Approaches to strategic planning regarding the condition of the ceramic tile industry using SWOT analysis

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1 International Research Journal of Applied and Basic Sciences 2013 Available online at ISSN X / Vol, 6 (10): Science Explorer Publications Approaches to strategic planning regarding the condition of the ceramic tile industry using SWOT analysis Mohamad Hasan Gholizadeh 1, Mohamad Reza Azadeh del 2, Mahmood najari 3 1.Assistant professor, Department of Management, University of Guilan 2.Assistant professor, Department of Public Administration, Islamic Azad University, Rasht Branch,Rasht,Iran 3.M.A in MBA Marketing, University Of Guilan (PARDIS BIYNONMELAL ) Corresponding author: Mohammad Hasan Gholizadeh ABSTRACT: Complexity and subtlety of decision making in every business, make the planning and strategic management necessary in the management of organizations. The most approach of strategic planning can be seen in the leading and successful industries of the world. Among this tile and ceramic production industry in Iran has the needed context for developing and achieving to international rightful place but the statistics show the fact that the Iranian ancient industry accounted an insignificancy proportions of international export rate. In the surveys conducted it becomes clear that weakness in planning system and lack of proper strategies had led the backwardness of this industry. In this paper was attempted by using SWOT analysis method and providing weaknesses, strengths and considering environmental features, all kinds of appropriate strategies in the area of manufacturing, marketing and sales presented. By presenting Tables in the results section and using experiences of Pundits, the results of this study is presented as the title of the most important aggressive strategies, the most important adaptive strategies, the most important variety strategies and the most important defensive strategies. Keywords: strategic planning, industry, ceramic tile, SWOT management strategies. INTRODUCTION In the current Fluctuations of economic that manufacturing industries are in a bad conditions, Tile and ceramic industry in the country also particularly have huge problems in the design and planning section (Atafar, 2010). In the last decades three Billion dollars is invested in the industry. Now in tiles and ceramic porcelain sanitary production industry of Iran about 40 thousand people are directly employed and currently more than 100 companies in Iran operating in the manufacturing of all kinds of ceramic tile. According to the latest published Statistics, in 2011 the Production of ceramic tiles in Iran achieve over 270 million square meters which this number shows 22% growth compared to the previous it is while The Table (1) illustrates the fact that the proportion of the ceramic tile industry in Iran is Negligible in the international competition (Sadeghi Foroushani, 2006). Therefore, with a rich and ancient culture of thousands years old and also having rich resources and raw materials, the question arises as to what is the cause for industrial backwardness? In a general look we can describe the main problem in this industry, the lack of systematic planning and development strategy in this section (Panahi, 2006). SWOT analytical method is a tool that in many successful industries and organizations are used to assess the situation and providing scientific solutions (Porter, 1987).

2 Collection period Table 1. Share of Iran's export value of world exports of tile - ceramic from 1997 to year Tariff code Total activity. RESEARCH METHOD To use SWOT analysis method it is necessary to explain some of the terms outlined in detail. Environment All internal and external factors that affect the general atmosphere of organization and influence results of Strengths and Weaknesses These points are in the controllable activities of an organization that the organization organizes them in an excellent way or in a very poor method. They are created Under Managerial activities, marketing, finance (Accounting), production (operations), research and development and information systems. Opportunities and Threats Includes Events and economic, social, cultural, ecological, environmental, political, legal, governmental, technological and competitive trends that can greatly benefit or harm an organization in the future. Opportunities and threats are largely outside the control of an organization. That is why in the reliable sources they interpret them as opportunities and external threats to. (Mobarak, 2010). To access the results and making clear the approaches to strategic planning in the ceramic tile industry the present study was designed to analyze the collected data (David, 2013). In the research process, first the clear questionnaire was raised to obtain information from specialists and member of Quintuple committee about status of the internal environment (strengths and weaknesses) and external environment (opportunities and threats of the industry) at meetings. Collection of active Committees in the society structure of this study include: steering committee for editing steering plan that is responsible for integrating ideas and guiding working committee. Then by holding sessions (called News panel) in the committees strengths and weaknesses and opportunities and threats of the ceramic tile industry based on expert ideas of committee members were extracted and probable strategies were identified and committee s suggestions were also collected. After those data (initial strategy collection in the Expert Committees) in a separate committee called elite panel was discussed that in the end of work the final strategies placed in the SWOT matrixes. This outcome in the consensus of above panel has provided the main strengths, weaknesses, opportunities and threats in the elite view. At the end the process of analyzing what was achieved as a model of the strategic plan was delivered to case study industry insiders. All data processing was performed by the statistical EXCELL software and in two steps first sorting and then prioritizing was changed to the data used in this study. Table (2) shows a view of SWOT matrix. External environment Table 2. a view of SWOT matrix Matrix SWOT Weaknesses Strengths WO Adaptive strategy or revision Maximum-minimum WT Defensive strategy Minimum-minimum SO Aggressive strategy Maximum-maximum ST Contingency strategy or diversity Minimum-maximum Opportunities Threats Internal environment 1540

