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ACADEMY OF ECONOMIC STUDIES

FACULTY OF BUSINESS ADMINISTRATION IN FOREIGN LANGUAGES


ENGLISH SECTION

Business strategies
~ ANGST ~
PROF. COORDINATOR: Irina Purcarea
GROUP 137

Abstract: In my project below I have written about Angst Romania to provide to other people the necessary information about how this company functions. I have analyzed the business, the market and the managerial functions in order to obtain a complete description of the company in terms of management.

Introduction Angst is a Romanian-Swiss company which produces meat products, providing the consumers high quality specialties. All Angst products are made taking into account the care for a healthy alimentation. The factory makes pork, beef, chicken and mutton products. The improved recipes are mostly traditional, but also international for the big specific restaurants, embassies. The products made by Angst arrive in almost all regions of the country, having regard to the fact that they are sold and with the help of the big store chains, some of them being spread at a national level and the distribution of products is more intensive in the south part of the country (South, South-East, South-West). The address of the registered office of Angst group is 298 Bucuresti-Targoviste Driveway, Buftea-Ilfov. At this address the administrative activity as well as the effective production and storage activity are carried out. Angst Romania Group includes the meat products factory in Buftea, a production unit for raw-dry products. Salsi Sinaia and a dairy factory Swissland Mereni. Besides the meat products, Angst provides also other products in order to satisfy the requirements of the customers. In Angst stores you will find a great variety of food and nonfood products, focusing on quality and permanent diversification, creating a realistic connection with the needs of the market. At present Angst has one of the most famous chain stores, 24 stores from which 20 in Bucharest, 2 in Buftea, one in Otopeni and one in Sinaia. The company was set up in October 1991. It is a Romanian-Swiss investment, the Swiss party being represented by Mr. Urs Angst and the Romanian parti by Mr. Sorin Dumitru Minea. In 2010 SorinMinea takes over the majority shareholding of ANGST RO. Angst is a medium company judging by its capital and number of workers and has as objects of activity the production and processing of meat as well as the marketing of foodstuff.

Angst retail

Angst believes in the success of the proximity store which perfectly combines the hospitality of the proximity store and the products diversity of a supermarket. The retail concept promoted by Angst Group is based on the intercommunication with the customers. This concept may be synthesized as it follows:

self-service; optimized range of products; immediate stock rotation; attention paid to the quality-price ratio. Corporate values, Mission and Vision

In 1991 Sorin Minea together with Urs Angst set up ANGST RO. The CEO position of the Romanian Company was held from the beginning by Mr. Sorin Minea. In 1993 the first Angst store opens in Bucharest. Taking advantage of 70 years of experience from which the management of Angst Corporation benefited, it was easier for Angst Ro to build a successful business in Romania. The company is going continuously through a development process as it is always looking forward to offering its customers the best products and services at competitive prices, fallowing the concept what is good for us is also good for others. By motivating their employees and make full use of available resources, both tangible (land, buildings etc) and intangible ( the knowledge, experience, ideas of their workers), the managers of Angst have successfully build a reputation for their company and thus made it become the leader in the retail industry in Bucharest. Moreover, Eduard Vlaston, the General Manager of Angst retail declared their new price policy come into force with a view to help its customer who are strongly affected by the financial crisis and in this respect transfers a part of benefits gained from the expansion of the company to its clients by constantly reducing the prices of the merchandize it sells with percentage of 5% to 10%. Not only does this capability of the manager draw new customers to the stores it supervises, but it also builds customer loyalty, which is very important in this field where the competition is so severe. Along with the creative capabilities of the management of the company, other key elements that led to its success are its core values which stand at the basis of any decision making: Decisiveness Integrity Courage

Judging from the development of the company and the competencies it benefits from, we might gather that Angst is in line with its mission and vision. The mission states thatWhen we started, we wanted to be number one in Romania, but not number one in terms of quantity, but number one in terms of quality. In 2011 AngstCompanywasawarded the"trophy quality". The vision is "The excellence makes the difference". Those are the words describing the basic principles for the past actions, which define at present the company's strategy, but which also outline the future. The unquestioned values are:

respect towards the customer and the product; solid ethical principles perpetuated up to present. seriousness and punctuality basic concepts.

Their competitive advantage also lies in this area, since not only do sell similar products as their competitors do, but they also produce their own lines of organic products, which provide their customers with better quality than those are already on the market at affordable prices.

