Strategic Plan for OPORTO

The report analyzes the various forces that affect business functioning and the analysis of value chains including the inbound and outbound logistics, operations, structure and other strategic management approaches managed to gain competitiveness in business.

Strategy and Change
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Sydney, NSW
Term
Assessment 2 – Strategic Plan for OPORTO
Submitted by:
Submitted to lecturer:
Due Date:
Campus: Sydney
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Strategy and Change
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Executive Summary
The report was prepared to analyze the various forces that affect business functioning
and also the analysis of value chains including the inbound and outbound logistics,
operations, structure and other strategic management approaches managed to gain
competitiveness in business. Oporto, the fast food chain in Australia managed to analyze
these forces and to deal with the strategic issues related to differentiation and cost, the cost
leadership and differentiation strategies were implemented to distinguish the products and
services from its competitors, while at the same time, contributed to the lowering cost of
operational costs and prices of products without compromising on the quality of those, The
focus on environment friendly production process and fast food items could also benefit the
business to provide good rate of return to the shareholders and attain high level of profit in
business effectively.
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Table of Contents
Executive Summary...................................................................................................................1
INTRODUCTION......................................................................................................................1
EXTERNAL AUDIT.................................................................................................................1
Analysis of Porter’s Five Forces Model of the industry.........................................................1
Three primary key success factors (KSFs) for the industry...................................................1
INTERNAL AUDIT..................................................................................................................1
Porter’s Value chain analysis of Oporto.................................................................................1
Key core competencies and capabilities.................................................................................1
Two key strategic issues.............................................................................................................1
Strategic plan..............................................................................................................................1
References..................................................................................................................................1
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Strategy and Change
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INTRODUCTION
The report is done for demonstrating the development of strategic planning that can
allow the business organization named Oporto to define the strategies and form a direction
through making decisions, furthermore manage resources’ allocation properly. The strategic
planning enables managing better control over the mechanisms and implement strategies
effectively for accomplishing the business goals and objectives with ease and effectiveness
(Noe et al., 2017). The company’s ability to implement the strategic management concepts
for conducting the external and internal audit will also be done for overcoming the strategic
issues, thereby, generate higher sales and revenue too. This will also enable anticipating the
needs of customers and fulfill those so that the company can adapt to the changes
experienced in the future as well (Oporto.com.au 2019).
Introduction to the company
Oporto, Australia is one of the major chicken shops in North Bondi that has served
good quality chicken items that are flame grilled and other burnet chicken items to cater the
needs of people. The preparation has been made with the following of Portuguese Style
Chicken mixed with original chili sauce for meeting the changing tastes and preferences of
the customers. The Australian fast food market has experienced a lot of changes for the last
few years, though most of the people residing in Australia have become more health
conscious due to which, the demands for healthy food items have increased as well (Chang,
2017). Within the fast food industry, McDonalds and KFC are few of the key players
targeting the right market segments. The company chosen here as the case study is Oporto,
which has been a new and growing brand that started its operations in Australia and the first
location of the chicken shop is in Bondi. Oporto in Australia consists of some good number
of staffs who are specialized in the production of quality chicken items and great customer’
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services have further contributed the positive brand image and name, which influences
consumers’ buying behaviors (Oporto.com.au 2019).
EXTERNAL AUDIT
Analysis of Porter’s Five Forces Model of the industry.
The business organization aims to expand its business with the help of a proper
strategic planning needed to assess the various external forces that impact the business
functioning. The multiple forces include the threat of new entrants in the market, threat of
substitute products, buying power of consumers, bargaining power of suppliers and
competitive rivalry in business. The five forces are analyzed with the help of Five Forces
analysis model by Porter, which also enabled the company to address the external
environment issues, furthermore determine the level of competition within the market too
(Eden & Ackermann, 2013). For Oporto, the forces associated with the business function can
also impact the strategic management as well as remain competitive through assessment of
market conditions and influencing consumer buying behaviors (Oporto.com.au 2019).
Threat of new entrants or new entry – Moderate Force
There are multiple companies within the fast food market that have provided snacks
items on the go and fast food items that are easy to access by the customers. These kinds of
products are new in the market and have affected the market share and financial performance
largely too. Due to the new entrants within the market available at much reasonable prices,
the low costs of switching has made customers to move from Oporto to some other fast food
company. The variable costs of capital further contribute to the other businesses ability to
enter the market while it also becomes difficult to develop a string brand image and name
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(Baker, 2014). Thus, the threat of new entrants into the market is medium and does not pose
any serious kind of risk or strategic issue.
Threat of substitutes or substitution – Strong Force
The threat of substitute products is high and can directly impact the growth and
development of the business. Due to the emergence of similar kinds of food items available in
the market along with food items by the local bakeries and food manufacturing companies.
