Answer 2:
The organization that has been decided to choose for the final project is KFC (Kentucky Fried Chicken) fast food restaurant. The restaurant was found in 1930 and headquartered in Kentucky, United States. Currently, the restaurant is operating at 19952 locations (Yum.com). It is intended to open a medium size restaurant called “penny restaurant”, as the restaurant industry has been amongst the most profitable businesses. The penny restaurant will enter in the industry with market penetration strategy and related diversification strategy, which means a same product to the same target audience, will be offered with variations in the menu. However, grasping the market share from a giant through serving same customers with similar products will not be easy. Therefore, the bistro will use competitive strategies to have a competitive advantage over the giant. The restaurant will ensure the excellent service through streamlining the order taking and food preparation processes. The restaurant will differentiate itself from competitors by its unique menu setting (include logos and colorful images with low fat food items), packaging, and ambiance (fragrance in the air and tables will have flower printing). The restaurant will welcome the online orders within half an hour delivery promise. The restaurants will offer attractive deals with minimum price offering. Introducing unique low fat dishes with the proposed strategies will allow the penny restaurant to have a competitive advantage and long-term sustainability advantage (Hawes & Glisan, 2015; Madaan, 2009).
Answer 3:
KFC calls its values as “how we work together” principles, the company values include trusting employees, encouraging ideas, recognition, coaching, support, accountability, positive energy, teamwork, execution excellence, and responding to customers (U+KFC, n.d). The mission of the company is “to sell in a friendly and fast environment that appeals to pride conscious, health minded customers” that indicated the objective of expanding business through responding customers’ health needs. The major goal of the company is to provide quality food to customers. The restaurant has capabilities of providing first-class services to its customers; maintain the appropriate level of inventory, therefore, fulfilling the demand of customers. The company has good marketing and management capabilities.
Porter five forces is a tool that is commonly used to determine the I/O industry based structure of the strategy (Verberg, Ortt & Dicke, 2006).
The threat of new entrant: Threat of new entrant is moderate due to existing dominant players, the economics of scale, and high brand awareness and loyalty. The company has all advantages that enable it to be sustainable.
Buying power of buyer: the bargaining power of the buyer is high as customers have several low price options to switch due to which the organization is in losing its market share (Blanco & Mottesi, 2011). However, the company overcomes the constraint offers discounts and reward loyal customers.
Buying power of supplier: The supplier power is low as there are several suppliers of raw material. The company for assuring the supply of proper raw material quantity makes a contract with suppliers (KFC, 2012).
The threat of substitute: The threat of substitute is high as several restaurants are offering foods to customers that pose a constraint to the profitability of the company. KFC to overcome is offering breakfast to customers (Ibrahin, 2012).
Rivalry in the Industry: the competition in the industry is high to deal with competition, the restaurant offers free in store Wi-Fi option and 24-hour service (Ibrahin, 2012).
VRIO framework
VRIO refers to value, rarity, imitation, and organization; the framework is used to describe the constraint and opportunities of the restaurant.
Value: KFC holds a significant value in exploiting its resources and in agreement with the image of the brand due to which the company is successfully running its operations since years.
Rarity: The Company does not hold any rarity in its operations; therefore, the restaurant has an opportunity to integrate value added services in it a chain that will benefit the restaurant.
Imitation: The KFC menu is not unique; therefore, imitation is quite easy. For overcoming this constraint, the organization needs to come up with new items every time.
Organization: The organization structure is aligned with the operation of the restaurant and supports the service excellence
Both of the frameworks present some constraints and opportunities for the organization. However, I/O industry based structure presents limitations and opportunities by look to the external environment, and VRIO framework observes constraints and opportunities by looking to the organization internally. Both frameworks present that the company needs to improve for having sustainability and competitive advantage with considerable market share.
Answer 4:
Companies manage their global competitive advantage either through attacking or counter attacking the competitors. Attacking refers to the initial set of activities pursued by the company to gain competitive advantage. However, counter attacking refers to the actions taken by the organization in the response to attack (by competitors). These dynamics of global competitiveness are related to the external and internal environment as well. For example, counterattacking require the awareness of rivals, their objectives, social environment and regulatory bodies. If an organization is preparing a diversification strategy for maintaining a competitive advantage as a counter attack, then it will need to consider its internal capabilities of taking the initiatives. In addition, for successful conduct, it will require the information regarding the external environment of the region (Peng, 2016). Competitive advantage is based on company’s internal resources. For example, if the organization decides to lower the price of having a competitive advantage, it will have to look its resources that can contribute to cost reduction capabilities of the firm. However, formal and informal institutions also play an immense role in creating competitive advantage. For example, if the government increased the taxes, it will contribute to cost and may not allow companies to reduce the prices. Similarly, facilities from the government in term of lower rate finance available or decreased taxes help organizations in expanding their businesses and reducing the cost and therefore, prices.
Answer 5:
In such a competitive era, every innovation becomes obsolete after some time and fro remaining competitive, companies have to come with new ideas and creations. Knowledge and learning processes allow organizations to have talented and intellectual people. Enhanced learning and knowledge aid the decision-making capabilities of the company. Constant learning is strongly associated with the good performance of the organization and leverages the businesses even in fierce competition through making the innovation a part of organizational culture. Knowledge-powered organizations continue to outpace the competition through introducing new solutions to their customers. PESTEL analysis and SWOT analysis are the two frameworks that are used by organizations to understand the industry environment and consider formal and information institutions. However, SWOT analysis helps companies in determining firm specific strengths and weaknesses.
References
Blanco, M., & Mottesi, M. A. (2011). Arcos Dorados Holdings Inc. United States Securities And Exchange Commission. Retrieved February 16, 2016, from <http://www.sec.gov/Archives/edgar/data/1508478/000119312511272204/d234794df1a.htm>
Hawes, G. M., & Glisan, G. B. (2015). Proceedings of the 1987 Academy of Marketing Science (AMS) Annual Conference. USA: Springer.
Ibrahin, E. (2012). Fast Food Industry. Retrieved February 16, 2016, from <https://angelajohndotme.files.wordpress.com/2012/10/fast-food-industry.pdf>
KFC Inc. (2012). KFC Poultry Welfare Guidelines. Retrieved February 16, 2016, from <http://www.kfc.com.sg/cares-poultry>
Madaan, K. V. S. (2009). Fundamentals Of Retailing. Tata McGraw-Hill Education
Peng, M. (2016). Global Business 2009 Update. USA: Cengage Learning.
U+KFC. (n.d). Vision and Values. Retrieved February 16, 2016, from <http://www.kfcjobs.com.au/team/vision-and-values.aspx>
Verberg, R. Ortt, J. R., & Dicke, W. M. (2006). Managing Technology and Innovation: An Introduction. New York: Routledge.
