Analysis of Global Air Cargo Supply Chain

The assignment requires students to analyze the global air cargo supply chain using Porter's Five Forces model, infrastructures, and strategic management principles. It involves reviewing various research papers and articles on the topic, including those by Berchicci et al., Huth and Düerkop, Köksal and İlkuçan, Köseoglu et al., Litov et al., Rugman and Verbeke, Seraphin and Yallop, Teece, and Vargas-Hernández and Garcia. The assignment also includes online resources such as articles by Jordan Melnick, Karen Weise, Katie Hope, Growth Strategies in Business, and others.

STRATEGIC MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
EXTERNAL ANALYSIS................................................................................................................1
PESTLE analysis.........................................................................................................................1
Five forces...................................................................................................................................3
INTERNAL ANALYSIS.................................................................................................................4
IDENTIFICATION OF COMPETITIVE STRATEGIES...............................................................6
STRATEGIC DIRECTIONS...........................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management is referred as continuous planning, analysing, monitoring and
assessment is necessary for organization to accomplish its objectives and goals. The present
report will discuss about external and internal opportunities and threats which are faced by Five
Guys. This enterprise is an American fast casual restaurant chain laid focus on hot dogs,
hamburgers and French fries which is headquartered in Lorton, Virgania in United states. It will
articulate about current positioning of this organization with application of external macro and
micro environment. This report will provide strategic recommendation which could be proposed
for business and it will determine competitive strategies with application of Porter's Generic
strategies. There will be consideration of future methods of strategic directions and expansion
available to business.
EXTERNAL ANALYSIS
PESTLE analysis
Political factors: The political factors has huge impact on fast food industry where
government has desire of huge influence over the business and announcement of different
regulations for taking care of people's health. There is requirement of checking standards of
cleanliness in restaurant along with following rules such as tax rates and labour laws as well. In
the same series, government will check food and ingredients quality which are used for food
preparation as cholesterol could impact people's health. Simultaneously, they will suffer from
obesity and other stomach issues as well. There are various restaurants which does not take
proper care of kitchen where food is cooked and dishes are washed. The preservation of food is
necessary through keeping place very clean and tidy (Teece, 2019). The Belgium government
had imposes employment law for safety rights of employees along with environmental
regulations for adhering with environmental policy and following restrictions of trade with
context of tariffs and political stability for maintaining food standard.
Economic factors: The economic factor is fully concerned with availability of
purchasing power in economy as food is very essential part of everyday lives where trends are
impacting purchasing power could have strong impact on products are essential for food which
might be perceived as luxury items. The government fiscal policies could impact business of this
particular industry. In case, tax is imposed on consumer items then this restaurant would enhance
rate of items of food. The fluctuations in inflation rate could impact Five guys as ingredient's
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price could be raised and with context of this outcome, this restaurant would have increment in
rate of food items which could directly minimise profit margin. With presence of economic
alterations in other countries, this could provide bad impact on restaurants as it has various
outlets in other countries as well along with risky economic market could be referred as major
threat for this particular industry (Ansoff and et.al., 2019). Within Europe, economic situation is
stable so business of this Five guys is strong as it would flourish in rapid aspect.
Social factors: In social sector, people are educated as in present era, people are very
health conscious related to food products. They observe for food quality along with growth rate
of population is referred as major factors for business with increment in population and
increment in restaurants. In the present scenario, people are aware about food products and they
check each of them which are used for preparing food. As this is fast food restaurant but this
market comprises people who are health conscious and health food is offered through restaurant
but people get attracted towards high fat food (Köksal and İlkuçan, 2019). With this
consideration, food is prepared as per choice as this has opportunity to attain growth with context
to purchase fast food rather than cooking at home.
Technological factors: There are various famous restaurants which uses IT technology
and television for purpose of publicity. The TV channel is very expensive so website
development and specifying each detail of food products online and to attain information with
food availability (Huth and Düerkop, 2019). Simultaneously, this will improve inventory system
for appropriate updation of clients as Five guys will use cellphones through sharing SMS related
to this franchisee and offering incentives to its clients. The activities of research and
development would be carried and increment in business automation.
