Strategic direction is one of the most significant forces of business, which directs the employees towards researching a proper aims and objectives set by the organization. In order to run the entire process of business the organization needs to make appropriate strategic decision, which can ultimately helps the business experts in reaching the peak of success. This very specific study has focused to make detailed overview about the importance of strategic business decision, which can direct the organization in meeting the peak of success. However, the primary purpose of this very specific study is to make critical analysis about competitive market strategy by evaluating the environmental analysis of Singapore. The study has highlighted the core competency of the organization based on which different analytical tool is used. At the end of the study, major recommendations have been provided based on which strategies implemented within organization can be improved for getting immense recognition.
ABR Holdings Limited is one of the most recognized food and beverage chains occupying a predominant place in the market of Singapore (abr.com.sg 2018). Established their journey in 1978, Singapore the organization has held its franchise for Swensen’s Inc. in Singapore. ABR has initiated their journey as Swensen’s ice cream restaurant. After that, this group has expanded their business wings in different geographic areas of Singapore by launching 25 restaurants. Providing superior quality of products in affordable price range is the primary mission of this specific study. Foods and beverages are the core product with which ABR Holdings is maintaining their business sustainability. By 2017, ABR has purchased 50% of Bintan Lagoon Resort, which implies S$65 million (abr.com.sg 2018). The market scope of the organization is growing which has immense opportunity in holding international fame and reputation. The service providers associated with this group are very much well mannered and professionally trained. As a result, customers do not have to face challenges in receiving the services from ABR. It has been observed however that this particular organization has immense scope and opportunity to expand their business in multinational countries.
Macro environmental analysis implies on how environmental factors leave a major impact on the overall success of business. Environmental factors imply political, environmental, social, technological, economic and legal (Hill, Jones and Schilling 2014). In order to make effective business strategy the executives need to make environmental analysis with the help of which people have to face immense challenges in dealing with the customers effectively. Singapore is one of the most popular counties in terms of economic development due to the rising growth of business industries.
Political risk in the market of Singapore is low due to which the business experts do not have to strive in running a smooth process of business. As stated by Tremewan (2016), analysing the political environment in Singapore, it has been identified that after the independence, political stability is being cherished by the people. Due to such opportunities, living standard in this country has been developed (Yeung 2017). Due to stable political environment, Singapore is being considered as the Asian country with lowest political risk. Therefore, in this situation it will be easier for ABR Holdings Limited to enhance its business in an effective manner.
Analysing the economic situation in Singapore, it has been identified that the country has slow economic growth. In the year 2017, the GDP rate in Singapore was 3.6%. However, if the growth rate in previous years can be analysed, it will be identified that comparing the previous years, the GDP rate much not increased (Focus-economics.com 2018). Therefore, it can be said that economic risk in this country is quite high for expanding business. Due to the unstable economic situation, the rate of unemployment in this country is increasing day by day (Friedman 2017). In this situation it is tough for the ABR Holdings Limited to sustain in the Singapore market.
In the socio-cultural situational analysis, it has been identified that it is a high collective society (Vertovec 2015). Near about 2 million others nationalities of people live in this country, which has brought the diversified culture in Singapore. In the words of Esmaeilpoorarabi, Yigitcanlar and Guaralda (2018), it is true that depending on the current situation, the changing needs and demands of the customers, it can be said that social cultural risk in this country cannot be ignored. However, it is also true that due to availability of large numbers of customers, it will be easier for the company to sustain in the market. Therefore, social cultural risk of ABR Holdings Limited in the Singapore market is moderate.
As stated by Gosens, Lu and Coenen (2015), Singapore is being considered as the first ranked country in digital competitiveness. Due to availability of technology and knowledge, a strong technological environment has been developed in this country. This situation has brought various talent, training and development opportunities in the country. Therefore, it can be said that technological risk in this country is very low, which can help to flourish the business of ABR Holdings Limited. Technological environment can help the company to sustain in the competitive business environment.
According to Kim, Moon and Yin (2016), strict air and water pollution regulation are being followed by the Singapore government. All the internal environmental agreements are being followed by the government. However, it cannot be denied that increasing health disease in this county, the government has become strict for maintaining the food standard in the food selling organization. In this situation, it can be said that environmental situation is not in favour of ABR Holdings Limited in the Singapore market. In this situation the pressure on the organization to maintain the waste management standard will be high.
