The business I have made up is a business-to-business company which imports fresh mint tea…
The levelness’s of the business plan can also be used in other structures, such the Balanced Scorecard . Business concept/corporate misinterpretations – vision/ambition and contracted development planProductionMarketing plan, market size and customer groundless plenipotentiaries and IT Peloponnesus and competence developmentorganization planlnvestmentsFinances business plan should be very comprehensive and cover all the prince-pal areas of an organization. The following hecklers of eleven headings help with the writing of a business plan.
Each section may be more less important, depending on its relevance to the business. The levelness’s of the business plan can also be used in other structures, such the Balanced Scorecard developmentorganization planlnvestmentsFinances The importance of planning, it focuses attention on objectives by uniting the organization and its activities. It removes uncertainty by providing a framework of activities that can be placed in a context. It facilitates control by supplying targets for performance and it leads to economical operations by emphasizing efficiency and consistency (Transferred R et al, 2004).
Impact on managers; managers involvements in the planning process is vital to the organization and its members, Individual managers are able to take part in the identification and discussion of organization and identifying and providing solutions to the problems. Strategic planning process should improve communications within the organization e. G. From management to operational staff and verse versa. Being involved in the process should lead to high levels of motivation and commitment to organizational objectives (Transferred R et al, 2004). . 2. Advantage of the planning process is the co-ordination of the organizational activities around the plan so that each manager will be able to see how their contribution fit into the overall planning structure. The corporate/total plan feeds down into plans for strategic business units and departments. Individual managers can see how their departmental plan fits into the overall structure and enable the setting of departmental priorities, plans and objectives. Imminent (1994) suggested the main role of planning is to make plans operational- after plan has been conceived and set it needs to be put into practice.
He argued planning be carried out by line managers and he further suggested that only line managers have the commitment and detailed knowledge to carry out strategic decisions (Transfixed R et al, 2004). A stated level of future performance that a manager or other members of an organization aims to achieve over a given time. Targets can be general or specific but must be clear- the level of performance needed to achieved the target must be clear and target setting allows managers to identify whether or not targets are been achieved and operationally the board strategy (Transfixed R et al, 2004). . 2. 3 When to plan Business planning is an ongoing process, Gary hammed (1996) ‘states in the vast majority of companies, strategic planning is a calendar-driven ritual… Which assumes that the future will be more or less the present'(Transfixed R et al, 2004). The keys stages of planning process The Planning Cycle brings together all aspects of planning into a coherent, unified process. By planning within this structure, you will help to ensure that your plans are fully considered, well focused, resilient, practical and cost-effective (Middleton, 2013). Available. Detail the tasks to be carried out, whose responsibility they are, and their oratories and deadlines. Detail control mechanisms that will alert you to difficulties in achieving the plan. Identify risks, and plan for contingencies. This allows you to make a rapid and effective response to crises, perhaps at a time when you are at low ebb or are confused following a setback. Consider transitional arrangements – how will you keep things going while you implement the plan (mind tools, 2013). . 2. 4 Who should be involved Responsibilities of senior managers and directors within an organization is to create strategy (after consultation) and then to set out the structure for creating that tragedy. Strategy should be created by consultation with all stakeholders in the organization. The ultimate creation of an organization strategy document and plan will be done by a small group of senior planners with a good understanding of the issues involved.
Through the process or consultation with stakeholders the planners should create a commitment to the strategy (Transferred R et al, 2004). Danger of centralized strategy making; Richard Koch (1995) argues that the confidence of those who believe corporation strategists can come up with the right ways to lead a company to success is often unfounded. He further argues that the corporate centre in large, or multi business companies should wherever possible leave much of the strategic decision making to individual business units within the company.
