CASE STUDY: INTRODUCTION
Orb360 Background
Orb360 is an accountancy business with personality and heart based in Auckland and Wellington, New Zealand. Husband and wife team Gia and Jay Changlani founded the business in 2014. Gia is a barrister; solicitor for the high court of New Zealand (NZ) and Jay is a chartered accountant (CA) with 15 yearsâ experience working in large corporate accounting organizations in NZ.
The vision for Orb360 is to be a global champion of financial well-being, business growth and personal fulfilment.
The organizational motto is to provide clients with mind, time and financial freedom, which is precisely what they do. Orb360 is guided by the values and philosophy of Innovation, Evolution and Prosperity.
The culture within the organization is dedicated to enabling prosperity for people and giving back to the community. The staff at Orb360 are part of a valued team which is highly evident when you walk through the doors. The clients are viewed as long-term partners who value results.
Services include; specialist advisory services in accounting, taxation, mergers, acquisitions and business growth. The clients are viewed as long-term partners who value results.
Other activities complementary to the values and core business of the organization include the setup of a sister company Franchisor Advisor and Orb360 Foundation Trust (registered charity) as set out below;
Franchise Advisor http://www.franchiseadvisor.co.nz/
Part of the service is to facilitate acquisition for clients. A new franchise advisory service has been developed to better enable this. This is a one stop shop to all franchisors and franchisees with over 19 Franchisors on board. This is a niche industry with plans for growth to become a market leader in this space.
Social Responsibility â We care
Orb360 Foundation Trust was developed to ensure that the organization plays its part in the community that they are part of. There is ongoing activity in this space and the most recent was the hosting of a charitable dinner with the theme of Triple H (Homelessness, Health and Hunger). Orb360 donated $30k to this mission.
Orb360 has received funding of $60,000.00 Ethnic Development Funding from the office of ethnic communities that support ethnic communities to grow their skills, celebrate their culture and take part in society. Orb360 are also part of the Regional Business Network Programmer volunteering time as an advisor for over 50 businesses struggling due to Covid 19.
Critical Success Factors and Operations
The business has grown both organically and through acquisition (18 Months ago) of a 35-year-old accountancy firm called Patel, Pike and Associates, incorporating the client base seamlessly into Orb360. Although we had the challenges of Covid 19 we were still able to sustain business and grow by acquiring another accounting firm.
Orb 360 is customer centric providing tailored services, so the customers are central to the development and delivery of services. The business model is based on a foundation of developing partnerships with clients and external partners such as lawyers and bankers to deliver a seamless service. They provide clients
with accurate and timely information for their business decision making. The key factors to deliver this are the people, expertise, partners and technology.
There is major investment into technology as a key value proposition for clients. The software platforms include; Xero; Spotlight (data warehousing); Hubdoc (document collection and management software); Receipt Bank (a âpre-accountingâ tool for data collection); Crystal Payroll and Furls (integrated forecasting and reporting for better cashflow management). Also, on offer are hands-on tutorials and videos on software packages â free of charge to clients.
Core strategies for growth and innovation are to develop business sector expertise and leverage that by providing specialist advisory services on that sector. A sister company has been set up called Franchise Advisor that provides a wrap-around service for anyone wishing to purchase a franchise, beginning with analysis to ensure that the client is considering the right type of franchise operation for their background and skillset. Establishing partnerships with franchisors is key with 19 on board, including Greenacres, Zambrero, Kelly Sports and Tint a Car.
Key Performance Indicators
Since 2014 the business has grown their client base substantially from 0 to 1000 with two branches in major centres in New Zealand, Auckland and Wellington growing to a team of 19. Starting with $1 in the bank in July 2014 now generating revenue of 774K. The business has grown by 30% every year and last year the sales growth was 274%. Gross Profit Margin 95 % and productivity 91% have increased every year.
A variety of tools are used such as critical path /90-day plans and BIZ improvement scorecards. Their technology is critical in measuring and monitoring in achieving positive business results.
Four key performance indicators (KPIs):
Staff retention: Only one staff member left in the last two financial years. They were enticed elsewhere by better pay. Six monthly performance reviews are held which work both ways.
Client retention: Aim never to lose a client. That may seem unrealistic but if the bar is high, they will strive for excellence. The main reason they lose any customers (3% in the last three years) is due to price sensitivity.
Business development: Aim to establish market leadership in a new industry every two years. This is a new KPI and the new business enterprise, Franchise Advisor, meets that objective.
Financial performance: Aim for 20% revenue growth each year. To date they have achieved 30% growth year on year since 2014. In FY19 they achieved 274% growth with the purchase of another accountancy firm.
Market
The target market is small to medium enterprise (owners) with a 1m to 5m turnover, which is the optimum size client for these services. Clients range from the one-man band to specialized manufacturing companies. A strategic approach is taken in working with clients as partners. The success is evident in how quickly the market has grown and retained and the results they get. No clients are lost due to service satisfaction.
Franchise Advisor is developing markets for Four Square Stores, and Childcare Centers.
People and Capability
The people are the greatest asset and respectful relationships among staff is evident. Their expertise is important and being culturally competent, personable, healthy and happy are equally important.
