BIBM678 Strategic Planning For Small Business

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BIBM678 Strategic Planning For Small Business

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BIBM678 Strategic Planning For Small Business

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Course Code: BIBM678
University: Waikato Institute Of Technology

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Country: New Zealand

Question:
Explain how the Wigram Borneo Restaurant must develop their business strategy?
 
Answer:
Introduction
The concept of strategic planning simply encompasses the process of arranging and organizing the business procedures of a firm in a systematic manner and under a set period of time. It helps an organization to achieve the business goals and the small firms can compete with the market giants as well supports Burns (2016). In order to build an individual strategic planning regarding how the organization can move ahead and how can they win the customer preference in a short period, the company at first set the business objective and their organizational goal. The goal must be clear to each of the employees. The next step is to have a strategy plan for each goal. The action plan must follow the strategy implementation. Lastly, the organization must keep in view that the strategy plan is being executed properly in each level of the organization.  The aim of this report is to highlight how the Wigram Borneo Restaurant must develop their business strategy and how these strategies should be implemented in their business. The report concludes by giving a proper overview of the entire topic.
Competitive Strategies 
 Competitive strategies are necessary to gain competitive advantage in the existing market dominated by the marketing giants. According to Dibrell, Craig & Neubaum (2014), those organizations which do not seem to be flourishing greatly, must have been suffering from the problem of lack of competitive advantage. Until the competitive edge or advantage is realized, the competitive strategies cannot be built. An organization must build its competitive strategies in order to get distinguished among all the rival companies. The small business or the start- up companies get highly benefitted by the competitive strategies. The competitive strategies proposed by Michael Porter, considered to be the management guru are differentiation, cost leadership and focus strategy (Dodgson,2018). These are the cornerstones for any business. The competitive strategies are necessary for an organization to sustain and survive in the industry. The cost leadership is the strategy of being the lowest cost producer in the market. Differentiation on the other hand is by which strategy the conventional customer belief in the uniqueness of a product is exploited by introducing and innovative products. The focus strategy concentrates on some particular segments in the market.

Advantages

Disadvantages

Cost Leadership

The cost –friendly nature of the products decreases the market entry barriers that the restaurant faced initially.  The threat of substitutes becomes lower since the firm is not firm is not vulnerable.  The power of the buyers also reduces as they cannot drive the prices down further. The organization becomes flexible to handle hikes in prices. The organization enjoys profits even in the periods when the rivals face extreme price competition.

 The cost –friendly nature of the organization demands huge capital investment in order to make the products cheaper. The product design or marketing issues might be ignored due to cost concerns. The competitors can benchmark their cost- friendly strategy and copy it.

Differentiation

The entry into the market becomes easier for the small firms by adopting the differentiation strategy because the uniqueness in the products can increase the popularity of the restaurant (Elmes & Barry,2017).  The organization can avail customer loyalty due to their different approach towards the customers.  Since the customers do not find any alternative which can beat the uniqueness of the organization, they stick to the organization for a long time.
 

 The new entrants can bring more exclusive product range which can allure the customers more. It is true at the customers initially get driven by the uniqueness of the product but after some times, inevitably they become price concerned. The concern of whether the customers will understand the unique feature of the products and accept it or thy will simply overlook it.  Huge expenses are associated with differentiation because the uniqueness is supposed to be actually unique with extra features and competencies.

Focus strategy

The focus on the niche segments of the market is more secure and a small business firm can easily adjust with this strategy.  It does not require much investment and only some tricks can win the game. The focus can be on vegetarians , vegans or community based .

 The competitors can relocate and come under the target segment with higher resources. The segment requirements can be less distinct from the main market.

