Food and Beverage Management
Making Strategic Decisions
Origins of strategy
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Vision
Mission
Policy
Goals/aims
Strategy
Objectives
Tactics
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
The three levels of strategy
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Assessing current performance
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1.
Same three levels used when assessing the
performance of the current operation:
Operational
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2.
Business
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3.
includes day-to-day sales and the way the product is
provided and promoted
the performance of the enterprise in terms of profitability,
competitiveness and other business measures
Corporate
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the strategic direction of the operation and how this is
being achieved
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Assessing current performance
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Quantitative analysis
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Business environment analysis
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Qualitative evaluation
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Quantitative analysis
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Essential part of appraisal
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Considered over time
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Evaluation is more important than the
data itself
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Business environment appraisal
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Macro environment
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PESTLE
Industry environment
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Five forces
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
The business environment
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P
E
S
T
L
E
Political
Economic
Socio-cultural
Technological
Legal
Ecological
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
The micro-environment
Porter’s Five Forces
Adapted from Porter 2004
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Qualitative evaluation
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Making informed evaluation of the
business
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Allowing for external comparison
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Asking the right questions
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
The foodservice cycle
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
The foodservice cycle
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Can be used to as an analysis tool for
the operation:
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Difficulties in one element of the cycle will
cause difficulties in the elements of the
cycle that follow
Difficulties experienced under one element
of the cycle will have their causes in
preceding elements
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Assessing organisational capability
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Resource analysis
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How well do we do what we do?
Existing capacity for change
Identifying changes in resources
Value chain analysis
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Examine all stages of the foodservice cycle
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
SWOT matrix
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Strategy is a means to an end
“Would you tell me please which way I
ought to go from here?” she asked.
“That depends a good deal on where you
want to get to,” said the cat.
Lewis Carroll, Alice’s Adventures in Wonderland
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Strategy is a means to an end
Where do
Where are
you want to you starting
get to?
from?
Which way
ought I to
go?
Objective
Strategy
Current
situation
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Basis of strategy
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Cost leadership
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Differentiation
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Focus based on cost
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Focus based on differentiation
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Porter’s matrix
Competitive advantage
Low cost
Broad
Target
Differentiation
1
Cost
leadership
2
Differentiation
3A
Cost focus
3B
Differentiation
focus
Competitive
scope
Narrow
Target
Adapted from Porter 2004
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Eight possible strategic routes
Strategy Clock
Adapted from Johnson et at 2010
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Determining strategic choices
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Various approaches can assist,
including:
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Growth Share (BCG) Matrix
Directional Policy (GE-McKinsey) Matrix
Ansoff’s growth matrix
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Ansoff’s growth matrix
Adapted from Ansoff 1988
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Life cycle analysis
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Stages
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Market position
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Embryonic – Growth – Mature - Aging
Dominant – Strong – Favourable – Tenable – Weak
Variants
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Fad life cycle
Extended life cycle
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Strategic means and assessing
options
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Strategic means
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Internal development
Mergers and acquisitions
Joint development
Assessing options
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Suitability
Feasibility
Acceptability
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers
Reality of strategic management
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Organic not linear
Affected by organisation and culture
Complex and judgmental
Continuous process
Combines a variety of approaches
A management job
Needs to be flexible to cope with
uncertainty
© 2011 Cousins et al: Food and Beverage Management, 3rd edition, Goodfellows Publishers