BUS/475
Introduction
Strategic planning entails a consideration of key factors that affects an organization’s operations hence a need for a comprehensive analysis of both external and internal factors for the purpose of identifying aspects that needs to be addressed. In that respect, this analysis seeks analyze the factors and trends that affect Windy City Deli operations and how well the business adapts to the market changes. Further, the business supply chain is analyzed and the prevalent and potential opportunities as well as issues identified for consideration in strategic planning.
- Environmental analysis
An organization’s operations are usually subject to various factors including those outside its control referred as external factors and those within its control referred as internal factors. In that respect, external factors determine the organization’s opportunities and threats depending on their effect on its operations, the market and its performance in general. On the other hand, internal factors tend to determine an organization’s strengths and weaknesses. In respect to Windy City Deli, the external and internal factors in play and which needs great consideration in strategic planning include the following. (Arthur, Gamble & Strickland, 2006)
External factors and trends
The most prevalent external factors with the capacity to affect Windy City Deli operations include the economic, technological, legal & regulatory and social factors as discussed below. (Fred, 2011 )
Economic factors
- The market’s economic growth and development determines the aggregate demand as well as development of key facilities and infrastructure that support organizational operations. Thus the advanced economic development and suitable growth in the US promotes demand hence business growth.
- With operations that require some sourcing from the international market, Windy City Deli operations and finances are subject to exchange rate fluctuations. In that respect, the US dollar fluctuation fluctuate the costs of such goods and raw materials sourced internationally. Therefore, Windy City Deli requires a consideration of the cost implications when deciding where to source the goods from.
- Inflation rate in the market erodes customers’ purchasing power hence affecting demand for goods and services. In that respect the increasing inflation in the US has the potential of reducing demand hence a need for suitable pricing strategies in order to attract customers.
- Interest rate in a market determines the cost of financing and borrowing hence the ability to affect investments in businesses. The low interest rate in the US thus lowers the cost of borrowing hence the potential of increasing competition as more investors access capital. This requires the business to create a competitive brand that can effectively compete with the potential increased competition. (US, 2013)
Technological factors
- High technological advance in the country enhance innovative capabilities hence the ability to develop new products and systems of operations. Some of the effects include the ability to develop online platforms like online order through which customers can access information as well as order for products.
- Technological advances also provide new ways of marketing hence influencing the ability and means of reaching customers with marketing initiatives like advertisements. This is the result of increase in use of online systems and the social media which requires Windy Deli to respond appropriately in order to effectively reach its customers.
- With technology becoming a key aspect of an organization’s operations, there is a cost factor considering the dynamic nature of technological advance which makes the systems obsolete as well as avails more effective systems in the market hence a constant need to invest in the systems in order to enhance performance as well as develop competitive advantage. (Arthur, Gamble & Strickland, 2006)
Legal and regulatory factors
- Increasing environmental regulation has been affecting business operations with businesses being required to meet some standards in terms of raw materials sourcing as well as operations in respect to waste disposal. This has an effect of increasing operational costs as well as a need to source for raw materials from approved sources which are considered as having met environmental standards.
- Regulations and legal guides on operational issues like advertising determines the target market for certain marketing activities with government regulations banning some products advertisement due to their influence on children. This requires businesses to carefully consider their marketing operations in order to adhere to the guidelines.
- Quality requirements by relevant authorities also have an effect on the quality of products that the business can deliver to customers. In addition, the growing health concern on the health effect of some ingredients as well as product results to a need for Windy Deli to adhere to production standards that ensure that their product are suitable for consumption and have no negative health effect like obesity. (Fred, 2011)
Social factors
- The food and beverage market is marked by increasing health concerns with customers becoming more concerned over the healthy effect of the products that they consume. Therefore, the ability for Windy Deli to deliver products that address the concerns that marks the youthful target market that it serves and seeks to serve near the college locations as well as in downtown could enhance its competitiveness.
- Changing lifestyles in the market results to a need for the business to adapt new systems of operations. This is with example of the increasing adaption of social media by the youthful generation and the professionals that mark a significant market for Windy Deli. Therefore, Windy Deli should adapt more use of social media and online platform as means of communication to its customers as they shift from the traditional media of Radio, TV and print media. (Porter, 1980)
Internal factors
Some of the internal factors that determine Windy City Deli’s situation includes resources, leadership and organization structure whose operations are discussed below.
Resources
An organization’s resources determines its capabilities hence the ability to deliver value to customers effectively. Some of the key resources include human resource, finances and facilities.
- Human resources are the key determiner of an organization’s capability with employees’ skills and experience determining to a greater extent the effectiveness and efficiency of service delivery. Therefore, Windy Deli needs to have well skilled and experienced employees in order to enhance its competitiveness against businesses like McDonalds.
- Finances also determine the ability to invest in systems that enhance effectiveness. Therefore, adequate finances enhance capability and profitability which in-turn builds the businesses’ finance muscles that enables building of a strong brand in the market.
- Facilities including key service delivery systems as well as the buildings and their locations are great determiner of a restaurant and hotel business’s attractiveness to customers. Therefore, suitable location for Windy City Deli business premises in downtown and advanced service delivery equipments enhance its competitiveness in the market. (Kotler & Armstrong, 2004)
Structure and leadership
- An organization’s structure determines the management and leadership structure hence have a great effect on decision making in terms of speed and effective communication. In this respect, Windy Deli should have a horizontal organization structure that enhances consultation and eases decision making. With horizontal organization structure, there is easier sharing of skills as well as enhanced decision making which benefits from diverse skills contributed by various departments. (Pearce & Robinson, 2009)
- How well the organization adapts to change
Ability to adapt to change and devise suitable response strategies is the key to an organization’s success due to the dynamic nature of the factors that influences organizational operations. In that consideration, Windy City Deli’s strategies that seek to adapt to the changes in line with performance enhancement and growth include expansion, innovation, skills development and marketing. (Kotler & Armstrong, 2004)
- Expansion
With economic development as well as growing demand for healthy products in the market, Windy City Deli responds by establishing new business ventures in a bid to increase coverage of the suitable market segment hence enhancing its competitiveness and market share. Good example is the expansion to open operations in downtown like California and near colleges to capture the growing need for health food products by the youthful students and professionals.
