Desert Industry

Desert Industry INVESTIGATING COMPETITIVE ADVANTAGEIN THE SMALL SCALE DESSERT INDUSTRY IN SOUTH WALES.1. INTRODUCTIONFinancial Success often depends on grocery storeing ability of a firm. Finance, operations, accounting and other business functions cannot help unless there is adapted demand of products and services of a firm in the market. Hence, the focus of the firms today is totally on the nodes (Kotler and Keller, 2006). In broader sense, the whole marketing process can be defined in the following diagram In every stage of the marketing process, a firm not simply has to keep its focus on the nodes exclusively to a fault have to keep the efforts to be ahead of its competitors. Hence, in each stage of the marketing process, a firm tries to be ahead of its competitors by gaining a militant payoff over them. In order to do this, certain competitive strategies ar followed. These strategies involve taking offensive or en garde actions to create a defendable position in the ind ustry. The best competitive dodging for a firm is unique and dependent on the challenges that the firm is facing. However, it is not possible for a firm to enjoy a competitive advantage in the market over a same strategy for long name basis. So, with the change in the external environment and competitors strategies, the competitive strategies of a firm, in like manner, has to undergo certain changes.The project proposes to study competitive advantage for small firm in desserts industry, which has created a niche segment for itself in the competitive dessert and bakery market of S come out of the closeth Wales. It also aims to study the importance that such small firms fall to competitive advantage and the way they evolve with clock.2. FOCUS2.1 AimBy considering the above mentioned facts, the aim of the project has been narrowed down toTo study Wales dessert market taking into consideration the prominent players in the industry, thereby, identifying the evolution of its compet itive advantage and strategies over a period of time and the possible opportunities and threats in the coming time.2.2 Objectives1) To study Wales Dessert market and evolving competitive strategies of prominent players of industry with time.2) To carry on a comparative study on the competitive strategies of the prominent players of wales dessert market. 3) To identify the upcoming threats and opportunities, hence, making recommendations in basis of how players can gain competitive advantage over its competitors.3. CONTEXTThe impression of gaining competitive advantage forms the gorge of marketing activities in an organization. Working on a project using a study on competitive advantage would be a nifty value addition to me as a student of marketing specialization. This is because of the reason that agonistic advantage encompasses almost all major aspects/fields of marketing ranging pay from the conception of product development through product promotion to product launch and s trategies for its sustenance in the market. The reason for choosing not similarly developed dessert market was that selective information about the competitive advantage and strategies of large firms and MNCs is well talked of in books, articles, news, journals. Even while compounding theories and frame works related to competitive advantage and strategies, theorists have given major consideration to large companionships and MNCs. The Focus of project on such small segment industry is to understand the aspect and dimensions of the concept of competitive advantage and strategies at a small scale.4. LITERATURE REVIEW4.1 About the Conceptual frameworkCompetitive advantage The ConceptThe concept of Competitive Advantage was compounded by Michael E. Porter in 1985. In order to create a defendable position in the market or in order to survive successfully in the presence of various competitive forces so as to generate high returns on investments, it is important for a firm to take eit her offensive or defensive strategies (Porter, 1998).Resource Based TheoryThe major contribution of the resource-based view of the firm to date has been as a theory of competitive advantage.It argues that it is very important for a firm to develop a applyable competitive advantage (SCA) within so as to successfully survive in highly competitive market. According to the theory, achieving a SCA allows the firm to earn economic returns over its investments. Also, it lays emphasis on how firms achieve and sustain competitive advantages. The theory puts forward the idea that in order to gain competitive advantage, possession of certain key resources that have unique features like value, barriers to duplications and appropriability, acts as an effective stimulus. The theory also stresses upon effective deployment of the resources in the market to maximize returns and on the appropriate strategic pickax of the firm (Fahy and Smithee, 1999).A customer should assemble any competitive adva ntage as a customer advantage. For example, if a company sells fresh food than its competitors, this leave not be a customer advantage if customers do not value fresh food. Companies must concentrate on building customer advantages because only by focusing on customer advantages, high customer satisfaction and vale can be assured which further leads to repetitive purchases that be i.e. A loyal customer base and at last higher market sh ar (Kotler and Keller, 2006). Resource-Based Model of Sustainable Competitive Advantage Source (Adapted from Fahy and Smithee, 1999)Porters Generic StrategiesThese argon the Basic approaches to strategic planning that can be adopted by any firm in any market or industry to improve its competitive performance. For an organisation to obtain a sustainable competitive advantage Michael Porter suggested that they should follow either one of three generic strategies1) Cost Leadership2) note3) FocusThese strategies are applied at the business