Each student will write a strategic analysis report of NOT more than 2500 words. The report should demonstrate that the student has thoroughly researched their topic. Students should use examples of business practice from the scholarly journals papers, conferences, books and professional magazines to support their arguments. The strategic analysis will be on a local company. The report consists of two parts and should cover the following requirements:
1. Business background 2. What industry is it? 3. General environment analysis (economic, physical, sociocultural, global, technological, political/legal and demographic – and work out what the important facts are). 4. The industry environment ((i.e., supplier power, buyer power, potential entrants, substitute products and rivalry among competitors) and explain briefly what is significant for each). 5. Competitive environment (Is there a strategic group that you need to take account of? What is the rivalry like in this group? What capabilities do the relevant firms have? What strategies do they follow? What threats do they represent?) 6. Opportunities and threats
(Internal analysis and proposal)
1. The firm’s resources, tangible and intangible 2. Capabilities identification (explain the capabilities carefully to indicate what the firm really does.) 3. Core competency analysis (For each capability, indicate which of the four tests for a core competency it meets). 4. Propose a suitable information system solution that meets the chosen company needs. 5. Evaluate the proposed system and provide your recommendations
HI5019 Strategic Analysis
Strategic Information Systems
Part-1: External Analysis
Today, with increased challenges of the external environment and due to globalization it is found that the organizations want to expand in other parts of the world. They want to increase their market operations and thereby increase the net sales of the organization. However, it is important for them to understand the culture of the new regions, focus on their strengths, and also deploy technological solutions to achieve desired objectives in a given environment (Daft, 2016).
Today, the role of technologies has increased across the organization to improve the productivity levels of the employees. Further, these technological modules will help in improving the overall efficiency of the different business processes of the organization. The senior management thereby needs to analyze the current practices and accordingly make changes in the organization.
This report will focus on Oporto, one of the leading local restaurant companies to analyze their business environment and other practices. It will then conduct Porter's Five Forces analysis, SWOT Analysis, and even PESTEL analysis to understand the external working environment. . It will then focus on the internal environment and determine the key capabilities and core competencies through which they will be able to overcome the threats and thereby achieve required objectives of expansion. It will also determine the need of new technological platforms that will assist in their supply chain operations in a given working environment.
Oporto is one of the leading fast food restaurant chains operating in Australia. It has a Portuguese theme and specializes in Portuguese food items, specifically chicken burgers. It has more than 100 take-away restaurant outlets across Australia, India, UK, and even New Zealand. However, majority of the operations are in New South Wales, Australian.
It opened the first franchise store in 1995 and since then it has been growing at a tremendous pace. Further, as per the reports of Business Review Weekly, there were 100 locations of this restaurant in New South Wales, 5 in the Australian Capital Territory, 14 in Queensland, and 6 in New Zealand.
Later in 2009, they opened their first store in London and in 2011, opened their first store in United States in Rancho Cucamonga, California. The headquarters of the company are located in Chatswood, New South Wales. Craig Tozer is the acting CEO and the major products of Oporto include - chicken products, salads, wraps, sides, and deserts. However, it has a reputed name among major competitors in the food industry due to the quality of food and services offered to the customers.
PESTEL analysis refers to the - political, environmental, social, technological, economic, and legal factors that could impact on the performance of the organization from different perspectives.
From the political perspective, it is noticed that the environment of Australia is changing over a period. The demands of such fast food products are increasing and hence, it might happen that the restaurant chain needs to open more branches (Daft, 2016). However, at the same time, they need to consider following the different governmental policies and other norms. They need to take into account the operational laws to ensure that they do not breach any of the policies and laws in a given environment.
From the economic perspective, it is found that factors such as increased disposable income, increasing purchasing power parity of the customers, and increased demands of such items in the market will force Oporto to not only meet these demands but also introduce new products to cater to the changing needs of the customers.
The senior management at Oporto thereby needs to track the changing trends of these products and accordingly serve them in a given market environment. Also, due to increased competition, they need to consider pricing as their top-priority and accordingly serve quality products to the customers (Daft, 2016).
From the social perspective, Oporto needs to focus on their products and services in a given environment. They need to adhere to the tastes and other preferences of the customers in such conditions (Daft, 2016). Only then they will be able to achieve desired sales in a given environment.
