Firm Situational Analysis and Recommendations

FIRM SITUATIONAL
ANALYSIS AND
RECOMMENDATIONS

Table of Contents
Table of Contents.............................................................................................................................................2
1.0 EXECUTIVE SUMMARY...................................................................................................................5
2.0 COMPANY HISTORY........................................................................................................................5
2.1 Background........................................................................................................................................6
2.2 Purpose of study................................................................................................................................6
3.0 EXTERNAL ANALYSIS.....................................................................................................................6
3.1 General environmental analysis.........................................................................................................7
3.1.1 Demographic segment....................................................................................................................7
3.1.2 Economic segment..........................................................................................................................8
3.1.3 Political/ legal segment.................................................................................................................10
3.1.4 Socio-cultural segment.................................................................................................................10
3.1.5 Technological segment.................................................................................................................11
3.1.6 Global segment.............................................................................................................................11
3.1.7 Summary of general environmental analysis................................................................................12
3.1.8 Driving forces...............................................................................................................................13
3.2 Industry Analysis.............................................................................................................................13
3.2.1 Descriptions of the industry..........................................................................................................13
3.2.2 Industry dominant economic feature.............................................................................................14
3.2.3 Market size...................................................................................................................................14
3.2.4 Market growth rate.......................................................................................................................14
3.2.5 Industry trends..............................................................................................................................16
3.2.6 Five forces analysis.......................................................................................................................17
3.2.6.1 Threat of new entrants...............................................................................................................17
3.2.6.2 Power of suppliers.....................................................................................................................18
3.2.6.3 Power of Buyers........................................................................................................................18
3.2.6.4 Power of Substitutes..................................................................................................................19
3.2.6.5 Intensity of rival firms...............................................................................................................19
3.2.6.6 Summary of five forces analysis................................................................................................20
3.2.7 Summary of industry analysis: Key success factors......................................................................20

3.3. Summary of general environment analysis: Critical issues.............................................................21
4.0 INTERNAL ANALYSIS..........................................................................................................................22
4.1 Organizational analysis....................................................................................................................22
4.1.1 Corporate mission.........................................................................................................................22
4.1.2 Products and services....................................................................................................................23
4.1.3 Leadership....................................................................................................................................23
4.1.4 Organizational Culture..................................................................................................................24
4.1.5 Structure.......................................................................................................................................24
4.1.6 Strategy.........................................................................................................................................25
4.1.6.1 Current strategy.........................................................................................................................25
4.1.6.2 Components of strategy.............................................................................................................26
4.1.6.3 Competitive strength..................................................................................................................27
4.1.7 Summary of organizational analysis.............................................................................................27
4.2 Analysis of firm resources...............................................................................................................27
4.2.1 Tangible resources........................................................................................................................28
4.2.2 Intangible resources......................................................................................................................28
4.2.3 Summary of firm resources...........................................................................................................29
4.3 Capabilities......................................................................................................................................29
4.3.1 Value chain analysis.....................................................................................................................30
4.3.2 Core competencies and sustainable advantage..............................................................................32
4.3.3 Summary of firm capabilities........................................................................................................33
4.4 Financial analysis............................................................................................................................33
4.4.1 Valuation analysis.........................................................................................................................34
4.4.2 Growth analysis............................................................................................................................35
4.3.3 Profitability analysis.....................................................................................................................39
4.4.4 Financial strength analysis............................................................................................................44
4.4.5 Management efficient analysis......................................................................................................48
4.4.6 Summary of financial analysis......................................................................................................49
5.0 STRATEGIC ISSUE ANALYSIS............................................................................................................49
5.1 Critical challenges...........................................................................................................................49
5.2 Resources and capabilities...............................................................................................................51
5.3 Strength or weakness analysis..........................................................................................................52

5.4 Opportunities or threats analysis......................................................................................................53
5.5 Summary of strategic issue analysis................................................................................................54
6.0 REFERENCES.........................................................................................................................................57

 EXECUTIVE SUMMARY
Situational analysis is an integration of methods that is used by the manager of company to
examine company internal and external environment to effectively understand the business entity
capabilities, resources and business environment (Wróbel, Montewka & Kujala (2018)). This
project study demonstrate a situational analysis for Sysco Corporation that is an American
multinational company work under the marketing and distributing of several range of products
such as food, kitchen equipment, tabletops items for hotels and restaurants, healthcare and
educational facilities and also a wholesaler for other company who offers food services to
customers. In this report several frameworks are to be included that are useful to examine the
situation analysis and support in reflecting recommendations for the same. In this internal and
external analysis of foodservice industry are to demonstrated below that impact individual
company in these industries. In this external analysis includes general environmental analysis
that provides driving force that company will face. After examine external trends, company need
to focus on assessing internal trends that helps in examine capabilities and resources so that
effective recommendations are presented that gives competitive advantage and profitable results.

