(Rail sector is my chosen sector) and I have to demonstrate the commonalities and differences between the current service marketing strategy of the major players within the rail sector in the UK.
Select ONE of the existing players (major or otherwise) and
A identify that organization?s key strategic service marketing issues for the next 5 years, drawing on your foregoing analysis.
B. briefly demonstrate the relationship between any one of these issues and some relevant theoretical principles of services marketing, taken from any appropriate and referenced source.
Read case study (L’Oreal) and answer the three case study questions (1000 words each).
Assessment ONE: Individual Case Study Report (40%)
Each student will be provided with a case study and will be required to write a report on the case study based on three questions.
Students will achieve the following learning outcomes for this assessment
a) Ability to demonstrate critical analysis of their knowledge of international markets and the risk elements, including political, economic and socio-
cultural factors.
b) Demonstrate robust knowledge of entry strategies of international companies into foreign markets.
c) Ability to evaluate and assess international marketing strategies and international marketing decisions and activities in general and in the context of
the case study.
The case study in question is mentioned on page
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Creating Good Professional PowerPoint Presentations Order Instructions: Please read below for information concerning assignment. Support responses with examples and use APA formatting in the paper.
Creating Good Professional PowerPoint Presentations
You may access the school’s website by logging into:
Please note that when you log into the website you must click launch class, and on the next screen click syllabus to view this week’s readings (week 3) and Academic Resources to access the school’s library.
To support your work, use your course and text readings and also use outside sources. As in all assignments, cite your sources in your work and provide references for the citations in APA format.
Creating Good Presentations
Using the South University Online Library or the Internet, research on good and bad habits while creating Microsoft PowerPoint presentations. Based on your research and understanding, complete the following tasks:
• Identify and explain at least five bad habits that are often seen in Microsoft PowerPoint presentations.
• Recommend how to overcome each of the bad habits mentioned in the point above.
• Describe five recommendations to create a compelling Microsoft PowerPoint presentation.
Creating Good Professional PowerPoint Presentations Sample Answer
Creating good PowerPoint presentations
Five bad habits that are often seen in MS PowerPoint presentations
The first bad habit seen is that the PowerPoint presentation lacks consistency. For example, the author uses different font faces and sizes on different slides and author also employs a poor choice of colors which shatter the presentation.
Poor use of contrast, for instance, the author uses white text on yellow background making it difficult for the audience to read properly.
Lack of images in the presentation or poor use images for decoration.
How to overcome each of the aforementioned bad habits
To overcome the first bad habit of using different colors in each slide and lack of consistency, the author should use consistency. The author should ensure that he or she matches colors for every slide. If the author is not sure about which colors match best, he or she should utilize ColorBlender to obtain a set up of several matching colors just by moving back and forth a set of RGB sliders (Sieber, 2011). The author should also consistently utilize the same font sizes and face on every slide. To overcome the second bad habit, if the author wants to play with colors, he or she needs to keep it easy on the eyes of audience members and employ good contrast so that the readers do not actually need to strain to guess what the author has written in the slides (Cartwright, 2015).
To overcome the third bad habit, the author should add images in the presentation but should not utilize images to decorate the presentation. Images should be used to explain and visualize, considering that images could complement or reinforce the message. Images copied from the internet should be cited and referenced (Cartwright, 2015). To overcome the fourth bad habit, the author should always spell check and ensure that everything he or she has written in the presentation is spelled correctly. To overcome the fifth bad habit, the author needs to get to the point and avoid rambling or including unnecessary information in the presentation.
Five recommendations for creating a compelling PowerPoint presentation
Simplify the presentation and limit the number of words on every PowerPoint slide.
Utilize high-quality images which complement and reinforce the message.
Utilize contrasting colors for background and text. It is best to use light text on dark background.
Stay on point and control the audience members and do not add irrelevant information.
Spell check and correct any spelling and grammar mistakes before making the presentation to an audience (Sieber, 2011).
Creating Good Professional PowerPoint Presentations References
Cartwright, J. (2015). PowerPoint presentation tips to make your PPT designs more effective. Albany, NY: CRC Press.
Sieber, T. (2011). Preparing a professional presentation. Columbus, OH: Penguin Publishers.
Marketing involves several theories that are applicable at different stages of the life cycle of a product. The persuasion theory targets the change in subtle attitudes of receivers.
Marketing in Value Creation and Persuasion Theory
Developing optimal persuasive advertising propaganda that seeks to create value for the service introduced in the market. Theories like Hypodermic Needle assert that effective campaigns can be switched from manipulation to persuasion (Griffin, 2012). The focus must remain however on the psychological factors that attract individual customers. The Banyan tree is built around those principles. The receiver of the information from the opinions and experiences remains embedded in their minds (receiver). The social judgment theory resonates around the self-persuasion theory (Darity, 2008).
Customer Experience
Customer experience management is a process of collecting, tracking, organizing and overseeing the interactions between customers and the company or organization throughout the customer’s entire lifecycle. These processes are integrated into the persuasion theory by managing customer experiences that involves breaking the processes into five basic steps a). Reach b). Acquisition c). Conversion d). Retention e). Loyalty (SearchSalesForce, n, d). The life cycle of a customer takes the shape of an ellipse which represents the customer behavior as it is a cycle and it stems from effective CRM (Customer Relationship Management) that seeks to get the customer to move in a cycle repeated again and again (SearchSalesForce, n, d).
Value Creation and persuasion theory
The Banyan tree has utilized value creation by capturing the attention of potential customers, educating them on what the organization is offering and turning the customers into paying customers as well as finding ways to retain them as loyal customers through customer’s persuasion and satisfaction hence attracting and luring new customers.
Marketing in Value Creation and Persuasion Theory on Target
Banyan has successfully targeted the CRM processes and effectively applied the five processes that would capture potential customer’s attention as well as turning them into loyal paying customers. The Banyan tree has been positioned as a luxury resort that targets the ideal tourist destinations that most multinational hotel chains can’t offer. The niche market that Banyan tree offers has been personalized over the years based on customer’s experiences, recommendations, and expectations. The Banyan Tree Maldives in Vabbinfaru, as well as the Banyan Tree in Seychelles, have invested heavily on water desalination instead of underground water extraction that would have resulted in ecological interference. The conservation efforts are used as part of the organization’s corporate social responsibility.
Marketing in Value Creation and Persuasion Theory on Motivation
The Banyan tree niche market comes complete with packages that are meant for the surrounding communities, a process similar to the expansion of corporate social responsibility (CSR) which has marketed the Banyan tree resorts to higher levels and status. The community around the Banyan organizations has outreach programs that have set up community relations department to oversee the promotion of the Banyan Tree. The Green Imperative Fund that is affiliated to Banyan tree organizations acts as a motivation to environmental conservationists and proponents of the Green Movement to patron the Banyan tree establishments. The Green Imperative Fund contributes to environmental conservation efforts around Banyan organizations by contributing $2 per night for every night spent by a visitor at the organization’s hotels. These monies are donated towards public education on the importance of environmental conservation around the organizations’ premises.
Marketing in Value Creation and Persuasion Theory on Orientation
The concept of market orientation in the Banyan brand literally stresses the differentiated market that has created an ideal niche that has attracted customer loyalty across the world. The unique nature of the service delivery at the Banyan resorts has been achieved by the innovative ideas that different communities living around the resorts have been allowed to export to the organization like new and innovative ways of serving customers. For example, the Phuket in Thailand, allows couples to sample traditional Thai dinner on a long tail boat complete with Thai Musicians. The garden spas concept and the Banyan Gallery have been created as a showcase for Banyan tree uniqueness (Wirtz, 2015).
To conclude, marketing has for many years been tied to conservative principles and concepts as marketers like using marketing tools that have been tried and tested before. For example, marketers have relied on age, gender or even social class to segment the market. But the Banyan Tree has introduced a different aspect of segmentation. A market where uniqueness creates a niche market that is available in one particular place globally (Dahl, 2015).
Marketing in Value Creation and Persuasion Theory References
Dahl, S. (2015) what’s the Deal with Tribes and Marketing, Advertising & marketing Theory retrieved May 8, 2016, from http://dahl.at/wordpress/category/advertising-communications-marketing-theory/?
Griffin, E. (2012). A First Look at Communication Theory. New York, NY: McGraw-Hill. p. 195
SearchSalesForce (n, d) Customer Experience Management (CEM), TechTarget received May 8, 2016, from http://searchsalesforce.techtarget.com/definition/customer-experience-management-CEMBottom of Form
SWOT Analysis of an Airline Operations and Marketing Order Instructions: The Assignment is designed to allow you to practice the Analytical tools/skills we have been working on all week. For Parts 1, 2 assume you have been asked for a brief by senior management on the Situation/Issue.
SWOT Analysis of an Airline Operations and Marketing
For Part 3 you have been asked to perform a SWOT analysis of an Airline’s operations and Marketing Mix for a possible investment by your company. Consider the SWOT analysis to be part of determining if this is an “attractive” or “unattractive” business for your company to invest in. Use the process we used when analyzing Easyjet’s decision to enter the European LCC market. The grading breakdown is shown below. Note the bulk of the grades are for Analysis. Your primary role is to do a “deep dive” into the issue/situation described and provide senior management with the relevant information towards a decision.
Assignment Weighting
• Part 1 -10%
• Part 2 -40%
• Part 3 -50%
Details of the Marking per Part
• Understanding the Situation(s)5%
• Standard of English 5%
• Quality of the Analysis 15%
• Critical Understanding 15%
• Decision Making &Recommendations10%
• Critical Analysis 20%
• Effective Use of Analysis Tools 10%
• Relevance 15%
• Structure 5%
Total 100%
ASSIGNMENT DETAILS Airline Operations, March 2016
Part 1 – Analysis from the Hong Kong Landing SlotAuctions:
(10% OVERALL GRADE)
1. In the landing slot auctions how much contribution did your airline make?
2. What is the significance of Contribution?
3. Analyze your performance, what could you have done to make more money?
Part 2 – From one of the 2 cases provided: Alaska Airlines or Kingfisher Nosedives, Answer the questions provided *** Note choose only one case
(40% OVERALL GRADE)
Choice #1 Alaska Airlines
1. What was Alaska Airlines’ most dramatic argument for change, in effect, its “burning platform” or “melting iceberg?”
2. What “legacy” assumptions that were part of the existing culture were challenged and tested?
3. What new and deepening commitments began to form and would foster the change?
4. What stakeholder groups were identified and included in planning for the future?
5. Which individuals or groups advocated and lead, and which remain entrenched and resistant?
6. Analyze Alaska’s decision to move to an all 737 fleet?
7. If you had been the CEO of Alaska Airlines, what would you have done to support the VP of Seattle Operations in his role of fixing Seattle?
8. How might the senior leadership team have reduced the potential risks of failure while moving through this state?
9. What strategies would you have deployed to develop employees’ greater sense of ownership in Alaska Airlines’ success?
Choice #2 Kingfisher Nosedives
1. What do you think are the current issues faced by KFA’s top management?
2. Analyze the external environment under which the company is operating in the post-2008 economic recession.
3. Discuss the company’s strategy of differentiation in the face of a changing environment. ?
4. What are the internal resources or competencies does the company possess? ?
5. What are the internal challenges faced by the company? What do you think of Kingfisher Airlines’ handling of the aggrieved employees in the face of the crisis? ?
6. Kingfisher Airlines initially started operations with the Airbus A-320 as the only aircraft in its fleet, but soon acquired a range of turboprops/ATR for specific sectors. Was it a good strategy to expand its fleet for the new sectors in this manner? ?
7. The “Customer is King” is an old adage in business. Did the customer support staff of Kingfisher Airline’s respect and honor the golden rule of business for service organizations? ?
8. How has the different viewpoint of political parties in the current coalition (UPA II) dampened the hopes of the aviation sector for recovery from the ongoing crisis? ?
9. How do you recommend that Mr. Agarwal solve his problems? Describe your action plan. ?
Part 3 – Select any airline(except the ones we analyzed in class) from anywhere in the world for your SWOT analysis:
(50% OVERALL GRADE)
You are a newly hired Aviation Analyst for XYZ Capital Partners and the company is considering an investment in the Airline you have chosen;
1. Perform a SWOT analysis of the Airline.
2. Critically analyze the Current Marketing Mix of the Airline. If you were the Chief Marketing Officer what would you do differently,& why?
3. Would you recommend investing in this Airline? Why or Why Not?
.
Fly Safe & Low Cost of Capital!
SWOT Analysis of an Airline Operations and Marketing Sample Answer
Assignment: Airline Operations ECM84SE
Introduction
The airline sector has experienced remarkable development and international expansion in the previous decade. Aviation is important not just national but also international business development and provides vital socioeconomic benefits. The considerable growth is attributable to various factors including; deregulation of aviation laws and bilateral agreements among governments; growing demand as a result of quality services putting pressure on airfares thus reduce costs of travel. In addition, there is intense competition between airline and globalization, which has contributed to the growth of air transport with international business and tourism that has greatly facilitated the aviation flight sector. The 1978 aviation deregulation act presents new opportunities for airline’s leading to expansion of the aviation sector (Suganthlakshmi, 2011). Such expansion has also led to intense competition, in turn contributing to air disputes. The sector has been forced to restructure its operations to remain sustainable while focusing on airlines. The paper evaluates the strategic analysis of the Alaska Airline and the structure of decision making.
Part One
In the landing slot auctions how much contribution did your airline make?
In the Hong Kong arrival slot auction, Alaska airline was in the 3rd slot, which represented full-service operations. The auction was performed for 3 days while about eight landing slots were auctioned to the highest dealer. This means that the airline contributed a total of USD 49,796,250, with investments of approximately $ 1,75,00,00,007 and return on investment (ROI) of 28%. During the auction, a total of USD 6b was invested while Alaska invested USD 1,750,000,007 that earned 1, 4, and 6 landing slots.
The significance of the Contribution
This contribution was of great importance, because, Alaska was successful in low-cost airlines with an ROI OF 28 percent. Owing to the fact that ROI is an indicator for measuring performance, it depicts a high efficiency from not only investments but also provides productive results. The focus was mainly on enhancing RASM for generating high-profit margins for Alaska airline. However, based on the load elements, the only chances of enhancing RASM is to increase revenue using pricing strategy. This is practical in terms of assessing the cost of round trip Alaska airline offer s and breakeven costs. Therefore, bidding for landing slots was performed effectively. Because Alaska airline was in the full-service category, it was in the position to get rid of intense competition. As such, this move was important for an airline when it comes to generating a higher contribution. Nonetheless, there was intense competition, especially in groups 1 and 2, which led to a low contribut5ion and significant losses in certain areas.
Analyze your performance, what could you have done to make more
To make more money and performance, Alaska airline could have bided a lower price for its opening bid, then increase it when necessary (Suganthlakshmi, 2011). This attempt could increase Alaska Airline’s opportunity for earning better contribution in the 1stlanding slot at low auction value. By and large, Alaska acted as the basis and supported by its core competencies while taking advantage of its rivals, which was important for increasing profitability.
Part 2
Alaska Airline was formed in 1985. It is a holding firm whose parent company operates airlines, with a staff base of around 15,000 workers and a fleet of 200 aircraft. The holding firm and the parent company are both independently branded. The company is the seventh biggest US carrier when it comes to passenger carrier and it is widespread across the US. While headquartered in Seattle, the airline has grown significantly to serve several US states.
What Alaska Airlines’ most dramatic argument for change, in effect, its “was burning platform” or “melting iceberg?”
Alaska airlines allege that the change is due to not only unsustainable but also travel-hacking. As such, the airline promises to give notice in the future. However, it has lost credibility and has to refund mileage so as to restore it.
What “legacy” assumptions that were part of the existing culture were challenged and tested?
Some of the assumptions include; the devaluation could have been regarded as an inconsistency. Nonetheless, this strategy fails to depict a new normal because the airlines have the responsibility of communicating changes in its operations within one month. Another assumption is that Emirates pricing plan is below the industry value, which is not true in comparison to JAL that offers Emirates redemptions.
What new and deepening commitments began to form and would foster the change?
Some of the deepening commitments were in form of ensuring optimal and efficient services. In this, it is imperative to understand Michael Porter’s competitive forces, which shape the strategy. In the aviation sector, competitive forces are intense and largely affect the profitability of the airline. Generally, some of the operations that would promote change include management and other associated services including catering, handling cargo and baggage (Wilhelm, 2015).
What stakeholder groups were identified and included in planning for the future?
Some of these stakeholders include; business and leisure travelers, corporate clients, workers, shareholders, the communities in which the airline operates.
Which individuals or groups advocated and lead, and which remain entrenched and resistant?
The individuals advocated to remain entrenched and resistant are suppliers and Alaska airline’s partners and airports
Analyze Alaska’s decision to move to an all 737 fleet?
The airline’s decision to move to an all 737 fleet implies an increase in the mainline fleet to approximately 10 aircraft. In addition, a number of upcoming deliveries are likely to replace 737 fleets.
If you had been the CEO of Alaska Airlines, what would you have done to support the VP of Seattle Operations in his role of fixing Seattle?
I would not ignore contract workers instead take into account that the airline in the community should work towards accomplishing its corporate social responsibility. This is effective when it comes to enhancing not only the bottom line but also recognizing front line employees and customers’ input to the bottom line. In short, good management requires balancing all vital competing interests and enhancing the overall revenue.
How might the senior leadership team have reduced the potential risks of failure while moving through this state?
The airline is known for its dynamic innovation technologically and improvement on customer service. Therefore, senior leadership could have reduced the potential risk by increasing the airline capacity, great craft operation, solitary aircraft type, economical fares, a terminus to terminus services, and rapid turnaround time at the airport, predominantly short- to medium haul routes (Hwang, 2011).
What strategies would you have deployed to develop employees’ greater sense of ownership in Alaska Airlines’ success?
While the cost-effective model has largely been a preferred model for an airline, the gap between the full-service carriers and low service carriers is getting smaller each day, as such, the LCCs might take over the market share of FSCs (Suganthlakshmi, 2011). Being that this market niche is still unexplored a lot of improvements can be done to grow it. It has been ranked highest in client contentment for old-style North American Airlines for 5 successive years.
Part Three
XYZ Capital Partners SWOT Analysis
Strengths
Domestically, XYZ has a strong market presence; it takes in more commuters across the US than any other carrier. The carrier is one of the largest carriers when it comes to passenger traffic. Owing to the remoteness of Alaska, air is the main form of transport. For five years consecutively it has been ranked highest when it comes to customer satisfaction for traditional North American airlines. The company has a strong operational network on its well established domestic market amid all turmoil characterized by international recession and increased terrorism the Airline still continues to grow. Unlike its competitors, the company has been generating profit for over three decades except for six years since it was conceptualized; it has enabled mergers to stay afloat. It has a great public acceptance in both travel safety and fast way of air travel. It has segmented its market by offering different services and different pricing. This model to a greater extent increase organization popularity and visibility because of specialization (Perry, 2012).
The airline staff training is intense and high in terms of quality coupled with experience earns them great customer satisfaction. The airline offer pilots extreme weather training an aspect that enhances the safety of its operations. To help navigate through an impossible terrain, the airline uses modern radar communication technology. This also enhances the reliability and safety of its services. The company’s operations stretch back to the cold war era when it offered chartered flights to the Soviet Union. The airline does not have competitors who fear to venture into this harsh terrain marred with extended flights. The airline obtains its greatest revenue overseas; however, it still plays a major role in national transport. Alaska Airline has established that computes 50,000 points to enhance the real-time performance of data which saves time and money. Approximately, the system saves the firm about $25 to $30 million annually (Blachly, 2012). This is the cutting edge for XYZ Capital Partners as it enables it to hold down expenses and compete effectively on routes that cost less outside of US. It has received special honors on philanthropy and community involvement this increases its acceptance by the wider community.
Weakness
A large workforce that is spread over the vast geographic areas, with the inclusion of the international points, requires continual monitoring and communication increasing on the operational costs for XYZ Capital Partners. Airlines demonstrate a high spoilage rate in comparison to other sectors. Immediately flight takes off, a vacant seat is lost and is non-revenue generating. Nothing can salvage such situation that revenue is lost. Aircraft are very expensive and require huge capital outlays (Ommani, 2011). While the commerce environment can change rapidly, the in the aviation sector it is very complex to make speedy schedule and airplane variations due to staff commitments, contracts, and other factors. The greatest weakness for XYZ Capital Partners marketing mix is in the promotional strategies. This is an attempt for cost cutting to stay lucrative but might work against them on creating a new customer base or even losing customers to competitors. XYZ Capital Partners model of business not necessary it depends entirely on one source of revenue and that is passenger revenue in terms of fares. Anything that disrupts it sends the whole business on its knees. It’s absent in the lucrative certain regions market that is growing in terms of tourism and business travel also affects its operations.
Opportunities
Technological advancement can lead to cutting costs, starting with fuel-efficient aircraft to additional computerization in terms of ground operations reducing the cost of manpower. Developing a symbiotic relationship with other carriers can increase passenger volume. This can be achieved by harmonizing timetables; carriers can offer services to the destination on a code-sharing arrangement with a partner carrier. XYZ Capital Partners offers continual opportunities to both business and leisure air travel (Porter, 2008).The recent growth on international tourism is increasing the air traffic the airline can tap into this growing the market niche, and by so doing; it increases the revenue generating platforms and air space. XYZ Capital Partners has in-flight entertainment player to improve on customer satisfaction, which is a great marketing move that will improve customer retention.
Threats
Global economic recession greatly affects leisure, business and optional travel that cut down the market sphere as well as the revenue in it. Fuel cost is the biggest expense for the airline as is the case everywhere; hence an upward approach can threaten the business strategy. With the surge in the insecurity that has been greatly caused by terrorism negatively affects air travel. This applies mostly by governments to safeguard national carriers and caution them from external competition (Blake & Wijetilaka, 2015).Fluctuation in air travel in demand by the economy class market segment, which hurts the business economically. There has been an increase in personnel training costs; this has been characterized by high technological advancements and the global increase in training fee.
Marketing Mix
Price
XYZ Capital Partners has a reputation for being lowly priced in terms of air ticket fare in comparison to the competitor that is majorly delta air. The other attraction on the price cap is that you can cancel your flight and get back your fare back without any penalty. This makes XYZ Capital Partners attractive to its customers because of customer friendly policies. In this case, there are price changes such as, reduction in price that customers receive in form of a credit for use in future flight (Wilhelm, 2015). XYZ Capital Partners has mileage, which enables one-way redemption for frequent flyers. The airline also introduced program 49 for planning mileage for Alaska residents with various benefits including email notification, fare, discounts, and sales
Promotion
XYZ Capital Partners is technologically savvy and recognized for embracing technological changes to improve clients’ experience. The main mode of marketing is customer referrals it endears itself to its passengers thus creating more customers by referrals from its existing customer base. Such a marketing tool is easy to run because it is not expensive to run as compared to mega sponsorship deals with sports clubs, and television adverts that cost millions to run (Suganthlakshmi, 2011). This requires working on the personnel and hiring those with a friendly character and attitude and imposing a strict code of the character. The customer here is the most important aspect of the business and how you treat them determines their loyalty to your airline.
The Internet is the greatest marketing platform, XYZ Capital Partners has earned a reputation as having funny and clever ads, but there is the only problem is that these ads are few and far between. Such an operational philosophy of cutting down expenses though beneficial can work against them. Airline business requires a lot of visibility and constant communication with the public or you might run a risk of losing business to its rivals. A brand has to be recognized in public at all times, most airlines fail to know that customers as such, they need to be reminded why they have to be in business and the younger prospects want a visible airline, it has to do that if it has to tap into these market sphere. Therefore, XYZ Capital Partners has to look for ways of understanding such issues.
On time delivery, nobody likes delay and XYZ Capital Partners to ensure that services are delivered timely as well as performance. It has a reputation for prompt service delivery and keeping their schedules. Such a kind of reputation is a morale booster for existing customers and new customers (Porter, 2008). Again, this less intensive marketing strategy that stirs the XYZ Capital Partners ahead by generating greater customer confidence is the brand for such a dynamic market.
The airline is devoted to its clients and this is one of the leading strategies as far as the company is the concern. XYZ Capital Partners should invest in Alaska Airline as services are offered through a way of technology, process, and customer relations they share a passion. While this is what the organization aims to do, this is exactly what XYZ Capital Partners intends to carry forth, before investing so as to share on the same network.
Place
Since the XYZ Capital Partners is strategically located, air travel is the main mode of transport. On most occasions, residents use their services to buy goods and services. Patients are also flown for emergency services. Recently, Alaska airline expanded to other regions, particularly, Hawaii and non-airline center so as to increase the revenue streams, an important element that should convince XYZ Capital Partners to invest. There are plans to exit underperforming routes and cut the capacity of other routes this is to enable it fully concentrate on the more profitable routes. This is a short term strategy due to increased competition from an established airline. However, with good marketing strategies, XYZ Capital Partners can be at the top.
In business there is no jack of all trades, a company has to specialize in its core activities that way it enables it to retain your existing customer base before thinking of a new market. Furthermore, Alaska airline has developed new branding strategies for affiliate regional as well as independently owned flights that it collaborates with, hence good venture for XYZ Capital Partners. Among the companies it has subcontracted to do additional flying for the group are; Canadair CRJ-700 regional jet, SkyWest Airlines they are dedicated to serving the group and are painted in a similar manner as Alaska horizons.
Product
The major product it offers is low-cost passengers who travel frequently to either shop or seek medical help. It offers alternatives for customers who do not have time-sensitive shipment and can wait for space available services. Moreover, XYZ Capital Partners operates a wide range of flights connecting small towns to main transport centers and carry many customers in comparison to other airlines across the United States. On the course to increase its market share, XYZ Capital Partners can invest in other airlines such as Alaska Airlines. In such collaborations, XYZ Capital Partners can sell tickets on Alaska flights, which will promote its services on global networks and connection with frequent flyers. This symbiotic kind of relationship rides on the already existing market of the two giant airlines, these minimize the spoilage rates and in return improves profitability while keeping the operational costs low.
