Compass group

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Introduction:

Compass group is one of the most dominant food service company specialising in providing food, vending and related service on clients, premises in over 90 countries. Compass group was founded by jack Bateman back in 1941 with factory canteen to serve British workers supporting war effort. In 1984 company was acquired by grand metropolitan and the catering business became compass with full flow. The businesses of Compass group are rendering food service in the following food services:

* Healthcare and seniors

* Business and industry

* Defense, offshore and remote site

* Fine dinning

* Vending and

* Education

In the community this company has been recognized and rewarded best community based initiatives across the world such as employability, tackle social exclusion and promote diversity. Compass awarded for establishment a pioneering infrastructure for distributing in Turkey for the needy community. In Czech Republic the silver award went to Compass for their support to a group of thirty orphans in a centre in Honavar, south-west India.

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With 375000 employees Compass group has been serving in more than ninety countries around the world providing food service and vending. By maximizing employee's effort for the company Compass provide best possible service for their customers and clients to ensure their continued loyalty. This company has a passion for quality. They are proud for their brands, people, companies and they are proud as they do. To set high standard of Service Company deliver high standard of performance that can not match to their competitors. This ambition runs throughout their business and every sector to keep their standard high.

The mission of Compass group is to deliver high quality of service by their people maximum performance to achieve leadership in their chosen foodservice markets. Company has own strategy to establish their business following these:

* Keep importance of customer satisfaction standard

* Maximum return on investment

* Maintain unrivalled consistency on company expertise

* Providing best people in right place for company business.

Company Strategy

Compass group grown both organically and through acquisition. In 2001 compass group had stepped up its strategy of growth through acquisition. This appear strategically sound and helped to lobster compass's position as the world's leading caterer, it affected the strong cash flow of business while putting pressure on margins and returns. Acquisition strategy is a high level business and technical management approach designed to achieve program objectives withind

To achieve leadership in the chosen foodservice market company has to maintain some strategy time to time to keep their position providing superior level of service. Towards their vision this giant company of being most profitable owner, highest quality and world's top food service provider based on few strategic key areas those are stated below:

a) Client and customer satisfaction

b) Choose right employer

c) Excellence operation

d) Taking market leadership and

e) Keeping financial performance in order

The company uses different strategy depends on demand of business as well with the movement of competitor's initiatives. Sometime company takes new innovative concepts, to confirm customer have right choices that meet their lifestyle needs and provide well balanced nutritional options. For example ‘Steamplicity' was one of the ideas to use to cook prepared fresh ingredients within minutes to meet individual patient orders, improve nutritional content, choice, service and the same time reducing costs. The above five strategic point will be described here in brief:

a) Putting client and customer in first priority provisioning of a standard of service that is second to none. Although maintain a good working relationship with client and listen carefully and respond quickly as per demand.

b) By maximizing effort from company employee achieved success and for their provision of exceptional opportunities for them to develop their careers and their full potential.

c) To adopt best practice throughout the business company used latest information technology and policy. To ensure use and application of superior systems, process, equipment and standard.

d) By improving quality of food, cost effectiveness and through dedicated teams experienced in the particular demands of specific market sectors.

e) The major group objectives for this company are to focus on continuous growth on earnings per share and highest return on investment.

Compass Performance

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To become world largest food vending and service provider Compass had to step up its strategy of growth through acquisition. As a result it puts company position in the world leading market but affected on cash flow of the business that push pressure on margins and returns. In the year 2001 company has taken biggest stepped in the respect of acquisition but in return questioned 6 percent possible growth in target by end of the year. In addition this was no mean achievement regarding economical and political climate even though geography and by market sector.

Year

Nature or name of business

Cost Million (£)

2001

1. Morrison management caterer, US contract caterer

2. European vending machine operator

3. Supplier of vending machine from Vendepac of TM group

4. Ancillary healthcare services, Crothall services

5. Seiyo food systems

6. Restorama, Rail gourmet and parts of Gourmet Nova

£383

£374

£84

£120

£193

£41

2002

Bon Appetit management based in California
Gruppo Events at Somerset house in London
60% stake in Italian catering company Onama

£114

£6.6

£80

2003

1. Millies Cookies of 100 cookie outlets

£24

2004

Creative host services, US airport concessions company

2. Keith Prowse corporate hospitality

3. Mitropa in German stations

£22

£10

£12

Table:

In the year 2004 this company got their sales rise about 4.4% in billion 440 compared to 3.4% of last year. Accelerated growth was bit slow compared to assumption figure. But further growth is expected in 2005 with around 4.9% increase and sales to reach 476 billion pound.

The US catering industries continue to see increase consolidation with major acquisition by key player like Compass. This company has expanded their share from 27.3% to 20.2% in the year of 2000. But this sector always to be dominated by big brand such as McDonald's, Burger King. This market is fragmented with the top 10 fast food companies acquiring 15.4% of total sales in the US food sector.

Obstruction in Business Growth

In recent economy this food service and vending business segment has suffered more than any other current downturn. For recent years recession Company bounded to cut cost of manufacture price, labors cost and removal of many employee benefits. But companies where there have been redundancies of plant closure and there have fewer people to serve. Even though their healthcare and education market have less influenced by downturns in the recent economy. But now-a-days hospitals are relying on cafeterias, cafes, bar and restaurant for much needed revenue. As a result compass group disposes some of their business in recent years describing as follows:

Year

Name or Nature of business

Cost in million (£)

2001

Le Meridien chain of hotels to Nomura Intl.

48 Heritage country hotels

Seven wheeler chain restaurant and wine bar

Strand palace and Regent palace

£1.9bn

£235

£8

£105

2002

220 Travelodge and 368 Littele Chef restaurant

£712

2006

Select service partner travel concessions

£1.8bn

Table: Disposal in recent years

………………………………………...… Answer to question Q3

Business opportunities in UK

In the year 2000 Compass completed an £18bn merger with UK based Media Company named Granada to create two different sector or divisions: Granada media and Granada hospitality. Later this company comprised and started to cover the area of roadside restaurant, motorway service area and the former forte hotel estate.

There is still growth in business and Industry. Compass is seeing a number of new markets emerging in the UK. Still to get education and healthcare these are very lowly penetrated by contractor at this moment in time. In further there are still more sites for new business markets such as remote site, military and Defense market. Compass has found new opportunities to open retail shop at London Zoo.

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