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Strategic Management Procedure of Restaurant Brand Company Limited Assignment 3 Answer

Strategic Management

Assessment 3

Learning outcomes assessed:

2. Research and design strategies to help an organisation achieve a sustainable competitive advantage consistent with its values and vision.

ASSESSMENT 3: Developing a strategic competitive plan. Word limit: 2500

In Assessment 1, you became familiar with Restaurant Brands New Zealand Limited’s (RBNZ) Internal and External environment. Using this information, you are required to write a report outlining strategic directions RBNZ could take, and recommending one of them. Your recommendations must be justified with the appropriate theoretical models, evidence and literature, and agreeing with

RBNZ’s Vision, Mission, and Values. You may complete this assignment individually or in pairs.

Include:

  • Introduction (300 words)

oRe-introduce RBNZ; include their vision, mission statement, and values briefly. Discuss the main findings from your Internal and External analyses.

  • SWOT analysis (700 words)
    • In their strategic plans, RBNZ like to include three Values: 1. Social responsibility, 2. Environmental sustainability, and 3. Technological progression. However, you can only include two of these dimensions in this report. Therefore:
      • Provide a detailed SWOT analyses (include SWOT table) using findings from your Internal and External analyses to develop a minimum of four strategic options.
      • And use two of the three Values shown above in your SWOT analyses when developing your strategic options
  • Strategic Options (700 words)
    • Explain the strategy options you have determined from your SWOT analyses, using the appropriate theories you have learned.
    • Evaluate and justify the strategy options using the RACES framework (Resource, Acceptable, Coherent, Effective, Sustainable).
  • Best Strategic Option (600 words)
    • Discuss which strategy or combination of strategies you believe would be the best option for RBNZ and which strategies should be rejected. Ensure you justify your choices.
    • Discuss the impacts, trade-offs and unintended consequences that may occur if your strategy is implemented.
  • Conclusion (200 words)

(Please note that word counts are only suggestions as to the breakdown of your report).

Information sources:

Annual Reports - look on the company website

  • Other websites (see list in course outline)
  • Business magazines and newspapers
  • Academic books and journals (particularly for generic information about the retail sector)

Professional appearance guidelines

  • Print on both sides of the page
  • Be consistent in your formatting for things such as headings, subheadings, numbering, and in the way graphs and tables are presented
  • Leave a 3 cm space on the right hand side of each page for comments
  • Text should be 1.5 spacing
  • You may also include appendices. Appendices contain extra or supplementary material which gives extra information which is too detailed to be put in the main report but you think will help illustrate some aspect of the report.

Answer

STRATEGIC MANAGEMENT

Introduction 

Strategic management referred as consistent monitoring, analysis, assessment and planning of everything important for the organization to fulfill their business objective and goals. This assessment aims to discuss strategic management procedure in respect to RBNZ or Restaurant Brand Company Limited within New Zealand to help its leaders examine organization’s current situation, outline strategies, deploy and evaluate their effectiveness for the established strategies. The assessment will consist of SWOT analysis depending on the findings from external and internal evaluation related to the selected organization, produce strategic option for them as well as provide an effective strategic alternative for achieving business objective or goals. 

The RBNZ organization is a strong corporate franchisee with collaboration with several top brands like Teco Bell, Pizza Hut, KFC and many others. The company was founded in the year 1989 in Penrose, Auckland. In the initial, the respective company use to acquire brand like Pizza Hut and KFC in 1997 to continue their operation effectively within the marketplace (Restaurantbrands, 2018a). At the same time, the company took the decision to incorporate with PepsiCo, also called Yum! Restaurant, however later RBNZ built their own payroll management, logistics, marketing, financial and property enhancement in an effective manner. The company have the vision to be a top operator of innovative and enduring QSR brand within New Zealand (Restaurantbrands, 2019d). The mission is to service potential customer effectively, and values relate to achieving better development opportunity as well as competitive position within the NZ marketplace. The findings from internal analysis highlighted that resource as staff, funds, plant or equipment deliver competitive benefit, where human resources and borrowing ability partially competitive need attention. In addition, the external analysis highlighted that the company gets tough rivalry from other brands operating in the same industry, buyers and suppliers hold power to influence profitability rate. The political, legal and technological factors offer a certain threat to the growth of the company within NZ; however, the economic, environmental and social aspects within market offers RBNZ with the opportunity to lead their business growth.