3 Within the frame of this matrix four strategies are possible, which may be briefly presented. Defensive strategy (least strategy, least) This strategy is called a survival strategy. Its aims are to reduce the weaknesses of the system to reduce and neutralize threats. In the management activities domain, an organization which is faced with external threats and internal weaknesses, is actually dealing with a dangerous situation. In this regard, the industry must fight for his survival and search a way for its self-defense (Hosseini, 2007). Adaptive strategies (Minimum Strategy-Maximum) The goal of adaptive strategy is to reduce the weaknesses In order to take advantage of existing opportunities. An organization might realize some opportunity in External environment, but through its organization weaknesses one may not be able to take advantage of it. In such a situation gaining adaptive strategy can provided a situation to take advantages of these opportunities (Mobini, 2011). Diversification strategy (maximum - minimum) Diversification strategy (demanding) is editing for taking advantage of the strengths of work collection to deal with external threats. Its objective is to maximize the strengths and minimize the threats. However, experience has shown that inappropriate use of power can be brought about undesirable results. No organization should use its power to eliminate threats Unconsidered (Nemati 2007). Aggressive strategy (maximum - maximum) All working businesses are trying to be able to maximize their strengths and opportunities. Unlike defensive strategy that is a reaction solution. Aggressive strategy is an active solution. In such a situation, the organization performs by using its strengths to expand the market for its products and services (Galileans, 2013). To analyze the situation, in this study it has recommended that the four strategies use with respect to the development level and from responsive strategies or maintaining and survival of the system up to the responsive strategies to achieve industry to new prospects in the future (Strickland, 1999). Study population and research sample The statistic population in this study includes specialists, practitioners and important stakeholders of ceramic tile industry. Due to the fact that dispersion of producers in different provinces of the country due to resource limitation and access to all professionals were broad, the focus of researcher for this study was low. Samples used in this study include 30 experts in the field of industrial activity in the statistical population. In this regard, for each referred Committee 5 experts and practitioners and industry stakeholders were considered as members of the panel. Research methods and data collection tools The data collection method of this research is field research. Given that in performing the process of collecting data from experts and elite s opinions in the panel is used. The Type of instrument used in this study consisted of an open questionnaire with related questions to identifying indoor environment including actual potential and strengths, Range of weaknesses, and also studying external environment including opportunities area, and available threats collection in the ceramic tile industry in The experts panel and novices and according to the opinions of experts as examples of the research was allocate to prioritizing responses. For each Expert Panel 4 to 5 sessions of the Seminar were held in order to achieve the views aggregate on the strengths and weaknesses and the opportunities and threats. In The next step for elite panel for prioritization and selecting strategies three sessions were held to combine the final opinions. RESULTS OF RESEARCH The first question from expert people was about introducing strengths and weaknesses and identifying opportunities and threats about production status in ceramic tile industry. After some sessions of intellectualizing, 1541