There is an onboard offer of beverages from a fellow US company that produces coffee. It also features onboard entertainment; it is regarded as the first airline to introduce in-flight entrainments in 2003. When the sun and the moon aligned on March 2016 the Alaska airline decided to delay the flight for 25 minutes to catch this rare spectacle. In addition, Alaska airline has an accommodating gesture; it gets individuals from one point to another while offering them quality service delivery. It is not only the airline to talks to its people but also listens to them, hence offering customer service at its very best.
Analysis
Alaska Airline operates in a growing market niche where so much can be done to improve its profitability by increasing its revenue. In 2014, for instance, the airline carried over 21 million passengers with a fleet whose average age is 9.7 years. It had a reported net profit for the 4th quarter of USD148 million despite the heightened competition on that year alone it was reported to have a net profit of $571 Million excluding special items. The operating margins for 2014 expanded to 17.7%. Furthermore, full-year pretax margin came in at 17.2%. As its giant competitors went into restructuring, Alaska Airline turned itself into a high-quality industrial company. Most of the gains that year were attributable to the price o fuel, but even without this, the profit margin was substantial.
The airline is still much in the growth phase, it can improve further by targeting new markets such as the lucrative Asian market and the African market as a tourism edge. The strength of the local economy especially, in the Pacific Northwest has helped keep the demand afloat, but the rise in Alaska’s margin was characterized more by the reduction in fuel cost. Its competitive capacity rose by 7% and the percentage of its market by 8% in the same year. It has launched 16 new North American markets in Seattle where Seattle signifies 55% market share. With the recent decision to add more Q400 to grow the E175 sub fleet is interesting, this is a statement even if the fuel prices rise these means that operation margins won’t suffer too deeply, with such kind of management ideas investing in this company is profitable, there is no better time to invest in such a fast-growing company but now. With the recent acquisition of Virgin America, it shows great growth prospects for the airline this will boost its capitalization increase revenue and then in return more profits this in return rewards shareholders with increased returns to investment. If I were to take a personal stand, I would, therefore, recommend any prospective investor to put their money in this company because it has proven sustainable over the years, generation profit for 33 years for a business operation than span close to 39 years.
SWOT Analysis of an Airline Operations and Marketing Conclusion
Based on the discussion and SWOT analysis, it is clear that Alaska airline is in the transformation stage, whereby it is focusing on its strengths while capitalizing on potential opportunities. The very objective of Alaska airline may be achieved if it puts emphasis to fulfill the demand of users; implement appropriate marketing strategies; and improve services offered particularly dewing inflight and post-flight.
SWOT Analysis of an Airline Operations and Marketing References
Blachly, Linda (2012). Alaska Airlines places $5 billion 737, MAX order. Air Transport World. Archived from the original on October 11, 2012. Retrieved 1/5/2016
Blake, Martin & Wijetilaka, Shehan (2015). 5 tips to grow your start-up using SWOT analysis. Sydney. Retrieved 1/5/2016.
Hwang, Inyoung (2011). Alaska Air to Replace AMR in Dow Jones Transportation Average. Bloomberg BusinessWeek. Archived from the original on May 9, 2012. Retrieved 1/5/2016
Ommani, Ahmad (2011). The SWOT analysis for business management 5 (22). African Journal of Business Management, 9448–9454.
Perry, Dominic (2012). Alaska orders 50 Boeing 737s in $5 billion deal. London: Flight global. Archived from the original on October 11, 2012. Retrieved (1st May 2016).
Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy [online] available from <http://hbr.org/2008/01/the-five-competitive-forces-that-shape- strategy/ar/1> (1st May 2016).
Fair Trade Jewelry Challenges for Making Niche Market Order Instructions: ASSIGNMENT Field Report: Separate
Produce a brief report of no more than 750 words, highlighting key issues and provide critical reflection debate: not descriptive.
Fair Trade Jewellery Challenges for Making Niche Market
Can Fair Trade Jewellery be mainstreamed, or is it destined to be a niche market, and what challenges to jewellers face in making it a reality?
Potential projects that could be undertaken with Publish What You Pay (PWYP)
Background
Publish What You Pay (PWYP) is a global coalition of civil society organisations united in their call for an open and accountable extractive sector, so that oil, gas and mining revenues improve the lives of women, men and youth in resource-rich countries and that extraction is carried out in a responsible manner that benefits countries and their citizens.
Our coalition is made up of more than 800 member organisations across the world, including human rights, development, environmental and faith-based organisations.
Organisations can be members on an individual level. However, in several countries (more than 35), network members have joined forces to create national coalitions. Members also collaborate at theregional level, as is the case for instance in Europe and Africa.
All our members and coalitions have to adhere to Publish What You Pay’s principles and standards.
We are guided by the belief that coordinating the collective actions, skills and interest of a diverse coalition of civil society organisations is the most effective way to influence key stakeholders and drive policy and practice change in the extractive industries and the governmental sector.
The coalition is supported by a Secretariat and governed by various bodies, for more information visit our governance page. You can also read about our history or find out who funds us.
Project Report: 2. Separate (pick one from these two) Not more than 3000 words. The report must reflect critically on key debates, issues and trends in the literature. Not descriptive.
1. The EITI and climate change – a conversation we can’t just ignore
A study on policies/thoughts/practices towards climate change of the key companies and donors in the EITI. The EITI is keen to look to move into the area of climate change, as the homepage demonstrates (www.publishwhatyoupay.org). A study around EITI is essential and would be very interesting. A study could look at all the statements on EITI partner websites fora they are included in and yet investments they continue to make.
2. The role of civil society in ensuring a qualitative EITI report
At PWYP, we argue that a solid civil society participation will lead the way to better implementation, hence reinforced disclosure a higher quality (and usability) of EITI reports. But is that true, does civil society participation really matter in delivering EITI results (beyond the principle of dialogue and dissemination of reports)? A research on this would certainly be of key interest to us.
3. Separate. Produce a power point presentation from 3000 report project.
NOTE Before you commence writing, I would like to know which of the two you have chosen.
This report therefore seeks to examine the role of the civil society in ensuring a qualitative EITI report. This can be seen in the manner in which revenues generated from the minerals and oil is in this case utilized in the transformation of different economies with the aim of reducing poverty and raising the standards of living for different population in resource-rich nations.
The Role of Civil Society in Ensuring a Qualitative EITI Report
Introduction
The purpose of this report is to establish the involvement of the civil society in determining an EITI qualitative reporting. The paper will critically establish the functions of the civil society the process of EITI qualitative reporting. It is vital to consider that states that incorporate the element of EITI make a commitment to strengthen the aspect of transparency in the revenues generated from its natural resource revenues. The citizens of these states are also accorded the responsibility of holding the state and the government accountable on how these resources are dispensed (Disclosure as Governance 2010). This aids in the building of prosperous and stable societies that function in an effective manner in the global economy.
On the other hand, much of ETI’s development is owed to the civil society. This clearly depicts the fact that without the existence of the civil society, ETI would not be functional. This is attributed to the fact that the civil society makes concerted advocacy approaches that sees the extractive companies publish their payments to the host governments. Consequently, close to 400 civil society organizations have been committed to the participation of governance through the implementation of ETI in resource rich states around the globe (Sovacool, & Andrews, 2015).
ETI in this case incorporates and approach of governance that advances the element of revenue transparency within the mining, gas, and oil sector through an approach that stresses the need of multi-stakeholder approach with integrated roles of the civil society, the governments and extractive companies (Topal, & Toledano, 2013). Thus the key elements of the success of this approach lies in the ability of developing dialogue that fosters the collaboration between different players in the development, monitoring and evaluation of EITI process. The engagement and functions of the civil society occurs in its approach aimed at overseeing the implementation of EITI in countries and within the international EITI board (Lehrer, & Delaunay, 2009).
EITI Background
In 2002, at the World Summit for Sustainable Development, United Kingdom’s Prime Minister Tony Blair launched the EITI process as the future global transparency standard. As a coalition of different stakeholders came together, expectations were heightened towards believing that through governance and accountability, nations, companies and other players in the economy would improve their share of revenues being spent on economic growth and poverty reduction.
In this case, the process of EITI has been promoted in international development agendas as an instrument that will finitely establish and develop the resource-rich countries to reap the benefits of their resource endowments, a factor that has exhibited excessive expectations about the impact it could have. The G8 has critically emphasised its support for the EITI process, by initiating effective approaches aimed at improving its transparency, accountability, and good governance and thereby leading to sustainable economic growth in the extractive sector.
The EITI Principles
According to Aaronson (2011), the EITI principles were first initiated in conferences that were held in London in 2003. During these conferences, several states, investors and civil society organizations reaches a consensus on the principles that were required in order to establish transparency over the payments of revenues in the extractive sector (Murphy, 2012).
The EITI aspect holds on the belief that prudence should be a key aspect in the use of natural resources for the development of a sustainable economy and development that would in turn impact poverty reduction approaches (Aaronson, 2011). If the proponents of EITI are not fairly management, this would result in a negative economic and social impact.
EITI on the other hand acknowledge the initiatives directed towards managing wealth that is gained from natural resources with the aim of benefiting the citizens of a state within the domains of sovereign governments, a factor that needs to be initiated within the interests of a national state (Sovacool & Andrews, 2015). EITI also takes into consideration the benefit accrued from the extraction of mineral resources, occurring over a revenue stream for a period of time, a factor that depicts the high dependency on the prices (Aaronson, 2011).
Benefits for Local Communities and Civil Society Organisations
The local community is considered to be the single most beneficiary of the benefits that arise from the increases in revenues. This can be viewed in the efforts that have been developed to ensure resource accountability through good governance, and justice, with the aim of mitigating the element of corruption are promoted and reinforced (Aaronson, 2011). The civil society organizations are also considered as part of the beneficiaries of these efforts as seen in the improved relations developed to influence governments and companies in the process. This can be viewed in their efforts directed towards:
Increasing the opportunities aimed at building and strengthening different networks with the international organizations and investors.
Strengthening public institutions.
Enhancing governance and citizens who are aware of the empowerment.
The climate of transparency is one that ensures the civil society groups are empowered. An instance of this can be viewed in the implementation of EITI that facilitates the public participation in governance and improves the access to information for civil societies. The local community is aimed at profiting from the increases in revenues. The element of justice, accountability, good governance are promoted and reinforced with the aim of mitigating corrupt practices during the process (Aaronson, 2011).
The Role of Civil Society in EITI Reporting
As argued, the solid involvement and participation of the civil society is considered as essential since it has the capacity to better implement and a reinforce the initiation of a high quality EITI reporting approach. Participation of the civil society needs to be observed in the delivery of EITI results that go beyond the principles of dialogue and the dissemination of reports (PR, 2013). Engagement of the civil society’s in ensuring a qualitative EITI report occurs at different levels that include: the international EITI Boards and the states that implement the EITI process as part of the multi-stakeholder groups that have the capacity to oversee the EITI (Holden, & Jacobson, 2007).
The civil society as attributed in the process has the powers and initiative to discuss and establish the genuineness of the aspects of revenue transparency and increasingly contribute their experiences and expertise in fostering dialogues with different stakeholders. In some states, the civil society groups are considered to be in the forefront in popularizing EITI. In other regions, the civil society works in supporting legislative processes that are directed towards the strengthening and advancing of the states the agendas on resource and revenue transparency (Holden, & Jacobson, 2007). This clearly depicts that the role of the civil society has the capacity to monitor and engage in the implementation of national dialogue in addressing some of the issues that are not covered directly by EITI such as the use of revenues that are accrued from the extractive sector.
Experiences that emerge from the implementation of EITI clearly shows that the civil society groups are bound to face several challenges within a state’s level that include the lack of capacity constraints, the lack of resources and other security issues (Pal, & Pantaleo, 2008). EITI Board has a functionally developed range of policy responses that are determined in the strengthening of the EITI requirements aimed at ensuring the civil society groups are fully interdependent and are provided with the opportunity to get engaged within the stages of EITI process.
Within the context of governance and development, the civil society is considered as a third sector that is distinct from the business and government that are functioning as an intermediary institution in ensuring that the issues that deal with the interests of the public within the public domain are coordinated through advocacy (Pal, & Pantaleo, 2008). The goal of this is to ensure these issues are addressed and effectively implemented in order to serve the common interest and good of the society
The non-governmental organizations through their involvement and activities, strong beliefs and principled positions voice out their views and positions to the sectors of the society through an approach that promotes discussions, debates, and constructive engagements. These roles are developed to enrich the public’s participation in the decision-making process thus strengthening good governance, accountability and democratic principles (Frynas, 2010). These reasons therefore determine the manner in which the concepts of EITI are developed and built through an approach that engages a multi-stakeholder approach. This approach involves several key players such as the government, the civil society and other companies who play different roles in the EITI process. The civil society plays an integral role in reforming the EITI process even in situations where these roles are unclear in several implementing countries. The roles of the civil society would also include:
Identification
The civil society organizations beside the aspect of dialogue also share the view that it is their responsibility to identify the key issues that are within the interest of the public and that relate to the mandate of the EITI process that are directed towards extractive revenue transparency, the process of governance and ensure that the identified issues are addressed and brought within the public domain for debate and dialogue (Calland, & Bentley, 2013). Some of the issues that the civil society organizations clearly focus on include the process of leasing, oil block allocations, bidding rounds, the issuance of mining licenses, physical, financial and process management, the environmental standards and so on.
Agenda Setting
The civil society is different states consider the aspect of agenda setting as their traditional responsibility and a primary tool of their engagement (Calland, & Bentley, 2013). Under these roles, the civil society organizations identify some of the issues that are related to the EITI mandate and use these issues to set national and international agendas for the publics discourse, debate and engagement with the governments and the extractive revenue companies with the aim of improving the aspect of governance through a transparent process and accountability that is done through the use of EITI frameworks.
Public Education and Enlightenment
The element of public education and enlightenment in this case is another role of the civil society even though individuals tend to think these needs to be left for the media alone (Shenton, & Hay-Gibson, 2009).
Agents of Social Mobilization and Change
The civil society organizations also makes use of the fact that for the process of EITI to secure the public’s interests required within the sector, there is a need of providing a supporting role-that of acting as the agents of social mobilization and change (Mejía Acosta, 2013). In this case, it is essential to consider that these roles include the sustained mobilization of the opinions of the public with the aim of advancing the course of the EITI process within the areas of legislative processes and policy formulations. These are known and have been considered to come in the form of peaceful protests, resource mechanization and petitions.
Monitoring and Oversight
It is additionally essential to consider that the civil society organizations are also tasked with the responsibility of monitoring the processes and programs of EITI including the policies and the unfolding events within the extractive sector and ensure that accurate reports and facts are provided with the view of directing the appropriate course of action that can improve the process of governance (Mejía Acosta, 2014). The monitoring and oversight in this case needs to be community based and people driven, In order to carry out these functions in an effective manner (Caspary, 2012).
Advisory
Advisory in this case gives the position of the civil society organizations as some of the professionals within this field that offer fair, profound, qualitative and constructive advice to the EITI processes and in the implementation of an effective EITI process (Mejía Acosta, 2014). The EITI Board in this case needs to be open to advices within the areas of their operations and publicly acknowledge the contribution of the civil society within the EITI process.
Whistle Blowing
The civil society remains in a better position to blow the whistle in the event that extractive revenue transparency functions of the EITI process are not clearly following their mandates. This would therefore see the civil society active is in the exposition of fraudulent practices, process lapses, bribery, corruption, and dishonest dealings with individuals at any stage within the EITI process (Magner, 2015). The functions of whistle blowing as conducted by the civil society may also be used to attract and draw the attention of the areas that have achieved poor performance and that have been neglected and the failures in the rise of statutory responsibilities (Mejía Acosta, 2014).
Fair Trade Jewellery Challenges for Making Niche Market Observation
The civil society has the mandate of taking up the roles of being the observers within certain activities in the EITI process in consultation with the Board and the secretariat. These roles also include the formulation of procurement processes for some of the projects, budget preparations, the development of annual work-plans, and meetings held with the public in situations that are advisable (Eigen, 2013). In performing these roles, civil society organizations are considered to have the right to engage in independent reporting of these events and give EITI Board the opportunity to make their final comments on these reports before they are disseminated.
Feedback
The role of the civil society in providing feedback in this case is considered as essential and desirable within the processes of EITI (Mouan, 2010). Many of the civil society organizations in this case draw from professional groupings, coalitions, and clusters and take up the full charge and role of providing adequate feedback to their states through a process that extends to the larger publics interests with the aim of addressing the issues of interests.
Fair Trade Jewellery Challenges for Making Niche Market and Examples of Restricted Civil Society Group Cases
It is essential to establish that there are a number of examples that depict the restrictions of the civil society in the process of EITI. In one of the illustrations, the government of Congo can be viewed in the detention and trial of two Publishers Brice Mackosso and Christian Mounzeo who tried to publish the state of the nation as opposed to the governments view. In other countries such as Equatorial Guinea that believe in the authoritarian style of leadership, the situation is conceived to be worse. In Guinea, the President then-Teodoro Obiang Nguema and his government have overtime been criticised by NGOs and other civil society organizations for placing restrictions on the basic civil and political rights, such as freedom of expression.
This therefore determines the fact that the space civil society involvement through activism on issues corruption and transparency remains non-existent as viewed in this states (PWYP, 2006). However, it is essential to determine that a government only has the capacity and power to restrict supporters who contend for transparency in a more discreet way. For instance, this can be seen in the case of Nigeria where Nuhu Ribadu, who was considered as the head of t Economic and Financial Crimes Commission (EFCC) then was forced to resign and requested to attend a one year course in policy studies in consideration of the fact that the EFCC had come too close to top policy layers and had arrested several governors for corrupt practices (The Economist, 5 January 2008).
Civil Society is not Strong and Independent enough to take on the Responsibility that EITI Implies
In as much as the formal structure of the EITI process suggestively gives that governments responsibility for the implementation of the EITI process, much responsibility is put on civil society. Civil society in this case is given the power and autonomy to pressure the governments to join their initiatives. Civil society has the power to scrutinise and request for clear information of the figures presented in the EITI reports (in spite of the fact that most reports reveal very limited information), and to determine the manner in which the finances are utilized by the organisations extractive sector works, the payment types utilized, the relevant government receiving the payments and the accountability of these payments.
The list of the expectations from the civil society organizations remain long and for the countries in need of the EITI. In considering that the extractive sectors are, legally, technically and financially complex makes this approach difficult to achieve. In general, the EITI process requires an environment of justice and accountability in order to be implemented. This therefore requires an environment where the civil society is empowered in knowledge and is considered as independent with the leaders within these organizations elected through a transparent approach that inclusively engages the democratic powers of the system. There is a need of ensuring that there are no conflict of interest that arises between the government, citizens, and the extractive industries.
The voices of the civil society organisations as viewed in this process can be alleged to affirm these organizations limitations within the EITI framework. Aaronson (2008) notes in several countries, the multi-stakeholder approach are an essential element that inhibits these organizations in the departure from the prevailing institutional and political norms. As a result of this, the civil society is incapacitated to effectively participate in the EITI process. In some states, the nongovernmental organisations (NGOs) are considered as autonomous since government officials are given the tasks of appointing the stakeholder groups rather than giving the citizens and NGOs opportunities to choose their representatives.
Fair Trade Jewellery Challenges for Making Niche Market Discussion of Results
It is arguable that the civil society besides engaging in dialogue within the EITI process is also engaged in several other processes. An instance of this can be viewed in the implementation of EITI that facilitates the public participation in governance and improves the access to information for civil societies (Mouan, 2010). The local community in this case benefits from the increases in collected revenues that are channeled in projects, while of justice, accountability, and good governance on the part of the civil society are promoted and reinforced. The engagement of the civil society occurs in overseeing the implementation of EITI in countries and within the international EITI board (Walden, Jerome, & Miller, 2007).
Fair Trade Jewellery Challenges for Making Niche Market Recommendation
Beside the aspect of dialogue, the civil society also shares the view that it is their responsibility to identify the key issues that are within the interest of the public and that relate to the mandate of the EITI process that are directed towards extractive revenue transparency, the process of governance and ensure that the identified issues are addressed and brought within the public domain for debate and dialogue (Frynas, 2010). Within the context of governance and development, the civil society is considered as a third sector that is distinct from the business and government that are functioning as an intermediary institution in ensuring that the issues that deal with the interests of the public within the public domain are coordinated through advocacy.
Fair Trade Jewellery Challenges for Making Niche Market Conclusion
In this reports, it is established that in 2002, at the World Summit for Sustainable Development, United Kingdom’s Prime Minister Tony Blair launched the EITI process as the future global transparency standard. As a coalition of different stakeholders came together, expectations were heightened towards believing that through governance and accountability, nations, companies and other players in the economy would improve their share of revenues being spent on economic growth and poverty reduction.
As determined in this report, the EITI in this case provides a governance approach that advances revenue transparency within the gas, mining, and oil sector through an approach that stresses the need of multi-stakeholder approach with integrated roles of the civil society, the governments and extractive companies.
The solid involvement and participation of the civil society leads the way in the implementation and a reinforcement of high quality EITI reports. This can be achieved when the civil society in this case has the capacity to discuss the aspects of revenue transparency and increasingly contribute their experiences and expertise in fostering dialogues with different stakeholders.
Fair Trade Jewellery Challenges for Making Niche Market References
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Abstract for Swatch Group New Marketing Strategies Case Study
This study, centers upon Swatch Group case study and concentrates on the different strategies adopted by the company since 1983.
Swatch Group New Marketing Strategies Case Study
It indicates that, instead of brand innovation (Swatch), it was the streamlining and globalisation of alongside with new marketing strategies (product differentiation, supply and retailing services, communication, amid others) which have been critical sources of the success of Swatch business on the global market up to date. Swatch Group fundamentally identifies its competitiveness on technological resourcefulness.
CHAPTER 1: Introduction to Swatch Group New Marketing Strategies Case Study
1.1. A Brief History
According to Jeanerette (2011) the watch business is considered the ancient industry of Switzerland. It grew at the onset of the eighteenth century. Nevertheless, following some profitable decades for Swiss watchmakers, the industrial revolution provided them with their initial difficulty. The unveiling of new technologies that permitted for more calibration, revolutionised the watch making customs that depended chiefly upon handiwork. As a result, the watch business industry experienced some difficulty when adapting to these new technological advancements. At the start of the 19th century nevertheless, the business had recovered and dominated nearly 90 percent of the international watch market.
By 20th century that witnessed the beginning of mass manufacture of watched saw challenges for the sector. The discovery of the quartz technology and the emergence of new Asian and American rivals in 70s and 80s period challenged Switzerland’s dominant status in the watch industry. Initially, a critical restructuring was implements so s to fragment the robust cartels that characterised the market in that age. In attempt to repel the new market players, who were more consolidated and thereby economically stronger, senior company executives tried to achieve a higher magnitude of consolidation in the industry. Such restricting resulted in three further outcomes of critical significance for the topography of the segment, as it is currently. A company like Swatch Group started to form while targeting standardising the market ever more. Additionally, the corporation envisioned to regulate every step of its distribution network, stressing on vertical and horizontal incorporation, as regulating the wholesome value-chain was essential so as to stay effective. Ultimately, for the company to be capable of lowering the manufacturing expenses and to reach new stores overseas, the decolonisation started, with varied processes of production being globally fragmented.
But the brand “Swiss manufactured” was developed at the same time in order to conserve the premeditated benefit of Swiss superiority against competitors. As result, the market chiefly made high-end and luxury sectors as their main targets. So as to accomplish that goal, a decision was arrived at to market mechanical watches as an epithet of Swiss superiority, custom and a well-recognisable history of watch manufacture, and to utilise these aspects as strategic marketing instruments. Consequently, quartz technology chiefly remained with Asian and American rivals. These core transformations, sparked by the industrial revolution and the quartz technology crisis, changes the Swiss watch industry into what it is currently. In spite of the various crises the sector has encountered across history, it appears that the business has succeeded in conserving its image, embodying a practice and a robust mechanical culture (Zou and Cavusgil, 2012).
1.2. Existing Landscape of the Watch Market and Swatch Group New Marketing Strategies Case Study
Deshpande, Misztal & Beyersdorfer (2012) posit that as initially indicated, the Swiss watch industry consists of more than 400 watch products of different sizes, majorly accumulated in Western Switzerland. The market comprises a great range of companies with a diversified operation portfolio. Contrariwise, the watchmakers manufacture the sum of their watches in a vertically incorporated arrangement, without pleasing to subcontractors. In contrast, horizontal incorporation occurs. Distributors and subcontractors like the parts producers, initially offer assemblers with movements and other components of the chronometers. Next, the assemblers as well assemble the distinct parts of the watch and are accountable for the commercialisation activity. Since this last stage, assemblers and manufacturers, even if just symbolising a drop on the ocean of the industry, are famous to the public.
Many watch products stay moderately small-sized firms, recruiting less than 100 individuals, whereas couple of them consist of more than five-hundred workers. Apart from the small self-regulating products and the larger independent players, for instance, Rolex, three registered corporations dominate the industry: Swatch Group, Richemont and LVHM. Among the three competitors, Swatch Group is presently the premier international watch manufacturer.
1.3. Swiss vs. Japanese Watch Industries for Swatch Group New Marketing Strategies Case Study
The Swiss timepiece business is regarded as practically unproductive at the onset of the 1980s, as a result of being incapable of repelling the global growth of its Japanese competitor. Thanks to the mass manufacture of exclusive motorised chronometers trailed by quartz timepieces, the Japanese watch business commenced in the second half of the 60s a development plan designed to end the Swiss control of the global market. The remarkable growth of Japanese watchmakers in the 70s, whose production level increased from 350 million dollars in 1970 to USD2 in 1980, made it possible for the nation to outdo Switzerland in 1981-1985. More so, Japanese watch exports amounted to an average 1.7 million dollars during 1981-1985 i.e. a greater value than Switzerland, a variation that implicitly shows how Swiss watch manufacturers had become inefficiently competitive on the a global scale. Japanese competition sparked a critical crisis in the Swiss nation, typified by a decline and unproductivity in exports and also a steep fall in services.
