Business Strategy Online Test, Coursework Example

Question One

• Identify key strategies adopted by fast food giants and whether they are sustainable with a changing customer base, increasing concerns about obesity and growing interest in food source (where the food comes from).

Human health is a critical factor. Populations need to ensure that they embrace habits that promote healthy living. In contemporary times, there is an increase in lifestyle diseases, such as diabetes, cancer, and cardiovascular illnesses. The lifestyle diseases can be effectively addressed or minimized by the initiative of the people to live healthily. Living healthy entails adopting upright eating habits and regular exercise (Chan et al. 2020, p.57). Human beings are what they eat. Consuming junk food implies that an individual is paving the way for lifestyle illnesses to dominate, while eating healthy foods implies that a person is striving to prevent any possible lifestyle diseases. Basing on the idea that prevention is better than cure, society is shifting from embracing unhealthy foods to healthier diets.

To determine whether fast food companies need to adjust their menus in light of changing customer interest in meat-eating and healthy food options, there is a need to deploy contingency strategy theory. The given theory is based on the structural-adaptation-to-regain-fit (SARFIT) model, whereby, in open systems, the environment establishes the requirements for organizations, which their managers address in part by adopting transformational strategies (Abba 2018, p. 41). It is then that the developed strategies establish contingencies-size, degree of diversification, or technology. In the context of fast food companies, the management needs to transform with the changing needs of the population. Currently, people across the world have realized the dangers associated with fast foods (Chan et al. 2020, p. 58). Fast foods, being unhealthy, are associated with obesity, diabetes, cancer, and other health complications. Moreover, the emergence and spread of the Coronavirus pandemic has also stressed the need for the population to observe its diet by eating healthy foods to boost the immune system. Although the international growth of big fast-food brands and business efficiency tends to make high-calorie nutrition popular and still in demand, with time, the same companies will experience a decline in their productivity.

Based on the contingency strategy theory, when managers of companies ascertain that the strategies being used by the firm do not align with its contingencies (may be due to specific transformations), the overall performance of these organizations suffers (Abba 2018, p. 45). Therefore, they are prompted to change their strategy or structure to the one that is acceptable by their target audience to enhance the overall performance. Based on the shifting trends from unhealthy to healthy foods by the population, fast foods need also to change to maintain their clients and uphold their productivity.

Previously, populations preferred fast foods because they were readily available and tastier than the recommended healthy foods (Wang et al. 2016, p. 1112). While it was easier for society to ignore the reality of the health challenges associated with junk foods because the implications were observed later in life, presently, the population is observing the repercussions of its ignorance. Lifestyle illnesses are on the rise globally. For instance, while diabetes was previously associated with elderly individuals, the disease is currently observed among young adults, as well as children. Consequently, the rampant rise of cancer in society, affecting people irrespective of their ages, proves the adverse effects of unhealthy eating. The increasing lifestyle illnesses have made society to be cautious of what to eat, thus making people take a difficult but necessary decision of embracing healthy diets.

Regarding the health challenges associated with the intake of fast foods and meat, the population is advised to embrace home-cooking, where people are cautious of their ingredients to ensure they align with the health recommendation.  Based on the advice, the fast-food sectors are vulnerable to decreased profits as people shift to healthy foods. However, to maintain their relevance in the food industry, the given companies can seize the opportunity and offer the population healthy foods. In fact, fast food companies are projected to perform better if they shift from high-calorie diets to offer healthy foods (Tempels, Verweij, and Blok 2017, p. 403). Through the production and selling of healthy foods, they will be supporting the nation to maintain a healthy population, thereby indirectly promoting healthy living. At the same time, it should be noted that companies need people for their businesses to thrive. Therefore, feeding customers with healthy foods guarantees them a long-term relationship while serving them with unhealthy foods will result in a short-term relationship, as clients will acquire lifestyle illnesses and shift their focus away from fast foods.

