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Strategic Analysis

Discuss about the Business Strategy for West Fried Chicken?

This paper is about the strategic analysis of the business strategy of West Fried Chicken. The company is fast food shop situated in London. The aim of the business of this company is to provide the best quality foods to the customers in the most affordable price. The business of the company is not so big at present. They are conducting their business with the vision of being one of the best seller brands of fast foods in the UK market. In order to fulfill the strategic vision of the company the management of this company needs to develop a good marketing strategy for attracting a huge amount of customers towards their products and services. The company is conducting their business well in the small target market with the superior level of customer services provided by the employees. Now they are operating in London. After developing a good place in the target market, now they are planning to expand their business. They are currently offering different types of fried chicken products such as fried chickens, grilled chickens, kebab, chicken popcorns etc.

At present, the demands for fast foods are good but the people of the present world become more conscious about the health issues. Therefore, the fast food companies need to focus in the area of producing healthy food products for their customers. Diverse taste of the foods is also affecting the industry in a significant way as people of different region of the world are living in the UK. People are also showing their interest in taste of different regions in one place (Kellermanns, Dibrell and Cruz 2014). Therefore the companies of the fast food industry of the country are trying to develop diverse food products in healthier way. West Fried Chicken is not an exception of this trend. They are facing above mentioned trends in their target customers and they are also trying to introduce new range of fast food products for their customers. The company is trying to introduce a number of shops in different segments of UK where different types of regional fast foods of different countries will be available. In this context, the company needs to be associated with an efficient supplier company that will be able to supply the good quality products in a reasonable price (Wittmann and Reuter 2013). They have succeeded to increase the sale by 15 % in the last year by introducing some new fast foods. In this report, the business strategy of the company will be analyzed to understand the condition and future scope of the business. After analyzing the strategic goal, purpose and the business environment some suggestions will be given for the future improvement of the business.

PESTEL Analysis

In this section the internal and external environment of the business will be analyzed to understand the present condition of the business market and the position of the company. After analyzing these facts the SWOT analysis of the company will be done for understanding the potential strength and weaknesses of the company.

PESTEL analysis is the best tool for analyzing the external business environment of a business organization. In this the six important factors of the business environment will be analyzed.

Political: The present market of the fast food is associated with supplying genetically modified food products. The UK government has some special rules regarding the labeling and packaging of this type of food products. The companies have to inform the customers about the genetically modified ingredients by writing this information on the packages. The customers have the right of taking decisions about purchasing these products (Ibrahim 2015). The fast-food business sector is exceedingly influenced by the presentation of (GST) Goods and Service Tax which brought about the progressions of costs in fast food outlets while the costs of other sustenance things stayed unaltered. In this manner, the fast food industry gives a greater focus on administration instead of item expressing that the client won't get such kind of administration in their homes to separate them (Kourdi 2015).

Economic:The expense for setting-up a fast food joint or an outlet is low. It turns out to be similarly simple to enter the business sector. Franchising is an additional useful fact and offers setting up a decent brand image. The business sector is developing as ever and a developing business sector is vital for the fast food industry. At the season of recession, the fast food shops improve business than other costly eateries as the value component gets to be critical at such circumstances. Common people tend to minimize their costs as their extra cash is less (Morris et al. 2015).

Social: The business of the fast food is highly associated with the life style of the common people has more focus on the social needs of the target customers. The trend of eating different types of fast foods is increasing which is influencing the business of the fast food sector. The increased health consciousness is affecting the product development strategy of the fast food companies. Generally, the fast foods are known as high calorie foods. This fact is affecting the choice of the health conscious people (Khalili Shavarini et al. 2013).

Porter's Five Forces Analysis

Technological: This is fast growing industry where technological innovation is playing a vital role. Computerized order taking and the billing system is using for the business operations. In case of large business organizations, the electronic fund transfer and online order placing are also playing a vital role in the business of the fast food products (Alstete 2013).

Environmental: At present, environmental development is a vital issue for the fast food companies. An eco-friendly company can develop a better brand image in the present world. In this context, the companies have to use the eco-friendly packaging of the products which can ensure the minimum level of negative effect on the environment. The energy efficient systems should be used in the outlets and production houses of the companies (Verbeke 2013).

