The Strategic Options for Americana Group Company - Research Paper Example

? Americana Group Table of Contents Introduction 3 Critical Evaluation of Trends in the Marketing Environment 4 PEST Analysis 4 Market Analysis 6 Nature of the product 6 Market (Local/Global) 7 Current Strategy Pursued by Americana Group 7 Alternative Strategic Option 8 Recommendation 9 Conclusion 10 References 11 Introduction The paper deals with the analysis of the product offered by Americana Group Company, which is based in Kuwait and operates in Middle East and North Africa region. The company is categorized under the banner of successful companies operating in the sector of restaurants, manufacturing consumer food and other food-related products. It has a network of 1300 outlets and it is not only the largest operator of restaurants in MENA region but also the most successful franchise operator globally. The group encompasses the most recognized brands globally and includes in its list of franchise brands worldwide known brands like Pizza Hut, KFC, Hardee’s Costa Coffee, Krispy Kreme, and TGI Friday’s; recently the group has took over the franchisee of Signor Sassi. In addition, with a proper understanding of the Middle Eastern taste the Americana Group has created 6 own brands which are also equally successful among its consumers as global counterparts of the aforementioned successful brands (Americana Group, 2012). The project critically evaluates the trends of marketing environment by using the PEST analysis, a complete market analysis is performed to gather information about the nature of product, market operations along with the type of strategy the firm has undertaken over the years and also determine the strategic option which is made available to the firm. Finally, a set of recommendation has been provided to America group stating the strategy that the company should adopt for its further operation considering the skills, resources and capabilities available to the firm. Critical Evaluation of Trends in the Marketing Environment Marketing trend needs to be considered by every marketer and it is one of the most important recipes for successful operation of business in the competitive marketing environment. Companies follow the trend to get itself up to date with the demands of the consumers so that they are able to produce products which will fulfill the needs of the consumers. Americana Group deals in restaurants and holds franchise for some big brands globally and includes consumer food and food related products in its product category. It has been analyzed there exists a huge demand for Quick Service, Casual Dining and Fine Dining categories and with change in consumers taste and preference the fast food centers have gained a huge attraction and are expected to grow globally in the near future. Therefore, PEST analysis has been adopted to critically evaluate the marketing trends. PEST Analysis PEST is used to scan the general market environment and is referred to political, economical, social and technological factors. It helps to detect as well as monitor the weak signals that might affect the working of the organization (Henry, 2008, p. 51). Political Factor: Americana Group deals with restaurants and consumer food products and operates on international grounds and therefore the political factors plays an important role in dealing and setting up of franchise in foreign countries. Different countries impose different laws and it is important for the company to comply with the concerned rules and regulation to successfully operate in international countries. Economic Factor: When the countries perform well the business operating in the area also seems to have performed well and has an opportunity to increase its revenue and profit. Americana Group based in Kuwait has been operating in the MENA region and has tasted success over the years and has its operation franchised globally. It can be inferred that the economic condition are important while implementing the marketing strategies. For example, when Americana Group goes for international expansion along with the political factors the economic factors are also considered. If the economic conditions are not stable, risk might be imposed over the company which may result in loss or failure of the franchise business in international countries. Social Factors: With change in taste and preference in the consumer’s habit, along with spending habits the social factor plays an important role in deciding upon the marketing strategy of a firm. Consumers prefer having fast food and so the business of fast food joints like KFC, Pizza Huts and others are doing well. But at the same time there are set of consumers who prefer eating healthy food and avoid fast food. It can be said that buying patterns influences the ongoing changes in consumer’s lifestyles. Technological Factors: Technology is another factor which has an impact on the strategies that markets use to influence the buying decision of the consumers. It is an external factor and affects the marketing strategy of the firms. Thus it is essential for companies to adopt new technologies which would help the firm to reduce the cost of operation and invest into new products. Especially in the food industry latest technology is required to manufacture fresh, healthy and tasty products. Market Analysis Market analysis is a study which aims to study the dynamics and the attractiveness of a market within a specified industry. It is performed to access the business opportunity by analyzing the nature of the product, the market and the strategies that are been used by the company to access the opportunity (Winston, 1993, p. 4). Nature of the product Americana Group’s main business is operating food and beverages outlets and also consumer’s foods which are manufactured by the company. It has the largest chain of restaurant operating in Middle East and North Africa and also operates as franchise for many well known brands globally. The company operates as franchiser and also manufactures many different brands under its own brand name. Americana Group is well recognized in the food manufacturing and processing sector in Middle East and provides quality food product. The product line of its own manufactured brand consists of 9 brands like California Garden, Koki, Americana Meat and Farm Frites (Americana Group, 2012). Americana Group is the franchisee of many well known brands in the quick service restaurants sector which means that the Middle East food industry has been able to attract international names mainly because of the strong economic growth rate (AME, 2012). The company has marketed well its products including the franchisees and its own brands. The quick service food industry is at a growth stage and a huge opportunity prevails in the industry and Americana Group has utilized the opportunity and has been able to introduce its products successfully into the MENA market. Market (Local/Global) Americana Group operates