Assignment on Strategic Business Plan (Doc)

STRATEGIC BUSINESS PLAN

TABLE OF CONTENTS
Company Mission.......................................................................................................................1
Internal Analysis.........................................................................................................................1
External Environment.................................................................................................................1
Strategic Analysis and Choice....................................................................................................1
Long-Term Objectives................................................................................................................1
Generic and Grand Strategies......................................................................................................1
Short-term objectives..................................................................................................................2
Functional tactics........................................................................................................................3
Policies that empower action......................................................................................................4
Strategic Control and Continuous Improvement........................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................8

Company Mission
Al-Hungry is a new venture which will start its business in fast food market. The main
goal of organisation is to be successful fast food outlet in Saudi Arabia. The outlet will be
focused on premier fast food liked by Arabians and would offer quality food at great affordable
value for maximising sales.
Internal Analysis
Internal analysis is a review of company's strength and weaknesses. Internal analysis
often incorporates measures that provide useful information about the companies performance
and the area where improvement is need to be done.
SWOT analysis of AL-Hungary:
Strength:
 Food consumption in market of Saudi Arabia is an increasing trend. Young age people,
below 25 years age population accounted more than 40% share in fast food industry and
they are the biggest consumer in the market.
 The location of Doha Al Janubiyah, Dhahran, is suitable for most of youngster in food
market.
 The items that will be offered consist of fried chicken, shrimp, fish. Chicken products
such as chicken fillet burger, nugget snack burger will be provided are new to customers
and different from other fast food restaurant in market.
 The reasonable pricing of the food items with quality services will help to attract more
customer to the restaurant.
Weaknesses:
 There is no proper promotional strategies to introduces new business in fast food
industry of Saudi-Arabia.
 The lack of suitable timing and no home delivery is one of the weaknesses of Al-
Hungary.
 They are targeting the youth of the location. Where, family and children are also main
consumers of the restaurant.
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Opportunities:
 The location of the restaurant Doha Al-jamuhiyah is prime and draws a footfalls as it
near the main market.
 The increasing popularity of fast food trend will help Al-Hungary for getting success,
with the quick and quality services to the customers.
Threats:
 There are other local as well foreign fast food chain restaurant which are established as a
king of fast food market and has greater market share. Like Mc. Donald's, Jan Burgers,
Subways etc.
 The competitors has superior access to distribution in the market, where AL-HUNGARY
has one outlet in the location.
 The take away outlet trends in fast food market can cause threat to the restaurant. Fast
food trucks are the growing trend in the market owing to increasing social events such as
food festivals and quick servicing.
External Environment
External environment is considered of all the environmental factors which affect the growth and
success of the AL-HUNGARY in Saudi Arabian fast food industry. Al-Hungary before
operating should consider all the potential external factor which could hinder its success.
PESTEL analysis of Al-Hungary:
Political:
The main aim of the government's Saudization policy is to reduce unemployment among
nationals by encouraging companies to maintain a specific Saudi national to expect ratio. This
creates challenges for restaurant operators as majority of employees are Non-Saudi. Al-Hungary
can be affected with fluctuating political terror, and the civil-political unrest in middle-East Asia.
And the fact that every Emirates has its own governmental institution and different laws.
Economical:
Saudi-Arabia is the second largest economy in the middle east and richest Arab country.
The solid position of countries economic position helped almost all the sectors in country. The
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food industry of Saudi-Arabia is also growing with the impact of its strong economic position.
Most of the supplies of food industry are provided by the local and regional supplies of the Arab
world.
Social:
Eating out and shopping are the main entertainment activities in Saudi Arabia, which will
help Al-Hungary in its success. The disposal income are increasing the standard of living of
people, the social media has turned he exposure of society with western culture. Al-Hungary
should considered the social requirement of local people, maintain Halal non-veg in restaurant,
hygiene and quality service will help in boosting up the business of restaurant.
Technological:
Technological factors always play a crucial as well as the vital role in the business of
glob food business. The adaptation of modern technology in Saudi Arabia, had a positive impact
on the fast food industry and market. Al-Hungary can use the digital technology for ordering
food from home, direct online payment of their order. This will also attract the customers who
are more prone to technology.
Environmental:
The environmental factors include the changing trend of global environmental norms.
The steps taken by the world against the pollution and promoting activities like recycling has
affecting the food businesses also. The programme by restaurant operators like health awareness
and other norms among people to save food will affect the business of Al-Hungary.