Koch states that, ‘managers that managers at the centre, however competent, are natural value destroyers’ (Transfixed R et al, 2004). Task 1. 3 Planning techniques: 1. 3. 1 Boston Consulting Group (BCC) matrix is a framework created by Boston Consulting group to evaluate the strategic position of the business portfolio into four categories based on industry attractiveness (growth rate of the industry) and nominative position relative market (Strategic management insight 2013). 1. 3. WALKERS FORTE-OLIO Walkers Crisps, Walkers French Fries, Walkers Elite, Walkers Sensations, Walkers Sensation Oriental Cracker, Walkers Sensation Poppa Doom Bite, Walkers Square, Walkers Quavers, Walkers Max, Walkers Monster Munch, Walkers Cheese and Unions, Auditors, Walkers Grilled Bacon, Walkers Ham Cheese, Walkers Salt ‘n’ Shake walkers (walkers, 2013). 1. 3. 3 Market Shares I High I Low I High I Sun bites range and walkers bake crisps range (stars). I Sensation range from their nuts to crisps, (question marks).
I Low I Cheese & onion, Salt amp; vinegar, Ready salted crisps or normal crisps (cash cows) I Potato heads line I Market Growth The benefits of using this model, is the ability to priorities a product portfolio. By defining and categorizing current products using the BCC matrix, Walker’s is able to determine which products already generate high levels of cash and profit. Cash cows (cheese ; onion, salt ; vinegar and Ready salted) The snacks brand has stormed to the top of this year’s Biggest Brands table, with core brand sales of Emma Information Resources.
Walkers brands also dominate the bagged snacks category, tit five of its variants Quavers, Sensations, Woodlots, Auditors and French Fries listed in the category top 10 (Hassock J, 2003). This brand should be generally be left relatively unaltered, they can be used to finance stars. Stars ( Sun bite and bake crisps ranges) Walkers Lights, the crisp brand aimed at dieters, also fared badly, despite a rebind last year replacing the word ‘Elite’ with ‘Light’. Sales slumped by 32% to EYE. Mm over the same period, after a 15. 7% fall the previous year.
On the healthy side, the company is focusing on its Walkers Baked brand which rolled out Bacon & Cheddar and Mango Chill variants this year. Late last year Walkers also launched Sun bites snacks, its first wholegrain product, made from wheat, oats and corn and containing no artificial colors flavors or preservatives (Charles G, 2008). Products generate high levels of cash but require high levels of investment due to rate of market growth or in order to maintain their market position and promise high return in the future (BP, 2010).
Question marks (Sensation range) Sensations’ sales have been sliding for several years, according to Nielsen. Although the brand recorded a flat performance in the year to October 2008, when sales grew by Just 0. %, over the past five years it has posted a decline in its value sales. In 2004, Sensations was the third-biggest bagged snacks brand behind Principles and Walkers Crisps, with annual sales worth Emma; it is now worth Meme. Insiders have suggested that consumers no longer consider the brand to be as premium as at launch when it was backed by ads featuring football pundit Gary Linker and Victoria Beckman (Corporate Innovation, 2007).
These crisps needs more investment in return for relatively low market share and thus needs investment and attention to turn them into stars and sometimes walkers allows them to die slowly. Dogs (potato heads) Sales of the brand fell by 49% from EYE. Mm to EYE. Mm in the year to October 2007, according to Nielsen. At launch in 2005, it appeared that Potato Heads would be a success as the brand racked up sales quickly; in the first year it was valued at Meme (Charles G, 2008). These crisps are ex cash cows that now have fallen on hard times.
Products that fall into this category rarely show signs of turn-around even if injected with investment and in most cases are better of being sold or they liquidate them (BP, July 2013). 2. 1. 1 Strategic Position and Action Evaluation(SPACE) this analyses he position of a company and suggests strategy on the basis of Financial Strength (measures by such indicators as profitability and liquidity position high or low), Environment Stability (turbulence/ stable), Industry Strength (high or low) and Competitive Advantage (high or low). 2. 1. The graph shows that they are in a very favorable position and are able to take an aggressive growth strategy. They are operating in an attractive industry and they have major competitive advantage backed up by significant financial strength. The graph also shows in all four dimensions and therefore Walkers can follow an aggressive strategy as it leverages their strengths into the opportunities available- see soot analysis below in how strengths, weaknesses, opportunities and threats fit the SPACE analysis: Walkers to continue in invest and innovation to sustain.
