SWOT Analysis for Richward Ltd.
Strength

• Richward Ltdis an established business with an experienced management team
• Bonku lives on site enabling Richward Ltdto offer a 24-hour service to customers
• The company acquired a lease on a new site that has quite a lot of potential
• The company has diversified into truck driver training which reduced dependence on read haulage for income.
• Replacement of old trucks and other equipment. This increases the efficiency of operations.
  Weaknesses
• Richward Ltd’s existing site is too small, so it will have to locate the new site that requires more capital and will disrupt business operations.
• Richward Ltd currently does not have an effective management accounting system, which means Richward Ltd’s managers make decision without having sufficient information
• The company is too dependent on Grace Ltd, which account for majority of its business
  Opportunities
• The enlarged premises will enable the company to attract new business and offer new services e.g. overnight trailer parking and a vehicle repair service.
• Richward Ltd should be able to establish stronger links with existing customers, which should help to retain their business.
• Location of land/business premises.
  Threat
• The most serious threat facing Richward Ltd is the loss of Grace Ltd’s custom. In the last two months one third of this business has already been lost.
• There are a large number of competitors working on low profit margins and this forces price down. There appears to be little prospect of Richward Ltd being able to increase its prices.
• Local residents are opposing operations from the current site and the company is receiving bad publicity in the local press.

1. Rivalry amongst existing competitors
Richward Ltd faces strong competition for haulage contract work and it appears that there are several firms operating in the market. Profit margins are low, which indicates that work is undertaken at low prices. A major customer, Grace Ltd, uses other haulers, which suggests that competition for business is fierce. Richward Ltd is facing strong competition from existing competitors. The strong nature of competition is also exacerbated by low switching costs of customers.
2. Threat of a new market entrant
The main constraints on setting up a road haulage business will be obtaining a license and having sufficient capital to purchase or lease a tractor unit and trailer. Finance for such an operation will be readily available. The only other significant entry barrier might be low profit margins. It appears that, overall, the road haulage industry has few major entry barriers so this will always be a threat to established business such as Richward Ltd.
Note: Any of the points under barriers to entry that is well explained may considered – capital requirements, low switching costs of customers, degree of differentiation, economies of scale, knowledge requirements, etc.
3. The power of customers
The customer of Richward Ltd will be primary organisations that employ skilled people who know the road haulage industry and how to negotiate contracts. As there are many competing businesses in the trade, this puts the customers in a strong bargaining position. This is shown by the fact that Richward Ltd’s major customer Grace is using other hauliers and is, no doubt, assessing its supplier’s prices and performance. The power of customers in the market is strong; this poses a serious threat to Richward Ltd.
Note: Other points which may be considered are switching costs, concentration risks (demand), number of competing firms, negotiating skills, profit margin of customers.
4. Power of suppliers
The main suppliers to Richward Ltdwill provide vehicles, other plan and equipment, formal services and labour. It is unlikely that any supplier is in a strong monopolistic situation, except possible providers of capital. Richward Ltdis in an established position and while it remains profitable will probably be able to obtain reasonable amounts of capital. The power of suppliers does not appear to be very strong.
5. The threat of a substitute product
The main substitute for road haulage services is freight carried by the railway industry. The current dire state of this industry means that rail freight cannot be considered a serious threat to Richward Ltd.
Note: Other points which may be considered are switching costs, concentration risks (demand), number of competing firms, negotiating skills, profit margin of customers.
Overall, Richward Ltd’s competitive position is not strong as it faces a number of competitive threats.

Most corporate governance codes are based on a set of principles founded upon ideas of what corporate governance is meant to achieve. This is based on a number of reports.
1) To ensure adherence to and satisfaction of the strategic objectives of the organisation, thus aiding effective management.
2) To minimize risk, especially financial, legal and reputational risks, by ensuring appropriate systems of financial control are in place, systems for monitoring risk, financial control and compliance with the law.
3) To promote integrity, that is straightforward dealing and completeness.
4) To fulfill responsibilities to all stakeholders and to minimize potential conflicts of interest between the owners, managers and wider stakeholder community.
5) To establish clear accountability at senior levels within an organisation. However, one danger may be that boards become too closely involved with day-to-day issues and do not delegate responsibility to management.
6) To maintain the independence of those who scrutinize the behaviour of the organisation and its senior executive managers. Independence is particularly important for non-executive directors, and internal and external auditors.
7) To provide accurate and timely reporting of trustworthy/independent financial and operational data to both the management and owners/members of the organisation to give them a true and balanced picture of what is happening in the organisation.
8) To encourage more proactive involvement of owners/members in the effective management of the organization through recognizing their responsibilities of oversight and input to decision making processes via voting or other mechanisms.
Note: Some students may approach this question from the perspective of the OECD principles of corporate governance as follows:
1) The right to shareholders: Shareholders should have the right to participate and vote in general meetings of the company, elect and remove members of the board and obtain relevant and material information on a timely basis. Capital markets for corporate control should function in an efficient and timely manner.
2) The equitable treatment of shareholders: All shareholders of the same class of shares should be treated equally, including minority shareholders and overseas shareholders impediments to cross- border shareholding should be eliminated.
3) The role of stakeholders: Rights of stakeholders should be protected. All stakeholders should have access to relevant information on regular and timely basis. Performance-enhancing mechanisms for employee participation should be permitted to develop. Stakeholders, including employees, should be able to freely communicate their concerns about illegal or unethical relationships to the board.
4) Disclosure and transparency: Timely and accurate disclosure must be made of all material matter regarding the company, including the financial situation, foreseeable risk factors, issues regarding employees and other stakeholders and governance structure and policies. The company approach to disclosure should promote the provision of analysis or advice that is relevant to decisions by investors.
5) The responsibilities of the board: The board is responsible for the strategic guidance of the company and for the effective monitoring of management. Board members should act on a fully informed basis, in good faith, with due diligence and care and in the best interest of the company and its shareholders. They should treat all shareholders fairly. The board should be able to exercise independent judgement; this includes assigning independent non-executive directors to appropriate tasks.

