Project and Operations Management: Fantastic Farm Foods - Case Study Example

Project and Operations Management: Fantastic Farm Foods Executive Summary Fantastic Farm Foods (FFF) is considered a small food producer in the North West of England focused on producing ready meals, such as cottage pies and chicken supreme, in their large farm kitchen using local farm fed and field grown produce. The food producer has recently seen an increase in demand for products through their network of local retailers. Due to demand for their products, FFF has decided to expand their operations to meet their new production targets and provide them with the additional capacity they think they will need in response to their marketing activities. With the increase demand for their products, a review of current operations strategy, structure, and performance needs to be done in order to advise FFF on their potential options and optimum solutions with respect to their operational strategy, design, location, and capacity planning decisions. The operation strategy is a candid disclosure of FFF, where our intent is to set realistic business expectations, and remove any questions concerning the profitability and operation strategy of this business venture. Our intent is to have a business that is definitive with an operational strategy, structure and performance that not only serves the need for expansion to satisfy the increasing demand, but is used as a daily operation strategy roadmap. Let us begin by looking at the situation analysis of FFF. Strategic Objectives Fantastic Farm Foods should strive for several objectives for the first year of operation that include: Maintaining the price of food at 4.5 pounds so that the retailers and hotels can make a substantial amount of profit. Meeting the increasing demand of products through their network of local retailers. Expanding and promoting the FFF farm products of readymade meals concept as a unique North West England destination for excellent readymade meals. Expanding advertising and marketing in Greater London and South East of England. Situation Analysis Situation analysis is considered a collection of numerous methods that managers utilize to analyze an organization’s inside and outside environment to recognize or understand the organization’s capabilities, business, and customer’s environment (Viardot, 2004). The situation analysis utilizes SWOT analysis that will be used to analyze FFF as a business and its level of competitiveness. SWOT analysis is a planning structured method utilized to assess the weaknesses, strength, threats and opportunities involved in a business or in a project (Ratnasingam, 2005; Dealtry, 1992). As consultants, we will use this SWOT analysis to evaluate whether FFF strengths and opportunities are essential for its growth in meeting the increasing demand for farm food products. Strength Location: the North West of England is a tourist destination with a population of 7,052,000 as of 2011 and the third populated region after Greater London and South East (Dale, 2010). This provides FFF potential customer base to serve their ready meals, such as cottage pies and chicken supreme. Uniqueness: FFF is the only farm food producer that produces ready meals for local supermarkets that buyers find unique. This means that FFF product is distinguishable from other food products. Strong management: FFF keeps records in a book where they note the lot digit for everyday’s batch and the corresponding client. This means they will be able to demonstrate traceability that shows they can meet business regulations. Economies of scale: with experience in making ready meals, such as cottage pies and chicken supreme, FFF has the potential to serve many local supermarkets and hotels leading to increased profits. Established reputation: with buyers praising FFF readymade food, it is possible that other supermarkets and local hotels will try their food. This means with established reputation, more buyers will want to build their supermarket and hotel names by serving FFF readymade meals. Weakness Lack of storage space: with increased demand for readymade food, the current operation at FFF does not have the space to store high volumes ingredients in bulk, which means they shop every week. This implies they are not achieving economies of scale that can yield better profit margins. Therefore, huge storage space is needed to allow storage of many ingredients. Speculation: the increased demand for readymade food can be attributed to customer’s sudden change of preference of food. This means that FFF may be speculating on the sudden adoption of customers to their readymade meals. This is a serious weakness because in expanding operation strategy to meet the increasing demand may make FFF spend money from loans that may be difficult to pay later. Hence, readymade meals market needs to be analyzed even more to avoid speculation. Unknown distribution methods: with increased demand for readymade food, FFF only depends on local supermarkets and hotels. This means that in case these two distribution channels cease to take FFF readymade food, then a huge loss will fall on FFF. Therefore, other distribution channels “partners” are needed to ensure constant supply readymade food. Perishability of farm products: the problem with fresh farm products is that they are readily perishable. This means that the time it takes for farm products to be delivered to supermarkets and hotels may result in the products going bad. This problem with