In order to bring business opportunities various trade regulations have been introduced by the Singapore government. Maintaining the standard employment policy in the workplace, different employment regulations as well as customer safety rules have been introduced in the industry. However, most of the competitive regulations are hard to be followed by the organizations. Therefore, it can be said that legal risk is moderate for ABR Holdings Limited.
Porter’s Five Forces:
|
Situation |
Analysis |
|
Bargaining power of the suppliers |
In the Singapore food market, bargaining power of the suppliers is low. With increasing opportunities in the market, the numbers of suppliers in the market have also increased, which has reduced the bargaining power. |
|
Bargaining power of the buyers |
Analysing the competitive business environment in Singapore food industry, it can be said that bargaining power of the buyers is high. After introduction of technological innovation, it has become easier for the customers to compare the price before experiencing the service (Flynn et al. 2016). Due to availability of many options in the food market, customers get options before purchasing products. |
|
Threats of new entrants |
In the external environmental analysis it has been identified that due to slower economic growth in the Singapore market, the extreme competitive business environment in Singapore food industry is the major concern for the organizations. In this situation, most of the food markets are being ruled by the large organizations, which creates tough situation for the new entrepreneurs to develop their business in the Singapore food market. Therefore, it can be said that the threat from new entrants is low for ABR Holdings Limited. |
|
Threats of substitute products |
Threat of substitute products is high in the Singapore market. in most of the cases, the small organizations provide same types of services and foods to the customers in lower ranges, in this situation, it is tough for the companies to maintain uniqueness in the market. |
|
Exiting rivalry |
Analysing the food market in Singapore, it has been identified that Sheng He food Chain, Haji Kadir Food Chain and Dine in the dark are the major competitors of ABR Holdings Limited. These organizations have established its strong brand image in the market, which can create tough situation for ABR Holdings Limited to sustain in the competitive market. Therefore, it can be said that threat from existing competitors is high for ABR Holdings Limited. |
Table: Competitive analysis in market
(Source: Flynn et al. 2016)
Core competency of an organization implies on how multiple resources and product features can distinguish the business process at the marketplace based on which the business experts can gain competitive advantages (Doz 2017). Before analysing the core competency of ABR Holdings, the business experts have used three major analytical tools for evaluating company’s internal and external structure. In order to evaluate the core competencies ABR has to analyse its resources. VRIO framework is one of the most systematic tools of analyzing the cre competency level of ABR Holdings.
Valuable:
In this very specific phase, ABR holdings can decide on how expensive the resource is in gaining competitive advantages in market (Meyer, Neck and Meeks 2017). As per resource structure of this organization, it has been observed that resources are very much affordable for the stakeholders with the help of which they do not have to struggle in using the services.
ABR holdings resources are sufficient in fulfilling the needs and demands of the customers. The stakeholders do not have show their dissatisfaction regarding the availability of resources (Song, Sun and Jin 2017).
ABR after being recognizable in the market has set their own market trends. Therefore, it is very much difficult for the competitors for to imitate the resources created by ABR Holdings.
If the resources are not limited and it is valuable, the business experts do not have to face challenges in capturing organization value in the market instead of having innumerable competitors (Wheelen et al. 2017). On the other hand, it has also been observed that the quality of products in affordable price range is the core competency of ABR Holdings due to which the entire process of business has created a self-identity in market.
Figure: VRIO framework for analyzing the core competency of the organization
(Source: Todorovi? et al. 2015)
In order to gain competitive advantages ABR Holdings has implemented several strategies and policies within organization. SWOT analysis is conducted for analyzing the strengths, weaknesses, opportunities and threats of organization. Value chain analysis is evaluated for maintaining the inbound and outbound procedure of organization (Hill 2017). Ansoff Matrix is one of the most significant marketing strategies that is implemented for forecasting future product growths and opportunities.
|
Strengths |
Weaknesses |
|
Ø Quality of products in affordable prices Ø Good customer management system with proper professionalism |
Ø Operation system is slow due to limited number of workforces Ø Lack of balance between product supply and demands |
|
Opportunities |
Threats |
|
Ø The organization has immense opportunities in expanding the entire process of business in multi-national countries Ø The organization can make more product developmental growth |
Ø The company has to face major threats from the competitors due to its limited workforces |
Table: SWOT analysis of ABR holdings
(Source: Stark 2015)
Ansoff Matrix strategy primarily aims to evaluate the market scope and product opportunity in future. This particular marketing strategy is of four major phases that include marketing penetration, product development, market development and product diversification.