Legal:
The legal factor includes the legal obligation which on each sector which should be
followed by every sector in countries. The legal factor that can affect the business of Al-Hungary
are the policy of Halal food in restaurant, and certificates should be granted by local authorities.
As per the law, restaurant also get the certificate of food safety and hygiene.
Strategic Analysis and Choice
Al-Hungary is a new fast food business venture which is going to established in Saudi-
Arabia. The fast food market is a increasing trend in Saudi-Arabia because of the young
population and raising in standard of living of people. Business plan of starting fast-food
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restaurant will anticipated to register growth as digital technology has influence the adaptation of
western culture. The people of the age group below 25 years age are which are 40% of overall
population and are biggest consumer of fast food. Fast food industry is going to increase rapidly
in coming future. It is one of the most profitable business in Saudi-Arabia as it is in increasing
trend (Growing Young Age Population and Increasing Food Consumption Would Drive the
Saudi Arabia Fast Food Market-6Wresearch, 2018). Al-Hungary has a wide range of
opportunities for its business, with offering different variety of meals in menu with reasonable
prices and best quality services. But, the competition in the market are tough as the foreign
franchise, Some of the major companies in Saudi Arabia Fast Food market include- McDonald’s,
Domino's, Pizza Hut, Burger King, Herfy, KFC and Al Baik. They owns a large amount of
market share in fast food industry.
Long-Term Objectives
 To establish foot in local fast food outlets in Saudi Arabia for attainment of strategic
objectives.
 To make fast food proper one stop destination for people of Doha Al Janubiyah, Dhahran.
 To expand market share by delivering quality food items for increasing sales.
 To offer quick service food for maximising satisfaction of customers.
 To gain over 5 % of return on investment through opening chains in nearby places in
Saudi Arabia.
 To mark 8 % of profit on starting operational year and further increment of 5 % year by
year.
 To enhance productivity by hiring efficient employees and maintaining cordial relations.
 To overtake competitive forces by implementation of well-developed strategies
 To offer variety of food products by maintaining hygiene ensuring responsibility towards
public.
 To display digital menu boards and self-order kiosks ensuring technological leadership.
 To maintain orderly growth of employees for increasing their efficiency over the years.
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Generic and Grand Strategies
The generic and grand strategy which are implemented by organisation derives value in
accomplishing long-term objectives in the best way possible. Low cost, differentiation and focus
strategies are main pillars describing company's potential in attainment of goals. Al-Hungry will
use low cost strategy in its new venture for increasing number of customers with ease. The
business will use this strategy as it will start its operational activities in Saudi Arabia particularly
at Doha Al Janubiyah, Dhahran which is better location to attract consumers who wants quick
service food. The items that will be offered consist of fried chicken, shrimp, fish. Chicken
products such as chicken fillet burger, nugget snack burger will be provided (Miandad & et.al.,
2017). Fish fillet sandwich and jumbo shrimp meal will also form part of menu for Al-Hungry
consumers.
Along with it, fresh garlic sauces, French fries and Cocktail sauces will offer at
affordable costs. This means that for giving good range of products to customers, low cost
strategy will be implemented. At initial level, lower profits will be attained which will be off-set
by increasing prices of food items in effective manner. This will help firm to accomplish set
targets within stipulated time. On the other hand, grand strategy is that which provides basic
shape to functional tactics of business. It directly helps business to reinforce strategies in the best
way possible. There are various grand strategy such as stability, expansion, retrenchment and
combination strategies.
Al-Hungry will implement stability strategy so as to maintain its current position and
focusing on improvement of services and food items for increasing its market share. It will be
achieved when firm would be satisfied with its market share. Moreover, it will have better
services by merely changing business operations in terms of perspective of customer groups,
consumer functions in a better way (Al-Shabib & et.al., 2017). The basic rationale of using
stability strategy is that risk averse usually small scale firm and it is satisfied with current
operations in effective manner. Moreover, Al-Hungry will be able to grab its market share in
Dhahran which is better location for business to attain profits in effective manner. Thus, it can be
said that following low cost generic strategy and stability grand strategy, firm would capture the
market of Saudi Arabia and satisfaction level of consumers will be accomplished in a better way.
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Short-term objectives
The short-term objectives are consistent with that of long-term objectives being made by
organisation. These are usually attained within one year when operational activities are started.
