Retail

Assignment for the next class. ( P. S. You are required to split yourselves in group of 6to 8 members each, the details of which shall be collected in class. Students would be called out randomly from each group to present their analysis. In case of a dismal performance of any group member, the marks of the whole group will be at stake! )

1. The marketing channel for Mary Kay Cosmetics is called a “direct selling” channel. The company uses a sales force of over 1,000,000 Independent Beauty Consultants around the world.

These Consultants are not employees of Mary Kay Corporation; they buy cosmetics from the company at a wholesale price and sell at a retail price to end-users. They maintain personal relationships with their end-user consumers, and deliver product to them after it is ordered; it is a high-service purchasing relationship from the consumer’s point of view. Consultants thus act as both distributors and retailers.

• To what extent does an Independent Beauty Consultant participate in the eight universal marketing flows?
• How might these flows be shifted, either among the members now in the channel or to different agencies or institutions not presently included?
• What do you think would be the implications of such shifts? (think about how cosmetics are sold through department stores or through drugstore chains, for example)
• Within each of these distribution systems, specify what the consumer’s role is from a flow-absorption perspective?

Contrast this with the consumer’s role when buying cosmetics from a department store, or a drugstore chain.

2. For each of the three scenarios below, categorize the demand for bulk- breaking, spatial convenience, waiting/delivery time, and assortment/variety as “High,” “Medium,” or “Low. ” In each case, explain your answers.

a. A woman in an emerging-market country of Southeast Asia wishes to buy some cosmetics for herself. She has never done so before, and is not entirely sure of on what occasions she will wear the cosmetics. She does not live near a big city. She is too poor to own a car, but has a bit of extra money for a small luxury.

b. A manufacturer uses a particular industrial chemical in one of its large-scale production processes and needs to buy more of this chemical. The rest of the raw materials for its plant operations are delivered in a “just in time” fashion.

c. Before you visit certain parts of the world, you are required to get a yellow fever vaccine. Many travelers let this slip until the last minute, forgetting that it is advisable (or avoiding an unpleasant shot as long as possible). But, they definitely realize they need the shot, and don’t want to have to cancel their trip at the last minute because they didn’t get it. They often find themselves making a long trip to a regional medical center because they didn’t plan ahead.

Ansoff’s Matrix (1968) is used to analyse an organisation and develop a strategic approach to growth, whilst helping to understand the risks that are associated with that strategy. From what I have ascertained in the first section of this assignment Amazon are still very much in the growth stage of their life cycle and as a result have many strategic options available to them. The most obvious way for Amazon to continue its current growth would be to maintain its market development strategy. This means taking existing products to new markets. Over the last few years they have already expanded their operations into 9 different countries, maintaining this type of growth could be a good option for Amazon. They have shown they have the capacity to open new ‘stores’ in new countries and cultures successfully, so this option would be relatively low risk if done correctly.

They are also using elements of market penetration as a current strategy for growth, taking existing products to their existing markets in the form of the new product lines (apparel and accessories, beauty, grocery etc). They are simply buying in from the wholesalers upon order placement, and selling on to the customer for a lower price, enabling them to maintain their cost leadership strategy and penetrating the market. According to Porter’s generic strategy Amazon were also using elements of differentiation as a growth strategy. They are achieving this by creating new technological website features. Also taking into consideration the SWOT analysis there is an opportunity to take advantage of the rising number of people shopping online and adopting broadband internet.

Taking all these factors into consideration could lead them into a diversification strategy, taking new products to new markets. For example this could be achieved by the development of an Amazon Marketplace that enables third parties to sell their products via Amazon websites to the customer. This would allow customers to shop for products owned by third parties, whilst using Amazon features and technologies as their guides (adapted from Amazon Annual Report, 2006). It would create a new marketplace, where new products that would probably be non-existent on Amazon otherwise, could be sold. This kind marketplace would put them in direct competition with the intern retailer eBay.

Finally their technological partnerships with Oracle and Internap will enable them to enhance their database and web-delivery mechanisms and therefore enable them to gain a competitive advantage in terms of service delivery. Amazon could use these technological advances to develop a series of computer applications that could generate growth for the business, for example

• Amazon Simple Storage (providing a web services interface for storing and retrieving data from anywhere on the internet)
• Amazon Simple Queue Service (which offers a reliable, highly scalable mechanism for storing messages as they travel between computers).
• Amazon Mechanical Turk (which provides a web service for computers to integrate a network of humans directly into their processes)
• Amazon E-Commerce Service (which exposes the product data and e-commerce functionality to allow developers, web site owners and merchants to leverage the data and functionality that we use to power our own e-commerce businesses).

