Case Study of Sydney F&B Industry

Question: Discuss about the Report for Case Study of Sydney FB Industry. Answer: Introduction The food and beverage industry face continuous challenge in the market due to the constant change in the taste and preference of the consumers. The new landscape in the food and beverage business experiences turbulent environment that is highly dynamic and competitive. In order to survive in this highly competitive market it is extremely important for the food and beverage companies to strategise their business and take smalls steps to achieve the strategic objectives. From the evolving customer needs and changing spending habits and tastes have together created dilemma for the food and beverage industry (Hollensen, 2015). In this scenario it is important that the food and beverage companies have strategic capabilities which would help them to gain competitive advantage in the market. The global food and beverage industry has become highly competitive due to the increased interest of the consumers in food and in this circumstance number of companies started operating in the market ju st to attract consumer attention with affordable price and improved offerings. This is where the competition in the food and beverage industry started to grow (Thompson et al., 2013). With more and more companies started to operate in the hospitality sector the competition became stiff and the concepts of competitive advantage and value creation became important for the companies. In the present moment it is essential for the food and beverage companies to assess their strategic capabilities and resources which would help them to gain competitive advantage in the market through effective value chain analysis. The terms Competitive advantage and value chain analysis are not mere words in business and hold high significance as management tools which would give a company the much needed upper hand in a highly competitive market environment (Reed, 2009). It could be stated that competitive advantage is a key strategic tool which could help the food and beverage companies to get sustainable position in the market which would help to survive in the market for a long period of time. The present study holds significance as it will take an opportunity discuss the role of c ompetitive advantage as a tool in the food and beverage industry to achieve the strategic objectives of the business with reference to the Sydney Food and Beverage Industry and discuss. This will help to understand the indispensability of resources which can give upper hand to a company in a market and also help to gain competitive advantage which is the ultimate aspect to survive for long in the market (Esty Winston, 2009). Concept of competitive advantage and its importance in Food and Beverage Industry In this highly turbulent business environment most of the business owners are toiling in keeping their business in the right path and run the operations effectively and efficiently. In the wake of internet civilisation things have got easier doing business has remained the same. Maneuvering weaknesses and competition still remains key threats to a business and hence it becomes extremely important for a company to discover and innovate tools which would help them to manage these hardships and achieve success. It is not only important for companies facing rivalry to compete well but it is also important to maintain a position where they will be able to sustain in the market for a long time which is why most of the companies try to gain competitive advantage in the market (Pullman et al., 2009). Competitive advantage could be defined in various ways but the classical definition of competitive advantage states that it is a circumstance or a condition which places a company in better busi ness position as compared to its rivals. Hence it is quite natural from the definition that each and every business would want to be in this kind of situation. But it is important to know that competitive advantage for a company doesnt only mean to gain a better position in the market but also to understand what the consumers want in order to keep the advantage intact (Beske et al., 2014). The Sydney Food and beverage industry is highly competitive. The consumers in the Sydney FB market have number of options to choose from which makes the FB market in Sydney quite competitive. Talking from the Food and Beverage perspective Competitive advantage could be stated as the condition where one company has got better of its rivals in the food and beverage market especially with capability of producing better quality food and beverages at a lower price in a more desirable fashion for the consumers (Rothaermel, 2015). Every company working in this market have specific objectives to achieve which will help them to grow and develop for which gaining competitive advantage becomes essential for these companies. The present Sydney Market is highly competitive and in this scenario it is important that the authentic food and beverage companies understand the key activities and resources which would help them to gain competitive advantage in the market. With some of the top class bars and up-market restaurants in the country the Sydney food and beverage industry has become highly competitive and hence consumers are often confused to choose where to go if they are not brand loyal (Capitanio et al., 2015). The FB Market in Sydney is competitive as most of the consumers from this place have better knowledge and taste buds to understand good food and wine which is why most of the top class restaurants and bars have found their existence even in this competitive environment. There are around 5000 top class up market restaurants and bars which employs over 1.3 million people (Soosay et al., 2012). There are some of the top class restaurants in the city for instance Quay it appears in the best list of restaurants formed out of a survey by Sydney Morning Herald the primary newspaper in the city. On the other hand there is The Bridge Room which is a three hatter with next level dining facilities. One of the leading Australian Chef Neil Perry launched the Eleven Bridge which has received accolades very quickly in the Sydney food arena. There are number of top class bars as well providing some of the best wines in the country like Continental Deli, Bar Bros, Monopole, Rockpool Bar and Grill are some of the most renowned bars in the city who have a huge customer base (Gereffi Christian, 2010). These restaurants and bars have strong competition among each other which makes the consumers confused at times and hence it is important that these companies are able to use competitive advantage as a tool to grow and develop their business in Sydney. As it can been seen that there are numer ous equally renowned bars and restaurants in Sydney one can easily comprehend the kind of competition these companies face against each and this is where the concept of value chain analysis becomes extremely essential (Belz Schmidtà ¢Ã¢â€š ¬Ã‚ Riediger, 2010). The concept of competitive advantage and Value chain analysis are interweaved in fact it could be said that by a successful value chain analysis a company could realise the potential it has to gain competitive advantage in the market. The idea of Value chain analysis was first suggested by Michal Porter where he described it as an internal process which a company performs to underpin the design, produce, market and deliver its products. In this case it becomes extremely essential for the companies operating in the Sydney FB market to produce and deliver their products very carefully as there is hardly a margin of error that these companies could afford. The above mentioned companies have been able to use the concepts of competitive advantage and value chain analysis to effectively create a separate position for them in the market (Grant, 2016). Through the use of the Value chain analysis these companies in the