池州小鱼论坛,熊维江,又一年
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The threat identified by SWOT mechanism was the competition from other pizza delivery points. The delivery speed as well as that of service performance is a key factor for customer satisfaction. Since competition is only based on these factors, Alice’s restaurant must ensure a fast and efficient speed concerning its service delivery performance without compromising the quality of products.
Five-force Model
Michael Porter's Five-force Model identifies five forces in an industry that determine the scale and extent of competition, these five forces combine to influence the attractiveness of the industry and the competitive strategic decisions of existing companies (Dessain, S., & Fishman, S. E., 2017).
As far as Alice's Restaurant is concerned, the bargaining power of suppliers refers to suppliers’ ability to obtain better prices when Alice's Restaurant purchases raw materials from them. Bargaining power of buyers refers to the ability of consumers to profit from the state in which Alice's Restaurant and bidders oppose each other by means of lowering prices, demanding higher product quality or requesting more service items. The rivalry among competing sellers in the industry refers to the competition between Alice's Restaurant and other restaurants in terms of price, advertising, products and services. Potential entrants will bring new production capacity and require a certain market share. Threat of new entrants to the industry depends on the entry barriers of the industry. The food provided by other restaurants or food companies may be a substitute for food provided by Alice's Restaurant, thus creating a competing behavior between them. This competition from alternatives will affect the competitive strategy of Alice's Restaurant in various forms.
4. a) Identify the appropriate tool for measuring how well Alice’s restaurant is operating
PEST analysis, SWOT analysis and Five-force Model
b) Description on how the tool works and the elements it measures.
PEST analysis
The PEST analysis analyzes the impact of the external environment on the development of Alice’s Restaurant from the political, economic, social and scientific aspects. Politically speaking, the local government has made clear regulations on many aspects, such as the quality of food, hygiene, qualification of employees, as well as catering waste disposal and environmental protection. Alice’s Restaurant needs to strictly abide by these laws and regulations. From an economic point of view, since the global financial crisis in 2008, the global economy has recovered, but the overall economic level and the consumption power of the general public have not yet reached a high level. Therefore, the price of food provided by the restaurant cannot be high.
From the perspective of social factors, modern consumers, especially young consumers, have become more and more fond of eating out, but in addition to being more picky about the taste of food, they have higher requirements for the environment, service and food health of a restaurant. From a technical point of view, with the development of network technology services, Alice’s Restaurant can adopt new technologies in ordering and payment, giving consumers more convenience.
SWOT analysis
SWOT analyzes the internal environment of any business organization hence providing a comprehensive view of the Alice’s restaurant’s situation. SWOT determines internal strengths and weaknesses as well as the opportunities and threats Alice’s restaurant is exposed to from the external environment. Using this tool, the interested parties are able to conduct and evaluation of the company relating it to the industry rivals (Grant, R. M., 2016). The strengths refer to the competences that the venture possesses such good management team while the weaknesses of a company describe the existing operational gaps that reduce the maximization of available resources such as incompetent management or insufficient cash flow.
Identifying internal weaknesses and external opportunities lead to the business understanding its current situation and where it deserves to be in order to achieve its strategic goals. Threats facing Alice’s venture involve competition and changing technologies that the business has to adopt in order to remain competitive. SWOT involves the collecting of data concerning sales trend, profit trends, customer and employee satisfaction levels. Analysis of the information enables derivation of strategies to minimize weaknesses while maximizing strengths. The strategy combinations also aim at lowering the threats while aiming at maximum opportunities. After using SWOT for analysis, Alice’s restaurant should focus on the threats and weaknesses where it can achieve the greatest difference (Grant, R. M., 2016).
Five-force Model
Porter’s Five Forces Model summarizes the five forces that influence the competitiveness of an enterprise in the industry and provides a basis for companies to develop a correct competitive strategy. For Alice's Restaurant, most of the raw materials needed are raw materials such as flour, meat, vegetables, etc. Since there are many objects to be chosen in raw materials markets, the suppliers’ bargaining power is not high. There are many direct competitors for Alice's Restaurant, including various types and sizes of restaurants. Therefore, consumers have many choices, so consumers have higher bargaining power. Judging from the threat of new entrants, due to the low technical content of the catering industry, less high requirements for funds, so the threshold of catering industry is low, and new entrants can bring food of new tastes to attract consumers' attention. Therefore, Alice's Restaurant faces with more threat of new entrants. About the rivalry among competing sellers in the industry, pizza is one of the foods that consumers love. There are many restaurants selling pizza. These companies compete in quality, price, service, marketing, etc., for Alice's Restaurant, the rivalry in the industry is very intense. Considering threat of substitute products, as globalization deepens, food from all over the world can be easily accessed in various markets, so there are many substitutes for pizza, and the competition from alternatives faced by Alice's Restaurant is also very intense.
Through the above analysis, it can be seen that the production technology threshold of the catering industry is low, pizza is often sold at a low price and the consumers are wide. Therefore, it is not suitable for Alice's Restaurant to adopt a differentiated management and centralized strategy. For Alice's Restaurant, a cost-leading strategy is appropriate because the suppliers’ has low bargaining power and Alice's Restaurant can control the costs of the products better. Alice's Restaurant can withstand the threats from the other four forces by controlling costs.
5. Value added by a transformational leadership to accompany
Essentially, organizations suffer great losses as a result of unsatisfied employees. Henceforth, a transformational leadership is critical in reinventing the company’s culture which adds value to its clients’ experiences. Transformational leadership ensures that the older culture which is obsolete is discarded and a new organizational culture which entails much employee and customer engagement to measure their satisfaction levels is put in place.
This new culture installed by transformational leadership demonstrates the characteristics of an understanding of the company’s mission, the need for change, improved communication, defined purpose and aligned values, a clear vision, the right quality of staff alongside measuring standards for performance. Moreover, a transformational leader ensures an innovative climate for the employees thus enhances self-efficacy. This increases teamwork and motivation among the employees who enjoy job satisfaction thus increasing productivity (Mittal, S., & Dhar, R. L., 2015). This is because this kind of leadership aims at improving the well-being of human resources who are the most crucial asset of any business organization.
References
Dessain, S., & Fishman, S. E. (2017). Chapter 7: Porter’s Five Forces and the market for angel capital. Preserving the Promise, 49-62.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Igliński, B., et al. (2016). Renewable energy production in the Łódzkie Voivodeship. The PEST analysis of the RES in the voivodeship and in Poland. Renewable and Sustainable Energy Reviews, 58(5), 737-750.
Meihami, B., &Meihami, H. (2014). Knowledge management a way to gain a competitive advantage in firms (evidence of manufacturing companies). International letters of social and humanistic sciences, 3, 80-91.
Mittal, S., &Dhar, R. L. (2015). Transformational leadership and employee creativity: mediating role of creative self-efficacy and moderating role of knowledge sharing. Management Decision, 53(5), 894-910.
Sallis, E. (2014). Total quality management in education. Routledge.
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