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In organising a business, strategy plays a critical role in executives responsibilities. In 2008, Johnson and Whittington defined that:
"Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations."
, which indicates the six elements-direction, markets, advantages, resources, environmental, and stakeholders-that build up a strategy.
Strategic Planning is where the long-term aims and the strategy are described specifically (Hussey 1999). It is much more concerned on the firm's market environment, which is not only the underlining of prediction but also the deep understanding of it (Aaker 1995). In the service industry, interacting and engaging with customers in order to understand their needs are highly demanded, so that the organisation can achieve a coordinated flow of service. Marketing, thus, must be recognised as the main element to strategy (Clegg 2011).
This literature review will discuss mainly on how to analyse markets in order to plan business' strategy. By carrying out the analysis, organisation will be more assured of what strategy to be exploited in order to attain its long-term aim.
According to Aaker (1995), a marketing analysis will not have a consistent characteristic and contents, as it depends on the framework. However, the common components being used are (1) actual and potential market size, (2) market growth, (3) market profitability, (4) cost structure, (5) distribution systems, (6) trends and developments, and (7) key success factors.
The analysis on an actual market size can be done by estimating the market size based on trade association findings or government sources. Additionally, the research from financial sources, buyers or competitors about the information of competitor sales can be performed as well. Besides, the consideration of potential market is useful, as it often influence the actual market size in the nearly future. By recognizing the potential new user and the usage method, the company will also have the sight and preparation of handling the changes in coming future (Aaker 1995).
Forecasting growth on market sales is useful in estimating whether the market is developing and making profit for the business or in reverse. Furthermore, the historical projections lead to a strategic interest in predicting the turning points of the business. Demographic data and sales of related equipment are both leading indicators that may assist in forecasting turning points. A high growth market may seem attractive but not when the number of competitors is greater than can be maintained by the growth opportunity (Proctor 2000).
Profitability of a company can be influenced by five forces, such as competitors, potential competitors, product substitute, supplier power, and customer power. (Porter 1980). Number, size and commitment of competitors act crucially in figuring the strength of competition, which will affect business profits. In addition, an analysis of barriers to entry is important in order to project potential competitors. It helps to calculate the profitability levels and the strength of competition in the future (Thompson 2001). Profitability is affected when buyers have more power than seller. Buyers can demand more services and force to lower prices when their purchase size is proportionally large.
Aaker (1995), moreover, proposed that the study in cost structure of a market will lead to a better knowledge of key success factor, either present or future. Firstly, value chain, where value added to a product or services, must be analysed. It is important to know how much of value added attributed to one value chain stage.
Consumers always have wrong perception of product's value they purchased. When consumers have problems of gauging their experience of using a product, the real and perceived value of the product can differ. This usually happens when the character of the differentiation is difficult to measure, during a first-time purchase, and when customers are straightforward (Thompson, Strickland & Gamble 2005).
Three main discussions in analysing distribution systems include the alternative distribution channels, the trends, and growing channels. Channel alternatives can be different according to the degree of directness. Some companies sell directly through their sales branch, while some others sell to retailers, distributors or other intermediaries. Most marketing control usually will go to the firms nearer to the end user, but will be the one that receive the highest risk as well (Aaker 1995). Internet, for example, has become one of the developing trends in distribution channels worldwide. The problem faced, according to Thompson, Strickland and Gamble (2005) is how much effort a company must place on the internet as a competitive strategy.
Market trends is one of the useful elements of external analysis by which, if there is a deep understanding, will helps to predict long term and prepare for the possible changes that will happen in the future. There will be a result of the summarization of customers, competitors, and market analysis from a discussion of the market trends.
Last but not least, Lehmann (2008) argued that the identification of key success factors is the most important result of a marketing analysis. Assets and skills, which provide company with foundation for competing successfully, are the key success factors to be diagnosed. Two categories of assets and skills are strategic necessities and strategic strength. Strategic necessities do not consequently beneficial, but significant weaknesses will occur out of its absence. On the other hand, strategic strength is those of which a company excel in, skills or assets, which provide core advantages.
