Using SWOT, Value Chain, Porter’s Five Forces Essay
Corporate governance has to be used to reposition the operations of BBC, analysis of both the micro and macro environmental points of view of the organization – where anemographic, socio-cultural, political/legal, technological and global considerations of the organization in question. It also dwells on strength, weaknesses, opportunities and threats including studying trend analysis of the organization.
Porter’s five forces model, concept of strategy groupings, resource-based view, triple bottom line reporting, value chain analysis and financial analysis would have to be examined critically so as to make BBC have a competitive advantage over its rivals. Based on the above concepts in this report, it is hereby recommended that BBC has o:open new markets and establish branches in other countries by targeting major cities and towns using same standards, quality, menu, site selection and construction. ?develop more healthy and quality foods, unique brands, always be ahead of competitors and try to use trend analysis to know the lifestyles of people, tastes, maintain its corporate social responsibility with stakeholders, look at marketing mix, develop its technological base and have a friendly atmosphere at their various cafes including motivating employees these recommendations are implemented, it is leveled that BBC will occupy more than 30% of
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1 . Introduction .
1 The aims of the report BBC can reposition its leadership edge by ensuring the management concepts remains special, opening up franchises, encourage transparencies in management practices and be proactive in terms of change and innovations. How BBC can sustain its rising profit and growth levels. 1. Objective of the report BBC can ensure consistency in their vision, mission Using SOOT, Value Chain, Porter’s Five Forces and other variables in Pander Bread Company, USA
By knockdowns formulation, implementation and corporate specialization’s the micro and micro environments of Busing Porter’s five forces model and concept of strategy groupings to make BBC have competitive advantage over their competitors. Using resource base view and value-chain analysis to identify possible opportunities and threats for BBC.
2. Background of the Company is a market leader in the restaurant industry business. Started business in 1981 with three bakery cafes and by 1997, their bakery cafes were 160 with branches in five countries and cafes in domestic airports and tools.
PC’s concept is to sell only fresh dough and no preservatives. Their mission is ‘a loaf of bread in every arm’ with 18 different products. It intends to establish Wi-If access in 2003, and has many awards in its kitty. They have a good distribution network, franchise operations, management information system and supply chain management and highly professionalisms staff. The 2004 first quarter performance showed an increase of 26% over same period in 2003 with a highly priced shares.
3. Case Study Unilateralism’s are set of actions that firms use to achieve its goal.
While strategic management focuses where an organization is at present and where it intends to be in the future. The task of analyzing a firm’s internal and external environment and selecting an appropriate strategy is known as strategy formulation. Strategy implementation involves putting appropriate controls and organization mechanisms to keep the company’s chosen strategy into action. Vision statement is the long run aspirations of the organization while mission statement means what is expected of the organization by its stakeholders.
This report focuses on micro-macro environment of BBC in order to retain their adhering role, increase market share and profitability. Resource Based View, Porters five forces model, strategic groupings, value chain, SWOT and financial analysis including triple bottom line reporting, and how these concepts would help the BBC to be a market leader would be analyses.
Macro Environmental economic factors are political, socio-cultural, environmental, economic, technological and legal.
Political consideration has to maintain its corporate governance issue by making sure that taxes are paid promptly and study government policies as it affects he business. At the moment political consideration is not really a big issue with BBC but if it intends to expand its operations, government polices of countries it wants to
Demographic forecasters that are less profitable by the organizations should be closed down and move to areas that increases profitability (Hill et al 2004).
Presently there is significant growth for young people and children who rarely cook at home and they patronize these fast casual restaurants. These youths are concerned about their health by eating healthy and quality foods which BBC should target for high reputability.
Socio-cultural baccalaureates in the population of women in workplaces are massive and higher levels of health consciousness have created a boom to many industries (Campbell et al 2006). BBC should study population demographics, income distribution and lifestyles changes within their areas of operation to their advantage. Read about Value Chain Analysis Under Armour
EnvironmentalOperating environments have to be friendly. This should done in such a way that corporate social responsibility to communities in terms of pollution, waste disposal and environmental protection laws are adhered to Monsoons et al 005). At the moment it runs ‘Operation Dough Nation’ where all monies received and all unsold inventories goes back to the community it operates.
Economic factorials all the industries are prone to general economic conditions. High interest and exchange rates, and average disposal income can affect organizations to larger extent (Campbell et al 2006).
At the moment business is booming for BBC, therefore it has to consider business cycles, product trends, interest rates, inflation and also disposable income of consumers in order to have a competitive edge.
Technologically is now a global phenomenon in virtually every business. For a company to remain competitive it has to enhance its technological base to compete with rivals (Campbell et al 2006). BBC is expanding its technological base by introducing point of sale machines and credit cards network at each cafe©.
This helps in planning for marketing information, product mix, quicker accounting information and other variance analysis. 3. 1. Legislation et al (2005) pointed out that organizations should be cautious of health and product safeties, employment laws and legislations. Taken into account its ranches operations with other organizations, it has to make sure that organizations’ it enters into agreements comply with its standards, quality, menu, site selection and construction of cafes. The training program organized by the organization prior to franchisee starting business is applauded.
Challenges in the environment such as political and economic have created a business boom to some countries, while some have witnessed economic recession as a result of this. Government policies and changing cultural patterns by consumers have had a positive impact in some industries while some are unhappy with these effect their business especially intra-country trades where they have to convert currencies of their branch companies overseas.
SWOT Analysis’s shows the internal strengths and weaknesses of an organization from the customers’ point of view as they relate to external opportunities and threats (Hangman 2002).