From the technological perspective, it is noticed that Oporto needs to deploy a proper technological solution such as an Enterprise Resource Planning (ERP) solution to increase the overall efficiency of the business practices in the organization (Jones & George, 2016). It is necessary for them to not only manage the different operations but also reduce the overall queuing time in a given environment.
From the environmental perspective, they need to take steps for environmental preservation. They need to avoid providing of plastic bags to the customers and simultaneously contribute toward the afforestation activities (Jones & George, 2016).
Finally, from the legal perspective, Oporto needs to ensure that they are following all the legal rules and regulations of a given nation. It is import for them to consider different aspects such as - employment law, equal opportunities law, and minimum wages law in a given working environment (Jones & George, 2016). The senior management in association with the Human Resources (HR) department needs to ensure that they are following all the legal norms and policies in a given environment.
Porter's Five Forces Analysis
Porter's Five Forces Analysis represents five major forces that can impact on the performance of the organization. First, from the perspective of bargaining power of suppliers, it is noticed that the organization is working with multiple suppliers that will provide them with required raw materials.
Since, these suppliers are independent, they will not exercise more power on the management team of Oporto; in such a case, and they might switch the suppliers and start receiving similar items. However, from the competition perspective, the organization will face stiff competition from McDonalds, Subway, Starbucks, Chipotle, KFC, Tim Hortons, Pizza Hut, Burger King, Domino's Pizza, and other local brands (Backer, 2013).
It is important for them to overcome the market competition by formulating appropriate strategies and working in the right direction. Now, from the perspective of threat of new entrants, the threat level is moderate. The new players will need to first adhere to the rules and regulations of the government and thereby ensure that they complete the required registration process.
Second, they will face stiff competition from major players but through effective marketing and promotions, they should be able to capture desired market share in a given environment (Backer, 2013). Now, from the perspective of bargaining power of buyers, it is high, as the customers or the end-users will dominate this fast food market.
They will focus more on their tastes, preferences, demands, and other changing trends and accordingly the restaurant needs to serve them (Backer, 2013). It will thereby become difficult for Oporto to retain them unless they deploy any such strategies in a given environment.
Finally, from the perspective of threats of substitutes, it is strong, as there are multiple substitute products available in the market. The customers need to choose the products from a wide range of options available in a given environment. Oporto, under such conditions, also needs to focus on their services management aspects to overcome the market competition.
From the competition perspective, it is noticed that Oporto will face stiff competition from - McDonalds, Subway, Starbucks, Chipotle, KFC, Tim Hortons, Pizza Hut, Burger King, Domino's Pizza, and other local brands. They need to deploy best management strategies and also focus on the aspects of services management to ensure that they can overcome the market competition.
The senior management needs to monitor the performance of the employees and the currently deployed strategies in a given challenging market environment. They will be able to determine the gaps in the given processes and subsequently will be able to revise their strategies in a given environment (Backer, 2013).
The senior management also needs to determine the new demands and preferences of the customers; they can accordingly launch new products in the market to gain substantial share among the stiff competition (Backer, 2013). The role of the HR department will be vital as well as they need to train the employees in this direction and make them work as per the expectations of the organization.
SWOT reflects to the strengths, weaknesses, opportunities, and threats in a given working environment. The major strengths of Oporto include - brand popularity, increased demand from local customers, and new products developed on Portuguese theme that attracts the customers most. Also, the company shapes itself as per the local culture and thereby caters them as per the expectations of the customers.
The weaknesses of the company include - lack of proper promotions in a given competitive environment, unhealthy food products leading to obesity issues, and lack of services management framework in the organization (Köpnick, 2016). The organization is also criticized for employee turnover issue in the organization.
The major types of employee turnover include - functional turnover and dysfunctional turnover. The undesirable employees will be leaving the organization due to different reasons in the case of functional turnover, whereas in the case of dysfunctional turnover, the desirable employees will be leaving the organization.
It is the responsibility of the HR management at Oporto to focus on these issues, determine the turnover types and accordingly deploy the retention strategy in the organization. Further, it is important for the HR department and the top-level management to determine the cost of employee turnover in the organization (Köpnick, 2016). It will help them determine the major issues and subsequently focus on the aspects of employee turnover in the organization.
