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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 • High-Performing Supportive Culture • Moderate Financial Strength • Related Diversification through Internal Start-up

  3. HIGH H&H WF CM MED. K LOW MED HIGH LOW Strategic Group Map Price & Quality Key H&H – Hubble and Hudson WF – Whole Foods Channels of Distribution CM – Central Market K – Kroger

  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 • 4 Buyer Bargaining Power – Moderate • Impact: Potential Customer Preference Changes • Recommendation: Increase brand loyalty by Focus on Value of Quality • 4.2 = 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 employee efficiency to maintain profitability (-) • Job redesign and training (+) = 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. Focus 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 = KSF • 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. Defense Marketing Strategy - 1:7 Build Name Recognition Offense End-Run Strategy - 3.5:1 More Distribution Methods

  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 Hubble and Hudson Black Walnut Cafe H&H Urban Express Priority Cash Trap Investment

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

  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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