The real food company

The real food company The real food company 1.0 Background of EAT the real food company: Eat was founded in 1996 with ambition of providing the best food, soup and coffee in London at reasonable prices. The first shop was opened at Villers street, WC2, London. At present EAT with 100 shops continue to strive for highest possible quality of food, service and shop standards in the same way they used to do since from the beginning. EATs secret of success is in their kitchen, they make all food products on their own i.e. they dont buy a single mass produced sandwich, soup or salad from any supplier. They offer variety of foods like sandwiches, soups, pies, salads, wraps, sushi, desserts, baked goods, breakfast, cold drinks juices and great coffees. 2.0 Planning process and its importance: Planning is a formalised procedure to produce an articulated result, in the form of an integrated system of decisions. The importance of planning to organisations will help in co-ordinating their activities; to make sure that their business is accounted for future and to have control on the business. Chernev (2009) describes marketing management consists of three step process and they are analysing the situation, developing an action plan and implementing the plan. Situation analysis will help in providing the overview of the company and environment in which it operates and also it helps in identifying potential markets to compete. It begins with analysing five key factors which are as follows as identified by Chernev (2009). Potential customers- Most of the EAT shops are located near offices, tourist places and transit places. So their major customers are tourists, workers and tourists visiting to London. Companys goals- EAT goal is to provide best food, soup and coffee in London at reasonable prices. Collaborators- Competitors- EAT companys potential competitors are Pret a Manger, Starbucks, McDonald and KFC. All these companies are also in the same market targeting same customers. Economic, social-cultural, technological, regulatory and physical factors- The current economic situation of the UK is under recession. Many people are unemployed and still losing their jobs. Recession has had an impact on tourist coming from different parts of the UK, as well as from other parts of the world. Social-cultural effect on EAT has had a very little impact on its business, because the type of food EAT produces suits the eat habits of most of the Londoners. Except the fact that London is multi cultural ethnicity, and among them most of the Muslim community and they do not eat non-veg food other than halal ones. According to official research collated for The Times as cited in Kerbaj (2009) Muslim population in Britain has grown by more than 500,000 to 2.4 million in just four years. Technology has had a significant effect on the EAT business, the introduction of readymade coffee machines reduced the customer waiting time and increased the productivity of the business. 3.0 Internal analysis of EAT 3.1 Mc Kinsey 7-S frame work: Mc Kinseys 7-S recognises seven important factors for internal effectiveness and efficiency of an organisation. The key elements of 7-S are as follows and is depicted in the below figure. Strategy: EAT prepares all food products in their own kitchen, and do not buy any single mass produced sandwich from any supplier. One day is the shelf life of all products for maximum freshness and quality Structure: Each EAT shop has shop manager, assistant shop manager followed by team leader, lead barista and team member. Skills: Employees of EAT are skilled in preparing delicious sandwiches, soups, pies, salads, desserts, and drinks. Moreover they are also skilled at delivering great customer services. Staff: EAT staff get training in their academy, and recognised for doing a great job. They are further encouraged to improve on personal development. All these factors motivate the employees and increases their productivity and loyalty to organisation. Style: EAT is adopting team management style in Blake and Mouton managerial grid as cited in Mullins (2005) which gives equally high concern to productivity as well as to the staff. This type of management style is the best in the business. Systems: EAT follows the system of delivering best quality food, along with it providing friendly and fun experience to every customers. Shared values: EAT believes in honest, simple and natural work space environment providing quality food and great customer service. 3.2 Advantages and disadvantages of Mckinsey 7-S Advantages: This tool covers the almost every aspect of the business and all major parts of the firm. This tool helps in analysing the internal situation of the organisation. This tool helps in implementing the organisational changes once the organisation has understood its internal situation. Disadvantages: A detailed case study on the firm is required to analyse it using this tool. This tool does not consider about the external factors influencing the organisation and presents only of the internal situation of firm. All the 7-S of Mckinsey are interrelated and if any one element is changed it affects others as well. 4.0 External analysis of EAT 4.1 PEST analysis 4.1.1 Political factors: Elections will be held before May 2010 and new government may alter the environmental rules which will have low impact on the organisation. Labour government might win the upcoming elections, and increase the basic pay rise of an employee which will have high impact on the firm. Customer protection law has a great impact on the firm especially for service and hospitality organisation. EAT has to ensure that it provides sufficient information about the food they produce and its ingredient. 4.1.2 Economical factors: Current market is struggling with recession; many people have lost the jobs and still losing it. It has negative impact on the firm. The firm has to pay tax for the government. 