unit lev el. They are called generic strategies because they are not firm or industry dependent. Each generic strategy implies different skills and requirements for success which ordinarily translates into differences in organisational structure and culture. Cost Leadership A firm is said to be following the strategy of cost leadership if it is able to deliver a product with same features and quality as its competitors but at a comparative lower cost to the customer. For a business to achieve such a strategy, it is important to achieve low cost of production and distribution. In short, the strategy emphasizes on charging lower price than competitors to gain more market share (Kotler and Keller, 2006) (Dibb et al, 2006) and (www.quickmba.com).Differentiation The differentiation strategy, unlike cost leadership, lays stress on delivering products with the benefits exceeding the same products produced by the competitors in the market. According to the strategy superior performance of the pro duct is precious by a large part of the market (Kotler and Keller, 2006) (Dibb et al, 2006) and (www.quickmba.com). Focus The focus strategy is also known as a niche strategy. This strategy is adopted when a firm is neither in a position to implement cost leadership nor differentiation strategy. In this strategy the focus in terms of efforts and resources is confined to on a narrow and defined segment of a market. A niche strategy is often apply by smaller firms. A company could use either a cost focus or a differentiation focus.A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly (Dibb et al, 2006) (Kotler and Keller, 2006).PROS1) Porters generic strategies model achieves to reduce the strategic alignment of the organisations amid cost and differentiation. The model successfully indicates that differentiation strategy is equally effective as cost leadership.2) The selection of a generic strategy provides direction to counseling and staff that helps them acquire internal consistency between management style, reward system, recruiting policy, etc. so as to shape its internal structure as per the choice of strategy of the firm.CONS1) The concept of porter generic strategies is mostly focused on large multinational companies with multiple business units although the strategy can be implement on small organisations too, but the tools employed in the strategies are too complex to add optimum value to them.2) Porter stated that competitive strategic analysis needs to happen on an ongoing basis. But even when a quantitative/economic change in the industrys conditions is detected, the reaction is frequently too late to realign the company. Most change occurs bottom-up, intuitively and creatively, and can be detected early using soft selective information rather than hard dataPorters Five Forces Michael Porters Five Forces of Competitive Position model provides a simple perspective for assessing and analysing the competitive advantage or strength and position of a corporation or business organization. Industry structure and positioning within the industry are the basis for models of competitive strategy promoted by Michael Porter. The Five Forces diagram captures the chief(prenominal) idea of Porters theory of competitive advantage. Source (Adapted from Ankli , 2007)Bargain Strength of Supplier Since a powerful customer always has the discretion of forcing supplier for discounts, delay stipend or preferred services, later, sometimes have to partly finance the former, so the supplier has to partly finance them. As for examples, Enormous bargaining power is enjoyed by huge Supermarket chains that have huge, concentrated buying power (C Murphy, 2005) (Thompson and Strickland, 2004).Bargain Strength of Customers The bargaining power of the customer depends on the range of choice of suppliers that it has with him/her. In a situation of monopson y, where one customer has the choice of many suppliers, the bargaining power of customer is high to an extent where he himself sets the price. Whereas for a situation where customers are poorly placed, their bargaining power is negligible and hence they have to accept the terms offered by the suppliers (Ankli, 2007) (Aaker and McLoughlin, 2007) (Thompson and Strickland, 2004).Potential Entrants The firm has to be alert from not only the competitors but the new entrants in the market pose equal threat of market share being snatched. The possibility is even higher if there are minimal barriers to the entry and exit to business entities in the market. However, in reality, the industries have the policies that protect the financial interests of existent firms in the market and restrain additional rivals from submission the market (Thompson and Strickland, 2004) (Ankli, 2007).Substitutes Another set of competitors that may pose threat to the market share of a firm are the firms that pr oduce the products that can be interfered against the existing product of the firm. This threat is of high intensity if there is high willingness among the customers to riffle from the use of current product to its substitute. Some major factors that may stimulate the willingness of customers to switch to the use of substitute can be use of breakthrough technology in substitute, Steep price difference between the existing product and the substitute (C Murphy, 2005) (Ankli, 2007).Industry Rivalry The intensity of competition is directly proportional to the structure of the industry. What matters here is the number and capability of your rivals if you have many competitors and they offer equally semiprecious products and services, then in this situation you will have little power. If you are doing the same thing what others are doing i.e. suppliers and buyers are not happy with your deal, theyll go elsewhere. On the other hand, if you do that no-one else can do, then you can often have tremendous advantage and strength (Thompson and Strickland, 