But towards the culmination of the 80s, both nations shifted into completely distinct stages, highlighted by a large growth in exports from Switzerland and conversely, a stagnation then decline in Japanese exports (Donzé, 2011). In the 90s, both the watch manufacturers and the academics gave a great preference to brand modernisation so as to overcome the crisis and gain a competitive advantage once more with Switzerland watch business. The preoccupation with brand improvements influenced companies to introduce new brands, but has had insignificant influence with respect to growth. While Japanese have continued to advocate for technological innovation, Swiss researchers seem to back societal concerns as well as marketing approach when defining changes experienced in this industry as from the 90s. Two critical strategies might be differentiated. The leading as well as major one is the justification centred upon the industrial quarter hypothesis.
The utilisation of various core aspects of Marshall’s district facilitated the interpretation of the renaissance of the Swiss watch business as emanating from a technical culture located in a particular region, which made is possible for relocation of the industry. This lead to the production of high quality brands utilising traditional technology. Nevertheless, this type of strategies cause problem, since they suggest a framework that is centred upon on disputable explanation of industrial quarter and on the assessment that does not depend sufficiently on documentary resources, and on the contrary since they fail to introduce the Swiss watch business through an international perspective.
1.4. Rationale
Conducting research of the subject of creating a sustainable competitive advantage is very crucial not just to understand the complex environmental dynamics experienced by organisations, but to count with theoretical explanations to develop a recommendation strategy to assist firms to articulate this problem.
The research will centre upon three disciplines: Strategic Management, International business models and Innovation models.
1.5. Swatch Group New Marketing Strategies Case Study Research Questions
This study is designated to answer the following questions:
What are current the political, environmental, social/cultural and technological factors of Swatch Group?
What are current the strengths, weaknesses, opportunities and threats of Swatch Group?
What are the strategies managed by Swatch Group at international level, as well as from strategic and innovative perspective?
What are most germane theoretic methodologies appropriate to structure the problems and issues entrenched in each discipline?
1.6. Swatch Group New Marketing Strategies Case Study Research Objectives
To have a look at the contemporaneous position of Swatch Group evaluating the external and internal atmospherics of the conglomerate.
To revise the present strategies of the firm from the perspective of globalisation, strategic management and innovation.
To distinguish the core challenges and matters drawn from these disciplines that endangers the competitive niche of Swatch Group.
To determine the germane models of business theories that might find solutions to those problems offering premeditated guidance to sustain a competitive position.
CHAPTER 2: CASE BRIEF
2.1. The development of Swatch Group and Swatch Group New Marketing Strategies Case Study
Donzé (2011) suggests that at the start of the 80s, the chief strategy implemented to overcome the recession consisted of incorporating two largest Swiss watch manufactures i.e. USUAG AND SSIH (1983). Having gross transactions averaging 1.3 billion Swiss francs and 815 million Swiss francs in 1979, the two groups outperformed other watch manufacturers, with second place being usually taken up by the Société des Garde-Temps SA and Rolex, whose gross transactions at this period were estimated at CHF 170 million. Besides, in 1979 USUAG and SSIH recruited approximately half of the labour force in Swiss watch market. Nevertheless, this dominance should be viewed in context, as it was chiefly as a result of the watershed that affected other corporations. Really USUAG and SSIH experienced large industrial and fiscal challenges, and their existence was indebted to the endorsement offered by major banks. ASUAG faced challenges as result of the rapid-expansion and diversification of former years. While this firm had previously been established in early 1930s as a trust regulating manufacture of motorised parts and components for almost the entire market and gained from the endorsement of centralised Republic, the liberalisation of the 60s called this mainstream function into interrogation. SSIH was as well caught in the crunch after 1974. This finished watch brands comprising particularly Omega and Tissot, differentiated broadly during the 60s as well as during the onset of the 70s, particularly into inexpensive motorised timepieces were not effective on the global market. Between 1974 and 1982, the corporation became bankrupt. The bulk of transactions fell from 12.5-1.7 million, whereas gross sales plummeted from CHF 720-535 million.
2.2. The Creation of Swatch Group and Company Governance
To succeed in restricting, financial institutions referred to the expert Nicolas G. Hayek. Born in 1998 in Beirut but was educated at the University of Lyon (France), he managed to set up a consulting company in Zurich, known as Hayek Engineering that provided numerous consulting services to some European Manufacturing firms. According to the reports he drafted for financial institutions in 1982, Hayek recommended as the chief strategy merging USUAG and SSIH into one holding corporation. This was carried out in 1983, culminating in the birth of world biggest watch group that adjusted its label to Swatch Group in 1998. The entire organisation of Swatch Group was certainly very unmanageable since USUAG and SSIH appeared structured as holding firms with numerous groups of stores. In 1983, some corporations were integrated into three sub-assets with respect to their kind of operations, and previously branded by rationalisation. As for the Executive committee, it was still controlled by financiers, who wished to supervise the achievement of the changeover. In the short run, the major outcome of streamlining the corporation was to facilitate Swatch Group to become lucrative for a second time (Wegelin and Mister, 2010). The Swiss mutual memory, the narrative articulated by Swatch Group and theoretical texts normally depict the important function of a brand invention in defining the productivity of Swatch Group and the rebirth of the watchmaking industry in Switzerland on the global marketplace: the Swatch. Designed as a fashion brand, this plastic-designed quartz watch made in the Swiss was introduced in 1983 and faced increasing success across the globe towards the culmination of the 80s. This popularity evidently facilitated the company to invest in dominating and reorganising other products and therefore reintroducing the whole industry (Wegelin and Mister, 2010).As a result of unavailability of information concerning some Swatch Group products, it is impossible to evaluate the actual effect of the product on the company’s administration or establish which brands were more accountable for its reinstated competitive edge. Nevertheless, the Switzerland’s overseas business statistics and the yearly reports of the centralised Swiss watch business offered certain important cues. These statistics certainly discuss the cost and bulk of sales of non-metal chronometers. Although these watches are not just Swatches, this product obviously symbolise an essential position within this classification, with the cost of its supply indicating great increase after the introduction of the Swatch. These statistics fail to completely show the company’s gross transactions. Contrariwise, not every watch products contained in these statistics, but the products continued to sell on the Swiss market. Since this is only available information, it becomes interesting to compare and contrast the value of these overseas transactions to Swatch Group’s gross sales. Although this certainly offers an essential profit source i.e. a major supply of finances for restricting, the company failed to play the profound function that it normally envisioned. In reality, Swatch Group retained competitive edge is founded upon two other core aspects: the rationalisation of manufacturing tools and a novel marketing strategy (Donze, 2011).
2.3. Analysis of stock price growth
The major shock that the luxury watch manufacturing sector experienced in the past few years was the worldwide financial crisis in 2007/08. Through evaluating the growth of the corresponding stock prices, this part infers a conclusion how Swatch Group and Richemont were impacted by and deal with the crunch was an economic and fiscal point of view. The illustration below shows the stock price growth of Richemont and Swatch Group measured by percentile from August 2007 to December 2010. Quantifying stock prices by percentile has the benefit that the whole performance can be recognised on a ratio basis, beginning at 100 percent during the start of the observation. This diagram is particularly important when equating two or more absolute share prices. For instance, the stocks’ initial price by now may have been varied and hence a comparison of absolute figures might provide no further value scholastically.
Figure 1: Stock prices of Richemont (CFR) and Swatch Group (UHR) (2007-2010)
The red line (UHR) denotes the stock price growth of Swath Growth whereas the blue line (CFR) denotes Richemont’s stock price index. The graph underscores the fact that both groups responded analogically to the overall path of the financial crisis. What is more, both firms stock price faces a robust hold up to the start of 2009 and a sluggish recouping from the start up to the end of 2010. This year highlights the stage of recovery as Richemont’s stock price overtakes the initially beginning point of 100 percent beforehand. On the other hand, Swatch Group’s stock price growth follows with a slim interruption of about 2-4 months. Nevertheless, especially surprising and of heightened significance for this research’s evaluation is the comparison between the two firms stock growth toward one another. As underlined in the figure, both circles underscore both comparative stock price growth similarities in terms of the slim variations up and also downward. Because the declarations in the corresponding shareholders’ segments failed to go public about this development, particularly with regard to similarity, it can be projected that this stock price growth indicated a generally standardised market. This hypothesis is underscored by comparing this observation with the stock price growth of LVMH, the succeeding largest Switzerland’s watch manufacturing corporation (Credit Suisse, 2013).
CHAPTER 3: PROBLEM STATEMENT
This paper will be focusing on four problem areas, which are base on the Swatch Group case study.
Firstly, this research will be focusing on Swatch’s strategic management by using two models: concept of social responsibility and environmental sustainability.
Secondly, the author will also focus on globalization by using both SWOT and PESTEL analysis
Thirdly, the author will also touch on innovation models by using open innovation and knowledge-based theory as tools.
3.2. Research Methodology
The corporate world of watchmaking on which this research is based exists externally and is not connected to the writer; thereby they would be measures via objective techniques as opposed to being concluded subjectively through reproduction, sensation or intuition (Smith, 2012). This paper would thereby adopt a positivist approach as reliable data could just be resulting from quantitative analysis of phenomena detected (Saunders et al. 2010).
Research approach
As a result of the positivist nature of research, this paper will adopt a deductive approach. This method denotes the most common perception of the association between theory and research and outcomes obtained from this technique are established through rational thinking (Bryman and Bell, 2009). The statistics findings will be equated against available literature to determine if they agree with what has already been available.
Research strategy
This study will adopt a case study in answering the research questions. Robson (2012) affirms that the case study is important if the objective of the study is to obtain as concrete understanding the research standpoint and the procedure of being recommended.
Validity and Reliability
The primary data exploration and the procedure information on Swatch Group upon the ground of the case study and other germane analysis are categorically valid for further study and enhancement of Swatch.
As for the findings and assumptions are absolutely founded on limited companies, these findings may not be generalized to some other firms in the equivalent industry.
3.3. Literature Review
3.4. Globalisation models
3.4.1. SWOT analysis
SWOT analysis is the evaluation of a company’s internal strengthens and weakness, its opportunities for development and enhancement, and the threats the external atmospherics presents to its existence.
The primary objective of strategic planning is to bring a firm into equation with the external environment and to sustain that stability over time. Companies accomplish this stability by analysing new strategies and services with the intention of exploiting structural performance (Cadle et al. 2010).
Strengths
Mainstream SWOT analysis views strengths as present facets that have stimulated exceptional organisational performance (Aguillar, 2007). An example may include highly competent staff, a clear understanding amid personnel of the company’s goals, and the determination on quality development.
Weaknesses
Weaknesses are a company’s facets that will raise operation costs. Weaknesses can be fragmented further to categorise reasons (Cadle et al. 2010).
iii. Opportunities
Conventional SWOT analysis sees opportunities as important new business initiatives accessible to a company.
Threats
Threats are aspects that might be negatively impact a company’s operations. Some examples include: political or economic instability, etc. (Aguillar, 2007).
3.4.2. PESTLE
Cadle et al. (2010) all firms are expected to establish external factors in their environment that have the potential of impacting their activities. Most of these will be issues that the firm has no control over, but the implications of which want detailed understanding.
An important tool for establishing these external factors is the PESTEL Analysis that can be used to assist the company to take into account: Political, Economic, Social, Technological, Legal and Environmental matters.
Political factors
It is always worthwhile to keep in touch in government priorities that can lead to new initiatives being ushered in and also transformations to trade protocols or fiscal policy (Aguillar, 2007)
Economic factors
These issues consist of the examining potential transformations to the economy inflation rate, taxes, interest rates, trading policies and excise duties (Aguillar, 2007). In terms of the company’s performance productivity it is necessary to take into account such facets as unemployment’s, competence levels, availability of expertise, payment patterns, working practices, amid others. When attempting to identify the economic feasibility of the market the company should examine such issues as the present cost of living for the target market and also the accessibility of credit or funds.
iii. Social factors
The company must put into account attitudes toward thing such as health, profession and environmental issues. Social facets and cross-cultural communication play an important function in the global markets, and the success of the firm will rely on the depth of their research in this field. Overlooking this factors will be costly to the company and might not be exposed until substantial investment has been undertaken the company (Cadle et al. 2010)
Technological factors
This aspect has become a core facet for companies in evaluating and determining things that might have a considerable effect on its performance and that might be essential to it long-term future (Aguillar. 2007). It is by utilising such methods as PESTLE that firms will be capable of brainstorming even the most bizarre recommendations, since what today appears unlikely may become ordinary in matter of just a few years.
Technological facets can extensively be broken down into two fields: manufacture and infrastructure. By taking advantage of opportunities to update of change their production a company can obtain market share, therefore achieving a robust competitive advantage.
Legal factors
The set of legal facets that must be put into consideration includes present and imminent legislation that might impact the industry in disciplines like employment, competition, and health and safety. Projected transformations in legislation in the key trading affiliate regions must as well be investigated.
Current years have witnesses a considerable increase in the number of regulatory entities that have been established to manage corporation’s observance of legislation associated with will fields of performances, including consumer protection, personnel wellbeing, waste disposal, and how their proceeds and investments will be taxed (Aguillar, 2007).
Environmental factors
These issues encompassing environmental protection have become progressively significant in present years as the outcomes of under-controlled economic action are witnesses today. This has turned into more important with globalisation as the effect of a firm’s activities might be experienced outside of its inherent region and might suffer immeasurable monetary penalties (Cadle et al. 2010)
3.5. Strategic management
3.5.1. Environmental Sustainability
The strategies of bot firms and nations are progressively inspected and examined from a natural environment angle. Corporations like Swatch Group now supervise not only the price its vendors provide for brands, but also how those brands are made with regard to environmental practices. An increasing number of business institutions provide separate courses and even a focus in environmental management (Basu et al., 2008)
Enterprises should not exploit and decimate the natural ecology. Workers, consumers, administrations, and society are in particular resentful of companies that harm as opposed to conserve the natural ecology. On the other hand, individuals today are in particular obliged of companies that carry out actions in a manner that mends, protects, and preserve the natural ecology (Berrone et al., 2009). Consumer interest in corporations conserving nature’s environmental balance and nurturing a clean, healthy ecology is high.
No company desires a reputation as being a polluter. A bad sustainability record will harm the business, endanger its status in the society, and invite inspection by watchdogs, stockholders and environmentalists. Administrations increasingly expect companies to act accountably and need, for instance, that the firms openly report the pollutants and wastes facilities generate.
The environmental challenge embattling all firms needs managers to formulate strategies that protect and conserve natural resources and regulate pollution. Important natural ecology includes ozone depletion, global warming, and depletion of rain forests, amid many others.
3.5.2. Concept of social responsibility (CSR)
Because Swiss watch products have their HQ in Switzerland, it can be argued that the legal context and cultural framework of the nation will shape the manner in which these products view and practice CSR. However, it is hard to explicitly measure Switzerland’s official strategy with respect with CSR since various federal agencies are accountable for different elements of responsible business. As a result of this fragmentation, it is a sophisticated duty to create a lucid impression of the management and operation of CSR practices in the Swiss. CSR chiefly deals with a willing foundation in Switzerland, as a result, no particular item of legislation are linked to CSR can be identified, as the subject is not yet a preference on the administration agenda. However there are a couple of legal requirements for the Swiss firms to support CSR plans, with mandatory reporting on CSR and sustainability for registered corporation being the only available legal limitations. It is suggested that restrictive regulations on the issues would just lead to extraterritorial discrepancies (Economieissue, 2010). Nevertheless, while vehemently endorsing voluntary CSR actions of any type, the economic link issues the “Swiss ethics for best practice for trade control”, concentrating its suggestions on the commercial governance field. From a cultural perspective, Switzerland appears thereby to assume the recently increasing phenomenon of obvious CSR in Europe prioritising trade voluntary standards in stead of codified and obligatory expectations for companies. There is however limited information about the manner in which Swiss organisations overall carry out CSR plans, as academic text on CSR practices in Switzerland is insufficient.
Even if most of the trademarks are associated with philanthropic work and each of them appears to further focus in other sectors of CSR. Operation processes, conservational sustainability, natural resource accreditations are some of the areas in which they are largely engaged in. inconsistencies are as well identified in the communication policy. Initially, the Federation of the Swiss Watch Industry does not have particular provisions for concept of social responsibility nor do the various available journals and magazines committed to the watch industry. CSR concerns appear, thereby, to be disadvantaged by the absence of reporting by the expert media in the market.
Additionally, not all products communicate about their CSR practices as regularly as expected. Whereas various corporations commit an entire segment of their online platforms to CSR-linked issues, others have absolute ignored it.
As before indicated, the portfolio of CSR practices that can be seem in the market are wide-ranging. It is assumed that these CSR practices are chiefly split into three major groupings: social, environmental and economic. With respect to social CSR, endorsing philanthropic activities and foundations appears to be a CSR network that that firms regularly utilise. Similarly, endorsing celebrities who are prominent for their charitable operations as well comprise a far-ranging plan.
3.6. Innovation
3.6.1. Open innovation
Open innovation is founded on a backdrop of rich knowledge that should be utilised voluntarily if it is to offer value for the firm that developed it. Nonetheless, a corporation must not limit the knowledge that it unearths in its research to its in-house marketplace conduits, nor must those in-house conduits essentially be restricted to bringing only the firm’s in-house knowledge to marketplace (Mata, 2005).
In any R&D activity, researchers and their supervisors should separate the bad suggestions from the good ones in order to weed out the previously whilst chasing and commercialising the latter. Both closed and open innovation concepts are adroit at removing false positives (ventures that previously appear to lack potential but become remarkably valuable). A firm that is focused too internally, i.e. a company with a closed innovation approach is susceptible to miss a couple of those opportunities since most will fall outside the firm’s present dealings or will require to be integrated with outside technologies to reveal their ability (Allen, 2007). This can be particularly hurting for corporations that have made considerable long-run investments in research.
Entirely incorporated innovators, for example, have become a jeopardised species in most industries. As concepts splash out of the central R&D laboratories of huge firms, the other techniques of innovation are in a locus to yield from them (Allen, 2007).
3.6.2. Knowledge-based view of the firm
It is hugely acknowledged that the knowledge-based view (KBV) of the company is a current extension of the resource-based view (RBV) of the company (Bologun 2010). The present addition of the RBV, the KBV is recognised to be sufficient to the recent economic perspective. In this framework, intangible assets are exceedingly valued. The explanation of knowledge as a resource sets up the hypothetical association between RBV and KBV of the company, and the potential made that extension probable (Orsenigo, 2010). The competition premised on the abilities and the idea of growing proceeded was initially proposed Edith Penrose (1959).
The KBV of the company is an extension of the RBV of the company since it affirms that corporations are mixt entities with sufficient knowledge. Conner (2010) posit that clearly there is a body of text that regarding KBV of the company as being the principle of the RBV of the company. According to this author there is a developing strategic management literature on the RBV that suggest knowledge as the root for competition.
Most organisations take into account that to operate with efficiency in the current economy, it is important for them to grown into a knowledge-based firm. Ever more we discover knowledge employees at the centre of the corporation operations (McGrath, 2011).
Strategic management literature presently is reviewing the competitive edge in manner that it links company operation variant to intangible facets (Rouse & Daellenbach, 2009). Other than natural resources trusts, the intangible resources embody a robust probability to generate competitive position, as they are overall uncommon, socially sophisticated.
3.7. Sources of Data
Sources of information are categorised into Primary and Secondary, and each of these has their own methods to collect data. Yin (2004) posits that selecting the appropriate technique for data collection will rely on four core elements: a) the nature, scope and study goal of the research, b) the availability of finances, c) the time factor, and d) the accuracy needed.
For that explanation, this writer chose to use secondary data, as a result of the strong methodologies and perspectives that this offers. They include: journal articles, books and so on.
3.8. Ethical Considerations
As a researcher, it is very significant to comprehend the significance of the research ethics, which talk about maintaining the confidentiality and integrity of data and the research work. Therefor the information and findings of this research will as well be utilised just for academic purposes (Bryman and Bell, 2013).
CHAPTER 4: ANALYSIS DEVELOPMENT
In carrying this analysis is indispensible to understand that all the theories are connected to the goal of accomplishing and gaining a competitive advantage in the market. In terms of what has been described in the previous chapter, using the concepts explicated will seek to examine the competitive locus of Swatch, and establish the suitable decisions that the company must take into consideration.
4.1. SWOT Analysis
Strengths
Swatch enjoys client allegiance. This was further improved with the introduction of Swatch Membership Club. It is a collectable that has demonstrated to be an important asset and has increased high costs at auctions.
The company enjoys esteemed brand position in the global market since it is one of the most successful brands in the world.
Weakness
Swatch is becoming so fragmented which make the endorsement of brands to be hard. Swatch has currently encountered a decline in turnover of its asses in contrast to its closet arch rival, Rolex. The productivity per worker is weak therefore impacting the fiscal proceeds. The effectiveness of Swatch is 0.2 million dollars compared to 0.3 of its rival Seiko (Donze, 2011).
Opportunities
Advanced economic environment in developing nations like China and Brazil is expanding individual’s disposable earnings
As growing nations become somewhat westernised: Swatch Group might obtain a competitive advantage in these advancing regions with an integration of its design architecture and artistic techniques (Wsjournal, 2013).
4.2. PESTEL analysis
PESTEL analysis is implemented by managers to comprehend the macro-environment impacting the industry. These analyses are strategic apparatus to for comprehending market expansion, market share, and recent trend, amid others.
Political factors: These stands for the germane government regulations that impact the business environment of Swatch such as tax policy, labour law, minimum wages law, excise duty etc.
Economic factors: These stand for the macro-economic facets that may impact the enterprise of Swatch which are inflation, GDP, GNP, reverse repo rate et cetera.
Socio/cultural factors: These comprise of the numerous social and cultural aspects prevalent in the corporate setting of Swatch such as greater awareness of the individuals toward environment, transformations in preferences of the consumers, standard age of customers et cetera.
Technological factors: These refer to the technological facets like R&D process, automation and other innovations that have transformed the manner in which to engage in business.
Environmental factors: These comprise of the environmental and ecological dynamics that impact the trade of Swatch such as climate change, global warming and fast depletion of natural raw materials.
Legal factors: These include the legal setting in which the business is carried out like trade barrier, consumer law,commercial acts, amid others.
Additionally, watch trademarks are as well dynamic in the cultural, entertainment, scholastic and artistic disciplines, by promoting varied faculties, awards or concerts (Weber, 2011). Target commercial charity appears thereby to be a leading sequence in the different products. Furthermore, the industry overall gains from a good reputation in terms of social involvement, as it overall provides superior domestic working standards and is accountable for mass employment. More some numerous activities have as well been carried out by organisations to enhance the public transport, and thereby the movement of the society they operate in. What is more, sustainability as well constitutes as component of the watch industry’s CRS plan: timepieces comprise sustainable products because they are sturdy pieces that consumers do not dispose of within a short timeframe, avoiding ecological contamination. Other firms additionally devote to lowering their CO2 emissions, to recycle or construct new premises made of biodegradable components (Wood, 2011).
With respect to the economic dimension, some positive elements regarding the value chain administration can as well be witnessed. Some trademarks have begun to join some official CSR-linked initiatives. For example, numerous brands became members of councils or global endorsement so as to verify the geneses of raw materials.
Findings: There are only two-thirds of Swiss firms consider implementing active and positive communication about their CSR practices. Only various Swiss watch brands as associated with three largest groups, namely Swatch Group, Richemont and LVMH). Nevertheless, firms gain from robust autonomous in the context of the responsible practices they desire to undertake and promote. The three conglomerates do monitor their subsidiaries CSR actions and offer them with guidelines and advice; however products can mostly take on their own policy (Richemont, 2012 and Swatch Group, 2013). Consequently, practices can differ largely from one product to another.
It is significant to acknowledge that individual watch trademarks fail to include certain online segments dedicated to CSR, all three trademarks (Swatch Group, Richemont and LVMH) at least own one. More so, the groups issues annually CSR-linked reports. It is feasible to assume that the absence of confederation of the industry might be as result of numerous aspects. First off, it can be credited to the different sizes of corporations in the watch market, some of which are leaders in the industry
4.3. Knowledge-based view of the firm
Orsenigo (2010) posits that the evolving knowledge-base view of the firm provides new understanding into the causes and management of interfirm associations. Nonetheless, the development of a productive knowledge-based model of alliance formation has been inhibited by a simplistic view of association as catalyst for structural learning by which strategic alliances have recognised to be inspired by companies.
Knowledge requires to be connected to unrestrained, astonishing and until now indefinite creativity, as explained by knowledge-based view of the firm concept. If rival firms had the desire to innovate on a long-run basis, most would be cagey since innovation always signifies threat. This threat is not just fiscal but also rather theoretical since it needs acceptance of indecision, the likelihood that are the outcome does not correspond to what is previously strategic, and the prospect for the whole failure (Mata, 2005).
In essence, the dawn of the Swatch flagship innovation is apparently unheard of. Hitherto, there is little is known about the pre-launch era, the period that lapsed between the innovative conception of the Swatch and its previous success on the market (Bologun, 2010).
Findings: Swatch cases shows that without knowledge, it is impossible to design: however, with knowledge, we can just replicate. Innovation needs knowledge and creativity. The Swatch design procedure complied with the knowledge-based view of the firm theory. There was arduous and constant interaction between individuals involved with conceptual matters and creative individuals participating in engineering matters (Mata, 2005).
4.4. Environmental/social sustainability
For a company that manufactures high-end chronometers utilising limited resources and jewels, as of the largely essential disciplines with relevance to ecological sustainability, is the ethical and justifiable locating of these precious gemstones. A corporation such as Richemont is engaged, for instance Responsible Jewellery Council (RJC).
