Diversification - Harvard Business Review Pest Analysis

Question: Discuss about the Strategies for Diversification, Harvard Business Review? Answer: Introduction As a marketing consultant, the chosen organization is Tasty African food known well as an African restaurant in London. Tasty African food offers the diverse menu to its customers with superior quality food and services. The major goal of the business is to provide the appropriate variety, ambience, entertainment and effective staff members to develop the best approach for people in the market place. The business aims to remain the high quality food and services with respect to clients satisfaction. The vision of the business is to offer high quality and nutritious food to the customers. (Grant, 2000) Assessment of market environment SWOT The SWOT analysis of the chosen restaurant are as follows: Strengths Friendly and cooperative staff Effective schemes of training and development Proper involvement through trust and delegation Customer loyalty provided by Tasty American Foods nt systems and process Weakness Lack of new products Poor competitiveness and high amount of prices Financial issues Regular absence of staff Poor communication Opportunities There are opportunities with major features that helps in the effect of the performance such as: Competitors strengths and weaknesses Technological advancements New markets Threats Levels of unemployment Environmental laws and policies (Zapoli, 2005) Pest analysis Political factors: The government of UK creates strict rules and regulations for the food market. There are increased level of rules and regulations in the market place. Economic factors: The market is rapidly growing and it is easy to enter the market. Thus, it can do better as the price factor is important. (Ansoff, 2007) Social factors: The people in UK have busy lifestyles but they offer quick and convenient services food of African taste. Thus, people are health conscious and look for healthy and tasty foods that are offered by Tasty African foods. Technological factors: The Tasty African food plays an important role for the ongoing success in the company. Online marketing are getting done via games, promotions of new products and offers on the website. (Williams, 2010) Target market The target market of the restaurant includes the right target market of African students, entrepreneurs and adults. After successful research, the restaurant found that the restaurant could be set on customer satisfaction based on the culture. They are very selective in case of quality and they cater to different market segments that involves tourists during the summer seasons. They provide the best place and open to entertain the people from the age group of 25-45 years of age. The restaurant is not limited to African people but also attracts major parts of UK. (Jorgensen, 2003) Marketing mix The chosen marketing mix is important to meet the needs of the customers to satisfy the needs with respect to promotion, price, place etc. Products: The restaurant help to meet the needs of the customers with important aspects of function in terms of high level of performance. Ambience is highly important and the quality of food plays a better role to attract the customers. Food includes all African foods and beverages. (Mintel, 2009) Place: The restaurant is located in UK region to attract the African tourists, students, and corporates in London. The restaurant offers huge facilities to the customers and allows unique feature to develop the culture as well as tradition in the famous city called as London. The use of culture and symbol represents tasty foods with proper use of culture in the restaurant. Promotion: Promotion is the major technique to communicate with the customers. It help the customers to involve in the process of encouraging consumers to avail the offer. It includes promotion and Tasty African food uses print media, electronic mediums and road shows, public relations to promote the brand and the products. With the help of trade magazines and print mediums, the target market is accessible to seek for the products. (Lynn, 2009) Price: Company uses penetration strategy of pricing to develop the larger volumes of sales and it starts with low price offerings to the increase on prices. Porters model Porters five forces model is based on five forces such as threats of entry, supplier and buyers power, substitutes and competitors etc. The threats of entry offers new skills and to increase the market share. There are major barriers to entry such as Economies of scale Product differentiation Capital needs Access to channels of distribution and Government policies Suppliers: Suppliers can exert bargaining power on respondents in an industry by increasing prices of goods, thus, powerful suppliers can meet with the profitability in the industry. Suppliers power depends on market situation and it helps to improve the ability of the industry. The supplier can integrate the business and there could have improvements in the ability