Due to this, the customers find it easy to get similar kind of product from another company at
a much reasonable price, which further makes them switch to the substitute products of the
new brand rather than the previous or existing brand (Goetsch & Davis, 2014). The substitute
products and services could also be superior in terms of quality and the company could
provide better customers services, which might even make customers to switch on to the
substitute products at once rather than making purchases from Oporto. Due to this, the threat
of substitute products is high (Hill, 2017).
Bargaining power of buyers or customers – Strong Force
Considering the customers as the most important stakeholders in business, the power
of buying from the customers’ perspective is also high. Based on the analysis of five forces,
this major force pose significant effect on the decision making and influence of consumer
buying behaviors. The saturation of market and wide availability of products such as the fast
food items in the market, the consumers have multiple options to choose from, which also
influence their buying behaviors (Bagnoli & Vedovato, 2014). Thus, Oporto should be
cautious about targeting the market segments wisely and make sure to implement right
marketing strategies for drawing new as well as existing customers in large numbers. This
kind of force could also allow the company to build strategies and approaches required to
establish a sense of trust and loyalty among the customers, furthermore keep up with the
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social and cultural trends to ensure consumer buying behavior influence largely too (E.
Dobbs, 2014).
Bargaining power of suppliers – Weak Force
The bargaining power of suppliers is quite low because there are large numbers of
suppliers all over Australia and New Zealand, who could manage availability or raw
materials and resources’ for the company easily. Due to the lack of vertical integration,
Oporto has further managed to manage a wide distribution network with the suppliers, which
also favored the weakening of suppliers’ bargaining power (Dälken, 2014). Therefore, this
force has very little impact on the way strategies issues are managed at the company.
Threat of Competitive rivalry in the marketplace – Strong Force
The presence of large numbers of competitors within the marketplace has posed
serious threat to the business within the fast food market in Australia. There are companies
like McDonalds, KFC, etc., all of which are reputed and well established for their offerings
and thus already attained a good amount of market share. The aggressiveness of the
organization could influence the competition level and thus might impact the way strategic
management of business is done all throughout (Rosenberg Hansen & Ferlie, 2016).
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Figure: Porter’s five forces model or framework (Rosenberg Hansen & Ferlie, 2016)
Three primary key success factors (KSFs) for the industry
The three key success factors for the company to sustain within the fast food industry are:
 Wide network of distribution with over 600 stores and good franchise policy
 The large customer base and effective marketing strategies
 Focus on healthy food items’ production, i.e., based on the vision of “Fresh not
frozen, grilled not fried”, which has met the global standards largely.
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INTERNAL AUDIT
Porter’s Value chain analysis of Oporto
Figure: Porter’s value chain analysis model (Fanzo et al., 2017)
The analysis of value chain based on the Porter’s model allows for determining the
primary activities and support activities managed by Oporto while operating in Australia. The
analysis of value chain helps in going through the various steps associated with the
management of raw materials and resources until the final product goes to the hands of
consumers, which also represent the entire product life cycle (Fanzo et al., 2017).
In terms of primary activities, the inbound logistics include the management of
suppliers by Oporto from whom raw materials and resources including meat, vegetables, etc.
are supplied, though experienced increase in working capital, labor cost and also the process
of production. The chicken and other items are supplied directly from the farms, which are
healthy and boosts the production efficiency too. The operations and processes are the
chicken store are managed with the use of a large grill that can grill the chicken items rather
than making it fried, which consumes a lot of oil and are often unhealthy (Grant, 2016).
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There are coffee machines and soda machines for providing beverage items while the counter
and seating arrangements within the shops allow for placing orders and get seats for enjoying
a relaxing time while consuming the food (Oporto.com.au 2019).
The outbound logistics operations include focus on environment friendly measures to
lower down the energy usage and manage sustainable packaging too for creating a much
better sustainable environment. This has also helped in making the customers acquire
knowledge about the nutritional information about the food item, furthermore gain a better
experience while having food at the shop (Nag et al., 2014). The advertisements on
televisions, newspapers and magazines have acted as great marketing and promotional
strategies for Oporto to facilitate the marketing and sales while the engagement of social
media platforms has further promoted the brand image and influenced consumer buying
behaviors. The Oporto shops have also provided services like free Wi-Fi for all who want to
sit at the shop and consume the food, which is a great way of attracting more customers
(Neven, 2014).
The support activities include the management of a proper infrastructure at Oporto,
which has been done already as the company presented a modern architecture that can allow
the customers to visit the shop and enjoy the ambience. The environment friendly workplaces
and shops further reflect the sustainable goals in the form of energy saving LED lights and
lower consumption of power, which may also create positive mind sets among people (D.
Banker, Mashruwala & Tripathy, 2014). The use of advance technologies have enhanced the
point of sales system while the flexible working conditions and good amounts of benefits
provided to the workers have further helped in managing the human resources at Oporto
effectively too.
