Strategic Planning for Bakery Industry

Using some models of business environmental scanning, identify the environmental factors that affect Delys Ltd’s operations. Environmental factors affecting Delys Ltd’s operation can be mentioned according to STEEPLE as one of the model for business environmental scanning. It is described as a seven factor. 1. Social factor: Just reviewing the demography of United Kingdom according to census 2008, population is around 61. 4 million. There is unsustainable population growth in this country since 2007 AD. Many immigrants from Asia especially south Asia came here and get reside.

So to cover up those consumers, this company should have variety range of sweetness in their product ranging from younger to old. Considering the religion, U. K is diversified country inhabited with Christians, Hindu, Muslims and other minorities. So as seeing diversified population distribution, this company should focus on the mentioned ethnicity. Usually, Hindu and Muslims are fond of sweets including some spiciness in that product. Since this country is now mainly inhabited by Indians and other Asians. Considering income distribution, most of the people are out of job or working in very low wages.

So, company should manufacture sweet as a basic. 2. Technological factor: It should have new communication channels as link up with some advertising channels so as to promote its product. This may lead to uplift their business not nationally but also in international market. Some sugar reducing technology should be adapted to decrease the threats of some healthy disease like diabetes and obesity. It can be done by use of sucrose based sugar instead of glucose based sugar. There should be more efficient infrastructure including transportation either by air or by road.

Although the manufacturing technique may be traditional but the distribution channel must be strong enough. 3. Economical factor: Company seems to have good turn over. Similarly, net profit on sales ratio is also very healthy. So, it’s better to take attract other company to get merge. This will provide strong support to run company in international market. Since, the exchange rate of pound is not so strong, most of the investor from abroad would like to invest on this company seeing its progress. This gives good outcome in near future. 4. Environmental factor:

It is one of the most prior factors to be considered. Due to excessive violation of environment, global warming is increasing day by day. So to get away from any kind of environment offend, this company should use technology to reduce carbon emission. Quality control and management should be maintained with help of some experts. 5. Political factor: Election is on hand. Although this country has stable political background. So, there is no necessary to be panic. The economy will inescapably be the primary battle ground for any political party.

But certain awareness should be considered such as increase in tax or national insurance. This increases costs for employers and employees. 6. Legal factor: In order to be perfect company, it should have certain standardization such as ISO based on food safety and management systems. International trade is a major source of economic revenue for any company. So, this company should build trade relation either in collaboration or as franchise. 7. Ethical factor: The company has its own speciality and reputation.

Although there are economists who claims ethics is irrelevant to the field of business. And CEOs have only one duty: to maximize the profit of a company. But to maximize the profit means not to degrade the quality, this is ethics. Analyse the needs and expectations of all Delys Ltd’s stakeholders and how you will balance those conflicting needs. Stakeholders may be person, group or organisation that has direct or indirect link with an organisation. It can affect or be affected by organisation’s actions, objectives and policies.

Stakeholders may be customers, shareholders (owners), suppliers, directors and government. All stakeholders are not equals and different stakeholders are entitled to different consideration. For example: customers are not entitled to the same consideration as the firm’s employees. Stakeholders need and expectation can be analysed according to what type stakeholders they are. Analysis can be done using AIDA (Attention, Interest, Desire, and Action). Customer as a stakeholder needs and expectation is good taste in reliable cost. So company should have attention in flavour . ince flavour decides the customer whether to eat it or not. Customer interest can be captured by the size and shape of the product. Desire should be of delicious test and action can be taken with the help of good ingredients. It can be described as that initially customer gets interested to eat the sweets by its shape, size and flavour. So company should have desire of making delicious sweet and action can be implemented by using good ingredients. Similarly, need and expectation of shareholders are good profits and rising of share value respectively.