4 an agreement was appear between expert s point of view about weaknesses and strength of productivity, marketing and sales that is shown in table 3. The gained results of the studies and SWOT matrix in tabular format as shown in Table (4) is given below. These suggestions and obtained results are approaches from strategic planning that can be useful in the ceramic tile industry will be benefit (3). Table 3. experts' views on the state of ceramic tile industry Analysis SWOT Possibility of benefiting from more capacity production in order to achieve high levels of greater exports S1 Promoting new technologies for production S2 simple and inexpensive utilizes from new technologies in the production of ceramic tiles S3 Presence of the strong association of industry and coordination between production units S4 Production of Internal goods with a good quality construction ceramic tiles products S5 Coordination of Producing units in product prices of S6 production is done traditionally in this industry, W1 Lack of appropriate design in production to other manufacturers companies of ceramic tile in W2 Lack of sufficient attention to quality W3 improper packing W4 The high cost packaging relative to prime cost W5 Lack of waste collection system for ceramic tiles according to the amount of consuming and savings in energy and minerals sections W6 Poor communication between major internal consumer organizations with this industry W7 improper use of ceramic tiles in construction, W8 The culture of long term Shopping W9 Purchase of manufacturing ceramic tiles are used as the mediating to long term, W10 Ceramic tiles can be replaced with a similar products instead O1 There are populous countries in Iran's neighborhood (population of 500 million) O2 Products Beauty compare to other similar products O3 Existence of good climate in the country O4 The availability of energy and raw materials compared to other neighboring countries O5 Suitability of industry in an environmental view And its reversibility compared to other products O6 Consumption per capita growth in the Ceramic tiles industry (5%) O7 Ceramic tiles production surplus over 25% of internal consumption T1 The effect of interest rates on cost price due to competition with other similar products of other countries, T2 Unexpected inflation and fluctuations in currency exchange rates T3 Lack of fluidity of exported infrastructure Importing products from China (which is possible to produced in the country but it isn t produce.) T5 analysis SWOT Possibility of benefiting from more capacity production in order to achieve high levels of exports S1 Promoting new technologies for production S2 Easy and cheap use of new technologies in the production of Ceramic tiles S3 Existence of powerful Industry and coordination Association between producing units S4 production of good quality Internal goods of Ceramic tiles construction S5 Coordination of Producing units in product prices S6 Production traditionally done in this industry w1 Lack of appropriate design in production to other manufacturers companies of ceramic tile in W2 Lack of sufficient attention to quality W3 improper packing W4 The high cost packaging relative to prime cost W5 Lack of waste collection system for ceramic tiles according to the amount of consuming and savings in energy and minerals sections W6 Poor communication between major internal consumer organizations with this industry W7 improper use of ceramic tiles in construction, W8 The culture of long term Shopping W9 Purchase of manufacturing ceramic tiles are used as the mediating to long term, W10 Ceramic tiles can be replaced with a similar products instead O1 There are populous countries in Iran's neighborhood (population of 500 million) O2 Products Beauty compare to other similar products O3 Existence of good climate in the country O4 The availability of energy and raw materials compared to other neighboring countries O5 Suitability of industry in an environmental view And its reversibility compared to other products O6 Consumption per capita growth in the Ceramic tiles industry (5%) O7 Ceramic tiles production surplus over 25% of internal consumption T1 The effect of interest rates on cost price due to competition with other similar products of other countries, T2 Unexpected inflation and fluctuations in currency exchange rates T3 Lack of fluidity of exported infrastructure Importing products from China (which is possible to produced in the country but it isn t produce.) T5 Strength (S) weaknesses (W) threats (T) strength (S) weaknesses (W) threats (T) 1542

