Planning Implementation and Control - Case Study Example

Introduction Hubbard Foods Ltd has been performing well in the food industry and since its inception in 1988 the business has grown. The company supplies with quality food products that help to check obesity has resulted in increased reputation for the business. The paper thereby looks into the external and internal environmental analysis of Hubbard Foods Ltd and look into the way the competitor is having an effect on the business model. The paper also looks towards using Porter Five force model and looks towards using a method which ensures that the company is able to gain maximum advantage through it. External Environment Analysis The external environmental analysis will help to explain how an effect on Hubbard Foods Ltd. It will also throw light different areas that Hubbard Foods Ltd needs to watch out. Demographic Increase concern towards obesity and using food products which are health concious products which have ensured growth of similar products. This has made more people look towards consuming food which has less fat. The other reason being that young population is on a rise as there has been a growth in population. This has been matched by a increase in income level as there has been an increase in the salary level of employees thereby ensuing higher per capita income. The other factor which has contributed towards the business is the geographical location and the distribution of population has grown the market base as customers pour in from all markets. This is the way the xternal environment is having an influence on businesses. Economic The strategy also gets affected by the economic condition prevalent throughout in the economy. Slowdown in an economy (Mullins, 2004) like the recent global recession has affected the sales to fall. Despite the company looking for different marketing strategies the sales are not rising. Hubbard Foods Ltd performance also got affected due to consumer confidence in the economy as the started to believe that it will take time for the economy to come out of sluggishness. (Mullins, 2004) This affected the overall growth trajectory The growth also hampered and strategies rendered useless due to barriers of entry and tightening of labour union laws. This affected the strategic thinking process and entering into different markets became difficult. This resulted in the commodity and input cost to rise. Another reason whic is having en effect on the market is the slow growth in traditional grocery stores making it easy to market through big outlets. This is making it difficult to ensure the samemarketing strategies. Social - Cultural Hubbard Foods Ltd strategies also get affected due to the social culture. This makes the company use different marketing concepts and theories in different countries like Firstly, Change in the buying habit of consumer (Mullins, 2004) has increased the sales of cereals as people are becoming more health conscious. This has made people move towards Hubbard Foods Ltd. Secondly, Change in generation as Y generation prefers different type of food (Mullins, 2004) has brought a change in the way production is done and changed the concepts and theories used by Hubbard Foods Ltd Thirdly, Slow to change to the changing consumer demand as can be seen from increase consumer concern because of downturn in the economy. This has increased work pressure making organizations to ensure fair pay for employees. Lastly, Increasing trend towards cereals, museli and other health conscious food because of the launch 12 variations of toasted museli added with 36 product lines form museli, bran flakes and oat based cereals. This has increased the options for the customer as they can choose from a large variety of products. Political - Legal The production and marketing strategy of Hubbard Foods Ltd gets affected by the political conditions prevalent in different countries where it is operation. The political situation ensured peace which allowed the manufacturer to take the required steps so that food could be processed in the most effective way Workers threatening to go on strike as being paid poorly (Mullins, 2004) is making Hubbard Foods Ltd look for alternatives of production and ensuring equality for all. Strong government legislation in regard to safety while having food which ensures better health Entering into trade agreements (Mullins, 2004) which was not seen as a great measure previously is being employed widely by Hubbard Foods Ltd to ensure swifter marketing tactics and growth. Strong government laws to make the required changes by having fair pay according to the working hours Global Availability of product in different countries highlights global availability.Also the presence of different producers and opening of economies makes organization have a global effect. This has allowed companies to trade after looking into the international arean and has multiplied the business. This has ensured manufacturing operations in different parts of the world by having plant to look after that aspect The drawback here has been the eeakened global economy affecting the demand for food products. This has made people postpone consumption of food products to a certain extent and is impacting the business. Technological The change in technology has enabled Hubbard Foods Ltd to bring about a change in marketing theories used previously. The changes in the quality, design and packaging of cereals, museli (Mullins, 2004) thereby making more people purchases it. This has also changed the buyer behaviour towards it. Matching the technology advancement as can be seen from manner advertisement evolved. This has increased media attention health conscious products and made more people look towards purchasing it. Profit Pool The food industry has been attracting different players because of the fact that the profits are high and it provides an opportunity for the investors to ensure that they are able to recover their cost quickly. This is visible from the fcat that Hubbard Foods Ltd was able to bank on it