Question:
Discuss about the Competitive Strategies being invoved by Pizza Cub in their Business Operation.
In the current business scenario, contemporary business organizations are gaining their competitive advantages by operating in various diversified sectors. Among all the potential business sectors, food and beverage sector is one of the most potential sectors. This is due to the reason that, food and beverage sectors cover a huge area of diverse food culture around the world (Davis et al. 2013). Moreover, in the present era of globalization, people around the world are having the access of different food culture, which is being effectively tapped by different business organizations operating in this sector (Govil & Rashmi, 2013). However, the current business scenario is much competitive than it was a decade ago. Thus, business organizations have to gain competitiveness in the market in order to stay ahead in the competition.
Pizza club is one of the leading organizations offering diverse range of pizza in New Zealand. They are comparatively new in this sector compared to their global competitors. However, with their diverse product portfolio catering to varied tastes of the customers helped them to target and attracts the customers effectively (Fernhaber & Patel, 2012). However, in the recent times, they are facing challenges in maintaining their operational facilities across New Zealand. Thus, they are in the need of an effective competitive strategy in order to stay ahead in the competition and to enhance their business potential.
This report will discuss about the competitive strategies being involved by Pizza club in their business operation. Different models including Porter generic strategies and SWOT will be discussed in this report in order to evaluate the competitiveness of them. Accordingly, recommendations will be provided, which will in turn help the organization to enhance their operational effectiveness.
The internal analysis of pizza club will be done in order to gain an understanding of the competitive strategies being followed by them (Tanwar, 2013). Porter generic strategic model will be used in order to analyze the strategies of pizza club.
Differentiation strategy
This model states about three competitive strategies namely focus, cost leadership and differentiation. According to this model, involving these three strategies will help the business organizations in gaining competitive advantages in the market. The first dimension states that, initiation of the differentiation strategy will help the business organizations in offering distinctive and unique products in the market, which will help them in staying ahead in the competition (Banker, Mashruwala & Tripathy, 2014). In the case of pizza club, the basic products that they are offering are same as their competitors. However, they have initiated the differentiation strategy in terms of their service delivery and product variation. According to the official website of pizza club, they are offering vast range of pizzas ranging from vegetables, chicken, meat and seafood. Moreover, differentiation is being initiated by them in terms of their service such store ambience, home delivery in less time and more area coverage. Thus, offerings of more flavor and variants are helping them to provide their customers unique experience among the competitors in the market.
Cost leadership
The next dimension is having the cost leadership in the market. According to this strategy, business organizations having cost leadership in the market will enable them to offer their products to their customers in lower prices. Thus, the more affordable will be the cost of the products, the more market area they will be cover with having more number of target customers (Valipour, Birjandi & Honarbakhsh, 2012). In the case of pizza club, they have initiated the process of cost leadership by sourcing their raw materials locally. Local sourcing of the raw materials helped them in reducing the cost involved in producing the end products. Eventually it helped them to offer their products in competitive process, which enhances their competitiveness in the market. Moreover, on the other hand, the reduction in the cost of production will increase the profitability in their daily operation. Thus, initiation of the cost leadership is helping pizza club in gaining competitiveness in the market.
Focus
Focus strategy is very much beneficial for the beneficial and effective for the contemporary business organizations such as pizza club. This is due to the reason that, majority of the contemporary business organizations has their own target market and according to the taste and preference pattern of the target customers, they offer their products in the market. In the case of pizza club, they are not offering niche products in the market and thus they do not have any niche marketing strategies (Wilson et al., 2012). However, due to the fact that they are catering to the customers of New Zealand, thus their product portfolio is being designed and offered accordingly. The flavor and variants of pizzas and other food products are being offered according to the local food culture and taste. This strategy helps them in effectively meeting the requirement of the local customers, which in turn are the target customers for pizza club.
Thus, from the above analysis of the competitive strategies being involved by pizza club, it is being seen that, they are involving all the three generic strategies in their business operation. Moreover, it is also been seen that, initiation of the above discussed strategies are helping them in catering their target market effectively along with offering the products at lower prices (Chakrabarti & Mitchell, 2013). However, there still some challenges and future threats that may be faced by them in their business operation. Thus, SWOT analysis will be involved in the following sections in order to determine the challenges and opportunities of pizza club.
Strengths
Weaknesses
Opportunities
Threats
Apart from the internal analysis of pizza club, external analysis will also be done in the following sections. PESTLE analysis will be used in order to evaluate the external factors being faced by them.
Political environment in New Zealand is stable and business friendly due to the change in the government policies according to the change in the business scenario. Moreover, the political regime in New Zealand is also favorable for the newly incorporated organizations such as pizza club. They are also availing the financial benefits due to the sourcing of locally produced raw materials. Thus, the political environment in New Zealand is favorable for their business (Kelsey, 2015). However, rapid change in the political scenario will have negative impact on their business. This is due to the reason that, change in the political scenario may also change the regulations in the country.
New Zealand is a developed country and thus the average purchasing power of the customers is high and favorable for pizza club. Moreover, with having lower rate of unemployment in New Zealand, pizza club is having good market opportunity. However, with the increase in the inflow of the foreign direct investment in the country, the competition is increasing with the increase in the global competitors in the market (Alfaro & Charlton, 2013). In addition, challenges such as economic rescission may also be faced by them, which will reduce the business potential of pizza club.
The brand image and value that is being gained by pizza club is helping them in attracting more customers in their existing market. However, the recent development in the market of New Zealand regarding the rising awareness among the customers about the negative impact of the fast food is posing challenges in the market growth of pizza club (Carter et al., 2012). Though, the current business scenario for them in New Zealand is huge due to the high level of fast food consumption of fast food of the customers.
Technology is rapidly evolving in the food and beverage sector and thus it is important for pizza club to cope up with the change. However, one issue that they are facing is the rapid inflow of the updated technology in this sector (Bigliardi & Galati, 2013). This is due to the reason that, small and new entrants in the market such as pizza club will not have capital to cope with the rapid change in technology. Thus, their global competitors are having more updated technologies compared to them, which further attracts the customers.
There are various legislations and regulations regarding the food safety and standard. Thus, it is important for pizza club adhere to these regulations. In addition, it is also important to train the employees in maintaining the food safety and standards.
In the current scenario, customers are more conscious about the environment. Thus, it is important for pizza club to initiate green strategies in order to attract their customers (Toniolo et al., 2013). However, their global competitors are having more effective green strategies such as recycling the packages. However, it will be difficult for pizza club to initiate due to the involvement of huge capital.
Conclusion
Thus, from the above discussion, it can be concluded that, pizza club is having various competitive advantages in the market such as local sourcing and product variants. However, there are various issues being identified, which are creating barrier in effectively competing in the market. One of the key issues being identified is the lack of capital. This is due to the reason that, pizza club is a new entrant and thus they are not having the access of huge capital. In addition, another issue that they are facing is the limited market coverage along with lack of brand image compared to its global competitors.
References
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