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FRESCH BUSINESS GROWTH ISSUES – ENT09692
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Contents
1 Introduction 3
2 Background 3
3 Rationale 4
4 Entrepreneurs Vision 5
5 Attitude to Growth 5
6 Impact of Growth on the Firm to Date 5
7 External Analysis 6
7.1 PESTEL 6
7.2 Porters Five Forces 6
8 Internal Analysis 7
8.1 Resource Audit 7
8.2 Value Chain 7
8.3 Boston Matrix 8
9 Growth Model 9
10 SWOT Analysis 9
11 Growth Strategy 10
11.1 Strategic Choices 10
11.2 Suggested Strategy 11
11.3 Feasibility 12
11.4 Acceptability 12
11.5 Suitability 13
12 Conclusion 13
References 14
Appendix 1 15
Appendix 2 24
Appendix 3 25
Appendix 4 26
Appendix 5 27
Appendix 6 28
Appendix 7 29
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1. Introduction
The initial presentation for Business Growth Issues was on The Fitness Experts Ltd. It has since come
to light that Summit Leisure Clubs Ltd has bought out The Fitness Experts LTD and now have full
control of the company. The Author has therefore decided to focus this report on Fresch a local
catering company based in Basingstoke. Fresch supply hand-made finger buffets for business
lunches, meetings and events to companies and businesses in Basingstoke and surrounding areas.
In this report I will firstly provide a detailed background of the business and explain my rationale for
choosing it as the focus of my case study. I will examine the attitude of the entrepreneurs behind
Fresch and define their vision. I will then study Fresch’s growth to date and attempt to draw
comparisons between the attitude of the entrepreneurs and the business’s growth so far.
I will study both the internal and external factors affecting the business by doing a deep SWOT
analysis. To establish the opportunities and threats affecting Fresch I will look at the macro-
environment; I will use PESTEL analysis and Porters (2008) Five Forces model to identify the external
factors that Fresch have no control over.
I will then carryout a resource audit, use the Boston Box and Porters (1985) Value Chain in order to
examine the micro-environment. This will demonstrate show how Fresch use its resources to create
value for the customer and create a competitive advantage over its rivals.
Having determined the environmental factors that Fresch operates within I will then apply Churchill
and Lewis’s (1983) Growth Model to establish what stage of growth Fresch is currently at. I will then
finalise my report with recommendations for growth based on Ansoff’s (1957) Matrix.
2. Background
Fresch was founded in February 2004 by Tim Goodwin and his parents Peta and John Goodwin. They
each own 30 percent of the business each. Tim’s brother Lee Goodwin owns the remaining 10
percent of the business, he was gifted his share when the business was formed, he is a silent partner
who would only gain from the business if it was sold.
Peta and John had jointly run businesses in South Africa and were keen to do the same when they
moved to England. Tim had watched his parents run their business whilst he was growing up, after
several years of employment he realised that he was not experiencing the same levels of job
satisfaction he had witnessed his parents enjoy.
Tim had a passion for food and wanted to immerse himself in the food industry; he had previously
worked as a function coordinator and therefore had an insight into the events industry. Peta and
John had experience of running a business so they set up Fresch with Tim as an outlet for combined
passion’s and experiences.
Fresch is a family run business but the three owner/managers fulfil different roles. Tim’s main
responsibility is menu and recipe development and quality control. Peta currently manages the
admin and marketing, with John occupying a general management role. All three owner/managers
have joint responsibility of the employee and recruitment side of HR.
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Basingstoke was chosen as it has a ratio of businesses per capita and has excellent links to other
centres of commercial activity.
At present Fresch operates from rented premises at the Winklebury Centre in Winklebury Way,
Basingstoke, they have however recently purchased new premises with view to relocating at the end
of 2014. On first impressions the business appears to be busy, in fact it is quite difficult to arrange an
interview with Tim as he is so preoccupied with running Fresch, this suggests to me that the business
has a growing customer base, a very good sign in this difficult economic climate.
3. Rationale
During the Business Growth sessions we were instructed to use a Small Medium Enterprise (SME),
“SME’s are a vital part of all EU economies. They dominate many service sectors, particularly hotels,
catering, retailing and wholesaling” (Burns, J. (2011), p.21). Tutor, Aiden Craig was persuasive in his
assertion that the chosen business should be run by an entrepreneur, somebody that could make
the decision to grow without having to seek approval from a board. It is for this reason that I decided
to end my study on the Fitness Experts Ltd. I then began work on The Green Room hair salon but the
owner had to fly to Canada for personal reasons, leaving me without a business to study.
I emailed, called and visited 16 local SME’s. I deliberately tried to target “growth firms, set up with
the intention of growth, usually by entrepreneurs” (Burns, J.(2011), p.20) as opposed to “lifestyle
firms, set up primarily to undertake an activity that the owner manager enjoys or gets some comfort
from whilst also providing an adequate income, for example craft-based businesses” (Burns, J.2011,
p.19). This strategy may have ruled out many willing business owners but I was certain this strategy
would provide me with a viable business to study.