Analysis of Porters 5 Forces Model

Threat of New Entrants

Bargaining Power of Suppliers

RivalryAmong Existing competitors

Bargaining power of buyers

Threat of Substitute Products

Industry of competitors On the segment of supermarkets of the Romanian market, there is strong competition among the following international groups:

1. REWE which owns Billa and XXL Mega Discount! 2. DELHAIZE with Mega Image and Red Market 3. ANGST CORPORATION with Angst RO These groups are competing in some areas with other local businesses, such as: Nic Delficom Other minimarkets in the area of food market

The competitors of Angst are divided into: Direct competitors: Billa, Nic, Profi, micRO, other minimarkets Indirect competitors: Hypermarkets: Cora, Auchan, Real Stores from category of cash and carry: Metro, Selgros, Kaufland Threat of potential new entrants Having an established reputation on the market, and planning to make even further acquisitions in the future in the retail industry, Angst has little to fear the potential new competitors, even though the barriers to entry in this field are high. Having as their main competitiveadvantagethe fact that theysupply thestoreswithmeatand othermeatcookedfromits ownproduction, considered affordable and at highest quality level, the threat represented by the new entrants on the market is low. Substitute products Angst provides its customer with a wide range of goods, chosen carefully from its suppliers, and thus thread constituted by the substitute products is low. Bargaining power of suppliers The suppliers represent the source of merchandise in the process of selling within the enterprise and therefore their bargaining power is very important. The size and the quality of their offer determine the activity of the firm on the market where it meets its most important competitors. The location of Angsts suppliers is an advantage for this company since more than 80% of them are located in Bucharest or in its outskirts. This brings about lower transportation costs which are supported by the suppliers, who are willing, as a result of this situation, to constantly provide the stores with merchandise. The prices asked by the suppliers are influenced by their position on the market (producer, direct importer or intermediary) and the size of the order made the client. 90% of suppliers of Angst are producer or direct importers, thus ensuring that the unnecessary increase

in the entrance price of a product in a store is eliminated along with the discharge of intermediaries. Also, Angsthas the advantage ofsupplying the storeswith goodsfrom own production. Thus the range of products provided to the consumers is a complete one, from fresh meat, takeouts to the most sophisticated boiled and smoked products, made of pork and beef, but according to the requirements with products made of chicken or mutton, with the best quality raw material. The spices used are exclusively natural. The membranes used are natural and artificial. The quality standard is very high, the validity is shorter than the one used on the Romanian market. The products are delivered in a fresh state, uncut or cut, traditionally packed or in vacuum. From the factory to the customers a full series of checks are performed in order to assure the required quality standards of all products. The quality/price ratio is balanced and represents an important strength of the products provided by the company to all categories of consumers. The commercialization of these products brings many advantages since they have the best commercial addition and they positively advertise for Angst. The bargaining power of buyers Angst is offering a wide variety of products for its customers, which represent the segment of consumers. The available products sold are strictly bought for satisfying current needs and do not impose specific conditions that address only certain segments of consumers. The company goes after satisfying all needs starting from those of a baby to those of an elder person. However, beside the regular products offered, Angst provides its customer with certain specialties which address only a certain segment of customers with refined tastes (e.g. French cheese, selected wines, delicacies etc).

SWOT Analysis STRENGHTS The high quality of the sold products The efficiency of the price policy The satisfaction of demand Financial stability The fast rhythm of diversification and renewal of the range of products offered for sale

WEAKNESSES Narrow space between shelves

The existence of expired products on the shelves Inefficient politics of attracting new suppliers There are no individual promotions in some areas

OPPORTUNITIES The supermarket segment is the best developed segment of the Romanian retail Since during the winter there were significant drops in sales due to the fact that a large number of people left to the mountain for the holiday, Angst opened a store in Sinaia They opened new stores in the central areas since here the competition is low The acquisition of new cash registers that accept cards in an effort of coping with the latest demand on the market

THREATS Angst, being connected to the towns networks, is obliged to pay higher and higher prices for the use of essential resource in order to operate in a normal environment The interruption of electricity for a longer period than hour may lead to great losses at the level of merchandise which needs to be preserved at a special temperature.

PEST analysis There are many forces which affect the external environment of a company, and this, in turn affects the internal environment towards which most of attention and efforts of the management team should be directed. These generic forces can refer to:

Politics Economics Social Technology

POLITICAL ENVIRONMENT This reflects the structure of the society, the social classes and their role in society, the political forces and relationships between them, the degree of implication of the state in the economy and the stability degree of the political climate, whether its internal or international. The promulgation of some laws that encourage the activity of some investors, along with their exemption from the payment of some taxes (e.g. investment in poor areas), might be threats for the others that dont benefit from these advantages. Furthermore, the instability brought about by certain political decisions, which are reflected in the promulgation of some laws followed by

