Strategic Aspects of Spoon Breakfast Cereals Company - Coursework Example

Business strategy-Spoon breakfast cereal Executive summary Spoon breakfast cereal is a new company that was formed by Anne Morris and Jonny Shammin in 2013. It is a breakfast company that mainly prepares various cereal foods to be eaten during breakfast times. The products are composed of seeds, nuts, fruits and dairy products. This was after a discussion at a family meeting during the summer season. The two individual are food lovers, and they held discussion at the right time of starting a business in that area (Meaden, 2014, pp1). Anne was a long term entrepreneur and had the desire of exploring his skills in the food industry. Jonny, on the other hand, desired to apply the knowledge he had acquired in business classes on practical business environment. Their idea of starting up a breakfast cereal was born when they always had unhealthy and boring breakfast cereals that were in most of the restaurants in the region. Nobody enjoyed the breakfast cereals that were offered in these eateries. Thus, they drew their business idea on this opportunity to start a breakfast cereal that offered a healthy and enjoyable breakfast for the residents of this region (Meaden, 2014, pp1). This paper is a business strategy they used to establish their business. Their first item on this strategy was to analyze the business environment which involved the analysis of economical, political, social and technical environments. The second aspect is the internal analysis of the company which involves the SWOT analysis. The third aspect is the strategic formulation which is the process of choosing the appropriate courses of actions to ensure that the business operate perfectly. The fourth stage in this business strategy is the strategic implementation; this is where the proposed strategies are now implemented. The paper has the conclusion which shows the summary of what the of all the strategic aspects Spoon breakfast cereals company planned. Environmental analysis (PEST) Political environment Europe is one of the regions of the world where there is political stability. Unstable political environment tend to disturb the operation of the business. A nation that experience political turmoil regularly discourages the operations of the business (Johnson, Whittington, Scheoles, Angwin &Reigner, 2013, pp11). Therefore, Spoon breakfast cereal has an advantage because it is thriving in a politically stable environment. This gives an enabling environment for its growth. Moreover, the government policies in Europe concerning the operations of businesses are more reasonable. Some businesses are boosted by the government because of creating the employment opportunities. Some firms are rewarded by the authorities to encourage them to thrive. Thus, Spoon breakfast cereals have been established in a good environment that would support its growth. European government encourages exports and gives exports incentives such as reducing exports charges and even taking some of the export charges. This condition would encourage Spoon breakfast cereals firm to explore new markets of its products in foreign nations. Economic environment British people are the biggest spenders of on breakfast cereal in the whole of Europe. They hold 49% of the total consumers of cereal breakfast. Therefore, the introduction of spoon breakfast cereal is on time (Meaden, 2014, pp1). This implies that the firm would not struggle to market its products because there is a ready market for the products. The goodness is that the existing cereals are boring and less nutritious as termed by Jonny and Anne. Therefore, when the consumers would have the test of the spoon breakfast cereals, they would shift their demand from the old existing staff to these nutritious and tasty products. This factor provides an enabling economic environment that would see this firm grow in double digits. Secondly, in 2002, the total sales of cereals rose by 5% in the UK (Meaden, 2014, pp1). It implies that there is high demand of the cereal products, and the demand would be sustainable for a long period. This enables the spoon breakfast cereal firm to be confident of the future operation of the business. There is no way the demand would go down because the population is growing, and the products are blended to produce even more appealing products. Thirdly, there are many new restaurants and hotels emerging meaning that the market for spoon breakfast cereal is expanding. When more hotels open, the demand for the cereals products increases. It shows that Jonny and Anne’s company has a bright future because there is a wide market for their products. Lastly, not only spoon breakfast products are liked in Europe, they are also liked in the neighboring countries. Other buyers from neighboring countries import these products for their customers and it is obvious that the outside market would open up because the products sell. Social environment Spoon breakfast cereal encourages unhealthy eating habits such as fast foods. All these products are snacks that have high fat and sugar content. This means that they pose health problems such as obesity and diabetes. These two health problems have are on the increase worldwide and most health experts are advising the society to take care of their eating habits. Therefore, the campaigns against obesity and diabetes are campaigns against eating these cereal products. In summary, spoon breakfast cereals cause social and health problems in the society. People with obesity do not socialize with the rest of other normal individuals because of the fear of stigmatization. Secondly, the consumption of the spoon breakfast cereal among the population makes them lack time to take their normal breakfast with their family member. Eating together in a family or a group is one way of socializing. It brings people