System Development

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Tutorial - Valentino’s

Question: Valentino’s decides to pursue a growth policy, aiming at 20% each year for the next 3 years. What impact is this likely to have on the organisational structure? What issues will arise from these changes? What else needs to be done in order to make the growth targets realisable?

Useful to look at the organisational structure – consider Directors to be running Departments and the boxes underneath to be Teams all run by a Manager.

How are you going to expand?

How much money will you need for example to invest in new products – where will you get the money from (important to have a system that tracks income and expenditure?)

New products? Launch quickly and sort out issues later? Why? Because if you take too long your competitors will overtake you! There is a fine balance between testing new products and making sure that they are foolproof which may take so long that your product is obsolete and ensuring that you can get it into the market place quickly to generate sales. This can lead to disasters e.g. Apple’s map issue last September.

Data implications – system must hold more product data.

Where will you get your ideas for new products from? Your staff!

What impact is this likely to have on the organisational structure?

Marketing Department is likely to expand, possibly adding a new team to report to the Marketing Director. Could consider separating Market Research from Internet Marketing – this will help expanding numbers in existing products and selling new products. Operations Department will need to increase in size as will the number of Finance staff. The Finance Director may consider taking on a senior direct report to assist with looking at ways in which to finance this growth strategy.

What issues will arise from these changes?

The Marketing Director will have an increased workload so (s)he will need to decide how to handle this – devolve responsibilities downwards perhaps? A new team...
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