Expansion Funds Sources And Hiring Processes In Lulu & Shopmore

Question: Discuss about theFunctional Areas Marketing Activities Expansion Funds Sources And Hiring Processes In Lulu Shopmore. Answer: Introduction This report`s goal is to look into the functional areas, marketing tasks, sources of expansion funds and recruitment procedures in a retail organization. The objectives include highlighting and demystifying four activities within four organizational, functional areas, elaborating two marketing activities employed in promotions, highlighting two internal and external finance sources for expansion and finally two internal and external hiring procedures within Lulu Group International. It opened its first supermarket during the early 90s in Abu Dhabi while its first hypermarket was opened in the year 2000 in Dubai. Currently, Lulu hypermarkets, department stores and supermarkets control 32% of the retail industry share with 134 stores spreading across the GCC. The main sources of data in this report are credible book materials and websites, a majority of which are most recent. The structure of the report follows the following format; a satisfactory discussion of the key points, conclusi ons based on the findings and a list of appropriate references. Information gathering Discussion Four activities within four functional areas A functional area depicts a logical division of an entity (Robert, 2013). He adds that every functional area is normally managed by a senior executive officer who is accountable for a given functionality which takes place within the entity. This means that such organizational divisions are headed by executives who oversee the activities within them and are responsible for them on a daily basis. Some of the common key functional areas include administration, research and development, finance, marketing, IT and human resource among others (Robert, 2013). According to (Rosemary, 2014), for a majority of centrally administrated retail organizations, product management is a chief functional area coupled with human resource, finance and systems management. When the entire functional areas of an entity work together, the business becomes more efficacious and effective (Ronald Perry, 2002). This means that the integration of all the functional areas is vital and beneficial to the entity. For instance, for Lulu Group International, incorporates its functional areas to facilitate its successful expansion.Today majority of firms incorporate them via databases (Ronald Perry, 2002). Such databases link the activities and monitor them concurrently. Human resources activities They include recruiting, compensation, training and development and performance appraisal (William, et al., 2009). Hiring entails luring job applicants while compensation involves rewarding well-performing employees via monetary rewards. Training and development involve teaching them modern skills and competences. In performance appraisal, there is evaluating workers present and potential delivery. The over 30,000 workers in Shopmore Group and the Lulu Group International experience the above HR activities. Marketing activities The marketing department has activities like discovering customer needs and demands, engineering products and services to meet needs, launching and promoting new goods and services among others (Robert, 2005). All these are based on market surveys. The quality products and services offered by Shopmore result from its efficient marketing activities. As such, it has an immense competitive merit in the market. This is partly why Shopmore Group controls about 20% of the retail sector share while Lulu Group currently enjoys 32% of the retail industry share. Additionally, that is why Shopmore`s yearly revenue is near $ 6.3 billion. Administrative activities Administrative tasks include organizing resources to accomplish goals and objectives, designing effective working procedures and communicating messages among others (Ferreira, et al., 2010). This implies that it is meant to oversee the overall organizational activities. It forms part of the crucial activities in any organization. This is because it is the steering force in the entity. For instance, in Shopmore Group, MA Ahmed Ali plays a key role in fostering its expansive growth as part of the administration. Finance activities Finance Department prepares annual fiscal accounts for the organization (Robert, 2005). This means that producing yearly financial reports for the entity is an essential task of any organizational finance section. It is responsible for projecting profits and losses. It also handles payment of salaries, invoices, and purchases among others. The about $ 6.3 billion annual revenue generated by Shopmore is prepared in the form of a statement by its finance department. Also, Lulu`s annual revenue reports are generated by the finance department. It forms an indispensable part of any entity globally. Two marketing activities employed in the entity`s promotions Marketing activities are normally so varied (Malcom Dennis, 2002). This implies that there exist different tasks in marketing within an organization. Such activities vary from one entity to another although a majority of them are universal to all firms. For