2004) (Ankli, 2007). According to Obasi Richard, with the use of the concept of Competitive advantage and strategies, it would be easier for the firms to have a better insight in business situations and the appropriate strategies pertaining to these situations. Also, the managers would be able to make tactical decisions rather than relying on their intuition, experience, or trial and error alone (Akan et al, 2006).4.2 About the Chosen Sector The desert industry of UK is although small industry however it is growing at a sound pace. Since last few familys many new players have entered in this segment and have been using competitive marketing strategies like Online Marketing, Customisation etc to sustain and do well. According to the website of British baker magazine there is an increase in the cake and cake bars market by 7% in the year 2008 as compared to 2007 to reach GBP 1.52 bn. According to research from Minte l out of the whole only two-third of the consumers only consume the cakes, frequency of use and penetration level is declining. Report also stated that the market is likely to grow between 2008 and 2013 by 26 % (www.bakeryinfo.co.uk).According to Reuters the UK biscuit and the cake market in the year 2007 was approximately to be worth GBP 2.96bn, a boost of 13.6% since 2003. It is likely to see a rise in the biscuit and the cake market between 2008 and 2012, even though this may be largely driven by rise in input cost. Biscuits and cakes are getting a tough competition from other alternatives such as fruits and savoury snacks but its value growth is maintained due to some added value activities (www.reuters.com). It can be seen that the dessert industry is growing and considerable research can further contribute to aspiring small desert industries which is my intention.5. Research Methodology5.1 Research ParadigmThe research paradigm which will be used in the dissertation is Phenome nology. Phenomenological approach to research is so called because it is based on the way people experience social phenomena in the world in which they live. Phenomenologists are concerned with what things mean, rather than with identifying and measuring phenomena. They are particularly interested in the idea that human experience is a valuable source of data, as distant to the idea that true research or discovery lies in simply measuring the existence of physical phenomena.5.2 Research ApproachSince the project aims to find out competitive advantage and competitive strategy, so the findings of the project would be qualitative in nature.5.3 Research MethodsDifferent research methods used for primary data are* Surveys* In Depth InterviewsDifferent research methods used for Secondary data are* Self study from internet* Books* Research articles and journals5.4 SamplingFor the analysis, two samples are considered, namely a. Consumers b. Players in the Dessert IndustryThe consumers woul d be taken from all age groups, geographic locations and lifestyles. Similarly, players too would range from the biggest players in the market to the small organizations mired in the same business.5.4.1 Sampling CriteriaFor the analysis, two samples are considered, namely a. Consumers b. Players in the Dessert IndustryThe consumers would be taken from all age groups, geographic locations and lifestyles. Similarly, players too would range from the biggest players in the market to the small organizations involved in the same business.5.4.2 Number of Respondents/Participants For Customers 125 150 For Players 10-155.4.3 Sampling TechniqueThe probability Technique will be used. The probability sampling is also known as random sampling. It gives each member of the target population an equal probability of selection.5.5 Methods to analyse elementary DataThe study would use MS excel for the analyses of the primary data and text analysis as well.6. ETHICAL CONSIDERATION AND ISSUESEthical considerations towards respondents* Proper information about the study* Anonymity of the participants* Freedom to choiceEthical considerations for self* Clear communication with respondents* Use of authenticated data* Proper interpretation of data7. REFERENCESMURPHY, C. 2005. Gathering, Analysing and putting it to work 1st edition. Aldershot, Hants Gower Publishing LimitedDoyle, P., Stern, P. 2006. Markeing Management and Strategy 4th edition. Harlow, Essex Pearson Education LimitedDibb, S., Simkin, L., Pride, W., Ferrell, O. 2006. Marketing Concepts and Strategies 5th edition. Boston, MA Houghton Mifflin CompanyThompson, A., Strickland, A. 2004. strategic Management Concepts and Cases 13th edition. New York, NY McGraw-HillAaker, D., McLoughlin, D. 2007. Strategic Market Management 7th edition. Chichester, West Sussex John Wiley Sons, LtdKotler, P., Keller, K. 2006. Marketing Management 12th edition. Harlow, Essex Pearson Education LimitedPorter, M. 1998. Competitive Advantage Crea ting And Sustaining Superior Performance 11th edition, New York, NY The Free PressQuickMBA. 2007. Competitive Advantage WWW http//www.quickmba.com/strategy/competitive-advantage/ (15th Nov, 2009)Bakeryinfo.co.uk. 2008. cake market on the up but trends are changing WWW http//www.bakeryinfo.co.uk/news/fullstory.php/aid/3879/Cake_market_on_the_up,_but_trends_are_changing.html (13th Nov,2009)Reuters. 2008.Fahy, J., Smithee, A. 1999. Strategic Marketing and the Resource Based View of the Firm. Academy of Marketing Science Review, 10, pp. 1-20Ankli, R. 1992. Michael Porters Competitive Advantage and problem History. Business and Economic History, 21, pp. 229-232Akan, O., Allen, R., Helms, M., Spralls, S. 2006. Critical tactics for implementing Porters generic strategies. Journal of Business Strategy, 27(1), pp. 43-538. TIME PLAN In 6 calendar months of the dissertation 2 weeks will be dedicate to introduction 1 month will be dedicated to Literature Review. 2 months for data analysis. 1 m onth for research methodology. 1 month for conclusion