Restaurant and Prepared Foods
Zifty Business operates two businesses within the food industry. However, the performance of the two businesses are not at the same level. This calls for the analysis of each business regarding their industry attractiveness as well as competitive strengths.
1. Industry Attractiveness Restaurant and Prepared Foods.
The market size and projected growth rate are high. However, the level of competition is low. This means that there are a few number of other similar businesses in the sector. Alternatively, the business has a competitive advantage over its competitors because of increased customer loyalty due to the provision of high-quality products and services. The most important factor to consider in this case is the industry profitability, which is one of the highest with a weighted score of about 1.8. Besides, the business’ external environmental factors do not have a lot of impact on its operations (Smith & Flanagan, 2013). The industry uncertainty and risks are less than one. Therefore, the industry seems to be certain, contributing to a high projection in market size and growth rate. Moreover, the business does not need a lot of resources to venture into the market. The main strength of the Restaurant business is that it is strategically positioned in the sector, making it responsive to external threats due to competition.
b) Groceries and Household Goods Since the two businesses belong to the same market, their industry attractiveness are equal. Interestingly, their levels of competition are similar. External factors such as threats and opportunities, socio-political, regulatory and environmental considerations are at the lowest level making the business to operate free from external interference. The industry is also profitable, therefore, the business is likely to be profitable.
2. Competitive Strengths.
In comparing the two businesses, their market shares are equal. This could be as a result of the company's good marketing strategies as distributed across all the business levels. This is affirmed by the businesses’ costs on beating or matching the rivals. However, the business incurs less expenses in counteracting the competitors. On the other hand, the groceries business incur more expenses in trying to counteract its competitors. This may be due to a large number of business selling the same groceries since the sector requires less capital compared to restaurants. The high investment in responding to its competitors has resulted in building the business brand image, as evident in the difference in brand image and reputation. However, the restaurant business is more profitable compared to groceries. In a combined analysis of business attractiveness, the restaurant business scores at 8.12 compared to groceries 7.59. The difference of 0.53 to the restaurant’s projected profitability and small impacts of seasonal and cyclical influences.
Therefore, Restaurant and Prepared Foods has a long-term industry attractiveness while Groceries and Household Goods are averagely attractive. On the other hand, the average weighted score on Competitive Strength of Restaurant …