Operations Decisions at McCain Foods - Term Paper Example

Operations Decisions s affiliation Operations Decisions Introduction McCain Foods was established by the three brothers i.e., Wallace, Andrew and Robert in 1957. The Company is one of the largest food producers in the globe. In addition, it has a market share of approximately 33% and more than twenty thousand employees. The Company produces high quality and healthy foods. The Company has a good work ethics, where they believe that they should have a healthy relationship with workers and employees. This is the reason as to why the Company has flourished for the last 3 decades (The Times 100, 2014). Plan that will enhance the effectiveness of the marketing structure Mission statement The mission of the Company is to offer high quality and low calorie food to people in United Kingdom. More so, the Company intends to sell its products at a fair market, targeting individuals from all socio-economic background. The Company is different from its competitors because it sells low calorie foods that are very tasty and look good. More so, most individuals focus on healthy foods, this in return makes the Company outshine its competitors who sell high calorie foods. The Company has planned to expand its clientele by opening up other branches in nations such as United States, France and Spain in the next 3 to 4 years. Target Market Most individuals in the United Kingdom are concerned about their health, thus prefer low calorie food. Therefore the Company has an added advantage over its main competitors who mainly sell high calorie food such as Mac fries and KFC. The product is consumed by individuals from all socio- cultural background, and most buyers range from ages 20 and 55. In addition, women are the ones who mostly purchase the products, thus the Company highly concentrate on the female population (The Times 100, 2014). SWOT Analysis These are external and internal factors that may affect the marketing opportunities of the Company. SWOT analysis identifies the strengths, weaknesses, opportunities and threats, which are essential in determining actions or aspects that are necessary for the marketing plan. Strengths of the Company The Company provides high quality, tasty and good looking products, thus attract large number of customers The Company uses other transport Companies to distribute its products to the wholesalers and retailers The Company has a good workforce that ensures that everything is in order The Company has an outstanding growth of sales, thus increased returns Weaknesses of the Company The Company has lower- priced competitors, which limits the amount of products to be sold Utilisation of transport Company in distributions makes the Company incur extra costs Introduction of new techniques or technology makes the Company incur extra costs of training the employees Limited resources may make the Company have less growth opportunities compared to the big competitors Opportunities of the Company Technology enables the Company come up with better production and marketing strategies that may make the Company advance There is an increased demand for healthy foods that have minimal calories The Company’s unique branding acts as a breakthrough to a larger target market Threats to the Company Competitors may attempt to replicate the Company’s products and sell at a lower price There are a large number of food Companies in United Kingdom, thus stiff competition Currency fluctuations may affect the Company Marketing strategy The Company strives to make simple and good food in a more sustainable way and at the same time meet its business goals. In order to achieve the above stated aspect, the Company ensures that it is able to balance the four major elements of the marketing mix. A service or a product will incorporate a distinct marketing mix. More so, the right mix will result to the achievement of the stated goal, which may bring about customer satisfaction. Marketing mix constitutes of four P’s, which include; price, product, promotion and place. In this case, the Company’s product ought to taste and look good and constitute the required ingredients. More so, the price of the product ought to be fair so as to increase sales that may result to increased income. The Company should know the best location for marketing and selling its products. In this case, the Company should sell its products to wholesalers and retailers such as supermarkets, restaurants, among others. In addition, the Company should figure out how the product will reach the consumers. For instance, it can place its products at a strategic section of the supermarket where customers are able to identify with ease, thus increase in sales. More so, the Company ought to utilise transport from other Companies. In this case, the transport Company delivers products to a central depot where the retailers are able to obtain them. Also, the transport Company delivers goods directly to wholesalers, who in return sell to restaurants, supermarkets, among others. In relation to promotion, the Company should ensure that the products have the correct labels that gives information on the amount of sugar, fat, salt, which enables consumers choose the right product for their health benefit. Labelling of food should be at par with the Food Standard agency and Guideline Daily amount (The times 100, 2014). The Products can be promoted through advertisements such as the media, television and radio. More so, the Company can incorporate the use of newsletters and emails in advertising its products. In addition, the Company can offer discounts to customers, drop leaflets to various institution in order to obtain an enormous market. Factors that may affect the marketing structure of the Company According to Smith (1999), an effective marketing strategy is an evolving aspect that changes because of a number of factors. When an individual is developing a marketing plan for a Company, he or she ought to put into consideration aspects that may affect the strategy in both long term and short term. An individual can develop a more effective long- term plan if he or she designs a marketing strategy that can adapt changes. The varying needs of the target consumers have a strong impact on the Company’s marketing strategy. If the consumer needs change because of economic, social and environmental aspects, the Company ought to change the marketing plan accordingly. If the Company does not adjust to the consumer