- Skills development
Value creation and delivery to customers requires skilled manpower. In that respect and the consideration that the market is changing towards a demand of value and quality of products and services rather than quantity, the business seeks to adapt to the change by enhancing skills through training and hiring of more skilled employees. (Kotler & Armstrong, 2004)
- Innovation
With the changing customer needs and prevalence for products that reflect the growing health concern, the business responds by developing and introducing into the market, products that reflect the changed needs and caters to the new tastes and preferences
- Marketing
There has a great adoption of social media and internet use in the US market which has resulted to a need for businesses to adapt marketing that uses those platforms to reach their customers. In that respect, Windy City Deli adapts internet marketing with use of social media like twitter and face book to effectively reach its customers. (Fred, 2011)
- Supply Chain
Supply chain determines the ability for an organization to deliver value to its customers with its suitability to market reach and creation of long-term and favorable relationship with key stakeholders among them the suppliers and customers. (Porter, 1980) In that respect, Windy City deli’s supply chain on the sell side involves restaurants, online order system as well as fast food cafes. With that combination, the business can easily reach customers with effective order and delivery system. The business also employs modern technology and equipments in enhancing customer flow within its premises therefore attracting customers who need quick and efficient service. On the buy side, the business establishes long-term relationships with its suppliers to ensure there is effective supply of needed raw materials as well as needed equipments. With that consideration, the business enhances value creation not only for its customers but also for its suppliers hence creating a competitive advantage over the peers in the market. (Arthur, Gamble & Strickland, 2006)
- Issues and opportunities
With the effects of external and internal factors, Windy City Deli faces issues and gets opportunities which the strategic planning should consider in ensuring that the issues are addressed and dealt with while the opportunities are been utilized by harnessing the organizational capabilities and managing inherent risks. (Porter, 1980) In that respect, the inherent issues and opportunities for the business include the following
Opportunities
Some of the key opportunities availed by the changing external factors and trends include
- New markets
With emerging markets being marked by low competition as well as suitable economic conditions, thy present opportunities for the business to venture into in its growth strategy and enhance its operations by reaching more customers and hence enhancing its performance.
- Changing customer needs and lifestyles
The changing lifestyles and customers needs creates new market segments to be served by establishing new business lines as well as expanding to new geographical markets.
- Availability of new marketing avenues
Technological advance and adoption of social media and online platforms by many people creates opportunities for the business to reach new segments as well as more potential customers by applying marketing strategies like advertising through the online platform and the social media. (Fred, 2011)
- Innovation
Technological advance presents the opportunity to develop more effective systems of value delivery as well as product development. (Arthur, Gamble & Strickland, 2006)
Issues
- Cultural differences needs to have different product attributes in order to attract customers from diverse backgrounds. In addition, employees have cultural differences which require effective management in order to enhance their performance.
- Rising health concern in the US market regarding the suitability of food products presents a challenge for the business since it requires maintaining rigorous standards in sourcing and production both of which have costs implications.
- Global challenges like the financial crisis which has highly affected business operations as well as finance accessibility is a challenge that needs to be considered in deciding suitable finance sources. Other global factors include the oil prices whose fluctuations affects the business operations due to the factor’s ability to affect raw material and transportation costs.
- Increasing regulations in respect to the environment and quality control presents a challenge for the business in its bid to expand operations to new markets as well as in achieving cost efficiency. (Pearce & Robinson, 2009)
Conclusion
The analysis has clearly demonstrated Windy City Deli’s operations are subject to some forces that are beyond its control termed as external forces and trends which are capable of determining its opportunities and threats. In addition, the business is also subject to internal factors which determines its strengths and weaknesses hence the ability to utilize the opportunities and address inherent risks and threats. In that respect the business has been demonstrated to have had suitable strategies in adapting to changes. Further, the organization’s supply chain has been one of its competitive advantage points with value delivery to customer being the focus. The analysis has also identified the business to have numerous opportunities which needs to be utilized in a bid to enhance operations as well as performance. Finally, some key issues have been identified that needs to be considered in strategic planning in order to enhance operations and performance. Among the issues include the cultural differences, regulations, leadership and other global factors.
References
- Arthur T. A. Gamble, J. E. & Strickland, A. J. (2006). Strategy: Winning in the marketplace: core concepts, analytical tools, cases. New York: McGraw-Hill.
- Fred, R. D. (2011). (13th Ed.). Strategic Management: Concepts and Cases. New Jersey Prentice Hall. ISBN-13: 978-0-13-612098-8
- Kotler, P. & Armstrong, G. (2004). Principles of Marketing. London: Prentice Hall.
- Pearce, J. A. & Robinson, R. B. (2009). Strategic management. formulation, implementation, and control. New York: McGraw-Hill.
- Porter, M. (1980). Competitive strategy: Techniques for analyzing industry and competitors. New York: Free press .
- US Bureau of Statistics. (2013). Economy at a Glance. Retrieved from
http://www.bls.gov/eag/eag.us.htm