Applications such as the ones above will enable the Amazon to sell into new markets previously untouched, such as the e-business and search engine market, and other physical stores looking to enhance their online operations.

GE/Mckinsey Matrix

The idea of the GE/Mckinsey matrix is to evaluate businesses along two dimensions, which are industry attractiveness and industry strength. In essence this matrix is similar to the BCG Matrix. This is because it maps SBUs on a grid of the industry and, at the same time, marks their competitive position. The GE/McKinsey Matrix improves on the BCG approach in two ways. Firstly it utilizes more comprehensive axes and secondly it consists of nine-cells rather than four, allowing for greater precision.

Amazon owns a large market share in comparison to other e-commerce companies; it is one of the leading e-commerce retailers and has been growing year upon year with sales increasing from $3,993m in 2002 to $10,711m in 2006. As a result Amazon would be found high on the competitive strength axis. As a large global organisation other factors such as economies of scale, brand power, the low cost of operating online and ever improving process efficiency and technology also add to its strong position.

The market attractiveness for Amazon would be based on factors such as market size, market growth, industry profit margin and the amount of competition. Taking such factors into consideration again I would have to place Amazon high within this dimension of the matrix. The company has grown in terms of profitability alone and has obviously seen opportunities arise in different markets outside the USA, with further profitability available by the seizing these opportunities. The organisation will maintain a high unit strength and high market attractiveness by consolidating in the markets where it has already expanded whilst searching further opportunities for growth.

Amazon falls into The Dark Shaded Zone of the thrre cells in the upper left corner. This means it’s in a favourable position with relatively attractive growth opportunities. Its important that Amazon protect and maintain their position, whilst continuing to grow. The matrix suggests that the best way for Amazon to achieve this would be via investment into selective growth via market development. Althougth this matrix is useful it does have its floors. For example the matrix doesn’t take into account interactions among SBUs or the core competencies that lead to value creation. For these and other reasons, some believe the matrix is better suited for providing an overview of the current market rather than serving as a resource allocation tool.

Objectives and Strategy Development

TOWS Matrix

The TOWS analysis enables an organization to understand the strategic choices that they face. It helps to formulate methods of make the most of their strengths, circumvent your weaknesses, capitalize on the opportunities and manage the threats.

Strategic Plan and Implementation

Utilizing the above matrices has enabled me to identify Amazon’s current position within the market, the strategic avenues available to them in order to grow and the ways to go about implementing these strategies in order to make them successful. From looking at Porter’s generic strategy I can see that they currently adopt a ‘cost leadership’ strategy which has enabled to gain a high market share and put them in amongst the top internet retailer’s. This strategy has put them into a strong position and I feel it can be made stronger if they stick this strategy during this period of growth that they are currently in.

As there financial reports, product life cycle and BCG matrix indicate they are currently performing well and growing at a fast rate. In order to turn their strong position in the market into a dominant one attain their cost leadership strategy, whilst incorporating elements of differentiation, which as porter’s generic strategy shows they are currently doing. This should enable them to make an aggressive push for the leading market share and as a result improve their competitive advantage through things such as economies of scale.

Over the short term Amazon should look at using market penetration as a growth strategy. This means broadening their product range and offering their current customer base more options in terms of products. This should suit them well in the short term as in coincides with their cost leadership strategy. They are simply buying in from the wholesalers upon order placement, and selling on to the customer for a lower price. It’s relatively easy for them to implement and should be picked up by their current customer base relatively easily.

Over the medium term it’s probably best for them consider market development. It’s a method of growth that they have already utilized to great affect. This means offering existing products to new markets. In terms of Amazon this would mean opening new stores in new countries, therefore broadening their customer base. Again this is relatively simple for them set up and should be successful. However as I ascertained from GE/Mckinsey’s matrix, it’s important for them to build selectively. The y must ensure they understand and are confident in the new markets that they are entering.

Both the above strategies should satisfy Amazon’s growth over the next 6-18 months however these methods of growth may become saturated rather quickly, there’s a limit on how many new markets you can enter and how many product ranges you can offer before your brand becomes diluted and less distinguishable. There is only so long Amazon will be able to protect it’s position at the top of the tree in internet retailing using these growth stratergies. As a result Amazon may have to consider as a long term plan diversification, to prevent them losing market share and entering the decline stage of their business life cycle. This means entering new markets with new products.

As I mentioned earlier this could be achieved by the development of an Amazon Marketplace that enables third parties to sell their products via Amazon websites to the customer. This would allow customers to shop for products owned by third parties, whilst using Amazon features and technologies as their guides (adapted from Amazon Annual Report, 2006). It would create a new marketplace, where new products that would probably be non-existent on Amazon otherwise, could be sold. This kind marketplace would put them in direct competition with the intern retailer eBay.

