Hubbard’s approach and strategic management
In this given assignment, focus would be given on the brand is aiming at spreading their business worldwide with a new objective of spreading to China using several analysis styles and effective strategies. The Hubbard framework provides a strong foundation of the business thereby enhancing them to carry on their functioning better. They focus on exploring new strategic plans using the SWOT, PESTLE and other forms of basic business analysis types to ensure that the work is successfully carried out.
By adopting several strategic plans and techniques, a proper framework is therefore made to predict the future growth and development using the Hubbard approach. Several factors such as political, social, technological and such are taken into account followed by a systematic analysis of the external pressures and competitions. Based on this, the micro environment of the business is taken and analyzed using the Porter’s Five Forces which aim at involving the external and global factors. Both these factors are associated with the competitive advantage of the various related organizations thereby measuring the Key performance Indicators ( KPIs) followed by a VRIO analysis. In the given context, the Hubbard’s Framework focuses on the Haigh’s Chocolate business which is situated in Australia and is making an attempt to widen their scope by increases their branches and focusing on setting up a new one in China.
In an attempt to understand the structure and framework of a firm’s internal factors and resources associated with it, the VRIO framework is used to understand the company’s capabilities that they can use in order to use it as a source of competitive advantage in the long run. Some of the tools involved in understanding the external factors involve Porter’s 5 forces, PESTLE analysis and such whereas those of the internal factors involve BCG matrix and value chain analysis. In understanding the internal factors of a business, one of the most effective tools which is still in use is the VRIO analysis.
Haigh’s chocolate aims at spreading their business on a worldwide basis thereby delivering the best chocolate experience at all times (Peteraf et al, 2014). Not only do they focus on the quality of the products but also on taking significant care towards each of their employees and customers in general and suppliers and shareholders in particular with significant focus on the development of community and environment at large (Goetsch and Davis, 2014). The company focuses on providing the best quality products and services in the whole of Australia thereby making use of the raw materials in the best manner possible to bring a productive output out of it (Rothaermel, 2015). With an increase in post production expenses which are involved in promotion and marketing followed by campaigns which has a direct effect on the profitability of the company at large. Australia has a highly competitive market structure in the confectionary industry thereby focusing on the manufacture process of the industry followed by creating a more extensive promotional process and use of marketing programs (McNeil, et al, 2015).
They also focus in determining the demands made by the customers and fulfilling their needs by providing the best services and understanding of the flaws by implementing the customer reviews to determine the consumption structure and influence the market system as a result (Hill, et al, 2014). An attempt is therefore made to provide the best quality products; the company therefore increases the efficiency of the labors with a proper management thereby strengthening the relationship with the suppliers of Haigh. Through policies of innovation, they have succeeded in increasing the customer preference thereby providing a better experience for the customers with proper connectivity with them (Wheelen and Hunger, 2017).
SWOT analysis is an acronym for strengths, weaknesses, opportunity and threats to the organization. Through this method an organization figures out their plans and strategies and helps themselves to grow its profits. The SWOT analysis for the company HAIGH’S CHOCOLATE is as follows:
It has the strong brand legacy which is actually operating since 1912 successfully. The company aims at maintaining the equity of their brand thereby emphasizing on the high quality to keep the customers satisfied at all times. Wide a wide variety of chains situated all over Australia, there main focus has been given to South Australia, Victoria and New South Wales where there branches have been set up on a wider basis. Besides the strong management system prevailing, they also qualify as one of the best in providing interesting packages with a wide variety of chocolate types such as Milk chocolates, Dark chocolates, liquor chocolates and such all of which are made of superior quality (Eden and Ackermann, 2013). The success they have achieved as a result of this business has also been made on the basis of a policy of Eastern bibly where they provide alternative offers and packages during the Easter year.
Despite the fact that they have been able to make such a huge success in this company all over Australia, the biggest shortcoming that they still go through is the failure to expand their business further on a global basis. Many attempts have been made by the company to lead in this business thereby focusing on all the important metropolitan cities and countries but have eventually failed to do so which has resulted in decrease in the market share of the company (Armstrong, et al, 2015). Another flaw that they still face is the failure faced while obtaining the certification from Fair trade Foundation which has barred them on their growth process.
With an increase in their business aiming to reach its peach in the near future, they have adopted several strategic plans in order to attract their customers. Developments have been made in the process of providing gift vouchers to increase their fame thereby making a successful promotion of their brand. Special offers and rewards have further added to the interests of the people thereby succeeding in achieving growth in this sector (Kinicki, et al, 2014). They have even taken the help of social media in advertising their business further through online selling of their products thereby delivering their services to all the sections of people. The market development plan that have been implemented by them has further helped to enhance their business in the rest if the parts of Australia with a spread of their business to other countries thereby spreading their business globally.