of the industry. (Porter, 2005) Buyers: Customers focuses on high quality products and services and the customer is powerful if it is focused in high volume. The buyers are likely to shop for favorable price and buyers are less price sensitive. The buyers can also seek for alternative suppliers and it might play an important role in terms of product, therefore, the buyers are likely to shop for the favorable cost and believes in selective purchases. Buyers are usually less sensitive in the industry. Substitutes: With respect to the prices, consumer switches the products and industry. The industry might suffer in terms of earnings and profits. Substitutes limit the profits in normal cases and also decreases the amount. Rivalry: Rivalry include the related restaurant besides the destination such as Duntai Ltd and Squires African restaurant in London. The company might suffer in terms of loss of clients if they offer high prices. There might have chances that the company can move to the competitors. Threats to entry: There are possibly high entry of threats with respect to the changing needs of customers and hygiene as well as healthy food. Good hospitality is important for customers and they prefer to select the health aspects. (Mason Stark, 2004) Needs and wants of customers The major needs of the customers are to focus on the healthy and hygienic food of superior quality. Customer looks for high variety of foods and soothing ambience is required to attract the customers. Innovative products and offerings are important for customers. Thus, they seek for excellent services, quality of food as well as ambience to enjoy their food and time with families or friends. (Napier, 2006) Customer needs and wants Availability of products in the Restaurant. Less waiting time for food Soothing and peace environment for food enjoyment Ambience and varieties of food offerings High quality and fresh healthy food for value (National statistics, 2010) Product / service in the organization Tasty African food offers high blend of all African cuisines from multiple parts of Africa. The menu is concentrated to have a range of varieties. This changes every six months with specials tradition. Thus, the staffs, kitchen and house staffs will be trained well in terms of food preparation and presentation. This way, it offers high quality services to the customers. They will ensure that the customers will be offered with the strong environment and best place with the comfortable and relaxing as well as appealing unique experience. Pricing strategies used for the products / services The restaurant offers multiple courses that includes fixed pricing strategy. It involves starters, deserts, African cocktail drinks etc. The restaurant is very particular about pricing and the menu varieties in terms of the experiences. The restaurant is charged very reasonably with a maximum menu price of 12 pounds. Thus, it appeals the structure of the restaurant i.e. the factors such as services that contributes to the overall experiences. (Tasty African food, 2015) In case of Tasty African food, the restaurant offers high level of opportunities for various ethnic of the restaurants and seeks for high quality food. In west and South London, there has been high opportunities to offer the good pricing schemes to the customers so that customers can select the food accordingly. The appeal and the structure of the restaurant are known to be the most important factors of consideration and adds to the overall experience of the customers. Therefore, the restaurant is deliberately priced at a mid-tier level that allows people to eat at a high quality restaurant on a lower cost. This way, consumers are happy always with the price related items and focuses on high quality food. (Reuvid Millar, 2003) Recommendations Promotion is all about communication and the Tasty African foods are lacking effective communication strategies. It should ensure proper awareness on the existence of the product as well as the positioning of the products in the minds of the customer. Television and social media plays a great role to attract millions of customers and Tasty African food uses these channels to attract the target group. Packaging is done in an appropriate manner and company also offers buy one combo offer and get the beverage drink free to sustain and create customer attraction. Therefore, there is a need to use major activities for promotion. It should be based on market strategy and budget of the company. (Barrow. et.al, 2005) The Tasty African food should split its promotion into two major types called as above the line promotion and below the line promotion. The above the line promotion will help the restaurant to promote its products and services through independent media such as advertisements on television and newspapers. This way, the Tasty African food can target the right kind of audience towards the restaurant. This will help the company to succeed in the market place for long term. It will also increase the level of customer