Headquartered in Los Angels, California, the company offers consumers over 250 quality and affordable arsenal care products. The Product Dry. Fresh makes Bianca brand nativity fluoride toothpaste. We offer a peppermint flavor which is preferable to our target audience and offers cavity protection, fresh breath and strengthens teeth. Active ingredient is sodium nonprofessionals (0. 76%) is an nativity with a series of inactive ingredients. The Market Target market includes low income individuals, students, head of household, and elderly.

The projected loss for our product in the current fiscal year is predicted $50,000 net loss. Variable costs to obtain a product and store in our warehouse is $0. 50 per unit. This variable cost cannot be reduced any further and will remain constant for the next two years regardless of volume. We have a unique advantage that our production can instantly vary to any output without increasing fixed costs or inventory costs. Our annual fixed costs are $250,000 annually including salaries, benefits, office supplies, warehouse space and our other product related expenses.

This does not include any promotion like advertising, public relations or personal selling. Company overview Our mission is to provide innovative, high quality and affordable personal care products that exceed consumer expectations. The mission includes being the leader in the oral care category through fully understanding and addressing consumer needs. Our companies’ SOOT Analysis includes our strength to offer a low price, have an effective product, and a good price to feature ratio.

We offer multiple oral healthcare products which increase customer susceptibility to our product. Bianca has had previous advertising in movies, and television which help our product recognition. Our weaknesses include lack of brand recognition and are unknown, lack of features including whitening, tartar control, sensitivity and also fluoride, low promotion edged, subpart quality and we offer smaller quantities than competitors for the of our product through retailers. Company opportunities include easy sales to wholesalers because of price.

We can offer to convenience stores and also vending machines to increase sales without extra cost. We also have the opportunity to advertise to dentist offices and to get support. Threats include name brand competitors, other low cost entrants, supplier power, buyer power, rivalry between other low cost competitors, and also threat of substitute products affect our business. 95% of our sales are at the price point of $1. 15 through wholesalers. The wholesalers sell to retailers, who sell our product at $1. 61 per unit.

The other 5% of sales occur over the internet at $1. 49 each. We show a fixed cost of 250,000 + (. 50 per unit PVC *units). We are selling at this price and are estimated to lose $50,000 this year. In order to market this toothpaste, and achieve a goal of $50,000 profitability a year we must sell 400,000 units. In order to hit this strategic goal we must attain more market share. The overall oral healthcare market is worth 10. 9 billion. Colgate holds 52% of the overall market. HULL holds 22%. Dabber has 14% We hold . 05% with other brands with 1 1. 5%. Current market trends it indicate whitening is a strong factor in increasing sales. Market Segments We have broken our market down into the following segments: Students (Students are on tight budgets, but still need to clean their teeth effectively because their diets are typically not conducive to oral health in the first place. ) Low Income Families (Lower income families need to buy lots of toothpaste, but can’t afford expensive name brands. ) Value Shoppers (Some individuals/families simply look to get the most value for their money. Each of our market segments have similar characteristics. Most of all, they are looking o get the best oral care product on a limited budget. They are typically value driven, and will buy a specific brand out of habit and convenience rather than any specific medical desires in their product. Their needs in a toothpaste include cleaning their teeth, preventing tooth decay, freshening breath, and preventing plaque and tartar build up in their mouth. Primary Target Market Our primary target market is value shoppers.

Our customers in rural areas are looking for a combination of features and convenience. Customers entail value shoppers, low income shoppers, students, households, low cost value proposition. We segment through Geographic (Rural and Urban), Behavioral ( Normal use, Whitening, Complete Care), Demographic (customer type) and other methods. Company Analysis Our goals include selling the best toothpaste at the best price. Through aggressive price techniques we offer a quality product at a low price. We sell most of our product to retailers and a slim margin over the internet.

Company culture includes giving employees fair chance to speak their mind and voice concerns to management. Through respecting catheter and fostering innovation we have been able to sell our other products very successfully. Internal strengths we have include our differentiation of products. We offer Bianca mouth freshening spray, toothbrushes, floss and other oral health products. A weakness we have internally is that we do not currently offer any whitening products, and with the current trend it is hurting our growth.

Opportunities that we have include a whitening pre brush rinse solution. We also can develop mouthwash and produce different flavors of our breath freshening spray. The oral healthcare market is increasing due to people’s reliance on vanity. Threats from other companies are hurting our sales due to competitor capitalization n the whitening, and feature/ luxury branding. Our low price toothpaste formula is not going to make your teeth any brighter, or remove layers of plaque that cause yellowing.