The agency was founded in May 2005. Cartier, Richemont’s dominating brands, is an instituting participant of the RJC. The agency is a voluntary program, whose members are devoted to the endorsement of responsible business operations throughout the diamond and gold locating distribution network.
In particular, all members carry out processes that guarantee that these gemstones entering the distribution channels have been located without harming the ecology or the community in which the location has occurred. On the other hand, Kimberly Process Certificate Scheme expects every unprocessed diamond exports and imports of member states to be reported, distinctively certified and sanctioned through a government agency so as to endorse war-free diamonds. CITES is associated with the purchase, import, utilisation and export of leather and other resources issued from endangered variety.
However, Swatch Group is devoted just to the Kimberly Process Certification Schemes, and of the company’s diamonds imports adhere to the Kimberly procedure protocols. During 2010, Swatch Group initially reported its program concerning distributors and the sourcing of resources. But its annual report fails to show when the corporation started adhering to the Kimberly procedure protocols (Mäler, 2010).
Findings: To guarantee an appropriate comprehension and so as to offer detailed outline, the information collected is presented with respect to social sustainability practices associated with transparency. Swatch Group annual report (2010) indicates that the corporation operated globally and has stores in over 37 regions. Nevertheless, more comprehensive data about the locations of manufacturing were not issued.
Also, Swatch Group reports data regarding the water use over the whole period under evaluation, except for 2008. But, rather than providing certain statistics, the corporation presented just the corresponding annual reduction or upsurge. For instance, in 2010, indicated that the utilisation rate of water declined by 1.8 percent respectively and that non-drinking water level rose by just 1.5 percent (The Swatch Group, 2010). Even if the company reported the total volume of waste in 2010, Swatch Group withdrew gathering of data with regard to the volume of waste by variety and also by disposal technique in 2011. This publication included data about the amount of distinctive waste, the portion of reused distinctive waste, and the reuse share of other manufacturing waste.
Nevertheless, rather than presenting particular information, the firm displayed simply the quotient escalation/reduction of the annual volume of waste. Swatch Group has been gauging its carbon footprints since 2009.
Within two years, the company become carbon free via engagements like sourcing energy from an eco-friendly distributor and through procuring carbon counterbalances corresponding to the early year’s emissions. Nevertheless the reportage indicates a persistent increase in volume, caused by a growth in overall trade. Swatch Group thus far reports just one publicly indorsed program that endorses worker training and growth, namely the six Hayek watch manufacturing institutions started by Swatch Group.
The company trains learners to become expert watchmakers. However the company does not provide any information regarding expenses pertaining to staff training and development. Lastly, Swatch Group does not present data about it being involved with any foundation endorsement or community engagement.
4.5. Overall Findings
The centralisation strategy had inconsequential effects upon the marketing policies of varied brands. It concentrated fundamentally on statistics. In the mid 1980s, there existed no brand strategy at the group strata, even if senior executives chose to ignore some low-end products that were not showing signs of growth like Record Watch and Baume. More so, just two products were unveiled in this year, the kids’ timepieces Flik Flak and the fashion chronometers Pierre Balmain failed to emanate as of any marketing branch then instead from the conglomerate’s motorised parts manufacturer, ETA. For some products, the appearance diversity amongst products did not appear as much marked.
Omega and Longines still were traditional competitors they had become ever since the culmination of the nineteenth century, with numerous brands under their belt that signified very analogous ethics (accuracy, athletic, fashion, and sophistication). There were as well vacillation in the middle variety (Certina, Mido and Tissot), where differentiation was somewhat complicated, although Tissot was selected for introducing new brands, like chronometers with a stone cases or wooden cases. The remaining two products to differentiate themselves were Rodo that was characterised by contemporary design, and Hamilton that appropriated its Western geneses (Deshpande, Misztal& Beyersdorfer, 2012). Evidently, the overall absence of distinction can be defined by the desire to start by restructuring the intramural marketing plan of every product.
The goal was rationalisation via a far-reaching minimisation of the quantity of prototypes. For instance, at Omega, the amount of distinct replicas resulted in some 1600 units at the onset of the 1980s, was reduced to 850 by 1985. This reform of distribution placed Omega back in the darkness in 1985 as never seen in history of the company. By 1990, the group’s CEO Hayek reorganised the management board to carry out product management on a group scope, typified by product differentiating and market segmentation i.e. a policy needing robust synchronisation between the numerous product supervisors. Hence the management board which had been mandated with the role of managing the ASUAG-SSIH merger accompanied by rationalisation of the corporation during the 80s experienced restructuring. Swatch Group products should compete with one another, but instead target distinct consumers. As much as the application of this recent strategy was taken into account, the buyout of Blancpain proved essential. During the second half of the 1990s, Swatch Group in a strategy of diversification and restructuring of its core products in the luxury sector, so as to increase the company’s supplementary in order to assist the corporation gain a competitive edge. This was essentially the situation in the available luxury sector, between the primary traditional products of the company, namely: Omega, Longines and Rado. The goal remained to underpin their own reputation and to portray the brands as distinct as well as supplementary brands, designated for varied consumers. Omega became the top notch end user product that the objective of repelling the influence Rolex already had throughout global market.
Omega rapidly turned into the group’s chief product. In all respects, Longines and Rado had to redesign to stop competing with Omega (Donzé, 2011). Longines was redesigned in a low-end sector and became to be associated with sophistication and elitism and was not capable of competing with other products within similar price variety, Rado. For instance, during the 1990s Longines transferred its endorsements practices fit for a reputation of orthodox sophistication, renouncing previous areas like Formula One racing. More so, Omega managed to underpin the group’s reputation of a traditional inventor in watch manufacturing with the release of two tomes, one narrating the company’s history, while the second one being the excision of prominent record of American watch corporations authored by Jacques David.
The marketing policy assumed during the start of the 1990s was pursued and improved in the subsequent years. The major supplements of this strategy were the restructuring towards high-end goods: the underpinning of differentiation between the products and large financing in supply chains. Hence, whereas the corporation’s expansion depended upon streamlining during the 1980s, it later came to rely heavily on marketing. The generation program was even restructured from this context witch major refocusing of movement production to finished watched vendor. Swatch Group’s strategy merged with the overall framework of the critical transformation in the luxury industry that occurred during the late 1980s. While this segment has initially been marked by classicism, discretion and handiwork, it encounter during this time a trend toward egalitarianism founded upon product internationalisation and the expansion of consumers alongside a refocus of luxury businesses in the lucrative industrial sector. Though, this egalitarianism of luxury resulted in robust division between elite luxury and reachable luxury. Elite luxury defines high-superiority and disproportionately lavish goods, produced for a select few.
As for reachable luxury, it designates brand commodities sold like luxury products but economically accessible to a huge consumer base. This brand differentiation aims varied targets and makes its likely to purse at the same time tactics founded on elitism and egalitarianism of luxury. The watch sector is appropriately suited to this framework, with, for instance, the arrival of Richemont (1988) and LVMH (1999) into the watch industry. Swatch Group espoused a restructuring plan centred on both the corporation’s procurement and rebranding of commodities. The initial goal was to increase its portfolio of high-end luxury products, as it just possessed Blancpain in this industry, by procuring for more brands. The policy was similar in all four instances. Swatch Group seized high-status products whole core shortcomings were entrenched in their marketing policies: constricted supply strategy, and the absence of a characteristic design (Deshpande, Misztal & Beyersdorfer, 2012).
The inclusion in high-end luxury targeted fundamentally at marketing accessible luxury goods, especially Omega. Obviously, some elite luxury products boast sufficient turnover margins, projected at roughly 24 percent for Breguet and at 19 Percent Blancpain in 2006. Nevertheless, they result in just a miniature stake of gross transactions. The major advantage of these products is instead indirect: they improve the image of other Swatch Group products and make it possible for restructuring. The products that produce the biggest profits are certainly affordable luxury brands, chiefly Omega that was responsible for one-third of timepiece purchases in 2006. The impact of these products marks the concern of democratising extravagance in the watch sector.
As for the standard-variety, other than Tissot, the group’s third product with respect to the purchases of 2006, it denotes just a fraction of gross transactions. Put together, Balmain, Certina, Hamilton and Mido was responsible for just 4 percent. However, Swatch Group has not parted with this sector. Since there is still a worldwide market for such brands, it pursues its engagement, for instance by unveiling inexpensive timepieces for the U.S. based fashion firm Calvin Klein. On the other hand, the vertical incorporation of supply has hitherto been an instrumental concern in the luxury watch sector during the culmination of the 1990s. The goal was not just to enhance regulation distribution and sales of commodities, but also to adopt earnings from this operation. Accordingly, in order to underpin the élite reputation of luxury brands, distribution turned into a main concern. Consequently, the verticalisation of supply impacted predominantly the group’s high-end products, via the production of flagship stores. The priority offered to the supply and sale of finished goods lead to the formation of dozens of new distribution networks (Swatch Group, 2010).
While Swatch Group concentrated on mainstream stores up to the end of the 90s, particularly Western Europe, it focused to new markets after 2000. Swatch Group as well bought shares in retail corporations, particularly in Thailand and in the UAE. In this perspective, China holds a unique position, as it comprised of ten supply and sale firms in 2009 in contrast to the two in 1998. Conversely, the development of retail firms should be underscores, since it became a central influence of marketing strategy. This was especially the case for luxury products, with Les Boutiques corporations opened in most nations (Germany, China, France, UK, and United Sates, amid others).
As from 2000, Swatch Group’s key brands had individual flagship boutiques that were designed cater to needs of sales stores but as well as settings and platforms for activities graced by international celebrities and emissaries. Ultimately, the reinforcement of connections with domestic corporations which regulate extensive retail chains can as well be seen, at times resulting in the development of joint ventures. On the whole, the generation strategy adopted by the Swatch Group shows an evolution dictated by the restructuring toward luxury. Its major aspects are the vertical incorporation of makers of external components; the end of the distribution of movement parts to Swiss timepiece producers outside of Swatch Group. In essence, the production mechanism reached stability during the close of the 1990s. The sweeping restructuring of the assembly strategy during the 1980s and 1990s was done.
CHAPTER 5: RECOMMENDATIONS
In general terms the analysis conducted hitherto, indicate that Swatch Group still enjoys a very robust competitive position in the marketplace. Useful knowledge has become widespread and notions should be utilised with alacrity. Such aspects have created a new logic of open innovation that supports external concepts and knowledge in conjunction with internal R&D. This transformation provides novel ways to develop value.
Within the span of 15 years, from 1985 to 2000, Swatch Group encountered fundamental transformations that made it move from a very incongruent corporation of tentatively incorporated Swiss chronometers to a national, streamlined and globalized conglomerate. While its Japanese competitor, i.e. Seiko, Citizen and Casio turned to technological innovation in the 1990s and 2000s in order to enter a new development stage, Swatch Group succeeding in establishing itself as the world’s dominant watch corporation without boasting technological novelty. This non-technological novelty is principally founded in two complementary strategies: the rationalisation of manufacture structure, and the application of a recent marketing policy. The initial stage of rationalisation of assembly structure lasted from the company’s foundation in 1983 till the culmination of the 90s. It cores aspects were the centralisation of motorised component manufacture in the company’s subsidiary’s ETA, the vertical incorporation of components and, in particular, the globalisation of manufacture structure with the introduction of stores in Asia. The rationalisation improved efficiency and underpinned ETA’s traditional role of a manufacturer and supplier of parts for the whole Swiss watch business. Alongside decision of the manufacture rationalisation activity, a novel marketing policy was adopted in the first half of the 90s, after the acquisition of Blancpain (1992). Categorised by an intense repositioning of products, this plan was designed to make Swatch Group a manufacturer, and especially a dealer of finished timepieces. Its core aspects were the takeover of numerous exclusive luxury products and the decision of Omega as the main product to dominate the global market of available high-end, customarily an exact lucrative sector and to repel Rolex’s leading role. This new marketing policy had an essential impact on Swatch Group’s whole executive arrangement (Deshpande, Misztal & Beyersdorfer, 2012).
According to Credit Suisse (2013) the 21st century is categorised by the growing competitive atmosphere and effort for productiveness at any level of the industry atmosphere, amid other factors. The resultant market sensitivity is impacted by probable as well as irregular instabilities with growing frequency. As outline in this investigation, these instabilities have the capacity to generate shocks that may reorganise whole industries and amount to departures and market phase out by recognised organisations. Firms that have the potential to survive such disturbances are regarded resilient. Contemporary transformation to the environment created adjusted consumer needs towards any corporation. In particular, this paper has discovered that consumers are progressively concerned with the firms’ capacity to balance trade operations with unburdening and conserving the ecology simultaneously, i.e. being sustainable (Glasmeier, 2011).
Available research mostly relates sustainability to a firm’s level of operation. This paper applied the hypothetical background to the fiscal crunch in 2007/08. The corresponding occurrence was regarded as a suitable industry disturbance upon which an illustrative industry model is analysed for performance. In particular, nevertheless, this research analyses whether any actions connected with sustainability have contributed towards performance of the firm. The explicated industry model included one of the largest firms of the Swiss luxury watch manufacturing industry.
The research evaluation of quantitative data showed that numerous industries are met with different and transforming consumer desires toward an augmented interest in sustainability. As a consequence, corporations are compelled to come up with solutions that meet these desires so as to gain competitive edge. This study found out that the investigated policies of sustainability, namely ethical and sustainable location of scare resources are of great importance for the corporations within the luxury watch manufacturing industry (Govindarajan and Kopalle, 2011).
5.2. RECOMMENDATION PLAN
Target the Indian Market
The Swatch must target the Indian market because there is a large local demand and availability of low-labour. With a population hitting the one billion mark and is the fifth-biggest economy around, India is alleged to have a fast growing consumer class comprising of the wealthy and middle class as well. Omega and Rado brands should be targeted to these customers in the Indian market. Swatch and Tissot, although less costly, still appeals to the fashion-oriented consumers and might be an efficacious brand (Donze, 2011).
To repel the fierce competition with LVMH Watch & Jewellery, the Swatch Group must take advantage of supply networks by basically launching extra separate, multi-branded outlets in India as the conglomerate did fruitfully in other regions. In that sense, Swatch, Omega, Tissot and Rado would be retailed. Tag Heuer has previously established six boutiques and wants to raise the number before the year ends. It is suggested that Swatch Group must as well plan to enter the metropolitan Indian marketplace via multi-brand stores that have synergy with the product like sports stores, or bookstores, amid others (Hollensen, 2010).
The essence of the Indian strategy would be to develop a focus on the differentiators at all echelons of the connexion, whereas targeting an extensive cross-section of fashion c mindful; Indian customers. Through adopting this path, the Swatch Group will create a credible and ambitious brand reputation and provide a global brand experience. Many of the global well-known fashion timepieces have not ventured into the Indian market, and Swatch Group may exploit this circumstance by setting up their fashion watch products in the fashion industry.
This researcher holds the view that for Swatch Group to be successful in the long-run, the company needs to create value for its shareholders and for society all together. This is known as Creating Share Value (CSV). As an important requirement for CSV, it is proposed that Swatch Group must ensure that they comply with all pertinent legal prerequisites and Swatch Group Corporate Business Principles also guarantee that the code of sustained development is entrenched in their operations, brands and products.
This means conserving the future by making the appropriate decisions in a situation where water is progressively threatened, natural raw materials are limited and biodiversity is decreasing. All these factors are germane for catering to the needs of an expanding global population and for the development of Swatch Group. More so, climate change might worsen our planet’s ecological challenge (Banerjee, 2008).
5.3. SURVEY OF THE PROPOSAL
The success of Swatch Group occurred, in spite of other branded products equivalent distraction for development and the value-mindful customer’ resistance to price inflation in a period of low increase, and are picking high-quality customised label products in lieu of brands. Hence, Swatch’s innovative development had basically expanded their consumer base ( Donze, 2012).
For Swatch, the rebirth and enhancement from their weakened market share as a result of their costly timepieces and the presence of low-cost products can be accredited to the following aspects (Deshpande, 2012). Firstly, the growth of their brand from the utilisation of stylish components to plastic enclosed watches and the successive price decrease that they were garnered made it possible to introduce low-price point watches.
The manufacturing activity having intended to be more productive than its rivals made it possible for the production of low-price range goods. The growth of the process nevertheless due chiefly to the transformation in the brand design: both rising the economies of Scale for the group making it capable of increasing its target market and hence, furthering its marketplace share.
Adroitly premeditated, the Swatch timepiece adopted a distinct function; it had changed itself to a portion of extravagance. The packaging offered to the new mien by the company had offset its previous image and integrated the younger generation. Hence, the marketing strategy in line with its new architecture had achieved marketability increased to overlook the social stratification.
CHAPTER 6: APPLICATION CASE-SEIKO
6.1. COMPANY BACKGROUND
Seiko was founded in 1881, but entered the global fame in 1969 by commercializing the world’s original watch designed using quartz technology. A vertically incorporated watch producer, Seiko possessed competitive edge over its competitors in the Swiss watch industry, which included hundred of companies that specialized in several elements of motorized watchmaking. Seiko invested heavily in R&D and towards the end of 1980s has introduced numerous chronometers presenting technological novelty. Via in-house development, consolidation and buyouts, Seiko spread into a new enterprise over time. But the timepiece industry, for which Seiko was well-recognized, was being confronted by forces that were changing the worldwide timepiece business (Farhoomand & Hout, 2010). The benefit gotten from Seiko’s mechanical production potential at the time of quartz revolution had been eroded by cheap Chinese watchmakers and a burgeoning Swiss watch industry, controlling the low-end and high-end of the industry comparatively. In the meantime, opposition from Citizen, Casio and a plethora of new-fangled fashion trends suggested that Seiko’s status in all marketplace sectors was being confronted by an interminably growing number of rivals. In a sense, Seiko’s watch sales plummeted during the 1990s, provoking the resolution to form Seiko Watch Corporation (SWC) in 2001 as an independent subsidiary of Seiko Company.
The decision was designed to rationalise internal decision-making and provide for concentrated product vision. By 2005, the luxury watch market had emerged as the most profitable, whilst tightening margins overwhelmed the lower-priced sectors. Shinji Hattori, the CEO of SWC, felt obstinately that the corporation must increase its perceived image outside of Japan, shift their focus to upmarket and even confront the Swiss in the domain of automated watch production. While Seiko had traditionally manufactured luxury timepieces for the local market, its high-end lines enjoyed little prominence globally, with 95 percent of items distributed locally and the remaining 5 percent in other Asian regions. In 2007, it became obvious that Seiko’s entry into the upper ranks of global watch production profile would need restructuring of consumer awareness, especially in Europe and the United States (Farhoomand & Hout, 2010).
SWC’s role was to develop and promote timepieces, tracking down from Seiko Instruments and Seiko Epson. The two firms progressively expanded into large corporations in their own right. Consequentially, the firm created production-oriented managing decisions instead of making them from the point of running a proprietary watch enterprise.
A stronger separation of labour between the two industrialised facilities of Seiko Group was institution to prevent overlying growth expenses. To stay cost competitive, much of SWC’s industry-intensive watch production processes were relocated to China, since the region provides cheap labour. The idea of innovation and refinement was to expand to the complete gamut of Seiko’s operations: production growth, distribution and marketing advertisements. Conventionally, SWC had concentrated upon creating products where sales opportunities were present in a specific price ranges, allowing its international systems of 10 subsidiaries and some thirty suppliers to carry out promotion and retailing policies appropriate to their areas. This strategy complicated the challenge of differing consumer awareness in Seiko’s varied markets worldwide. The corporation as well integrated annual international advertising promotions for primary watch collections.
During the 1980s and 1990s, Seiko entered the watch industry with a market-share leaning culture, exploiting opportunities to accomplish gross sales by launching timepieces at varied price ranges, without caring the risk of changing its reputation. What is more, the company managed a portfolio of sub-products: Pulsar falling in the mid-price points quartz timepieces. Globally, the price of Seiko timepieces was characteristically viewed as falling in the $150-600 point, with the product typically linked to consistency and value for money. Nonetheless, in the local marketplace, Seiko was identified as a fully incorporated watch firm and sold expensive timepieces for the high-end of the market. The United States is SWC’s biggest market by value, then Japan, Asian and finally Europe.
Strengths
The corporation has collaborated with leading football clubs, which have assisted Seiko brand presence in Europe
The company has an important presence in Asia and also in China
Seiko has also endorsed Olympic Games
The product has a robust after sales services channel that works for the company
Weaknesses
The company is present in manifold brand sets apart from watches. Thus, the positioning of the product as a watch is not robust in the consumer market.
Differentiation of its rivals is considerably robust as compared to Seiko dominance in the low-end market.
Opportunities
Brand sets can be introduced to several sectors
The product can as well increase its global presence through marketing strategies
Threats
There is fierce competition in regard to cost in this industry. Because the price of production has inflated considerably, the proceeds have suffered in the mid level sector
Counterfeit brands that portray similar brand label an sell cheaply
6.2. RELEVANT CONNECTIONS WITH SWATCH
Seiko and Swatch share some elements that make likely the transference of the learning outcome from one case to the other. These factors are defined below:
Competitive environment
Both conglomerated experience fierce competition. The watchmaking industry is greatly competitive and fragmented, in particular among the three incumbents: Rolex, Swatch and LVMH.
Core Values
The goal of Seiko is to produce a reliable and ambitious product image and offer its customers a justly global brand experience, which the company believes is important for success in the marketplace.
6.3. PROPOSED INTERVENTION FOR SEIKO
From what has been discussed above, both firms are related in the factor explicated previously, thereby this author will recommend the same core learning outcome.
Aim to use the most efficient technologies
Seiko must aim to utilise the most productive technologies and apply best practises so as to further optimise energy and water usage, reduce waste production, use sustainably managed recyclable energy sources, recoup value from by-products and regulate and eliminate omissions, for instance, greenhouse gases. At present, Seiko integrates environmental sustainability goals when they create, build and restore amenities (John, 2011).
Reposition itself in the U.S. market
Because the U.S. holds the biggest population of high-earnings consumers globally, it is suggested that Seiko must reposition its brands to appeal to these patrons. Brands like King Seiko, Grand Seiko and Seiko Marinemaster provide greater margins and with consumer confidence attaining impetus, these products can cater to the consumers’ expensive preference (Banerjee, 2008). These products can as well pay off the Seiko brands success. Because most young Seiko customers of the past now want more luxurious and trendy timepieces as their earning expand, the Seiko Corporation can target this clients with more luxurious brands.
CONCLUSION
The global watch industry has become an extremely competitive market with most brands covering all pricing points. Moreover globalisation of the primary enterprise of the Swatch Group into foreign markets like India will assist to carry on with its leadership position in the marketplace. Competition in the last couple decades did everything it could to obtain market share and venture into new markets. Swatch Group rivals will persist to do everything within their power enter new markets and to protect their existing markets.
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Appendix (List of Figures)
Figure 1: Swatch Group exports by type of watches and number of units
Figure 2: Swatch Group watch and Jewellery
Figure 3: Swiss watch brands: Top 20 by (watch) sales 2014 (in CHF)
This project will evaluate the business structure of Levendary and the future implications of its present strategies. By evaluating the strategic imperatives like how to increase growth abroad and comprehending the global context, this paper will establish robust and weak business plans of the firm. This paper will then offer an approach and execution suggestions on how Levendary Café can expand as a global business.
CHAPTER 1: INTRODUCTION
To benefit from revenues obtained from owning a robust brand image, superior consumer service, and persistent firm practices throughout its international activities, Levendary Café should enter China as a completely owned business, concentrate previously on accretion-arbitrage plan, and shift its Levendary Cafe activities to a new arm of its leadership pyramid. Up until now, Levendary Café has encountered a dispersed brand image (Bartlett & Han, 2011). In an attempt to set up as many subsidiaries as imaginable, the company has depended on a wholesome variation plan, which has disjointed its judiciously curated company reputation. If Levendary Cafe wants to have a complete control over its branding, it must only take into account setting up completely-owned operations to circumvent mislaying further control. Through using an accretion-arbitrary plan, the company can as well accomplish its viability by building economies of scales amid its stores and taking advantage of Chinese consumers’ ability to pay extras for foreign food. An accretion-arbitrary plan will change Chinese store activities to turn into a homogenised company that will have an easier time reporting GAAP-adherence financial performance procedures, teaching its personnel using an overall system, and promoting its primary line of menu items instead of disbursing its finances.
This project will be analysing a comprehensive synopsis of the specialty food industry and the function Levendary Cafe plays in it. Levendary Café is in a growth market, and it occupies an ideal comparative position. This project will evaluate the business structure of Levendary and the future implications of its present strategies. By evaluating the strategic imperatives like how to increase growth abroad and comprehending the global context, this paper will establish robust and weak business plans of the firm. This paper will then offer an approach and execution suggestions on how Levendary Café can expand as a global business.
1.1.Background of the Chinese fast-food Development
According to Kotler (2012) in this era of globalisation, individuals have the potential to share any types of food from distinct regions of the world, thanks to internationalised enterprise of food and beverage firms. As the foremost catalyst of global development in consumer food service, the fast food market is getting fresh consumers persistently via enhanced menus, dining experience improvements and fast global growth. As a characteristic of this market and expert multinationals, the American food restaurant groups of Levendary Café and other companies such as McDonald’s and KFC are leading fast food chains both in China and other regions of the globe. Nevertheless, in spite of the leading status of McDonald’s in the global fast food industry, it experienced severe competition from Levendary China and KFC in the Chinese food industry and increasingly misplacing its market portion. This has taken place in the stage of China, an ancient nations with a well-known history and distinctive oriental culture. One of the likely explanations for this variation between the performances of McDonald’s, Levendary China, KFC and other global restaurants , the gradation and means of their cultural adaptation to the Chinese market was of great interest to this author. In essence, to adjust to a distinct culture is to encounter a huge setback and adhere to a foreign system of regulations in the particular group that needs a clear mind. Therefore, since Levendary China began its business operations in China, has it adapted itself to Chinese culture to a particular degree? These days, China has the biggest population in the globe and is recognised as a speedy growing nation with various increasing GDP. Taking into account the amount of fast food consumption, in 2010, China is ranked the second biggest industry across the globe, with the U.S. taking the first place (Lu, 2010).