Adopting the “fast-casual” concept will be useful for fast food companies as a foundation strategy to shift to healthy foods. The fast-casual concept reveals to clients that companies value their health. Fast food companies can gain a competitive advantage by investing in fast-casual services, which promote healthy foods.  Currently, with the Covid-19 pandemic, the population is cautious of foods it consumes in light of promoting and protecting immune systems. Fast food companies can take advantage of the fast-casual to gain customer loyalty by offering fresh-quality foods. The secret to enhanced productivity in the business industry is to offer the target market what it needs, and fast food companies are entitled to offer people healthy foods to curb lifestyle illnesses that are otherwise preventable through balanced healthy diets.

Question Two

• Demonstrate how the major brands have acquired the market shard and developed a strong position in the market.

Competition Is for Losers

According to Peter Thiel, a good business does not consider competition and that engaging in competition with other companies is a trait for losers. Thiel (2014) claims that for business people and entrepreneurs if they want to develop a lasting value, they should look for establishing a monopoly. While the idea of “competition is for losers” undermines the fundamental and cultural assumptions that claims competition unveils winners and losers, it is associated with substantial truth.  According to Thiel, it is actually true that competition encourages individuals to work harder and perform even better. However, competition tends to dilute the value and importance of a company’s products or services (Thiel 2014, p.3). The most influential companies in the world, such as Amazon and Google, among others, can be considered a monopoly based on the unique strategies their management put in place to ensure that they dominate in the market. Although some people might argue that they are not a monopoly, based on Thiel’s explanation of such, it is evident that influential companies have managed to stay relevant in the business world because of domination. According to Thiel, there is no competition that represents an ideal business model and urges founders and entrepreneurs to avoid competition and seek monopoly.

In the context of Alphabet Inc., it has managed to keep other entrants at bay based on its domination of search and online advertising. In terms of searching for information on the internet, Google is the most significant player compared to its competitors. In fact, most people refer to the utilization of the search engine as an act of “googling,” revealing how the company has dominated the online industry. Research reveals that upon integrating searches conducted on all the Google platforms, the company handles over 90% of all the internet searches, followed by Yahoo at 3% (Pygas 2010, p.1). Based on the monopoly theory explained by Thiel, a business becomes successful when it attains the creation of value and captures a fraction of that value. Based on the use of Google services, the company has managed to capture a significant fraction of the value it creates, thus making it a monopoly. On the other hand, Amazon.com Inc. has dominated in the e-commerce (book industry) over a long period, compelling publishers to conduct businesses with the firm. The organization deploys its market power to downplay competition and take control of other industries, leaving the world with an economy that is less diverse and innovative. Therefore, Amazon exercises its domination by exhibiting itself as a player in a big market, rather than functioning as a non-monopoly, which promotes distinctiveness in a small market.

In a nutshell, it is evident that the most successful businesses in the world are monopolies, where they do not consider the competition. Although monopolies are illegal, there are ways that businesses can exercise them devoid of being perceived as such, as described by Thiel. However, it should be noted that functioning as a monopoly works to the disadvantage of new entrants, as it becomes extensively challenging for them to penetrate the market. However, for small businesses, competition is inevitable as they have to compete for clients who are also seeking services at affordable and friendly rates.

Question Three

• Comment on how innovation and creative things allow new entrants to enter the casual dining market.

Business internationalization is associated with opportunities and challenges. There is a need for businesses to ascertain their survival and thriving chances in other nations as they purpose to expand their businesses. According to Porter’s Diamond Model, any company’s ability to compete in the global arena is based majorly on an intertwined set of location advantages that other industries in different nations have (Wonglimpiyarat 2018, p. 76). The location advantages include firm strategy, structure and rivalry, factor conditions, demand conditions, and related and supporting industries (Industry Analysis 2018, p.1). According to Porter, when the named conditions are favorable, it compels domestic companies to revolutionize and upgrade consistently. It is the competitiveness that results from the continuous innovation of the companies, which is essential during internationalization.