Selection of Strategy 
Although there are so many strategies that helps to compete with the rivals in the market and gain the competitive advantage, an organization must apply any one strategy. The risks and the opportunities go hand in hand, but an organization must develop their efficiency to manage those risks and get the best out of the strategies as per the view of Grant (2016). The focus group strategy is frequently used by the small business because it is the most cost –efficient strategy among the three. The cost –leadership strategy requires greater investment, so does the differentiation strategy. The focus group strategy has relatively less conceptual complications. The Wigram Borneo Restaurant can easily deal with the competitors by introducing customized products according to the preferences of the customers following the market segmentation (Read et al.,2016).  The restaurant can find out the needs of a particular segment of customers and promote the niche products. It will help the restaurant to attract major mass of customers and in this way the threats of competitors can be reduced.
Value Proposition
Value proposition is the marketing statement that a company applies to say in short why the customers should prefer that company.  It includes their serving process and clearly states how much they value their customers and how they act to meet the specific needs of different customers. The restaurant must construct their value proposition and convey it their target customers using focus group strategy. First of all, the firm needs to know how they are going to position themselves in the market. It is not exactly the mission statement because a mission statement talks about what the company wishes to offer the customers in coming days whereas a value proposition describes the unique features of the company which are different from other companies and why the customers should choose them. In the case of restaurant Wigram Borneo Restaurant might focus on the appetizers, beer and wine collections. It can also focus on the ambience, interior decoration or fast customer service features.
It must be kept in mind that whatever the restaurant is focusing on, it should be the best one in the entire market otherwise it will not grab the attention. In the case of focusing on the appetizers, the restaurant must ensure that they have an exclusive range of dishes in their menu for all kinds of customers. The table service must be pleasant and fast as nobody prefers delay in food service. However, the value proposition must not be limited in only the food section.  A restaurant can also create its value proposition by offering music concert every weekend focusing on the music lovers segment in the market.
Balanced Scorecard 

Financial Perspective
· They should have customer credit procedures
· They need to pay all the taxes on time
· They should prepare the monthly budget at the beginning of every month
· They must have an inventory gross profit requirement
· They need to  maintain good cash flow management

Customer perspective
·  They must have established customer returns and refunds
· They must have online customer accessibility
· They must have a strong and integral customer management
· They must have ensured customer sales processes

Internal Process Perspective
· They should establish perpetual system
· They should maintain minimal stock processing errors
· They must have integrated stock management
· They should  follow up on the purchase orders

Learning and Growth Perspective
· They should have membership of relevant groups
· They should continuously develop product knowledge
· They must establish standard training procedures

 
Strategic Initiatives for implementing focus group strategy 
 In order to do better business, the restaurant must know the preferences of the customers first. It is a part of digital marketing strategy.  The customers can be known more by emails, customer feedbacks, listings, building fond relationships and also by generating loyal customers. The loyal customers are the most important people for a business, especially for a small business, according to Hunt (2015). The local neighborhood people must be listed first for observation. Their communities, which countries they belong from, how many of them are vegetarians, their financial status, lifestyles, purchase decision can be observed via campaigns, conducting food festivals, promo code application on restaurant coupons which are to be distributed among the customers.
The customers should be attracted and invited in food campaigns by offering special discounts on the food items. In order to know the customer types, their likes and dislikes by conducting a short survey with questionnaires in a playful manner. It will enhance the restaurant’ image un the eyes if the customers and promote them the make the customer segmentation easily and subsequently they will feel ease regarding implementing the focus group strategy (Phillips & Moutinho,2014). The questionnaire must include questions asking the customers to put their opinions on certain aspects such as their interior design opinions, food recipe modification, customer service improvement and others. The quantitative and qualitative feedback will help the restaurant to incorporate improvement in their products and services. Social media is another easy way to segment the customers (Scarborough,2016). Their feedbacks are a good reflector of their preferences, behaviors, attitudes and cultures. The restaurant can mold their products and services evaluating the customer feedbacks and target their customers. However, interacting with the customers face- to face is always a better option.
Strategic goals of the initiatives 
 The specific goals of conducting the customer surveys is not only the end profit of the organization. The primary goal must be to serve best whatever they are serving. It does not matter how much revenues the firm earns at the end of the year, they can easily win the hearts of the customers by sticking to their customer preference and customer satisfaction strategies (Karadag,2015). The primary goal of the customer survey is to know the customers in a better way, to build relationships with the customers in order to provide them the exact service they want and it the exact way in which they want it. The data collected by the two initiatives the restaurant will assess the customers and design their product and services according to that (Grayson & Hodges,2017). The restaurant will come to know their drawbacks, their areas on which they will have to work and also know they key factors that attract the customers more. The motif behind the initiatives are simple. Hence, the three goals are tracking and acknowledging customer opinions to improve customer services, identify different service delivery modes and identify the best one among them and persuading the employees to work efficiently on specific gaps. 
Specific Strategic Goals

Goals

Tasks and subtasks

People Responsible

Timeline

tracking and acknowledging customer opinions

 After knowing the customer opinions, the restaurant must act on the same. The members of the restaurant must sit for   a discussion on the customer feedbacks and resolve how they can be implemented into their business. The process must go part by part and take the consent each member in the firm. Another task will be to gather resources and equipment according to the feedbacks.