Legal: The companies which are conducting their business in the UK fast food sector should adopt proper Health and Safety regulations as the business is related to the foods. The rules proposed by the Food Standard Agency (FSA) should be maintained by the fast food companies (Pagani 2013).

Porter’s five forces is a frame work useful for the analysis of the market completion of a business organization. There are five important factors which are affecting the market competition of WFC are discussed in the section below.

Threat of new entries: The growing market which has high returns always attract new companies to enter in the market. This affects the profit level of all the existing companies. One of the main reasons behind this fact is the tendency of the customers to get attracted by the new products and services. The new companies attract the customers by attractive products and services within a low price by maintain a lower profit level at the initial stage of the business. In this case, WFC is itself a new company which is trying to enter in the broader market (Sabherwal, Hirschheim and Goles 2013). It has to ensure attractive services for developing the brand image and position in the broader market.

Threat of substitute products: A lot of similar types of fast food products are available in the present market and the companies are always trying to develop new types of products for their customers. Therefore, the business organizations of this industry have a potential threat of the substitute products (Basili et al. 2013).

Bargaining power of the customers: Bargaining power of the customers has a major effect on the profit level of the business of a company. The high bargaining power of the customers is the cause of lower profit in the business. More options of the companies for shopping give the high bargaining power to the customers. In this case, there are lot of fast food companies in the present UK market, so the customers have significant level of bargaining power (Rothaermel 2015).

SWOT Analysis

Bargaining power of the suppliers: Bargaining power of the suppliers is dependent on the number of suppliers available in the business area. Less number of suppliers increases the bargaining power which is harmful for the company. In this case, the WFC may not face this problem as there are lot of suppliers which are able to supply the necessary products for developing the different types of fast foods and offering to the customers (Pisano 2015).

Intensity of competitive rivalry: The target market of the company is full of market competition. They are trying to enter in the broader market where some giant competitors are present. The big competitors of the company are McDonalds, KFC, Domino’s, Subway, Greggs etc. There are lot of small restaurants and takeaway shops which are the potential competitors of the company. Therefore, the company needs to achieve the sustainable competitive advantage for conducting their business well and grow the business in the global market (Burlton 2015).

After understanding the market environment and the competiveness of eth target market of the company, the SWOT analysis of the company will help to understand the strength, weakness, opportunity and threat of the business by comparing the factors of business environment to the current strategy of the company.

Strengths:

·         Good customer service

·         Lower price

·         Lot of options for the customers

·         Quality assurance

Weaknesses:

·         New company, the brand image is not developed

·         High expenses are required for developing the business for entering into the bigger market

·         Low profit level

Opportunities:

·         Better customer service and eco-friendly business operations will help the company to develop the brand image and grow their business

·         Trend of tasting different types of regional fast foods of the customers will help to grow their business by introducing the new ranges of regional foods.

Threats:

·         The high level of market completion and the presence of the big fast food companies in the target market is the main threat to the business of the company.

As the company is growing there business, the direction of the future business strategy should be set at this level. The company will give the main focus in the area of brand image development. In this context, the high level of customer services will be the main aim of the company. The business expansion will be also started in the first year and significant level of promotional activities will be the target. In the second year, the company will open number of outlets in UK. In this year, the promotional activities will be conducted in standard manner to develop the high level of awareness and to improve the brand image of the company. In the third year, the technological innovation and more expansion of the business will the main target of the company.

Re-evaluation of the vision and mission statement:

As previously discussed, the mission of the company is to deliver the superior quality of the products in the most affordable prices to the customers. This mission of the company should be unchanged at the time of business expansion and the brand image development. Beside this mission another aim should be incorporated with the mission statement of the company. The aim is to conduct an eco-friendly business. Therefore, the modified mission statement of the company should be delivering the richest quality product in the best prices in an eco-friendly manner (Carraher and Paridon 2015).

