Homework Solutions

The owner is continuing to put together the research needed to open his new restaurant named aNachos in the heart of Chicago, IL. As discussed in the previous report, this start-up venture will highlight many processes to consider, strategies to take while understanding what challenges the owner may face along the way. In seeing the potential for this restaurant to grow, the owner must conduct an environmental scan of his business. The purpose of an environmental scan is to business owners, managers, and leads to decide the future path that an organization should take. In conducting this analysis, the following information will be considered: Determine how to create value and sustain competitive advantage using the environmental scanning strategy, evaluate a company’s external environment, assess the company’s general environment, and evaluate the organization’s industry operating environment.

Environmental Scan Strategy

To create value and sustain competitive advantage aNachos will use environmental scanning to research new market opportunities, review trends in current markets and analyze product sales in all markets. When a company like aNachos wants to create value a competitive advantage, the company must establish brand loyalty with its customers. It builds a trust with the customer that the company is providing them with quality of product or service. Another way is to use incentives with customers such as discounts for birthday’s or price reduction due to a sporting event or purchase of party size order. For the company to sustain its competitive advantage, it will utilize the feedback and recommendations from customers in designing and developing menus and food selections that meet the needs of all patrons. The company will locate an area with few competitors that serve similar food to minimize customers from choosing between competitors. This company will also select a highly visible location that has a large consumer base nearby. Highly visible locations include areas near schools, downtown areas, places where people hangout on weekends and off days. Once the location has been selected, analyze any local competition. Other restaurants are competition, but this is more geared towards grocery stores or convenience stores that may also sell prepared food to consumers. Next, identify the competitor’s strengths such as grocery stores that offer ready to eat meals for customers while they shop. While reviewing the strengths, also review the competitor’s weakness. For instance, as stated in the previous example, if the competitor offers ready to eat meals, are the meals stale from sitting out for long periods.

External Environment

General Environment

The industry environment looks at the conditions that affect the people in a specific industrial market that cannot be influenced by marketing. The specific environment is make up of many factors to considered. A company has the ability to monitor the needs of consumers through determining problems noticed by the consumer or anticipating them before they happen. aNachos will have to pay attention to competitors that are well-known, because all levels of management frequently underestimate the competitors or have a poor job in recognizing potential contender. The buyers along with the suppliers depend on one another, and that dependency may lead to unprincipled actions. Such actions where the two obtain benefits at the expense of one another. Businesses are affected by regulatory agencies as they create the rules as well as enforce them. Advocacy groups do not have the regulatory power to change the practices of a business. What they can do is advocate their concerns for changing business practice by informing consumers through the media and boycotts, as a way of convincing company to change its practice.

Industry Operating Environment

aNachos as a company that will prepare food, is similar to many of the constant elements that involve retail businesses. A direct strategy such as opening new doors is typically a leading way for a business to generate revenue in the beginning stage. When a business is analyzing other restaurants, using comparable store sales, is a beneficial metric to use. What makes comparable so important is once the business gets to the stage of maturity, it becomes the leading driver for growth. Additional products and rises in menu-price, are the main ways to boost store sales. The cost of food is plainly a line item of great importance that at times may fluctuate as a result of price changes by suppliers. Another cost to factor in for the restaurant industry is labor. Constant changes into state or federal law can have an impact minimum-wage which can have an affect towards the costs and margins to a restaurant's.

In conclusion, this report focused on the potential for aNachos to grow. The owner had to conduct an environmental scan for his business. The purpose of an environmental scan is to help business owners, managers, and leads to decide the future path that their organization should take. In conducting the analysis, the following information was considered: Determine how to create value and sustain competitive advantage using the environmental scanning strategy, evaluate a company’s external environment, assess the company’s general environment, and evaluate the organization’s industry operating environment.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic Management: Competitiveness & Globalization: Concepts and Cases (11th ed.). Stamford, CT: Cengage Learning.

Pearce, J. A., & Robinson, R. B. 2009. Strategic Management. Formulation, Implementation, and Control. (11th ed.). McGraw-Hill Companies, Inc.