Corporate Strategy: Steakhouse Case, Swot Analysis, Competitors, M. Porter´S Forces...

2249 words - 9 pages

SWOT-AnalysisStrengths and WeaknessesTo gain a competitive advantage, the profit rate of a corporation has to be higher than for the average of the industry. The profit rate is the difference between the value the customers attach to the product and the costs of producing it. It is determined through the performance of the different value creation functions.R&D-Innovative ProductsProduction-high quality of ingredients-40% of total costs are food costsMarketing-Outback has won several awards, good PR-Corporate identity through a common theme of all restaurants-High value for money leads to a good image of the company-Community involvementMaterials Management-good relationships to the suppliersHuman Resources-best qualified, trained and highly motivated employees-low turnoverInfrastructure (Leadership)-management experience in the restaurant business-no middle management , decentralised lean management-franchisees live in their area-corporate culture-location strategy: nicheFinance-high stock price allows further expansionGenerally the efficiency of the production is neglected but as Outback embarks on a differentiation and niche strategy that doesn't affect its competitiveness. All other building blocks of competitive advantages are addressed, its products are of excellent quality, its products as well as the management system and the organisational structure are innovative and its customer responsiveness is outstanding.Opportunities and ThreatsThe strategic position of Outback is mainly determined through companies that are in the same strategic group: moderate price and high quality dinners. The opportunities and threats are mainly the same for that strategic group, the entry into another group might be desirable and would result in a diversification strategy.Industry StructureAccording to Porter's Five Forces Model, the restaurant industry is highly competitive. The rivalry among established companies is very high as Outback operates on the one hand in the highly fragmented restaurant industry and on the other hand has to compete directly with a few big chains. The demand conditions depend to a high degree on the general economic situation, but the US market in general can only accommodate a limited number of restaurants. The exit barriers are very low. The risk of entry of potential competitors is high as the barriers of entry are very low.The bargaining power of buyers is moderate, all customers account for only a marginal part of the revenues but as the demand is very elastic they tend to switch to the competitors if they are not fully content. The bargaining power of suppliers is moderate to high, the company doesn't depend on one single supplier, but on high quality. The threat through substitute products is quite high, steaks could be replaced through poultry or completely different meals.MacroenvironmentThe macroeconomic environment influences the restaurant industry to a high degree as a decline or growth of the economy influences...

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