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Key core competencies and capabilities
The human resources are considered as major assets of Oporto, Australia, which
represent the major competencies of the organization while the extension of product line has
been also considered as such because of the introduction of new products and services or
catering the needs and preferences of people with ease and efficiency (Ray Gehani, 2013).
The cost leadership and differentiation strategies have increased the economies of scale,
which are also considered as major strengths possessed by the organization to ensure
production of good quality and healthy foods at a lower price, thus attained sustainability and
competitive advantage in business too (Zehir, Can & Karaboga, 2015). Another major
strength or competency could be the global standard maintained for the quality of food items
delivered and mostly due to controlling by the local franchises, the culture of the place has
been well adopted too, furthermore leading to formation of a large customer base
(Oporto.com.au 2019).
Two key strategic issues
Differentiation: From the strategic perspective, the company should focus on anticipating the
needs of customers and make sure to differentiate the products, otherwise the presence of
competitors in the market could pose real challenge for Oporto to sustain in the competitive
business environment.
Low cost: There are multiple competitors and small companies that serve similar kind of
grilled chicken items available a lower price range, which could be a major issue for the
company to attract new potential customers. The competitors might be able to take this
opportunity as their strengths and create challenges for Oporto to attract enough customers
and influence them regarding purchase decisions made (Oporto.com.au 2019).
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Strategic plan
Based on the strategic issues focusing on the presence of competitors and offering of
similar kinds of products at lower prices, Oporto must prepare a proper strategic plan for
anticipating the needs of people in the future, furthermore ensure meeting the financial and
strategic goals and objectives effectively too. A proper strategic planning is required to
prepare an action plan and implement the right actions needed to overcome the strategic
issues and sustain in the competitive fast food industry perfectly (Kaliappen & Hilman,
2013).
The differentiation of products would be possible for the company to ensure that the
customers could distinguish between the products of Oporto and the other company products
while the lowering down of cost of the chicken grilled food items should help in making
consumers feel that they are being valued by the company, though without making any
compromise on the quality of food items delivered. It has also been found that the company’s
ability to innovate the products is not consistent, due to which the items in the menu remain
same most of the times and with the lowering down of sales, the turnover of employees has
increased largely too (Ray Gehani, 2013). Due to this, the company needs to bring something
unique and innovative that are healthy and can easily draw the attention of consumers
towards the company rather than making the potential customers to switch on to some other
company (Noe et al., 2017). Oporto’s business functions and processes are supported by
systemization of the knowledge and information acquire through standard operating
procedures that have influenced the strategic management practices and ensured control over
the various aspects of business.
The cost leadership and differentiation strategies of Oporto supported the
development of generic strategies, which favored the management of business along with the
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production of good quality and healthy food items that could be easily differentiated from the
competitors’ products. The company should assess the costs of products by the competitors at
first and then implement the differentiation strategy to ensure that the intensive growth is
possible and the lower prices could empower the company to draw in enough customers
through penetration into the new market segments as well (Eden & Ackermann, 2013). The
company should also implement the cost leadership strategy to offer the fast food items at
reasonable prices and at the same time, allow selection of a dedicated umber of individuals
who possess the right amounts of skills, knowledge and expertise to enhance the production
process and meet the demands and expectations of clients comprehensively (Goetsch &
Davis, 2014). The differentiation strategy should enable creating some unique additional
features to the product and bring in new product line for expanding the product line and
ensure catering to the needs and requirements of people in different market segments with
much ease and efficiency (Oporto.com.au 2019).
Figure: Strategic plan for Oporto (Goetsch & Davis, 2014)
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The action plan prepared should assist Oporto to identify the assets of information,
determine the value and significance of information and data, then assess the risks that may
be created due to the emergence of competitors, lack of differentiation, etc., furthermore
implement the right safety measures for keeping the workplace safe and ensure managing the
risks all across the life cycle of product effectively too. Another strategic management
practice could be the innovation management, which could allow Oporto to focus on
environment friendly business functions and introduce the healthy products that are grilled
rather than being fried, which could be a craze among the health conscious customers in
different market segments and influence their purchasing behaviors largely too (Fanzo et al.,
2017). With this, the company would be able to increase its sales of food items and generate
higher business revenue along with competitive advantage in business as well
(Oporto.com.au 2019).
Conclusion
Based on the analysis of various forces presented in the Porter’s five forces model,
Oporto has maintained strong relationships with the suppliers, due to which the bargaining
power is low while the customers, regarded as important stakeholders, their buying power is
high, because of the presence of multiple competitors who deliver new products and
substitute items in the marketplace. To overcome these strategies issues, the cost leadership
and differentiation strategies were being focused on to promote innovation and manage the
extension of product line to cater the needs of people and generate higher revenue and attain
competitive advantage in business.
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References
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Zehir, C., Can, E., & Karaboga, T. (2015). Linking entrepreneurial orientation to firm
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