Wings and Legs Company: Performance, Strategy, and Recommendations

This report analyzes the performance of Wings and Legs, a large chicken meat production and distribution company in the Netherlands, facing challenges in a competitive market. The report evaluates the company's marketing strategy using the STP model, including segmentation, targeting, and positioning, and identifies issues such as decreasing delivery performance, quality concerns, and supply chain inefficiencies. The report provides recommendations to improve customer experience and value creation, suggesting improvements in segmentation, targeting, and positioning. It explores the causes of operational problems using the % whys analysis tool, focusing on issues like unmet customer requirements, production planning, and demand-supply imbalances. The report also discusses the effects of expanded product assortment on inventory levels, production changeover, and quality costs. Finally, it suggests strategies like outsourcing and lean/agile strategies to enhance value creation and recommends volume flexibility to address demand challenges, offering insights into improving the company's market position and operational efficiency.

Wings and Legs Company Performance 1
Wings and Legs Company Performance
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Contents
Introduction......................................................................................................................................3
Evaluation Of Marketing Strategy In Delivery Customer Value....................................................3
Recommendations For Wings And Legs.........................................................................................6
Causes Of Wings And Legs Company Operations Problems.........................................................8
Effect Of Expanded Assortment Of Different Chicken Products..................................................10
Effect Of Expanded Assortment Of Different Chicken Products on Inventory Level..............11
Effect Of Expanded Assortment Of Different Chicken Products on Production Changeover..11
Effect Of Expanded Assortment Of Different Chicken Products on Quality Costs..................11
How Outsourcing can improve the value creation....................................................................12
How lean and agile strategies can improve value creation........................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Wings and Legs Company Performance 3
Introduction
Wings and Legs is a large chicken meat production and distribution company located in
the Netherlands. The company produces chicken meat in bulk and has its customers as small
retail stores and large retail distribution centers. The company utilizes simple products to serve
its customers and progress in the competitive business market. Its vision is to provide quality,
cost-effective, and readily available products to its customers. The company is, however, faced
with a couple of challenges as it struggles to deliver to its customers. Chicken meat, for instance,
is being provided at a lower price in the Netherlands, making the company have less profit
margins. It is overwhelmed by demand, and it faces difficulty in predicting the demand in the
market.
The company's objectives include an adequate supply of its commodities without
compromising its customers. It has the responsibility of delivering the products to its customers
without delay. Products have to relatively cheap to attract many buyers, even if the production
cost is high. All these draw the management board's attention to find strategies in which they can
manage the business to achieve its success.
Evaluation Of Marketing Strategy In Delivery Customer Value
The evaluation of the company is done based on the STP model.
Segmentation
The company ideally identified the food industry as a target market with potential
growth. The management realized the increasing need for white meat as most people are
deviating from the consumption of red meat due to increasing health concerns. The country
has numerous farmer who needs a market for its products. The people need ready chicken in

Wings and Legs Company Performance 4
their meals. The company, therefore, identifies chicken food as their niche as they provide
particular food to the citizens. The company is a player in purchasing from the farmers and
selling the products to consumers. The industrial and commercial development corporation
body is of great necessity to this business. This involves a chain of companies that come into a
given company to provide support for better progress of the company (Dalton, 1999; Hamada,
1969; Jorion, 1986). These companies may support the company financially or with any other
moral support. They provide close monitoring of the organization's activities and strengthen its
areas of failure. They also have shares in the business, which, in return, serves as a means of
payment to them.
Targeting
The company targets consumers and retailers through retailers distributed all-over the
country. In the Netherlands, people love to eat Tandoori and fried chicken legs. Wings and
legs chicken target this market to provide the chicken component of the meal for a profit. The
business is at its maturity stage, with the demand almost outdoing the supply. Failure to meet
the market leads to the decline of the business as there may be competitors in the market who
tend to take away the customers by producing better products in the market. To prolong the
life of this company, the supply chain should be improved by increasing the number of
suppliers of the same product. They should as well comply with the rules made by customers
regarding the standard weights of meat and the quality. Wings and Legs company should open
up more broiler growth farms to accommodate the increasing demand (Anderson and
Zeithaml, 1984).
This concept is fulfilled through customer perceived value whereby the success of
Wings and Legs company is based on the notion that its customers are satisfied with the way