Legal factors: There are different agencies of government which are operating for daily
supply along with food product's quality. There is implementation of particular regulations and
rules for controlling provision and supply of food products in market. The restaurant has need to
face multiple regulations not only related to food along with welfare and wages of their
employees. Furthermore, there is requirement of following every rule which could create lawful
atmosphere in particular area where food quality must be high and healthful for people and one
who undertakes employees welfare.
Environmental factors: There are various ecological factors which are implied on
consumers of restaurant along with referring to environmental issues. There are multiple
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regulations and rule for keeping food nutritious and healthy for people's health. In this aspect,
there is requirement for tracing the increasing rates for programs of corporate environment and
adoption of sustainable strategies for business growth. The issues related to environment are
severely growing with concern of atmosphere as all business are contributing more or less in
environmental issues and awareness related to environmental threat. This will try for avoiding
government policies related to environment protection.
Five forces
Five forces is referred as valuable tool which helps in understanding each dynamic of this
restaurant industry. The application of five forces on restaurant industry is stated below:
Threat of new entrants: The restaurant industry is highly dominated with various
international chains such as Burger King, McDonald, KFC, Domino's and Pizza Hut. The global
brands are highly valuable, boasting strong customer loyalty along with recognition as it
indicates consistent service and quality. In this aspect, the key players adopt various marketing
orientation for suiting social norms and local cultures as it has strengthened brand along with
avoiding customer alienation (Baxter, 2019). The new players always struggle for purpose of
competent with incumbent organization as but this is a franchisee which has resources for
retaliating in aggressive manner via pricing promotion and deterring innovative players to enter
market place. Conversely, social media websites have contributed with context of marketing
communication and allows business for communicating their message in efficient and
inexpensive manner.
Threat of substitutes: In the present scenario, threats are available readily as food could
be purchased almost anywhere via retail or food service. On the contrary, convenience is referred
as component which adds value on services and decreases threat of substitutes. Consumers could
cook meal at their home in cheap but there is lack of convenience element which is high
requirement of people of this present generation. On basis of threat, ready meal are substantial
and gives cut throat competition to fast food on convenience and price as well. With reference to
differentiated players along with varying with service offerings so in this context, customer could
opt for best value option.
Power of Buyers: The competitiveness of market has raised buyer customers and power
which is very price sensitive with absence of switching cost among providers. On the contrary,
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key players directly attempt for decreasing power of buyer and offering range of product which
will cater for whole demographic instead of single specific segment.
Power of Suppliers: With reference to competitive global supply chain, power of
supplier is limited as there are suppliers who will transform about raw materials into items of
food which are ready for cook and serve. With context to numerous suppliers in industry, it is
very hard for purpose of leveraging significant power over business of fast food. This particular
market along with their brand and align with brands of fast food, decreasing customer's cost
which would passed onto them.
Competitive Rivalry: The Burger king and McDonald had duopoly in segment of burger
as this market is wholly fragmented with various international chains along with independent
operators. In the similar aspect, competition is initially based on cost where firm could
continuously invest for process of production and service with context of undercutting
competitors (Köseoglu and et.al., 2019). Furthermore, exit costs are low and capacity is raised
with reference to franchising branding is referred as strong weapon with context of competing.
INTERNAL ANALYSIS
VRIO analysis is referred as analytical technique for purpose of evaluation of resources
of organization along with competitive advantage. In this aspect, V denotes for valuable, R for
rare, I for Inimitable along with non substitutable and O for Organized (Vargas-Hernández and
Garcia, 2019).