Recommendations

The company is conducting the business with the vision of being on the biggest fast food companies of the world. The vision is good for the growth of the company but the management the company should understand that the expansion of the business should not be too high. The expansion should be slow but steady. The rapid growth within a shorter time period may be harmful for the business operations of the company. In case of major growth over a short time period the company may take wrong decisions which may affect the business negatively. The companyshould increase the business step by step (García‐Rodríguez et al. 2014). At the first m the business expansion should have the target of being the best one among the local retailers available in the present local market in which the company is currently operating their business. After this step the target should be the being the best one in the companies in a larger area. In this strategy, by achieving the strategic vision step by step, the company will be able to achieve the ultimate vision of being one of the most successful fast food companies across the globe. This will take time but the strategic approach and proper business operation maintenance the company will be able to achieve this goal (Iacob et al.2015).

The company is a small company and has the aim of increasing both of the market area and sales volume. The common growth strategies will be applied to the company’s business strategy which will incorporate some changes in the previous business strategy of the company. The first strategic change will be required to incorporate the market penetration for gaining a good position in the expanded target market. In order to do this, the company needs to develop proper awareness about their product and services. In this area the main changes are required in the area of the promotional activities of the company (Schrader et al. 2012).

They should also incorporate the product diversification strategy in their existing business strategy where they will be able to introduce a large number of new options for the customers. In this area, the company will introduce the regional fast foods of different countries for attracting the customers who are interested in tasting the foods of different areas (Nordin et al. 2013).

The business of the company will be increased to a higher level, so the total operational strategy of the company needs to be updated as per the requirements. Hierarchical structure should be incorporated in the operational strategy of the company. They should also incorporate the latest technological innovation in their operational environment. The innovative IT tools should be sued for handling the information and the business operations of the expanded business of the company. The internet technology has become the essential part of the life of the common people (Woerner and Wixom 2015). The business operations can be efficiently expanded and operated by the use of the internet technology for information sharing, customer order taking, payment and customer feedback collection etc.

The main aim of the company is to expand their business. In this context, the selection of and maintenance of the growth strategies are the most important factors to be considered by the management of the company, in this area, the BCG matrixis one of the best models for analyzing the status of the growth of a particular organization (Woodard et al. 2012).

Figure: BCG matrix

(Source: Albeladi, Khan and Khan 2014)

There are four sections of the BCG matrixwhich are indicating the individual status of a business organization. The sections are discussed in the below section:

Question marks: This section refers that the business organization is currently operating in a lower market share in a market with high growth rate. The business organizations which are currently in the question market section have a low profit rate and small business are abut they have the potential to gain a good position into a broader market. The business organizations have the aim of going to the star section by the significant investments in the business area (Wang and Verma 2012).

Stars: This section refers to the high market share of the company in a rapid growing industry. A business organization is able to reach to the star section after making the satisfactory level of investment in the question mark section. The organizations have the aim of reaching soon the next section of the business growth i.e., the Cash Cow section.

Cash Cows: In the Cash Cow section, the business organizations are able to have a steady growth and high profit level in a steady and large market. The business is able to give the excess amount of cashes which are required to maintain the business operations. The business is considered to be able to give “milk” continuously (Slack 2015).

Dogs: In this section, the business organizations arenot able to generate the required amount of revenues for maintaining the business operations of the company. When a company reaches to the Dogs state, it’s better to sell the company (Jayaram et al. 2014).

In this case, the WFC is a small company which is expanding their business and ready to invest for the growth of the business. Now, the profit level of the company is not so high, therefore, the status of the company can be considered as in the Question mark section of the BCG matrix. The company has the aim of reaching to the star section and thereafter to the cash cow section of the BCG matrix (Leonidou et al. 2015).

In order to achieve the desired growth rate of the company and the highest position in the BCG matrix, the company should achieve the sustainable competitive advantages. In this context, the management of the company should follow the Porter’s competitive strategy to ensure the desired level of competitive advantages from their business. porter developed a generic model to achieve the competitive advantages in the tough competitive market. The generic strategies are known as ‘Cost leadership’, ‘Differentiation’, and ‘Focus’ strategies (Martinez-Simarro, Devece and Llopis-Albert 2015).

