STUDENT NAME

Activity 1:

Introduction:

Pizza is the most famous fast food item among all age groups and is consumed at high rate. Porter Five
Forces is used by Pizza21 to make decisions that will increase the customer base, and competitive
advantage.

Threat of a new Entrant:

The threat new entrants results in innovations. It put pressure on the Pizza21through low price strategy. The
Pizza21 can take advantage of its economy scale in the pizza industry. It has fight off the new entrant
through it cost advantage. The Pizza 21 has provided the customers with new propositions. Pizza 21 should
manage all the challenges of ne entrant. It should build strategies to improves the customer base, and
competitive advantage.

Bargaining Power of Suppliers:

The suppliers are important as Pizza 21 buys the raw material from the numerous suppliers. However,
suppliers in the dominant position can reduce the profit margin. The suppliers in powerful position use their
negotiating power, and set high prices. Pizza 21 can solve this problem by developing efficient supply
chain with multiple number of suppliers. Another way is to produce innovative, and experiment new
products so that if price of one raw material goes up, product can be still launch without it.

Bargaining Power of Buyers:

Buyers are often very demanding. Buyers are usually interested in buying the minimum price. This will
affects the profit margin. If the customer base is small, and powerful, the bargaining power of the
customers are high. This will result in higher chances of customer to grab discounts.

Threats of Substitute Products:

It is always present in the market. It is high if a ne product is launched in the market, which is offering
similar product like Pizza 21 but with more value creation to customers. The threat of the substituted
product can be decreased by the focusing more on the customer needs, by being more service oriented and
less product oriented. Another way is by increasing the switching cost for customers.

Rivalry among the Existing Competitors:

Higher the rivalry in the industry, more it will reduce the prices, and decrease the profitability. The rivalry
among the Pizza21 competitors is high. It’s a competitive Industry. At this Stage, the best outcome will be
collaborating with the competitors about the increasing the market share.

Activity 2

Part A:

Threat of a new Entrant:

There is a long set of operations to be performed before entering a restaurant business. There should be
good infrastructure available. The threat of the entrant will focus on decision making to make product ore
attractive then the competitors.

Bargaining Power of Suppliers:

In order to overcome the suppliers bargaining power, there should be multiple suppliers available so if
one cost increases, the other can be contacted. It is necessary to have a firm supplier who business is
wholly dependent on us so that it can make less bargaining.

Bargaining Power of Buyers:

In a hub where there are more options to dine in, the buyers have high bargaining power. Therefore, it is a
disadvantage so decision should be made as much to attract more customers, and increase the customer
base. Innovative products, and offering which are unavailable at the customers are important for the
buyers.

Threats of Substitute Products or Services:

This will affect the decision making by bringing innovation in products, by creating value for customers,
so that they cannot purchase substitutes. It will affect the price of product.
 Threat of competitive Rivalry:

To solve this issue the Pizza 21 has decided discount coupons, home deliveries, and other special
customers offering. This will help make the competition less intensified.

Part B:

Competitive advantage is define as the factors, and values which makes one product preferable to
customer above other choices. The competitive advantage can be created by the use of three
strategies. Cost leadership, differentiation, and Focus strategy. In the pizza 21. I will mainly focus on
the cost leadership. As we have competitors like Domino, and Pizza Hut so I will focus on selling
product and services at lower prices than competitors will create and sustain competitive advantage.
This will also increases the operational efficiency of my product. It is necessary to know the target
market, and the position of the competitors in the market before making decision regarding the cost
leadership. The other firms using this is Walmart. The sustainability of the competitive advantage
depends on the value creation. Another way to increase competitive advantage is strategic alliance
with a drink shop so that it will also increase customer base as customer who come to buy drink, will
give a second thought to buy a pizza.

Activity 3:

Introduction:

With the emerging Global Economy, the companies of different sizes are marking their place in the foreign
markets through various nature of operations. The international expansion has provided with the several
advantages including significant opportunity for the market growth, and diversification.

Importance of diversification:

The international expansion of business result in diversification of the assets. This protects the company
from the adverse and unseen events. For instance, the international expansion allows the company to
operate globally, and can offset the negative growth in one market by successful operation in the other
market. The companies can use the internal expansion as a source to introduce innovative products, and
services. This help maintaining a positive revenue stream. For example, Coca Cola diversifies through
global operations. The company has reported increase in sale in China, India, and South Korea. Coca cola
is working on international expansion and bringing diversification in its operations. Recently, Coca cola
has bought the Mexican Sparkling Water brand named as Topo Chico. It is an effort of Coca cola to grow
globally and built a diverse portfolio. (Rosssum, 2017)

It is necessary for the firm to have proper market knowledge. The diversification will affect the corporate
decision-making. It is compulsory for the firm to have proper allocation of the assests and competitive
capacities through both direct and indirect interactions. (Kamakur et al, 2011).