MdTF must go through an accurate marketing analysis, using the seven components mentioned above, so that competent market strategies could be generated. Analysis on current and potential hotel as competitors, tourists' demand on the accommodation in Corsica, the way of delivering information, will MdTF generate the targeted profit in time and how much will the plan cost in order to work, will be the best practices to program a competitive strategy.
Operations Management and Group Culture
Operations management is defined as the alteration process which involves designing, operating and improving the firm's systems in order to establish and distributes its primary products and services (Chase et al. 2004). They also stated that in operating a business, operations managers must be familiars with social environment, as the focus is not only deadlines and technology but also dealing with people. Therefore, managers must be excelling in behavioural skills.
Nowadays, issues of diversity appear more and more widely regarding to managing an operation. Group culture - a number of people who is associated together based on its identity, values or achievements (Solomon & Schell 2009) - patterns emerge along with the application of diversification workforce in the business. These trends of changing demographics of the workforce are believed to continue in the foreseeable future (Davis et al. 2003).
The main point of the Literature Review will be discussing on how managers of Human Resources operation manage diversity issues in order to generate benefits from group culture.
Thomas (2001) stated that managing diversity means allowing every people in the workforce to operate to his or her potential, not merely just involving and controlling diversity. A more elaborate understanding of diversity, according to Konrad and Linnehan (1995) will be the focus of disadvantaged groups, such as those who have faced suppression and discrimination at work. These groups would particularly include older employees, ethnic minorities, women, and non-whites.
Ozbilgin and Tatli (2008) argued that global diversity management involves planning, adaptation, and implementation of a set of management activities that demand to reconcile the distinction of work places. Today, Human Resource has extended its diversity practices beyond affirmative action and equal employment opportunity staffing efforts. Holding mandatory training, creating a Diversity Advisory Committee and targeting communications to different affinity group members are commonly adapted (Konrad et al. 2008)
A successful diversity strategy must overcome culture change in the organisation so that it creates a work environment that maintains teamwork, strength, and participation of the whole organisations culture (Dweyer et al. 2001). Cox (2001) believed that early in the process, a standard measurement program is important so that there is a baseline of diversity's current climate. The results of an organisational diversity climate survey must be first started by the top managers, as a model behaviours, by leading and conducting a feedback sessions. The common obstacle of a diversity management is often found with the fear of managers for lowering standards (Thomas, Jr 2001). However, changes in a culture workplace are difficult and require a substantial commitment of leadership (Cox 2001). Thus, it is crucial for top managers to involve in the overall processes of diversity change efforts because the long-term transformation of the organization's culture will not be effective without it(Nkomo and Kossek 2000).
Additionally, there are three research sequences of the Human Resource diversity practices (Konrad et al. 2006). The first research takes into consideration the impact of applying specific Human Resource practices on workforce diversity measurement. The survey Goodman, Fields and Blum (2003) done on HR managers in Georgia showed that there is a good relationship arise between affirming employee promotion and development, and the representation of women.
The second research assesses the existence of diversity and performance results in the survey of individual, group or organizational levels in the association. Researches have to measure variables such as social cohesion and collaborative behaviour as the impacts of group diversity.
The third research examines the process of individual, group or organisational performance outcomes can be generated by HR practices. Heterogeneous organisation that appreciate diversity are assured to have greater creativity and innovation, higher quality group decision making, greater capability to attract and maintain the best talent, more flexibility, and bigger marketing ability (Cox and Blake 1991).
Richard, Kochan and McMillan-Capehart (2002) proposed that a diversity workforce may lift up buyers' demand for related products and services. Organisations with higher cultural diversity are predicted will have a better ability to reflect increasingly diverse products markets and have more elaborate social relationship (Richard 2000). In addition, Thomas and Ely (1996) suggest various preconditions that assist in applying identity-group differences, which is useful as sources of individual and organisational effectiveness. A leader must understand the important of a diverse workforce, and must highly appreciate variety perspectives and approaches in workplace. Moreover, organisation must establish high expectations on standards of group performance as well as encourage openness.