Even if the Western outlets, such as Levendary China, have had specific advantages (like quick service, modern technology and rationalised organisation) by taking on some of the benefits and integrating them with domestic food tastes, native fast food outlets have encountered growing success in the domestic market. On the other hand, the 90s witnessed globalisation become a central process of transformation for the urban regions of countries that are encountering fast economic development. Standardisation of food kinds and style throughout the globe fast food revolutions is not a generalizable model. Current Chinese-style fast food outlets only appeared after Western fast food like KFC and McDonald’s were introduced in the Chinese market in 1987 (Li, 2010).
The aim of this paper is to complete a hypothetical and analytical dissertation which indicates how a company can become successful by utilising the same strategy with regard to local setting. On the other hand, the chief objective is to examine the impact of globalisation strategy on Levendary Cafe and the strategy aspects of the company in China. Thus, in this case, Levendary Café has been used as a case to investigate the aspects that impact the choice of moving figurative connotations via store atmospherics in different regions.
The analysis will be centred on the three areas: Strategic Management, Marketing Management and Globalisation Business Models, because as it will be explicated in chapter three, each of these has crucial influence in fuelling a competitive strategy.
1.3.Research questions
This study will strive to find solutions to the following questions?
What are the political, environmental, social and technological factors in the Levendary Café present time?
What are the strategies managed by Levendary Café at Global level, as well as from Human Resources and Marketing viewpoint?
What are the conclusions and outcomes after using those theoretical models?
1.4. Research Objectives
To analyse the current situation of Levendary China external and internal environment of the conglomerate.
To examine the present strategies of the company from the standpoint of Globalisation, Marketing Management and Strategic Management.
To find the germane models of business theories that could address those issues offering strategic goals to sustain a competitive niche.
To carry out the hypothetical methods selected and formulate definite, achievable and realistic proposal for the firm.
1.4.Scope
This project will be analysing a comprehensive synopsis of the multi-unit restaurant industry and the function Levendary Cafe plays in it. Levendary Café is in a growth market, and it occupies an ideal comparative position. This project will evaluate the business structure of Levendary and the future implications of its present strategies.
CHAPTER 2: CASE BRIEF
Levendary Café is a popular, publicly traded trademark in the United States and presently entering the Chinese market. According to Bartlett and Han (2011) the company started a miniature salad, soup and sandwich eatery that developed into a billion dollar business. Levendary Café basics are robust and operation is in line with administration projections yet their stock is trading at rebate. This is a result of the company’s growth slump and the new COO’s lack of initial global management skills makes Wall Street cynical that she simply cannot make Levendary Café a global product. The multi-unit café denotes 30 percent of the food service market that is a 600 billion dollars market with 960,000 positions. Levendary Café is classified into three market sectors: speciality establishments, quick service diners and casual dining. The company is a hybrid of the last two known as quick casual that includes in its line of menu a standard price in the $8-$12 variety. Levendary Café is set apart by two aspects: nutritious diets utilising high quality ingredients and a devotion to service in a relaxed, pleasant setting. The company is as well renowned for its readiness to take risks which was a characteristic of its original founder. The same characteristic the President of the company has. Levendary Café currently ventured into the fast expanding Chinese market and rather that maintaining the U.S. ideas intact the company altered the store design and menu selections in 23 new stores situated in various Chinese towns. The moment the new COO was unveiled in the company she began to analyse the Chinese operations. At this juncture the Chinese activities had already been established and have been operating successfully for 18 years now. The new COO recounted her outcomes to the U.S. team and currently they are all infuriated by these adjustments and are insisting things must stay as in the United States. The CEO has attempted to explain that if the company fails to adjust to the environment in a region in the company is attempting to carry out business it will be less successful. Leventhal had spent one and half years opening these 23 settings in China (Bartlett & Han, 2011). However the U.S. based team were worried that if any of the United States consumers travelled to China and became aware of the transformations it would devastate everything the company had accomplished over time. On the contrary, the new chief executive officer compared firms that as well expanded in other nation taking this strategy by radically transforming the whole menu while maintain their rations look and feel. The new CEO also likened what McDonald’s has accomplished globally, maintaining their stores homogenised for the most part and only changing the menu marginally. She also felt neither of these strategies was suitable for the company and that Levendary Café must keep things persistent across borders.
CHAPTER THREE: PLAN OF ANALYSIS
3.1. Problem statement
This case will be focusing on three main problems, which are based on Levendary Café case study.
Firstly, this research will be focusing on Levendary Café’s Globalisation issues since its involves creating marketing strategies, and marketing standardised brands in the similar manner everywhere. It is only global companies that will accomplish long-run success by focusing on what everybody desires as opposed to been distressed about the specifics of what everyone imagines they may like. Which strategy will work is not a matter of belief but necessity.
Secondly, another problem is Marketing management, and it will be critical to examine the position strategy of Levendary Café to gain a competitive edge. Analysing the position and trend of Levendary Café leaves one with a hint of a totally prosperous company. Levendary Café is growing at a fast rate which is mirrored in the fact that the chain has recently opened about 23 subsidiaries in China. According Bartlett and Han (2011), the idea behind this let this growth to continue and the plan is to venture into more markets across the globe. Levendary Café holds the view that increasing competition from quick services restaurants that have began to offer wholesome foods utilising high quality ingredients in a foreign market, are the key explanations for the company’s superior outcomes.
Thirdly, this paper will be looking at Levendary’s Strategic management as the multi-unit restaurant strategies of differentiation and brand innovation define the firm’s success. With respect to theoretical techniques in this subject, it will be considerable to revise appropriate strategic approach for Levendary Café in order to sustain their competitive advantage in the multi-unit restaurant industry.
3.2. Research methodology
This paper will use mixed method strategy (qualitative and quantitative) analyses. Qualitative archival data is used to inductively expose the aspects and mechanism salient to the field of research and will help in the understanding of research from varied points of views and also different strategies to carry out the research.
Quantitative analysis of archival data illustrates the transformations in the industry and company behaviours between temporal periods. Together, these outcomes serve as evidence to demonstrate the phenomenon of the success of Swatch Group in the watchmaking industry.
Finally, this study will rely on archival data to triangulate (Creswell, 2013) and to search for harmonies and variances in my results through sources. Each data source will be used to analyse how Swatch has responded to competition in the industry.
Sources of data
This research will collect data from multiple sources; following what Creswell (2013) termed a synchronised triangulation strategy, whereby various techniques, data sources, and units of scrutinises are utilised to examine a set of hypothesised interactions within a distinct study.
There are two main kinds of data collection techniques that many researchers have been using, namely Primary data and Secondary data collection method. Since this study will be focusing on Levendary Café, secondary data only will be used. These data is available in the public domain such as journals articles, books etc.
CHAPTER 3: PROPOSED PLAN OF ANALYSIS
A comprehensive evaluation of the data offered within the case demonstrated a myriad of challenges faced by firms, region markets and also different environments. With the time restriction, it would not be practical to have a look at all the challenges. The researcher has thereby decided to concentrate on the situations of Levendary Café. On the basis of the dynamics involved, the following topic areas have been chosen and the relevant appraisal tools recognised as drawn below:
3.2. Literature revieW
3.2.1. Marketing Management
According to Doyle (2004) marketing strategy is preciselyconsiderably essential for the success of any business. Without it, the effort of the business to attract consumers is random and really unproductive. The main focus of a firm’s strategy should ensure that their product fulfils the demands of the clients and also sustains a competitive advantage.
The moment a firm has developed and implemented its strategy, it is supposed to determine the response from its consumers and if any adjustments or enhancement is needed to be applied for the full satisfaction of consumers.
In that sense, one of the core worries in the process of strategy-making is how a company must position itself above its competition, and then protect that position from other competitors. From the above explication, it can thus be argued that Marketing Management is an important when appraising cavities in the markets that symbolise the opportunities for the firms and to identify the most effective manner to compete against industry opponents. There are limited numbers of consumers in the market. To develop long-run business, it is critical to retain individuals once they have become clients.
Utilising this kind of information Levendary Café can tailor communication to the desires of specific people. It is their needs that establish the kind of products and services provided, cost charged, promotions developed and where outlets are situated.So as to develop a marketing strategy that will make it possible to accomplish the needs of the market, strengths and weakness of the firm should first be identified and appraised.
Objectives communicate what marketers want to accomplish, guide marketing actions and are utilised to gauge how appropriately a strategy is working. They can be linked to market share, sales, getting to the target audience and developing cognizance in the market.
Outcomes can be appraised frequently to determine whether objectives are being fulfilled. This kind of response makes it possible for the company to adjust strategies and allows flexibility. The moment marketing goals have been identified; the next step is to explain how they will be accomplished. In that sense, a marketing mix will be put together.
3.2.2. Marketing Mix 4ps
McCarthy (1975) formulated the concept of the 4Ps-product, price, promotion, and place marketing mix. Nonetheless, with particular attention being offered to services marketing in recent years, scholars have acknowledged further variables that might be integrated into the 4Ps. Fified and Gillian (1998) acknowledged the following variables as an integral part of the marketing mix-process, physical, and people. By utilising this apparatus, it results in having value added products with consistent prices, sufficient promotion aspects and sufficient distribution channels.
3.2. 3. Globalisation
Globalisation assists firms to have a strategy to a huge potential markets and valuable production aspects like affordable workforce, better sources of raw materials and skilfulexecutives from other regions. Additionally, fast-food firms can make the best use of globalisation to venture into many varied regions across the world. For example, foreign food like Sushi and burrito will have opportunities when introduced into the U.S. local sector and threaten fast-food outlets.
Globalisation involves creating marketing strategies as if the world is a singular entity, marketing homogeneous brands in the equivalent manner universally. Globalised firms use homogeneous products, promotional campaign, prices and supply networks for all markets. Additionally, globalisation includes adapting marketing strategies for distinct countries with respect to cultural, regional and nationwide differences to serve particular target audience.
Since Levendary Café is a global food outlet it needs to appraise strengths, weaknesses, opportunities and threats through SWOT analysis. In that sense, situation analysis is the method for harmonising organisational strengths and weaknesses with environmental opportunities and threats in order to identify the rich position for the company.
3.2.4. The I/R Context
The IR context has various suggestions, but the core variables are witnessed in the strategy of the domestic reaction and the strategy of global incorporation. Multinationals can take on global integration by having homogenised brands anywhere in the world and centralise the regulation of the operations. Global incorporation is evaluated by Yip (2012) who states that integration is espousing a global strategy. The global strategy provides a lot of advantages to the multinationals and Yip argues in favour of this strategy. The first advantage is viewed as the reduction of prices via having homogeneous products, which means that organisations can benefits from the economies of scale by integrating production and R&D performance. Second, the brand mixture, and design inside of the global plan, is more restricted and offers high quality related to the strategy of domestic reaction. The last advantage is viewed in the transnational acknowledgment: consumers globally will experience no difficulty when recognising the product and brand offering, hence product loyalty can expand. The policy of domestic response is varied from the transnational strategy. It defines how an organisation benefits from adapting its products that suit the local location and tastes. The framework is somehow varied from the superlative multi-domestic strategy by Yip (2012) since its still takes on particular aspects from the primary idea of the multinational and does not completely modify in every region. The regulation and the operations are regionalised and regularly autonomously managed by domestic executives. The creativeness of the domestic executives is improved by allowing them to be part of creating new products, so product design may be underpinned by having many sources dispensing new responses. The restriction of domestic reaction strategy is a result of the absence of knowledge sharing since every agency inside the multinational operates relatively autonomously from others. Yip (2012) argues for the global strategy, although he still recognises the liabilities of the framework. The restraint of the strategy is viewed in the manner it can overlook domestic demand. Standardised products may not be suitable for every nation. In this instance Yip is supportive of the manner in which to balance the global strategy. Transnational companies must therefore not over-globalise and in the same degree must not under-globalise.
3.2.5. Strategic management
The appraisal of this segment will focus on the suitable strategic approaches for Levendary Café so as to develop and sustain their rich competitive niche in the market. Having a sustained niche and valuable growth is problematic if there a clear lack of robust and differentiate principal business. Furthermore, ensuring this sustainability asks for great investment in the core competencies of the enterprise so as to prevent imitation. Porter (1998) suggests that the competitive strategy aspires to locate a positive, lucrative and sustainable niche in the market. The choice of this plan is founded on the productivity and desirability of the business and the virtual competitive position. In that sense, this author shall use the Five Competitive Forces.
Since the rationale of strategy formulation is to deal with competitors, this framework will help us to better understand how the market dynamics impact the firm environments, and thereby set the action to be implemented in order to adjust to those forces and to utilise them.
3.2.6. Sources of data
As a result of the nature of this study, case study research strategy was utilised as the most suitable apparatus. At the time of carrying out this case study, this author tried to evaluate the variables germane to the topic under investigation. Levendary Café was chosen as the case company. This author aims to produce a rigorous evaluation of a single case-Levendary Café, in regard to which this writer engages in hypothetical examination. Also, this writer has decided that he will use secondary data to analysis Levendary Café. However, there a numerous risk associated with utilising secondary data, for instance, they might not be completely correct, and bias could be produced by the limitations of the initial research. The secondary information utilised is chiefly from academic journals and books. This writer has also utilised other academic literature which is germane to the study. The website of Levendary Café has as well been used to collect data about the firm, and their worldwide strategy. Since it has varied platforms, it is possible to find data about Levendary China. In this investigation, important part of empirical information was gathered. Hence the sources of data utilised in this research are reliable. Usually, for the case study research method, the results of a single case cannot be applied more universally to other cases.
3.2.7. Ethical Issues
With respect to the utilisation of secondary data, there are several factors that need to be considered to gather the right information. What is more, secondary data must be reliable, appropriate and accurate (Yin, 2004).
Furthermore, this research will be deferential about the ethical concerns that are presented in business research: objectivity (the research must be objective and founded upon facts, misrepresentation of the findings (the outcomes must not be exaggerated), discretion and plagiarism.
CHAPTER 4: ANALYSIS DEVELOPMENT
In carrying out this evaluation research it is critical to take into account that all the models are associated with the goal of accomplishing and having a strong competitive niche in the market, through brand innovation. With respect to what has been analysed in Chapter 3, applying the tools recommended will strive to review systematically the position of Levendary Café, and to determine the suitable steps that the company must address, with the drive of sustaining an outperformance in the food industry.
4.1. GLOBALISATION
In this area, the author will concentrate in the SWOT analysis concepts and I/R context that were developed through the following methods.
SWOT Analysis
Levendary Café has many strengths when looking at the company; it has a brand recognitions valued at around ten (10) billion dollars. This firm specialty rests on the reputation of its classic, core menu items: the Turkey and Avocado Sandwich, high-quality cheese soup and chicken Ceaser salad. Many restaurants provide insignificant, local menu versions. To make a corporation successful there is the need to evaluate the company’s. In spite of Levendary Café’sattempt at offering nutritious food, their line of menu has not completely been adapted to meet the demands of the Chinese culture. The other weakness is Levendary’s high employee turnover. The workers are paid minimum stipend and have a low skilled job, which is often viewed negatively by its personnel. After the firm has reviewed its strengths and weakness, it needs to concentrate on new opportunities and threats. Levendary Café is a growing business and has a lot of new opportunities ahead of them, for instance, there is a swelling demand for healthier nutritious fare. Therefore while the demand for healthier food grows, Levendary Café must usher in food choices in their line of menu and transform its weaknesses into strength. One way the company is trying to expand and make the best use of these opportunities is by opening up more food outlets in China. Levendary can take advantage of full adaptation of their new operations.
The food industry has gained so much popularity over time, and with their being many varied food outlets Levendary Café should take into account is the issue of competition.
Findings: Levendary Café U.S. rivals in the quick service industry have each approached China with massively varied strategies, thus all of these competitor have integrated in any case some mark of domestic adaptation to their line of menu.
I/R Context
According to Bartlett and Han (2013) Levendary Café entered the Chinese market in 2009. The company desired to carry out its theory of “delighting the customer” with exclusive based contributions to the Chinese market. As a result of insufficient insight about China, the head-quarter (HQ) saw it fit to allow the Chinese market pundit Louis Chen implement the tasks independently. Within a span of one year, the Chinese operations and managements failed to achieve what was projected by the HQ. This chapter will evaluate this matter concerning a fragmented strategy between the U.S. based HQ and its Chinese stores. The IR framework centres upon the strategies of global incorporation and local reaction will be analysed so that it would be possible to evaluate how Levendary’s approach lacked in its incorporation within the Chinese chains.
Findings (1): The firm holds firmly the thought of quality and relishes its longstanding demand i.e. increase the culture and everyday activities. For quite some time, Levendary Café and its former president invested in fostering the company’s theory, marketing, brand variety and performance under a classified organisation to ensure that all its chains are affiliated with the strategy. This focused on superior quality commodities; the company supports the relaxed/pleasant environment kind of restaurants that achieve the needs of those individuals who are ready to pay the superior price. In all respects, as result of the Levendary’s detailed understanding and existing institution in the local Chinese-restaurant supply and demand, the company understands that it will be greatly advantageous to imitate its operations by taking full advantage of the economies of scale with marginal modifications. Through instituting the concept, Levendary Café earned the right to reduce costs and obtained high rate of product appreciation and fidelities in the Chinese industry.
McCracken (2005) posits that with restricted understanding and expertise in globalisation, Levendary Café held the notion that it was fundamental to apply a parallel conception in China after seeing the significance of supporting the original company’s concepts together with its local achievements and other rivals response. It is assumed that integrating the global strategy may be greatly important for the firm when entering a new market accompanied with standardised commodities, streamlined processes and consolidated organisation and regulation with marginal adaptation of the framework and culture. In 2009, Luis Chen was appointed the acting president and was expected to uphold the concept and set up a robust market locus as the foundation for franchising the company’s restaurant stores across China. Levendary Café believed that venturing into China would benefit the firm in the long-run via the focus on economies of scale analogous to the local marketplace.
Findings (2):The 2 year agreement permitted Chen to carry out managerial and regulate decisions in all Levendary’s stores in China. With detailed understanding of the Chinese market and domestic affiliations, he was capable of comprehending the demand and the necessity to adapt the concept and become “domestic reaction” (Bartlett and Han, 2011). This initial concept was applied into particular settings of multi-storey structures, targeting high earning personnel and entrepreneurs. In other settings with frequent visits and middle-class populations, the concept was adapted to cater for the domestic taste; quick and recognisable. Menus and decorations were altered. Various dining structures were removed, and left just the take-away counter. The new CEO then noticed what the demand needs were in the U.S. product with Chinese noticeable food offerings. Within the span of a year, Chen was capable of setting up 23 Levendary China stores. The performances conducted by Chen obviously indicate a missing connection between the incorporation by the Levendary’s previous and the Chinese chains plans. The new CEO was anxious that imitating the transnational approach would not completely achieve the targeted consumers and the approach might result in the loss of competitive advantage, hence making a robust market position difficult. Chen regarded fast profit-making as greatly fundamental elements of business to carry out and independently created varied concepts to cater to domestic tastes. This finally contradicts with the agreed conception and culture of “Forget today’s profit. Have a positive impact on customers’ lives” (Bartlett and Han 2013: pp.4). Preoccupied with the idea of making profits, he set up most of the Chinese restaurants that lacked a link with the Levendary Café’s original brand. For instance, the line of menus was modified with respect to domestic tastes to a degree that a U.S. based visitor was incapable of recognising it as one of the company’s. The service in this new market was profit-oriented and completely ignored the concept of ‘delighting the customers’. In effect, what the U.S. based restaurant expected was their consumers to acknowledge the product globally and every Levendary store thereby needed marginal adaptations in their concepts. The American restaurant wanted the long-term benefits the transnational plan can provide like economies of scale for advanced growth, lower cost of production by generating a huge supply network and global product acknowledgement and fidelities
4.2. MARKETING MANAGEMENT
This part will evaluate the manner in which Levendary Café has positioned itself in the market, and the plans that support that position.
4.2.1. MARKETING MIX
Product
One of the objectives of Levendary Café is to develop a standardised set of products that cater to the Chinese preferences. Levendary China learnt that, even if there are considerable costs of savings via standardisation, and the success of adapting to a foreign environment. Adaptation is important for manifold reasons including consumer preferences/tastes. Levendary has provided local menus to cater to the preferences of Chinese people. For instance, the restaurant offers: Chicken soup, Chicken sand, Roast beef sand, BBQ chicken sand, Thai veggie soup, Chicken dumpling, Pork dumpling, Pu-erh tea amid other food types. These all examples of how Levendary China has adapted its brands offer in the global setting.
Place
Levendary Café has over 3,500 outlets across the U.S. The company continues to concentrate on working investment expenditures more productively via farsighted and strategic expansion. Just recently, Levendary Café added 23 more outlets in China. The company acknowledges the potential for development in global markets and plans to take full advantage of what it has learned over time in the U.S. The company’s venture into the Chinese market was a strategy that created a gap between Levendary Café and competition.
Price
Levendary Café has recognised that, in spite of the cost savings inherent in standardisation, success can often be credited to being capable of adapting to a certain setting. This is certainly the case with its implementation of its pricing strategy that is one of the localisation that internationalisation. Levendary Café has had to choose the correct price for the Chinese market.
Promotion
Promotion also known as the marketing communication mix was proposed by Kotler (2012) as comprising the five key tools:
advertising
direct marketing
sales promotion
public relations
personal selling
By utilising these tools, Levendary Café aims to localise its marketing communications strategy as it is expected to take into account the massive variety of cultural and other variations that it encounters in China.
Findings (1): From the above, it can be explained that all of the strategies of the marketing mix have made it possible for Levendary Café to position itself as a strong brand, with reputation based on brand innovation and the ability to adapt to the Chinese market.
Findings (2):Levendary Café has committed itself to working on setting up a Chinese product and change to Chinese life since the company was introduced to this market (Bartlett& Han, 2011). So as to guarantee the implementation of this performance management, just recently, Levendary Café established a taste kitchen and food laboratory to determine Levendary China nutritious food strategy. The purpose of this taste kitchen and food laboratory is to promote its brand innovations and strive to beat the idea of offering unhealthy food. Essentially, the percentage of localized brands accounts for 30 percent amid the whole Levendary Café brand line. On the contrary, on Levendary Café’s line of menu for China region almost half of the commodities are particularly designed with Chinese feature among 20 brands currently. These brands are enhanced by integrating distinctive Chinese ingredients to cater to Chinese preferences (Anderson and Marja, 2012). Levendary Café targets the “entire family relations” starting with children to elders. The company has made efforts on creating a dining setting of family model in which consumer can experience the cordiality of home. Aspects like the cordiality of family get-together, caring amid various generations, love, among other features can be witnessed in the company ads and external decorations. Both it diversified menu and adapted preferences, these concepts have made Levendary Café prominent to various generations. Rather than utilising celebrity influence like KFC and McDonald’s has done before, Levendary Café inclines to present a narrative or some fascinating act into the infomercials, making it more connected to real time and easier to approach. On the other hand, Levendary Café meal slogan “Tasty Good Freshness” is the company strategy to obtain identification from the consumer group and arouse their eating habits.
Findings (3):In 2008 the American company local growth was slowing, the restaurant’s geographic growth strategy plateaued and they began to notice that their idea did not suit small cities. Understanding that the company’s local market has been exhausted they now looked for benefits to invest overseas (Bartlett& Han, 2011). The other variant is the removal of conflicts in markets abroad. Confronted by this circumstance where the rival firms are attempting to enter the same foreign market an organisation can collude and share the market with competitors or attempt to be somewhat dominant. The latter expands the market dominance for the firm, and raised the imperfections within the whole market. This subsequent variant explicated how Levendary Café ventured into the Chinese marketplace. Bartlett & Han (2013) posit by using horizontal FDI Chen was expected to set up a strong market position as a foundation for franchising stores across China.
4.3. STRATEGIC MANAGEMENT
This area will focus on the concepts of brand management that have been developed through the following methods:
4.3.1. FIVE FORCES ANALYSIS
The intensity of competition amid competitors(High)
The intensity of competition amid rivals in the quick service food industry is the most powerful aspect amid those five forces. The rivalry in this sector is very robust as a result of oversaturation of products competition in cost and quality services like McDonald’s, Taco Bell and Wendy’s. Thereby Levendary Café must offer an affordable price, enhance quality of customer and delivery services, as well as develop a robust brand awareness to succeed in this competitive market.
Bargaining power of supplier (Low)
In the multi-unit restaurant industry, firms are expected to have a steady and persistent raw materials supply to operate the trade to meet the high demand of the massive consumer base. Hence, developing robust relations with suppliers is essential to sustain a perfect quality of raw materials Regarding Levendary Café, the company can consider growing its own suppliers of raw maters to ensure a continuous supply.
Bargaining power of buyers(High)
Since there many substitute brands in this industry, Levendary Café will have to put more attention on consumer demands to gain new clients while sustaining a base of loyal consumers. Clients put special attention to their health and the growth rate of obesity in China, the company will have to provide healthier food in their servings, such like fruits and salads and use oils that are free-off fatty acids.
Threats of new entrants (medium)
The infant businesses that first venture into the food market might have to experience some difficulties in terms of the economies of scale, product fidelity, capital needed and government control. However, this challenges lack the potential of being a threat to the existing firms. The economies of scale might be achieved by standardised products and consolidated R&D in brand and marketing from the United States.
Threats of substitutes (medium)
The threat of substitute brands in the multi-unit restaurant business is very high. As a result of globalisation, a lot of foreign food firma have ventured into the domestic and adopted their menus to suit the tastes and preferences of consumers. Many Chinese households still prefer homemade meals, and young adults frequently purchase from mall food courts.