VRIO Framework of “Five Guys”
Resources V= Valuable R= Rare I= Inimitable
O= Organized to
exploit
Speciality food Yes No No Yes
Strong global
presence Yes Yes No Yes
Cozy and
unscalable
atmosphere Yes Yes No Yes
Specialised food
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 Valuable: Five Guys offer various unique and delicious fast food comparatively to its
competitors such as Patty melt, Presidential burger. In-N-Out Animal style, double grilled
Cheese burger, Extra well done fires, HB slammer, burger bowl and artery Annihilator. It
also provides nutritional information, guide of allergen and speciality of 120 day grain
finished from family owned farms. This attain competitive advantage by deceiving menu
in simpler and attractive form and copycat recipe also to prepare at home. Rare: Five Guys provides offers speciality in bun of burgers as they actually originated
from Brenner's Alexandria bakery it was eggier and sweeter comparatively to standard
hamburger bun and after its, they are making their own bun. The alone bun is whopping
with 260 calories and fat of 9 grams. In the similar aspect, they get their potato from
Idaho (Katie Hope, 2019). Inimitable and non substitutable: With consideration of the restaurants which are
already utilizing with context of capability as it could be imitated. Organized to exploit: With offering of varietal options and alterations in menu, Five
Guys had undertaken as advantage of capability along with various options, people could
extract something according to like and people who prefer to try variety of fast food on
frequent basis can easily do at Five Guys.
Strong global presence Valuable: Presence of strong global presence is referred as significant asset of
organization which tries for raising sales, size and very important is market share. It is
considered as get a method to gain more profit by new and existing customers (Seraphin
and Yallop, 2019). Rare: It is the fastest growing restaurant chain and provides better burger throughout
world which is fast and cheap as well. There are other restaurant chains as well but it is
one the most recognizable. Inimitable and non substitutable: In both short and long term, rather than Pizza hut,
McDonalds and Burger king could attain global presence. Organised to exploit: Five Guys is taking advantage with context of this capability. As
stated in their website, they had opened more than 750 locations and in similar breath as
chain restaurant titans such as McDonald, Subway and Burger King.
Cozy and unscalable atmosphere
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 Valuable: The atmosphere at Five Guys locations had allowed its customers for having
meal and to feel relax. It is very welcoming so stores are designed for reflecting unique
character (JORDAN MELNICK, 2019). Rare: It is one large restaurant with sophisticated and upscale business. Inimitable and non substitutable: It is relatively easy for restaurant shops for renovating
stores and copy business models of Five Guys.
 Organised to exploit: Five Guys is efficiently utilizing about capability along with
creating atmosphere which every customers could thorough enjoy (Karen Weise, 2019).
This organization is undertaking advantage of trendy lifestyle which is present in
Belgium.
IDENTIFICATION OF COMPETITIVE STRATEGIES
Porter's generic Model:
Potential of New entrants into the industry: it can be said that the new entrants in
market can leads to disrupt the business but will not affect much. But, the low cost can leads its
easy for customers in order to choose other substitute in market easily. The new entrants will
face moderate cost advantage as other like Five Guys will have benefit from economies of scale.
Also, the moderate cost of doing business could pose a financial challenge to new entrants.
Power of Suppliers: these are the factors which can leads to affect the fast-food industry
through different variables like change in price and supply control of raw material (Rugman and
Verbeke, 2017). However, it can be said that, company has low or moderate threat from the
suppliers in the market. It can be because there are high umbers of suppliers that are available in
market, overall supply of the raw material are also very high which assist in having weak force
on the Five Guys. The large supply of law material and ingredients leads to limit the force of
suppliers power on the company. Thus, the threat from the bargaining power of suppliers are the
least concern for the company.
Power of customers: It can be analyse that consumers are affecting the performance of
Five Guy's and the quick service restaurants in food market. It can be said that, the company is
having a strong force from the customers because of the low cost of product available which can
leads then to switch to other firm, easily. The substitution force is also very high as lots of
similar firm with same products are available in market. Low cost can affect the consumers to
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change their decision which can leads to affect the profitability of Five Guys (Litov, Moreton
and Zenger, 2012). The presence of consumer organisation, such as consumer union and Better
Business Bureau will assist in increasing the demand of customers
Threat of substitute products: Customers can easily switch to the other substitute that
are available in market which lads a strong force on the Five Guys. In addition there are high
threat from other restaurants which includes fine dinning restaurants. As there are lot substitute
available in market, thy all are satisfactory in terms of taste, cost, quality and other criteria. This
can assist in evaluating that threat of substitute are high which can leads to affect the Five Guys
business.
