Conceptual Analysis of a New Brewpub

Subject: Case Studies
Pages: 10
Words: 2730
Reading time:
10 min
Study level: PhD

Executive Summary

Interpretative business analysis is significant to Brewpub’s success. However, while a businessperson analyzes the viability of a business venture plan or the level of business success, it is difficult to perceive things from an objective point of view. Therefore, such a businessperson must hire a knowledgeable and experienced freelancer. That way, the investor may get an expert’s view into the deep business operations. Moreover, the business analysis is indispensable because it provides informed and exceptional opinions on what can make the business to be successful. The paper deals with a conceptual analysis of a new brewpub.

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The proprietor of a restaurant faces a problem in making an investment decision. The investor has to grab the opportunity and intensify the competitiveness through venturing into cutting-edge technology for an in-house brewing system. The rationale for investing in the new brewpub is that, with the modern technology, the business is capable of producing annual pints of 496,000 and a total investment of $150, 000.

The rationale for investing in the new brewpub is that the business venture is lucrative and there is less competition. Since it is a new technology, the business does not have much competition in comparison to other similar business ventures. The advantage, which such investors will have is the fact that the business products will be cheaper than the ones on the market. The competitive advantage the business has is that it will sell the product at a wholesale price. Therefore, they will sell the brew in bulky, and not as retailers like the neighbouring and international competitors. Additionally, since it will be a new product on the market and in the locality, most people would wish to taste before making up their minds, the investor takes advantage of the opportunity to ensure that whoever tastes it will long for another.

That is to say, given that the brew will be new on the market, it will market itself. Therefore, the investor must ensure the production of a quality brew for consumers to leave the ones that are already on the market. That is to say, the rationale of investing in the new brewpub investment is that it has a competitive advantage over other competitors in the industry.

Strategic Analysis

According to Burns (2009), strategic analysis is the science and art of investigating, developing and delivering significant value in goods and services to meet the needs of the target market at the benefit of a particular company or business. It is the initial stage of strategic business management. At this stage, the Brewpub defines its environment.

Providing this information to key stakeholders is crucial for improving the plan and formulation of future strategies. The importance in the first step of strategic management is the ability to provide the external and internal environment variables. These identify strengths, weaknesses, opportunities, and threats (SWOT) to potential development, and define work context and the corporate structure along with the culture that defines the organization main purpose in any given market.

General Environment

When looking at the general environment, it is important to consider PEST analysis. This refers to analysis on political, economic, social, and technological points. Tata Motors operates worldwide. As such, it abides by different rules depending on the country within which it is operating. It is also essential to be watchful of any political events within various countries. PEST will include the following:

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Political factors

The product of Brewpub is dependent on government policies. The policy puts on raw materials that help in the manufacture of steel and other products (Zoephe, 2011). It harms Brewpub products, as the raw materials are necessary for making the production of steel possible.

Economic Factors

The overall economy is in a recession where the interest rates are the highest and consumer-spending power is low. During the inflation period, the unemployment rate increases. Therefore, the car distribution markets will decline because of unemployment as “it targets higher income customers across different regions” (Fernando, 2010).

Technology

Technology is rising and modern society adopts technological products. A brewpub can easily gain customers’ attention as its product is an innovative idea that beats most of the products that are in the market today (Nieman, 2009).

Lastly, Brewpub lags technologically. This results from fear of increasing the cost of production. This has made Brewpub products less desirable to consumers who want good-looking cars and vehicles. The product of Brewpub is pocket friendly and it can capture the market of saving money of customers.

Competitive Environment

The brewpub has grown over the years since it was established. The general operation activities in Brewpub need to have improvements to sustain their growth and profits. The incorporation of information technology into the Brewpub business will be of much help to the company in managing its ever-growing operations (Saunders, 2010).

The Five Forces Model

A company website plays a huge role in the activities and operations of many businesses in today’s electronic world. The Five Forces Model that is to be put into consideration analyzes the effects that a company website has on business:

  • Buyer Power
  • Supplier power
  • Threat of substitute products or services
  • Threat of new entrants
  • Rivalry among existing competitors

Buyer Power

A company website would enable Brewpub to reach more customers. A website can reach a good number of potential customers thus increasing the target audience. Promotion of the business is also a target in an effective way (Hunger & Wheelen, 2007). The buying power of the customer is enhanced as he or she can make informed decisions on a variety of products offered that are listed on Brewpub’s website. The competitive nature of prices offered on their commodities also affects such decisions. The customer also has control over the purchasing process (Jasper and Crossan, 2012).

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Supplier Power

The suppliers of Brewpub have little power based on the influence and target of Brewpub. They are restricted from increasing prices on commodities that they offer to enable them to maintain the prices of services that they offer as all-time low (Saunders, 2010). Their target market trend in existence necessitates the influence of Brewpub.