To sum up, there are several actions that Human Resources manager needs to implement in MdTF regarding its diversity. A responsible and low-profile manager must be chosen in managing the diversity, followed by conducting climate survey annually. There will be some mandatory training that all employees must go through every month in order to know more about other culture in the workplace.
Quality within Food and Beverage Management
Food and Beverage management is the management of food and beverage operations that consist of three different systems, such as food production, delivery or the service sequence, and customer management or customer process (Cousins et al. 2002). They, as well, defined quality as the service provided to meet customer's needs according to the using purpose and safety.
Food and beverage industry is continuously facing competitive challenges. Unlike the 60's, where low cost was the challenges, and flexibility and quick response in the 70s, environmentalism has become the main issues nowadays (Payne-Palacio and Theis 2005). This issue was one of the three discussed in the Brundtland report in 1987 about sustainable development - economic, social, and environmental sustainability.
There are three environmental issues that food and beverage operations should manage in order to maintain its quality, such as waste management, energy and water consumption, and food miles (Davis et al. 2012). This literature review will bring up about how to manage waste in food and beverage operations.
According to the research done by Payne-Pakacio (2009), foodservice operations contributed the greatest amount of municipal solid waste - packaging and containers, yard trimmings, lasting goods, non-lasting goods, leftovers, and other inorganic wastes - in the United States. This leads to the existence of urgent need to reduce the amount of it. Integrated waste management, which is the combination of technologies, methods and control programs that aims to achieve waste management objectives, should be applied by all foodservice operations (El-Haggar 2007). The systems that can be employed involve source reduction, reuse and recycling, composting, combustion or incineration, and landfill use.
First, the appliances of 3Rs - reduce, reuse and recycle. Operators can reduce the number of source used, such as buy less food and finish the remaining stocks before replacing. Labelling and computerising inventory will practically help. Purchase supplies that meet the operation's specification with minimal packaging. Krochta and De-Mulder Johnston (1997) argued that although packaging reflects only 30 percent weight of municipal solid waste, it actually seems more important as its thickness fills approximately 65 percent of waste volume. Managers can use kitchen towels, silverware, dishes and linen instead of disposable paper products. By recycling glass, plastic, aluminium and paper, operations can save up to 35 percent waste emission (Davis et al. 2012).
Composting organic waste is another way of managing waste of food and beverage operations. By composting biodegradable plastic ware, operations are helping in returning valuable nutrients to the soil without producing more carbon footprint to remove it (Payne-Pakacio 2009). Moreover, it helps the business to spend less on the removal of waste, which costs $15 a ton for compostable materials and $65 a ton for non-compostable materials (Chris 2006).
The other way of managing waste that was suggested by Payne-Pakacio (2009) is the combusting system. Restaurant operators can employ waste combustion systems with energy recovery for packaging waste. The oil waste from operation can be combusted into biodiesel, which is a cleaner burning fuel. In addition, Chris (2006) added that, before released to the atmosphere, 90 out of 100 pollutants from combustion emissions can be filtered out.
The least practiced system of waste management is the use of landfill. Recoverable waste is compacted into certain land for biodegradation by itself. This system is also known as landfill reclamation (Chris 2006). However, this practice is not useful as the cost of filling waste in a local land has tripled in some localities in recent years (Keiser et al. 2000).
Lastly, train and educate staff, suppliers and customers. Managers must spread the importance of proper waste management to the employee, in the perception that they will share it with customers as well, so that the amount of waste in the premises are minimised. Besides, this is believed to gain customers' respect, which will add points to the quality of the business (El-Haggar 2007).
The fact that energy and water consumption and food miles also play important parts in establishing a sustainable food and beverage operation cannot be avoided. Food and beverage operations are not only the largest energy polluters, but also the biggest users of toxic synthetic and fresh waters and air polluters (Davis et al. 2012). Managers must employ all the three systems in creating environment excellent.
MdTF, likewise, will apply the three systems of sustainability in its restaurant and bar in order to achieve better quality of operation management. The kitchen inventory will be computerised and checked every month. Waste water will be filtered to be used as irrigation water and waste food will be composted into fertilizer for vineyard. Moreover, MdTF will cooperate with local organic suppliers to reduce carbon footprint resulted from transportation.