In the context of firm strategy and rivalry, the model claims that, when companies are compelled to innovate and improve to attain a competitive advantage, it helps them when venturing into the international markets. At the same time, competitive advantage is attained from the availability of international institutions that create specialized factors and then upgrade them continuously. On the other hand, the demand condition posits that the presence of complex demand conditions from local clients tend to compel organizations to grow and improve their quality. Supporting industries are essential in terms of suppliers who seek to enhance innovation by providing high-quality inputs, effective communication, and timely feedback (Wonglimpiyarat 2018, p. 82). Therefore, Porter’s Diamond model claims that a business that has managed to outshine the pressures from local competitors has a high chance to succeed internationally.

On the other hand, the cultural, administrative, geographic, and economic (CAGE) framework provides a wider view of distance and a way of thinking about location and chances alongside the associated risks with international arbitrage. The CAGE framework can be used to consider first-order distance, cultural differences, and institutional diversity between the local nation and the targeted global market. Institutional differences entail political systems and financial markets. According to the CAGE, the greater the distance, the more difficult it is to operate within the target country. Moreover, emerging markets (to be precise) can have a huge difference because targeted nations lack most of the specialized mediators that facilitate financial markets (W?sowicz-Zaborek 2018, p. 413). Therefore, among the difficulties, companies might face include lack of social connective ethnic and social networks, language barriers, and differences in social norms and religion. Consequently, in terms of geographical location, there are issues, such as lack of common borders, physical remoteness, and weak transportation or communication links. At the same time, the disparity in consumer incomes might affect the financial aspect of a business as it tries to internationalize.

Conversely, globalization or internationalization has opportunities for organizations based on market drivers, as per Yip’s (2003) framework. According to Yip, a significant aspect of globalization is the continuous convergence of client’s needs. The fact that clients in different regions of the world are increasingly demanding the same services and products offers opportunities for businesses seeking internationalization of their services. Moreover, in terms of government drivers, businesses tend to thrive when there are favorable trade policies, a benevolent regulatory climate, and common product and technology standards.

Therefore, there are various factors that businesses have to consider before taking the bold step of investing in other nations. The success chances depend on how well research is conducted in the target region and the willingness of stakeholders of the business to invest in globalization. Cultural and economic differences are crucial to consider before going global. The business has to ascertain that its services are needed in a particular region and offer a competitive advantage to other rival companies in order to be successful.

Reference List

Abba, M., 2018. Explored and Critique of Contingency Theory for Management Accounting Research. Journal of Accounting and Financial Management, 4(5), pp.40-50.

Chan, C.Y., Kee, D.M.H., Chong, E., Hak, K.K., Yeong, P.H.A., Stephani, S., Sara, H., Chanchal, B., Quttainah, M.A., Pandey, R. and Sin, L.G., 2020. The Challenges of Healthy Lifestyle: A Study Case of Kentucky Fried Chicken. International journal of Tourism and hospitality in Asia Pasific, 3(2), pp.57-69.

Industry Analysis. 2018. Porter’s Diamond Model: Why Some Nations Are Competitive And Others Are Not. Business to You. https://www.business-to-you.com/porter-diamond-model/

Pygas, M. 2020. Is Google a Monopoly? Tech Giant Faces Questions over Search and Advertising.  Market Realist. https://marketrealist.com/p/is-google-a-monopoly/

Tempels, T., Verweij, M. and Blok, V., 2017. Big food’s ambivalence: seeking profit and responsibility for health. American Journal of Public Health, 107(3), pp.402-406.

Thiel, P. (2014). Competition is for losers. The Wall Street Journal, 12.

Wang, Y., Wang, L., Xue, H. and Qu, W., 2016. A review of the growth of the fast food industry in China and its potential impact on obesity. International journal of environmental research and public health, 13(11), p.1112.

W?sowicz-Zaborek, E., 2018. Influence of national culture on website characteristics in international business. International Entrepreneurship Review, 4(3), pp.421-442.

Wonglimpiyarat, J., 2018. The role of government in Porter’s Diamond model: comparative cases of Singapore and Thailand. International Journal of Technology, Policy and Management, 18(1), pp.73-88.

Yip, G. 2003. Total Global Strategy. https://www.researchgate.net/publication/248120905_Total_Global_Strategy