Findings:Levendary Café competitive position is still robust in this instance; however it might be at risk as result of the industry behaviour, particularly from its Chinese competitors. Gaining the information that these five competitive advantages determine the firm’s strategy to follow is brand innovation.
As a symbol of American food outlets, Levendary Café has encountered the challenge of cultural disparity between U.S. and China at the time of venturing into this industry. Judging from its operations, Levendary Café has investigated and adapted to Chines practice to dissimilar degree. Spring festival is regarded as an essential centenary in China; it is the main day of Chinese New Year as well as marks the starting of spring. At the time of the spring centenary, Levendary Café will transform the decoration in its cafes, Chinese features like the China and conforming animal sign for the new years will be integrated to the decorations, infomercials and brand packages and the musing streaming out of Levendary Café eateries will be transformed to custom songs with festal and jolly feelings. Also, the Chinese subsidiary will embellish the cafes with conventional Chinese paper-cutting workings of flowers and animal cryptograms. With respect to language variation between cultures, most global products require to pay special focus on the decoded varieties of their product names when entering a foreign market, particularly in China where individuals display interest on names with auspicious connotations (Lu, 2010). Again, brand development is as well definitely linked to the perception of adaptation. Over time, Levendary Café has made numerous attempts in brand innovation to gratify the Chinese preferences and luckily this attempt has been identified and appreciated by Chinese consumers because they have offered an affirmative insight on this element. The other positive-allied variable for Levendary Café is “Delighting the customer”. Even if the involved of this variable cannot entirely be associated positively to general adaptation sequence, there is an important link confirmation between “delighting the customer” and they favourable adaptation. Most importantly, what requires a special focus is that store position is negatively associated with the general adaptation sequence of Levendary Café that suggesting that the adaptation endeavour concerning location aspect made by Levendary Café is not appreciated by Chinese consumers for they view adaptation processes as tricky.
4.3.2. Generic Strategies
{Source: www.mindtool.com}
Levendary Café manages a differentiation stratagem because their goal is to provide unique brand to a wide market. This strategy is supported by several aspects:
Nutritious diets utilising high quality ingredients
A devotion to service in a relaxed, pleasant setting gives their customer a rich experience
Finally, their slogan “Tasty Good Freshness” is as well part of their differentiation strategy.
Findings:
Having a market positioning has a progressive impact in differentiation and innovation strategies. On the other hand, there is no relationship between this plan and a low-cost strategy. Furthermore, while determining an appropriate differentiation strategy might be more expensive than a low-cost, for this case makes more sense economic-wise.
CHAPTER 5: RECOMMENDATIONS
5.1. OVERVIEW OF THE ANALYSIS
It is possible to say that the study conducted so far, indicates that Levendary Café is yet to enjoy a very robust competitive position in the Chinese market. However, the industry is witnessing severe competition that denotes a huge threat to be sustainable. The multi-unit restaurant industry is absolutely sophisticated not only as a result of competition, but also to the huge variety of substitute products presence. Conversely, it will not be very cost-effective because the power of buyer and suppliers is not low.
The landscape of the industry generates the need to compete through a differentiation strategy, which is the one that Levendary Café has chosen. This differentiation strategy Levendary has positioned itself as innovative company, via brand innovation that has redefined consumer attitude.
On the other hand, an adequate solution for Levendary Café is to carry on aiming for the global strategy, but the company would have to identity the correct equation. As Shaw and Goodrich (2012) assert the perfect plan by the U.S. restaurant should incorporate and align its status with the capacity of the Chinese industry. Sufficient insight is essential to incorporate global strategy and still indicate some reaction toward domestic markets. Information sharing between U.S. based Levendary Café and the Chinese stores will restrict the misconceptions and ensure that the wellbeing between the two companies will be more aligned. Santos and Williamson (2012) offer a context for how an organisation can build its information sharing base and reap big from it. A company is expected to identify inside of its distinct agencies where the knowledge is produced, then how to evaluate it and ultimately how to distribute it. It is just when the information is disseminated that a company will benefit. As Alfred and Chandler (2010) indicate, Levendary Café is required to offer an appropriate structural model to support their endeavours and make sure incorporation between itself and the Chinese stores. This feature may be suitable so as to assess how the company can raise their advantages of the global approach. Fragmented approach between the company and its Chinese outlets is mirrored through the contradictory constructs in the IR context. The global strategy is desired by Levendary Café to incorporate its ideas in the Chinese market with marginal modifications so as to take advantage of the advantages it provides. The company stores, however, acknowledged the fact exploitation is best used within the domestic awareness plan. The misconception of the novel concept builds a crucial circumstance that requires a prompt solution. As explained in the previous chapter, Levendary Café may benefit greatly by carrying on using the global strategy, hence the company should strive to find the correct balance between U.S. based Levendary wish to coalesce the operations and the stores domestic tastes. A context of information mobilisation has been supplemented to support the discussion of how Levendary Café might solve the issues by aligning the knowledge between the Denver HQ and its Chinese stores.
5.2. RECOMMENDATION PLAN
Following are suggestions to improve:
Strategic Management
Levendary Café may analyse potential advantages such a low costs through service and position standardisation, as well as adapting menus provided. Additionally, the CEO is expected to be incorporated in the concept of forgetting current profit and begin formulating long run goals. This will mean that Chen will have to acknowledge and take advantage of the opportunities the Chinese market has to offer.
Contrariwise, regarding carrying out a reasonable and rigorous market plan evaluation, Chen should be made to know that particular facets are important in the process of choosing whether to enter a new market or not. These facets comprise selecting the level of venture portfolio, developing enterprise with the understanding that start-up expenditure may not be provided as well as fiscal need, availability of marketing projections that are important in predicting the profitable future, and restructuring prospect of incentive and acknowledgments aspects in that concern.
Marketing Management
Birkinshaw and Pedersen (2010) explicate branches as a unit that operate value-increasing performances for a company. Their discoveries underpin Yip framework on globalisation, as the two scholars assert that subsidiaries find themselves in a situation more challenging as never before, since CEOs are projected to perform entrepreneurially and authorised as well as adhere to the international principles. Additionally Birkinshaw and Pedersen (2010) elucidate the function of the firm as that is elaborated by the mother corporation. Levendary China with its 23 stores can be regarded as an important subsidiary for the parent firm. Looking at the challenges of establishing a common base for globalisation ability of the market, and hence the magnitude of the domestic reaction, Foster as the chief executive must manage the subsidiary in an improved manner.
Additionally, she must integrate the original function to create base for more growth in China, and thus the company must include a lucid meaning of the kind of growth it desires. Foster should suggest that Levendary Café does not need development if it compromises with product’s originality to ensure Chen is incapable of devaluing the brand in the Chinese market.
On the contrary, Foster should thus recognise that the approach in China cannot be agreed on in American HQ. As suggested by Birkinshaw and Pedersen, she must align market positioning aspect and a resource expansion aspect. Chen understands the Chinese market, and the two executives should work together to identify a brand array that caters to this market. Brands are at present slightly distinguished in the United States, therefore this must not a challenge (Bartlett & Han, 2013). With respect to the resource developments elements, Foster should differentiate between resources and potential.
Alfred & Chandler (2010) thus suggest that resources are the variety of aspects accessible for and regulated by the company, while potential is the company’s ability to utilise these resources. Foster should recognise that even if she holds and regulates such resources and potential as fiscal and company-particular information, Chen has expanded some potential like fast improvement and adaptation. In establishing the plan, it is therefore important that Foster involves Chen and his concepts. Taking into account the fact that Levendary Café decided to venture in an entirely owned subsidiary, and provided with the challenges associated with domestic reaction against globalisation, this author will recommend a new strategy for the firm. As posited by Birkinshaw and Pedersen (2010), Foster must establish a new mechanism for mobilising knowledge. This may be accomplished through a global team located in China that would engage both Chen and his members and also the staff based in the U.S. positioned in China. This mechanism might ensure that the connection between the market and resource component of the policy balance is being handled. As result, both Chen and Foster may identify a mutual base in their globalisation obstacle: to decide a suitable level of domestic response and internationalisation.
Reilly & Wallendorf (2010) explicate that in essence many U.S. based restaurant enterprises have entered and continue to enjoy profitable performances in the nation, some have nose-dived desolately. This is an aspect worth recognising in the process of the market venture. It is challenging to understand the fact that many companies with dismal operations in China failed not as a result of ineffective managing but due to failure to carry out comprehensive and succinct evaluations.
For example, Pretzel Time was unsuccessful in the Chinese markets as a result of inexperience and sitting design. The firm underestimated the requirement to investigate and align decent decoration. Hence, the tile decoration that was utilised in its stores was linked with a lavatory and this somehow managed to upset their clients’ attitudes.
The other suggestion is that there is an alternative of dissolving the Chinese company and hence leave the market. This resolution may be long-lasting or time-based depending upon the basic aspects on the ground. For example, the termination might be made provisionally so as to permit Levendary Café to develop a productive planning strategy prior to resuming its operations again. Foster must consider dismissing the present operation executive, Chen by replacing him with an expert. Equally, the termination may be long-lasting as a result of the fact that company has not recorded profits as yet for the whole phase of operation.
By carrying a succinct evaluation of the given fiscal statements, it is nearly certain that the enterprise is not likely to report any profits in the near future. This is linked with the fact that the restaurant has faced inefficient management for a significantly protracted period. Chen as Levendary China CEO, does not appear to give a clear vision of the company future but rather starts carrying out the operations utilising a mainstream strategy. Permanent termination is as well a feature of obliviousness showed by the Denver HQ granted that the parent company has never started an initiative of being included in the Chinese processes.
Alternatively, the parent company under the leadership of Mia Foster may elect to support a mixed concept aspect. This needs prompt change of the services provided in order to make it possible for extra menus to be served in the same restaurant. As Yan (2009) suggests, Levendary China may be forced to offer its patrons with both the Chinese and Americanised menus so as to fulfil the varied desires of the market. The mixed theory can as well take on another idea that integrates various stores that offer distinct menus. For this model, two outlets may be developed: Levendary China and Levendary American. The former café can be situated in the less advanced regions of the market while its counterpart may be situated in the advanced regions of the same market, so as to draw different consumers.
Contrariwise, regarding carrying out a reasonable and rigorous market plan evaluation, it is suggested that Chen should be made to know that particular facets are important in the process of choosing whether to enter a new market or not. These facets comprise selecting the level of venture portfolio, developing enterprise with the understanding that start-up expenditure may not be provided as well as fiscal need, availability of marketing projections that are important in predicting the profitable future, and restructuring prospect of incentive and acknowledgments aspects in that concern.
Globalisation
According to Bartlett and Chen (2013) one of the biggest difficulties Levendary Café experienced, as they decided to venture into the Chinese market was a classic problem when opening restaurants in a divergent cultural environment. Global accessibility, serviceability and acknowledgment are obviously advantages of a global plan, while the imperfections include greater management expenses as a result of heightened coordination, and the inability to achieve domestic need. In all respects, for a company to perform fully it requires to adapt an international strategy that is suitable for the globalisation ability of the business.
In all respects, for a company to perform fully, it is suggested that Levendary Café must to adapt an international strategy that is suitable for the globalisation ability of the business.
5.3. EVALUATION OF THE PROPOSAL
The sustainability to cultivate the idea recommended in this paper is highly likely, since Levendary Café possess the intangible and tangible resources required. The global strategy provides a lot of advantages to the multinationals and Yip argues in favour of this strategy. The first advantage is viewed as the reduction of prices via having homogeneous products, which means that Levendary Café can benefit from the economies of scale by integrating production and R&D performance.
Chen can reap the advantages of economies of scale from aggregating his raw materials orders and benefit from the increased reputation that comes with cultural arbitrage. Such a strategy towards standardisation will make it easier for Levendary China to gauge financial performance with regard to GAAP, improve customer service consistency and make it possible for advertising actions to be more concerted. Moreover, the implications for shareholders are negative, because it is greatly unlikely that investors will increase their share value.
CHAPTER 6: APPLICATION CASE-KFC
KFC company’s headquarters are situated in Louisville, Kentucky, United States. Globally it is the biggest fried chicken restaurant estimated by sales. Currently, KFC chiefly sells fried chicken, burgers, chips and beverages amid other Western-style fares. The company opened its first location in China in 1987, in Beijing, a city well known for its cultural diversity. The data from KFC annual report indicates that the company’s core competence is incorporation of operational resource. KFC’s franchising model is seen as an appropriate one with robust Chinese chains. The multinational’s original strategy of “not starting from scratch” attracted a lot of Chinese stakeholders (Bloomberg, 2012). The standardisation of KFC is commendable. To make sure there is a consistent taste of foods on an international scope, the process of KFC needs comprehensive developments for the company to obtain the deduction from the suitable quantitative criterion. The strategy of Kentucky Fried Chicken is simply growth plan in the Chinese market. The concept of KFC’s “do not start from scratch” is a unique point of franchise of the company in China. This means beginning a resale of profitable and sophisticated cafes, which are made available to franchisees. Franchisees are expected to begin from scratch in order to prevent selecting a location individually. New franchise operators are authorised to run a mature Kentucky Fried Chicken. The company is part of Yum’s Groups brands. By having multi-brand synergies, it improves the competitive advantage of KFC and incorporates the supply network as well (Alfred & Chandler, 2010).
Aaker (2011) suggest that under the paradigm of brand position and branded with the impact of the parent product makes it effortless for the consumer during the previous contact with reason for unease. This means that it is unproblematic to develop visibility and recognition, but becomes difficult to set preferences and brand image. KFC focuses on specialisation such that it complies with the specialisation of management, technology, brand and service differentiation and market acknowledgment of professionalization (Dickson and Ginter, 2010). Kentucky Fried Chicken pays serious focus on the research of the growth potential of the industry, in order to make an improved plan for their growth strategy. On the contrary, many aspects impact the cost of operation. KFC has vastly invested in cost effect resources, thus ensures the standardisation of the company’s basic brands and services countrywide. As multinational fast-food restaurant, KFC has broad experience in the Chinese market. Thereby, from a strategic standpoint, the core aspects impacting the cost of operating are the economies of scale. On the menus of Kentucky Fried Chicken, the company has standardised and integrated main product in China. KFC has spared no efforts to achieve the varied desires of Chinese consumers. In order to make sure the implementation of the concepts, in 2000 the company established Chinese KFC Food Advisory Committee. The role of the committee was to investigate how the company was going to adapt to Chinese preferences, diet and eating attitudes. In 2004, the invention and localisation program enabled KFC products to break the boundaries of Western foods and Chinese fast food. Today, KFC develops its products according to Chinese preferences, for instance, hibiscus fresh vegetable soup, mushrooms and chicken soup, traditional Beijing Chicken roll, amid other fares. These foods are motivated the Chinese cuisine and served quickly with reasonable prices
China is a huge country, and the variations between diverse regions are very clear. The major performance of variations is culture and the rate of economic growth, both of which affect in the food industry. It is effortless to discover that the growth rate of the food market is very varied across the eastern, central regions and western localities of China. The eastern region has the biggest sales of food industry, and the central province experiences fast growth level compared to other areas. Chinese fast food offers more emphasis to the use of grains, beans and vegetables. The technique of preparing food is deep frying to boiling. There is a huge variation between Chinese style fair and Western-style fair. Many western firms target their youth and families as their consumers, but Chinese firms offer more focus to the group aged between 25 to 45 years. When attempting to get an equation between standardization and adaptation, one of the critical facets that impact the global management of brands and commodities is culture facet. From the concept of cross-culture, the Chinese people are overall inquisitive about foreign things. So as to accomplish this inquisitiveness to foreign brands, KFC try to introduce products fast and consequently win many consumers in China. By integrating the core of Chinese mainstream dining culture with the emergence of western food, Kentucky Fried Chicken has achieved the success of implementing the new brand stratagem in cross-culture promotion. KFC introduces new taste of brands in varied season to satisfy the desires of Chinese consumer (Alfred & Chandler, 2010). It would not have been easily for KFC to achieve the success it enjoys globally, if the company supplied American style foods without taking into account the diversified cultures and traditions of domestic customers in foreign regions.
KFC owns over 140 food outlets in continental China. KFC stores in the Chinese market are normally situated at locations where there are large areas, well-established supply networks, with easy access to domestic consumers and tourists. Consequently, transportation expenses can be saved, and the transforming preferences of domestic consumers can effortlessly be acknowledged and KFC can utilise appropriated approaches to cater to the customer tastes rapidly. For Beijing that is the heart of Chinese political and culture, the populace and holiday business market experiences an increase each year. Hence it has always been valuable for KFC to sell brands and attract consumers. KFC grows their enterprise by collaborating with Chinese products as well. For example, in 2006 KFC launched for types of beverages and carried out advertising by collaborating with QQ (a prominent product in China, particularly recognisable to young individuals) (Kara, 2010). The quick service industry, place stratagem indicates that where to sell the brands and services to consumers. Equally, place policy can be impacted by both in-house elements and peripheral elements. Social culture aspects like domestic law and government rules, religion, language, amid other factors influence this strategy evidently in distinct ways. KFC has its own customary when selecting the appropriate location to set up restaurants. During this activity, the political risk, the fiscal status, the amount of population and the particular culture in numerous regions all the concern to KFC.
Challenges
Most of the food its serves lack traditional dishes that appeal to the Chinese
KFC has failed to position itself as the cheapest dining alternative
Negative publicity
KFC China menus typically consist of over 40 items, in contrast to about 30 in the U.S. The line of menu diversity increases circulation and emboldens repeat visits. Menus provide spicy chicken, rice dishes, egg tarts, shrimp burgers, among others. However, for instance, Shanghai consumers protest that foods were too hot, while others complained that they were too bland. In spite of the endeavours to be successful in the Chinese market, KFC does not position itself as the cheapest dining alternative. Patrons spend the equivalent of $2.50 to $3.50 per visit, a cost point that places KFC way above street retailers and domestic cafes and nearly somewhat above other fast-food outlets, this impacts their total revenue because this customers resort to other food outlets that provide a good value for their money. KFC China rapid growth poses challenges: An extremely visible firm might easily turn into the target of consumer or administration counterattack against the perceived negatives of fast food. Several western health issues are already manifested in China, such as obesity, and KFC has received its fair share of backlash.
KFC should put the focus on explaining aspects pertaining to cost drivers, advertising strategies for the enterprise, and the fundamental factor of carrying out frequent risk analysis. Although KFC has already established a considerable consumer base, and performs comparatively fairly in the market, the company seems to discount specific aspects. For instance, KFC does not appear to take into account the value of the consumers. In an attempt to attract more patrons and consequently set up wider consumer base, KFC needs to go the extra mile to promote a personalised approach in its services. So as to fully maximise its potential for expansion, China must be offered its own position within KFC’s company organisation, permitting China to be at the frontline of the firm’s main concern for future development. KFC should also continually attempt to balance its primary sales drivers with offering personalised service to delight the client, just like Levendary Café. Last but no least, KFC must move its focus away from adaptation so as to start building a consistent brand image in China.
6.2. RELEVANT CONNECTIONS WITH LEVENDARY CHINA
Kentucky Fried Chicken (KFC) shares some features that make possible the relocating of learning objectives from one case to another. These features include:
Competitive environment
Both corporations are faced by severe competition. In the case of KFC, the global market of multi-unit restaurants is highly competitive and fragmented, particularly amongst the key incumbents: McDonald’s, Taco Bell, Wendy’s, Applebees, among others. Furthermore, as a result of the growing awareness about health the demands for healthier nutritious demand for this type of food products is also growing, paving way for new actors.
Basic Values
The objective of KFC is to offer consumers with innovative brands that integrate creatively distinct cultures to cater to distinct tasters/preferences. In that sense their vision offers four core principles to guide all the employees and shareholders in decision making and operations. Those values are, to believe in all people, commitment to customers, go for breakthrough and build competence. Analogous to Levendary Café, competence and devotion to the consumers are the heart of the strategy of the company.
6.3. PROPOSED SOLUTIONS FOR KFC
Given that both companies are similar in all the aspects mentions previously, it is possible to proposal core learning points (identifies from the research of Levendary Café) to KFC, so that the company can sustain and enhance its leadership position in the multi-unit restaurant industry.
New Product Development
New brand development has been proposed to have a new product such as Dumpling, fish and shrimp burgers. These two products are mainstream dishes for Chinese. In touching an individual’s heart, that person will develop loyalty towards Kentucky Fried Chicken more than any other quick service café. As result, the marketplace share will further be enlarged.
Implement market plan
Making a marketing plan and offering actual teaching to the personnel is as well a critical strategy for the development of the company is foreign localities. This will advance global political economic relations.
Differentiate its products
It is suggested that KFC must apply differentiation strategy by offering stick-out services. It will shield KFC against competitors in a very robust market like McDonald’s, Pizza Hut. Firstly, KFC will have to develop their brands differentiate from their rivals by providing new variety of menu to new target audience like consumers who are vegetarians or those who enjoy eating consuming low-carb.
6.4. CONCLUSION
This paper has offered a vastly critical analysis for firms that encounter strong competitive landscape that make susceptible the likelihood of sustaining their competitive niche.In the process of presenting the difference between the company’s strategies, limitation can take place when applying the outcome derived from this research to other firms and markets. Additionally, as a result of specialty of multi-unit restaurant business, further research might be needed when applying the assumption in other globalisation cases.
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This project will evaluate the business structure of Levendary and the future implications of its present strategies. By evaluating the strategic imperatives like how to increase growth abroad and comprehending the global context, this paper will establish robust and weak business plans of the firm. This paper will then offer an approach and execution suggestions on how Levendary Café can expand as a global business.
CHAPTER 1: INTRODUCTION
To benefit from revenues obtained from owning a robust brand image, superior consumer service, and persistent firm practices throughout its international activities, Levendary Café should enter China as a completely owned business, concentrate previously on accretion-arbitrage plan, and shift its Levendary Cafe activities to a new arm of its leadership pyramid. Up until now, Levendary Café has encountered a dispersed brand image (Bartlett & Han, 2011). In an attempt to set up as many subsidiaries as imaginable, the company has depended on a wholesome variation plan, which has disjointed its judiciously curated company reputation. If Levendary Cafe wants to have a complete control over its branding, it must only take into account setting up completely-owned operations to circumvent mislaying further control. Through using an accretion-arbitrary plan, the company can as well accomplish its viability by building economies of scales amid its stores and taking advantage of Chinese consumers’ ability to pay extras for foreign food. An accretion-arbitrary plan will change Chinese store activities to turn into a homogenised company that will have an easier time reporting GAAP-adherence financial performance procedures, teaching its personnel using an overall system, and promoting its primary line of menu items instead of disbursing its finances.
This project will be analysing a comprehensive synopsis of the specialty food industry and the function Levendary Cafe plays in it. Levendary Café is in a growth market, and it occupies an ideal comparative position. This project will evaluate the business structure of Levendary and the future implications of its present strategies. By evaluating the strategic imperatives like how to increase growth abroad and comprehending the global context, this paper will establish robust and weak business plans of the firm. This paper will then offer an approach and execution suggestions on how Levendary Café can expand as a global business.
1.5.Background of the Chinese fast-food Development
According to Kotler (2012) in this era of globalisation, individuals have the potential to share any types of food from distinct regions of the world, thanks to internationalised enterprise of food and beverage firms. As the foremost catalyst of global development in consumer food service, the fast food market is getting fresh consumers persistently via enhanced menus, dining experience improvements and fast global growth. As a characteristic of this market and expert multinationals, the American food restaurant groups of Levendary Café and other companies such as McDonald’s and KFC are leading fast food chains both in China and other regions of the globe. Nevertheless, in spite of the leading status of McDonald’s in the global fast food industry, it experienced severe competition from Levendary China and KFC in the Chinese food industry and increasingly misplacing its market portion. This has taken place in the stage of China, an ancient nations with a well-known history and distinctive oriental culture. One of the likely explanations for this variation between the performances of McDonald’s, Levendary China, KFC and other global restaurants , the gradation and means of their cultural adaptation to the Chinese market was of great interest to this author. In essence, to adjust to a distinct culture is to encounter a huge setback and adhere to a foreign system of regulations in the particular group that needs a clear mind. Therefore, since Levendary China began its business operations in China, has it adapted itself to Chinese culture to a particular degree? These days, China has the biggest population in the globe and is recognised as a speedy growing nation with various increasing GDP. Taking into account the amount of fast food consumption, in 2010, China is ranked the second biggest industry across the globe, with the U.S. taking the first place (Lu, 2010).
Even if the Western outlets, such as Levendary China, have had specific advantages (like quick service, modern technology and rationalised organisation) by taking on some of the benefits and integrating them with domestic food tastes, native fast food outlets have encountered growing success in the domestic market. On the other hand, the 90s witnessed globalisation become a central process of transformation for the urban regions of countries that are encountering fast economic development. Standardisation of food kinds and style throughout the globe fast food revolutions is not a generalizable model. Current Chinese-style fast food outlets only appeared after Western fast food like KFC and McDonald’s were introduced in the Chinese market in 1987 (Li, 2010).
The aim of this paper is to complete a hypothetical and analytical dissertation which indicates how a company can become successful
by utilising the same strategy with regard to local setting. On the other hand, the chief objective is to examine the impact of globalisation strategy on Levendary Cafe and the strategy aspects of the company in China. Thus, in this case, Levendary Café has been used as a case to investigate the aspects that impact the choice of moving figurative connotations via store atmospherics in different regions.
The analysis will be centred on the three areas: Strategic Management, Marketing Management and Globalisation Business Models, because as it will be explicated in chapter three, each of these has crucial influence in fuelling a competitive strategy.
1.7.Research questions
This study will strive to find solutions to the following questions?
What are the political, environmental, social and technological factors in the Levendary Café present time?
What are the strategies managed by Levendary Café at Global level, as well as from Human Resources and Marketing viewpoint?