instance, advertising is common to all businesses. Physical distribution of goods is one of the marketing activities in any business (John, 2014). This involves the transportation of products from the manufacturers to the retail entities for the consumer to purchase them. Other large array of marketing activities includes product modification, product procedure changes, modifications in packaging and advertising among others (Tapan, 2009). Additionally, according to (Teik, 2015), other marketing activities include special offers, sales, the launch of new products, customer relationship management, and others. This means that businesses have a wide pool of choice from which they can select the most suitable marketing activities wh ich best serve their marketing needs and in an affordable manner. Overall budget is needed to be allocated to the diverse marketing activities (Geoff Frank, 2006) However, for Lulu Group International and Shopmore Group, the focus will be on two most universal marketing activities and suitable for such large retail organizations namely advertising and special offer. The two normally yield remarkable returns when executed prudently and promptly. As such, most of the times they go hand in hand to produce the desired results, that is, increased sales for higher profits. Advertising Advertising is commonly done via the media and particularly in the electronic media such as the television, radio and the internet. The adverts are usually captive, alluring, appealing and persuasive to the targeted audience of the company who are heterogeneous and are located in diverse parts of the globe. As such, the adverts must appeal to the logic part of the consumer as well as the emotional part since the two works concurrently. The failure to appeal to either of the two leads to increased chances of futile advertising and that is not the outcome any organization would wish for. Every entity wants a fruitful advertisement. Lulu Group and Shopmore Group employ advertising as a marketing activity in their promotions. For example, Lulu`s popularity and the operation of 134 stores across the GCC and Shopmore`s placement among the globes 50 rapidly growing retailers is partly attributed to its advertising worldwide. Through this, it can reach many consumers. This is why these group s are popular in the GCC, and as such, they enjoy an immense customer base. Special offers Special offers refer to the products and services whose prices have been reduced from the normal prices. This means that they are being charged lower prices than normally. It is executed during specific times and seasons. Such special offers run for a short period after which the normal prices resume. Lulu and Shopmore usually launch special offers for their products and services during times of festive seasons, when they establish a new product or rebranded products among others. This is chiefly meant to promote their products and services and boost their revenue. That is why they have captivated the hearts of many customers via their high-quality products and services. Sources of expansion funds It is any firm`s desire to expand its operations. Reduced prices could be but a provisional short term plan meant to create expansion capital (Charles Patrick, 2011). This means that when the prices of commodities and services are lowered to increase sales and reduce storage costs, extra funds are generated. Such money can be channeled into the expansion activities of the organization. It is essential. Internal sources of expansion funds Internal sources of finance for companies include retained profits, reduced inventories, stricter credit control and delay paying trade payables (Students, 2013). The increasing costs of securing a loan capital is one of the reasons which makes internal financing much paramount for businesses (Burkhard Stefan, 2007). As such, a majority of businesses use the above sources to a greater extend. For Lulu, the emphasis will be on retained profits and lowered inventories. Entities may increase funds by retaining profits rather than disbursing them as dividends, and a majority of large organizations retain 50% of profits to finance expansion (Students, 2013). This implies that keeping profits is the most suitable and readily available finance source for expansion. Since Shopmore is a large entity, with yearly revenue of about $6.3 billion, it can plow in part of this revenue to expansion prospects. The reduced stock is another source. Acquisition and storage expenses use revenue which cou ld otherwise be employed to expand the organization (Students, 2013). This means that reducing the amount of stock purchased and stored translates into saved finances which can be in turn invested in the expansion of the firm. For instance, Lulu Group only purchases and stocks that which is needed by the customers. However, businesses need to be diligent when lowering stock to ensure they maintain the capacity to meet future demand (Students, 2013). External sources of expansion funds The external finance sources include shares, bank overdraft, term loans, finance and operating lease among others (Students, 2013). The above are some of the most commonly embraced sources of finances by a great number of