Sustainability involves developing strategies so that the company only uses resources at a rate that allows them to be replenished such that the needs of the current generation can be met without compromising the needs of future generations. At the same time, emissions of waste are confined to levels that do not exceed the capacity of the environment to absorb them.
The triple bottom line (TBL) is sometimes summarized as People, Planet, and Profit. It consist of:

• Social justice: fair and beneficial business practices towards labour and the community and the region in which a corporate conducts its business. A TBL company conceives a reciprocal social structure in which the wellbeing of corporate, labour and other stakeholder interests are interdependent.
• Environment quality: a TBL company endeavours to benefit the natural order as much as possible, or at the least do no harm and curtail environmental impact. In this way, the company tries to reduce its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewable resources, and by reducing manufacturing waste, as well as rendering waste less toxic before disposing of it in a safe and legal manner.
• Economic prosperity: the economic benefit enjoyed by the host society. It is the lasting economic impact the organization has on its economic environment. Importantly, however, this is not as narrow as the internal profit made by a company or organization.

Longer term decisions, particularly relating to design and the innovation of improved products, cannot be taken by the production department alone; its activities must be integrated with other functions in the firm.

• Product design is co-ordinated with R&D. Production should advise R&D as to the consequences of particular designs for the manufacturing process.
• Job design will involve consultation with human resources specialists.
• The quantities needed to be produced will be notified by the sales department.
• The human resources department will be involved in managing the work force.
• The finance department might indicate the resources available for new equipment

All corporate governance reports (included Ghana’s Code of Best Practices in Corporate Governance) state that board directors should explain their responsibility for preparing accounts. They should report that the business is a going concern, with supporting assumptions and qualifications as necessary.
In addition, further statements required include:
1. Information about the board of directors: the composition of the board in the year, the role and effectiveness of the board, information about the independence of the non-executives, frequency of, and attendance at, board meetings, how the board’s performance has been evaluated. For example, the South African King Report suggests a charter of responsibilities should be disclosed.
2. Brief report on the remuneration, audit and nomination committees covering terms of reference, composition and frequency of meetings.
3. Information about relations with auditors, including reasons for change and steps taken to ensure auditor objectivity and independence when non-audit services have been provided (Ghana’s code requires that audit and non-audit fees are disclosed).
4. A statement that the directors have reviewed the effectiveness of internal controls, including risk management. Also sufficient disclosures should be given for shareholders to understand the main features of the risk management and internal control processes. Board should also give details of, or at least confirm, any action taken to remedy significant failings or weaknesses. (This is required by Ghana’s Code).
5. A statement on relations and dialogue with shareholders.
6. A statement that the company is a going concern. (This is required by Ghana’s Code).
7. Sustainability reporting, defined by the King Report as including the nature and extent of social, transformation, ethical, safety, health and environmental management policies and practices.
8. A business review
9. A statement detailing the compliance by the organisation with corporate governance, legal and statutory requirements. (This is required by Ghana’s Code)
10. Ghana’s Code of Best Practices in Corporate Governance also requires the following disclosure:
The board should also ensure that information is disclosed on the following matters in the annual report insofar as they are relevant to the period under review –
(a) All management fees paid by the corporate body with details of the names of the parties and their relationship to the compote body;
(b) The identities and percentage holdings of substantial shareholders;
(c) significant cross shareholding relationships;
(d) Related party transactions;
(e) Details of incentive schemes, such as stock option scheme;
(f) The fees paid to the auditors of the corporate body for audit and non-audit related work; and
(g) Any other material issues concerning employees and other stakeholders such as creditors and suppliers.

Resource audits identify human, financial and material resources and how they are deployed. A resource audit is a review of all aspects of the resources the organisation uses. The Ms Model categories the factors as follows:

1) Stating the purpose of the organization
2) Stating the business areas in which the organization intends to operate
3) Providing a general statement of the organization’s culture
4) Acting as a guide to develop the direction of the entity’s strategy and its goals/objectives
5) Customers. Who are the enterprise’s customers?
6) Products or services. What are the firm’s major products or services?
7) Markets. Where does the firm compete?
8) Technology. What is the firm’s basic technology?
9) Concern for survival, growth, and profitability. What is the firm’s commitment towards economic objectives?
10) Philosophy. What are the basic beliefs, values, aspirations, and philosophical aspirations of the firm?
11) Self-concept. What are the firm’s major strengths and competitive advantages?
12) Concern for public image. What is the firm’s public image?
13) Concern for employees. What is the firm’s attitude toward employees?

Note: Any student who approaches this question from the Ashridge College model perspective should earn the full mark. Find below
1) Purpose: Why does the company exist? Who does it exist for?
2) Values: are the beliefs and moral principles that underlie the organisation’s culture.
3) Strategy: provides the commercial logic for the company (the nature of the organisations business), and so addresses the following questions. ‘What‘s our business? Or, what should it be?’ What are our elements of sustainable competitive advantage?
4) Policies and standards of behavior: provides guidance on how the organistaion’s business should be conducted.