The threat of Substitute Products or Services

Brewpub faces a great threat from substitute products. This is greatly attributable to the large number of competitors, who have their company websites in operation and have crossed a range of products and services that they offer. Research and purchase of commodities on the Internet are very general (Hunger & Wheelen, 2007).

Rivalry among Existing Competitors

The rivalry between competitors of Brewpub would be on the increase due to the emergence of similar firms that offer the same range of commodities that they do. Firms will be competing in having a substantial market share and command of customers in the region.

Rivalry among Existing Competitors

The threat of New Entrants

Brewpub faces a threat of new entrants into their market base. The internet has emerged as one of the most important factors in enhancing globalization making it easy for new participants to find a new client base.

Porter’s Generic Strategies

The generic strategy for Brewpub is one involving low costs and a broader market. A broad market has an effect of increasing demand for commodities offered by Brewpub, which is constantly maintained by setting a low cost.

Strategic Business Areas and Process Improvement

Various strategic areas of great concern arise because of the analysis of Porter’s Generis Strategies. They constitute activities related to a consumer, a supplier, marketing, and employees. Consumer related activities include providing new and emerging methods of payment, advertising of a variety of commodities offered with an option of purchasing and interaction with customers by maintaining accounts with them (Saunders, 2010). Activities revolving around marketing include creating awareness of new and existing products, enhancing customer outreach, promoting the business in their undertakings, and embracing its dynamic nature. Supply related activities include management of the supply chain and facilitation of the supplier.

Strategy Formulation

In strategic management of a business, strategy formulation seems to be the second phase in the process and it involves three basic levels that are a functional strategy, a business-level strategy, and a corporate level strategy.

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Strategy Formulation

Stages of Strategic Formulation

Functional Strategy

Functional Strategy develops long-range plans, incorporates and defines the mission, and sets policies and guidelines (Hunger & Wheelen, 2007). It is essential to determine the resources available to reach the goal set. In addition, it is necessary to identify the areas of the business of the healthcare organization where the external resources are potentially lacking or sparse. The issues that arise during the strategy formulation should contain prioritization to form the strategy modifications.

Furthermore, alternative methods should be part of the development at this stage of strategic management (Hunger and Wheelen, 2007). One important piece of this phase is the emphasis on the mission and purpose of the organization. Whether a broad or narrow mission statement, the imperative importance at this stage should help to define the affirmative action is in the product or services.

Business-Level Strategy

For most organizations to succeed there is the need for business-level strategy by the management (Ashock, 2006). This thought process is indispensable to the formation and modification of strategies, or incorporation of it with other plans; that is, it mixes projections of expansions with the research of situations of how to respond to them. The constant changing platform of oil and gas is one strong reason to have a strategic plan in place. According to Varkey and Bennet (2010), “The development of organizational strategy provides a long-term road map for Brewpub and is vitally important in the light of current uncertain economic circumstances”. The purpose of strategic thinking is to see a distinct market and acknowledge the decisions and actions, which will bring long-term growth success.

The brewpub has many opportunities, considering its very rich past. In its last 20 years, the services have gained popularity both in Arabic and the entire world, making it one of the world’s most preferred brands in the oil and gas industry. To achieve the outlined Brewpub communication objectives of the company, creative strategies will have to be in use to reach the target consumers of the company product on offer. The needs advise and determine strategies, preferences and the buying habits of the company’s target market (Harrison, 2009).

Corporate Level Strategy

The approach of corporate-level strategy can bring sustainability and longevity to an organization. Without the business level strategy step, the long-term success could be at risk. By using the four stages of strategic management, and coordinating the mission statement and values into the plan, the outcome yields a profitable return. Strategic planning is a more effective means to a strong decision-making platform. The vision and a sense of the future are inherent parts of strategic thinking, and adopting an intellectual process helps to make the changes and to capitalize on the changes in a way that brings better organizational performance to the organization.

Strategy Implementation

Implementation of strategic management at Brewpub is beneficial from many perspectives. Strategic management provides an objective view of the organizational issues. The strategic management process provides a framework for coordination and control of activities (Hunger &Wheelen, 2007). Implementation of strategic planning minimizes the effect of unfavourable changes in an external and internal environment. The structure in the process of strategic management helps to bring effective allocation of organizational resources. In addition, careful strategic planning can help allocate fewer resources in correcting erroneous decisions (Swayne, Dunkan and Ginter, 2008).

The foundation for the strategy implementation process lies in the importance of a mission statement in alignment with the values at Brewpub. Its vision statement embodies the highest values and aspirations for excellence, service, and community. More importantly, the definition of the “unique purpose” of an organization brings a clear scope to the operations, services, or even markets they develop or create.

Strategy implementation is a method that plans and procedures are put into action through developing programs, budgets, and actions that would aim at improving the performance of a business. This step involves changing the general culture, organization structure, or the management arrangement of the entire organization from time to time to find means of improving performance (Hunger and Wheelen, 2007). This step is about actions in the process of strategy implementation. During this step, the organization may see operational changes within the day-to-day decisions and resource allocation change.