needs, it may lose a large amount of money in advertising products that the target consumers are not interested in purchasing. In addition, the Company’s objective can make one change the marketing structure. In the initial stages of marketing strategy development, the objectives of the business ought to act as a frame and end goal. In the long run, one’s strategy will have to be altered based on adjustments at the top ranks of the company. By being focused on strategic objectives, the Company can mould its strategy to act as the main target and be efficient on a greater level. Analysis of the major long run and short run production and cost functions As established by Food and Agricultural Organisation (2003), the production and cost function acts are the major factors that determine the economic sustainability of a Company in micro- economic analysis. In trying to maximise profit and achieving state of balance, a Company must consider factors of production and costs to be incurred. The short run and long run production function helps one understand the supply aspect in a given market. The price of a product is usually determined by the input. In this regard, if productivity diminishes, more variable input is required so as to increase the quantity of goods. This in return brings about increase in cost of production, thus the Company increases the price of commodities so as to make adequate profit. Production function can be expressed as below Q= f (X1, X2, X3…… Xn) Where Q is the amount of output and X1, X2,,,,X3 are the amount of inputs (like labour, capital, land and resources (Food and Agricultural Organisation, 2003). On the other hand, the analysis of production cost indicates the relationship between the production and costs of a product in a given duration of time. The cost of production can be calculated if the prices of the inputs are established. In this regard, the cost production function can be expressed as follows: Q = a + b x (VI) + c x (VI) 2 - d x (VI) 3  Where Q is the amount of the product, VI the elements of the variable inputs, and ‘a, b, c and d are constants’ (Food and Agricultural Organisation, 2003). Aspects that may result to disclosure of a Company Factors that may lead to the disclosure of a firm or a Company may have an adverse negative effect to the Company. A Company may find it hard to find potential buyers or to put into place essential marketing. This may result to losses, thus force the Company to discontinue its practices. In addition, a Company may evaluate its strategies and performance of its business; if it finds out that its business is unfit or there is a potential huge loss, it may decide discontinue its operations. To curb the stated circumstances, management ought to purchase insurance cover so as to be compensated for potential risks. More so, disclosure of business may force employees lose their job, who in return may sue the Company. To avoid such legal problems, the Company ought to know the legal obligations towards their employees. For instance, they should compensate workers by giving them ‘goodwill’. A pricing policy that will make the Company maximize profits When pricing a product, the Company ought to come up with a strategy that will maximize its profits and reduce cost of production. Info Entrepreneurs. Org (2014) state that, value- based pricing is one of the essential strategies of pricing a product. In this case, the Company should determine a price in which consumers are able to pay. Value- based pricing is determined by the strength of the benefits the Company is willing to offer to the consumers. If the benefits attract more to consumers, the Company can outshine its competitors resulting to more profits. Outline of a plan that will evaluate the financial performance of the Company: Business Help. Org (2013) Long term assets Land $ Renovations $ Building $ Furniture & Fixtures $ Computers and office apparatus $ Total Long- Term Assets $ Intangible Assets Accounting and legal fees $ Franchise Fees $ Pre- Opening Costs (grand opening advertising, training) $ Other; $ Total Intangible Assets $ Short- Term Assets Working Capital $ Inventory $ Supplies $ Lease and Utility Deposits $ Other: $ Total Short- term Assets $ Total Uses of Funds i.e. short- term, long term and Intangible Assets$ Sources of funds Equity Injection Cash $ Other Equity $ Total Equity Injection $ Borrowed Money Company Loan $ Other $ Total Debt $ Total Sources of Funds $ Profit and loss projection graph Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Revenues @month Total revenue Cost of goods sold @month Total COGS Expenses Partner’s salary Employees wages Taxes Office Expense Promotion/advertisement Insurance Transport Others Total Expenses Actions for improving profitability A company is able to attain more profits if it comes up with a clear advancement strategy and powerful execution infrastructure. In this case, a Company’s infrastructure must support the success of strategy execution. To achieve this, the Company ought to grow leaders in all levels of management, get rid of departmental silos and make use of performance drivers that are in line with the strategy. More so, the leaders should consider the potential growth that is incorporated in the core business. Also, the Company should come up with a strategy, which involves the creation of advanced impact value propositions essential for the new/ potential customers. Outline of the implementation plan References Business Help.Org (2013). The Importance of a Business plan. Retrieved on 5February, 2014 from http://www.bhfreebusinesshelp.org/content/docs/PlanOutline.pdf Food and Agricultural Organisation (2003). Micro- Economic Analysis of Production. Retrieved on 4 February, 2014 from http://www.fao.org/docrep/003/v8490e/v8490e07.htm Info Entrepreneurs.Org (2014). Price Your Product or Service. Retrieved on 5 February, 2014 from http://www.infoentrepreneurs.org/en/guides/price-your-product-or-service/ Liabotis, B. Three Strategies for Achieving and Sustaining Growth. Ivey Business Journal. May, 2007 Smith, E, (1999). What Factors will Impact Your Marketing Strategy? Retrieved on 4 February, 2014 from http://www.ehow.com/info_7742564_factors-impact-marketing-strategy.html The Times100 (2014). The Marketing Mix in the Food Industry: A McCain Foods Case Study. Retrieved on 4 February, 2014 from http://businesscasestudies.co.uk/mccain-foods/the-marketing-mix-in-the-food-industry/promotion.html#axzz2sLOIjOni Read More