Wings and Legs Company Performance 5
their needs, wants, and demands are satisfied. To achieve this, the company must check the
quality of its products, ensuring that the chicken meat is fresh and comply with specified
weights, thus making the retailers satisfied (Ravald and Gronroos, 1996).
Positioning
The company positions its products for ready consumption. Wings and chicken tries to
present the products for consumption within a short period after processing to ensure
freshness. However, the company is in a fix currently since customers are complaining, and
delivery performance has decreased. The company further has positioned itself as the provider
of fresh chicken products and promises fresh products. The products are mostly placed via
retailers to hotels and individual buyers. The company study already has an existing market,
and it deals with a particular product, which is chicken meat. The market growth strategy
being applied is the market penetration whereby the company does much promotion to its
products (Watts, Cope, and Hulme, 1998; Kotler, Gregor, and Rodgers, 1977). However, this
is not satisfactory as promotion should come with expanding the product such that there is no
insufficient production of the products. The company, however, does promotion and it doesn't
look into the production sector. Measures taken towards the production sector comes with an
outcome that the quality is not satisfactory to meet that needed by the customer (retailers who
are the direct customers to the company). The company should increase its distribution efforts,
especially within the supply chain (Reed and Luffman, 1986; Wikstom, 1996).
Wings and Legs company has a market share of the broiler meat business. Its market
growth rate is almost out of control with less profit margins, thus close monitoring of
organization activities is of necessity. The company's product at this stage can be classified as
a star; the company is, however, facing minor challenges that may drive it into a question mark

Wings and Legs Company Performance 6
its growth rate highly maintained and market share declining. Major drawbacks to the
company are in the production process. An order made today takes 12 weeks before delivery,
an implication that several orders are pilled hence minimal response to change in the market
(Hamada, 1969).
Marketing Concepts” and “Customer Perceived Value- marketing concepts are strategies
that an organization uses to meet its customer demands as well as benefitting from its business
(Lapierre, 2000).
Recommendations For Wings And Legs
Customer experience and value creation are key drivers of any kind of business set up
(Covin and Slevin, 1990). Whatever comes from the customer's mouth concerning a given
business affects such a business. Positive comments from customers on the business tends to
attract more customers, while negative comments drive the customers away (Anderson, 1995).
The positive comments from customers may be due to satisfaction by product quality, low prices,
proper handling of customers, delivery of goods in time(speed), and flexibility of the business to
market demand.
Segmentation
Promotion in the company is another advantage to its progress. The company can offer
incentives to its customers either in terms of financial relief on cost or financial relief through
sales. This will win them the segment of the market, especially hat middle class that fails to
order from Wings and Legs due to financial constraints. This strategy, however, is no longer
efficient as almost all competitors use the same strategy to hold back their customers. The
company can make customers feel appreciated by sometimes delivering chicken products to a
given customer free of charge. This should only be done when the company identifies an

Wings and Legs Company Performance 7
opportunity in which it can utilize to compensate that offer (Badri, Davis and Davis, 1995).
Targeting
The company can introduce a service by opening a website, mail, or other online
systems where customers give their views about how they feel about the business. They can
also make orders using these services, comment on where they are not satisfied, and even
provide their views on how they feel the business should be done to make them satisfied
(Wikstrom, 1996). The owner of the company and managers of the board should take their
time and contact their customers on a personal level (Vanrlermenrve, 2000; Francis et al.,
1986; Tybout, Calder, and Sternthal, 1981; Rink and Swan, 1979). This helps to know what
the customers like most and what they dislike. After-sales services like ferrying the products to
retailers' places of work should also be implemented as it makes customers feel that his/her
efforts are appreciated.
Positioning
The company should position its products as a cheap but valuable brand. High costs in
the whole production system reduce the profit margin in the business. The company has a high
demand for its products, with customers having higher priority in fresh products.
Standardization is thus necessary to ensure that the company doesn't run at a loss. It should
have a given standard with a production cost per unit item and the expected amount of profits
(Wikstrom, 1996).
The company can moreover make its capacities in stages whereby it doesn't wait for its
capacity to be reached but responds to the market to its growth trend. The current capacity can
only be increased after the demand reaches a given percentage, which is below the set
capacity. This strategy can accommodate the unpredictable demand in the market (Doyle,