industry have been able to create two different kinds of competitive advan tage namely cost advantage and differentiation advantage. In order to create competitive advantage it is extremely important for restaurants like Quay and The Bridge Room to distinguish their products in terms of cost and also in terms of taste and its product mix. The major objective that these companies look forward to achieving is profit and opportunity to expand and this can only happen when the firms activities are capable enough to support its thoughts (McWilliams Siegel, 2010). Since the profit motive is common to all the food and beverage firms working in the Sydney market it is important to analyse the company value chain to see the key activities which are important to gain competitive advantage. Since the restaurants and bars focus on sustainable and superior performance anslysing the key activities which would help to gain competitive advantage in the market is extremely important and the below value chain will try to discuss the key activities to get effective insights . Fig 1: Porters Value chain model (Source: McWilliams Siegel, 2010) Primary Activities Inbound Logistics: This mainly deals with material handling and inventory management. All the mentioned FB companies in Sydney follow a strict and standard inbound logistics maintenance procedure. They clearly understand that food is an extremely important subject for a man and hence it is extremely important to handle materials used to cook foods and other edibles are kept and preserved according to the industry standard. This is clearly an advantage for the bars like Rockpool and Monopole. These organisations get their wines directly from the vineyards and also focus on setting quality benchmarks for them and this helps them to exhibit it among the consumers effectively creating a very clean impression and image of the company among the consumers hence allowing competitive advantage (Zhang et al., 2009). Operations: It is another key layer in the organisational system. Operation mainly deals with the manufacturing of the food from the raw materials. This is taken care by these companies operating in the market significantly as they understand the food and the beverage represents the image of the company and in case the quality is not good they might lose the plot and hence tend to emphasise more on their food manufacturing procedure. They have world class equipments that help them with other supporting activities that help to gain competitive advantage in the market. Companies like companies like the Bridge Room and Eleven Bridge focus on setting up total quality management system that also includes food testing system before it is served to the customers which also provides upper hand in the market. Hence it could be said that operational activities are extremely essential in terms of gaining upper hand in the market for the food and beverage companies in Sydney (Casadesus-Masanell Ricart, 2010). Outbound Logistics: This mainly deals with order processing and distribution. This section of the model is extremely important as it shows the capability of the company to respond to consumers needs and most importantly how quickly. In this case apparently it has a very little role to play for the restaurants and bars but still it is important to mention that these companies focus on delivering the order of the customer as soon as possible. Continental Deli has a clause of delivering by 10 minutes which is a unique clause and seriously gives an upper hand in the market. Marketing and Sales: This mainly focuses on the communication of the FB industry in fact to say the companies have with the consumers. Marketing is the best way to gain competitive advantage. Even though the companies mentioned in the assignment are all big companies but they stick to very strict advertising plans. With the introduction of internet these companies have taken to social media and inbound marketing through internet. Eleven Bridge the company of Neil Perry has got good publicity due to the awareness of the name of its owner. These companies are all within top 50 restaurants and bars which have been considered in terms of their sales and revenue and hence it could be said that they managed sales and revenue well (Van der Wagen Goonetilleke, 2015). Service: The main focus of these organisations operating in the Sydney food industry is their service. All of them have been very consistent in their service approach and have created good names for them. Supporting Activities Infrastructure: This is what makes the difference between these organisations. Since all of them are working quite well it is essential that they have effective management and administration procedure working. HRM: Another key supporting activity. Companies like Eleven Bridge, Continental Deli, Quay et cetera have emphasised on having the best possible manpower who are well trained so that they can provide the best industry service and this has created customer loyalty giving them upper hand in the market. Technology: Technology is integral part of every service. All these restaurants are hi tech and have technological facilities for its consumers like free Wi-Fi (Cho Gu, 2010). Procurement: Procurement for the development of food and wine manufacturing is done with help of effective and expert help. Not all of them have it but companies like Continental Deli, Eleven Bridge, Caf Paci, Baxter Inn, Lobo Plantation focus on getting expert help for this which creates significant competitive advantage in the market. Overall it could be said that the present value chain analysis of the restaurants and bars in Sydney have helped them to understand the key aspects which they need to focus on in order to gain competitive advantage in the market. For bars and restaurants quality food and wine is extremely important and also excellent service and these aspects become important in gaining competitive advantage in the market and provide upper hand (Pullman Rodgers, 2010), A very new concept of gaining competitive advantage is Menu Engineering for the restaurants and bars. It is important to note that menu engineering is what most of the renowned restaurants and bars have taken to in order to develop a strong understanding of the needs and demands of the consumers and develop their product manufacturing accordingly. Menu engineering is a step by step process where the FB Company is able to evaluate its current menu pattern, pricing, and design and content decisions. The FB companies in Sydney have developed effective menu engineering in order to attract consumers and gain competitive advantage in the market (Pizam, 2010). For instance Sepia in Sydney has understood their customer interest and has engineered its menu to good effect brining in a classic dessert Winter Chocolate Forest that has become the signature of the restaurant and have driven a lot of consumers clearly giving it an upper hand. On the other hand Rockpool Bar and Grill which is consid ered one of the best dining place in Sydney have focused on customer demands to engineer its menu (Fitzpatrick et al., 2012). It has become famous for its seafood and everyday sales huge number of seafood which has forced the company to take interest in Seafood and vintage wine and ale for sales as the consumers are driven to the restaurant for their wonderful seafood and wine. The evaluation of menu helps these companies to understand which one selling more and which one is going unnoticed and these companies start selling more of the loved foods and through this many up market restaurants and bars have got competitive advantage and sustainability in the Sydney FB market (Grant, 2016). Conclusion From the discussion it could be concluded that gaining competitive advantage is extremely important in the food and beverage industry especially when the market is competitive like in the Sydney FB market. 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