Our product simply removes surface bacteria and doesn’t get in deep like other competitor products. Market share is a growing concern for us, we hold half a percent of the total market, and our competitor Colgate holds 52% of the overall market. We have a lot of room for growth inside our current market and huge incentives. Overall we are going to suffer a loss this quarter. We are going through some changes currently in our marketing ND management staff and are predicting a rise next year. We have more than adequate production methods and inventory warehousing.

We anticipate being able to handle sales at a much higher volume. We are coming up with a new marketing scheme to make our product more appealing to our target market. We need to think creatively and bring in some fresh ideas and interns. Stock pence 2. 50 BASE (August 1st 2013) Competitor Analysis Our top three competitors are The Procter and Gamble Company Philips Oral Healthcare Inc I. Market position The consumer product conglomerate focused on toothpaste, toothbrushes and other oral care products. The position of the quality toothpaste could be niche or mainstream.

The decision to position the new toothpaste on retail shelves is another important aspect of our sales positioning. Colgate toothpaste places the toothpaste in between one of the existing products and a competitor’s product. It. Strengths – Colgate Optic white and Colgate sensitive pro- Relief toothpastes and the re launch of Colgate total toothpaste contributed to their strength in the oral care market. – Collage’s strength in manual toothbrushes also continued in the U. S, driven by the success of Colgate 360 degree optic white, Colgate 360 degree Sensitive Pro- Relief ND Colgate 360 degree Surround. ‘. Weaknesses Colgate brand directly compete with P Oral-B company toothpastes which are globally known for their high functional properties, including sensitivity and teeth whitening. The company also increased its advertising expenditures by 31% in the two quarters of 2013. It has resulted in an overall market share gain in toothpaste and has growth from 52% in 2012 to 56% presently. Colgate has to worry about the innovative new products that could compete with their current quality toothpaste. Iii.

Market Shares Colgate has been able to stay ahead of the market; it has one of the widest networks, caching 4. 5 million retail outlets in India. Collage’s sustained distribution strength, coupled with product innovation and creation of sub-categories such as mouthwash and sensitive oral care have helped it drive growth aggressively. They are always coming up with new ideas to push the barrier and capture new market shares. Promoting healthier lives, improving community oral health care, expanding their current “Bright Smile, Bright Futures” program all ATA low cost.

They ensure that ingredients continue to meet safety, quality and environmental compliance and biodegradability. They have also been environmentally responsible through educing the environmental impact of Colgate products and packages by 20% increasing the use of sustainable materials and recycled content. Value Chain Partners Supply chain partners consist of primarily a manufacturing company (Dry. Fresh) in India. The factory produces the toothpaste, packages the paste into tubes, and seals and prints the tubes and boxes the final product.

Large shipments leave the factory by means of distribution. A distributor moves the product from the factory to Wholesalers Warehouses Shipping yards Wholesaler’s mark up the product and sell the product in bulk to tillers. Wholesalers are responsible for distribution of the product after they purchase the product from the factory. Warehouses store the product until demand for the toothpaste is reached. At this point the product is removed and sold to different partners Shipping yards are usually located where a sea port meets a railroad.

The trucks can drop off product for easy transportation over 1) ocean through massive commercial ships and 2) railway where trains transport goods efficiently 3) Trucks drop off their trailers and are easily navigated to new locations by other drivers. Once the goods are delivered to their final location it is usually at a retailer. Retailers purchase the goods from the wholesaler, offer a markup on the product and arrange the product on the shelves where it is ultimately bought by customers. When the product is sold directly over the internet a lot of the process is cut down.

The internet protocol is much more simple. A supply chain partner is through the website design and maintenance teams in order to process orders and receive accurate shipping information, as well as process payment. When an order is paid for and set up for delivery, the company uses a mail company such as faded or SSP to deliver the final package to the customer. Climate Reducing global impact on the climate and environment plays an important role in associated with the manufacture and distribution of products it plays a large role in our manufacturing process.

We try to reduce waste sent to landfills as well as request that all of our key suppliers measure and disclose the climate change information. Through the economic climate we are reducing the amount of water consumed in the manufacture and consumption of our products. Reducing the amount of water associated with our products saves a lot of money. Through working tit local and global organizations to promote access to clean water we promote water conservation awareness across the world. We reduce our environmental impact of products and packages by up to 20% by increasing the use of sustainable materials and recycled content.

Social and cultural environment includes the increase of sustainability profile in our new products and in the balance of our portfolio. We ensure ingredients meet or exceed all recognized standards for safety, quality, and environmental compliance and biodegradability. Political and legal environment is included in promoting health and wellness and to reduce employee employee health risks. We have achieved a 5% reduction in costs and improvements in early diagnosis of chronic and treatable disease. We are focusing on safety to achieve the goal of zero lost time incidents.