and helped them to open up fcatories at different locations. Industry Analysis Looking into the industry analysis will help to understand the manner Hubbard Foods Ltd business is been affected due to external situations and the steps that have to be taken to ensure better productivity. It is as follows Porter’s Five Force Model of Hubbard Foods Ltd The analysis of this model for Hubbard Foods Ltd will help to explain how the different factors are exerting pressure on the industry (Mullins, 2004) Threat of Potential Entrant The threat of potential entrant is high because of increasing competition. The food industry faces competition from other players who are using technology to ensure that they are able to capture a wide market like Sanatarium, Uncle Toby’s & Kellogg’s. The food industry also faces competition from local players who have captured the local grocery business and is impacting the sales of Hubbard Foods Ltd. Increased competition from development new technology and supply chain management skills which allows the products to be readily available at different places has also made more people look towards the food industry as an avenue to earn. Bargaining power of buyers The bargaining power is high because of availability of different brands. The bargaining powers of customers have increased as presence of different players like Sanatarium, Uncle Toby’s, Hubbard Foods Ltd & Kellogg’s provides an opportunity to choose any company. The growth in the customer base as consciousness towards health and health products have grown. This has made customers look for options. Decrease in the purchasing power parity of customers has affected the way business is conducted and has thereby affected the bargaining power of customers as they ahve to look for cheaper products as well. This has been fuelled by reduced per capita income due to economic recession which is having an impact on the buying capacity of people added with low rates being paid to employees has multiplied the problems. Availability of Substitutes The threat of substitute is low because there is little differentiation between the products. Increased options for the customers as they can choose between Sanatarium, Uncle Toby’s, Hubbard Foods Ltd, & Kellogg’s. This has made customers to be choosy and provided different options to choose from. Also the option for the customer to purchase it from the local vendors who supply similar products but without any brand name has increased the level of competiton. Bargaining powers of Suppliers The bargaining power is low because of the possibility to source raw materials from different places. The bargaining power for the food industry has decreased as the numbers of players are increasing. The increased options available to the customers as they choose any and swap between companies Also the development of technology which enables the raw materials to be procured at a cheap rate has ensured that firms are able to take maximum advantage of it has reduced the bargaining power. Rivalry among firms The rivalry is high because of increasing business houses. Increasing rivalry among the food industry due to increased in players like Sanatarium, Uncle Toby’s, Hubbard Foods Ltd, & Kellogg’s. This has made it difficult for the players to sustain a market advantage. This has been added by the lack of differentiation between the products of Sanatarium, Uncle Toby’s, Hubbard Foods Ltd & Kellogg’s has intensified competition The estabishment cost in setting a factory is high which makes it difficult for old players to exit from the market. This along with increased rate of growth witnessed by the food industry due to increased consciousness of the people towards healthy food Industry Analysis Conclusion The industry analysis brings forward to the notion that the food industry has low barriers of entry and the suppliers have a strong bargaining power. The increase in customer base and the availability of similar products have increased the bargaining power of customers and increased the threat from competitors. Since, the products are mostly similar and have very little differentiation thereby the industry highlights low profit potential. Competitors Analysis The analysis of the competitor strategy and movements will help to understand the areas that Hubbard Foods Ltd needs to work on. The company faces stiff competition from Sanatarium, Uncle Toby’s, & Kellogg’s. The increasing presence of global and local brands is making it difficult for Hubbard Foods Ltd to develop strategies which differentiate them from their competitors (Wilson & Gilligan, 2005). With little or no differentiation between the products of one player to another makes it difficult to ensure that the competition level is putting pressure on Hubbard Foods Ltd. A comparison of the competitors is provided below Hubbard Foods Ltd Sanatarium Toby’s Kellogg’s Aims at all people Aims at all people Aims at all people Aims at all people Offers variety at different prices Offers variety at different prices Offers variety at different prices Offers variety at different prices Strength Wide range of products Using retail formats to sell the products Strength Wide range of products Using retail formats to sell the products Strength Wide range of products Using retail formats to sell the products Strength Wide range of products Using retail formats to sell the products Internal Analysis of Hubbard Foods Ltd The following is the internal analysis of Hubbard Foods Ltd Tangible resources Strong network coverage by having its presence in different countries giving a strong market Rising employee base of around 100 employees as the company looks to hire people who have the capabilities and skills Ability to identify areas to advertise like billboards, television, to keep with the changing times Addition of new products into the product line like museli, gluten free cereals, rice puffs and cornflakes Intangible resources Strong brand presence due to strong marketing and quality in the product Improved focus on business development by dividing the business