Wings and Legs Company Performance 8
2000).
The company can eliminate demand challenges by practicing volume flexibility. The
company's production capacity can be made in such a manner that a given capacity is set in
which this company produces its meat products. This capacity should be organized in such a
manner that another higher capacity can only be set after the demand reaches the existing
capacity (Christopher and Ryals, 1999).
Causes Of Wings And Legs Company Operations Problems
Wings and Legs company has a couple of challenges despite it being in its maturity stage.
The challenges can lead to the decline of the company's operations and subsequent collapse
(Bostrom and Heinen, 1977). The company’s problem causes can be identified by using the %
whys analysis tool. The challenges the company is facing are discussed as follows.
The quality being delivered to customers could not meet customer requirements because
the company does not know the precise customer requirements. The company does not know the
requirements because it has not asked the customers through customer feedback platforms. They
have failed to ask because they have not conducted market research because the company has no
initiative for market research. The root cause of this problem is the failure to create an initiative
for market research. For example, The meat delivered was not fresh (Bostrom and Heinen,
1977). Most customers prefer fresh chicken meat delivered to them. On the contrary, the
company delivered to retailers’ meat that had stayed for long in the refrigerators hence not fresh.
In addition to freshness, they could not meet the specified weights, referred to as underweights.
Accumulation of water during measurement moments led to lower weights when the water
evaporates (Courtney, Kirkland, and Viguerie, 1997). Customers are sometimes dissatisfied by
the sales agreement being not conforming with the capacity that they get. As the customers make

Wings and Legs Company Performance 9
the orders, there are a set of requirements and qualities that the product needs to meet. This is
never the same when the product reaches the recipient.
The second problem was high demand, which was not proportional to the chicken supply.
The company’s production capacity does not match the demand because the company produces
less than is demanded. It produces less because of poor production planning. The production
planning plans for capacity utilization rather than demand satisfaction; as a result, the company
has not built enough capacity. As such, the company fails to meet the demand because it has
insufficient capacity. The demand in the market was so high as compared to the quantity
supplied in the market. The result being customer dissatisfaction since their demand is not met
(Drumwright, 1996). The demand could not be met since retailers dis promotions to their
customers without informing the company. As a result, there were high demands from retailers’
customers whose impact was only felt by the company is not meeting their demands
(Gunasekaran and Forker, 2000). Demand kept fluctuating without staying at a standard range.
This was due to promotional activities by the retailers, thus attracting more customers. As much
as the company tries to match the market demand (Koch and Fisher, 1998), it can never fit it as it
keeps fluctuating, sometimes the demand is too high such that all customers cannot be served
while other times the demand going lower than the company's expectation leading to losses since
the product is perishable. When the company brings in means by which the product life can be
extended, the result is high costs, which finally leads to low profits (Murphy and Bendell, 1997).
The company has a short lead time, which hinders it from fully supplying its customers
with the products. The product production time is 12 weeks, while the retailers its serves come
infrequently and in large numbers. The retailers may come out of stock before the next delivery
is not ready. Sometimes they also find a long chain that is waiting o be served within the 12

