Analysing Current And Future Strategies For Pizza Express By Using SAF Model

this report, the evaluation of current and future strategy for Pizza Express will be done on the basis of strategic analysis done in part one.  The future strategy will be evaluated with the help of SAF model, its importance for Pizza Express will be discussed and its recommendations will be given for implementation of strategy. It is highly useful for business concerns to formulate and implement a strategy that is effective and helpful in attaining business objectives. On the basis of strategic analysis done for Pizza Express in the previous task, one current and one future strategy will be evaluated by using SAF model. Currently, Pizza Express is focusing on cost leadership strategy. Pizza Express is not getting successful because of economies of scale with respect to promotion, research, marketing but it is focusing on cost leadership, knowledge as well as experience (Aaker, 2008). There are different types of initiatives taken by the management of Pizza Express for saving the cost and reducing the expenses. Instead of different issues present in the external environment, Pizza Express has maintained a strong strategic position in the market with the help of its strengths. Currently, Pizza Express is reducing the cost of its products and offering different products that are average-priced. There are different models that can be used to evaluate business strategies. The current strategy of Pizza Express which is “Cost leadership strategy” will be evaluated with the help of SAF model. According to Anderson et al., (2009) SAF model consists of three major components on the basis of which, business strategy can be evaluated. These components include suitability, acceptability and feasibility (discussed in appendix). The current strategy adopted by Pizza Express is quite suitable for company because it has different types of strengths including efficient workforce, friendly business environment, advanced technology. With the help of these strengths, Pizza Express is able to reduce its costs. Cost leadership strategy is acceptable for Pizza Express because the risk attached with it is low and is acceptable by the stakeholders including employees, government, suppliers and many others. As discussed before, the employees at Pizza Express are focusing on research and development to find out ways for cost reduction. That is why, cost leadership strategy is quite acceptable. There are four generic types of strategies that can be focused by businesses (mentioned in appendix). The current strategy adopted by Pizza Express is highly feasible because company has both tangible and intangible resources/assets. For example, the human resource of Pizza Express is quite efficient and is enabling the company to get benefit from cost leadership strategy. Moreover, the profitability, advanced technology, machinery and suppliers play an important role for Pizza Express to focus on cost leadership strategy. Differentiation is considered to be a potential strategy for Pizza Express. According to Jain and Haley (2009), differentiation includes making the products or services unique and highly attractive as compared with the rival brands. But this strategy can be effective for Pizza Express if it focuses on good research, innovation as well as development processes. Differentiation strategy can be suitable for Pizza Express if it focuses on providing high quality food products to the customers by using skills and capabilities of its workforce and by focusing on innovation. Differentiation strategy will be acceptable for Pizza Express because it will improve organisational productivity, profits and shareholders’ value. However, it is important to discuss that different costs can be incurred to adopt differentiation strategy and can have an impact on feasibility. But, Pizza Express is a profitable firm with efficient labour force and resources, that is why, it can successfully differentiate itself from others.

1.Identifying and reviewing future strategy for Pizza Express

The future strategy that should be focused by Pizza Express is differentiation strategy. Pizza Express can focus on product differentiation term of price, quality, taste, quantity of product. It is highly recommended for Pizza Express to differentiate itself from competitors by providing healthy and green products to customers. It was stated by Kotler and Armstrong (2010) that the customers in UK are becoming diet conscious and focusing on green and organic food rather than manufactured or processed food. Pizza Express can differentiate itself and get competitive edge over rivalry by positioning itself as healthy and green restaurant. Differentiation strategy will be highly useful for Pizza Express. It was mentioned by Kotler and Keller (2009), that differentiation leads towards high customer loyalty, huge profitability as well as enables the company to get competitive edge over rivalry by producing unique products. Murphy (2010) stated that product differentiation can lessen the power of customer because no equivalent substitutes are present in the market. This indicates that Pizza Express can attract the customers towards its differentiated products and increase its profitability. In the view of Oliver (2014) value added distinctiveness is added in the product through differentiation and companies can charge premium prices for the products because of no other alternative present for customers in the market. Pizza Express can differentiate its product by producing organic food items.  It was mentioned by Kotler and Keller (2009) that differentiation strategy can have negative impact on business concerns because the supervisors are assigned huge number of administrative duties due to which they cannot pay attention towards customer relationship management. The response time for customers is slowed down if the managers remain too busy in implementing differentiation strategy.

It was mentioned by Raska et al., (2015) that if the consumers are given unique product or service with a good experience then they become highly satisfied and focus on repeat purchase. It will be quite easy for Pizza Express to focus on product differentiation strategy because it has creative workforce, innovative culture, high workers’ commitment towards attaining organisational goals, emphasis on R&D as well as highly creative product development team members including chefs and cooks. It is important to keep in mind by the management of Pizza Express that their product differentiation strategy can be copied by competitors and it can lose competitive edge over rivalry. According to Shepherd et al., (2005) the companies paying attention towards differentiation should be capable to communicate this strategy to customers and general public. In addition, this can be done thorough skilled and efficient sales and marketing teams. This can be done by Pizza Express by focusing on integrated communication tools and through effective advertisement of differentiated products.

