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2004 - Cary moves to The Woodlands

2005 to 2006 – GM of HEB/Central market. 2001 to 2005 – Fox and Obel CEO. 1987 – Graduates from The Culinary Institute of America. 1990 – Graduates from Cornell University. 11/4/08 - Store Opens. 2004 - Cary moves to The Woodlands. Introduction.

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2004 - Cary moves to The Woodlands

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  1. 2005 to 2006 – GM of HEB/Central market 2001 to 2005 – Fox and Obel CEO 1987 – Graduates from The Culinary Institute of America 1990 – Graduates from Cornell University 11/4/08 - Store Opens 2004 - Cary moves to The Woodlands Introduction Team 10: Joe Ablaza, Oana Botusan, Brody Jungers, Eric Le Baron, Aaron Lindquist Product - Specialty Market, Bistro, Cooking School and Catering Focus Target Market - Upper Middle Class with Disposable Income

  2. Executive Summary • Mature Consolidating Industry • Increasing Societal Concerns • Strong Competitive Forces • Increasing Price Value • Moderately Attractive Industry • Broad-Differentiation Strategy • Blocking Defensive and End-Run Offensive Strategies • Specialized Knowledge and Expertise of Staff • Moderate Financial Strength • Related Diversification through Internal Start-up

  3. H&H HIGH WF CM K MED. LOW Both Store Front Internet Strategic Group Map R Price & Quality Key H&H – Hubbell & Hudson WF – Whole Foods Channels of Distribution CM – Central Market K – Kroger R – Randall’s

  4. Industry dominate economic characteristics • Rapidly consolidating industry • Several large rival companies • Moderate to high economies of scale • Low to moderate differentiation

  5. Driving Forces of Change • Increased demand by an expanding segment of consumer for quality products • Increased interest in healthy, organic products = new customers/competitors • Recommendation: build brand loyalty • Increasing market growth characterized by richer consumers • Rise in demand = competition • Recommendation: initiate end-run offensive • Declining economy in light of recession • Less income to dispose = decreasing sales • Recommendation: innovative promotions

  6. Five Competitive Forces • 4 Rivalry – Strong • Impact: Aggressive Marketing by Competitors • Recommendation: Focus on Value of Superior Quality and Services • 4 Threat of New Entrants – Strong • Impact: Dilutes Market Share • Recommendation: Focus on Product Differentiation • 5 Substitute Products – Strong • Impact: Threatens future growth • Recommendation: Educate on Value of Superior Quality and Additional Services • 4 Supplier Bargaining Power – Strong • Impact: Threat to Profitability Due to Higher Costs • Recommendation: Strengthen Established Supplier Alliances • 3Buyer Bargaining Power – Moderate • Impact: Potential Customer Preference Changes • Recommendation: Increase brand loyalty by Focus on Value of Quality • 4.0 = High – Overall Competitive Pressure

  7. Key Success Factors • Sufficient financial strength to management expenses (-) • Increase financial investors • Increase supplier relations to maintain quality product (+) • Increase supplier relations • Increase product differentiation to meet growing demands (+) • Expand products and services • Increase competitive quality to maintain market share (+) • Continue competitive pressures • Increase diverse distribution to maintain profitability (-) • Utilize internet distribution (+) = Integrated into company strategy (-) = not integrated into company strategy

  8. Industry Attractiveness Analysis Impact • Projected Growth Rate: High • Competitive Forces: 4.o High Pressure = Offensive/Defensive Strategy • Business Risk: Consolidating Industry = Moderate Risk • Industry Profitability: Moderate Company Profit Margins • Consumer Trends: Product Offerings Opportunities • Expertise: Highly Knowledgeable Employees • Seasonal Differentiation: Little Seasonal Differentiation • Industry Regulations: Extensive Government Agency Licensing • Resource Requirements: Moderate Profit Margin = Constrained Resources • # = MIS Resource Allocation Priority

  9. Broad Differentiation Strategy CompanyStrategyAnalysis • Product and Service Differentiation • Full service market • On-site bistro & catering • Superior quality • Responsive customer Service • Supply Chain Management • Locally grown premium organic products • In-house branding • Market Development • Consumer Education - Specialty foods via Viking Cooking School

  10. SWOT Analysis (Broad Differentiation Strategy) Internal External Strengths Weaknesses Opportunities Threats • Core Competencies: • Expertise = KSF * • Supplier Relations = KSF * • Product Differentiation = KSF * • Reputation • Customer Service Amenities • Single Market Presence • Quality Control Methods • Low Employee Efficiency • Distribution Method • New Rivals Entering Market • Lower Priced Substitutes • Shift in Buyer Preferences • Limited Market Size • Expand into Additional Markets • Supplier Strategic Alliances • Expand H&H Branding * = Integrated into company strategy

  11. Offensive Strategy Central Market -3.5-:1 End-Run Strategy More Distribution Methods Defensive Strategy Whole Foods – 1:7 Blocking Strategy Build Name Recognition

  12. Culture Strategy Structural Analysis • Broad Differentiation Strategy • Specialty products and services • Strong, High Performance Culture • Principles established and executed • Supportive Culture • Employee support of principles and goals • Culture Changing Strategy • Substantive - reward system • Symbolic - lead by example

  13. Financial Analysis • Moderate financial strength • Relatively new to the segment • Conquer and hold strategy • Offensive strategy: End Run (Central Market) • New location in same geographic area • Defensive strategy: Blocking (Whole Foods, Inc.) • 15 mile radius marketing campaign

  14. Corporate Strategy Recommendation Analysis Related Diversification Strategy Internal Start-up • Sustain Hubbell & Hudson’s Strategy • Maximize Strategic Fits • Gain brand recognition • Increase synergy with Black Walnut Cafe and H&H Urban Express

  15. HIGH Industry Growth Rate LOW HIGH LOW Relative Market Share BCG Analysis - Internal Startup Hubbell & Hudson Black Walnut Cafe H&H Urban Express Priority Cash Trap Investment

  16. P S P S P S Black Walnut Cafe High Med. Industry Attractiveness Low Med. High Low CSAM/CPAM GE/MCKINSEY - INTERNAL START-UP Hubbell & Hudson H&H Urban Express

  17. HIGH P P P S S S Black Walnut Cafe High Med. Industry Attractiveness Industry Growth Rate Low LOW Med. High Low LOW HIGH CSAM/CPAM Relative Market Share COMBINED MATRIX ANALYSIS ≈ Hubbell & Hudson H&H Urban Express

  18. Strategic Issues Analysis Long-Term Future Short-Term Future How do we maintain quality control during expansion? How do we expand geographically? How do we broaden our target market? How do we increase our capital investment? How do we increase our market share? How do we block competitors from gaining market share?

  19. Action Step Analysis Short Term Long Term Grow unexploited geographic markets Increase distribution with internet sales Diversify into health industry segment Utilize marketing to increase market share Increase brand image through customized service Increase product differentiation through focused product lines

  20. Conclusion Implement Decline • Focused Marketing • Broad Differentiation Strategy • Collaborative Product Development • Move to Diversify Corporation • Direct Competition • Status Quo • Product Isolation • Unprotected Downside

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