Al-Hungry would be able to achieve desired objectives by taking into account all relevant factors
with the help of which firm would effectively attain goals in effective manner. The short-term
objectives which are in conjunction with long-term objectives are as follows-
 To maximise sales revenue by 3 % within 6 months of operations
 To promote business by using social media channels for attaining customer attention.
 To hire and train new employees and try to minimise employee turnover by retaining
them.
 To maintain balance of raw material usage for increasing productivity and reducing
wastage.
The above mentioned short-term objectives will help to attain generic and grand
strategies. By implementing low cost strategy, sales will expand and 3 % increment will be
effectively attained with ease. Moreover, raw material usage such as ingredients for making non-
vegetarian products, packaging etc. will be met by taking into account achievement of goals.
Social media channels will be used by implementing stability grand strategy in effective manner
so that people may come to know about products and discounts offered on it. Employees will be
trained in a better way and as a result, they will be given attractive salaries by which they will be
retained (Moradi-Lakeh & et.al., 2017). Thus, with the help of such strategies, short-term
objectives will be accomplished within one year.
Functional tactics
The functional tactics are tools which are used for making effective business operations
by taking into account each function in effective manner. Tactics such as social media channels
will be used like Instagram, Facebook, Twitter for promoting products to public with ease.
Moreover, it will have better profitability level which will be attained by company in the best
possible manner. On the other hand, inventory reduction i.e. wastage will be minimised for more
productivity so that only desired food items will be made. In relation to this, short-term
objectives will be met by taking into consideration all relevant policies and procedures
(Backholer, Blake & Vandevijvere, 2017 ). This will help Al-Hungry to attain profits in effective
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manner. The product-focused approach has four areas such as product, price, promotion and
distribution will be followed by Al-Hungry for attainment of short-term objectives.
In addition to this, product means item being offered to market which are wide variety of
non-vegetarian products to Arabian people. Price means that amount of money which have to be
paid by customers for availing food services. The average price will be 10 SAR (Saudi Arabia
Riyal) for people for chicken products, while for fish products, 8 SAR will be charged. Along
with it, deserts will be 5 SAR which will attract consumers. Promotion is necessary part of
functional areas as activities communicating merit about product will be made so as to persuade
people to buy food items. Distribution means activities undertaken for making product being
available to target consumers. This means that firm is able to achieve goals by strengthening
position of restaurant in Doha Al Janubiyah, Dhahran. Thus, organisation will be able to attain
objectives by incorporating functional tactics which will maximise sales quite effectually.
Policies that empower action
There is requirement for creative policies in the business so that it may be able to flourish
in the long-run. Al-Hungry is a new venture and maintaining public relations strategy is
essentially needed for enhancing sales revenue with much ease. Public relations effectively helps
to trigger for making strong connection with audience by increasing visibility and elevating
organisation's credibility up to a high extent. This will help in meeting out objectives in effective
way and that too within stipulated time (Amqizal & et.al., 2017). Apart from this, speedy policies
are to implemented so that firm may be able to take better decisions at all levels.
It is required that unimportant or low priority policies should be shifted and transferred to
lower-level of management. This leads to more time for top-level management to focus on other
important matters in the best possible manner. The creativity has to be imparted by lower-level
management so as to enable them to take better decisions with the help of which goals can be
accomplished. Al-Hungry will make policies in speedy way and authority will be delegated by
them so that they may be able to take decisions (Al-Kahtani, Ismail & Ahmed, 2017). By
incorporating delegation, speedy policies will be implemented and as a result, restaurant would
achieve competitive advantage over its rivals in particular location in Saudi Arabia. Moreover,
firm will effectively able to attain higher amount of profits. Hence, by implementing creative
policies, decorum of restaurant will be maintained and Al-Hungry will achieve its goals.
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Strategic Control and Continuous Improvement
Strategic control is required for tracking strategy which is already being implemented by
organisation in order to attain efficiency. This is done by detecting problems and changes if any
required to be made for gaining productivity quite effectually. Al-Hungry will sell wide variety
of products such as chicken fillet sandwich, burgers, fish fillet sandwich, French fries, jumbo
shrimp meal and many other food items for attracting customers in the best way possible. It is
needed that firm will improvise upon its products by incorporating periodic checking so as to
identify shortcomings in food items if any. This will be helpful for attracting people's attention
towards restaurant and would be beneficial in the long-run (Hammad, & Berry, 2017). Goodwill
will be generated as consumers will have trust on business quite effectively.