4.1.3 Social factors: London is a multi ethnic city, so eating habits of the people differs from person to person. This factor has a medium impact on the firm. Lifestyle of the people has a great impact on the firm. Now a days people like to carry their food along with them, rather than sitting and eating in the restaurant. Considering the fact that Muslim population in Britain has grown by more than 500,000 to 2.4 million in just four years, according to official research collated for The Times as cited in Kerbaj (2009). This factor has a medium impact on the firm. 4.1.4 Technological factors: Technology has been evolving and there is no end for it, introduction of readymade coffee machine have had a great impact on sales reducing the customer waiting time. Internet has a strong impact on the business helping customers to know about the locations of EAT braches near to place where they live or work. Also they get to know about the variety of products they make. 4.2 Advantages and disadvantages of PEST analysis: Advantages: This tool helps in determining the external factors which have positive and negative impact on the firms growth. This tool helps in identifying its business survival according to the surroundings. This tool is simple and only costs time to do. Disadvantages: This tool tells focuses only on the external environmental analysis based on assumptions. But in reality assumptions may go wrong and strategy is not of worth. This tool covers only external environment, but the results to need to be considered along with other factors for example firm itself, competitors and type of industry in which it is operating. Changes in the environment make this tool difficult to implement developments and it will affect the firm in the future. 4.2 Porters five forces Industry rivalry: EAT is in food industry sector where in, there are lot of other big competitors like Pret a manger, Star bucks coffee, McDonalds and KFC. These companies are also well settled in the business and have good market share. So industry rivalry among the competitors is high because of too many competitors in the same market. Supplier power: The supplier has a low bargaining power with firm because, because there are lot of suppliers producing the same raw materials for the food industry sector. Buyer power: Since EAT business is retail one the buyer power has less influence on its business. On the contrary, care should be taken to deliver quality food and great customer service if not it brings bad reputation to the business. The effect of it will be losing customers in large proportion. New entrants: It is very difficult for a new entrant to start business in the same industry as EAT is doing. Because since EAT is in hospitality sector, it takes years to get recognised with quality food and great customer service. Threat of substitutes: Now a days people are turning to readymade packed foods which are convenient to carry to their work places or homes. Because of recession as the prices of packed foods are cheap they are attracted to them. Advantages of porters five forces: This tool helps in identifying the profitability of a new product or business. It helps in identifying who has better power buyer or supplier. Disadvantages of porters five forces: It does not account the rapid changes that are happening in present world, so even a new entrant can come with some new methods and straight away make profits. 5.0 SWOT analysis Strengths Skills of employees. Strategy of firm. Trained employees in cooking delicious foods and delivering great customer service. Wide range of food products in menu. Brand reputation doesnt allow new entrants to succeed immediately. Opportunities Joint ventures with supermarkets to increase the market share. Introduction of online order and delivery systems. Introduction of low priced food products consisting of only basic ingredients. Weakness High priced food products. Limited funds available to expand the business. Inconsistence of quality and service across all branches. Threats Recession has had an impact on the business. Changing eat habits of the people. Similar products offered by other companies at low price. 6.0 Ansoff matrix: The EAT can make profits by stepping into product development by adopting one of the two strategies introducing online delivery system to their products gives tough competition to Pret a manger that are already in the same business. Because there are some factors which are in favour of this purpose and they are weather conditions may hamper the interest of going to restaurants and some people want to enjoy their meals at their residence itself. The second strategy EAT can adopt is introduction of low priced food products. According to Farnham (2009) most of the people are abandoning restaurants and are turning to low priced food products because of recession. EAT can turn to low priced food range by reducing the number of ingredients but not all comprising with quality or service. 7.0 Marketing Mix elements Product: According to Chernev (2009) a product should have certain features that make it unique in the market. EATs products are known for its delicious and high quality, but introduction of Halal foods in their menu will attract handsome of customers to their restaurant. As we have discussed in the external environment analysis, London is a multi ethnicity city and in it Muslim population is increasing day by day. It has grown to more than 500,000 to 2.4 million in just four years Kerbaj (2009). Price: EATs food price has had a significant effect on the customer behaviour, as majority of them were abandoning the restaurants and are turning to basic foods with less ingredients in it. Because of recession many people are losing their jobs and reducing their level of expenditure and trying to save money. Introduction of low priced foods with less ingredients but not comprising with quality of food will help in attracting the customers. Place: Most of the EAT shops are located near commercial places, tourist places and transit places which are easily accessible places by people. However to increase further sales of the firm, it is suggestible to implement online order and delivery systems with the help of internet technology. In this way it can target the customers who are of big families and like to have meals at their premises itself. Promotion: EAT has to promote its brand in one of the fastest way of communication channels. By advertising in the daily news paper, radio channels, local television channels in London, internet and by leaflet distribution it has chances of promoting its new products in the market. References Chernev, A. (2009) Strategic marketing management 5th edition. Bright star media, Inc.: Chicago, USA. Eat (2009a) www.eat.co.uk [online] available from: http://www.eat.co.uk/pages/facts.html [accessed on: 26 November 2009] Farnham, J. (2009) Recession bites into eating habits, June [online] available from: http://news.bbc.co.uk/1/hi/business/8124352.stm [accessed on : 24 November 2009] Doyle, P. and Stern, P. (2006) Marketing management and strategy 4th edition. Pearson education ltd.: Harlow, England. Fifield, P. (2007) Marketing strategy: The difference between marketing and markets. 3rd edition. Elsevier ltd: London, UK. Kerbaj, R. (2009) www.timesonline.co.uk January 30 2009 [online] available from: http://www.timesonline.co.uk/tol/news/uk/article5621482.ece [accessed on: 01 December 2009]