This very specific phase occurs when a business organization seeks in achieving growth in market with the existing products (Jarzabkowski and Kaplan 2015). In this very specific stage, the organization does not have enough opportunity in expanding their products and services due to economic constraints. Large number of small and medium enterprises after launching their business in market tends to follow this phase.
Product development is the phase of developing new products in the existing market segmentations (Miller, Merrilees and Yakimova 2014). In order to maintain market sustainability the business organization intends to render development on their products so that they can overcome customer complaints
Market development is the process of expanding target markets with the help of existing products (Pike and Page 2014). In this very specific phase, the business experts aim to increase their number of target market for expanding business in other geographic backgrounds as well
Product diversification is the stage of rendering new products in new market. While expanding the market the business experts have to make product diversification (Cardy and Leonard 2014). Otherwise, the customers would not be able to get effective services from the organization.
After evaluating the four major phases Ansoff Matrix strategy it can be stated that ABR holdings has implemented diversification stage with the help of which products and markets both will be developed for expanding their business beyond going the market of Singapore.
Value chain business strategy enables the business experts in evaluating the entire supply chain process of ABR holdings. While maintaining the inbound procedure systematically the organization has implemented ERP system so that the authority does not have to recruit large number of labour forces in the warehouse of ABR holdings. Outbound is the systematic process of delivering the products to proper destination within proper time (Karadag 2015). The transportation system of ABR holdings is very much systematic which is constantly controlled by surveillance technology. As a result, the supply chain managers can get an in-depth overview about the shipping procedure of ABR holdings. In accordingly they can communicate with the customers appropriately.
However, while evaluating the suitability of these implemented strategy it can be stated that ABR holdings is going to achieve the peak of success after implementing these strategies successfully. Value chain business strategy enables the business experts in evaluating the entire supply chain process of ABR holdings (Hashemi, Karimi and Tavana 2015). After evaluating the four major phases Ansoff Matrix strategy it can be stated that ABR holdings has implemented diversification stage with the help of which products and markets both will be developed for expanding their business beyond going the market of Singapore. However, it is also true that due to availability of large numbers of customers, it will be easier for the company to sustain in the market. Due to availability of technology and knowledge, a strong technological environment has been developed in this country. This situation has brought various talent, training and development opportunities in the country. However, it cannot be denied that increasing health disease in this county, the government has become strict for maintaining the food standard in the food selling organization.
After introduction of technological innovation, it has become easier for the customers to compare the price before experiencing the service. These organizations have established its strong brand image in the market, which can create tough situation for ABR Holdings Limited to sustain in the competitive market. Before analysing the core competency of ABR Holdings, the business experts have used three major analytical tools for evaluating company’s internal and external structure. Ansoff Matrix strategy primarily aims to evaluate the market scope and product opportunity in future. In order to gain competitive advantages ABR Holdings has implemented several strategies and policies within organization (Chang and Taylor 2016). Therefore, it can be stated that the implemented strategies are going to be effective in rendering business success.
After evaluating critical discussing on various strategic decisions of ABR holdings, some of the major recommendations can be provided:
Conclusion:
This very specific study has in-depth knowledge about the importance of strategic business decision, which can direct the organization in meeting the peak of success. The study has evaluated that ABR has initiated their journey as Swensen’s ice cream restaurant. Foods and beverages are the core product with which ABR Holdings is maintaining their business sustainability. It has been observed however that this particular organization has immense scope and opportunity to expand their business in multinational countries. In order to make effective business strategy the executives need to make environmental analysis with the help of which people have to face immense challenges in dealing with the customers effectively. Before analysing the core competency of ABR Holdings, the business experts have used three major analytical tools for evaluating company’s internal and external structure. It has also been observed that In the external environmental analysis it has been identified that due to slower economic growth in the Singapore market, the extreme competitive business environment in Singapore food industry is the major concern for the organizations. ABR Holdings Limited. These organizations have established its strong brand image in the market, which can create tough situation for ABR Holdings Limited to sustain in the competitive market.
The study has evaluated that fact that as per resource structure of this organization, it has been observed that resources are very much affordable for the stakeholders with the help of which they do not have to struggle in using the services. On the other hand, it has also been observed that the quality of products in affordable price range is the core competency of ABR Holdings due to which the entire process of business has created a self-identity in market. In this study, SWOT analysis is conducted for analyzing the strengths, weaknesses, opportunities and threats of organization. Value chain analysis is evaluated for maintaining the inbound and outbound procedure of organization. Ansoff Matrix is one of the most significant marketing strategies that is implemented for forecasting future product growths and opportunities.
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