With the increase in consciousness among people related to health and welfare, the demand for chocolate is going down. People are now more inclined to adopt a healthier lifestyle and food habit in order to avoid the various health risks from befalling, the most common being diabetes.
One of the most crucial parts of the business involves maintaining the quality of the products which is one of the biggest challenge faced by them.
PORTER FIVE FORCES MODEL
In order to understand and analyze the structure of the company better, Haigh's chocolate makes use of certain effective strategies using the Porter’s five forces model. The model focuses on the five forces which are made use of while shaping the market and the industry in particular. Understanding of the intensity with which the competition prevails in the industry, and the profitability margin it can achieve as a result of following this are all implemented with the help of the forces applied in the model (Pritchard and PMP, 2014). The five forces involved in the process include the following:
- Threats Faced by the New Recruits:With the increase in profit level of Haigh's chocolate, many new companies may come up and make an effort to enter into the market (Hill, et al, 2014). With the entry of new entrants in the system, it however becomes troublesome for the company to expand properly considering the fact that they may result in the overall decrease in their profit margin in this industry (Shields, et al, 2015). It thus becomes necessary to bar them to enter in this industry thereby preventing the various levels of threat that they may impose on their company in the future.
2. THREAT OF SUBSTITUTES:
They involve creating a form of threat to the company if they fail to implement the right standard by implementing alternatives which fail to meet the needs of the customers. An example can be cited where tap water is replaced by Aquafina or Coca Cola replaced by Pepsi (Hudson, 2017). Substitutes can be of various types related to performance, price, and quality of substitutes available in the market where degradation is seen on the part of the promised product.
3. DEGREE OF INDUSTRY RIVALRY:
- With a decrease in the investment and resources involved in making a product, the more increases the number of competitors in the market. This results in an eventual decrease in position and standard of the company. The potential factors which are responsible in influencing the competition of the company involve:
- Presence of a competitive advantage in the market
- A constant use of innovative ideas and techniques involved.
- Based on the competitive advantage present, attaining a sustainable position in the market.
- Strategic methods involved to promote and increase in the level of advertising of the particular product.
4. BARGAINING POWER OF BUYERS:
- The customers have the ability to influence the prices of the products and the level of cost which results in understanding each product's ability and related flaws to introduce the products in the market accordingly (Bryce, 2017). The customers have a huge power to introduce the alternatives in the market based on the demands and needs of the customers. With less availability of alternative and substitute products present, it becomes difficult for the consumers to choose since they are bound to buy the only available product in the market where the sellers may even enjoy a monopolistic power thereby raising the prices. They even fail to switch to new products if they do not get similar output from other products on the process (Grant, 2016).
5.BARGAINING POWER OF SUPPLIERS:
It refers to the ability of the supplier to increase and decrease the prices of certain products over which they have full control in the market (Morschett, et al, 2015). With formation of more new alternative products having a lot many substitutes can in return affect the company thereby posing a threat to their products since customers would then be vested with the power to choose (Dinnie, 2015). The bargaining power of the supplier is directly proportional to the availability of alternatives in the market. With presence of fewer alternatives, the suppliers bargaining power increase and vice versa. This in turn provides the consumers with the supreme power to choose and switch according to their choice (Certo & Certo, 2013).
One of the most effective tools involved in analyzing the business working better, the PESTLE analysis is used which can be divided into factors such as political, Economic, Social, Technological, Environmental and legal cases related to the opportunities that the company can offer in future (Hahn, 2013). It is an extremely informative form which helps in identifying all the possible threats and possibilities that the company can work upon for its future development. It offers several opportunities:
- Assuming all the possible changes that are required need to be thoroughly accessed beforehand to prevent any form of risk from turning up through the process of Brainstorming.
- Understanding and analyzing of all those opportunities that may possibly arise during the process of change
- Examining of the possible threats and issues that may turn up at any possible time while the work is being carried out to work upon all the flaws and improve them for better.
- Analysis of the cost benefit involved in the particular product to carry out the function successfully.
7Ps of marketing
The 7Ps aim at controlling both the internal and external environment of the market thereby making all efforts to properly scrutinize all the flaws and work effectively to maximize the customer satisfaction.
Product: The products sold by the market are based on a number of factors and characteristics giving more emphasis on the advantages and benefits that they provide to the customers as a result (Morden, 2016). Understanding the benefits that are associated with the particular product and in this case, Haigh's chocolate helps the company to examine the needs of the customers and the aspects related with it.
