Strategic management is a procedure of continuous planning, controlling, monitoring, analysing the overall necessities of a business company that would aid in attaining basic goals and objectives in specific time frame (Hill, Jones and Schilling, 2014). The present report is based upon Papa John’s International Inc. which is the third largest pizza chain in the world. This owes largely to the strategy adopted by company to ensure its sustainability in marketplace for a long duration of time. Over the years, this organisation has largely focussed upon its quality quotient, marketing campaigns, excellent customer service and accessible ordering system, franchising and training and development of workforce to gain a high stake in market.
This report is going to include the strategic management literature by outlining the concept of strategy and strategic perspective from business, functional and operational levels. Also, it gains an insight into the strategic process adopted by company along with the establishment of strategic design. Besides this, three assessment models, Stakeholder analysis, value-chain, PESTLE and SWOT analysis have been included to study various aspects related to company and business environment. Lastly, the key challenges faced by enterprise while launching the strategy have been included.
2.1 Mission, values, objectives and strategy for business with reference to the business, functional and operational strategies
Papa John's International is one of the leading pizza chains of the world. They are the third largest chain after Domino's and Pizza Hut. Their major objective is to develop such a brand image and position in market and pizza industry that customers are intended to remain loyal to the enterprise for a long period of time.
“To create superior brand loyalty by providing exceptional customer and community service”
“To become a leader in Pizza industry by making high quality products accessible to all”
- Company's main objective is to make its quality products reach a wide range of audience such that it can gain a strategic advantage over its rivals.
- Another objective of Papa John's is to ensure exceptional customer service so as to enhance the loyalty of consumers towards the brand.
- The last objective is to tap the advantage of its franchisee business model to gain high share in market and increase its profitability.
To stay aligned with vision and mission of company, Papa John's has made a global strategy through which enterprise is planning to capture the attention of a large number of people across the world. This strategy comprises of 5 key areas, namely, menu offerings of exceptional quality, training and development of workforce, effective and optimum operating systems, extensive marketing programs and a well established franchise system (Taylor and et. al., 2015). All these aspects are explained in detail below:-
High Quality Menu:
Papa John's is emphasizing upon improving the quality quotient of menu so as to gain the trust of large number of people who visit the stores daily. They have planned to execute this by offering a wide variety of pizzas along with complementary products and beverages of exceptionally high quality so that people have many options to choose from. The enterprise ensures that all its products are made in hygienic and fresh manner and prepared using fresh dough. All the ingredients used within products are of high quality and no additives are added.
Efficient Operating System:
Papa John’s is focussing upon lowering the operating cost, This is being done by improving the quality of products and promoting exceptional service for customers by way of their operational and distribution systems. The layout of restaurant is aligned with this strategy and delivery areas are separately made. The domestic outlets take benefit of bulk purchase of materials and provide economy of scale for production of fresh dough.
Training and Development of Staff:
Papa John's recognise the importance of providing training and ensuring development of employees. They conduct regular training sessions for workforce and offer lucrative incentive schemes for employees to encourage them for working in an effective manner (Oh, Yang and Lee, 2012). These sessions are conducted for corporate employees and offered to franchisees at domestic and international training locations.
This enterprise makes use of extensive marketing campaigns and programmes to create awareness about the brand amongst people. They focus on domestic as well as local marketing strategy. Its domestic marketing includes advertisement via television, mail, website and print media. Programmes are arranged at outlets to gain attention of customers. Also, activities are organised in schools, colleges, sports venues and other organisations. Flyers, sponsoring events, sports competition etc. are some other ways.
Papa John’s is making use of franchising model to gain strategic advantage in global market. This is being done by inviting experienced operators, providing them assistance for business expansion and growth and reviewing their compliance with the standards set by Papa John’s at regular intervals. For ensuring high quality and consistent food offerings across all outlets, Papa John's makes every domestic franchise buy dough, tomato sauce and other essential ingredients only from from their QC centres. This company provides all the required resources to its franchisees to ensure that quality and consistency of products is not sacrificed.
2.2 Establish the strategic design of any large business based on planned and emergent strategic actions
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Papa John's has decided to implement a global strategy in order to gain a competitive edge in marketplace. To duly formulate this, company has decided to focus upon quality of food products, training and welfare of staff, operating systems, marketing campaigns and its franchising model. The next thing to be considered by Papa John's is implementation of the strategy. The execution of strategy takes place in three different areas as described below:-
This is largely concerned with selection of target market and target audience. In this regards, Papa John's has analysed that the product in which company specialises is Pizza which mostly captures the attention of kids and younger generation. This has been strategically done to tap the advantage of influential behaviour of people belonging to this age group (Ungson and Wong, 2014). Also, it is targetting global market as company has outlets spread across many countries.
This is basically related to the strategy adopted by company to gain a competitive advantage in market. In this regards, Papa John's has opted to focus upon making its franchising system strong enough to gain strategic edge in market. Also, enterprise has given importance to quality quotient for this. This is done with an aim to increase sales volume and overall profitability of organisation.
Functional Level: This is concerned with implementation of strategy adopted by company across all the functions of organisation. For this, Papa John's is devoting its attention towards use of efficient operating system and high quality ingredients and dough for making pizza. The strategy is implemented within all functions like operations, finance, product development, marketing and customer service.