What are the conclusions and outcomes after using those theoretical models
1.4. Research Objectives
To analyse the current situation of Levendary China external and internal environment of the conglomerate.
To examine the present strategies of the company from the standpoint of Globalisation, Marketing Management and Strategic Management.
To find the germane models of business theories that could address those issues offering strategic goals to sustain a competitive niche.
To carry out the hypothetical methods selected and formulate definite, achievable and realistic proposal for the firm.
1.8.Scope
This project will be analysing a comprehensive synopsis of the multi-unit restaurant industry and the function Levendary Cafe plays in it. Levendary Café is in a growth market, and it occupies an ideal comparative position. This project will evaluate the business structure of Levendary and the future implications of its present strategies.
CHAPTER 2: CASE BRIEF
Levendary Café is a popular, publicly traded trademark in the United States and presently entering the Chinese market. According to Bartlett and Han (2011) the company started a miniature salad, soup and sandwich eatery that developed into a billion dollar business. Levendary Café basics are robust and operation is in line with administration projections yet their stock is trading at rebate. This is a result of the company’s growth slump and the new COO’s lack of initial global management skills makes Wall Street cynical that she simply cannot make Levendary Café a global product. The multi-unit café denotes 30 percent of the food service market that is a 600 billion dollars market with 960,000 positions. Levendary Café is classified into three market sectors: speciality establishments, quick service diners and casual dining. The company is a hybrid of the last two known as quick casual that includes in its line of menu a standard price in the $8-$12 variety. Levendary Café is set apart by two aspects: nutritious diets utilising high quality ingredients and a devotion to service in a relaxed, pleasant setting. The company is as well renowned for its readiness to take risks which was a characteristic of its original founder. The same characteristic the President of the company has. Levendary Café currently ventured into the fast expanding Chinese market and rather that maintaining the U.S. ideas intact the company altered the store design and menu selections in 23 new stores situated in various Chinese towns. The moment the new COO was unveiled in the company she began to analyse the Chinese operations. At this juncture the Chinese activities had already been established and have been operating successfully for 18 years now. The new COO recounted her outcomes to the U.S. team and currently they are all infuriated by these adjustments and are insisting things must stay as in the United States. The CEO has attempted to explain that if the company fails to adjust to the environment in a region in the company is attempting to carry out business it will be less successful. Leventhal had spent one and half years opening these 23 settings in China (Bartlett & Han, 2011). However the U.S. based team were worried that if any of the United States consumers travelled to China and became aware of the transformations it would devastate everything the company had accomplished over time. On the contrary, the new chief executive officer compared firms that as well expanded in other nation taking this strategy by radically transforming the whole menu while maintain their rations look and feel. The new CEO also likened what McDonald’s has accomplished globally, maintaining their stores homogenised for the most part and only changing the menu marginally. She also felt neither of these strategies was suitable for the company and that Levendary Café must keep things persistent across borders.
CHAPTER THREE: PLAN OF ANALYSIS
3.1. Problem statement
This case will be focusing on three main problems, which are based on Levendary Café case study.
Firstly, this research will be focusing on Levendary Café’s Globalisation issues since its involves creating marketing strategies, and marketing standardised brands in the similar manner everywhere. It is only global companies that will accomplish long-run success by focusing on what everybody desires as opposed to been distressed about the specifics of what everyone imagines they may like. Which strategy will work is not a matter of belief but necessity.
Secondly, another problem is Marketing management, and it will be critical to examine the position strategy of Levendary Café to gain a competitive edge. Analysing the position and trend of Levendary Café leaves one with a hint of a totally prosperous company. Levendary Café is growing at a fast rate which is mirrored in the fact that the chain has recently opened about 23 subsidiaries in China. According Bartlett and Han (2011), the idea behind this let this growth to continue and the plan is to venture into more markets across the globe. Levendary Café holds the view that increasing competition from quick services restaurants that have began to offer wholesome foods utilising high quality ingredients in a foreign market, are the key explanations for the company’s superior outcomes.
Thirdly, this paper will be looking at Levendary’s Strategic management as the multi-unit restaurant strategies of differentiation and brand innovation define the firm’s success. With respect to theoretical techniques in this subject, it will be considerable to revise appropriate strategic approach for Levendary Café in order to sustain their competitive advantage in the multi-unit restaurant industry.
3.2. Research methodology
This paper will use mixed method strategy (qualitative and quantitative) analyses. Qualitative archival data is used to inductively expose the aspects and mechanism salient to the field of research and will help in the understanding of research from varied points of views and also different strategies to carry out the research.
Quantitative analysis of archival data illustrates the transformations in the industry and company behaviours between temporal periods. Together, these outcomes serve as evidence to demonstrate the phenomenon of the success of Swatch Group in the watchmaking industry.
Finally, this study will rely on archival data to triangulate (Creswell, 2013) and to search for harmonies and variances in my results through sources. Each data source will be used to analyse how Swatch has responded to competition in the industry.
Sources of data
This research will collect data from multiple sources; following what Creswell (2013) termed a synchronised triangulation strategy, whereby various techniques, data sources, and units of scrutinises are utilised to examine a set of hypothesised interactions within a distinct study.
There are two main kinds of data collection techniques that many researchers have been using, namely Primary data and Secondary data collection method. Since this study will be focusing on Levendary Café, secondary data only will be used. These data is available in the public domain such as journals articles, books etc.
CHAPTER 3: PROPOSED PLAN OF ANALYSIS
A comprehensive evaluation of the data offered within the case demonstrated a myriad of challenges faced by firms, region markets and also different environments. With the time restriction, it would not be practical to have a look at all the challenges. The researcher has thereby decided to concentrate on the situations of Levendary Café. On the basis of the dynamics involved, the following topic areas have been chosen and the relevant appraisal tools recognised as drawn below:
3.2. Literature review
3.2.1. Marketing Management
According to Doyle (2004) marketing strategy is preciselyconsiderably essential for the success of any business. Without it, the effort of the business to attract consumers is random and really unproductive. The main focus of a firm’s strategy should ensure that their product fulfils the demands of the clients and also sustains a competitive advantage.
The moment a firm has developed and implemented its strategy, it is supposed to determine the response from its consumers and if any adjustments or enhancement is needed to be applied for the full satisfaction of consumers.
In that sense, one of the core worries in the process of strategy-making is how a company must position itself above its competition, and then protect that position from other competitors. From the above explication, it can thus be argued that Marketing Management is an important when appraising cavities in the markets that symbolise the opportunities for the firms and to identify the most effective manner to compete against industry opponents. There are limited numbers of consumers in the market. To develop long-run business, it is critical to retain individuals once they have become clients.
Utilising this kind of information Levendary Café can tailor communication to the desires of specific people. It is their needs that establish the kind of products and services provided, cost charged, promotions developed and where outlets are situated.So as to develop a marketing strategy that will make it possible to accomplish the needs of the market, strengths and weakness of the firm should first be identified and appraised.
Objectives communicate what marketers want to accomplish, guide marketing actions and are utilised to gauge how appropriately a strategy is working. They can be linked to market share, sales, getting to the target audience and developing cognizance in the market.
Outcomes can be appraised frequently to determine whether objectives are being fulfilled. This kind of response makes it possible for the company to adjust strategies and allows flexibility. The moment marketing goals have been identified; the next step is to explain how they will be accomplished. In that sense, a marketing mix will be put together.
3.2.2. Marketing Mix 4ps
McCarthy (1975) formulated the concept of the 4Ps-product, price, promotion, and place marketing mix. Nonetheless, with particular attention being offered to services marketing in recent years, scholars have acknowledged further variables that might be integrated into the 4Ps. Fified and Gillian (1998) acknowledged the following variables as an integral part of the marketing mix-process, physical, and people. By utilising this apparatus, it results in having value added products with consistent prices, sufficient promotion aspects and sufficient distribution channels.
3.2. 3. Globalisation
Globalisation assists firms to have a strategy to a huge potential markets and valuable production aspects like affordable workforce, better sources of raw materials and skilfulexecutives from other regions. Additionally, fast-food firms can make the best use of globalisation to venture into many varied regions across the world. For example, foreign food like Sushi and burrito will have opportunities when introduced into the U.S. local sector and threaten fast-food outlets.
Globalisation involves creating marketing strategies as if the world is a singular entity, marketing homogeneous brands in the equivalent manner universally. Globalised firms use homogeneous products, promotional campaign, prices and supply networks for all markets. Additionally, globalisation includes adapting marketing strategies for distinct countries with respect to cultural, regional and nationwide differences to serve particular target audience.
Since Levendary Café is a global food outlet it needs to appraise strengths, weaknesses, opportunities and threats through SWOT analysis. In that sense, situation analysis is the method for harmonising organisational strengths and weaknesses with environmental opportunities and threats in order to identify the rich position for the company.
3.2.4. The I/R Context
The IR context has various suggestions, but the core variables are witnessed in the strategy of the domestic reaction and the strategy of global incorporation. Multinationals can take on global integration by having homogenised brands anywhere in the world and centralise the regulation of the operations. Global incorporation is evaluated by Yip (2012) who states that integration is espousing a global strategy. The global strategy provides a lot of advantages to the multinationals and Yip argues in favour of this strategy. The first advantage is viewed as the reduction of prices via having homogeneous products, which means that organisations can benefits from the economies of scale by integrating production and R&D performance. Second, the brand mixture, and design inside of the global plan, is more restricted and offers high quality related to the strategy of domestic reaction. The last advantage is viewed in the transnational acknowledgment: consumers globally will experience no difficulty when recognising the product and brand offering, hence product loyalty can expand. The policy of domestic response is varied from the transnational strategy. It defines how an organisation benefits from adapting its products that suit the local location and tastes. The framework is somehow varied from the superlative multi-domestic strategy by Yip (2012) since its still takes on particular aspects from the primary idea of the multinational and does not completely modify in every region. The regulation and the operations are regionalised and regularly autonomously managed by domestic executives. The creativeness of the domestic executives is improved by allowing them to be part of creating new products, so product design may be underpinned by having many sources dispensing new responses. The restriction of domestic reaction strategy is a result of the absence of knowledge sharing since every agency inside the multinational operates relatively autonomously from others. Yip (2012) argues for the global strategy, although he still recognises the liabilities of the framework. The restraint of the strategy is viewed in the manner it can overlook domestic demand. Standardised products may not be suitable for every nation. In this instance Yip is supportive of the manner in which to balance the global strategy. Transnational companies must therefore not over-globalise and in the same degree must not under-globalise.
3.2.5. Strategic management
The appraisal of this segment will focus on the suitable strategic approaches for Levendary Café so as to develop and sustain their rich competitive niche in the market. Having a sustained niche and valuable growth is problematic if there a clear lack of robust and differentiate principal business. Furthermore, ensuring this sustainability asks for great investment in the core competencies of the enterprise so as to prevent imitation. Porter (1998) suggests that the competitive strategy aspires to locate a positive, lucrative and sustainable niche in the market. The choice of this plan is founded on the productivity and desirability of the business and the virtual competitive position. In that sense, this author shall use the Five Competitive Forces.
Since the rationale of strategy formulation is to deal with competitors, this framework will help us to better understand how the market dynamics impact the firm environments, and thereby set the action to be implemented in order to adjust to those forces and to utilise them.
3.2.6. Sources of data
As a result of the nature of this study, case study research strategy was utilised as the most suitable apparatus. At the time of carrying out this case study, this author tried to evaluate the variables germane to the topic under investigation. Levendary Café was chosen as the case company. This author aims to produce a rigorous evaluation of a single case-Levendary Café, in regard to which this writer engages in hypothetical examination. Also, this writer has decided that he will use secondary data to analysis Levendary Café. However, there a numerous risk associated with utilising secondary data, for instance, they might not be completely correct, and bias could be produced by the limitations of the initial research. The secondary information utilised is chiefly from academic journals and books. This writer has also utilised other academic literature which is germane to the study. The website of Levendary Café has as well been used to collect data about the firm, and their worldwide strategy. Since it has varied platforms, it is possible to find data about Levendary China. In this investigation, important part of empirical information was gathered. Hence the sources of data utilised in this research are reliable. Usually, for the case study research method, the results of a single case cannot be applied more universally to other cases.
3.2.7. Ethical Issues
With respect to the utilisation of secondary data, there are several factors that need to be considered to gather the right information. What is more, secondary data must be reliable, appropriate and accurate (Yin, 2004).
Furthermore, this research will be deferential about the ethical concerns that are presented in business research: objectivity (the research must be objective and founded upon facts, misrepresentation of the findings (the outcomes must not be exaggerated), discretion and plagiarism.
CHAPTER 4: ANALYSIS DEVELOPMENT
In carrying out this evaluation research it is critical to take into account that all the models are associated with the goal of accomplishing and having a strong competitive niche in the market, through brand innovation. With respect to what has been analysed in Chapter 3, applying the tools recommended will strive to review systematically the position of Levendary Café, and to determine the suitable steps that the company must address, with the drive of sustaining an outperformance in the food industry.
4.1. GLOBALISATION
In this area, the author will concentrate in the SWOT analysis concepts and I/R context that were developed through the following methods.
SWOT Analysis
Levendary Café has many strengths when looking at the company; it has a brand recognitions valued at around ten (10) billion dollars. This firm specialty rests on the reputation of its classic, core menu items: the Turkey and Avocado Sandwich, high-quality cheese soup and chicken Ceaser salad. Many restaurants provide insignificant, local menu versions. To make a corporation successful there is the need to evaluate the company’s. In spite of Levendary Café’sattempt at offering nutritious food, their line of menu has not completely been adapted to meet the demands of the Chinese culture. The other weakness is Levendary’s high employee turnover. The workers are paid minimum stipend and have a low skilled job, which is often viewed negatively by its personnel. After the firm has reviewed its strengths and weakness, it needs to concentrate on new opportunities and threats. Levendary Café is a growing business and has a lot of new opportunities ahead of them, for instance, there is a swelling demand for healthier nutritious fare. Therefore while the demand for healthier food grows, Levendary Café must usher in food choices in their line of menu and transform its weaknesses into strength. One way the company is trying to expand and make the best use of these opportunities is by opening up more food outlets in China. Levendary can take advantage of full adaptation of their new operations.
The food industry has gained so much popularity over time, and with their being many varied food outlets Levendary Café should take into account is the issue of competition.
Findings: Levendary Café U.S. rivals in the quick service industry have each approached China with massively varied strategies, thus all of these competitor have integrated in any case some mark of domestic adaptation to their line of menu.
I/R Context
According to Bartlett and Han (2013) Levendary Café entered the Chinese market in 2009. The company desired to carry out its theory of “delighting the customer” with exclusive based contributions to the Chinese market. As a result of insufficient insight about China, the head-quarter (HQ) saw it fit to allow the Chinese market pundit Louis Chen implement the tasks independently. Within a span of one year, the Chinese operations and managements failed to achieve what was projected by the HQ. This chapter will evaluate this matter concerning a fragmented strategy between the U.S. based HQ and its Chinese stores. The IR framework centres upon the strategies of global incorporation and local reaction will be analysed so that it would be possible to evaluate how Levendary’s approach lacked in its incorporation within the Chinese chains.
Findings (1): The firm holds firmly the thought of quality and relishes its longstanding demand i.e. increase the culture and everyday activities. For quite some time, Levendary Café and its former president invested in fostering the company’s theory, marketing, brand variety and performance under a classified organisation to ensure that all its chains are affiliated with the strategy. This focused on superior quality commodities; the company supports the relaxed/pleasant environment kind of restaurants that achieve the needs of those individuals who are ready to pay the superior price. In all respects, as result of the Levendary’s detailed understanding and existing institution in the local Chinese-restaurant supply and demand, the company understands that it will be greatly advantageous to imitate its operations by taking full advantage of the economies of scale with marginal modifications. Through instituting the concept, Levendary Café earned the right to reduce costs and obtained high rate of product appreciation and fidelities in the Chinese industry.
McCracken (2005) posits that with restricted understanding and expertise in globalisation, Levendary Café held the notion that it was fundamental to apply a parallel conception in China after seeing the significance of supporting the original company’s concepts together with its local achievements and other rivals response. It is assumed that integrating the global strategy may be greatly important for the firm when entering a new market accompanied with standardised commodities, streamlined processes and consolidated organisation and regulation with marginal adaptation of the framework and culture. In 2009, Luis Chen was appointed the acting president and was expected to uphold the concept and set up a robust market locus as the foundation for franchising the company’s restaurant stores across China. Levendary Café believed that venturing into China would benefit the firm in the long-run via the focus on economies of scale analogous to the local marketplace.
Findings (2):The 2 year agreement permitted Chen to carry out managerial and regulate decisions in all Levendary’s stores in China. With detailed understanding of the Chinese market and domestic affiliations, he was capable of comprehending the demand and the necessity to adapt the concept and become “domestic reaction” (Bartlett and Han, 2011). This initial concept was applied into particular settings of multi-storey structures, targeting high earning personnel and entrepreneurs. In other settings with frequent visits and middle-class populations, the concept was adapted to cater for the domestic taste; quick and recognisable. Menus and decorations were altered. Various dining structures were removed, and left just the take-away counter. The new CEO then noticed what the demand needs were in the U.S. product with Chinese noticeable food offerings. Within the span of a year, Chen was capable of setting up 23 Levendary China stores. The performances conducted by Chen obviously indicate a missing connection between the incorporation by the Levendary’s previous and the Chinese chains plans. The new CEO was anxious that imitating the transnational approach would not completely achieve the targeted consumers and the approach might result in the loss of competitive advantage, hence making a robust market position difficult. Chen regarded fast profit-making as greatly fundamental elements of business to carry out and independently created varied concepts to cater to domestic tastes. This finally contradicts with the agreed conception and culture of “Forget today’s profit. Have a positive impact on customers’ lives” (Bartlett and Han 2013: pp.4). Preoccupied with the idea of making profits, he set up most of the Chinese restaurants that lacked a link with the Levendary Café’s original brand. For instance, the line of menus was modified with respect to domestic tastes to a degree that a U.S. based visitor was incapable of recognising it as one of the company’s. The service in this new market was profit-oriented and completely ignored the concept of ‘delighting the customers’. In effect, what the U.S. based restaurant expected was their consumers to acknowledge the product globally and every Levendary store thereby needed marginal adaptations in their concepts. The American restaurant wanted the long-term benefits the transnational plan can provide like economies of scale for advanced growth, lower cost of production by generating a huge supply network and global product acknowledgement and fidelities
4.2. MARKETING MANAGEMENT
This part will evaluate the manner in which Levendary Café has positioned itself in the market, and the plans that support that position.
4.2.1. MARKETING MIX
Product
One of the objectives of Levendary Café is to develop a standardised set of products that cater to the Chinese preferences. Levendary China learnt that, even if there are considerable costs of savings via standardisation, and the success of adapting to a foreign environment. Adaptation is important for manifold reasons including consumer preferences/tastes. Levendary has provided local menus to cater to the preferences of Chinese people. For instance, the restaurant offers: Chicken soup, Chicken sand, Roast beef sand, BBQ chicken sand, Thai veggie soup, Chicken dumpling, Pork dumpling, Pu-erh tea amid other food types. These all examples of how Levendary China has adapted its brands offer in the global setting.
Place
Levendary Café has over 3,500 outlets across the U.S. The company continues to concentrate on working investment expenditures more productively via farsighted and strategic expansion. Just recently, Levendary Café added 23 more outlets in China. The company acknowledges the potential for development in global markets and plans to take full advantage of what it has learned over time in the U.S. The company’s venture into the Chinese market was a strategy that created a gap between Levendary Café and competition.
Price
Levendary Café has recognised that, in spite of the cost savings inherent in standardisation, success can often be credited to being capable of adapting to a certain setting. This is certainly the case with its implementation of its pricing strategy that is one of the localisation that internationalisation. Levendary Café has had to choose the correct price for the Chinese market.
Promotion
Promotion also known as the marketing communication mix was proposed by Kotler (2012) as comprising the five key tools:
advertising
direct marketing
sales promotion
public relations
personal selling
By utilising these tools, Levendary Café aims to localise its marketing communications strategy as it is expected to take into account the massive variety of cultural and other variations that it encounters in China.
Findings (1): From the above, it can be explained that all of the strategies of the marketing mix have made it possible for Levendary Café to position itself as a strong brand, with reputation based on brand innovation and the ability to adapt to the Chinese market.
Findings (2):Levendary Café has committed itself to working on setting up a Chinese product and change to Chinese life since the company was introduced to this market (Bartlett& Han, 2011). So as to guarantee the implementation of this performance management, just recently, Levendary Café established a taste kitchen and food laboratory to determine Levendary China nutritious food strategy. The purpose of this taste kitchen and food laboratory is to promote its brand innovations and strive to beat the idea of offering unhealthy food. Essentially, the percentage of localized brands accounts for 30 percent amid the whole Levendary Café brand line. On the contrary, on Levendary Café’s line of menu for China region almost half of the commodities are particularly designed with Chinese feature among 20 brands currently. These brands are enhanced by integrating distinctive Chinese ingredients to cater to Chinese preferences (Anderson and Marja, 2012). Levendary Café targets the “entire family relations” starting with children to elders. The company has made efforts on creating a dining setting of family model in which consumer can experience the cordiality of home. Aspects like the cordiality of family get-together, caring amid various generations, love, among other features can be witnessed in the company ads and external decorations. Both it diversified menu and adapted preferences, these concepts have made Levendary Café prominent to various generations. Rather than utilising celebrity influence like KFC and McDonald’s has done before, Levendary Café inclines to present a narrative or some fascinating act into the infomercials, making it more connected to real time and easier to approach. On the other hand, Levendary Café meal slogan “Tasty Good Freshness” is the company strategy to obtain identification from the consumer group and arouse their eating habits.
Findings (3):In 2008 the American company local growth was slowing, the restaurant’s geographic growth strategy plateaued and they began to notice that their idea did not suit small cities. Understanding that the company’s local market has been exhausted they now looked for benefits to invest overseas (Bartlett& Han, 2011). The other variant is the removal of conflicts in markets abroad. Confronted by this circumstance where the rival firms are attempting to enter the same foreign market an organisation can collude and share the market with competitors or attempt to be somewhat dominant. The latter expands the market dominance for the firm, and raised the imperfections within the whole market. This subsequent variant explicated how Levendary Café ventured into the Chinese marketplace. Bartlett & Han (2013) posit by using horizontal FDI Chen was expected to set up a strong market position as a foundation for franchising stores across China.
4.3. STRATEGIC MANAGEMENT
This area will focus on the concepts of brand management that have been developed through the following methods:
4.3.1. FIVE FORCES ANALYSIS
The intensity of competition amid competitors(High)
The intensity of competition amid rivals in the quick service food industry is the most powerful aspect amid those five forces. The rivalry in this sector is very robust as a result of oversaturation of products competition in cost and quality services like McDonald’s, Taco Bell and Wendy’s. Thereby Levendary Café must offer an affordable price, enhance quality of customer and delivery services, as well as develop a robust brand awareness to succeed in this competitive market.
Bargaining power of supplier (Low)
In the multi-unit restaurant industry, firms are expected to have a steady and persistent raw materials supply to operate the trade to meet the high demand of the massive consumer base. Hence, developing robust relations with suppliers is essential to sustain a perfect quality of raw materials Regarding Levendary Café, the company can consider growing its own suppliers of raw maters to ensure a continuous supply.
Bargaining power of buyers(High)
Since there many substitute brands in this industry, Levendary Café will have to put more attention on consumer demands to gain new clients while sustaining a base of loyal consumers. Clients put special attention to their health and the growth rate of obesity in China, the company will have to provide healthier food in their servings, such like fruits and salads and use oils that are free-off fatty acids.
Threats of new entrants (medium)
The infant businesses that first venture into the food market might have to experience some difficulties in terms of the economies of scale, product fidelity, capital needed and government control. However, this challenges lack the potential of being a threat to the existing firms. The economies of scale might be achieved by standardised products and consolidated R&D in brand and marketing from the United States.
Threats of substitutes (medium)
The threat of substitute brands in the multi-unit restaurant business is very high. As a result of globalisation, a lot of foreign food firma have ventured into the domestic and adopted their menus to suit the tastes and preferences of consumers. Many Chinese households still prefer homemade meals, and young adults frequently purchase from mall food courts.
Findings:Legendary Café competitive position is still robust in this instance; however it might be at risk as result of the industry behaviour, particularly from its Chinese competitors. Gaining the information that these five competitive advantages determine the firm’s strategy to follow is brand innovation.
As a symbol of American food outlets, Levendary Café has encountered the challenge of cultural disparity between U.S. and China at the time of venturing into this industry. Judging from its operations, Levendary Café has investigated and adapted to Chines practice to dissimilar degree. Spring festival is regarded as an essential centenary in China; it is the main day of Chinese New Year as well as marks the starting of spring. At the time of the spring centenary, Levendary Café will transform the decoration in its cafes, Chinese features like the China and conforming animal sign for the new years will be integrated to the decorations, infomercials and brand packages and the musing streaming out of Levendary Café eateries will be transformed to custom songs with festal and jolly feelings. Also, the Chinese subsidiary will embellish the cafes with conventional Chinese paper-cutting workings of flowers and animal cryptograms. With respect to language variation between cultures, most global products require to pay special focus on the decoded varieties of their product names when entering a foreign market, particularly in China where individuals display interest on names with auspicious connotations (Lu, 2010). Again, brand development is as well definitely linked to the perception of adaptation. Over time, Levendary Café has made numerous attempts in brand innovation to gratify the Chinese preferences and luckily this attempt has been identified and appreciated by Chinese consumers because they have offered an affirmative insight on this element. The other positive-allied variable for Levendary Café is “Delighting the customer”. Even if the involved of this variable cannot entirely be associated positively to general adaptation sequence, there is an important link confirmation between “delighting the customer” and they favourable adaptation. Most importantly, what requires a special focus is that store position is negatively associated with the general adaptation sequence of Levendary Café that suggesting that the adaptation endeavour concerning location aspect made by Levendary Café is not appreciated by Chinese consumers for they view adaptation processes as tricky.