Price: It involves the strategies made in accordance with the pricing policy of the products involved in the business and how that would affect the customers in the near future (Hitt and Ireland, 2014). Proper understanding and identification of the customers help to frame the cost prices of the products thereby maintaining their profit margins and other related costs. Special offers and discounts are provided by the company to further induce the interests of the customers thereby retaining their competitive advantage in the market.
Promotion: Several promotional strategies have been made by the company to aware their customers about the details about their products and services using several sales tactics to attract them. Use of social media and campaigning through posters are other effective ways.
Place: Choosing the right place to set up the business is one of the most crucial parts in the success of the business and distributed successfully. The place should be such so as to make it easily accessible to the customers and ensuring an easy availability of their products to meet the needs of the customers at all times. With the use of effective merchandising techniques and design, maintaining their standard in the competitive market can be assured. Therefore in starting up any form of business,. One of the key factors essential to carry on the business successfully is choosing the right location with the use of marketing tactic.
People: They refer to the staff members involved in the business and the salespeople who do the work of promotion for acquainting all people about their presence. Providing the best customer services help to keep the customers satisfied and place the position of the brand in the right manner. Recruiting the right type of people is therefore essential to improve the skills of the overall working in the business.
Process: They refer to the processes involved in the delivering of the products and services to the customers thereby ensuring a successful working of the business. A good delivering of the process ensures the standard of the service provided to the customers and saving time and money thereby increasing the efficiency.
Physical evidence: They refer to what the customers face and experience in their real lives while interacting in the business process. They focus on certain portion including the physical environment that is related to the business, its layout and branding and packaging processes involved all of which are made in accordance with meeting the customer satisfaction.
Awareness of Ethical and social considerations in strategy
While conducting of a strategic management plan based on the company named Haigh’s chocolate, several ethical and social considerations are taken into account as a part of the strategic plan (Carroll and Buchholtz, 2014). This helps them to ensure their standard in the market thereby focusing on the legal behavior displayed in the organization. A systematic code of conduct ensures the work in the organization better and helps in determining the principal factors involved in the business.
The societal norms are based on the firm and industry that the brand comes in thereby influencing all the workers in the organization including the managers, owners and other employees associated with determining the work. Morality and loyalty of the employees and towards the customers in particular is essential to determine the sales involved (Chang, 2016).The stakeholder pressure is responsible to enforce the business thereby implementing the ethics and policies in the right manner based on public concern. This in turn has resulted in the development of the business in the long run and determining their hold over the market and against their other competitors. Loyalty and trust therefore creates a base to determine the ethical conduct and culture of the organization.
Suitable competitive advantage
One of the biggest competitors of Haigh's chocolate are Cadbury and Nestle where they make use of several effective strategies to sell their product based on the quality and pricing policies involved. They therefore focus on setting up a specific target market to reach their specific goals and objectives to safeguard their position. They make an attempt to make sure that their product does not face any lessening of their bargaining power with the infusion of more alternative products which may deal with a better taste and quality (Barkema, et al, 2015). Based on all the analyses, it has been seen that Haigh's chocolate is one of the most famous companies to have achieved their position in Australia and is making an effort to spread worldwide with focus on China as their next target. With the help of the marketing mix policies they further ensure their competitive position in the market thereby influencing their customers to make their products as one of the best (Stead and Stead, 2013) .Not only do they focus on providing better quality of their products but also makes them affordable for their customers to maintain their position in the market.
It is therefore crucial for the company to implement the sustainable means of production in an effective manner to ensure a successful work in the organization. Haighs chocolate should take one step forward towards ensuring the variety and vitality of the product by understanding the possible risks that may befall at any time thereby making a position of their own brand in a global basis (Griffin, 2013). Understanding the flaws and working on them for a better development in the future ensures the quality of their product and with the help of social media and other marketing tactics they can further implement the development process. Making the products as appealing as possible, with implementation of new and innovative packaging styles ensure the customer's attraction (Vogel and Güttel, 2013). The company is already making attempts to enforce their strategies and choose the right places in order to carry on their business forward. With the plan of establishing their branch in China, they have made their business stronger and more effective provided they use all the strategies and analysis in the right manner for a further future development in their long run.
Thus it can be seen that a well developed and planned strategic management is essential for any form of business to carry out their work effectively. Out given company, Haigh's chocolate is one of the most famous chocolate brands of Australia which has spread too many of the states and is making plans to further spread on a global basis starting with China. Their biggest competitors being Cadbury focus on implementing the strategic plans in such as way so as to make sure that no other company of brand can take their position in the long run. They aim to follow all the important marketing mix policies and with the help of PESTLE and SWOT analysis, the different sections have been thoroughly checked and all the flaws existing need to be rectified for a successful development in this industry and get worldwide fame in the future.