Competition in the industry: It can be said that, Five Guys is facing a strong
competition in the market, like Burger king, Mc Donald etc. the company is facing a strong
competition from high numbers of company in fast-food market, there are high varieties of firm
that are available in market (Berchicci, Dowell and King, 2012). There are also threat of quick
services restaurants with different sizes and low cost of product can leads to customer to switch
the other form easily. It can be said that the competition from rivalry is the main concern of the
Five Guy's business.
Identification of competitive strategies
Competitive strategies are required for effectively facing the severe competition in the
market and standing still in front of rival firms. These strategies could be identified by applying
porter's generic model for developing a competitive advantage. This competitive advantage could
be mainly from two way which are low cost products or highly differentiated products and
services. The firm either chooses low cost leadership in which it sells products and services at
the most reasonable prices or it focuses on broad differentiation for making its products and
services to outperform the competitors in the marketplace.
`Cost leadership : In cost leadership, Five Guys could focus on the competing with it
rivals on the basis of their cost. Providing food products at the most reasonable prices will attract
more customer which would the company in increasing its sales and revenue. For providing low
cost products, the management of the company will focus on controlling the cost of its operations
by managing the different business resources. When man, equipments and materials are aligned
in the most optimum way, it not only leads to greater productivity, cost control but helps in
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serving the exactly what the customers expects from the Five Guys. Thus, creating a capability
of producing low cost products, the company can gain leadership on the basis of low cost in the
market. This will be a competitive edge for the company (Kurt and Zehir, 2016).
Differentiation : Differentiation is the process of making company's product unique and
different from its competitors in terms of quality, features, way of serving the customers,
delivery style, taste, labelling and packaging etc. The Five Guys restaurant can gain a
competitive edge by making its highly different from what is already being served to the public
in the market. It can select one or more attribute which customers sees as greatly valuable and
which influence their buying decision and according make its products modified or could create
the new products (Avolio, Avey and Quisenberry, 2016).
For example, customers likes to experiment with food, this can be taken as opportunity
by the restaurant and it can blend the dishes of different and make a fusion dishes which will
help in attracting more customers to the place. Another example, is making products of supreme
quality. People nowadays does not compromise with the quality of food, they want the best
quality and are even ready to pay just for the quality. When quality of the food offered to the
customers is capable of satisfying them, it would help the restaurant in building a loyal customer
base which itself is a competitive edge upon which it can give hard times to its competitors.
Strategic directions of five guys.
This is one of the crucial forces in the business. It is effective in order to establish
structure for the internal capabilities that each each department needs to carried out. Thus, it can
be defined as strategic planning that is useful in order to guiding out day to day decision and to
evaluate the progress and changing approach to move effective in business (Rugman and
Verbeke, 2017). In order to have better strategic direction the five guys needed to considered
following factors as-
Market strategy- In order to be competitive the firm can able to adopt the expansion strategy so
that product can be expand in new market effectively. With the help of brining development in
product and services the entity can able to introduce with number of product that aids to bring
effective development within the market. By adding innovative features the entity can have
growth in market.
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Product- The product expansion strategy can be termed out as when the firm uses the innovative
method to develop the better product aids to gain the competitive advantage within enterprise.
With the use of new method and quality the Five guys can able to attract the customers. To
provide better test in affordable prices aids to attract the customers within market.
Services- In order to be competitive within the enterprise the firm should work as to provide
discount offers at first time. So, that customer can identify the taste and quality of products
services. The home delivery services, online offers aids to gain the attraction of customers. Thus,
prime coupons must avail to customer at their maximum orders.
The method of expansion-
These as are-
Market penetration strategy- The one of the effective strategy is market penetration. This will
be uses by the firm at time to market existing product in the same market. With the help of
existing commodities and market the firm can able to enhance its markets hare.'