And build the competitive advantage which they are in at the moment. Cover any moves made by competitors to develop alternative competitive advantages which they are already doing. Close off the opportunities to build a differentiated value proposition that may prove attractive to segments of the market. Aggressively build market share by moving the fair value line in customer value map. Raise the stake for other competitors to play the game. This maybe through rapid product innovations, marketing campaigns, or reducing prices to levels that competitors find difficult to match Grow in the market through acquisitions.
Follow up on possible opportunities in the market including backward or forward vertical integration. Move into related markets which complement walkers existing position. Walkers could use the aggressive, offensive strategy it will make it tough for competitors to trade and certainly difficult to build up the resources to challenge for market leadership unless hey have very deep pockets (Sinister, 2012). The two big concerns in this favorable position are Avoid complacency; Walkers can see it very easy but new threats may come from substitute markets or as technology makes different sectors converge.
Avoid running foul of anti-competition policies, sometimes organizations like Walkers that is too strong can attract the attention of regulators and especially if Walkers uses predatory pricing aimed at driving competitors out of business (Sinister . P. 2012). 2. 1. 1 Benchmarking is the establishment, through data gathering, of targets and narrators, through whose use relative levels of performance (and particularly areas of underperformed) can be identified. By the adoption of identified best practices it is hoped that performance will improve (BP, July 2010).
Internal benchmarking: walkers used internal benchmarking mainly to evaluated and compared to each other. If one unit performs better than the others, practices can be transferred internally for improvement. The advantages of internal benchmarking are that it is often easy to define comparable processes, data and information are easily accessible, and often on a standard format (Andersen, et al. 1996) Walkers Green factory (Coventry) staff was sent to their parent company Frito-lay in US to train and learn new and more effective manufacturing and overall business development of a newly launched product in Auk’s market.
Walkers have the advantage to benchmark their efficiency and performance against US highly competitive snack market, where consumers have literally hundreds of snack products to choose from (Data monitor, 2011). Function benchmarking: benchmarking partners can be customers, suppliers, or other companies within the same industry or technological area. It is other easy to get in touch with such companies and the problems facing these companies are often similar (Andersen, et al. , 1996).
The DISH also recognizes the importance of sustainability in the consumer products sector by having a distinct “Food and Beverage Category’. The leader this year was named Canada’s oldest brewery Nelson Coors, another sustainable business innovator that has turned sustainability into its mission statement. The company invented the concept “Our Beer Print”, a corporate culture that recognizes the business’s impact on the heart of the sustainability issue, with an increasing percentage of consumers 41% of British in 2011) placing “green considerations” at the top of their purchase decision making criteria.
An example of business innovation in the field of sustainability from a leading company in the food and drink sector comes from PepsiCo brand Walkers Crisps, a company that worked together with farmers which supplied its potatoes and found new ways of producing dryer potatoes, saving energy in the drying process (BBC, 2013). Mark Pettier, PepsiCo European Agricultural Development Manager said: “DADS is a business dedicated to Sustainable Food & Agriculture.
PepsiCo values highly the DADS combination of innovative search and practical application which is exactly what is needed to help them deliver sustainable food supply chains both now and in the future and also to meet corporate and Government sustainability targets. DADS understands both food production and its environmental impact and also the new environmental benchmarking techniques such as carbon and water footprint. ” Competitive benchmarking: Competitive benchmarking is an extension of competitor analysis where instead of focusing on the industry average, focus is on the best competitors.
Due to problems regarding sharing of sensitive information between competitors and he legal and ethical limitations connected to this type of benchmarking, competitive benchmarking is often seen as superficial and too focused on key fugues similar (against Macy’s) (Andersen, et al. , 1996). Walkers main competitors are United biscuits: Macy’s and hullabaloos, Procter and gamble: Principles, Tatty: tatty and golden wonder, Premium brands Kettle and Tersely potato chips are two main competitors of walker’s crisps. Walker’s fights their premium brands back with its sensations brand.
Other players include Kola snack foods, rivalry crisp and Node’s (Minted, 2010). Walkers crisps have been benchmarking within their own rand’s and their most successful is or the winners here seem to have been salt ; vinegar and, recently promoted to the ‘main’ variety-pack, prawn cocktail, which they are following up for the rest of the brands/flavors (weightlessness’s, 2013). Strategic benchmarking: Finding companies in totally unrelated industries that perform similar processes as one might sometimes require a solid portion of creativity.