On the other hand, the opportunities to Oporto include - acting the people in helping the problems of obesity by introducing health-oriented food items, promoting health quotient, expanding in new territories of Australia to gain their strength in the market, and also focus on services management to increase the satisfaction levels of the customers. It will help them accelerate their growth and subsequently achieve the objectives of expansion in a given environment.
Finally, from the threats perspective, the major threats include - increased competition in a given environment and decreasing sales as customers are avoiding fast food items in their diet. It is thereby important for the organization to tackle with these threats and ensure that they achieve desired objectives in a given environment.
Part-2: Internal Analysis and Proposal
Firm's Resources - Tangible and Intangible
The organization needs to use their resources for the purpose of overcoming the major challenges present in a given environment. There are both tangible and intangible resources of Oporto that they can use to overcome the threats in the external environment. The major tangible resources include - infrastructure of the restaurants, supply chain systems, and resources to manage the restaurants in different locations (Kahana, 2014).
Further, the intangible resources include - goodwill of the restaurants, patents of the products served to the customers, their trademark logo and brand name, and other copyrights of their products and services delivered across the world. The company, however, needs to analyze their assets and accordingly deploy them in different working environment and different working conditions. They need to train the employees so that they can overcome these challenges and subsequently achieve desired objectives in a given environment.
There are several capabilities of the organization that has helped Oporto to achieve desired results in a given market environment. Their infrastructure, collaboration working approach, team work, effective supply chain design and implementation, logistics management, time management, and resources management (Duffy, 2012). It is helping the senior management of Oporto to overcome the internal and external challenges and thereby achieve desired results in a given environment.
Core Competency Analysis
There are several core competencies of Oporto through which they are able to overcome market competition and subsequently able to achieve desired results in a given environment. These include - customer loyalty achieved through better services management, brand name, their focus on managing the fast-food operations in different cultures and different working environment, materials management, and logistics system, and (Studebaker, 2015).
The organization is also benefitting from their products, services, perceived quality among the customers, and loyalty that they earning though positive word-of-mouth in a given challenging work environment. The top-level management, however, needs to monitor the performance of different strategies and accordingly deploy ways to improve the gaps found in the system (Ilut & Schneider, 2014). The senior management needs to deploy performance tools as well for the purpose of analyzing these strategies in a given environment. It will subsequently help them modify the strategies to meet the needs of the near future.
Suitable Information System Solution
Today, with increase business processes and other tasks in the organization, the senior management needs to implement a proper technological solution in a given working environment (Jung, Baek, & Lee, 2012). They need to link all the tasks and thereby improve coordination among all of them.
Further, they need to train the staff to work on these modules so that it will help them achieve desired level of optimal effect in the current work environment. Through an ERP solution, they will be able to improve the current business practices, will be able to analyze the trends and subsequently focus on their demand forecasting techniques, channelize new strategies for the different departments, and train the staff on the aspects of time management and resources management (Jung, Baek, & Lee, 2012).
It will thereby reduce overall efforts, costs, and time in managing the different complex processes of the organization. It will help the organization to achieve desired results in the future. However, the senior management can modify the strategies wherever required in the given operational environment.
Recommendations and Conclusion
Today, it is important for the Human Resource department to motivate the employees so that they can perform as per the needs of the organization (Attridge, 2009). It is noticed that motivation is the major factor that will help work as per the expectations of the organization (Rhoades et al., 2013). Also, the top-level management along with the HR department needs to identify those factors that will help the employees to work in a given environment.
Further, in a given scenario, the HR department not only needs to revamp their strategies but also train the employees on the new working modules and frameworks (Stewart et al., 2011). The employees need to be trained on the aspects of collaboration and cooperation so that they can perform as per the needs of the organization.
As recommended in the report, it is necessary for Oporto to manage their business practices, channelize their sales process, train the staff to achieve desired level of optimal efficiency in the given work environment, and subsequently overcome the threats present in the environment. Further, with the help of ERP solution they need to improve their supply chain operations, improve logistics processes, and subsequently deliver as per the needs of the organization (Su, 2014).
Even, the employees need to be trained on the aspects of these technological modules so that they can perform as per the needs of the organization. The organization, however, needs to analyze the health quotient of the customers and accordingly launch new product in the given market environment (Sahut & Peris-Ortiz, 2014). They need to analyze these market trends so that they can satisfy the changing needs of the customers.