Assignment 1: Strategic Thinking – The Importance of Aligning HR Strategy with Business Strategy Human Resources Management, University of Manitoba Extended Education HRM 0126: Strategic Human Resource Planning Business Strategy: The Golden Bone and Happy Dog Pet Food Using Porter's four generic strategies (Boyd, 2018) analysis of the business strategies employed by each company is highlighted below: 1. The Golden Bone: employs a differentiation strategy. They differentiate themselves by offering high-end, stylish, and exclusive pet products through their own brand, “Goldie's Choice.” They focus on providing a unique and curated selection of luxury pet items, including fashionable accessories, pet-friendly home decor, and holistic wellness products. By vetting and recommending products personally, they establish trust and credibility with their target market of discerning pet owners. The company also aims to grow its subscription services. The organization's strengths lie in its ability to offer a wide range of premium products and its expertise in the luxury pet market. Their physical presence in upscale neighbourhoods enables them to cater to affluent customers willing to spend on their pets' well-being. Their strong supplier relationships enable them to access unique and exclusive products. Golden Bone's target market consists of affluent pet owners who prioritize quality and are willing to invest in high-end products for their pets. 2. Happy Dog Pet Food: adopts a cost leadership strategy. They focus on providing highquality pet food at a lower cost than fresh, raw, or homemade options. Using humangrade, fresh ingredients and eliminating middlemen, they maintain competitive pricing while delivering nutritious pet food. The company sells directly to posh pet retailers and individual consumers through its website, offering a subscription service that ensures a consistent supply of pet food. The organization's strength is its ability to offer quality premium pet food at a lower cost. By sourcing directly from suppliers and bypassing intermediaries, they reduce costs and maintain competitive pricing. Happy Dog Pet Food targets pet owners who prioritize their pets' health and nutrition but are conscious of their budget. They aim to capture a loyal customer base through excellent product quality, customer satisfaction, and efficient manufacturing processes. SWOT Analysis SWOT Strength Weakness Opportunity Threat The Golden Bone Strong brand image and reputation in the luxury pet market. Good supplier relationships, ensuring access to unique and high-quality pet products. Expensive retail space and high labour costs. Growing market demand for high-end premium pet products. (based on projection) Lack of labour supply in the marketplace for specialized employees. Happy Dog Pet Food High-quality pet food made from human-grade, fresh ingredients sold at a lower cost. Strong online reviews and loyal customer base. High turnover Lack of scalability compared to larger pet food manufacturers. Increasing consumer awareness and demand for premium pet food. Price competition from larger manufacturers with better scalability Potential disruption in the supply chain or ingredient availability affecting production and delivery. The implications of the business strategy on the HR strategy The best-fit approach or contingency model asserts that organizations will be more effective if a strong fit exists between corporate strategy and HR programs and practices. In the same light, the concept of vertical fit is “concerned with ensuring integration of HRM with the strategic management process.” (Azmi, 2019) Happy Dog Pet Food In line with this approach, the cost of leadership business strategy adopted by Happy Dog Pet Food has immediate significant implications for its HR strategy. An organization with this kind of strategy should have the following HR practices: Selection: The recruitment and selection process will be cost-effective, with little or no advertisement needed, and focused mainly on entry-level employees with minimal skills. Training: Employees hired are such that they can be trained quickly and easily. Most training will take place on the job in the form of coaching from a supervisor. There will be no need for investment in long-term development for employees. Compensation: This strategy requires lower wages to keep costs low. Performance appraisal: Employees are evaluated based on standardized criteria. Feedback will be specific and immediate, with little opportunity for debate. HR categories of improvement With a focus on offering high-end and exclusive pet products, Golden Bone’s business strategy requires specialized knowledge and ongoing education about pet nutrition. This implies that their HR strategy needs to prioritize attracting, training, and retaining employees with the necessary expertise in the luxury pet market. Happy Dog Pet Food, on the other hand, focuses on providing cost-effective, nutritious pet food options. Their strategy emphasizes reducing costs, including labour expenses, and enhancing employee skills and productivity without specialized training. With two different business strategies, the impact on the HR components in each organization is different: Category of Improvement Talent Strategies The Golden Bone The recruitment and selection process will be rigorous to identify candidates with a deep understanding of pet nutrition and a passion for the industry. Investment in employee retention initiatives such as competitive compensation packages, performance-based Happy Dog Pet Food The recruitment and selection process will be simple and cost-effective, prioritizing hiring people with minimal skills at lower wages to align with their cost leadership strategy. Employee job functions will be simplified and narrowly Learning and Development incentives, and opportunities for growth and advancement within the organization Investment in comprehensive training programs and continuous education initiatives to enhance specialized knowledge. structured. Focus and emphasis on skills training and cross-training for efficiency and flexibility Aligning HR with Strategy Strategic Objective of Happy Dog Pet Food: Increase Average Revenue Per Account (ARPA) by 10%. Strategic HR Priority: Enhancing Customer Service and Relationship Management. HR Initiative: Implementing a Customer Relationship Management (CRM) System. The link between the HR priority/initiative and the strategic objective: To support the strategic objective of increasing ARPA, Happy Dog Pet Food can prioritize enhancing customer service and relationship management by implementing a CRM system. The Customer Relationship Management (CRM) System would enable the organization to effectively manage customer interactions, track their preferences, purchase history, and provide personalized services. The HR initiative of implementing a CRM system aligns with the strategic objective. With a better understanding of customer needs and preferences, the organization can improve customer engagement and satisfaction, foster loyalty, drive repeat purchases, and ultimately boost ARPA. References Boyd, J. (2018, October 5). What are Porter's Generic Strategies? Theory by Video Explained. Toolshero. Retrieved June 21, 2023, from https://www.toolshero.com/strategy/porters-generic-strategies/ Azmi, F. T. (2019). Strategic Human Resource Management: Volume 1: Text and Cases. Cambridge University Press.
