis. More importantly, is the caste system in India. The caste system defines occupational, economic and religious hierarchy among those practicing Hindu religion. Despite, democracy and fight for equality the caste system in India has remained largely relevant in socio-economic endeavors. (Indian Child, 2011)

3.2 Environmental Analysis of the Indian Banking Industry The analysis narrated below responds to Political, Economic, Social, Technological as well as Environmental and Technological (PESTEL) situation in the Indian Banking Industry. For purposes of Clarity and interrelatedness the analysis is subdivided as follows: 3.1.1 Challenges faced by Barclays in India 1.Entry Barriers In India, just like other emerging markets in Africa, the Banking sector is overregulated by the governments and the central banks of those countries. (Jones, 1990: 57). Central banks in India controls and sets up policies on interests rates accrued

Performance Measurement on loans as well as deposits, money supply and circulation. (Sinha, 2004: 104).Other regulations include the number of branches that a particular bank or company can establish, regulation of amount of money that can be lent and how it should be lent. (Gupta, 2010 Gupta, 1990: 78) Associated to this is that a number of people in India prefer operating governmental banks rather than private banks because they feel that their deposits are more secure when they operate public banks. (Friedman, 1990). This is more heightened by the fact that foreign bank branches operating in India are restricted and this means that the rural areas remain largely unattended to the disadvantage of foreign Banks such as the Barclays bank. In this the Barclays Bank in India attracts more the urban dwellers and the corporate world due to its modernity, faster services, and product differentiation. The rural people are however left out. (Hoffman, 2003: 189) 2.Competition from other Banks A number of private and public banks offer stiff competition to the Barclays Bank in India. Moreover, there are other microfinance institutions that heighten this competition further, especially in the rural areas. (Path, 2008: 104).These competitors enjoy the exposition of foreign Banks are put through as a regulatory mechanism, some of which they are exempted from. ( Joyner 2006: Mok, 2006: 34). The assertion thus calls for it to consider acquiring major stakes in ABSA to give them an easy access into unexploited market and create brand visibility.(Gupta, 2010). Beyond this there are hosts of other substitute in the retail finance industry. These include among others NBFCs, moneylenders and the insurance companies. These categories offer series of services which the banks offer. Lending is particularly of

Performance Measurement interest here because the alternatives that offer it are many. (Trehan, 2010: Trehan 2009 p 89). For instance, even companies such as Microsoft and General Motors are known to offer monetary incentives to customers who buy say in bulks and huge goods such as cars. This has technically frustrated efforts for people to take loans like car loans. (Gupta, 2010)

3.1.2 Strengths of Barclays Bank India. 1. Quicker faster Services Barclays bank offers quicker services in India with the highest tinge of mode. As mentioned earlier, this has led to it attracting more the urban dwellers and the corporate world due to its modernity, faster services, and product differentiation. (Gupta, 2000:p67). The rural people are however left out. (Dana, 2004: 16) According to IRIS 2010, Barclays Bank ATMs in India are regarded as prestigious convenient and a sense of class. (IRIS, 2010)

Summary: PESTEL Analysis of the Indian Banking Industry P-POLITICAL -overregulation of businesses by T-TECHONOLOGICAL -Developed ICT in India

Performance Measurement government -Limitation on the number of branches to be established -Good infrastructural facilities in India -Quicker services offered by a number of banks -ATM Services

E-ECONOMIC -Regulated Interest Rate -Low income among rural population -Caste system occupational determinants -Stiff Competition from other banks especially local ones S-SOCIAL -Caste System based on Hindu Religion - Literacy level standing at 63.8% in India -Requirements for corporate social responsibility

E-ENVIROMENTAL -Many slums exist in India -There exists corporate environmental policies for multinationals operating in India

L-LEGAL FACTORS -overregulation of businesses by government -Limitation on the number of branches to be established -Good infrastructural facilities in India

Performance Measurement

5.0 CONCLUSIONS & RECOMMENDATIONS 5.1 Conclusion Indeed, the banking sector for foreign banks in India has had not necessarily a smooth ride. Barclays Bank India, as much as it invested heavily to take advantage of the perceived emerging market in India, has not realized as much due to limitation and lack of proper policy interventions that would enable it penetrate the market sufficiently. The good news however is that it has succeeded in a few areas and pulling its socks in others. 5.2 Recommendations Based on the above discussions, this report makes several recommendations and further areas which should be touched. The recommendations here are based on the empirical evidence adduced from the study only. Some of the recommendations here in made have been probably made in other research studies that have studied similar situation. This shows that such recommendations carry stronger justifications hence they appearance here goes along way to recognize they are scientifically weighty. The recommendations include

Performance Measurement Recommendation 1: Barclays Bank India should consider acquiring major stakes in ABSA to give them an easy access into unexploited market and create brand visibility in all parts of India.