The program takes an activity in scrutiny and applies actions to restructure or begin to change. In addition, securing additional resources and funding is in this step. The third step is important because of its connectivity with an initial implementation of the original strategy outline. In fact, in this step, one must complete a test to validate the appropriate value and sustainability of the strategy (Hunger &Wheelen, 2007). The standard operating procedures (SOP) are important in bringing the process and identifying consistency. The documentation of each operational step is crucial in analyzing gaps in workflow and even organizational inefficiencies.

Strategy implementation helps to direct the efforts of the employees towards the achievement of the objectives of the healthcare organization. “Strategy implementation is about identification and description of the actions that key leadership can undertake to achieve a better performance and competitive advantage for their organization” (Atta-Panin, 2013, p. 15). There are several implications to an organization that lacks a clear strategy implementation when it comes to decision-making and financial performance.

Without a strategic proposal, set demands on the organization may fail to produce a financial return, most organizations will fail and their performance will drop. The lack of strategic planning may indicate an allocation of poor resources available, an increase in unnecessary expenses, and the negative experience of patient satisfaction. The impact on care could simply occur because of a lack of leadership. Highly engaging strategy implementation plans impact the organizational performance positively because the goals are clear to the employees. Employees will find motivation and perform well when they realize the results of their efforts (Swayneet et al., 2008).

The organizations that use strategy implementation outperform the organizations that do not use this approach (Hunger &Wheelen, 2007). There is no limit attached to the amount of information availed on the website as is the case with other communication media. They are also dynamic and flexible. It can have an easy update. They also have an impact on increasing the company’s interaction with their clients.

The last crucially important step is evaluation and control of the implementation strategy, which includes performance measurement, continuous review of changing factors of external and internal environment, and taking corrective actions. A successful evaluation of the strategy analyzes the effective performance measurement indicators since they mirror the accomplishment of the goals. The progress is a result of actual outcomes and then comparing the actual goals and plans (Hunger &Wheelen, 2007).

Continuous monitoring of changing external and internal environments is important to react to changes on time. If the strategy does not move the healthcare organization towards its goal, then corrective actions should ensue. This area of strategy implementation holds the ability to provide a piece of clear and unbiased information to bench against or form a different approach.

Conclusion

In conclusion, an organization is a social entity with different managerial and structural people to meet an objective or aim at a particular goal. All organizations have different administrative structures that give roles to various departments within the organization. It must assign roles, subdivide responsibility to the members and authority to undertake various tasks. Organizations are termed open systems they are affected by and affect the environment in which they operate. It is therefore important to use the main strategies of business management in moving towards constructing, evaluating, and potentially reinventing the current organization. The four key components in strategic planning are “environmental scanning, strategy formulation, strategy implementation and last evaluation and control” (Hunger & Wheelen, 2007).

Therefore, Brewpub must implement long term relationships with existing clients, not only by satisfying their desires at single service encounters but also by engaging new customers who may be dissatisfied with competing service providers. A producer must understand every service and product and seek to achieve the concepts of satisfaction, and Brewpub must be able to evaluate and measure the success of its strategic management. They should emphasize developing strategies that are customer-centred and which will allow them to achieve the overall company objective (Hunger &Wheelen, 2007).

References

Ashock, J. (2006). The Process of Business and Environmental Collaborations: Partnering for Sustainability, (1st Ed.), MA Antioch University press.

Atta-Panin, J. (2013). Leadership and strategy implementation. GSTF Business Review (GBR), 3(1), 14-21. Web.

Burns, N. (2009). Understanding Marketing Research: The Importance of Business Plans and Proposal (2nd Ed.), Philadelphia: W.B. Saunders Company.

Fernando, A. C. (2010). Business Environment: Understanding Cultural Globalization Illustrated. India: Pearson Education India.

Harrison, K. (2009). Five Steps to Building Winning Sales Proposals; Analysis & Management. Berkeley: University of California Press.

Hunger, D.J. and Wheelen, T.L. (2007). Essentials of strategic management. (4th ed.).New Jersey: Pearson/Prentice Hall.

Jasper, M., & Crossan, F. (2012). What is strategy implementation? Journal of Nursing Management, 20(7), 838-846.

Nieman, G. (2009). Managing Growth: A Guide for New Business Ventures. New York: Juta and Company Ltd.

Saunders, K., (2010). Essentials of Strategic Management: Business Statistics. (2nd Ed.). San Francisco: Bass Publishers.

Swayne, L.E., Dunkan, J.W. and Ginter, P.M. (2008). Strategic management of health care organizations. (6th ed.).West Sussex: Jossey-Bass.

Varkey, P., & Bennet, K. E. (2011). Practical techniques for strategic planning in health care organizations. Physician Executive, 36(2), 46-8. Web.

Zoephe, M., (2011). Michael Porter’s Competitive Advantage Theory: Focus Strategy for SMEs. Illustrated. Santa Cruz: GRIN Verlag.