4.3.2. Generic Strategies
{Source: www.mindtool.com}
Levendary Café manages a differentiation stratagem because their goal is to provide unique brand to a wide market. This strategy is supported by several aspects:
Nutritious diets utilising high quality ingredients
A devotion to service in a relaxed, pleasant setting gives their customer a rich experience
Finally, their slogan “Tasty Good Freshness” is as well part of their differentiation strategy.
Findings:
Having a market positioning has a progressive impact in differentiation and innovation strategies. On the other hand, there is no relationship between this plan and a low-cost strategy. Furthermore, while determining an appropriate differentiation strategy might be more expensive than a low-cost, for this case makes more sense economic-wise.
CHAPTER 5: RECOMMENDATION
5.1. OVERVIEW OF THE ANALYSIS
It is possible to say that the study conducted so far, indicates that Levendary Café is yet to enjoy a very robust competitive position in the Chinese market. However, the industry is witnessing severe competition that denotes a huge threat to be sustainable. The multi-unit restaurant industry is absolutely sophisticated not only as a result of competition, but also to the huge variety of substitute products presence. Conversely, it will not be very cost-effective because the power of buyer and suppliers is not low.
The landscape of the industry generates the need to compete through a differentiation strategy, which is the one that Levendary Café has chosen. This differentiation strategy Levendary has positioned itself as innovative company, via brand innovation that has redefined consumer attitude.
On the other hand, an adequate solution for Levendary Café is to carry on aiming for the global strategy, but the company would have to identity the correct equation. As Shaw and Goodrich (2012) assert the perfect plan by the U.S. restaurant should incorporate and align its status with the capacity of the Chinese industry. Sufficient insight is essential to incorporate global strategy and still indicate some reaction toward domestic markets. Information sharing between U.S. based Levendary Café and the Chinese stores will restrict the misconceptions and ensure that the wellbeing between the two companies will be more aligned. Santos and Williamson (2012) offer a context for how an organisation can build its information sharing base and reap big from it. A company is expected to identify inside of its distinct agencies where the knowledge is produced, then how to evaluate it and ultimately how to distribute it. It is just when the information is disseminated that a company will benefit. As Alfred and Chandler (2010) indicate, Levendary Café is required to offer an appropriate structural model to support their endeavours and make sure incorporation between itself and the Chinese stores. This feature may be suitable so as to assess how the company can raise their advantages of the global approach. Fragmented approach between the company and its Chinese outlets is mirrored through the contradictory constructs in the IR context. The global strategy is desired by Levendary Café to incorporate its ideas in the Chinese market with marginal modifications so as to take advantage of the advantages it provides. The company stores, however, acknowledged the fact exploitation is best used within the domestic awareness plan. The misconception of the novel concept builds a crucial circumstance that requires a prompt solution. As explained in the previous chapter, Levendary Café may benefit greatly by carrying on using the global strategy, hence the company should strive to find the correct balance between U.S. based Levendary wish to coalesce the operations and the stores domestic tastes. A context of information mobilisation has been supplemented to support the discussion of how Levendary Café might solve the issues by aligning the knowledge between the Denver HQ and its Chinese stores.
5.2. RECOMMENDATION PLAN
Following are suggestions to improve:
Strategic Management
Levendary Café may analyse potential advantages such a low costs through service and position standardisation, as well as adapting menus provided. Additionally, the CEO is expected to be incorporated in the concept of forgetting current profit and begin formulating long run goals. This will mean that Chen will have to acknowledge and take advantage of the opportunities the Chinese market has to offer.
Contrariwise, regarding carrying out a reasonable and rigorous market plan evaluation, Chen should be made to know that particular facets are important in the process of choosing whether to enter a new market or not. These facets comprise selecting the level of venture portfolio, developing enterprise with the understanding that start-up expenditure may not be provided as well as fiscal need, availability of marketing projections that are important in predicting the profitable future, and restructuring prospect of incentive and acknowledgments aspects in that concern.
Marketing Management
Birkinshaw and Pedersen (2010) explicate branches as a unit that operate value-increasing performances for a company. Their discoveries underpin Yip framework on globalisation, as the two scholars assert that subsidiaries find themselves in a situation more challenging as never before, since CEOs are projected to perform entrepreneurially and authorised as well as adhere to the international principles. Additionally Birkinshaw and Pedersen (2010) elucidate the function of the firm as that is elaborated by the mother corporation. Levendary China with its 23 stores can be regarded as an important subsidiary for the parent firm. Looking at the challenges of establishing a common base for globalisation ability of the market, and hence the magnitude of the domestic reaction, Foster as the chief executive must manage the subsidiary in an improved manner.
Additionally, she must integrate the original function to create base for more growth in China, and thus the company must include a lucid meaning of the kind of growth it desires. Foster should suggest that Levendary Café does not need development if it compromises with product’s originality to ensure Chen is incapable of devaluing the brand in the Chinese market.
On the contrary, Foster should thus recognise that the approach in China cannot be agreed on in American HQ. As suggested by Birkinshaw and Pedersen, she must align market positioning aspect and a resource expansion aspect. Chen understands the Chinese market, and the two executives should work together to identify a brand array that caters to this market. Brands are at present slightly distinguished in the United States, therefore this must not a challenge (Bartlett & Han, 2013). With respect to the resource developments elements, Foster should differentiate between resources and potential.
Alfred & Chandler (2010) thus suggest that resources are the variety of aspects accessible for and regulated by the company, while potential is the company’s ability to utilise these resources. Foster should recognise that even if she holds and regulates such resources and potential as fiscal and company-particular information, Chen has expanded some potential like fast improvement and adaptation. In establishing the plan, it is therefore important that Foster involves Chen and his concepts. Taking into account the fact that Levendary Café decided to venture in an entirely owned subsidiary, and provided with the challenges associated with domestic reaction against globalisation, this author will recommend a new strategy for the firm. As posited by Birkinshaw and Pedersen (2010), Foster must establish a new mechanism for mobilising knowledge. This may be accomplished through a global team located in China that would engage both Chen and his members and also the staff based in the U.S. positioned in China. This mechanism might ensure that the connection between the market and resource component of the policy balance is being handled. As result, both Chen and Foster may identify a mutual base in their globalisation obstacle: to decide a suitable level of domestic response and internationalisation.
Reilly & Wallendorf (2010) explicate that in essence many U.S. based restaurant enterprises have entered and continue to enjoy profitable performances in the nation, some have nose-dived desolately. This is an aspect worth recognising in the process of the market venture. It is challenging to understand the fact that many companies with dismal operations in China failed not as a result of ineffective managing but due to failure to carry out comprehensive and succinct evaluations.
For example, Pretzel Time was unsuccessful in the Chinese markets as a result of inexperience and sitting design. The firm underestimated the requirement to investigate and align decent decoration. Hence, the tile decoration that was utilised in its stores was linked with a lavatory and this somehow managed to upset their clients’ attitudes.
The other suggestion is that there is an alternative of dissolving the Chinese company and hence leave the market. This resolution may be long-lasting or time-based depending upon the basic aspects on the ground. For example, the termination might be made provisionally so as to permit Levendary Café to develop a productive planning strategy prior to resuming its operations again. Foster must consider dismissing the present operation executive, Chen by replacing him with an expert. Equally, the termination may be long-lasting as a result of the fact that company has not recorded profits as yet for the whole phase of operation.
By carrying a succinct evaluation of the given fiscal statements, it is nearly certain that the enterprise is not likely to report any profits in the near future. This is linked with the fact that the restaurant has faced inefficient management for a significantly protracted period. Chen as Levendary China CEO, does not appear to give a clear vision of the company future but rather starts carrying out the operations utilising a mainstream strategy. Permanent termination is as well a feature of obliviousness showed by the Denver HQ granted that the parent company has never started an initiative of being included in the Chinese processes.
Alternatively, the parent company under the leadership of Mia Foster may elect to support a mixed concept aspect. This needs prompt change of the services provided in order to make it possible for extra menus to be served in the same restaurant. As Yan (2009) suggests, Levendary China may be forced to offer its patrons with both the Chinese and Americanised menus so as to fulfil the varied desires of the market. The mixed theory can as well take on another idea that integrates various stores that offer distinct menus. For this model, two outlets may be developed: Levendary China and Levendary American. The former café can be situated in the less advanced regions of the market while its counterpart may be situated in the advanced regions of the same market, so as to draw different consumers.
Contrariwise, regarding carrying out a reasonable and rigorous market plan evaluation, it is suggested that Chen should be made to know that particular facets are important in the process of choosing whether to enter a new market or not. These facets comprise selecting the level of venture portfolio, developing enterprise with the understanding that start-up expenditure may not be provided as well as fiscal need, availability of marketing projections that are important in predicting the profitable future, and restructuring prospect of incentive and acknowledgments aspects in that concern.
Globalisation
According to Bartlett and Chen (2013) one of the biggest difficulties Levendary Café experienced, as they decided to venture into the Chinese market was a classic problem when opening restaurants in a divergent cultural environment. Global accessibility, serviceability and acknowledgment are obviously advantages of a global plan, while the imperfections include greater management expenses as a result of heightened coordination, and the inability to achieve domestic need. In all respects, for a company to perform fully it requires to adapt an international strategy that is suitable for the globalisation ability of the business.
In all respects, for a company to perform fully, it is suggested that Levendary Café must to adapt an international strategy that is suitable for the globalisation ability of the business.
5.3. EVALUATION OF THE PROPOSAL
The sustainability to cultivate the idea recommended in this paper is highly likely, since Levendary Café possess the intangible and tangible resources required. The global strategy provides a lot of advantages to the multinationals and Yip argues in favour of this strategy. The first advantage is viewed as the reduction of prices via having homogeneous products, which means that Levendary Café can benefit from the economies of scale by integrating production and R&D performance.
Chen can reap the advantages of economies of scale from aggregating his raw materials orders and benefit from the increased reputation that comes with cultural arbitrage. Such a strategy towards standardisation will make it easier for Levendary China to gauge financial performance with regard to GAAP, improve customer service consistency and make it possible for advertising actions to be more concerted. Moreover, the implications for shareholders are negative, because it is greatly unlikely that investors will increase their share value.
CHAPTER 6: APPLICATION CASE-KFC
KFC company’s headquarters are situated in Louisville, Kentucky, United States. Globally it is the biggest fried chicken restaurant estimated by sales. Currently, KFC chiefly sells fried chicken, burgers, chips and beverages amid other Western-style fares. The company opened its first location in China in 1987, in Beijing, a city well known for its cultural diversity. The data from KFC annual report indicates that the company’s core competence is incorporation of operational resource. KFC’s franchising model is seen as an appropriate one with robust Chinese chains. The multinational’s original strategy of “not starting from scratch” attracted a lot of Chinese stakeholders (Bloomberg, 2012). The standardisation of KFC is commendable. To make sure there is a consistent taste of foods on an international scope, the process of KFC needs comprehensive developments for the company to obtain the deduction from the suitable quantitative criterion. The strategy of Kentucky Fried Chicken is simply growth plan in the Chinese market. The concept of KFC’s “do not start from scratch” is a unique point of franchise of the company in China. This means beginning a resale of profitable and sophisticated cafes, which are made available to franchisees. Franchisees are expected to begin from scratch in order to prevent selecting a location individually. New franchise operators are authorised to run a mature Kentucky Fried Chicken. The company is part of Yum’s Groups brands. By having multi-brand synergies, it improves the competitive advantage of KFC and incorporates the supply network as well (Alfred & Chandler, 2010).
Aaker (2011) suggest that under the paradigm of brand position and branded with the impact of the parent product makes it effortless for the consumer during the previous contact with reason for unease. This means that it is unproblematic to develop visibility and recognition, but becomes difficult to set preferences and brand image. KFC focuses on specialisation such that it complies with the specialisation of management, technology, brand and service differentiation and market acknowledgment of professionalization (Dickson and Ginter, 2010). Kentucky Fried Chicken pays serious focus on the research of the growth potential of the industry, in order to make an improved plan for their growth strategy. On the contrary, many aspects impact the cost of operation. KFC has vastly invested in cost effect resources, thus ensures the standardisation of the company’s basic brands and services countrywide. As multinational fast-food restaurant, KFC has broad experience in the Chinese market. Thereby, from a strategic standpoint, the core aspects impacting the cost of operating are the economies of scale. On the menus of Kentucky Fried Chicken, the company has standardised and integrated main product in China. KFC has spared no efforts to achieve the varied desires of Chinese consumers. In order to make sure the implementation of the concepts, in 2000 the company established Chinese KFC Food Advisory Committee. The role of the committee was to investigate how the company was going to adapt to Chinese preferences, diet and eating attitudes. In 2004, the invention and localisation program enabled KFC products to break the boundaries of Western foods and Chinese fast food. Today, KFC develops its products according to Chinese preferences, for instance, hibiscus fresh vegetable soup, mushrooms and chicken soup, traditional Beijing Chicken roll, amid other fares. These foods are motivated the Chinese cuisine and served quickly with reasonable prices
China is a huge country, and the variations between diverse regions are very clear. The major performance of variations is culture and the rate of economic growth, both of which affect in the food industry. It is effortless to discover that the growth rate of the food market is very varied across the eastern, central regions and western localities of China. The eastern region has the biggest sales of food industry, and the central province experiences fast growth level compared to other areas. Chinese fast food offers more emphasis to the use of grains, beans and vegetables. The technique of preparing food is deep frying to boiling. There is a huge variation between Chinese style fair and Western-style fair. Many western firms target their youth and families as their consumers, but Chinese firms offer more focus to the group aged between 25 to 45 years. When attempting to get an equation between standardization and adaptation, one of the critical facets that impact the global management of brands and commodities is culture facet. From the concept of cross-culture, the Chinese people are overall inquisitive about foreign things. So as to accomplish this inquisitiveness to foreign brands, KFC try to introduce products fast and consequently win many consumers in China. By integrating the core of Chinese mainstream dining culture with the emergence of western food, Kentucky Fried Chicken has achieved the success of implementing the new brand stratagem in cross-culture promotion. KFC introduces new taste of brands in varied season to satisfy the desires of Chinese consumer (Alfred & Chandler, 2010). It would not have been easily for KFC to achieve the success it enjoys globally, if the company supplied American style foods without taking into account the diversified cultures and traditions of domestic customers in foreign regions.
KFC owns over 140 food outlets in continental China. KFC stores in the Chinese market are normally situated at locations where there are large areas, well-established supply networks, with easy access to domestic consumers and tourists. Consequently, transportation expenses can be saved, and the transforming preferences of domestic consumers can effortlessly be acknowledged and KFC can utilise appropriated approaches to cater to the customer tastes rapidly. For Beijing that is the heart of Chinese political and culture, the populace and holiday business market experiences an increase each year. Hence it has always been valuable for KFC to sell brands and attract consumers. KFC grows their enterprise by collaborating with Chinese products as well. For example, in 2006 KFC launched for types of beverages and carried out advertising by collaborating with QQ (a prominent product in China, particularly recognisable to young individuals) (Kara, 2010). The quick service industry, place stratagem indicates that where to sell the brands and services to consumers. Equally, place policy can be impacted by both in-house elements and peripheral elements. Social culture aspects like domestic law and government rules, religion, language, amid other factors influence this strategy evidently in distinct ways. KFC has its own customary when selecting the appropriate location to set up restaurants. During this activity, the political risk, the fiscal status, the amount of population and the particular culture in numerous regions all the concern to KFC.
Challenges
Most of the food its serves lack traditional dishes that appeal to the Chinese
KFC has failed to position itself as the cheapest dining alternative
Negative publicity
KFC China menus typically consist of over 40 items, in contrast to about 30 in the U.S. The line of menu diversity increases circulation and emboldens repeat visits. Menus provide spicy chicken, rice dishes, egg tarts, shrimp burgers, among others. However, for instance, Shanghai consumers protest that foods were too hot, while others complained that they were too bland. In spite of the endeavours to be successful in the Chinese market, KFC does not position itself as the cheapest dining alternative. Patrons spend the equivalent of $2.50 to $3.50 per visit, a cost point that places KFC way above street retailers and domestic cafes and nearly somewhat above other fast-food outlets, this impacts their total revenue because this customers resort to other food outlets that provide a good value for their money. KFC China rapid growth poses challenges: An extremely visible firm might easily turn into the target of consumer or administration counterattack against the perceived negatives of fast food. Several western health issues are already manifested in China, such as obesity, and KFC has received its fair share of backlash.
KFC should put the focus on explaining aspects pertaining to cost drivers, advertising strategies for the enterprise, and the fundamental factor of carrying out frequent risk analysis. Although KFC has already established a considerable consumer base, and performs comparatively fairly in the market, the company seems to discount specific aspects. For instance, KFC does not appear to take into account the value of the consumers. In an attempt to attract more patrons and consequently set up wider consumer base, KFC needs to go the extra mile to promote a personalised approach in its services. So as to fully maximise its potential for expansion, China must be offered its own position within KFC’s company organisation, permitting China to be at the frontline of the firm’s main concern for future development. KFC should also continually attempt to balance its primary sales drivers with offering personalised service to delight the client, just like Levendary Café. Last but no least, KFC must move its focus away from adaptation so as to start building a consistent brand image in China.
6.2. RELEVANT CONNECTIONS WITH LEVENDARY CHINA
Kentucky Fried Chicken (KFC) shares some features that make possible the relocating of learning objectives from one case to another. These features include:
Competitive environment
Both corporations are faced by severe competition. In the case of KFC, the global market of multi-unit restaurants is highly competitive and fragmented, particularly amongst the key incumbents: McDonald’s, Taco Bell, Wendy’s, Applebees, among others. Furthermore, as a result of the growing awareness about health the demands for healthier nutritious demand for this type of food products is also growing, paving way for new actors.
Basic Values
The objective of KFC is to offer consumers with innovative brands that integrate creatively distinct cultures to cater to distinct tasters/preferences. In that sense their vision offers four core principles to guide all the employees and shareholders in decision making and operations. Those values are, to believe in all people, commitment to customers, go for breakthrough and build competence. Analogous to Levendary Café, competence and devotion to the consumers are the heart of the strategy of the company.
6.3. PROPOSED SOLUTIONS FOR KFC
Given that both companies are similar in all the aspects mentions previously, it is possible to proposal core learning points (identifies from the research of Levendary Café) to KFC, so that the company can sustain and enhance its leadership position in the multi-unit restaurant industry.
New Product Development
New brand development has been proposed to have a new product such as Dumpling, fish and shrimp burgers. These two products are mainstream dishes for Chinese. In touching an individual’s heart, that person will develop loyalty towards Kentucky Fried Chicken more than any other quick service café. As result, the marketplace share will further be enlarged.
Implement market plan
Making a marketing plan and offering actual teaching to the personnel is as well a critical strategy for the development of the company is foreign localities. This will advance global political economic relations.
Differentiate its products
It is suggested that KFC must apply differentiation strategy by offering stick-out services. It will shield KFC against competitors in a very robust market like McDonald’s, Pizza Hut. Firstly, KFC will have to develop their brands differentiate from their rivals by providing new variety of menu to new target audience like consumers who are vegetarians or those who enjoy eating consuming low-carb.
6.4. CONCLUSION
This paper has offered a vastly critical analysis for firms that encounter strong competitive landscape that make susceptible the likelihood of sustaining their competitive niche.In the process of presenting the difference between the company’s strategies, limitation can take place when applying the outcome derived from this research to other firms and markets. Additionally, as a result of specialty of multi-unit restaurant business, further research might be needed when applying the assumption in other globalisation cases.
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Bartlett, C. A. & Han, A. (2013) Levendary Café: The China Challenge. Harvard Business School: Brief Cases
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Betz, F. (2011) Executive Strategy: Strategic Management and Information Technology. New York: John Wiley & Sons.
Birkinshaw, J. & Pedersen, T. (2010) Chapter 14: Strategy& Management in MNE Subsidiaries. In: Alan M. Rugman the Oxford Handbook of International Business. 2nd ed. London: Oxford University Press.
Bradley, F. (201) Strategic Marketing: In the Customer Driven Organization. London: Wiley, Chichester.
Braganza, A. (2011) Radical Process Change: A Best Practice Blueprint. New York: John Wiley &Sons.
Calantone, R., Cavusgil, S., Schmidt, J. & Shin. G (2010) “Internationalization and the Dynamics of Product Adaptation—An Empirical Investigation”, Journal of Product Innovation Management, 21(3): 185-198
Dickson, P.R. & Ginter J.L. (2010) “Market Segmentation, Product Differentiation and Marketing Strategy,” Journal of Marketing, 51(2), 1-10
Geringer, J.M. & Hebert, L. (2010) “Control and performance of international joint ventures. Journal of International Business Studies”, Summer, 235-253
Hamper, R. (2013) The Ultimate Guide to Strategic Marketing: Real World Methods for Developing Successful, Long-term Marketing Plans. New York, NY: Scribner.
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APPENDIX (List of Figures)
Figure 1: KFC’s Online Survey
Figure 2: KFC Lunch poster (KFC 2015)
Figure 3: China’s GDP as of 2015
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What is the difference between a marketing plan and a business plan?
A business plan covers the overall elements of business, including the strategic plan, financial plans, target markets, sales, products and services, and operations. The business plan also contains information on how all of these elements relate to each other.
A marketing plan, in contrast, focuses on the marketing and marketing strategy of certain products and services. Essentially, the marketing plan is tasked with identifying potential market areas while also addressing how to appropriately engage in marketing messages for those products or services to target populations.
Therefore, both marketing and business plans cement the foundations of how the organization of business will operate. They identify which populations are served and which products or services will most likely contribute to the viability of the business or organization. Specific to the health care administrator, the marketing and business plan should focus on effective health care delivery and capitalize on the unique health care services offered by individual health care organizations.
For this Discussion, review the concepts of a marketing, business, and strategic plan in the resources for this week. Reflect on how these plans contribute to business operations. Then consider the consequences a potential misalignment between these plans might hold for the business or organization.
ANSWER THE FOLLOWING QUESTION:
1. An explanation of the consequences of how a misalignment between marketing plans, business plans, and strategic plans might affect the success of health care organizations and why.
2. Offer an example of when an alignment between these plans has contributed to effectiveness or success of the health care organization. Be specific and provide examples.
USE THE FOLLOWING ARTICLE & CHAPTER 1 & 2 REFERENCES:
1.Gombeski, W. R., Jr.,, Taylor, J., Piccirilli, A., Cundiff, L., & Britt, J. (2007). Effectively executing a comprehensive marketing communication strategy. Health Marketing Quarterly, 24(3/4), 97–111.
2.Hillestad, S. G., & Berkowitz, E. N. (2012). Health care market strategy: From planning to action (4th ed.). Burlington, MA: Jones & Bartlett Learning.
o Chapter 1, “Strategy Development and the Strategic Mindset” (pp. 1–33)
o Chapter 2, “Understanding the Strategic, Business, and Marketing Planning Process” (pp. 36–56)
SAMPLE ANSWER
The alignment of the business, marketing, and strategic plans is essential for the smooth progress of operations in a given organization (Gombeski et al., 2007). These plans influence the organization structure of the given healthcare organizations. The misalignment and poor coordination of these plans lead to serious consequences on the operation of the healthcare organization. The misalignment lead to the reduced productivity in the heath care organization. The health care organization will face the consequence of decreasing potential growth. Such cases are caused by the poor connection between various plans. The scheduling of medication, financing of operations and also marketing of the service offered by the health organization will be at a decline affecting the success of the organization (Gombeski et al., 2007). The misalignment leads to poor planning that causes the healthcare organization to direct its efforts and services in the wrong directions. The following of the unrealistic objectives leads to the wastage of the opportunities such as expansion that contribute to the greater success of the healthcare organization. The misalignment also leads to the poor control of the operations of the organization. The ineffective control affects the ability to take corrective action of improvement after determining the performance of the organization (Hillestad & Berkowitz, 2012). The misalignment also causes the ineffective communication between the various departments in a healthcare organization that is an obstacle to the success of the various operations.
There are numerous benefits resulting from the proper alignment of the various plans in the health care organization. The Sutter healthcare organization is one of the successful healthcare organizations in the US that enjoy the fruits of the proper alignment of its plans (Ball et al, 2013). The health organization has beeADGn able to develop new healthcare services, commence the medical practice and also revamp the existing patient flow in the various offices of the organization. The development of the new facilities is done considering plan various phases. The plans considered by the organization include studying the market to understand demand, carrying operation plans for each proposed entity and also financial feasibility studies (Ball et al, 2013). Such activities have helped the organization control in its operations effectively and also set realistic objectives that are efficiently achieved. In this case, the alignment has proved to contribute to the success of the Sutter healthcare organization.
References
Ball, M., Weaver, C., & Kiel, J. (Eds.). (2013). Healthcare information management systems: Cases, strategies, and solutions. Springer Science & Business Media.
Gombeski, W. R., Jr.,, Taylor, J., Piccirilli, A., Cundiff, L., & Britt, J. (2007). Effectively executing a comprehensive marketing communication strategy. Health Marketing Quarterly, 24(3/4), 97–111.
Hillestad, S. G., & Berkowitz, E. N. (2012). Health care market strategy: From planning to action (4th ed.). Burlington, MA: Jones & Bartlett Learning.
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Marketing Plan Strategic Case Analysis 1) English isn’t my native tongue so please try to avoid using extremely high-level terms/ vocabulary if possible.
2) Should not use any outside source.
Marketing Plan Strategic Case Analysis
Everything must be from writer’s own words/interpretation. No citation/bibliography needed
3) I’m going to upload the file “MarketingPlanCheck“. It is a criterion. Please follow this criterion. Marketing is a key part of business success. You need to decide which customers to target. You need to work out how you will reach and win new customers. You need to make sure that you keep existing customers happy. And you need to keep reviewing and improving everything you do to stay ahead of the competition.