Other political impacts are the standards set to monitor our product and ensure public health. Technological environment by reducing our waste through technological upgrades we have been able to increase effectiveness and efficiency with lower waste. New methods allow for the reduction of water used in production and distributing so that we can control costs and provide the best product available. Insight driven innovation provides value added products and our marketing strategy shows that in order to ensure high standards we must have the essential technology to make it happen.

Outline Informative Process Analysis Audience: Individuals interested in purchasing a vehicle Purpose: To help potential car buyers be prepared; so, they may achieve what they want, and need in a vehicle. Thesis: There is a method to the madness of buying a vehicle; you just need to have the right weapons for battle. A. Know what you want. B. Know how you’re going to pay for it. C. Be informed. D. Take your time. E. Above all, don’t be gullible The Battle to Buy a Car After twenty-six years in the car business, I can honestly say, “I’ve seen and heard it all. As with most things, the car business changes constantly. Always inventing new ways of sell a car. However, one thing hasn’t changed. It still needs salesmen to sell their product. Most salespeople are knowledgeable, and upfront. However, it is a business. Salesmen are there to make money. Simply as that. Some just do it a little more ethically then others. This leads us, to the fast talking salesmen. You know the type: tall, dark, handsome, and knows it all. The minute you walk on the lot, he’s on you like white on rice.

Equipped with sunglasses, and a cigarette in his mouth, he’s ready to sell you everything but the kitchen sink. With that said, let me start by saying, “get armed”. Buying a car today is a battle. Being prepared will be one of your greatest weapons. Therefore, here are five “Do’s and Don’ts I’ve come up with. First, before you step onto the car lot, know what you want. What are your needs? Know what you like and do not like about your present vehicle. Knowing this ahead of time will help you buy what you want and not what the fast talking salesperson wants you to buy.

I’ve seen it. For example, a customer comes to purchase a four-wheel drive truck. He’s living in Buffalo New York and gets 20 feet of snow at a time. However, instead he leaves with a two-wheel drive truck. The customer is all excited; he loves his new red truck. Can’t wait to show the guys. Bright red, 20-inch chrome rims, and only two hundred and forty bucks a month. What a deal! Unaware that his salesperson was awarded salesmen of the month; for selling the only two-wheel drive truck, the dealership has ever had.

There you go. The saying is correct. There is an ass for every seat! Three weeks down the road the customer is late for work because the bright red truck, he’s only paying two hundred and forty dollars a month for; can’t get out of the driveway! Prioritize. Have an ideal of what’s most important to least important to you. Second, know how you plan to pay for this vehicle. Are you paying cash or will you need to finance. If you are paying cash, know ahead of time how much you have or are willing to spend; and stick with it.

If you need to finance, check out interest rates and terms that are available to you through banks and other financial institutions, such as credit unions, small finance companies, and even family. Car dealers generate a great deal of income from assisting you with financing. The financial institutions pay dealers depending on what interest rate and term they give to the customer. You may, be able to save money doing it yourself. Third, be informed. The price is important to all of us. However, it’s not everything. Before you can successfully negotiate anything, you need to know as much about it as you can.

Use all resources of information available to you. Today we have the optimum weapon, the Internet. Use it. The internet can show all makes and models of vehicles, help find the history of a vehicle, the worth of your trade-in, along with, the vehicle your interested in. Can assist you in being informed of warranties, recalls, and what problems may exist within certain makes and models. Remember, when purchasing a used car, warranty means everything. You don’t want to be stuck with a problem vehicle, and have a “thirty-seconds, thirty-feet” warranty.

In addition, previous purchasing experiences can be helpful. Knowing what kind of treatment and service you received from a particular dealership will let you know weather or not to return. A return customer should also be entitled to receive an additional discount. Loyalty has its advantages. Fourth, take your time. Don’t be an impulse buyer. Never buy the first time on the lot. Take your information, and experience home with you. Discuss it, way all of your options and then make your decision. Fifth and finial thought. Don’t be gullible! Remember, if something is to good to be true it usually is.

My business will be called Usman’ Fish and Chip shop, located at 7 Queensbury Parade. My business will be a sole trader operator as this is the easiest set up. Being a sole trader there are less regulations that I would have to comply with but with serving hot food I will have to obtain permission from the local authority. As with preparing hot food I will have to obtain planning permission for the local authority, as there are certain laws that have to be abided. I have to obtain the A3 planning permission that basically states the laws and regulation on serving and preparing hot food.

I will also have to require insurance for the business as you must have this by law. By law any business that employees people even part time must have insurance. This will provide protection against accidents etc. Starting up formalities for a sole trader are fairly simple as only need to register as self employed, I am responsible for all the costs of the business and the debt. All the decisions will be made by me the owner and I will invest into the business a sum of 5000 and obtain a loan form the bank.