firms. For Lulu Group, the focus will be on shares and bank overdraft. Companies normally create capital through the selling of shares, especially to the public. Since Lulu is a large retail organization, its main source of expansion capital is the sale of shares and especially the ordinary shares. That is why it can afford to open up 134 stores across the GCC. Bank overdraft is also a suitable source of expansion financing. Entities may get funds by keeping a negative balance in its bank account, and it is advantageous since it is flexible and competitive interest rates (Students, 2013). Lulu can access bank overdraft services based on its expansive nature, and as such, the organization finds it easy to expand with great ease. However, dependence on overdraft may have a negative impact because it is repayable on demand (Students, 2013). This means that it is indispensable for organizations to exercise prudence when operating on bank overdraft to avert such risks. Recruitment processes for the entity Recruitment process refers to the collection of activities involving planning and monitoring to find and attract fitting applicants for vacancies in the entity (Tapomoy, 2006). On the other hand, (Lawrence Carl, 2007) argues that recruitment describes the process of luring qualified individuals to create an applicant pool. Essentially, the two arguments point out that the hiring process is all about filling empty job posts. The vacant job positions could arise due to retirement, sacking, voluntary quitting and dismissals among other reasons. Such posts need to be filled by the most qualified persons available. They should possess the suitable skills, education levels, work experience, appropriate ethics, personal values, and competences. Internal hiring processes Internal recruitment depicts the filling of positions from within the organization (Jonathan Diana, 2008). This means that the present workers in the entity are the ones encouraged to apply for any emerging job vacancies. Promotions and transfers are internal sources of recruitment (Lewis, 2009). This means that existing workers can be selected to occupy vacant positions through promotions and transfers within the firm. Shopmore does the above-mentioned processes. Part of the organization`s over 30,000 workers have undergone that. This is because it is perceived to increase the employee morale, it is relatively cheap, workers need less training and orientation since they are conversant with the entity`s policies among others (Lewis, 2009). In cases where a junior worker is promoted to a higher rank which was previously vacant, such a worker feels appreciated and motivated to work harder and smarter. Again, Lulu and Shpmore will not incur extra expenses in training and orient the new occupiers of such positions since they are quite familiar with the way things work within the entity as well as the organizational policies. This further means that there will be a smooth transition of duties and responsibilities from the old position to the newly occupied one. External hiring processes External recruitment implies the filling of job vacancies using persons from outside the business (Jonathan Diana, 2008). This means getting new employees from without the firm and especially for new entry jobs. They add that external source processes include advertising and contracting an external recruitment agency. As such, the absorbed workers are purely new to the entity. Lulu partly does advertise some of its job openings via its website, other job search websites, the television and many others. Such job adverts are accessible to a wide array of job seekers who believe that they possess the required skills, experience and competences to take up such job positions. Additionally, the adverts usually reach the target audiences, which in this case are potential applicants on a timely manner and can apply within the stipulated deadlines. Consequently, external potential employees apply for such vacancies. On the other hand, Lulu can hire the services of an external hiring agency t o select suitable employees on their behalf. This is very useful especially when the business or organization wants to save on resourceful time. Conclusion The conclusion touches on a number of issues namely: functional areas of an organization need to work harmoniously, there are diverse human resource, marketing, administration, and finance activities, Shopmore heavily uses advertising and special offers as part of its marketing activities, there exist various sources of both internal and external expansion financing, and recruitment process can be delegated to an external recruitment agency or be conducted internally by the firm itself. References Burkhard, S. Stefan, B., 2007. `Making Growth Work: How Companies Can Expand and Become More Efficient`. S.l.: Springer Science Business Media. Charles, W. J. Patrick, M., 2011. Theoretical Developments in Marketing. S.l.: Marketing Classics Press. Ferreira, E., Erasmus, A. Groenewald, D., 2010. Administrative Management. S.l.: Juta and Company Ltd. Geoff, L. Frank, W., 2006. Marketing Fundamentals. S.l.: Routledge. John, A., 2014. The Marketing Environment ( RLE Marketing ). 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