5 - based on table ( 4 ) data the most important adaptive strategies (SO) for the case study industry based on expert s perspective panel of products exhibition with proper price and penetrating international marketing in the ceramic tile industry and absorbing famous brands of world by presenting in international marketing. - based on table (4) data the most important adaptive strategies (WO) for the case study industry according to elite s panel view is effective attendance of ceramic tile industry in the world s famous international exhibition and development of dealing with producing companies to promote sales and exports. - based on table (4) data the most important variability strategies (ST) for the case study industry based on expert s perspective panel of attempt to achieve the suitable capacity of internal sales promotion comparing to exports and the development of dealing with external and professional sales companies of international marketing. - based on table (4) data the most important defensive strategies (WT) for the case study industry based on expert s perspective panel is absorbing governmental supporting and editing suitable tariffs and preventing from industrial goods of ceramics and tiles. Table 4. SWOT matrix Ceramic tiles industry from the perspective of members of the committee of production analysis, marketing and sales Weaknesses(W) Strength(W) Matrix SWOT (WO) strategies W1O5 Strong presence of the tile industry and Ceramic in the international world exhibition W3W4O2 The development of cooperation with companies producing Ceramic tiles industry technology and providing packages suitable for introducing and promotion of domestic sales and more exports (WT)strategies W2T2T3 State support and define the appropriate formulation of according to Ceramic tiles industry in the country W6T6 Preventing the entry of Ceramic tiles goods industry (SO)strategies S2S3O1 Supply products with reasonable price and high penetrate in world market S3O3 Absorbing the world's famous brands by attending international markets (ST)strategies S1T1 Trying to achieve the capacity of export of 25 percent (500 thousand tons in short term and 750 thousand tons in long term S4T4 development of Interaction with external and professional Sellers international marketing opportunities (O) Threats(T) Accordingly and on the basis of the conducted results and surveys the results of experts views are presented in the following table Strategies and Politics Creating Research Center of Ceramic Tiles industry Technology Development and modernization secondary industries of Ceramic Tiles Reconstruction and modernization of existing industries with high-tech technologies for improving the quality and development of international markets Supporting the formation of joint companies with technology owners (joint venture, cooperation, etc) more profits and competition with large companies of the world. Moving towards with high added value production and appropriate with the needs of both present and future world Strengthening the Community of Ceramic Tiles of country and setting up a Research Center by that Community Development, Interaction with associations and groups, related research centers to consumers (e.g., Housing and Building Research Center). Creating Research Network With the help of Research Center 1543

6 Qualitative Development of industry according to export capacity in collaboration with other countries technology Development of production good Ceramic Tiles with consumer s new needs Supporting the production and exporting Ceramic Tiles with high added value such as self cleaning production Ceramic Tiles for special applications such as brick and ceramic tile, floor, laboratory ceramic tile Capacity building of Ceramic Tiles industry for development of related industries to building Supporting the production of ceramics and tile pottery to achieve a high-tech green industry Strengthening mechanisms to obtain project from regional countries and executing with collaboration of world renowned companies. Supporting of creating trading companies for international marketing Absorbing cooperation in form of creating cooperative consortium or other mechanisms of cooperation for Development of Ceramic Tiles industry Providing facilities to foreign investors, for example giving land and energy with lower prices Market development and providing services and technical knowledge due to localization Training in order to transferring technology of conducted Development in new projects technology Development and modernization the Ceramic Tiles secondary industries. REFERENCES Panahi M International market entry strategies for the ceramic tile industry of country, International Marketing Management Conference,4-5 September, Tehran. Jalilians J, Akbari P A comparative study of strategic management and strategic planning. Studies and Research Center of Joseph Jalilian with approach to informing the management and accounting students. 05/05/2013 available. Hosseini SM, Panahi M creating competitive advantage in the tile industry with approach of key factors of success (case study of Iran tile industry ) Website SID, Sadeghi FOROUSHANI MR studying benefits, obstacles, and potential of exporting Iran ceramic tiles to target markets of Persian Gulf, Quarterly Journal of Commerce, 2006 ). Atafar A Evaluation of new entrants entry barriers of ceramic tile to the tile and ceramic industry from the perspective of strategic management, First Management International Conference, Innovation and Entrepreneurship,16-17 February, Shiraz David Fred R Strategic Management. Translated by Seyed Muhammad Ali Parsaeian and Arabs. Tehran, Cultural Research Bureau, twenty- fifth edition. Najjari M, GHOLI zadeh MH, azadeh del MR Strategic Planning for the ceramic tile industry. M.A. Thesis. University of Guilan. Nemati Z strategies and Research challenges and development of sina tiles in the globalization, 2007, the Sixth National Conference on Research and Development of Industries and Mines, Tehran, June 25-26, Atafar A Evaluation of new entrants entry barriers of ceramic tile to the tile and ceramic industry from the perspective of strategic management, First management International Conference, Innovation and Entrepreneurship,16-17 February 2010, Shiraz. Mobaraki KK Research Methods in Entrepreneurship, Tehran University School of Entrepreneurship Mobini dehkordi A, salmanpoor khoee M Introduction to strategic and operational planning,yas strategy magazine, second year, sixth issue, pp Strickland AJ, Thompson AAJr / "strategic management." Concepts and Irwin McGraw - Hill, Boston. Porter M "The state of thinking. The Economist "/ May 23 / strategic / pp Fry LF, Stoner RCh "Strategic Planning For The New And Small Business," Upstart Publishing Company, Inc. 1544

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