Question 1
One benefit of the strategic approach adopted by Mr. Arthurs is that it is anticipated to improve the financial and economic results of his company and enhance its market position. This is because he can respond quickly to changing circumstances. In addition, the effective emergent strategy requires the firm or business to embrace flexibility, especially on the executive or owner level to accommodate a new strategy. Furthermore, the emergent strategies pave the way for consistency of the strategic decisions with tactical and current ones and enhance coordination of functional unit within the business. However, Mr. Arthurs’ approach is prone to challenges. For instance, such approach does not involve scientifically obtained data allows him to make an informed decision. As a result, the decisions are prone to errors, assumptions, distortions, guesswork, and inequitable judgment. In addition, minimal planning does not allow the firm to remain better prepared in case an unexpected situation occurs.
Question 2
According to the analysis of Table 1, it is clear that some critical success factors that Arthur is currently lacking in his enterprise. One of the factors that he has to consider is to reduce the rental cost and hence increase profitability. This can be done by finding a strategic place with lower cost and has a substantial number of customers similar to the USA outlets. Another factor that is lacking is the mechanism to reduce waste in the UK firms. For instance, the wasted materials as the percentage of the sale in the UK outlets is more than a double for the USA outlets. Arthurs must also consider increasing the variety of the products available for juicing to meet the preferences and tastes of a broad range of consumers. It is also important to note that his marketing strategies are not effective because UK outlets are incurring more marketing costs than USA outlets and yet the USA has more number of customers per week. Another success factor lies being reducing the waiting time for the UK firms to increase the competitive advantage.
Question 3
Before entering the food/restaurant market that sells organic food and juices, Arthurs would have considered several external information. Such information includes the demand uncertainty, geographical distance, availability of raw materials, and social and cultural factors. He could have conducted a market demand analysis to determine the appropriate strategies to improve on demand. In addition, countries or regions are different from each other regarding religion practiced, language spoken, and food eaten among others. Therefore, it is important to consider how these differences can challenge or enhance the marketing efforts of a firm in a new market. It is also important to consider the strategic geographical locations of the outlets that have a substantial demand and at the same near to the raw material and offer cheap labor costs. Another factor to consider is the competitive environment and other attractiveness of the market regarding potential revenue that can be generated.
An appropriate model that can be applied to obtain the above information is the Porter’s five forces analysis model. This model would help Arthurs to understand both the strength of the prevailing competitive position and position he is considering to be in the future. The model helps to determine the potential attractiveness and the competitive intensity of a specific market by evaluating competition, new entrants, suppliers, substitutes, and the buyers (Hill and Gareth 43).
Question 4
Advantages and disadvantages of internal growth
One advantage of the internal growth is that it allows continuous and more fine-tuned modification of actions to the environmental changes. It also offers control over quality, processes, and product. Additionally, it preserves the organizational culture as well as encouraging internal entrepreneurship. Furthermore, it provides a strong motivational tool that allows promotion of employees from within. However, the internal growth offers a slow form of growth and fewer opportunities for co-branding necessary to enhance credibility. It is also risky and expensive since all new resources are required to be developed alone. It is also difficult to recover from the failed investment through this strategy (Seifert, Benoît and Christopher 369).
Advantages and disadvantages of acquisition
The acquisition is a vital strategy that would help Arthurs to gain market power. This is because it increases market share, enhance market presence, and reduce completion. The acquisition also adds value to the formed entity through the elimination of redundancies and as well as escalating the overall revenue. Arthurs will be in a position to benefit from the additional distribution channels and acquired business processes and existing technologies. However, the acquisition is challenged by the integration problems where that cultural fit and integration of old and new organizations become problematic. In addition, the process of acquisition involves high costs and hence might have financial consequences for the firm.
Advantages and disadvantages of franchising
Franchising has various advantages to business such as that owned by Arthurs. This strategy can help him reduce the risk of the business failure because it is a proven format of the business. In addition, his services and products will acquire an established market share. The franchising also helps in acquiring a recognized trademark and brand name (Nibusinessinfo.co.uk). However, the cost of franchising is much higher, and the agreement usually involves restrictions on the business operations. If thorough recruitment is not conducted, a bad reputation can be acquired from other franchisees.
Works Cited
"Advantages and Disadvantages of Franchising." Nibusinessinfo.co.uk. N.p., 2015. Web. 1 Feb. 2016. <https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-franchising>.
Hill, Charles W. L, and Gareth R. Jones. Strategic Management: An Integrated Approach. Mason: South-Western, Cengage Learning, 2009. Print.
Seifert, Ralf W, Benoît F. Leleux, and Christopher L. Tucci. Nurturing Science-Based Ventures: An International Case Perspective. London: Springer, 2008. Print.