Strengthener’s of organizations are the committed leadership zeal of managers, experience in the industry, clear and articulate line with external stakeholders, strong product design and commitment to consumers in the area of innovation (Lee et al 1999). The strengths or core competencies BBC has at the moment over its competitors include the product, distribution and franchising, operations, marketing mix, general managerial ability and low personnel turnover.
Handsomeness’s can be in the form of no clear management styles, poor image, research and development issue, competitive disadvantage, poor track record, insider problems, financing problems and possible training problems by managers and supervisors (Deeds et al 2007). BBC has to invest in research and development, improve its image with stakeholders and improve on its marketing strategies.
Opportunities growing demand for healthy and quality foods is an opportunity that BBC has at the moment over its competitors and it has to be sustained to make them have continuous dominant role in this industry (Stead et al 2004).
Managers of BBC should analyses competitive forces in the restaurant sector in order to identify the various opportunities in terms of product enhancement and new products, create new markets and prediction of trends.
Threats: What makes an organization to be strong is to identify possible threats within its operational base. The threats could be in the form of government policies, search, competitive pressures, new entrants, changing customers tastes, adverse demographic changes, recession, growing bargaining power of suppliers and customers (Deeds et al 2007).
BBC has to lay particular emphasis on new entrants, watch industry indicators, government adverse policies and changes in customers needs and tastes.
Resource based vitiates considers the opportunities available to a company either to add value to its products and services or look at ways of reducing costs (Deeds et al 2007). It may be possible to add value to the value chain of an organization n terms of procurement of raw materials and production processes.
The present system that BBC is using where it has signed agreement with Dawn Food Products and also having economic of scale in terms of supplies makes the pricing of their product very competitive.
Porter’s five force industry competitiveness’s five force industry competition rivalry among competitors in the same industry, the bargaining power of buyers and the threats of substitutes products. Porter argues that the stronger these forces are within an industrial setting the more limited companies raise prices and earn greater refits (Campbell 2006).
As far as this is concerned a strong competitive force can be regarded as a threat because it would drastically reduce the profit of an organization (Williamson 2004).
The threat of substitute productions within the same industrial setting are competing amongst themselves. Substitutes limits potential returns on an industry by placing a ceiling on the prices companies charge. This should be a lot of concern for BBC because there are lots of organizations offering same product in the market.
The threat of new entrant’s new entrants enter the industry they tend to cake extra effort in order to take full control of the industry. The extent to which new entrants can enter an industry exerts a significant influence on the degree to which companies may act to earn above average in terms of bottom line Monsoons et al 2005). At the moment BBC enjoys some element of economies of scale, brand recognition, access to distribution channels and experience in carrying out operational activities leading to lower cost of production.
But it is good for new entrants to enter the market because this brings about competition in the industry.
The power of presbyters are seen as competitive threats when they are in a position to demand lower prices or better service . Conversely when buyers are weak, a company can raise its prices and declare higher profits Monsoons and Schools 2002). This has to be taken into account by BBC following volume of restaurants around. BBC should recalculate its costs since it intends to increase prices by 2% to see the justification prior to embarking on it.
The power of superciliousness can be viewed as threats when they are able to force up the price for raw materials or reduce quality of materials. However, if suppliers are weak, companies can force down their prices and demand higher raw material quality. BBC believes it can have cost savings from switching to Dawn. 3. 4. Rivalry among established companies rivalry is weak this will result to increase in prices of products at the detriment of consumers and ultimately increase profits and vise versa Monsoons 2005). BBC should regularly study competitors’ moves.
Value Chain Analysis (VGA)VGA helps managers to understand how effectively and efficiently the activities of their organizations are structured and coordinated. In other words, it seeks to provide an understanding of how much value an organization’s activities add to its products and services compared to the costs of the services used in their production. This helps management to identify core activities, know if there is breakdown or blockages to their detriment (Tsar et al 2006). The distribution network of BBC is good since it uses an independent contractor that concentrate in the retail operations.
Their franchise operations should be sustained.
Strategic grotesque (1980) defined strategic (SO) groups as group of firms in the name line of business having identical strategy following through the strategic direction. Carroll et al (1992) as cited in Fluvial and Polo (1999) organizations within the same Sis often compete for market share. BBC has a lot of organizations within the same Sis, and therefore should use this to their advantage by understudying their competitors strengths and weaknesses.
Triple bottom linnet’s is the combination of social, environmental and financial reporting for an organization to its stakeholders (Deeds et al 2006). BBC does not show its report in this format, although this is optional for organizations but to enable takeovers understand PC’s business better they should incorporate this into their report like the Operation Dough Nation and the unsold inventory proceeds. 4RecommendationEncourage research for new products and branding. Explore the possibility of new branches across borders. ?Improve marketing drive to increase sales since its closing inventory in 2003 was $8066 million dollars as against $5191 million dollars in 2002. Identify threats and weaknesses through strategic grumpiness’s recovery of debts from debtors which shows $9646 million in 2003. Reduce its liabilities which gave $35,552 million dollars. ?Plan for succession incase of possible changes in leadership hierarchy.
Conclusion, BBC should regularly scan the micro and macro environments for signals of environmental changes or general trends that are occurring.
On observing a trend that may lead to a market changes, the company needs to monitor the change so it has a better understanding of the exact nature of the change and whether it applies to the organization. If the monitoring mechanism suggests the change is relevant, then the company needs to forecast how the change will affect its operations in future. It is then necessary to assess the forecast implications to determine whether the market change will require a change in the company’s strategy. Benchmarking, reengineering and total quality management should not be left out.
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