The amount of loan I will require depends on the total cost of the purchases to find that out I will produce a budget and than will find out the amount needed. A major advantage of being a sole trader is all the profits will be retained by me. I will have to employ a worker for the business as managing this project all by my self would be difficult and the highest level of customer would not be offered. In order to keep the costs to a minimum I will put great emphasis on the operational process. My aim will be to provide the highest level of customer service.

By doing so and pricing my goods competitively I will overcome my competition thus increasing sales and making a profit. My investment will hopefully offer excellent returns and I should be able to establish customer loyalty. The above set of results show the population of Harrow in employment and the number of people not working. My research shows that Harrow as a Borough has lower level of unemployment to the London Borough of Brent. This indicates that by myself opening the business in this Borough would be appropriate and most likely to be successful.

By opening the business I am sure that it will run effectively as a large number of people are employed and are mostly likely to eat out as they would be able to afford to. Marker research segmentation, potential customers age: all ages occupation: beginning from school kids to all types income: income range in Edgware on average 15000 Britain and chips (source bbc. co. uk). British are chipper about their national dish. The potato is probably the more versatile than any other vegetable. After extensive research I found out that the British have used the spud and come up with the great British chips.

Facts: Britons eat more than two million tonnes of chips every year. Potatoes are the countries biggest selling vegetable and chips. There is normally a national chip week in some parts of Great Britain on February 16th. Chips shops across the country generate on average turnover of 1500 per week. Source from Daltonsweekly. co. uk. Substantial amounts of taxes are generated from the fish and chip market in the UK. Sales have been rising despite the cod scare around the world. Sales have risen from 6. 8 million t 10. 1 million.

All this indicates that there is need for the product. Chips are consumed on average of 2-3 times a week in Great Britain and chips are the countries most popular dish and all this indicates that the market exists and by me launching would be appropriate. There is stiff competition from major fish and chip chains such as Harry’s Ramsden’s who during thi

s year will open three more shops in north of UK. Market size of the fish and chip market Great Britain In order to find out if demand exists for my service I conducted secondary research on the net on bbc. co. uk and on marketresearch.

com. My results indicated that fish and chips is once again Britain’s most popular dish. Britons eat more than two million tonnes of chips every year. The results also indicated that fish and chip sales in the country have increased even after the cod crisis. Sale of the product have soared form 6. 8 million to 10. 1 million. To find out the general demand for my service I have conducted secondary research that will show the size of the market, the number of competitors and where the competition is. To be able to run a successful business I need to conduct marker research.

I have collected secondary data as it already exists and cheaper to obtain rather than primary as that consumes more time and money. The above source gained from bbc. co. uk/news. The site also showed that chips were the main food people went for after a visit to a pub or after a night of clubbing. Most fish and chip shops are situated near pubs as after drinking the human body needs food so the closest shop they will see is a fish and chip shop and that is one of the reasons most chip shops are situated near pubs. The first piece of secondary data that I have researched is at the web site.

I used the search engine to find out the number of fish and chip shops and other hot foods services in Queensbury and the surrounding areas. In total there are approximately 87 hot food take-aways in Harrow. The hot food market is rapidly growing with more and more hot food take- aways opening. Source from Harrow. gov. ac. uk it stated in the planning options that more and more restaurants and take-way are opening in Harrow. Below is a list of all the competition my shop will be facing and it is within 2-3 miles of my desired location, Mollison Way fish and chips, shop is based at Mollison Way and sells fish and chips, kebabs and also caters a small eating area. Skip Jacks fish and chips, this is one of the major fish and chip shops in London Borough of Harrow. It sells a variety of hot food and has a take-away and a large seating area. The shop is one of the biggest fish and chip shops in the area and is well recognised. Kebabish Original is another major franchise located only two doors away from Skip Jacks. It has a large take-away and a family seating area.

The shop sells many varieties of hot food beginning from kebabs to fried chicken and even curries dishes. Chicken Cottage, the shop is based at Edgware that is only a mile away from my desired location. It sells American fried chicken and also many forms of burgers. The shop is in the heart of Edgware town centre and has a lot of potential customers especially from a school near by. PFC Perfect Fried Chicken, based in Hendon that is only two miles form my location. Again this specific shop deals with fried chicken and American burgers. This shop is too far from my location to be causing major concern.

MacDonalds, based in the town centre of Edgware and serves French fries, lunch meals and also breakfast specials in the morning. Nandos, is a major restaurant dealing with special Mexican food. Its prices are very high compared to all the above listed take-away. The shop caters for eat in and take-away. A typical burger and chip meal can cost around 6. 99. The shop is too far away to cause any competition to my business. The competition is extensive as many competitors. The average fish and chip shop makes a turnover of over 1500 – 2000p. w. There is tremendous potential for my fish and chip shop.