A coaching approach to leadership is evident where being a team player is key and management strive to encourage this. Every month staff attend various online webinars and networking events to remain current in their profession. For fun each week the team partake in recreational activities together such as zumba and cricket. Weekly fruit baskets are provided to staff to ensure that they are eating healthy.
To help keep everyone on track weekly Monday morning meetings are held. Together the team evaluate what goals have been achieved and set weekly goals and actions, budgets and billable hours. The Wellington branch holds weekly meetings, if Jay cannot be there he will skype in.
Key Strengths and Opportunities
The business has been innovative and competitive through their Customer engagement, networking and service. These have been the driving forces for their growth and customer retention. Innovations taken from Doblins 10 Types of Innovationi include customer engagement, networking and service. Right at the heart of this is the development and value placed on relationships with partners and clients in order to deliver a seamless service.
Partnering People and Capability
Relationships with partners and clients are key to seamless collaboration. Aligned to this is having a good reputation with partners and clients. No promises are made that cannot be delivered.
The people, staff and partners with their experience, skills, expertise and knowledge (technical) are central to the success and future opportunities. If it is apparent that people be it staff, partners or clients do not align with the guiding values and philosophy of the business there will be no engagement with them.
The culture of the organisation is based on respectful relationships and a strong team spirit. The team is self-managing and management only intervene when there is an issue of individuals not fulfilling their potential. There is a lot of flexibility for staff to ensure a well-balanced lifestyle and there is now outsourcing to a call centre in India.
The business is financially sound and risks are measured. The location is in an upmarket suburb in Auckland, Newmarket and Wellington which is central for the target market. The development of Franchisor advisor outlines how gaps in service are quickly identified then a service is developed to meet the gap in the market. Franchisor advisor is now operational with 20 partners on board.
There is also a raft of successful charitable activity being undertaken which helps to stay true to the values and reputation of the organisation.
Technology
As outlined the use of Technology for their customers such as Xero and Futrli forecasting tool is a key value proposition for clients.
Key Challenges
There is a need to document their strategic plans, clear action plans and goals to assist with clarity of focus and more efficient time management (policies and processes). This will also allow for the whole team to be on board for the journey, as direction will be clearer showing how each individual contributes.
Human Resources
Our people are our greatest asset and we care about their wellbeing. While business expertise is crucial, we also value strong EQ, cultural competency, health and happiness. Along with this expertise ensuring that their values align with those of Orb360 is equally important.
There is a need to get the right people on board through recruitment â clients do not like change in the people that they are dealing with the staff are critical to success.
Operations – Financial
The current lease of the Auckland, Newmarket premises to 2021 is at 130K per year. There could be an opportunity to co-lease in the space with partners.
It has been identified that clarity of focus, clear goals and actions are set before starting anything new over current projects. This is to scaffold growth of the infrastructure to maintain new demand.
Orb360 has a strong sense of social responsibility and environmental sustainability aiming to become paperless by 2022. This can be a challenge given the type of service they provide however through the use of technology such as a cloud-based Microsoft suite, this is becoming more realistic.
Developing a call centre in India or the Philippines for global market growth is new to the business.
Marketing
Much of the marketing thus far has been through acquisition, good networking, partnering and service leading into reputation and word of mouth.
The work carried out through charitable events is also contributing to reputation. This is a good opportunity to promote sponsorsâ business and there is much engagement with a large business community from a diverse culture.
There needs to be clarity on a marketing strategy as per strategic challenges above. There is a risk of confusing the market if there are too many things happening for growth. The infrastructure needs to grow with the demand of services to keep up the reputation for quality.
Financial
The business is financially sound, and risk is measured. Currently much of the liability for the company sits with Jay and there is a need to share risk such as bringing a partner/s on board.
As it is a case study you should answer all questions using information from the case study and give examples from the case study to support your answers.
Develop two strategic options (1 & 2) for revenue growth using the Porters generic strategies model. (Each option (1 &2) placed into model with reasons.) For each of the options state a finding for at least three forces of the Porters five forces model. (At least three sections of Five forces model covered for each option (1 &2) with one useful statement/sentence)
Describe the competitive rivalry using Porters five-force model and the competitive advantage for Orb360. (with one useful statement/sentence)
State and explain ONE action Orb360 would need to take for option 1, and relate that action to the CYNEFIN model.
State and explain ONE action Orb360 would need to take for option 2, and relate that action to the CYNEFIN model.
The two strategic options for Orb360 have implications for the business organization, as the business functions (operations / marketing) will face new challenges, and the way they work may change. Outline the changes faced by the functions named below for each of the two strategic options
a.Operations (A response is clearly stated , with correctreasoning and expected/ possible impact)
b.Marketing(Marketing reviewed against both options and clear (and correct) statements on impact made)
Both the options require significant funding for Orb360 Discuss a way that Orb 360 could access the funds, giving TWO advantages and TWO disadvantages for Orb 360.
(One funding source is stated and briefly explained (2) Two advantages /disadvantages are given (one sentence description only)
Sample Solution
