Purpose
An Australian commercial cooking equipment manufacturer plans to expand and penetrate the American market. The company is one of the leaders in the Australian market. Irrespective of lockdowns and certain constraints due to the COVID-pandemic in 2019-2020, the industry is expected to grow steadily, reaching over 4% compound annual growth rate by 2027 (Fortune Business Insights 2020). The American market of commercial kitchen equipment is forecasted to see growth as well, and it is expected to grow 3% between 2019 and 2027 (Businesswire, 2021). Therefore, expansion is quite a reasonable and strategic decision. In order to enter any market successfully with optimal gains, it is critical to implement profound research on diverse aspects related to the company, the American market, and its major competitors (Fahy & Jobber, 2019). It is important to analyze major areas to consider to develop a sound strategy for the company’s expansion.
Background
Luus
Luus Industries is an Australian manufacturer of professional cooking equipment that was founded in 1998 based on the creations of the engineer Don Luu (Luus n.d.). The company has facilities in Melbourne but has customers and partners across Australia, as well as beyond. Luus has a wide range of products that can be mainly divided into two large categories: Asian and professional kitchens. The company’s core priorities include excellence, high quality of products and services, functionality, and style. The primary values of the organization are people, the environment, and sustainability. The company aims to penetrate the American market, so it will compete with a leading kitchen equipment producer in the region, American Range.
American Range
The company started selling commercial cooking equipment in the early 1970s, built on the inventions of Mourad Demirjian, the founder of the company (American Range, 2019). His son, Shane Demirjian, is currently the head of the organization. American Range offers a wide range of commercial cooking equipment grounded on the desires and ideas of professional chefs. The products are sold domestically and globally through a network of distributors. American Range’s mission is to create “a strong value proposition” in offered products and services (American Range 2019, para. 1). The core values include innovation and excellence, with a focus on people and sustainability.
The Scope
The development of an effective strategic plan implies the identification of the scope of the project in detail (Larson, 2020). The project objective can be formulated in the following way: To construct a warehouse in California (USA) and reach the amount of 500,000 USD in six months. The project will result in the construction of a 2,000-m2 warehouse and a service center in California. This will be a single facility to reduce costs, but later more centers can be opened.
The warehouse in the target market will be needed to ensure the undisrupted delivery of products, parts, and services to customers. California is the most appropriate starting point due to its well-developed HORECA industry, as well as a significant rate of the Asian American population. Since Luus offers commercial equipment for Asian cuisine, this market can be a preferable location for the beginning of the penetration. The deliverables include the warehouse and service center, as well as signed contracts with two or three distributors. The collaboration with distributors will minimize costs and expand the potential market.
In order to ensure the effective implementation of the project, it is critical to set clear milestones (Larson, 2020). The central points to pay attention to include gaining permits, signing contracts with distributors, terminating construction and launch of the facility, beginning shipments, and reaching sales targets. Since the project timeframe is six months, each milestone will be attained within several months. As far as technical requirements are concerned, all local standards and codes must be met. Similar equipment, hardware, and software used in Australian facilities will be utilized in the new warehouse and service center. At that, equipment and hardware can be changed to more recent or more efficient versions (if used in the USA). The use of new software can be considered with caution to ensure undisrupted operations.
The development of a project is facilitated by the analysis of possible limits and exclusions (Larson, 2020). The implementation of the project cannot be disrupted due to the focus on goals that cannot be attained. For instance, it is important to choose among the sites that are available instead of trying to obtain permits for the location that is preferable based on some geographic or other logistical aspects. All parts and equipment cannot be shipped to the warehouse if construction is not complete. Direct sales should not be considered at this stage, as collaboration with distributors is the priority.
As for the acceptance areas, these are specific terms and conditions that must be met to proceed with the following phases of the project. It is essential to make sure that all milestones are completed on time, as delays may lead to serious issues at further stages.
Stakeholder Analysis
Prioritized
The identification and prioritization of stakeholders is an integral part of project management, as the project team must understand the responsibilities and level of power of all involved people and organizations (Larson, 2020). The major stakeholders involved in this project include senior management, the project team, other company employees, distributors, partners, officials, and the community. Although all these stakeholders are important and can influence the implementation of the project considerably, it is possible to prioritize them. Senior management must be well-informed and receive up-to-date information regularly. The project team has all the details and communicates them to the rest of the stakeholders. The rest of the stakeholders receive the information needed to conduct the corresponding tasks.
Expectations and Communications
As mentioned above, the project team is the core stakeholder, having complete data regarding the project. The team is the information hub providing details to others. Senior management expects to receive updates and the implementation of all stages on time. The company staff that is involved in the project needs to get tasks and receive updates regarding further steps. Distributors addressed by Luus’s personnel must obtain all documents and start a fruitful cooperation with appropriate terms and conditions. Partners expect to cooperate with the company on mutually acceptable terms. Officials will anticipate the provision of all documents and strict compliance with existing standards and regulations. Finally, community members also need to receive all data concerning the construction process, potential environmental risks, social benefits, and other details.
Project’s Priorities
Any project is time-bound, but time is not the highest priority for the start of sales. Clearly, the time spent on the construction and launch of the facility should be minimized to reduce costs, but the set time frame is not critical. Performance is the category that cannot be compromised because while penetrating new markets, companies try to create a certain (positive) image. If they fail to provide high-quality services, the entire project will fail as the company may get a negative image in the market. Although cost is an important aspect, it is vital to remain within the limits of the budget. However, in this case, inevitable fluctuations are possible, and the allocation of additional funds is possible.
The Project’s Success Criteria
The project success criteria include three major areas: sales, brand recognition, and networking. The attainment of the sales goal is essential as the ultimate goal of this expansion is to increase the company’s profits. Another vital goal that ensures the achievement of the first aim is to enhance the brand’s recognition among the Californian restaurant and other facilities owners and managers. It is also important to develop proper relationships with partners, as networking is critical for any business. Collaboration with new partners can bring more opportunities for expansion and growth in the American market.
References
American Range 2019, About us, American Range, Web.
Businesswire 2021, United States kitchen appliances market report 2021: compound annual growth of 2.9% is forecast during 2021-2027 – researchandmarkets.com, Businesswire, Web.
Fahy, J & Jobber, D 2019, EBOOK: foundations of marketing, 6th edn, McGraw-Hill.
Fortune Business Insights 2020, Justice served: case closed for over 40 dogfighting victims, Fortune Business Insights, Web.
Larson, E 2020, ISE eBook online access for project management: the managerial process, 8th edn, McGraw-Hill Higher Education.
Luus n.d., About us, Luus, Web.