Analysis Of Business Competitiveness Business Essay Example

the home, resulting in an estimated value of ?40.3 billion for the eating-out market. Additionally, this sector employs around one twentieth of the UK workforce. The Allegra survey aimed to quantify the economic value added by this sector while providing valuable insights into its strategic challenges.The Office for National Statistics introduced Gross Value Added (GVA) in 2005 to measure an industry's economic contribution to the UK economy. According to Allegra's findings, informal dining establishments are among the top 10 contributors to national GVA. The survey predicts that the eating-out sector will grow by ?850 million in the next 18 months, reaching a total of ?42.5 billion. However, this sector faces intense competition and annual challenges.

This sector includes various types of standalone establishments and restaurant chains, ranging from small snack joints and takeouts to large global chains and high-end gourmet restaurants offering cuisines from around the world. In London, which is known as a prominent global food destination due to its multicultural population, there is a wide range of cultural restaurants available – such as fish and chips places, Indian restaurants, and Chinese restaurants.

Interestingly enough, there are over 12,000 curry houses in the UK compared to only 1,250 McDonald's outlets. This could be why chicken tikka masala is considered the favorite dish in the UK. The Indian restaurant sector alone generates a turnover of ?3.5 billion and accounts for 7.5% of the total UK eating out sector.Estimates suggest that the number of curry houses in the country may equal or even surpass the number of Chinese establishments. The workforce in the restaurant sector is estimated to range from 50,000 to 100,000 people. While this sector has

experienced rapid growth in the past, it seems to have slowed down recently. It includes small standalone restaurants as well as chains like Rasa and Kerala Group, and upscale dining places such as Chutney Mary and Veeraswamy.

A PESTEL analysis is considered the most effective method for evaluating environmental factors that influence business strategies in this industry. This analysis covers political, economic, societal, technological, environmental, and legal concerns. It helps executives align their business strategies with these environmental imperatives and aids managers in understanding the broader context of their organizations' operations. Additionally, it assists in identifying market growth or decline factors and determining a company or industry's specific position.

In the UK specifically, the political climate leans towards democracy and neoliberalism while supporting all legitimate businesses. Sectors tied to tourism, including the eating out sector, receive particular encouragement. The economic environment also plays a crucial role in determining success for restaurants and other dining establishments.The recent economic downturn had a significant impact on people's dining habits, leading them to eat out less frequently and opt for cooking at home due to cost-effectiveness. However, it is anticipated that the recovery of the economy in 2011 will reverse this decline in restaurant visits throughout the UK. Changes in the social environment have influenced food consumption patterns, resulting in shifts in global social attitudes and customs. These changes can affect various aspects of restaurants' strategies, including demand, consumption, and prices.

The growth of the restaurant industry has been propelled by societal changes such as smaller families, single parenting, and an increase in women joining the workforce. The rise of non-native cuisines like Indian, Chinese, Latin American, and European can be attributed

to evolving food preferences and a multicultural society. Nevertheless, recent studies indicate a slowdown in growth for Indian restaurants due to conflicts between the trend towards healthy eating and their frequent use of oil.

Furthermore, stricter government policies concerning non-EU migration may have adverse effects on cultural Indian restaurants by limiting access to skilled cooks. Additionally challenging are current restrictions on short-term visas which pose obstacles for hiring workers from Bangladesh who make up a significant portion of UK "Indian" immigrants. While restaurant owners find it relatively easy to recruit Eastern Europeans for front-of-house positions, they encounter difficulties when searching for trained curry chefs.However, there are plans in progress to establish a ?20m Balti academy in Birmingham. The industry has benefited greatly from technological advancements, particularly in information management and accounting functions. The use of modern storage and cooking equipment has also improved efficiency. These innovations have increased productivity for food and drink manufacturers, which requires careful consideration when making capital investments throughout the environmental supply chain. Sustainable waste management practices must be prioritized by restaurant managers. The Food Standards Agency collaborates closely with local authority food law enforcement executives to enforce regulations across the entire food chain. This collaboration ensures that food businesses and enforcement authorities understand their rights and responsibilities, leading to consistent monitoring of legal requirements and upholding of food safety standards. The Agency conducts audits and collects information on enforcement activity to ensure proper inspections of food businesses take place. Introduced by Michael Porter in 1980, Porter's Five Forces theory helps businesses analyze competition within an industry through five factors: buyers' power, sellers' influence, level of market competition, threat from new competitors,

and threat from alternatives.This theory is particularly useful for companies entering new markets or expanding operations in existing markets. The dining industry experiences significant buyer power, as customers have a wide range of choices and the ability to decide whether or not to utilize specific dining establishments. While sellers typically do not have strong power, certain establishments like McDonalds, KFC, and Pizza Hut gain strength from their brand recognition. Others such as Veeraswamy or Chutney Mary have built reputations and loyal customer bases. The industry faces constant threats from new entrants as well as substitutes that can arise from the introduction of different cuisines or new food products. Competition between industry participants is intense. Considering these factors, it can be concluded that the dining sector is highly competitive.