 The team must be aligned to the action plan and the objectives behind all the actions.  The higher executives and the people management department of the restaurant must do the needful. The head chef must be made aware regarding the food related opinion of the customers so that he changes bring change in the food quality. A group of employees must be assigned to a group of employees who can look into the interior issues and bring change Another group will observe the customers service department to ensure that strategic change has been implemented .

Although the implementation process will continue throughout the year, the task fixing and task divisions will be completed within the first 15 days.

identify different service delivery modes

 The first task after knowing different modes of service delivery is to focus on meeting the customer expectations, keeping promises, treating people fairly and improving trust (Jones et al.,2014). In order to achieve these objectives, the first task will be reorganizing the staffs who are the backbone of an organization.  Active, agile, staffs will serve the best in meeting the customer needs and follow different service delivery modes.

 The entire task of recruiting suitable employees who actually talented and enthusiastic rests will rest upon the shoulders of the management.  Starting with the process of selecting, organization, evaluation of talent and ability everything are to be conducted by the HR department of the restaurant.

 Since the recruitment has been done before, the restaurant must focus after the customer feedbacks on the people management, people evaluation, reviewing their suitability and way of working within the next 15 days.

persuading the employees to work efficiently on specific gaps.

 The first task is to find out why an employee is underperforming. The underperformance can be the resulted by lack of proper training.   The restaurant must train the employees then, if not trained yet. The organizational goals must be kept clear to the employees. The efficient employees of found to be slowing due to lack of motivation , they must be motivated by financial or non- financial incentives.

 The HR department of the organization must look into the matter and plan for a specific training session for the employees.

The training session must start after 25 days of the survey when other aspects are resolved. The training must continue for 30 days ( each day 2 hours )

 
Conclusion
Therefore, from the above discussion it can be concluded that strategic planning is important for every organization to experience better outcomes.  The small firms like Wigram Borneo Restaurant must also develop a business strategy in order to sustain in the highly competitive market. The smaller firms must keep in mind that they are new in the market and cannot beat the dominating companies all of a sudden but they can adopt some measures and attract the customers more than the incumbents. In this regard the present report has dealt with a complete business plan for a small restaurant. All the aspects such as the focus group strategy, its implementation initiatives, action plans, balanced scorecard have been covered with details. It will support the restaurant to frame their strategic planning.
References
Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Dibrell, C., Craig, J. B., & Neubaum, D. O. (2014). Linking the formal strategic planning process, planning flexibility, and innovativeness to firm performance. Journal of Business Research, 67(9), 2000-2007.
Dodgson, M. (2018). Technological collaboration in industry: strategy, policy and internationalization in innovation. Routledge.
Elmes, M., & Barry, D. (2017). Strategy retold: Toward a narrative view of strategic discourse. In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.
Hunt, R. A. (2015). Contagion Entrepreneurship: Institutional Support, Strategic Incoherence, and the Social Costs of Over?Entry. Journal of Small Business Management, 53, 5-29.
Jones, P., Simmons, G., Packham, G., Beynon-Davies, P., & Pickernell, D. (2014). An exploration of the attitudes and strategic responses of sole-proprietor micro-enterprises in adopting information and communication technology. International Small Business Journal, 32(3), 285-306.
Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A strategic management approach. EMAJ: Emerging Markets Journal, 5(1), 26-40.
Marcelino-Sádaba, S., Pérez-Ezcurdia, A., Lazcano, A. M. E., & Villanueva, P. (2014). Project risk management methodology for small firms. International journal of project management, 32(2), 327-340.
Phillips, P., & Moutinho, L. (2014). Critical review of strategic planning research in hospitality and tourism. Annals of Tourism Research, 48, 96-120.
Read, S., Sarasvathy, S., Dew, N., & Wiltbank, R. (2016). Effectual entrepreneurship. Routledge.
Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management. Pearson.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.
Wolf, C., & Floyd, S. W. (2017). Strategic planning research: Toward a theory-driven agenda. Journal of Management, 43(6), 1754-1788.

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