lack of storage space may be catastrophic to FFF as they may lose a lot of farm products from perishability. Opportunities Area growth: since North West of England is a tourist destination with a high population, it means more local hotels and supermarkets will be built to cater for the needs of tourists. This anticipation of growth of local hotels and supermarkets will ensure FFF gets more customers for their readymade meals. Also, FFF may serve their readymade meals to customers directly by opening their own restaurant chains like Wal-Mart (Brunn, 2006) in order to eliminate middle men for even more profits. Increased demand for farm products: the demand of farm products has been increasing rapidly opening up more opportunities for FFF. One opportunity is for FFF to open their own restaurant supermarket chain like Wal-Mart in order sell directly to their customer making more profits than using other distribution channels. Threats Potential competition: since FFF is looking to serve more customers (local) using supermarkets and hotels, it is possible that a potential customer with more funds than FFF may come in and start the same business. Therefore, FFF needs to capture all the customers and retailers in order to create an entrance barrier to farm production of readymade meals. Being underprepared for increased demand: this problem is a serious threat to FFF because if they cannot meet the demand of local supermarkets and hotels, a potential competitor may get into the same business in order to fill this gap. When this takes place, FFF will see many of their customers leaving them for a business that fulfils their need. Strategies for Potential Growth Looking at the SWOT analysis, Fantastic Farm Foods should take complete advantage of the available opportunities to it as a farm produce for readymade meals; those opportunities are what will make the farm produce grow as the demand for readymade farm produce continue to increase. This can be done through continual making of unique readymade meals with strong management of ingredients as the space for storage is limited. However, with lack of storage space for ingredients, it is possible that FFF may have perishable goods going bad because of lack of storage space. This will lead to huge losses for FFF. To make matters worse, FFF has unknown distribution methods. This means their reliance on local hotels and supermarkets may run its course, which may result in local hotels and supermarkets cutting ties leaving FFF without distribution methods. This means that FFF will have to come up with a strategy to find more distribution methods or come up with their own. Currently, FFF is underprepared for increased demand. This simply means that a potential competitor may come in to meet this increased demand and take FFF out of readymade meals business. Hence, FFF needs to find strategies to meet the increasing demand. Let us look at the different ways FFF can come up with strategies that will eliminate its threats and weakness and take advantage of its strengths and opportunities. Let us start by looking at the target market segment strategy. Market Target Segment Strategy FFF will cater for a huge customer base. The following categories have been defined as target segments that will ensure goals of the strategy objectives of the business mentioned above are achieved: Retail Supermarket: retail supermarket serves a huge number of customers everyday looking to purchase low end products to high end products. Retail supermarkets that have a restaurant will be the main target of FFF readymade food. Promotion and advertisement of readymade food will be taking place inside the supermarket and at the restaurant to attract as many potential customers as possible. Hotels: hotels have the advantage of serving food that is inclusive of bed, which is known as bed and breakfast or full accommodation. FFF will concentrate on providing readymade food for hotels at an affordable price. This inclusivity will ensure FFF gets guaranteed profit from the sale of its readymade food. Common Customers: common customers are customers who will order readymade food directly from FFF through calling or ordering online via their website. This will ensure FFF prepares food that already has a particular number of customers. This will ensure losses from food that are not bought daily are avoided. Distribution Channels: distribution channels are different methods of getting a product to a customer (Berman, 1996). This is important to FFF because it helps in taking readymade food to customers who live far from the location of the farm. With suppliers taking care of distribution of readymade food, it simply means that FFF will be able to reach more customers, and therefore meet the increasing demand for products to local retailers. These above mentioned target segment can only be served by FFF through the implementation of different policies to attain (competitive) advantage over rivals in the same business. Strategy and implementation is examined next. Strategy and Implementation The strategy is very simple. In order for FFF to succeed in this food farm production of readymade meals, a combination of reliable distribution channels, retailers, hotels and delicious fresh farm food that appeals to a wide range group of all ages will be needed. FFF will put more emphasis on establishing a strong identity in the North West of England community with an invitation to potential distributors, retailers, hotels and common customers. The major focus