Market expansion and development- It is growth strategy that can be adopted at time of having
market development (Growth Strategies in Business. 2019. ). With help of it, firm can able to
market its product in the new place.
Product expansion strategy- In this, the firm decides to bring technological advancement so
that they can able to add different features to commodities. With help of it, firm can able to gain
competitive advantage.
Growth through diversification- in order to adopt it, market strategy is essential to sell their
products in the new markets. Thus, it can be bit risky. Under it, market research is very crucial as
it helps to determine the new market to develop products.
Acquisition- In this, the firm can merge their services with other firms. This will helps to
enhance the brand image of the enterprise. The entity can able to gave growth because the
product and market is already established.
CONCLUSION
From the above report it had been concluded that Five Guys is very popular restaurant
food chain. It has shown that Burgers of this restaurant has attained competitive advantage as
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strategic management is very important for purpose of attaining success in this present scenario.
In the similar aspect, it had shown that Five guys could expand its market share in European food
market with business expansion in Belgium with consideration of Political, legal and various
other external and internal environment factors. Thus, there is presence of recommendation to
adopt competitive strategies which will lead to gain competitive advantage.
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REFERENCES
Books and Journals
Ansoff, H. I. and et.al., 2019. From Strategic Planning to Strategic Management. In Implanting
Strategic Management (pp. 41-52). Palgrave Macmillan, Cham.
Baxter, G., 2019. A Strategic Analysis of Cargolux Airlines International Position in the Global
Air Cargo Supply Chain Using Porter’s Five Forces Model. Infrastructures. 4(1). p.6.
Berchicci, L., Dowell, G. and King, A. A., 2012. Environmental capabilities and corporate
strategy: Exploring acquisitions among US manufacturing firms. Strategic Management
Journal. 33(9). pp.1053-1071.
Huth, M. and Düerkop, S., 2019. Risk Management of Critical Logistical Infrastructures:
Securing the Basis for Effective and Efficient Supply Chains. In Revisiting Supply Chain
Risk (pp. 121-135). Springer, Cham.
Köksal, G. and İlkuçan, A., 2019. Vision and Strategic Planning of University Governance: The
Case of Middle East Technical University. In University Governance and Academic
Leadership in the EU and China (pp. 164-182). IGI Global.
Köseoglu, M. A. and et.al., 2019. Strategic Decision Tools and Organizational Performance in
the Hotel Industry. Journal of China Tourism Research. 15(1). pp.15-32.
Litov, L. P., Moreton, P. and Zenger, T. R., 2012. Corporate strategy, analyst coverage, and the
uniqueness paradox. Management Science. 58(10). pp.1797-1815.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Seraphin, H. and Yallop, A., 2019. Proposed framework for the management of resorts Mini
Clubs: an ambidextrous approach. Leisure Studies, pp.1-13.
Teece, D. J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers. 53(1). pp.1-43.
Vargas-Hernández, J. G. and Garcia, F. C., 2019. The Link between a Firm´ s Internal
Characteristics and Performance: GPTW & VRIO Dimension Analysis. REBRAE. 12(1).
pp.19-30.
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Online
JORDAN MELNICK. 2019. In just one year, Five Guys catapulted 12 spots on the QSR 50, from
No. 42 in 2010 to No. 30 this year. [Online]. Available through
<https://www.qsrmagazine.com/runaway-hit>.
Karen Weise. 2019. Five Guys' biggest struggle is to stay same. [Online]. Available through
<http://www.nbcnews.com/id/44138062/ns/business-us_business/t/five-guys-biggest-
struggle-stay-same/#.XHoCq3V948o>.
Katie Hope. 2019. How the 'better burger' is taking over the world. [Online]. Available
through :<https://www.bbc.com/news/business-40170738>.
Growth Strategies in Business. 2019. [Online]. Available
through:<https://smallbusiness.chron.com/growth-strategies-business-4510.html>.
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