The above list shows that there is demand for this service but I will face large competition and my shop will have to work hard. The average fish and chip shop turnover I found out by visiting Daltons weekly the web site where it stated what the fish and chip shops are making in Harrow. The competition will not have a major effect on my business as the competition is at a greater distance and if someone were hungry they would buy the food from the closest shop. The reputation on the other hand might play a small part as my shop will be new and not many people will know about it so people might stick to what they know.

As being second largest supermarket in UK, Asda has nearly 143,125 employees. (Asda, 20 November 2007) As we can see from overview of both organizations, we can figure out that these both organizations are facing the same environment factors which can affect them for formulation of strategy. So it will be necessary to understand such factors in such business environment which plays a vital role.

The Diversified Operating Business Environment As it can be said that in the world of globalization where every organization wants to be superior in race, factors like consumers needs, changes in consumers expectation, political, economical, socio-cultural, technological, legal, environment, and so on, are influencing that an organization has to be aware of them while building their scenario to apply strategies.

Today “Grocery Market” has not been jus limited within selling “Food Products”, but in the expansion of market it is now having a broader idea. There is not any concept such as “luxury market” or “discounted market” occurs, while one can get the both variety of products under one roof, according to their necessity. Today, to buy different variety of household products one has not to spend a whole day shopping in town; instead it can be bought, from one destination, whether it’s a pet food, finest range of wine or a show piece. And as market is highly competitive, one can shift one market to other if service of one market been unsatisfactory and other one providing better.

As other factor affecting a business would be said environmental and social responsibility. By providing eco-friendly products. By investing in products such as launching recyclable packing, organic food, etc. as we can see most of organizations trying to provide food containing less salt or sugar. However, today so many alternatives are available and it’s easier to switch from one market to another for a customer an organization must be very much concentrated on giving the best “consumer service”. Today life is getting busier and busier where customer requires a quicker service. To fulfill this expectation an organization has to focus upon building the scenario of providing customers with better and faster service by inventing and installing new technologies, which can be a major factor affecting a business. As well as easy access to the destination has a great impact on a business where providing or maintaining transport facilities, parking facilities etc.

So in this diversification as its been seen that organizations stepping in sectors which are completely different then their basics for instance supermarket are growing on non-food products such as “Fred &Florence” at Tesco, “George” at Asda and in electronics, home &leisure etc. On the other side, non-food retailers such as WHSmith, Boots have started to put their steps in small variety of food, which make the supermarket think about to making their strategies accordingly to face such major changes, where no-wonder any sudden change can occur.(Competition commission, 20 November 07)

If we try to fit Tesco and Asda in SWOT it can be said that Tesco has the biggest strength of being the largest and the most popular supermarket in UK, Where Asda has strength to be known as the part of the family of worlds largest supermarket Wal-Mart. Tesco with a brand name, expanding its market share and being the up most name, it is ruling the UK supermarket industry since 1999, where Asda is expanding with cheaper price. Have the strength of expanding within, non-food market such as clothing, e-grocery international growth etc. the side which are not strength can be seen as weakness such as poor quality for product of Asda.

Strength can be the opportunity by expanding through all over UK as well as internationally too, expansion in non – food market, new technologies. The biggest threat for these supermarkets is each other, by competing and applying aggressive strategies they can create threat to each other. Tesco apply the strategy in four different sectors: UK core business, non-food, retailing services, international market where they want to provide, 1, making customer shopping trip as easy as possible, 2. Reduce prices, 3. Providing easy access by different sizes of stores, 4. Bringing value and simplicity to market.

Where Asda want to make shopping easy for everyone by making products affordable and in reach of even common human beings, Aggressive Strategies Tesco and Asda are the leading supermarkets in UK, and having an aggressive war to be superior, where they applying aggressive strategy by cutting down price, n being successful to raise their market share. Asda wants to make its service affordable to every one where Tesco want to provide every little thing which can be proven help. “Goldman Sach’s latest pricing study from 12 January confirms Asda is already “turning up the heat on pricing in 2006” by being the most aggressive price cutter so far.”(Food and Drink, 20 November 2007)

“The supermarket chain, which accounts for 8 spent on the UK high street, is now the largest online grocer and takes around 30,000 orders per day which are collectively worth 2.5m. (Business Week, 20 November 2007) Seems like today these two supermarket wants to jus fight on the basis of price war by applying the aggressive strategy against each other. The reason behind that is the Asda is part of the massive Wal-Mart family and because of the huge brand name and reputation its can have the bargain power for suppliers which is creating a threat to Tesco.