together and in the end; they socialize by sharing ideas (Sutherland &Canwell, 2004, pp15). However, when breakfast is of takeaway, then this deprives individual time to sit together and share ideas. In simple terms, spoon breakfast cereals products encourage antisocial behaviors. Thirdly, the introduction of these tasty cereals by Spoon breakfast cereal has influenced the consumers’ lifestyle of choosing the breakfast. Many consumers now are buying more of these products to use them at breakfast and forsake other food such as fresh fruits in their diet. To some extent, the campaigns against these snack foods are creating awareness in the society about the dangers of consumers these foods in large quantities. Health awareness among the society members is the fact that has been neglected for a long time, and it has affected many people. Therefore, Anne and Jonny’s company has influenced the social aspects of the society and would still affect in the future. Technical environment Spoon breakfast cereals functions mainly depend on some technological factors. The processing of the various kind of cereals and blending them to come up with one product employees a high level of technology. The mixing of various components of food products ranging from dairy products, cereals, seeds, fruits need to need good knowledge and technology to make them tasty to the consumers. Furthermore, the techniques used to preserve these foods for a long time must be of high level. The technology of recycling the packaging materials of these cereal products is there. Most companies that manufacture food, they have a way of getting the packaging materials. Some are manufactured from the byproducts, and other are recycled from the already used materials. Therefore, the technological level available enable this company to carry out its business without any problem. Other companies are available in Europe, and they are specialized in manufacturing of food packaging products. Therefore, Spoon breakfast cereals do not necessarily have to manufacture its packaging material. It just orders from the manufacturing firms. Moreover, there is technical knowledge of processing the cereals right from their suppliers in farms till they reach in the firm. Therefore, the technology enables this company to get good quality of the components required to manufacture the cereal products. . Internal analysis -Swot analysis Strengths One of the strengths of spoon breakfast cereals is that its products are of high value as compared to the existing products on the market. This would still shift other consumers from buying the old stuff to buying these new tasty products. Secondly, spoon breakfast manufactures a variety of products that suits every customer on the market. Therefore, consumers right from children to adults, have at least something to purchase from this firm. Fourthly, the entrepreneurs who started this firm Jonny and Anne both have relevant skills in business. Anne is a long time entrepreneur in advertisement while Jonny is a knowledgeable individual well acquainted with business knowledge. Therefore, the management of this firm would not be a problem to them. They will combine the skills knowledge and experience to run a business. Weaknesses The two partners run this business as a small scale business This implies that they do not have eh workforce to carry out the operations of the business. They would be forced to hire specialists from outside to manage this firm properly; this would add extra cost to the firm. Secondly, this is a newly opened business firm; therefore, there are so many issues that need to be fixed for it to be a sustainable business. The employees such as salesmen need to be hired and trained thoroughly; the technicians who should be responsible for mixing of the food products need to be available always. The purchasing and storekeeping individuals need to be trained as well. Therefore, all these are a lot of work that needs enough cash and time. Another weakness is that the firm has not established its branches in the whole of the region; therefore some consumers are not even aware of the existence of the company. Therefore, there is a need for advertisements that is an extra cost to this new firm. Another weakness of Spoon breakfast cereals is that the firm has not yet established good relationship with the suppliers of the raw products. This implies that when these suppliers find the market for their produce somewhere else, where there are good returns, they can easily forsake this young firm. Therefore, this firm needs to work hard in terms of offering competitive prices to the suppliers of the raw materials so that it maintains a steady supply of the raw materials. Opportunities One of the opportunities spoon breakfast cereals firm has is that it has a wide ready market for the products. The food products it produces are liked by many, and the demand is on the rise. Therefore, the firm has an opportunity of growth due to the ready market. The second opportunity for this firm is that there is a ready supply of the raw materials. Many farms and organizations in Europe grow cereal crops; therefore, they seek the market for these cereals (Johnson, Whittington, Scholes, Angwin &Reigner, 2013, pp 65). This means that this firm would enjoy the steady supply of the materials because there is plenty of production of cereals in the region. Another opportunity is that the competitors do not process and come up with fine products as those produced by this firm. Thus, this gives it a competitive advantage where the consumers prefer the new products to break the boredom of the old stuff of cereals. This would save te firm the costs of advertisements because once the consumers have a test of these products; they would develop more desire of consuming them. Another opportunity for this firm is that it has not yet exhausted the European