However, decisions to enter the foreign market are executed through strategic options including
transnational, multi-domestic, and global combinations. (Thompson et al, 2009). These strategies are
evaluated through a variation of geopolitical responses (Coulter, 2011). This involves participation, and
control over the firm involvement with its foreign operations. (Kamakura et al., 2011). Most the small-
medium enterprises enter the foreign market and introduce a product base. The final product is distributed
through foreign distribution channel.(Thompson et al., 2009).

The international operational expansion of company optimize its performance. The international
expansion also brought in the company executives from the different countries in which it is going to
launch itself. Average of American leading companies has a ratio of 17% of foreign executives that has
been estimated as 40% of business globally However, in Europe this ratio is increasing. An international
company IBM does 60% of its business globally. Outside of US constitutes 40% of higher management. .
However, companies located in BRIC (Brazil, Russia, India, and China) countries are still not engaged in
diversification. The top management in China & India is still completely from the China & India.
(Morrison, 2013). However, the cross-border acquisitions is associated with the international
diversification, and access to new market. It also increases the risk of the value of merger and integration
risk after acquisition. (Barbopoulos et al, 2018)

Activity 4:

Strategic Control:
The first step in strategic control is the formulation of strategy. After formulation, the second step is the
implementation. The implementation involves the observing and rectifying organizational performance.

For effective strategic control, there must be mechanism for monitoring, and correcting organizational
performance. The strategic control includes both the informational, and behavioral control. The
organizational goals are conveyed to employees, and managers. The rules and procedure must be clearly
communicated among the employees, and managers. The reward for performance should be awarded to
the best performance employees. The control should be according to the organization strategy. There is
less need of the monitoring the behavior, if the employees have internalize the goals, and objectives.

The relationship between the formulation of strategy, its execution, and management; are highly
interactive, and utilizing.

This approach
allows the
employees and
managers to
accept, and make
alteration in the
internal, and external environment. The two types of strategic controls utilize by this approach is
informational control, and behavioral control. (Habidin et al, 2016)

Informational control

In this procedure the firm is controlled by the mean of informational sources, the firm gathers information
and analyze it. This analysis is based on internal and external environment. It is necessary to obtain the
best fit between objectives, strategy, and strategic environment of organization. The informational control
has following characteristics

 Interpretation of data, and discussing it face to face

 Shortened time lags
  Earlier detection of changes
 Enhanced the response

It is an going process for the control of an organization. It is learning process that enable to
analyze the information that continuously updates the organizational objectives, and make efforts
to solve the challenges faced by the organization. It is a kind of “double-loop” learning. It
monitors, analyze, and reviewed the assumptions, premises, goals, and strategies of organization.
The monitoring reduces the time lags, alteration of competitive strategy can be studied earlier.
(Pearlson & Saunders, 2009)
Behavioral control:
It is a method of organizational control. In behavior control firm influences the action of the
employees. This influences is in the firm of culture, rewards, and boundaries. It is an elaborated
system of rules, and procedure. Such actions are prescribed to direct the behavior of employees at
every level of the organization. To reach the goal it is necessary the employees follows rule and
procedure
There two forms of behavior control
 Budget management
 Standardization
The proper allocation of resources are needed for achieving goals by managers. Standardization is
the extent to which the business clarifies its decision-making that affect employees’ behavior and
made it predictable.
. (Habidin et al, 2016)

Conclusion:

Although both are important for the strategic management of the organization. But it not necessary that
the implements of both guarantee the success. Information control is necessary for best fit relationship
between the organization goals, strategies, and the external strategic environment. Behavioral control is
necessary for making employees behave correctly so that organizational goals are achieved.
 References:

Barbopoulos, L.G., Danbolt, J. & Alexakis, D. (2018). The role of earn out financing on the valuation

effects of global diversification. International Journal of Business Studies. 49, 523–551

.https://doi.org/10.1057/s41267-017-0142-4

Coulter, K. (2011). Film geopolitics in practice: Marketing the Miracle of Bern. Geopolitics, 16, 949-968.

Doi: 10.1080/14650045.2010.535180

Habidin, N.F, Yusof, S, M. & Fuzi, M.N.(2016). Lean Six Sigma, strategic control systems, and

organizational performance for automotive suppliers, nternational Journal of Lean Six Sigma, Vol. 7 No.

2, pp. 110-135. https://doi.org/10.1108/IJLSS-04-2015-0013

Kamkura, W. Jeronimo, M.A, Gravel, J.V. (2012). A dynamic perspective to the internationalization of

small-medium enterprises, Journal of the Academy of Marketing Science, 40(2):236-251

Morison, A. (2013). Diversification key to global expansion. Available at: https://www.imd.org/research-

knowledge/articles/diversification-key-to-global-expansion/

Pearlson, K. & Sauimders, C. (2009) .Strategic Management of Information Systems. US. John Wileyson

Inc.

Rosssum, J.E. (2017). 5 benefits of international expansion, The Business Journals, 18th Dec. Available at:

https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2017/12/5-benefits-of-international-

expansion.html