in the local as well as global market and has been recognized all over the world. Americana Group is the largest franchisee operating in Middle East and has helped many international franchisors to operate in MENA region and expand the international expansions. The growth of the brands was achieved through cooperation within each of the partners. Americana Group with its experience, understanding and knowledge of the local culture and market has helped its partners to expand successfully in the MENA regions. With covering 14 countries in the region of MENA, Americana Group has been regarded as the best franchising partner across the world (Americana Group-a, 2012). Americana Group is not only famous in the local region but also internationally. It has expanded its business on international grounds and has its brand in Egypt, UK apart from Arabian countries like Saudi Arabia, Kuwait, Morocco and others. According to report Americana Group in collaboration with the Counter Custom Built Burger decided to open and operate 33 new locations in UAE, Qatar, Kuwait, Jordan, Oman, Egypt, Lebanon, Libya, Algeria, Tunisia and England (Restaurant Magazine, 2012). It has a huge brand value and it can be said that Americana Group conducts its business successfully not only on its home grounds but also on international scale. It is through their quality products, innovation and good relation with the partners that has made it one of the most successful franchisee in the world. Current Strategy Pursued by Americana Group Americana Group is one of the largest and most successful franchisee brands operating in Kuwait and other parts of the country and over the years of its operation it has adopted various strategies depending on the mode of operation with its partners. Americana Group also manufactures consumer’s food under its own brand and has adopted the penetration strategy within the region of Middle East and North Africa. To deal with international brands, it has adopted the strategy of franchisee strategy, the most popular strategy adopted by marketers and deals with top brands like Pizza Hut, KFC, Taco Bell and others as franchisee partner. Americana group has also entered into joint venture with Heinz Egypt and was considered as a Greenfield project. The partnership had benefitted Heinz Egypt as with Americana Groups extensive knowledge of the food processing industry of Egypt as well as export regions of Saudi Arab (Estrin & Meyer, 2004, p.14). Therefore Americana Group is currently practicing the franchisee strategy for international brands, penetration strategy for its own brands and also joint venture for few selected brands. Alternative Strategic Option Americana group, which has been regarded as the most successful franchisee in the world, also tends to face certain issues with respect to its mode of operation. It needs to expand its operation into other countries apart from the MENA region in particular for its own brand. It has adopted the market penetration strategy, selling existing product in the existing market but before the market gets saturated, other strategies needs to be pursued by the company. Therefore, the firm can go for market development and attain a competitive advantage and stay ahead of its competitors. The company deals with quick food services, processed food and manufactures its own consumer food and presently they are highly demanded by the target market but with change in taste and preference of the consumer market, the company should alter its strategy and adopt the product development strategy. In addition another alternative strategic option available to Americana Group is of diversification, it can be related or unrelated diversification. Recommendation Based on the above strategic alternative options it is recommended to Americana Group to implement the strategic options and achieve a competitive advantage over its competitors and survive in the competitive market. The first alternative strategy is of market development. This strategy requires organization to offer the existing product in a new market. Thus, Americana Group has the opportunity to offer its existing product (own brand) into foreign countries. It has adopted the market penetration strategy but in future it is recommended to the company to go for market development which will enhance its position in the global market. Secondly, it is recommended to Americana Group to adopt the product development strategy. This is because with change in consumers taste, preference and lifestyle habits, the quick service restaurants, processed industry might get saturated over the years. Therefore, with innovation and new product development the company will be able to achieve competitive advantage and survive on the challenging market environment. The new product will be offered to the existing market, i.e. in the Middle East, so that the risk is minimized and the company is able to earn profits bearing less cost of operation. Finally, it is recommended to implement the diversification strategy where new product gets introduced to a new market. For this Americana Group can target Asian countries because the demand for new products are always high in such regions. The company has the option to produce either related products or go for unrelated diversification. The company is known for its food product so it is recommended to opt for related diversification. This will further enhance the company’s international expansion strategy and help it to create a brand value in a new market segment and achieve competitive advantage. Conclusion Americana Group is one of the most successful and famous franchisee operating not only in Middle East but also globally. It is the franchisee of many big brands and provides a good relation with the franchisors. Middle East has a huge growth options and with good economic growth rate franchisor are targeting the Middle East countries and Americana Group being the most successful franchisee maximizing the opportunity. Therefore, it can be concluded that Americana Group and its product lies in the growth stage of the PLC curve and has wide opportunity to grow internationally as well as in domestic market. References AME, 2012. UAE's quick service restaurants sector still open for growth. [Online]. Available at: [Accessed 23 August 2012]. Americana Group, 2012. About Us. [Online]. Available at: [Accessed 23 August 2012]. Americana Group-a, 2012. Our Commitment. [Online]. Available at: [Accessed 23 August 2012]. Estrin, S., & Meyer, K., Investment Strategies In Emerging Markets. Edward Elgar Publishing. Henry, A., 2008. Understanding Strategic Management. USA: Oxford University Press. Restaurant Magazine, 2012. The Counter Custom Built Burgers Announces Deal With Americana Group To Open 33 New Locations In The Middle East And United Kingdom. [Online]. Available at: [Accessed 23 August 2012]. Winston, W., 1993. Market Analysis: Assessing Your Business Opportunities. New York: Routledge. Read More