market. Other markets are unexplored thus; it has a great opportunity of growth due to many consumers. Furthermore, when it starts exporting its products to other countries, it would expand its operations because it would have enough funds to do it. Another opportunity is that it used Dragon’s den television show to commence its business; there many consumers were made aware of the existence of such a company. A company endorsed by this television show tend to gets more attention from the investors who can come and buy its shared and boost its reputation. Another opportunity for this company is that it has high chances of accessing to loans facilities because of its viable business (Johnson, Whittington, Scholes, Angwin &Reigner, 2013, pp28). The creditors consider the performance of the company by looking at the income, the demand of the products, and the future prospects of the company. Thus, Spoon breakfast cereals have this opportunity of getting funds from the creditors whenever the need arises. Threats This new company faces some threats, first, the campaigns against the snack foods byb the health organization discourages the consumers to consume the kinds of products this company manufacture. This can lead to decreased sales and low profitability. The second threat to this company is that there are many substitutes of the products produced by this firm. Therefore, if something happens that affects the perspective of the consumers, then they can easily shifts to these substitutes and the firm may incur great losses. The third threat is new entrants. This lucrative business attracts so many new entrants who would come with different methods of production which would shift the preferences of the potential customers (Sutherland &Canwell, 2004, pp43). When other firms start to manufacture similar products as those of Spoon breakfast cereals, then the sales volume would drop hence, fewer profits. Another threat that faces this firm is that it uses high technology o manufacturer and pack the products. This may mean that it incurs a high cost of production, and this cost is transferred to the prices of the products. Probably, the prices offered to the consumers are very much high as compared to the prices of the substitutes. High prices discourage some consumers who opt to go for the substitutes. Strategic formulation The key strategic issues in Spoon Breakfast Company are; 1-Countering competition from firms manufacturing similar products In formulating this strategy, the company intends to carry out brand differentiation which is the act of making the Spoon breakfast cereals’ products unique from other products so that the customers can easily identify them on the market. Therefore, differentiation is the tool the company would use to counter the problem of competition from similar products. 2-Creating awareness among the communities about the existence of the company and the products In formulating this strategy, the company would intensify product promotion activities through advertisement in different media so that many consumers become aware that this company exists and also know the kinds of products offed by this company. 3-Reaching to unexplored markets especially in rural areas and foreign countries In formulating this strategy, the marketing department would organize activities such as roads shows in rural areas and other towns where the consumers have not yet had a chance to taste our products. When such visiting are arranged, the consumers in these regions would start demanding these products. The markets would also arrange foreign visits to go and show case these new cereal products in foreign nations so tat to create more market. Strategic implementation The implementation of the above strategies would be achieved by focusing on four elements; expanding financial base, attracting and retaining customers, improving the internal process and booting the growth of the firm. The chart below shows how these elements would be acted upon Financial Expanding capital base More revenue Maximized profits Customer Creating customer loyalty Efficient services Reaching to more customers Internal Improving internal processes Management of operating time Minimizing material use Growth Developing new operational programs Training and developing employees Adoption of new technologies Conclusion Spoon breakfast cereal firm is one of the new food firms that is performing well in business. This firm came into existence because two individuals who had a business idea and fortunately saw the opportunity grabbed it and established a viable business that is growing fast. The main strategy that this firm adopted was to make unique product brand that would be liked by the consumers. It is only one year since the firm commenced its business, but it products are already known all over, and the demand of these products is very high. The firm employs the modern technology to process and pack the product. Moreover, it makes a variety of products that suits all segments of the consumers. Spoon breakfast cereals have a lot of confidence and bright future because of the enabling and favorable environment in which it exists. The political environment favors its thriving; the economical surrounding is encouraging same to technological status. The future prospects of this young firm are that it would expand its operation in all over Europe and to other countries. The ready market for the products is the engine behind the rapid growth of the firm. Bibliographic references Johnson, G., Whittington, R., Scholes, K., Angwin, D &Reigner, P. (2013). Exploring strategy. 10th Ed. Harlow; Prentice hall. Meaden, D. (2014). “Spoon cereals” . Accessed 1 Dec 2014. Retrieved from http://www.deborahmeaden.com/investment/spoon-cereals Sutherland, J &Canwell, D. (2004). “Key concepts in strategic management” . Basingstoke: Palgrave Macmillan. Read More