different ordinances, modifications or comebacks to the same normative acts, determines the insecurity in the establishment of long-term strategies, thus leading to a hostile business environment. One of such example would be the enforcement of a law that put a sample tax on alcoholic beverage and tobacco. In the absence of a clear and specific law with regard to these products, Angst stopped selling such items in order to avoid the unpleasant consequences that might have been caused by the regular controls of the Financial Guard. Nevertheless, there are also positive examples, such as meal tickets, through which the state transfer financial resources to the population by encouraging consumption. ECONOMIC FACTORS The economic environment emphasizes the saving behavior of the population, the distribution of income, of the debts and the credit options. Broadly speaking, the economic environment within which Angst operates its business is determined by the state of the national economy. Thus, a general trend of consuming has been observed from part of the population. At the beginning of transition period, Romains showed a tendency to save their supplementary income and invest it in banks. Nowadays, the inflation, low interest and small incomes (lack of supplementary incomes) led to higher spending of the income on consumer goods, such as food and clothing. These economic factors reflect current situation of the market, namely the volume and structure of the offer, the level of disposable income and the size of demand, the decrease in general level of the competition and this is the reason why they should be taken into account when managing a company, including Angst. The supermarket segment is the best developed segment of Romania retail products. Immediately after Romanian revolution, small stores and minimarkets appeared on the market and afterwards the wave of supermarkets began to show up. In parallel with the development of local business in this field, foreign companies started to activate in the retail area being attracted by the strong evolution of these local groups, which owned a significant number of supermarkets. SOCIAL ENVIRONMENT The constitutive elements of this environment reflect the system of values, the customs, the beliefs and the norms which govern the statute of the human-beings in our society. It contributes to the expression of the exigency of a certain market, which helps the retailers to understand what products to offer to their customer and how to distribute them. Angst appear on the market when the retailing segment was at the beginning of its development and for this reason the company grew and evolved along with its customers preferences. To be more precise, in time, customer started to emphasis on quality rather than on price, so companies had to adapt on this change. It a well known fact that Angst pays close attention to its customers needs and tastes, since it is very receptive at complaints and it is constantly trying to solve the problems occurred in the direct relation with clients. This stands as evidence of fact that the management of the firm is not reluctant to change, but is actually change-oriented as long as the modifications embed positive effects on the evolution of the company.

The social environment has a strong influence on the placement of the new store in an area and as a consequence, research should be made in order to see whether this form of commerce is accepted in the area and if the logo, the slogan and the language used in the advertisement that promote the products are appropriate. For example, the"fivestars", which is the brand of Angst, were chosenbecause theyinspireconfidenceofthe highest qualitychoices. The slogan is Every daywe wantto offerexceptionalproductsaccompanied byfive starservices! TECHNOLOGICAL ENVIRONMENT Nowadays in Romania is practically an invasion of technology, starting from phones, smart phones, laptops, etc. It is very important for Angst to keep in line with the technology, so the clients can be able to pay with credit card, or to search on the internet and to see on line were are our shops situated and what products they can find in each store. In order to help their client Angst bought new cash registers that accept cards. It is very important for Angst to satisfy the latest demands in technology, STRATEGIES Inthe first sixmonths of the year 2011, the network ofsupermarketsAngstrecordeda turnoverof85 millionlei, up with 7% more than the same period of the last year.Andthe number of customerswho visit the storeswas higherby 1%. EduardVlaston, commercial directorof the company, is explainingwinningsolutions. With 24locationsnowopen, of which 20inBucharest, Angstmanages tomaintainthe profitability ofstoresina time whenmore and moreownersRomanianretailnetworksare forcedto admitfailure,announcing theclosingof the stores. Moreover, forthe nextyear, the companyhas ambitious plans. "We want totake advantage ofa return toacceptable valuesoftheirprices of rents, so we planned toopen threenew locationsin the capital. It isa marketin which Angst has a very god reputation andthere are someneighborhoodsthatwe do notcoverinthis moment,butwewant to bepresent.AmongtheseincludeBerceni, Titan orBaltaAlba. We seek tocoveras manyareas ofBucharest, "said EduardVlaston, commercial directorof the company. Reduce supplires In this moment the company is working with 200 partners. This number of partners is considered to be optimum number. Reducesupplierswas atrenchantdecision, but extremelyimportantfor two reasons: in one handit wasdifficult to manageportfolioandon the other handtooptimizedesiredrelationshipwith suppliers.Togetherwith our partners wewantto lookat theportfolioof productsto replacethoseitemsthatdo not goand findthe right solutionsfor awinwinrelationship. We considerthat eachof ourstoreprofitcentermust beoptimized. If we fail todo this, we considerincludingrelocationof somestores, as today, the watch word for Angst network must be effective at all levels: in sales, product portfolio management and all costs.

Long term strategies

Extendingthe range ofreadymeals, bakeryitemswarmintroductionand development ofthe entirefresh-food segmentareputon papersome of theobjectivesofthe company'scommercialmanager. "Angst wanted for a long time to entryon the market forreadymeals, with aproductioncapacityofits own. I think it's time todothat becausesalesare good, the brand iswell knownAngstand fitswithsuchpreparations. to developthe range ofreadyproductswill workwithcurrentcompanysuppliers, "concludes EdwardVlaston. Another projectaims atlistingofmediumor hotpastryspecialtiesofmore specialtypesof coffee,bothconsidered asa potentialattractionfor certainstores. CONCLUSIONS All in all, I think that it goes without saying that Angst has succeeded in building a name for itself in the Romanian retailing segment of the market, largely due to the strong efforts of its managers, and their expertise in this field. Moreover, their strategic approach, namely the one that emphasizes that in this area the relationship between the quality of the offered merchandise and its prices is very important, seemed to attract customers, and thus helped this chain of supermarkets become the leader in its field in Bucharest. Although there are challenges they will have to face in the foreseeable future, as they plan to expand in other areas, I am confident that they will succeed in reaching their objectives thanks to their commitment and ambition.

BIBLIOGRAPHY

Official website: www.angstro.ro Book: Developing business strategies by David A. Aaker

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