into different core product line i.e. high end consumer, low end consumer Consolidation through huge size which provides competitive advantage as purchasing power multiplies. Value Chain Analysis The value chain analysis for Hubbard Foods Ltd will help to identify the areas the company is laying stress on for growth Primary Activities Inbound Logistics Strong relation with suppliers ensures timely deliver Using different inventory control system to ensure proper acquisition of materials Operations Improved packaging equipments to attract customers and ensure longevity of product Ability to convert materials into finished food products Outbound Logistics Proper integration with supply chain and retail stores to ensure timely delivery Proper handling and storage facilities ensuring no stock out Marketing & Sales Demonstrating the correct advertisement and being ethical in providing what they show Not looking towards influencing customers or any section towards the product Not having continuous advertisement to reduce irritation for customers Service Improved packaging to ensure attractiveness and customer attraction towards the product Efficient workforce to ensure customer satisfaction and the problems being solved quickly Support Activities Procurement Strong network coverage with suppliers ensure ready stock High bargaining power due to brand image and improved activities Technological Development Using machines which are technology advanced to ensure high quality Use of manpower to the highest extent possible instead of replacing it with machines Human Resource Management Strong and motivated workforce as company looks towards having different offers and schemes for employees Increasing employee base capable of handling all pressure Firm Infrastructure Having operations and factories located at different places Using different form of communication to ensure timely delivery of goods Capabilities Developing new product through innovation which has been the key for years and attracted consumers due to it. Ability to identify business to acquire which will strengthen their sale Being in business since age’s shows the reputation level developed. Reputation thus had added to the growth and made customers look towards their products. Core Competencies Rare: Development of new products like museli, gluten free cereals, rice puffs and cornflakes which are cheap and enable the lower income group to purchase one Non substitutable: The presence in industry since 1988 cannot be matched by others Differentiating factor: Ability to sell products directly to the customer by having a strong network of employees Strengths & Weakness Strengths Hubbard Foods Ltd has a wide range of sports products like museli, gluten free cereals, rice puffs and cornflakes which gives it an opportunity to grow It is a global brand which makes the customer to recognize the brand easily. It has a strong research and development wing which is helping the company come up with new products It has a strong marketing campaign which is lead by developing advertisement in such a way that it shows what they preach Ability to source material from the cheapest source at the same time ensuring quality Contract manufacturing has allowed Hubbard Foods Ltd to invest very little in fixed assets thereby giving them more liquidity Weakness Too much dependence on products for the high end customer is a problem The market is very price sensitive which is making it difficult to retain customers as customers switch frequently Increasing labour unions exerting pressure on the company to raise wage Current Strategy The case brings forward to the fact that the current strategy adopted by Hubbard Foods Ltd is that of a differentiator where the company is looking towards eyeing the high end consumer and providing quality in their products. The company also relies little on advertising and looks towards creating brand name through its performance. Future Strategy Hubbard Foods Ltd needs to look towards moving into other products and also looking towards aiming at the lower end of the customer by having products according to their needs. The chart of the present and future strategy for Hubbard Foods Ltd is shown below Product Market Market Present New Present Market Penetration Product Development Promoting its food products line Promoting its newly developed food which is different from the traditional ones Developing new products which helps to reduce obesity at the same time provide the required proteins and vitamins New Market Development Diversification Selling products in low end section as it provides an opportunity to tap on Improving their presence by entering into agreements traders and dealers to ensure steady supply This helps to identify the following strategy which Hubbard Foods Ltd Concentrating on diversifying the products by concentrating on the niche sector i.e. the lower end section of the consumer Looking towards increased marketing of the products by highlighting the benefits of the product Ensuring towards having a strategy where the employees are paid fairly and provided certain other incentives along with the pay Improve the quality and ensure slight differentiation of the product by having different taste for the product Conclusion The paper shows that Hubbard Foods Ltd has been able to use a lot of marketing concepts and techniques in their business model. This has helped them to achieve the target sales and grow. Hubbard Foods Ltd by promoting their product vigorously has ensured that customers remain loyal. The company is very high on quality which has ensured that it grows and multiplies rapidly. The company needs to ensure that they look towards highlighting the benefit of the new food products and the manner it will help people overcome their obesity. References Mullins, K. 2004. Critically examine the main drivers for food industry growth. Free Press, New York Wilson, R. M. S & Gilligan, C. 2005. Strategic marketing management: planning, implementation and control, Third illustrated edition, Butterworth-Heinemann Read More