2.Recommendations for implementation of product differentiation strategy at Pizza Express

It is recommended for Pizza Express to focus on product differentiation strategy and to provide healthy, green and organic food to the customers. According to Sherlerkar and Gordon (2010), it is not an easy task for the management of business concerns to effectively implement differentiation strategy because managers have to handle various factors. Different types of models and approaches can be used by management of Pizza Express to implement product differentiation strategy. According to Wheelen and Hunger (2011), force field analysis (as shown in appendix) is a process through which companies can successfully implement change by focusing on different factors including processes, attitude, resources, people, values, needs and traditions. These factors can support or resist change inside the company. Pizza Express is in a need to change its strategy and implement differentiation strategy. Resources, people (workforce) as well as cultural values and social factors can lead towards successful implementation of product differentiation strategy. It is recommended for Pizza Express:

  1. Making differentiating teams

The management of Pizza Express should make team consisting of members from different departments to implement differentiation strategy. According to Vanhonacker et al., (2013) companies should select innovative and creative workers for designing the procedures for implementing the change. Pizza Express should make a team by adding members from marketing, HR, R&D as well as finance department to find out ways for providing healthy, organic and green food items to customers. Solely a manager of Pizza Express cannot implement product differentiation strategy.

  1. Understanding the customers’ needs regarding taste

It is highly recommended for Pizza Express to understand the needs and requirements of customers before starting the production. According to Wee et al., (2014) customers’ needs regarding the product or service can be understood by marketers by focusing on surveys and researches. Pizza Express should produce differentiated products as per needs of customers regarding taste, appearance, benefits, calories, energy and nutritional needs.

  1. Reducing the negative forces

It was stated by Oliver (2014) that different negative forces are faced by companies that focus on change or implementation of new business strategy. These forces can be negative attitude of workforce, incapability of workforce to perform new roles, resistance of workers towards change and lack of resources. That is why, it is highly recommended for Pizza Express to effectively manage the workforce and their resistance by telling them importance of new strategy. The management should provide knowledge about green, healthy and organic foods and their importance for consumers. Moreover, monetary benefits that will be attained by Pizza Express in term of high sales and profitability should also be told to the workforce resisting change in strategy.

3.Conclusion

It can be concluded that product differentiation strategy will be highly useful for Pizza Express. By focusing on green, organic and healthy food production, Pizza Express can attract huge customer force that will lead towards high profitability. However, Pizza Express can face various hurdles and barriers in implementing the differentiation strategy but that can be overcome through effective management skills.

References

Aaker, D.A. (2008). Strategic market management. London: John Wiley & Sons.

Anderson, J.C., Narus, J.A. and Narayandas, D. (2009) Business market management: Understanding, creating, and delivering value. London: Prentice Hall

Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. London:  John Wiley & Sons.

Jain, S.C. and Haley, G.T. (2009) Marketing planning and strategy. New York: Cincinnati South-Western Publishing Company

Kotler, P. and Armstrong, G. (2010) Principles of marketing. London: Pearson education.

Kotler, P. and Keller, K.L. (2009) A framework for marketing management. New Jersey: Prentice Hall.

Murphy, P.E.  (2010) Marketing ethics. London: Prentice Hall

Oliver, R.L. (2014) Satisfaction: A behavioral perspective on the consumer. London: Routledge.

Raska, D., Sprott, D.E., Joireman, J. and Spangenberg, E.R. (2015) Marketing in Transition: Scarcity, Globalism, & Sustainability. London: Springer International Publishing.

Shepherd, R., Magnusson, M. and Sjödén, P.O. (2005) Determinants of consumer behavior related to organic foods. AMBIO: A Journal of the Human Environment, Vol. 34, No.4, pp.352-359.

Solomon, M.R. (2014) Consumer behavior: Buying, having, and being. NJ: prentice Hall.

Sherlekar, S.A. and Gordon, E. (2010) Marketing management. London: Himalaya Publishing House.

Vanhonacker, F., Van Loo, E.J., Gellynck, X. and Verbeke, W. (2013). Flemish consumer attitudes towards more sustainable food choices. Appetite, Vol.62, No. 2, pp.7-16.

Wheelen, T.L. and Hunger, J.D. (2011) Concepts in strategic management and business policy. New Delhi: Pearson Education India.

Wee, C.S., Ariff, M.S.B.M., Zakuan, N., Tajudin, M.N.M., Ismail, K. and Ishak, N. (2014). Consumers perception, purchase intention and actual purchase behavior of organic food products. Review of Integrative Business and Economics Research, Vol. 3, No. 2, p.378.

 

Appendices

  1. SAF model

This model contains three components. The suitability tells the management that either the strategic option is suitable for firm on the basis of its strategic position or not. Acceptability factors explains that either the strategic option is consistent with the firm's aims and either they are acceptable to the stakeholders or not. In addition, feasibility evaluates that either the organisation has the resources it needs to carry out the strategic option.

  1. Porter’s four generic strategy model
  1. Field forces model

 


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