in marketing thereafter will be on increasing awareness of distributors, retailers, hotels and customers in the surrounding communities. FFF will need to direct all its tactics towards explaining what readymade meals are all about especially to retailers, hotels, and common customers. The standards will need to be kept high and executed flawlessly, so that buyers will advertise FFF using word-of-mouth as the main operation marketing strategy. The retail price of 4.5 pounds is affordable enough for retailers and hotels to make their own after sales profit. It is this affordable price that retailers and hotels will be attracted to FFF because they will make substantial amount of profit. Let us look at the competitive edge of FFF. Competitive Edge Fantastic Farm Foods completive edges will include: 1. Serving readymade food from the farm to retailers directly at a low price, such as cottage pies and chicken supreme. 2. An excellent location with a huge population of potential customers and retail supermarkets and hotels. 3. Strong management that keeps records in a book where they note the batch number for each day’s batch and the customers the batch is for. 4. Experience in economies of scale from making ready meals, such as cottage pies and chicken supreme. 5. Established reputation from buyers of readymade FFF food. In light of these competitive edges mentioned above, it is good to look at the strategies of implementation using Porters 4 Ps of analysis. Porters 4 Ps of analysis focus on place, price, promotion, and product (Little & Marandi 2003). Place Location is the most important part of putting a strategy in place on where the business should be located. In this case, the North West of England is a tourist destination with a population of 7,052,000 as of 2011 and the third populated region after Greater London and South East. This provides FFF potential customer base to serve their readymade meals, such as cottage pies and chicken supreme. Price The retail price of 4.5 pounds is affordable enough for retailers, distributors, and hotels to make their own after sales profit. It is this affordable price that retailers and hotels will be attracted to FFF because they will make substantial amount of profit. To common customers who are buying the readymade food online or through the phone, the affordable price will ensure a word-of-mouth promotion to other potential customers. Therefore, maintaining an affordable price will position FFF as an affordable readymade food business. Promotion Advertising and promoting of FFF readymade food will be done mainly inside the supermarkets and at the restaurants located at the supermarket using display and brochures. The display and brochures will contain the types of food being sold and the affordable price to promote it. However, the most relied form of promotion will be word-of-mouth from customers (Silverman 2001) who have tasted FFF readymade food. This form of promotion is most trusted because it comes from the mouth of friends and families who are trusted to give informed opinion concerning relevant issues. Hence, much emphasis will be laid on persuading customers to spread a word-of-mouth about the readymade food through free food samples. Product The product being offered is a readymade meal from FFF. This product is unique because it provides retailers and hotels with readymade food for its customers. With buyers getting attracted to this product as mentioned in the case study, it only means that the product is of high quality. Therefore, in selling this product at an affordable price, FFF is telling its customers that a unique product that satisfies hunger instantly is available for everyone at a low price. Therefore, with well thought promotion and affordable pricing, this product has the potential of growing the FFF business to profitability. Operational Evaluation Operational evaluation focuses on operational issues, such as performance of a business or application of procedures (Kotler 2000). Here, effectiveness and efficiency of the business strategies discussed are the main focus. Two types of operational evaluations will be used that include thematic cross-programme that puts emphasis on innovation in a business (Fenwick & Farrell 2012) and operational cross-programme that puts emphasis on aspects of business, such as indicators of performance in a business (Fenwick and Farrell 2012). According to FFF, they have been able to innovate readymade meals that have attracted local supermarkets and hotels, leading to smooth operation of the business in terms of getting more customers. This implies their operational strategy above is fulfilling FFF strategic objectives. Bibliography Berman, B1996, Marketing Channels, Wiley, New York. Brunn, S 2006, Wal-Mart world, Routledge, New York. Dale, G 2010, BTEC level 3 travel & tourism, Edexcel, Harlow. Dealtry, T 1992, Dynamic SWOT analysis, Birmingham (Prince's Corner, Harborne Park Road, Harborne, Birmingham. B17 0DE): Dynamic SWOT Associates. Fenwick, T & Farrell, L 2012, Knowledge mobilization and educational research, Routledge, New York. Kotler, P 2000, Marketing management, Prentice Hall, Upper Saddle River. Little, E & Marandi, E 2003, Relationship marketing management, Thomson Learning, London. Ratnasingam, P 2005, A SWOT Analysis for B2C E-Commerce, Idea Group, Hershey. Silverman, G 2001, the Secrets of Word-Of-Mouth Marketing, AMACOM, New York. Viardot, E 2004, Successful Marketing Strategy for High-Tech Firms, Artech House, Boston. Read More