Conclusion

“Supermarkets are selling beer at a cheaper price than water, fuelling concern over their role in Britain’s binge-drinking crisis. Despite repeated public health warnings, Tesco, Sainsbury’s and Asda now offer lager at just 22p a can – less per liter than their own brand-mineral water and cola, and cheap enough to allow someone to get drunk for just 1.” (This is London, 20 November 2007) Low prices indirect harming the society, where for sake of quality they are trying to maximize profit and competitive by quantity.

Tesco and Asda are huge brand names, should be careful designing strategies as they set examples to retailers behind. Should create the strategies which are not harmful and completive to fight against rivalry, not jus focusing upon superiority. After all research an effort I came to conclusion that by using their swot analysis they should constant rate on other strategy than jus aggressive strategy. In some manners they apply different strategies but some situation these supermarkets facing are similar so they are implementing similar strategies, where they should concentrate on competing on basic which is not harmful to general public as well as to their own reputation.

When it comes to business decisions, there are many ways to analysis the financial status of a firm. What guidelines determine profit margin? Who uses these guidelines? How is profit used to analysis a firm and its business decisions? This paper will discuss two terms that are used to define profit: accounting profit and economic profit. The first term is called accounting profit which uses the equa-tion.

The second term for profit is economic profit. Economic profit adds another element to the equation when determining profit. It is as follows.

Both Economic and accounting profit have their place in analysis of a firm’s business activity. To have a clearer understanding of accounting profit and economic profit, a few terms need to be de-fined. According to the text, Economics Today- the micro view, explicit costs are defined as the ex-penses that business managers must take account of because they must actually be paid out by the firm. (p451, Leroy) The second term from the same text is implicit costs which is defined as expens-es that managers do not have to pay out of pocket. (p451, Leroy)

Both economic and accounting profits have their place in the analysis of the firm’s activities. “Profitability is a term of economic efficiency. Mathematically, it is relative index- a fraction with profit as the numerator and generating profit flows or assets as denominator.” (3) A closer look at accounting profits shows that it is mainly a mathematical process following firm’s cash flow. The ex-plicit cost are explained as the expenses that a firm must incur when operating. These expenses in-clude cost of raw material, wages, capital investments in machinery and property, office supplies, and other items that must be paid cash for. The reporting of explicit costs is required to finalize the formula for ac-counting profit. Cash flow is determined by revenue generating activities that offset the expenses of explicit costs to create the activities.

For example, a business selling shoes will have explicit costs from buying the goods and running a business site. The shoes are bought from a wholesale distribu-tor and sold at a retail price. The revenue is generated from the sales of the shoes. The net profit for the shoe store (firm) would be the retail price minus the wholesale price (revenue minus explicit costs). The net profit from the sale of goods is used to pay the business expenses such as rent, utilities, wages, and insurance which reapplies the accounting equation after the net profit is determined.

The whole story is not being told when looking at the accounting profit. The implicit costs of the eco-nomic profit equation take into consideration the opportunity costs that cannot be reported in the ac-counting equation. Looking at the first part of the above quote, “profitability is a term of economic efficiency.” the concern with implicit costs comes into consideration. The opportunity costs are the activities that the shoe sales man would be otherwise doing if not running a shoe store. What would have the shoe sales man have done if he wasn’t selling shoes? What kind of income would he had made if he was doing something else?

Let’s say, he was a doctor who got burnt out from a high patient load and went back to work at his family business. As a doctor he could make $10,000 a week and as a shoes sales man, he makes a store profit of $4000 a week. The economic profit margin would be a -$6,000.00 using the equation: economic profit =revenue- explicit costs and implicit costs. The doctor/ shoes sales man must con-sider the economic profit as to how long he wants to continue in the shoe business. The outside fac-tors that an accounting profit cannot look at are affecting the value of the economic profit. The deci-sion to continue as a shoes sales man will be based on factors that are outside the explicit costs of running a firm.

When it comes to business decisions, there are many ways to analysis the profit status of a firm ) business). The guidelines for the accounting profit follow an equation that recognizes profit = reve-nue minus explicit costs as a mathematical formula for cash flow management. The guideline for economic profit add the implicit costs to the equation so that non cash flow concerns can be consid-ered. With the equation, economic profit = revenue minus explicit costs and implicit costs, there is an external influence of potential revenue generating activities that represent the implicit costs (oppor-tunity costs.) The main difference between accounting profit and economic profit is the use of im-plicit costs in the economic profit equation. The ability to step back from a business and consider the impact of other activities will give a better review of whether to continue the firm’s activity or not when examining the profits of a firm.

Bibliography

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