Recommendation 2: Development of structures for testing indicators in the Banking Sector in India

Recommendation 3: Formulation of policy Intervention which will its expansion in the rural India. Recommendation 4: Adoption/Improvement of E-marketing strategies for awareness creation, Service Delivery and raising tools. Recommendation 5: Objective Planning in the recruitment and establishment of a remuneration committee. Recommendation 6: Lowering loan interest rates in the context of Indias Operating Environment.

Performance Measurement

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Gupta, A. Development of the Stock Market in India. New Delhi. Amnol. 2000 http://books.google.co.ke/books? id=1GdGPRRQDV8C&printsec=frontcover&dq=Development+of+the+Stock+Market+i

Performance Measurement n+India&hl=en&ei=xgu5TclEgZvxA779wVA&sa=X&oi=book_result&ct=bookpreview-link&resnum=1&ved=0CGcQuwUwAA#v=onepage&q&f=false Gupta, A. Barclays Bank in India. New Delhi. Amnol. 2010 http://books.google.co.ke/books? id=1GdGPRRQDV8C&printsec=frontcover&dq=Development+of+the+Stock+Market+i n+India&hl=en&ei=xgu5TclEgZvxA779wVA&sa=X&oi=book_result&ct=bookpreview-link&resnum=1&ved=0CGcQuwUwAA#v=onepage&q&f=false

Hoffman, D. L et al. Commercial Scenarios for the web: Opportunities and Challenges. Journal of Computer Mediated Communication. 1995 http://docs.google.com/viewer? a=v&q=cache:Awg7Ko2KA7QJ:citeseerx.ist.psu.edu/viewdoc/download%3Fdoi %3D10.1.1.109.7778%26rep%3Drep1%26type %3Dpdf+Commercial+Scenarios+for+the+web: +Opportunities+and+Challenges&hl=en&gl=ke&pid=bl&srcid=ADGEEShFSdED60bt6a nQcmCKMB9Lp89yE31RifbQN7_DLZtyOBdDzjquMfippAR8XNzu2qL3el3UcgZKzLtIgrvrb_ZtQSj fydp6E_AxauzTw3uO56HNA4YiZp4qIS35isuv8eXP4l&sig=AHIEtbSCcWnmb9qHnIZhHRiMQ_ i8Bi6bUA

Indian Child. Indian Population. 2011

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IRIS. Banking Regulators. IRIS. 2010 http://webcache.googleusercontent.com/search? q=cache:BKKesq0dgEwJ:www.irisindia.net/bankingPDF.php+Banking+Business+in+In dia+bY+IRIS&hl=en&gl=ke

Jackson T, Understanding organizational productivity. Communications of t he ACM . 2003 http://portal.acm.org/citation.cfm?id=859673

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Jones, G. Bankers as Multinationals. London. Routledge. 1990 http://books.google.co.ke/books? id=mMYOAAAAQAAJ&pg=PA130&dq=Bankers+as+Multinationals&hl=en&ei=fh65T

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Joyner.L. Marketing. New York. Times. 2006

Kelly, J et al. Law and Practice Relating to Banking. Scarborough. 1987 http://books.google.co.ke/books? id=v5gOAAAAQAAJ&printsec=frontcover&dq=Law+and+Practice+Relating+to+Banki ng&cd=1#v=onepage&q&f=false

Mok, Ka-Ho. Education Reform and Education Policy in Asia . New York: Routledge. 2006. http://books.google.co.ke/books? id=v2GkaXFOZj8C&pg=PR11&dq=Education+Reform+and+Education+Policy+in+Asi a+Pacific.&hl=en&ei=Ux-5Tc3aCsqfOpiPuaUP&sa=X&oi=book_result&ct=bookpreview-link&resnum=1&ved=0CDMQuwUwAA#v=onepage&q=Education%20Reform %20and%20Education%20Policy%20in%20Asia%20Pacific.&f=false

Patha, R. Commercial Banks and Monetary Policy in India. New Delhi. Academic Founadations. 2008

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Sinha, P. Multinationals in India: Managing the Interface of Culture. London. Sage. 2004. http://books.google.co.ke/books? id=4Yr1x3Q6dz4C&pg=PA296&dq=Multinationals++in+India: +Managing+the+Interface+of+Culture&hl=en&ei=DSC5TZrsKs_qObzzyacP&sa =X&oi=book_result&ct=book-previewlink&resnum=1&ved=0CEIQuwUwAA#v=onepage&q=Multinationals %20%20in%20India%3A%20Managing%20the%20Interface%20of %20Culture&f=false

Trehan, R et al. Indian Economy. New Delhi. VK Publications 2009 http://books.google.co.ke/books? id=CFZNtijhaB8C&printsec=frontcover&dq=Indian+Economy&hl=en&ei=NyC5TaYHsqBOqnBvYkP&sa=X&oi=book_result&ct=book-previewlink&resnum=2&ved=0CDgQuwUwAQ#v=onepage&q&f=false

Trehan, R et al. Indian Business Environment. New Delhi. VK Publications. 2010

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References Bradford, R and Duncan, P. simplified Strategic Planning: The No Nonsense Guide for Busy People Who Wants Results Fast, Chanlder House Press, 1999