retention. With the focus on below the line promotion, the promotional activities like direct emailing, discounts and offers schemes, money off coupons etc. will help to target the right audience. (Riley, 2015) Promotional message for communication The promotional message that could be used for communication can be formulated as a unique restaurant with superior quality and great food served in an eclectic atmosphere. With the selection of famous business publications and mediums, specific market penetration will be chosen for the entire population. The clients will also attract with the help of companys website. Therefore, Tasty African Food should try to encourage its customers with the help of media promotions and advertisements. This way, it can increase the life-span of the company through maximum advertisements. It will be able to manage the segments of customers who can enjoy high quality food and services. This will create the effective advertisement campaigns and it will use the concept of Spice of Life with the image and recognition of local press and medias along with the diverse menu. (Binks Ennew, 2007) Special events and promotions and online communities will also increase the source of marketing. Thus, the brochures should be provided to the guests to display the food prices, varieties and menu. This way, it will be able to produce high quality and well-maintained website. Online orders will also increase the maximum potential customers and their visits to the restaurant. Issues There were issues in terms of communication among staff members. Due to lack of communication, there were issues with effective implementation of marketing plan. Interviews with customers and information collected from questionnaires also were limited that limit the responses in front of the staff members. There are issues with every marketing plan and the initial expenses need to be financed in a suitable manner. The current business performs with the effective knowledge and skills of the consumers but the marketers faced challenges in terms of timeline as well. There were less time to implement the market plan. The success of any marketing plan is based on its management and implementation. It needs to be implemented carefully. Thus, it needs proper planning with forecasting. Marketer faced challenges with the bureaucratic layers in implementing the marketing plans. There were no IT based system to attain exact information on time. Thus, it should be dependent on strategic IT system. Information planned should be based on the proper planning and it should be correct. If the marketer will use contingency plans, the problems can be fixed successfully. (Collis Montgomery, 2008) Conclusion To conclude, it must say that the assignment focused on writing the report to understand the strengths, potentials, customers needs and wants etc. to start the Tasty African Food restaurant in London. Thus, the assignment specified the target group with respect to the SWOT, porters factor analysis followed with the PEST analysis to understand the impacts of the factors in the environment and the business in the market place. References Ansoff, I. H. (2007) Strategies for Diversification,Harvard Business Review, Vol. 35 (5), pp.113-124 Barrow, C., P. Barrow and Brow, R. (2005), The Business Plan Workbook (5thed), London, United Kingdom, Kogan page Binks, M.R. and Ennew, C.T. (2007) the Relationship between UK Banks and their Small Business Customers,Small Business Economics, 9(2), 167-178 Collis, D. and Montgomery, C. A. (2008) Competing on Resources,Harvard Business Review, Jul-Aug p140-150 Grant, R.M. (2000) Contemporary strategy analysis, (3rd ed.), Blackwell, Malden Jorgensen, A. S. (2003) Restaurant marketing and advertising: for just a few dollars a day, Atlantic Publishing Company, Atlanta, GA. 140pp Lynn, J. (2009) Start Your Own Restaurant Business and More: Pizzeria, Coffeehouse, Deli, Bakery, Catering Business. Entrepreneur Press, New York, USA. 256pp Mason, C., and Stark, M. (2004) what do Investors Look for in a Business Plan? A comparison of the Investment Criteria of Bankers, Ventures Capitalists and Business Angels,International Small Business Journal, 22(3), 227-248 Mintel (2009) Eating Out Meal Occasions UK September 2009,www.mintel.com, accessed: 17/02/2011. Napier, H. A. (2006) Creating a winning business, Cengage Learning, London, UK, 444pp National Statistics (2010) Region in Figures West Midlands,www.statistics.gov.uk, accessed: 17/02/10 Porter, M.E. (2005) Competitive Strategy, The Free Press, New York Reuvid, J., Millar, R. (2003) Start Run your own Business, London, United Kingdom, Kogan page Riley, J. (2015) Promotion: Introduction. Business. Tastyafricanfood.com. (2015) Tasty African: Menu. https://www.tastyafricanfood.com/food/the-menu/ Williams, S. (2010) Financial Times Guides: Business Start up 2010 (23rded), Pearson Education, Harlow Zapoli, J. R. (2005) How to succeed in the Restaurant Business: Crunching Numbers now thats the bottom line, iUniverse, New York, USA. 211pp