 COMPANY HISTORY
As a leading and successful food distributor in the wholesale and retail industry, Sysco
Corporation provides several types of products to consumers that involve marketing and
distributing food products, kitchen wares, tabletops items to restaurants, healthcare and education
facilities to people of society, wholesale to several companies who offers food services to
customers within marketplace. In 1981, Sysco food services purchased out the assets of Lankford
Produce that is based on West Pocomoke, Maryland that was founded on 1964. The company
was founded on March 19, 1969 headquarters in Houston, Texas, UK. As this company offers
food services and food away from home services are to be provided to companies and customers
who need it. On June 2015, US federal judge announced that the Sysco Corporation ruled 75% of
US food services industry and also stiff competition. In this company around 69000 employees
are working. In fourth quarter of 2020, sales of company are to be decreased by 42.7% to 58.9
billion (Sysco Reports Fourth Quarter and Full Year 2019 Results. (2021)). Operating income
was increased around $874.2 million.
2.1 Background
Sysco Corporation is a leading multinational company that was founded on March 19,
1969, headquarter is in Houston, Texas, United States. Sysco Corporation operates their business
around 330 distribution facilities worldwide. In simple terms it offers their services over 90
countries. The company becomes public company on March 3, 1970. Sysco, focus on improving
their performance by continuing focus on their customers. It helps in furthering progress of our
transformative initiatives. With the best and talented workforce an organization will gain high in
relation to getting profitable results and sustainability.
2.2 Purpose of study
The purpose of this study is to reflect an appropriate representation of external analysis
along with its resources and capabilities that impact the business industry and their related
operations. This report study helps in demonstrating how effectively the organization develops
its strategy by analyzing situation using internal and external aspect via dynamic use of macro,
SWOT analysis. Within general environment and industry analysis business industry examine
several aspects and frameworks which majorly affect the company operations and sustainability.
In this companies focus on using internal analysis because it helps in examine internal strength

and weaknesses along with several opportunities and threats that will affect company situation.
In this study external analysis is useful and supportive because it helps in developing the position
and gaining competitive advantage by recognizing several trends, standards, policies etc. As per
that recommendations are to be provided that will develop competitiveness and also highly
supports business firm to get success in their long term survival.
 EXTERNAL ANALYSIS
External analysis defines as an effective analysis of industry environment using several
general environment factors such as technological, demographical, social, political, legal and
environmental. The main aim of conducting this analysis is to examine the opportunities and
threats that are present for particular industry or any sector that urged for profitability, volatility
and growth. In this manager of Sysco corporation focus on examine the external analysis so that
profitable results are attained by maintaining reputation in the customer’s eyes within global
market.
3.1 General environmental analysis
General environmental analysis is crucial for company because it provides the several
opportunities and solution to overcome threats that are present within the whole industry. This
analysis involves mainly six components which are technological, demographic, economic,
political, social cultural, global factors that helps businesses to curve the market demand which
positively affects their sales and profit volume (Enikolopov and et. al., (2020)). All these factors
reflect opportunities and threats that are present within wholesale industry so that Sysco
Corporation effectively accepts the changes to sustain in the future. In this driving forces are
also included that reflects the prevailing changes that company would focus to gain
competitive advantage for the same. In this manager of the company reflects few driving
force which highly impact the company so that best strategy are to be implemented to
gain profitable results.
3.1.1 Demographic segment
It refers to that segment of general environment which is associated with population, age,
income of a people of the country. In this population is the major factor which highly influences

the demand of market within business industry of country (Demographic segmentation, (2021)).
Due to this aspect Grocery wholesale and retail industries face major challenge related to
production and supply of goods. In context of world, population is rising that will affect demand
and supply of whole industry. With the increment in population of world and US, demand of the
product and service are also enhances and due to this more people enter within the market. This
will reflect the positivity between population and demands of market. High population of US
create more demands that helps businesses to supply and produce the goods and services as per
market demands so that high profitable results are enjoyed within marketplace. Increment in
population positively influence the demand within grocery wholesale and retail industry that
directly efficient and effective for the Sysco corporation. A population of US increases in 2021
that is increase from 0.58% from 2020 (U.S. Population Growth Rate 1950-2021,). Due to high
population demand increases and because of this price of the products are also high that leads the
high sales volume. But at the same time it also reflects major challenges because of high
population in US and world trends changes very frequently which is the one of the major issue
for grocery wholesale and retail industry that affects Sysco Corporation. In this companies will
highly focus on strategy change in terms of future perspective. The growth rate of US, is high
that impact company sales in positive manner.