Cost Leadership: In the initial level of the business expansion the target of the company will be to develop a good position in the target market by lowering the cost of the products. Cost leadership strategy is about minimizing the costs for attracting a lot of customers towards the products and services of the company. This strategy is not about just minimizing the price. Besides the cost cutting, the company should also pay attention towards the quality assurance of the products. They should not compromise with the quality of the food products they are offering to their customers (Fiorino and Bhan 2014). In order to do that, the company needs to incorporate best suppliers with the best quality and less price of the raw materials required for the production of the foods.

Differentiation:Product differentiation is another growth strategy of the business organization. In this strategy WFC will introduce the new products as discussed in the previous sections (Rothaermel 2015).

Focus: The focus strategy refers to the achievement of the goal through the narrow market segment. In this strategy the company will divide the main target into sum sub part for capturing the divided market segments (Burlton 2015).

The first target of the company will be the development of the HRM strategy and promotional activities. The target in the first year will be the leading in the company among the local fast food companies. In order to do that, efficient work force is needed. The company will recruit the efficient persons in the beginning and then they will go for the next step. After that, the new product development and sale force management will be the main targeted activity (Ibrahim 2015). In this context, the effective management of the SCM is required. In the second year the company will target these activities. In the third year, the company will have the target of using the using fully automated production systems and computerized database management for the business operations. They will also introduce the online platform for the business.

HRM Strategy: In order to get the desired level of success in the business, the HRM strategy should be able to efficiently manage all the people who are working within the company. In the initial level the selection procedure should be effective enough to choose the right people for the right job. After that, the job designing should be done as per the expertise of the employees. The key of getting success in the business is the effective level of collaboration of the work force. In order to get the desired level of collaborative effort of the employees, the company should pay attention to the motivation of the employees. They need to provide rewards to the employees for better performances in the workplaces (Slack 2015). Effective level of training should be provided to the employees before assigning the job responsibilities to them.

Sales management: The sale force management is very vital for providing an effective level of customer services. The employees of the sales department should be properly trained to understand the customer requirements and provide them proper product with the effective level of help at the time of purchasing. In order to attract the customers, some special offers should be provided by the company.

Monitoring system: The activity of the sales force of the company should be monitored by the upper level of management. The feed backs of the customer should be gathered by the management. If any problem found in this area, the management should take immediate steps for resolving the issues (Wang and Verma 2012).

Supply Chain Management: The company has to use the cost leadership strategy, so they have to give a deep focus in the SCM. The selection of the efficient suppliers is the first work of the company. The transportation cost should be minimized by the company. In order to do that, they need to choose the suppliers near to the production houses. Initially they can use one centralized production house, from where the fresh foods will be delivered to the shops and the customers’ addresses daily (Fiorino and Bhan 2014).

The company should give the top level of responsibilities to the experienced people who will be able to efficiently monitor the work progress of the company and the level of customer services provided by the company. Use of innovative technologies is the most vital activity for ensuring the proposed growth strategy of the company. In this area, the advance tools of the information technology should be used by the company. The internet technology will help to find out an efficient suppliers and new innovative ideas for the business development. The data base management tools should be used by the company for handling the business operation related information. The promotional activities and public relationships can be properly maintained by the use of social media. Therefore, the company should use the social media platform as a tool of business operations. Internet technology will be used for order taking and supply after developing a good image and expanding the business throughout UK. In this context, they have to develop a web site and employ a number of IT experts to handle the IT related operations.

Conclusion:

In this paper, the business strategy of the Western Fried Chicken has been analyzed to understand the present status of the business. The company is small fast food company which is trying to expand their business in all over UK. The vision and mission statement of the company are analyzed and reassessed for ensuring the growth opportunity of the business of the company. The company is currently producing the popular preparations of chicken. They have the aim of supplying the top quality fresh foods to their customers in less price than the competitor companies. In order to enter the broader market the company will face huge completion from the big fast food industries. In order to face the competition, the company needs to use the porter’s competitive strategies. The HRM strategy sales management strategy and other business related operations should be upgraded as per the recommendation given in the company. The company is not so popular and will face tough market competition in broader market, but they will be able to achieve the desired level of success by the use of the given recommendations.

The company should use the advance media tools for promoting the products and services to the target customers. The prices of new products should be less than the other competitor companies. In this way the company will be able to penetrate the products in the new expanded target market.

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