Environmental Analysis for Jaffa Cakes - Assignment Example

Executive summary Introduction Jaffa Cakes is a world leading snack produced by snack world giants McVitie's (United Biscuits). With the headquarters in United Kingdom, Jaffa Cakes' popularity has continued to stretch beyond UK into the rest of European countries such as France, Belgium and Netherlands. Setting up the Jaffa cakes brand in UK is in itself a strategy considering that, cakes are not taxed in UK something which translates into a strategy aimed to tap at a favorable economic and political environmental. The name Jaffa largely is associated with Oranges and therefore the choice of the name is meant to appeal to the customers as oranges are a leading flavor and fruits in the UK. Jaffa cake has been in production for the last 60 years and one thing which has helped it survive in the market is the fact that, the brand keeps on reinventing itself and that keeps the customers expecting more and more and largely this explains the reason why Jaffa cake is to date still the leading cake the UK. Another strategy which helped propel the market performance of the Jaffa cakes was the repackaging of the products to reposition it as a lunch box as opposed to entirely being a snack. This meant that, the Jaffa cake could now attracts a new crop of consumers, lunch diners. The subsequent 'tube-like' repackaging in 1999 was a new strategy yet aimed at appealing to the growing class of young consumers. Jaffa cake continues to be a leading company in terms of community involvement considers the fact that, the company has on several occasions sponsored several community initiatives. The most recent and significant sponsorship which double as a marketing and advertising campaign was the sponsoring of Manchester united football club in the year 2000. This largely boosted the popularity of the snack as a favourite low calorie snack rich in carbohydrates. Continually, Jaffa cakes depend on creativity and innovatiness especially considering their technologically favorable environment. The company constantly invests in research in order to come up with customer focused products. With a customer loyalty accounting for about 88% of the households in the UK and unrivalled customer base in France, Netherlands and Belgium United Biscuits (UB) continues to feature as a world leader. McVitie's biscuits are purchased by 85% of UK households. In terms of technological advancement, Jaffa cakes will continue to lead considering the adoption the adoption of technology especially when it comes to outsourcing of labor, market intelligence as well as the adoption of e-purchasing systems. Industry attractiveness refers to the prevailing situation in the core business of an organization which favors the specific organization. For example in monotheistic business environment, a business is more likely to be favored in terms of business performance since it can manipulate market forces to its advantage. Jaffa cake faces great competition from competitors and has only succeeded in that; it has continually applied strategic measures in all its important decisions. Jaffa cake's performance has been termed as sterling by many business analysts. The chain of businesses has recorded an after taxes profit of above 1 million pounds. By applying concepts like vendor managed inventories as well as just-in-time concept, Jaffa cakes has continued to maintain leadership in the snacks and foods market in the UK endeavors to remain a low-cost retailer, and by that it has been very effective in maintaining market attractiveness. By all means, Jaffa cakes has achieved low cost retail prices something which has contributed to client faithfulness. This is core in terms of ensuring that, by utilizing this strategy, Jaffa cakes is able to save extra costs associated with poor planning. By keeping products and services as low as practically possible, can Jaffa cakes afford to lower prices since there are less expenditures. In long term this contributes to industry attractiveness. The other area in which the company has achieved competitive advantage is in terms of adapting information systems. By choosing to be a low cost producer the organization has set out to be a market leader. In terms of incorporating information technology, a Jaffa cake has computerized its purchasing systems to incorporate E-purchasing. As purchasing strategy e-purchasing is economical, reliable and cost effective. Compared to a competitor who does not recognize the e-business concept, Jaffa cakes has been able to save a lot by embracing e-business as a marketing strategy as well as incorporating ebusiness in its internal and external processes. In the case of Jaffa cakes, competitive advantage is also dependent on how company utilizes and takes advantage of buyer power at its disposal, the threat of substitutes, supplier power, and ease of entry as well as the intensity of intra-industry activity and converts all of those factors to its advantage. By integrating IT through out the whole retail chain Jaffa cakes ensures that, its partners are free and feel respected and therefore trade is done in an environment of cordial relationships. Jaffa cakes principal functions and