Homework Solutions

In part three of this report, we will evaluate many strategies and make recommendations for aNachos to consider. The evaluation will consist of multiple items such as, evaluating the potential business level strategies for the company. Next, we will assess potential corporate level strategies for the company. From there we will assess potential global strategies for the company, Lastly, we will provide our recommendation of a strategy or a combination of multiple strategies for aNachos to implement, and include a rationale for that recommendation.

To evaluate the potential business-level strategies for aNachos to consider, one must first understand the term. According to Strategic Management: Competitiveness & Globalization: Concepts & Cases “A business-level strategy is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets” (Hitt, Ireland & Hoskisson, 2015). The strategy of business-level is made up of five types (cost leadership, differentiation, focused cost leadership, focused differentiation and integrated cost leadership/differentiation). Cost leadership is described as a series of movements that a company will take when producing goods or services, that usages is acceptable to consumers for a lower cost, in comparison to a company’s competitors. Differentiation is a series of actions that a company will take when producing goods or services, by which the consumer sees it as specific to ways significant to them. Focused cost leadership is an action taken by a company in contending based on price to aim at for a narrow market. Focused differentiation which is an action taken by a company proposing a unique feature that will fulfill consumer demands in a narrow market. Integrated cost leadership/differentiation states that a mixture of captivating consumers in primary value chain activities and support objectives that favor pursuing lower prices and differentiation at the same time. The aNachos strategy will gain success by giving customers the combination of excellence and intriguing styles of nachos within an environment that will appeal to a wide and varying group of people. aNachos will have a competitive edge in its menu pricing. The competitive edge includes, student discount pricing of 5 to 10% off with student ID, lunch-time discounts for companies within a five-mile radius of 5 to 10% off and special pricing for events or parties with 50 or more customers up to 15% off. With fewer than five immediate restaurants near the location for Alston Nacho, the focused cost leadership approach will give this company a competitive advantage.

In evaluating the corporate level strategies for aNachos to consider, the term is defined as, “specifies actions a firm taken to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets” (Hitt, Ireland & Hoskisson, 2015). Corporate level strategy is mainly troubled by the strategic decisions a business makes that affect the entire organization and using diversification to help reach those goals. The two types of corporate level strategies under consideration for aNachos are (single business and dominant business). A business that is single in form of corporate level strategy where a company makes 95% or greater of selling for a profit from its main business. A dominant business is a form of corporate level strategy where a company generates 70 and 95% gross revenue within the single business area. The main reason a company utilizes the corporate level strategy is to have growth in revenue and profits. Another area to consider for growth using the corporate level strategy can be market development through a company entering a different geographic market. This strategy level while using the single business model, indicates that aNachos is solely focused on one industry, the fast food industry, and growing and developing a distinctive brand from all others.

To assess the global strategies for Alston Nacho to consider, the term is defined as, “A global strategy is an international strategy in which a firm’s home office determines the strategies business units are to use in each country or region.” (Hitt, Ireland & Hoskisson, 2015). When a company engages in a global strategy, there are multiple perspectives to consider. The first one is from the company which thinks about how expanding will provide the company with new sales and profits. For some companies, expanding may put the company into a better situation to generate profits if its original home market had only poor profits. From the consumer view, it will lead to prices being lower for products and services, as a result of economies of scale and scope that will take into account the larger global base. From an international government perspective, it removes barriers to trading around the world at the same time, providing protection to other industries in different countries. Each country has difference in cultures as well as preferences, but if a product or service that may sell extremely well in one country, may not sell as well in another country. aNachos utilizing the global strategy for expanding into international territory as a well-positioned brand would not be difficult. The key factors that aNachos should consider in expansion are people in other countries interested in different styles of nachos? Will the company have access to the kinds of ingredients it will need? If not, what would be the cost to obtain those ingredients to that market?

In recommending a strategy or combination of strategies for aNachos to consider implementing, it’s best to use a combination of the business level strategy (Focused cost leadership) and the corporate level strategy (Single business). After reviewing what defines both terms and understanding how a business can utilize both, a new startup company such as aNachos would benefit greatly from both. The business level strategy will focus on centering itself on developing a position against its competitors and remaining updated on market trends and changes in technology. As most of its menu options are priced between 6 and $15, it meets the pricing of most of the restaurant in Hyde Park a neighborhood of Chicago. This will give aNachos an advantage of narrowing the market to compete for those customers.

The corporate level strategy will give aNachos a single focus to work towards. Since the company is not looking to diversify into other ventures, it will look at what strategy will help the company achieve the strategic direction it seeks in accomplishing its long-term goals. This can include deciding which items to list on the menu as well as the potential market to compete in. It may define the geographic boundaries for aNachos operations. The corporate level strategy will help the company set aside money, staffing, and various other resources. This strategy may also guide the decisions about adding a new location in the near future or even whether to compete with another company or partner with another entity that will benefit all companies involved. The strategies of business level and corporate level focus on an overall performance for the company which is what this new company will need.

In conclusion, this report evaluated many strategies and made recommendations for aNachos to consider. The evaluation consisted of multiple items such as, evaluating the potential business level strategies for the company (aNachos), assessing potential corporate level strategies for the company, and assessing the potential global strategies for the company. Through the recommendations provided, aNachos will use a combination of the business level strategy and corporate level strategy. These strategies best fit the company as it looks to become successful in the short term and in the long terms a new company.

Hitt, M.A., Ireland, R.D., and Hoskisson, R.E (2015) Strategic Management: Competitiveness & Globalization: Concepts & Cases, Eleventh Edition, Cengage Learning.