Wings and Legs Company Performance 10
weeks; thus, they have to queue along the long-chain (Salamon and Dhaliwal, 1980). Low
flexibility is another challenge the organization faces. Organizations' flexibility, especially
volume flexibility, is curtailed by the specific qualities that have to be met by the company's
supply chain. Only a few suppliers comply with these specifications, and they are normally
below the demand level. In addition to this, it is always quite expensive to obtain the meat
product from different suppliers, thus leading to fewer profit margins from high productions. The
company thus resolves to produce its products than obtaining them from other sources
(Ahlstrom, 1998). There is always no allowance for delays to the company. Delay time enables a
company to identify mistakes and drawbacks in the organization, thus rectifying them. Delay
time in such a case is occupied by the struggles and attempt to serve other customers in the long
queue and eliminate it if possible. The company, in the end, remains in a total mess with its
customers dissatisfied and underserved.
Even after trying to solve the challenges facing the company, it could still not handle the
shorter set up time challenge. The orders were placed in bulk, making the whole production
process appear to be slow. What came out of this was delays and complaints from the
customers.
Effect Of Expanded Assortment Of Different Chicken Products
The production level of this company by the fact that only one type of product is being
produced. This reduces the chances of maximum customer utilization as only one type of
commodity is available. Production of chicken in different varieties can lead to full exploitation
of customers (Aylott and Mitchell, 1998; Briles, 1960). The left-over parts of the chicken are
normally treated as wastes, thus adding nothing to the company. When packed and delivered to
customers at a relatively lower price, they can increase the company's profits. This can also

Wings and Legs Company Performance 11
increase the demand in the market, thus need more production (Chin et al., 1992; Messinger and
Narasimhan, 1997).
Effect Of Expanded Assortment Of Different Chicken Products on Inventory Level
Expansion of product range would cause an increase in inventory levels for the
production and increase the rate of consumption of inventory. The company would have to
replenish its inventory more frequently and would need to keep more stock, considering that
each product would demand a separate inventory. Despite that some of the products would use
what would normally be disposed of as waste, the consumption would call for additional
supplies, and inventory levels would therefore rise.
Effect Of Expanded Assortment Of Different Chicken Products on Production Changeover.
Engaging in multiple products would force the company to frequently changeover its
production lines. For every product range, the production lines would have to be overhauled to
suit the production line. Frequent changeover demands more labor and more investment, and the
company might be forced to outsource changeover services. Cumulatively, more frequent
changeovers would be needed. However, the overall cost of production would get lower since
almost all parts of a chicken would be absorbed into products. Therefore, the entire capacity of
raw materials would be used, and the money used in creating unused capacity would have found
good use; as a result, overall profitability would increase (Creyer and Ross, 1996).
Effect Of Expanded Assortment Of Different Chicken Products on Quality Costs.
Quality is very important for the company. One of the main challenges that would come with
widening the product range would be quality control for the multiple product ranges. The
company will have to invest more in labor for quality control technicians, inspection specialists,

Wings and Legs Company Performance 12
and quality testing equipment. This means that the cost of controlling quality would increase in
proportion to the number of products added to the company service chatter.
How Outsourcing can improve the value creation
The goal of value creation is to create customer value at a cost that is affordable to
customers and producers. Currently, the company only outsources its raw materials. The
company can outsource some of the non-core functions, such as manual labor and logistics.
Outsourced labor would mean that the company only pays a fixed amount of money for each unit
of product as opposed to the current method in which the company pays fixed regular salaries
irrespective of production volumes and amount of work done. Outsourcing ensures that the
company will only pay for the productive fraction of a day’s work hours. In doing so, the
company will save money, which can be used as capital to increase production volumes, to
purchase better quality raw materials, and to package the products better for the customers.
Outsourcing some functions reliefs the company some of the responsibility and allows it to focus
on quality assurance and customer services (Gatty, 1993; Taylor and Ward, 1982). As a result,
more customer value will be created.
How lean and agile strategies can improve value creation.
Lean production is concerned with the elimination of wastes in a production system. In
lean production, excess capacity, excess inventory, unnecessary movement, over-processing, and
waiting times are all classified as wastes. Wings and Legs Company can adopt a lean production
strategy to minimize the cost of inventory by ensuring it only purchases as much inventory as is
necessary. Over-processing of products would also be eliminated through lean strategies, and the
time that a raw material takes to be converted into a final product would be reduced. Ultimately,
the freshness of the products would be preserved, the damage incurred in the movement would