After analyzing the PESTEL conditions and Porter's Five Forces in the Ethnic Indian Restaurant sector, it becomes evident that this industry is also highly competitive. There are additional challenges such as slow growth and potential shortage of skilled workers due to stricter immigration regulations for non-EU citizens. However, with the upcoming 2012 Olympics and an expected increase in international tourist traffic, there are growth opportunities in this sector.

It is advised that new entrants carefully assess the market and ensure their establishments are ready for the London Olympics.
To achieve success in this industry, it is important to maintain high quality standards, adapt to local community preferences, have efficient food-processing infrastructure, provide excellent service levels, and leverage strong brand recognition. The significance of location should not be underestimated as it greatly influences a restaurant's success. To develop an effective strategy, entrants must excel in these areas. It is recommended to

conduct an internal analysis of strengths and weaknesses, align organizational strengths with market opportunities, mitigate weaknesses, and stay aware of potential threats. According to Karan Billimoria, founder of Cobra beer in the UK, constant innovation and pushing boundaries are crucial for business success. He believes that regardless of competition or market saturation, there is always room for improvement in existing products or services. This mindset can ultimately transform the entire marketplace. In the highly competitive international market for cultural Indian restaurants in the UK, it is important to acknowledge that many restaurants from various cultures are entering Western markets by offering authentic and affordable cuisine. To assess the investment quality of opening an Indian restaurant in London, both quantitative and qualitative factors that contribute to its potential success need to be evaluated. However, this endeavor comes with complexity, challenges, and risks due to the highly competitive market.

The success and quality of the investment rely on various factors such as the entrepreneur's physical and financial resources, establishment location, management team's track record and experience, and achievement of critical success factors.

Analyzing financial projections for sales, profits, and cash flows in future years is crucial for making an informed decision regarding this proposed investment.

In terms of strategy, Alfred Sloan - former President of General Motors - emphasized the significance of placing organizations in markets where maximum profitability can be achieved. He believed that activities with unsatisfactory long-term projections should either be rectified or discontinued. Sloan recognized strategy as a distinct element from day-to-day business operations but essential for growth and success.

There exist four perspectives on strategy: classical, evolutionary, processual, and systemic. Among these perspectives, the systemic strategic procedure

is considered most effective when selecting schemes. The effectiveness of a scheme for systemic strategians depends on understanding the strategic model as well as complying with local regulations and ordinances.

Although classical planning can be effective, the competitive and unpredictable nature of markets sometimes requires embracing evolutionary strategic procedures. Additionally, organizations may be too inflexible to adopt simple plans.

Resource maneuverability from a distance can present challenges in maintaining a competitive advantage. It is crucial to align strategy with organizational, marketplace, and societal models instead of relying on a one-size-fits-all approach. Differentiating between corporate level strategy (decisions about participating in specific businesses) and business level strategy (competition within a particular business) is important. Research findings suggest that both corporate level and business level strategies play significant roles in determining firm profit performance. Theoretically, both corporate degree policies (differentiation between industries) and concern degree policies (differentiation within industries) are considered equivalent strategies for businesses. According to most strategic management literature, there are four levels of hierarchical strategies: enterprise strategy, corporate strategy, business strategy, and functional strategies. Each level has its own set of plans which reflect a "hierarchy of needs" similar to Abraham Maslow's theory.
< p > It should be noted that not all business endeavors have formally expressed policies at every level. Some levels may lack formal direction within the organization. However, many policies are based on claims made by organizational observers and stakeholders.The presence of a hierarchy of strategies is crucial in positivist methodology, as it stresses the importance of focusing on various levels of strategies within an organization. This hierarchical structure ensures that each level is limited by the one above it. The limitation of

a functional scheme arises from the concern scheme of administration, which itself has limitations imposed by corporate and enterprise schemes. The significance of the enterprise scheme for an administration and its influence on lower levels is emphasized through this hierarchical structure.

However, it is important to note that the process of strategy is not strictly one-directional despite this hierarchical arrangement. Mintzberg differentiates between planning strategy and crafting strategy, highlighting the value of rational control and systematic analysis in developing clear and effective strategies.

This passage underscores the significance of strategy in business contexts. Throughout history, managers have faced challenges in adapting to diverse circumstances. Studies consistently demonstrate that hiring new presidents or CEOs who can implement strategic change and facilitate recovery is essential for corporate turnarounds. These top-level managers often bear responsibility for driving necessary transformations, sometimes necessitating external recruitment due to resistance from insiders against significant changes.According to analysis by Whittington in the 1980s, aggressive refocusing and streamlining measures were typically implemented as a last resort, often enforced by new executives from outside the company. In today's dynamic business environments, directors should think creatively rather than relying on past experiences and prescribed strategies. Strategic planning and management are essential activities that business owners must engage in from day one, as they are crucial for both short-term and long-term growth and success. Without strategy development and implementation, it is impossible to enhance a company's size, profitability or provide clear direction. It is important to acknowledge that a good strategy is not only necessary during times of prosperity or adversity. The significance of strategy cannot be emphasized enough. Effectively utilizing resources within an organization to gain a competitive

edge underscores the constant need for strategic vigilance, especially in unfavorable economic and societal conditions.