2.3 Establishment of the strategic process of a large firm
Post the evaluation of areas of strategy formulation, the next biggest concern of Papa John's is to develop a strategic process through which implementation can be done (Marler and Fisher, 2013). While devising a strategy for gaining competitive advantage within global market by making use of extensive marketing channels and franchising, managers of Papa John's are following a strategic process. This process has three steps as explained below:-
This is concerned with the planning done by company in association with strategy. In this context, Papa John's is making use of franchising model to establish a brand image across global market. The strategy has been devised with an aim to become a leader in Pizza industry. Also, the company is emphasizing upon imparting training to employees and franchisee at regular intervals so that they remain aligned with the standards set by Papa John's. This is being done to largely assist enterprise in gaining a high share in market and enhancing the loyalty of customers by maintaining high quality at all outlets.
This is generally associated with the planning done related to the current situation of market (Eden and Ackermann, 2013). As evaluated, Papa John's is planning to tap the advantage of franchising model to enter and gain a high share in marketplace. This is being done with the use of extensive marketing campaigns and advertisement through print media, television, radio, flyers, sponsorship programmes etc. This will result in increased global sales of company along with establishment of positive brand image in Pizza industry.
Strategy as planned emergence:
This is basically an action plan that is made in order to deal with the challenges faced by company. In present context, Papa John's is planning to enter into various new markets by making use of franchising model. It can be observed that this involves a lot of risks such as huge costs associated, excessive royalty fees and regulatory procedures. Thus, it is required that company makes sure that all the laws and guidelines are being followed while entering new markets. Also, company will keep a backup plan to deal with any hurdles or challenges while establishing a strong franchisee system.
4.1 Strategic management approach adopted by Papa John's
In order to develop new strategic approach, it is essential for company to analyse its previous approaches, which have been used for running business successfully. In this regard, McKinsey 7S framework illustrates the ways by which Papa John's has aligned its approaches to increase effectiveness of business operations. It incudes Strategy, Structure, System which represents hard elements and shared values, style, skills and staff which are considered as soft elements (Palmer, Dunford and Akin, 2016). Here, shared values are positioned at core of Papa John's strategy that guide employee behaviour with implications in their performance.
As Papa John's majorly faces threat of new entrants across global market of Pizza, therefore, from last three years, it focuses more on becoming cost leader at marketplace. For this process, to reduce bargaining power, it has made effective relationship mostly with British Suppliers which can supply high quality materials to franchisees.
Instead of using franchising model for increasing its sales, Papa John's had previously made modifications in the variety of pizza by bringing alterations in the toppings and other complementary products and beverages. For this process, it concerns mainly on enhancing skills and knowledge of human resource by giving them training by wUKay of various sessions and welfare programmes.
The organisational culture of Papa John's is ascertained to be flat system where information can easily be provided to any employee within the entity at any level or department in a timely manner.
Skills: In order to become cost leader, Papa John's has provided effective training to its employees. This has helped in getting their contribution for reducing cost of production and providing high-quality products consistently at all the outlets within global market.Staff: Papa John's focuses upon welfare of employees by imparting them training at regular intervals so that they can make high quality pizza by using organic ingredients.
This company follows delegative style of leadership where leaders and managers within Papa John's pass on the tasks of less importance to subordinates.For more info visit here assinment help
Shared Values: Company believes in making high quality products accessible to maximum people across the globe so as to gain high stake in market (Minneci and et. al., 2014). Also, it focuses upon maintaining exceptional customer service delivery.
4.2 Key challenges from the review of case within research project
According to the review of case within research project, it has been analysed that while entering into new markets by making use of franchising model, Papa John's may face certain key challenges. These challenges are ascertained and briefly described below:-
Lack of fund:
While opening new stores in global market by tapping advantage of franchising model, company may face financial hurdles. Franchising model requires huge costs as well as royalty fees which leads to increased cost while implementation of strategy. This implies that in case the franchising model is not successful in yielding the desired results, there will be wastage of funds. This reflects that funds are the first and foremost challenge that the enterprise will face while executing the franchising strategy to enter new markets with a view to gain high share in markets (Storbacka, 2012).
Lack of adequate planning: To successfully execute the plan of entering into new markets with the use of franchising model, proper and systematic planning is required to be done in order to ensure the success of strategy across global market. In case the plan to execute strategy of company fails or is not feasible with the market scenario of new location where it enters, it can pose risk to the stake of company in marketplace as company is already spending a huge sum on doing enforcing franchising (Marra, Ho and Edwards, 2012).
From the above report, it has been concluded that strategic management is an essential aspect of execution of any business plan. Also, the marketing environment of new locations where business plans to expand by making use of franchising model and emphasizing upon its quality quotient, has been evaluated with the help of PESTLE analysis. In addition to this, Porter's Five Force model has been used to evaluate the rivalry within Pizza industry. Besides this, it has been observed that company has made a strategic design and strategic process in order to increase its stake in market and enhance the loyalty of customers. Furthermore, it has been assessed that company needs to analyse the probable challenges in order to successfully execute the new business strategy. For more info you can visit here for your assignment Help writing.