Business Strategy for the Food & Hospitality Industries Andrew Boer

Note: Within an industry, the balance of forces and the inter-relationship between the forces can be complex. It is not fully shown above. The seven basic factors influencing the organisation

Analysis of the Business Analysis of the BusinessAnalysis of the Business –Internal analytical review (resource base: tangible / intangible) –Immediate / near areas of interaction (customers; suppliers; competitors etc) Analysis of the EnvironmentAnalysis of the Environment

Assess the nature of the environment Audit environmental influences Identify key competitive forces Identify key opportunities and threats Identify competitive position Strategic position Steps in environmental analysis

Historical analysis Forecasting Experience and learning Scenario planning Static Dynamic ENVIRONMENTAL CONDITIONS SimpleComplex Approaches to making sense of the environment

Analysis of the Business Environment The Operating EnvironmentThe Operating Environment –the environment and factors which most immediately concern the business (ie those issues which have impact on the business, its markets and direct competitors) The Remote EnvironmentThe Remote Environment –those issues which may affect the operating environment but which the business cannot significantly influence

Analysis of the Business Environment The Remote EnvironmentThe Remote Environment –Likely to be huge number of issues / factors therefore some sort of choice / focus needed –Role of mission statement in assisting this element of choice (?) –Issues likely to have different ‘strength of impact’ dependent on the individual strengths, resources, values etc of each organisation

Megatrends influencing the Remote Environment The ‘Third Wave’ conceptThe ‘Third Wave’ concept. The impact of Information TechnologyThe impact of Information Technology. Internationalisation and GlobalisationInternationalisation and Globalisation

The ‘Third Wave’ Concept After Toffler, A “The Third Wave” 1980 refers to revolutionary changes within the environmentAfter Toffler, A “The Third Wave” 1980 refers to revolutionary changes within the environment 2nd Wave : Industrialisation Wave 19th - mid 20th Century2nd Wave : Industrialisation Wave 19th - mid 20th Century 3rd Wave : Information Wave mid 20th Century - future(?)3rd Wave : Information Wave mid 20th Century - future(?)

Characteristics of the ‘Third Wave’ Concept Second Wave Mass ProductionMass Production StandardisationStandardisation Passive consumerPassive consumer Centralisation & syncronisation of productionCentralisation & syncronisation of production Third Wave ‘Massed Individuality’ Specialisation Active consumer Decentralisation & flexibility of production

The ‘Third Wave’ Concept “Mega trends are very long-term trends of interest to virtually all business’s...these will still affect and inform the remote environments of all firms, albeit in a less immediately noticable way…we are at the beginning of the knowledge age…capital isn’t a limit on production; the limit is our imagination…” Finlay. P : Strategic Management: Pearson Education Ltd: Harlow 2000

Analysis of the Business Environment Aspects DevelopedAspects Developed –Need for management to take a ‘holistic’ view of the environment –Difficulty in deciding exactly which factors are most important –Identifying incremental new factors and priorities –The difficulty of being ‘objective’

Impact of Information Technology “ It took 38 years for the radio to reach 50 million listeners, and 13 years for television to reach 50 million viewers. It took only 5 years for the internet to acquire 50 million users…” Koenig.P The Independent on Sunday. July 1998

Impact of Information Technology Convergence of telephone; TV and computer ? Continued convergence? Central role of the computer?Convergence of telephone; TV and computer ? Continued convergence? Central role of the computer? Move from PC focus to ‘information appliances’Move from PC focus to ‘information appliances’ Impact? Which industries? When and how?Impact? Which industries? When and how? Readily transferable information, previous geographical ‘boundaries’ cease to be an inhibiting factor...Readily transferable information, previous geographical ‘boundaries’ cease to be an inhibiting factor...

Impact of Globalisation Move from individual countries trading (1900’s) to Unions and trading blocks (1950’s) to globalisation….?Move from individual countries trading (1900’s) to Unions and trading blocks (1950’s) to globalisation….? Nature of markets dictate extent of localisation, regionalisation, nationalisation or globalisationNature of markets dictate extent of localisation, regionalisation, nationalisation or globalisation

Impact of Globalisation ? “ Markets rather than political groupings dominate economic activity…there is a rise in small groupings and individualism, however it is easy to ignore the vast amount of activity that isn’t yet international, and given the emphasis on consumer involvement, perhaps never will be…” Finlay. P : Strategic Management: Pearson Education Ltd: Harlow 2000

Examples of environmental influences : DEEPLIST DemographicsEconomic EcologyPolitical LegalInformation Socio cultural Technological The Enterprise