The strategic control will be initiated particularly ascertaining generic strategic i.e. low
cost strategy. It is required that over the time, differentiation and focused strategies will be
implemented so that more competitive advantage may be gained by restaurant in the market.
Furthermore, through differentiation strategy, it will offer new unique products to customers
which are not yet offered by rival businesses. This will inculcate better profitability position of
Al-Hungry which will be beneficial for maximising sales revenue and enhancing overall
financial health. Moreover, it is required that grand strategies should be changed in other
strategies. This includes retrenchment strategy which means that restaurant could adapt to reduce
its one or more operations with main view to cut down costs in order to reach to stable position
(Grand Strategies. 2018). It follows turnaround, then divestment is being carried out and as a
result, liquidation is done.
Combination strategy can also be adopted by Al-Hungry over the years as it is an perfect
blend of stability, expansion and retrenchment and overall improvement can be done with the
help of it. On the other hand, expansion strategy is done with a view to attainment of more
profits, expands its number of operations so as to become customer-focus. Thus, for increasing
efficiency and initiating strategic control, Al-Hungry could implement expansion strategy for
better results.
CONCLUSION
It can be concluded that Strategic Management Process has four components which are
required for the business to get started its operations in the best way possible. Strategic analysis
and planning, strategic formulation and strategic decision-making, strategy choice and strategy
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implementation are being assessed for restaurant so as to make it enable to become successful in
Doha Al Janubiyah, Dhahran which can effectively attain competitive advantage in fast food
market of Saudi Arabia. In relations to this, cash flow statement clarifying cash inflow and
outflow for a year is as follows-
Cash Flow Statement
Particulars Amount (US$)
Received cash
Cash from operations 100000
Cash sales 102500
Cash (receivables)
Total 202500
Additional cash attained 18500
Investment made by owner 10000
Total cash attained 231000
Expenses
Operations expenses 70000
Cash spent 65000
Paid bills
Total spent on operations 135000
Making loan payment 33240
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Additional cash spent 33240
Total expenditures 168240
Net cash flow 62760
Cash balance at the end of year 62760
It can be interpreted from the above cash flow statement of Al-Hungry that it will be able
to attain good amount of cash balance in coming period. This is evident from the table that total
cash received will be 231000. While, in comparison to it, 168240 will be spent by it making it
favourable cash inflow as outflow is less than it. Thus, net cash flow comes to 62760 which will
be carried forward to next year. Hence, restaurant will be successful in Saudi Arabia fast food
market as cash position will be favourable.
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REFERENCES
Books and Journals
Miandad, R. & et.al., (2017). Waste-to-hydrogen energy in Saudi Arabia: challenges and
perspectives. In Biohydrogen production: sustainability of current technology and future
perspective (pp. 237-252). Springer, New Delhi.
Al-Shabib, N. A. & et.al., (2017). Rutin inhibits mono and multi-species biofilm formation by
foodborne drug resistant Escherichia coli and Staphylococcus aureus. Food Control,79,
325-332.
Moradi-Lakeh, M. & et.al., (2017). Diet in Saudi Arabia: findings from a nationally
representative survey. Public health nutrition. 20(6). 1075-1081.
Backholer, K., Blake, M., & Vandevijvere, S. (2017). Sugar-sweetened beverage taxation: an
update on the year that was 2017. Public health nutrition. 20(18). 3219-3224.
Amqizal, H. I. A. & et.al., (2017). Identification and verification of porcine DNA in commercial
gelatin and gelatin containing processed foods.Food Control, 78, 297-303.
Al-Kahtani, H. A., Ismail, E. A., & Ahmed, M. A. (2017). Pork detection in binary meat mixtures
and some commercial food products using conventional and real-time PCR
techniques.Food chemistry. 219. 54-60.
Hammad, S. S., & Berry, D. C. (2017). The child obesity epidemic in Saudi Arabia: A review of
the literature. Journal of Transcultural Nursing. 28(5). 505-515.
ONLINE
Grand Strategies. 2018 [Online] Available Through: <https://businessjargons.com/grand-
strategies.html>
Growing Young Age Population and Increasing Food Consumption Would Drive the Saudi
Arabia Fast Food Market-6Wresearch .2018 [Online] Available
Through:<https://www.6wresearch.com/press-releases/saudi-arabia-fast-food-market-ksa-share-
trends-forecasts-size-growth-opportunity-media-news-players-insights-cagr.html>
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