SWOT analysis 

The rapidly growing innovation, customer expectations and technologies has forced corporate to make decisions as well as thing strategically to remain successful. SWOT analysis is an effective tool in strategic planning and managed approach to examine the utilization of energy, time and money to enhance productivity as well as growth (Phadermrod, Crowder & Wills, 2019). Depending on the findings from the external and internal analysis, SWOT evaluation of RBNZ or Restaurant Brand Company Limited within New Zealand has been undertaking here to depict potential understanding of the organization performance and element impacting productivity. 

Strength 
  • Strong brand image
  • Patent
  • Profitable image among consumers
  • Strong connection with top brands
  • 283 stores with 120,000 consumers served on a routine basis (Restaurantbrands, 2019a)
  • Favourable contact to distribution channel
Weakness 
  • Poor marketing efforts
  • Untrustworthy suppliers
  • Franchise administration internationally has been challenging
  • Poor concentration on R&D


Threat
  • Alteration in legislation and laws
  • Higher lending rate
  • Technology diffusion
  • Intense rivalry
  • Risk of substitution
Opportunity
  • Positive effort towards environment sustainability under new product development
  • Effective technological progression (Restaurantbrands, 2019d)
  • Strong compliance with copyright and intellectual property act
  • Products with health benefits
  • A skilled and educated workforce
  • Political stability 


In reference to the above table, the RBNZ organization has strength related to strong brand image and favourable access to the distribution network (Restaurantbrands, 2019a). These can effectively utilize to deal with business loop wholes like inefficient support from suppliers and adequate marketing efforts. The company’s strength has been its capability to develop competitive benefit, where weaknesses need a realistic approach to strengthen corporate profitability. While threats can place RBNZ to encounter impede in business productivity, the opportunity has revealed a new alternative for the organization to achieve growth and profitability. 

Environmental sustainability: In order to profit from the accessing opportunity like better environmental sustainability and technological progression, the strategic option as product enhancement for the new marketplace would be significant. In this, RBNZ enhances new services or products like healthy or organic eating items and sell them in the latest marketplace with compliance with the digitalized network. 

Social responsibility: Even it needs more upfront investment, it pays rapid growth. The product produced with the eco-friendly process and digitalized network likely to decrease carbon footprint supporting environmental sustainability. The strategic partnership is another option that the company takes to form a contract with other organization in progressing towards agreed goals, while they remain separate business (Bryson, 2018). 

This can add to the opportunity of receiving a skilled and educated workforce by enabling RBNZ to take benefit of the partner's complementary strength with remaining control in their own business. While strategic option like market penetration to be beneficial in selling more of existing products or services, the existing customer base potentially attracted through upselling, devoting huge budget, marketing effort and adding sales representative to reach the latest account in the current marketplace. In order to achieve so, opportunities as effective compliance with intellectual property act and strong copyright would be favourable to mitigate the threat of substitution as well as frequently altering market law. The analysis of business internally highlights that selected operation is efficient and simple as possible, where the company making of their existing resources can boost profitability as well as helping to finance the growth plan. The selected restaurant company can also seek acquisition as other strategic option to power their growth exponentially within New Zealand’s restaurant industry. In the horizontal acquisition, the organization has the opportunity to acquire the rival company and taking over it by either rebranding it or undertaking within the umbrella of current business (Colombo, Moreira & Rabbiosi, 2015). This can be effective to mitigate the ineffectiveness of the RBNZ business to administer the franchise within a challenging marketplace profitably. Moreover, vertical acquisition related to purchasing organization engaged within distinctive phage of production within the same industry. For instance, the selected company may buy one of their suppliers to reduce material expense or may buy a distributor to push more of the products within the marketplace.  