These needs can be fulfilled as; good attention should be given to give them good profit outcome, create interest for them for their involvement, desire to give them good share value and finally action by providing bonus shares. Lastly, needs and expectations of directors are good salary and sophisticated facility. For this, company should have attention to provide good environment, should create interest to day to day proper work, company should have desire to increase the salary and action can implemented just by providing good salary and facilities. Key audiences| Preferred media and message|

Stakeholder| Needs &Expectations| Attention| Interest| Desire| Action| customer| Good taste| Good flavour| Size and shape of sweet| Delicious sweets| Good ingredients| shareholders| Good profit and raising of share value| Give them good profit outcome| Creating their involvement| good share value| Providing bonus shares| Directors| Good salary and facility| Good environment| Day to day proper work| Increase in salary| Good salary and facility| Critically assess the major changes taking place in the general economic environment and the market for food stuffs especially luxury items that will affect Delys Ltd’s strategy

Economic changes is related to changes in the wider economy such as rises in living standards or the general level of demand, rises or falls in interest rates etc. Economy changes are closely related to social one. The economy goes through a series of fluctuations associated with general booms and slumps in economic activity. In a boom, nearly all businesses benefit and in a slump most lose out. Other economic changes that affect business include changes in the interest rate, wages rate and the rate of inflation (i. e. general level of increase in prices).

Business will be more encouraged to expand and take risks when economic conditions are right. Example: low interest rates and rising demands. In july2008, annual inflation on food rose to 12. 3%. This report assesses the impact of these food price rises on consumer’s grocery shopping behaviour. Mintel’s research shows that consumers have tried to save money in a number of different ways including looking out for deals and promotions, buying own – label products and shopping at discount stores . consumer usually wants to get their needs in basic price. They don’t afford too much to buy luxury foods usually that is not needed i day to day life.

Meanwhile retailers have turned to high profile promotions and price cuts to keep consumers in their stores. So according to this research it can be said that people have started thinking before buying any luxury foods. Sweets and desserts are considered luxury food items taken usually to make in certain days or parties for ordinary people. So to make it easy viable to the consumer, it should be termed as basics. A basic is taken as essential needs which can be afforded in very low cost. These basic price foods are usually sold in reputed supermarket such as Tesco, Sainsbury and other supermarkets.

Most of the consumers usually believe in these types of supermarkets. Use appropriate tools to analyse and measure the effects and effectiveness of Delys Ltd’s current business plans. Various tools can be applied to sort out the effect and effectiveness of any company current business plan such as McKinsey 7s, porter’s five forces, Ansoff analysis and others. In the matter of this company, I would like to use porter’s five forces. Porter’s 5 forces deal with the factors outside an industry which influences nature of competition within it.

A business has to understand dynamics of it industries and market that helps to compete more correctly as well as effectively in the market. Aspect of porter’s 5 forces analysis and measure the effect and effectiveness of Delys ltd’s business plan is mention as following. 1. The degree of rivalry: the current plan of Delys ltd’s is to expand the range of desserts and sweets in Viennese and Italian style but the main things should be taken in consideration that already existed industries and bakeries have taken strong market in these sectors.

So, to overcome in these sectors this company should make those mentioned styles in standard, tasty as well as easily available through good supermarkets such as Tesco, Sainsbury and other. The degree of rivalry is most likely to be in these industries where there is a threat of substitute products. So in order to overcome this threat, company should also diversify into other areas including bakery. This help to fulfil the demands of suppliers and buyers in every sector of sweets, desserts and bakeries. 2. The threat of entry: this is one of major force that determines the company’s stability in the current business market.

This company’s has plan of exploring in international business platform. So this new entry should be make in peculiar strategy to compete internationally like ease of access (distribution channel), and investment in new technology. 3. The threat of substitutes: There are plenty of niche markets who are also dealing with various others sweet and deserts product including yoghurt and ice creams. Yoghurt can be strong substitute for sweets, desserts, and cake. Yoghurt can be accompanied by sweets and desserts to make good one. 4. Buyer power: Buyer power can be a strong force that can easily influence the strategy of the company.