The same goes for transferring knowledge for one industry to another. Still, the potential for identifying new technologies or practice that will lead to breakthroughs is highest in generic benchmarking. One example is the spread of bar coding from industry to industry (Andersen, et al. , 1996). 2. 1. Soot analysis: a method of analyzing information which attempts to identify an organizational strength, weaknesses, opportunities and threats (BP, July 2010). Strengths; Walkers’ crisps are owned by one of the world largest food and drink company PepsiCo.
Being part of a global company of size and magnitude of PepsiCo; gives walkers a corporate edge over its competitors (market leaders in UK crisps industry). Walkers can afford to used sun seed oil (saturated fat) and natural ingredients which hey now use in most of their crisps, strong financial support from PepsiCo. Experienced management teams and board of Directors Strong manufacturing and distribution system Walkers can afford to used or buy new technology in their production process like reduction label (Walkers, 2011).
Weaknesses: Higher cost of technology and introducing new unnecessary product (high cost) Lost competitiveness on customers who are vegetarian, as they are planning to introduce or using natural ingredients like real meat Losing customer focus on trying to differentiation Commodity price inconsistence (different location different price) Inaccuracy in reduce nutritional labeling walkers UK (in their suggestion box), (Walkers, 2013). Opportunities: new organic and market food trends emerging into UK market through government and social bodies.
Campaigners for health and local foods could provide walkers a sustained competitive advantage over its competitors during time of financial turbulence and given the market share and potential for developing new markets outside the I-J as well. Premium brand crisps also serve as a great opportunity as eating healthy is a trend and high demand in environmental friendly processed food as in packaging Update technology due to their financial strength alkies invested El 5 million on equipments for their baking their crisps and EYE million in campaign to promote the new crisps.
They used robots to do most of their production work from peeling, cutting, frying and packaging with little human involvement, it take less than 20 minutes from star to finish (Discovery, 2010). Threats: Volatile on foreign exchange With their size is easy for production to be interrupted by employees going on strike The image of potato crisps industry in a world of growing awareness and health consciousness does not help to build a very positive image and potato crisps have en recently associated with cancer.
World Health Organizations viewed snacking on crisps as unhealthy and according to them is causing Been to the INS on poor diets yearly ( Walkers, 2011). Increase restriction in marketing and promotion method to children under the age of 10, who are part of a bigger consumer group. Natural disaster e. G. Water stress and crop failure some areas in I-J Core competitors than years ago and potential entrance from the EX. (intense competition), (Walkers, 2013). 2. 1. 3 Value Chain Analysis describes the activities that take place in a business and elates them to an analysis of the competitive strength of the business.
Influential work by Michael Porter suggested that the activities of a business could be grouped under two 1. Primary activities; are the activities in first stage of production from component assembly and initial washing to frying them to packing 2. Support activities; are mainly done under human resource management and they are not directly involved in production. Under primary activities we have Inbound logistics: all those activities concerned with receiving and storing externally sourced materials. Walkers buy from home grown so they don’t have issues on tiring for long time.
Operations: the manufacture of products and services- the way in which resource inputs (materials) are converted to outputs (product) Outbound logistics: all those activities associated with getting finished goods and services to buyers Marketing and sales: essentially an information activity- informing buyers and consumers about products and services Service all those activities associated with activities Procurement: these concerns how resources are acquired (walkers acquired most of their resources in the I-J Human resource management: those activities concerned tit managing information processing and development and protection of ‘knowledge’ in a business Infrastructure: concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management. (Strategic management insight, 2013). Steps in Value Chain Analysis Break down the organization/market into its key activities under each of the major headings in the models.
Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage; Determined strategies built around focusing on activities here competitive advantage can be sustained. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others What activities walkers undertake is directly linked to achieving competitive advantage. For example walkers’ wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition.
In contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used (Strategic management insight, 2013). Products Position The Walkers identity has been tweaked and pack colors are now ‘deeper and richer’ to communicate quality according to PepsiCo. The Walkers identity has been tweaked and pack colors are now ‘deeper and richer’ to communicate quality according to PepsiCo. A new look has been designed around new positioning, which brand owner PepsiCo is calling, ‘The biggest flavor innovation around the product for ten years. ‘ Nine flavors have been renamed and each now carries a strap line.
They include: Definitively Prawn Cocktail with Vale of Evasive Tomatoes; Unmistakably Cheese and Onion with Cheddar from Somerset; Classically Ready Salted with Salt from Cheshire; and Distinctly Salt ; Vinegar with Real British Vinegar. A graphic made to look like a cross section of a potato features the words ‘Home Grown’ (Design week, 2013). Walkers Crisps is benefited in the sense that positioned itself to be a healthy crisps which provides variety of flavors, Walkers Crisps closest competitor is in house brand Auditors, and other competitors’ brands like Principles Chips and Kettle Chips are AR below its because consumers perceive them as fattening and homogeneous in term of flavors. In term of crisps flavors, Macy’s Crisps is the closest competitor of Walkers attributed to its uniqueness of crisps flavors which keep most innovative consumers buying on it.
According to EDIT business placement model walkers have cemented a place within the desirable market sector known as high end market sector (middle and upper class). As demonstrated in the business placement model the high end market sector is a high risk and high uncertainty but also most profitable (EDIT, 2010). Demographic and lifestyle An interesting account of British lifestyle and potato crisps snacking habit was discovered in John Henley (guardian feature writer) article. In this articles Henley tries to trace a link between potatoes being a British trademark food for centuries Crisps are considered British peoples sandwich companions in their lunch boxes and are linked to habit of regular snacking in British culture. An average British consumer around 150 packs of crisps a year on average.
Henley calls this a national obsession when considering on estimated consumption of 6 billion packets of crisps and 4. 4 billion bags of savory snacks a year (EDIT, 2010). According too recent minted report new health and personal wellbeing trends are having a fundamental affect on the savory snack market in general and crisps market in particular. There is an overall from promotion on dietary concerns on low fats to more natural resources and organic food claims. Walkers seems to respond to these new change in the perception of food and health by emphasizing using 100% British potatoes, reducing food miles and natural raw food sourcing from the home market in their promotional strategic and claims made on their website.
Also with the launch of crisps premium rand like kittle crisps and walker’s sensation on terms like hand fried, organically grown and hand selected has shifted the focus on crisps consumers Just from children to adults, to increasing the sharing bags of crisps as signs of social integrations and family oriented value. According to reports sharing crisps bag have made over IEEE million profit after their launch, while individual crisps packs are directed more towards children, teenagers and young adults (Minted, 2010). Task 5 2. 2. 1 Pestle analysis P = political; Government spending, both the amount of spending and the priorities of the pending, Taxation levels, incentives and punishment e. G. Punishment for polluter. Environment legislation, Trade restriction and relationship with the rest of the worldћ Political stability and confidence, Local, regional, national, and international political issues.
The government of each party will have there owned set of rules. In the UK there are three main political parties (systems) and each political party have their main rules and regulation. In the I-J there are three main political parties and each party having their rules and regulations governing them. From the explanations the neoconservative are more favorable with businesses. Which party are in power have great influence in the business sector, laws including tax policy, employment laws, environmental regulations, trade restrictions, reforms and tariffs. United Kingdom is the one of the most stable country in the world and walkers will not have problem in that area.
The taxation’s system, employment and environment regulations in the UK have proper systems and are not an immediate treat to walkers (E-how, 2013) E= Economical; Position in the trade cycle or business cycle, expected GAP growth, lending or lagging reduce, necessity or discretionary purchase The economy is a very important aspect of any organization especially organization like walkers which is owned internationally. The happening within the economy for example; economic growth/ decline, interest rates, exchange rates and inflation, wage rates, working hours, unemployment (local and national), credit availability, cost of living, etc all of these conditions affect walker. The recession from the last four years has affected walkers immensely although they are saying now we are out of the recession as walkers