Strategic Options 

The business entries are bound to manage and address the key resources and elements for a successful run in the market. The RACE framework includes brief analysis of the presence of necessary business elements for success. In the RACE framework, it is observed that the resources, its acceptability, coherence, effectiveness and sustainability. The restart rant brands RACE framework is evaluated as follows:

The RBNZ has a franchise of 283 stores of KFC Australia, Pizza Hut, Taco Bell and Carl’s Jr. Everyday Company operates and provides services to about 120000 customers with 9000 employees. The company includes a growth strategy by developing its financial capital through acquisition of 75% stakeholders in the market. The company make a sustainable relationship and networking with its suppliers for a smooth movement of raw materials and resources (Restaurantbrands, 2019c).  The physical resources of the company include assets, plant, and machinery. As per the tangible resources, the financial debt capability of the company is sound and proper to create a competitive advantage by making constant investments. The company has patents of KFC Australia, Pizza Hut, Taco Bell and Carl's Jr, which increase its right to operate and manage its franchise. The marketing strategies of the company are capable of improving the revenue generation by 3.1%. In addition to that, the company has reliable goodwill value, hr practices to increase the soft skills of employees and strategic options to enhance its business brand value in the market. The differentiation in the products is another strategic capability of the entity. In the current market, RBNZ is trying to expand its franchise by acquiring righties of McDonald and other fast-food chains in the market.

The resources shares by RBNZ stated that the resources are effective to increase the performance of the company in the market. It can be stated that the resources of the company have the potentiality to create the capability for the business. The tangible resources of RBNZ helping the company have the capability to structure its outer area of the business effectively. The company debt, fund generation options, stakeholder’s acquisition and sound cash flow management, has helped the company to structure its financial stability in the market (Borland et al. 2018). This certain help the company to expand its brand value and brand popularity through the engagement of its tangible and intangible resources. The company has some of the unique strengths such as 283 stores, a franchise of renounced fast-food restaurants has the capability to attract, engage and retain customers.  The training and development of the staff members increase their skills to deliver quality services to the customers of Restaurant brands. The business deal with Taco Bell has provided NZ$91.4 million earnings to the company, which could he use for investment in the business expansion.  This has increased the capacity of the company, in the near future, the company has planned to acquire more fast-food chains. The strategic decision is favourable for the company, as it will help to enhance its market share and competitive edge. The financial resources of the company dictate that increase in the net income, cash balance and management of investment values have the ability to meet the stakeholder's interests (Odt, 2019). However, there is a financial debt of the company, which is questionable to a certain extent. It also increases risks of delay in the payments of advances, debts and shareholders returns in the market.  There are interesting resources that increase the effectivity and sustainability of over performance of Restaurant Brands. The increasing number of the franchise is some of the resources that increase the effectivity of market performance. It helps the company to enhance its brand value in the market. The sound goodwill value creates sustainable growth of the business in the market. The company is trying to acquire the rights of McDonald fast-food chain, which can increase its customer acquisition rate in the market (Restaurantbrands, 2019b). The patents acquisition is another resource, which has developed rights for Starbucks Taco Bell and KFC for the restaurant brands. From the external analysis, New Zealand has a low inflation rate that has helped the company to maintain a low-cost alternative for its product and services. This means the customer’s gains low-cost products comparison to average rates in the market. Thus, the RBNZ has a sustainable market hold and market approach. 