Company should focus their market for large population in order to minimise the power of buyer. If not so then there are various other competitive product which can easily attract the large population. So to minimize the buyer power this company should have good taste with large quantity concept in their sweets and desserts. 5. Supplier power: it is the mirror of buyer power. While doing business in large population even in international market, suppliers have a good power if they have good quality and quantity. With the trade name of Delys, this company can easily find the superiority among other companies.

Summarise the position of Delys Ltd’s in its current market. Current market position of Dely’s Ltd according to current business value seems to be in very good and progressive situation. The sales of this company done through the renowned supermarkets like Tesco, Sanisbury, ASDA and other. These are the major access for the people to buy the food stuff. It is also well known fact that the national press has praised the quality of the products and a number of organisations have identified some Dely’s product as being the best kind in taste. This reflects that this company has a good market value.

This provides a company to get good platform in the challenging international markets. Similarly, while seeing the sales of the company’s product, it has grown by more than 15% per annum. This is very good out source of the company. It also clarifies even in harsh situation of recession, it has its stability with good profit where net profit on sales ratio as 10%. Similarly, this company has assets of ? 20 million as a big amount in which most of the amount is taken from the shareholders. So this reflects that this company is in very good step of business. It has got very good market in chilled products.

No competitors are found competing with this company in chilled product. Most of the people are nowadays attracted towards sweets and desserts. So, this factor is very crucial that can enhance the business of this company with very good profit in forth coming years. Nowadays people are taking sweet and desserts as part of their food. They wish to take sweets and desserts after having lunch or dinner. So this increases the high demand of sweets and desserts in the market. So company should focus on the high demand of this thing without deteriorating the quality of the products.

Evaluate the competitive strengths and weaknesses of Delys Ltd’s current strategies Competitive strengths and weaknesses of this company current strategy can be evaluate as SWOT analysis. SWOT Analysis is the Key Component of Strategic Development. It can prompt actions and responses. Successful businesses build on their strengths, correct their weaknesses and protect against internal vulnerabilities and external threats. They also keep an eye on their overall business environment and spot and exploit new opportunities faster than competitors. SWOT analysis is a tool that helps many businesses in this process http://www. 000ventures. com/business_guide/crosscuttings/swot_analysis. html INTERNAL| EXTERNAL| BUILD ON STRENGTH| EXPLOIT OOPURTUNITIES| RESOLVE WEAKNESS| AVOID THREATS| Strength: mainly two factors are responsible for strength: ability and resources Ability is further evaluated on 3 counts. * Versatility: it refers to ability to adapt to an ever changing environment. In a matter of this company, it has very good hold on sweets and desserts market with having good business even in during the period of recession. This shows the versatility of the company. * Growth: people are attracted towards sweets and dessert.

So this factor contributes for the continuing growth of this company. * Markets: this company has ability to penetrate or create new markets with its good brand name. As it has good trade name in market, no doubt for people to believe on its new market product. Similarly, strength of this company has three dimensions. 1. Availability: it has good ability to obtain the resources needed 2. Quality: this company has good quality and up to datedness’ of the resources employed 3. Allocation: ability of distribution resources of this company is very effective and efficient.

Weakness: weakness of this company can be determined through failures, defeats, losses and inability to cope with the dynamic situation and rapid change. It may be rooted in lack of managerial skills, insufficient quality, inadequate systems, slow deliveries or shortage of resources. Main weakness of this company can be slow deliveries. Since, Delys ltd owns no distribution businesses and no retail outlets. There may chance of slow deliveries. Similarly this company is only making just chilled product that sells through existing retailers is risky one. Opportunities: this company has wide range of opportunity.

Just by its good market value, it can expand the range of desserts and sweets. Weaknesses of competitors are also opportunities of this company. Since it has plan to take over two local firms with good regional reputation Worthing about ? 2. 5 million. This helps to broaden the business. Threats: threats may arise from political, economical, social, technological forces. This company wish to expand internationally but should consider that there may be different obstacle as empowering of other agency, increase in tax, or the taste may not be appropriate. Use a range of tools and models to develop a range of strategic options for Delys Ltd .

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