Download Week 2 DQs Week 2 - Discussion Question 1 Consider the

Week 2 DQs
Week 2 - Discussion Question 1
Consider the restaurant industry (or any other) and explain how recent, current,
and forecasted economic trends have affected the industry’s attractiveness. What
firms have exited the industry? What firms have entered or increased investment in
the industry?
Answer:
What I have in mind is the Waffle House. Its restaurant and many of its franchise
outlets had closed due to the recent economic downturn. Special promos and
product offers were introduced just to gain the market back. Another is the
Northlake Foods Inc. which filed for Chapter 11 in 2008. The company has
approximately $10 million and $50 million assets and liabilities. Increased minimum
wages has also contributed to the recent economic crisis. The closing of Stuckeys,
Furr’s Cafeteria and Kenny Rogers are some of the concrete examples of the
negative effect of the situation.
However, there are some fast food chains that keep themselves operating and
competitive in the market. One is McDonalds. This might also be due to the fact
that they operate in the international market. And they have this unique menu in
every country to match the lifestyle in that particular state. There are McDonalds in
Africa and in the Philippines as well. With this, I can say that the company is
continuing to rise in the food industry.
http://www.dealwatchblog.com/post/2008/09/17/Another-big-Waffle-Housefranchisee-files-for-bankruptcy.aspx
Week 2 - Discussion Question 2
Select an industry - or a sector within it - and identify its remote/industry/operating
environment. Explain how these can influence a company's strategy.
Answer:
Economic factors can greatly influence the hotel industry. Any economic change
would have an effect on tourism, which is the major catalyst in the hotel industry’s
success. To maintain growth in the industry, an organization must be versatile to its
changing environment.
A company’s strategy while being developed by its management must not solely be
based on internal matters. The outside factors are what matters most because this
is usually uncontrollable. These outside components include economic, social,
political, technological and ecological factors. Examples are hotels situated along
the coast wherein weather conditions can either cause tourism along the area to
increase or decrease. Equally important in the hotel industry is the social factor.
During schooldays, the public is much less engaged in traveling since it is often a
family activity. These are the days when people are busy on their jobs.
Industry environment are those that a company considers within the industry of the
firm, including product differentiation and government policies. Hotel owners and
managers deal with a variety of industry related constraints within the industry
environment. Their employment level must be matched with its industry
environment which depends on the forecasted level of tourism. Fixed costs analysis
like building maintenance and contractual arrangements must be duly noted as
well.
Operating environment comprises of factors of competition, having the ability to
analyze competitor profiles to forecast short and long term growth and profits by
looking at factors such as market share, advertising, marketing, union relations,
and customer profile. Hotel rates vary based on how tight the competition is.
Week 2 - Discussion Question 3
Select a company and identify its orientation and the reasons why the company has
decided to go global (or not). Identify what international strategy it is using and
validate whereas it is the right one or not.
Answer:
Different kinds of orientations are ethnocentric, polycentric, region-centric and
geocentric. In ethnocentric, the strategy is introduced by the parent. In polycentric,
it is the culture of a particular state that affects a management’s decision. In regiocentric, each of the different regions where the entity has branched out affects
strategy formulation. In geocentric, making decisions is mainly affected by systems
(Pearce & Robinson, 2011, p. 119).
Starbucks had been successful in the global market. It uses the polycentric
orientation wherein it is operating in a host country where income generation is
concentrated. It then trains new staff in other local countries where it decided to
expand its operation. The company’s decision to reach for the international market
is to increase its profiting ventures.
The strategy that Starbucks tries to implement is branching out in different
countries to attract a larger group of customers. The entity also considered
franchising with concentration on China, Brazil, and Russia (Pearce & Robinson,
2011, p. 128).
References
Pearce, J. A., II, Robinson, R. B. (2011). Strategic management: Formulation,
implementation, and control (12th ed.). Boston, MA: McGraw-Hill/Irwin.