activities include; purchasing, distribution in-store operations, marketing, Information Technology, Human Resource Management, and organization and management systems/style. However, Jaffa cakes main competitive advantages lie in the ability of the organization to identify new opportunities as well as staying ahead of competitors in terms of innovativeness and adoption of effective business systems. With a retail net work of over 10 branches all over the UK, the management styles as well Jaffa cakes; purchasing, distribution and warehousing, in-store operations, marketing, Information Technology, Human Resource Management, and organization and management systems/style have to be maintained at a high notch. Otherwise, it would be impossible for the outlets to achieve unity of purpose. With such a big number work force, success can only be achieved only if the is proper human resource management. A well motivated staff is the greatest asset for a company and therefore Jaffa cakes has been able to achieve that through introducing modern employee management systems which aim at ensuring that, the best staff is retained and also that, staff get well compensated for their hard work. This has given Jaffa cakes a cutting edge advantage, in that, it is able to attract and keep the best workers. In terms of supplies, a Jaffa cake has been able to cut lead time after streamlining its supply chain management. By doing that, Jaffa cakes have come to be regarded as the industries leaders in terms of efficiency and cost-cutting. Jaffa cake is the UK's food with over 10 million pounds worthy of annual sales. The company has adopted various strategies to become and remain a market leader in the industry. Of all strategies, it is its affordable cost of products that has made the biggest contribution to its market attractiveness as well as its competitive advantage. Jaffa cake has over 100 employees all of which are well trained through programs initiated by the organization. Also as a strategy in supplies management the organization has avoided reliance on single suppliers but has instead engaged different suppliers. This is effective in that, it becomes very hard for suppliers to collaborate and decide the terms for the organization. Jaffa cake also ensures proper communication through the setting up of a computer network which interlinks all its departments to a central command. All has not been smooth for Jaffa cakes, several, problems and challenges such as slow economic growth have meant it very difficult to project growth and therefore plan well. Managers at Jaffa cake are motivated in that, the organization always rewards creativity and effort as well as originality. This has been a plus for the company as productivity is always related with highly motivated staff as well as employees who can identify well with the organization. Its people friendly approach such as offering high quality products led to such a good relationships with customers that, a very loyal client base was realized which Jaffa cake it boasts of, to date. Jaffa cakes competitive advantage is sustainable. Jaffa cake's competitors have not been very successful in imitating Jaffa cake and duplicating its competitive advantage. This can largely be attributed to their strategy of affordable and high quality which is not very replicable. The current market environment is very competitive and therefore Jaffa cake must put in place some measures so as to sustain its recent performance and defend against competitive (and other) threats. Jaffa cake has been favored by globalisation, however, it needs to be wary of emerging issues such as the ones touching on ethics. Ethically, it has been accused of oppressing employees to an extent whereby, they are forced to lay-off employees hence causing joblessness. Bargaining power is another crucial strength for the organization; it has a big influence on policies as well as all the decisions or contracts entered with other companies. Jaffa cake engages in a continuous improvement campaign in what consumers view as being on the move every time. To consumers and customers this is viewed as an advantage since they know that every time the Jaffa cake makes a move, prices drop and quality of products improves or atleast is maintained. Conclusion Efficiency is one factor which Jaffa cake has achieved by investing in modern systems the company has been able to transact business in different countries all over Europe with ease while at the same time minimizing cost. The fact that Jaffa cakes has created a positive image for itself has ensured a constant demand for services and goods something which most competitors have not been able to match. Jaffa cake has maintained a public image and therefore this helps organization in all its strategic plans. References http://www.unitedbiscuits.com/80256C1A0047922E/vWeb/pcTSTT5DWK7K Accessed 18/03/2007 http://209.85.135.104/searchq=cache:A6GU4KGcPBwJ:www.unitedbiscuits.com/80256C1A0047922E/vWeb/pcTSTT5EPGEB+jaffa+cake&hl=en&ct=clnk&cd=3&gl=ke Accessed 18/03/2007 http://209.85.135.104/searchq=cache:A6GU4KGcPBwJ:www.unitedbiscuits.com/80256C1A0047922E/vWeb/pcTSTT5EPGEB+jaffa+cake&hl=en&ct=clnk&cd=3&gl=ke Accessed 18/03/2007 Read More