Best Strategic Option 

From the SWOT analysis and Race framework, the customer relationship strategy is introduced by RBNZ The customer relationship strategy has imported the relationship and connects of the company with its franchise clients and customers that have helped the company to create its brand and goodwill value. The acquisition strategy is another approach introduced by the company. The acquisition approach has helped the company to acquire patents and rights of five fast-food chain brands. With the usage of this strategy, the company has been able to expand its business in New Zealand. Acquisition strategy has helped the company to introduce about 280 stores of these fast-food chains in the market. In the future strategic approaches, the company has focused on the growth strategy to expand its franchise business (Restaurantbrands, 2019b). The company has already acquired the patents of Starburst and Taco Bell. The company is trying to achieve McDonald fast-food chain patents to increase its brand management franchise. The growth strategy has also introduced to expand its financial capital by acquiring 75% of stakeholders in the market. The strategy has been helpful for the entity to generate funds and make an investment in the company. The financial debt strategy applied by the business might not provide favourable resources to the company (Kartajaya, Kotler & Hooi, 2019). The financial stability of the company might be at risk of the financial debt increased. This might also affect the shareholder's relationship for the RBNZ. The late or low payment of a return on investment to shareholders might affect the share price of the entity. In the case of field affectivity, healthy, and safety, strategy is applied by the business for increasing employee morality and performance. Some other strategies could be developed by the business entity in regards to cover the weaknesses, embrace opportunity and reduce threats of the entity in the marketplace. Social media marketing strategy is one of the strategic approaches that might help the company to reduce its poor marketing efforts. The social media strategy helps to increase promotions of the product and services provided by RBNZ. The impact of social media strategy is it could address a mass audience within a short time (Kasemsap, 2018). Thus, the company might be able to increase its brand recognition and brand value in the market. The social media increase customer international and communication that improves customer engagement, satisfaction and loyalty. An unintended consequence might occur with the introduction of the social media strategy. The social media campaign is fruitful, although any negative comments of consumer might begin loss to the company. The diversification strategy is another approach and strategic option that can engage for better expansion of the business. In the strategic diversification option, the company can make an investment in other businesses to franchise brands, which operates in other sectors. The diversification strategy can include investment in the food and beverage market and acquire patents and rights of companies such as CocaCola. This increases the diversification approach and develops franchising more companies under the RBNZ brand. The introduction of this strategy certain increase income generation option for the company. The increase in income and earning helps to meet its financial debts in the market. However, diversification might limit the investment and management option for the company due to the increasing number of a different business franchise. In relation to improving research and development section, the company can engage the differentiation strategy. The development of differentiation strategy help to introduce quality features in the products, which are less available in the market. The differentiation strategy helps to develop the franchise and patents of its fast-food chain products in the market (Borland et al. 2018). The increase in brand recognition and sustainable customer engagement could be possible for the company with the introduction of this strategy.     

Conclusion 

In assertion to the above study, it is concluded that for leading effective strategic management, the consideration of several internal and external elements becomes crucial. The strength of the RBNZ organization has depicted its unique value and benefit over rivals. While strength has been an important capability of reducing business ineffectiveness and threat, opportunities have been strong elements to be utilized to improve market share. The four of the strategic option discussed has the potential for restaurant business enterprise to achieve explosive profitability rate, whereas risk and cost of investment need to be paid attention to attain success. In achieving business development, environmental sustainability and technological progress become crucial to have long-term survival of the selected organization within the competitive marketplace. The RACES structure has been evaluated to determine the crucial elements like the resource, acceptable, sustainable, effective and coherent for achieve success in business development. The resource of the organization has the potential to generate capability and acceptable, coherent or effective workforce as well as funds to improve competitive advantage. The strategic option for RBNZ or Restaurant Brand Company Limited within New Zealand based on the analysis of the strength, weakness, threat and opportunity for the organization has been acquisition tactics to acquire growing fast-food chains. The social media marketing added to the strength of promoting services and products to the diverse customer with ultimately increasing profitability. The diversification tactics have been effective to foster income generation alternatives for the selected organization. The significant utilization of strategic option would be favourable to add the sustainability of business within the competitive marketplace.

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