I used the criteria laid out by the Companies Act 2006 to define whether any potential case studies
were in fact SME’s. In order to be considered an SME a firm must answer yes to two of the following
three questions:
a. Does the business turnover less than £22.8m?
b. Is the balance sheet less £11.4m?
c. Does the business have fewer than 250 employees?
In my opinion Fresch are clearly a growth firm and answer yes to all of the criteria set out by the
Companies Act. After two false starts I was happy to learn that Tim Goodwin would act as
spokesperson for Fresch and was keen to for me to carry out a growth analysis report.
A quick internet search revealed that there are 68 other catering businesses in Basingstoke, all of
whom offer corporate catering for businesses. Therefore, Fresch is in a very competitive market and
based upon my first impressions seem to be successful and ready to grow.
This module also offers me the chance to expand my business acumen. As part of BA BE I have
studied Tesco, the retail giant and Mercona, an established and successful own label cosmetics
producer and distributer; Studying Fresch will give me an insight into an SME and the catering
industry thus gaining further valuable knowledge in business.
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4. Entrepreneurs Vision
The entrepreneur’s joint vision for Fresch is to use the Basingstoke business model and expand it to
five or six “manufacture and distribution centres”. Initially there were two goals; the first was to be
profitable within 12 months and the second was to draw two liveable wages. Goals that transpired
to be barely achievable, they had begun to see profit but were barely able to live off the wages. Tim
has clearly defined ideas that create a competitive advantage; Fresch use only fresh, high quality
ingredients to make all of their products from scratch on the day of the buffet. He also insists that
Fresch are customer focussed and do not compromise quality for profit. It is this competitive
advantage that Tim feels will drive them to reach their goal of up to six distribution centres.
Fresch does have a specific business vision and mission statement (see appendix one) both are
forward thinking and aimed being the best in their field. This is in keeping with Johnson, G,
Whittington, R and Scholes, K (2011), they explain that a vision relates to goals and is looks to the
future of an organisation and should relate to what the entrepreneur wants to achieve. A vision
should mobilise the passion and drive of the employees, it is a unifying statement that aligns the
effort of the employees within an organisation.
5. Attitude to Growth
Tim is ready and willing to expand the business. They have been trading for ten years and have
cemented their position as a leading provider of business buffets in Basingstoke and surrounding
areas. They are customer focussed and invest in marketing. The purchase of new premises is a clear
indication of their intent to consolidate and further strengthen their current position. Tim has stated
that opening six more units is where he sees the future of the business and already has plans to
open a second within five years.
The new premises are in Moniton Trading Estate in Basingstoke this is the first step in an existing
growth plan; a bigger unit can produce and deliver more buffets.
Fresch currently cater for functions within thirty minutes of their location, when they feel they have
fully exploited the potential of their current catchment area they will likely replicate their business
model in allocation that is approximately one hour closer to London. Bracknell has been cited as a
possibility.
6. Impact of Growth on the Firm to Date
Fresch opened on 2004, since then it has faced stiff competition from other catering businesses and
new upstarts. They have also continued to trade despite the financial down turn of 2007. They
opened as a team of two and now currently employ 11 members of staff. In ten years their client list
has expanded from 40 to around 400 with approximately a quarter of the current client list ordering
twice a month.
They have attempted to diversify. They started a bespoke lunchtime sandwich ordering service.
Customers would go online and order a sandwich to their exact design and Fresch would deliver it in
time for lunch. This ultimately failed because the demand was not enough to justify making besboke
sandwiches.
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When questioned, Tim is adamant that Fresch would not work outside of corporate functions,
believing that having a strong focus on their niche is an advantage as it means that the customer
gets their full attention. He also believes that the market is sufficiently big enough to allow them to
grow.
7. External Analysis
As part of the deep SWOT analysis I will now look at the macro-environment effecting Fresch, this
will enable me to examine the opportunities and threats that are that can either be harnessed by or
shielded from Fresch. This will include a PESTEL analysis and Porters Five Forces.
7.1 PESTEL
PESTEL analysis looks at future Political, Economic, Social, Technological, Environmental and Legal
factors that could affect Fresch. Identifying these factors can be a catalyst for change and offer
alternative future outcomes for a business. A PESTEL analysis for Fresch can be found at appendix
two.
The key opportunities established by the PESTEL analysis were:
a. Nutritional declaration will become mandatory in December 2016; this is an opportunity to
get ahead of rivals.
b. Interest rates are due to rise, probably in early 2015. Now is the time to secure low fixed
rate finance to pursue immediate growth opportunities.
c. Social media is a platform that could be used to enhance the brand and reputation of Fresch,
it also acts as quality control as a bad review will be seen by many. There are in excess of 10
million UK users of social media logged on at any one time.
d. Fresch could champion the Public Health Responsibility Deal this will align them with the
growing demands for healthy living.
e. The proposed change in location is an opportunity to update technological assets both in the
kitchen and in the office.
7.2 Porters Five Forces
Figure 1 Porter's Five Forces (1980)
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The five forces framework is a concept created by Porter (1980) that allows managers to assess the
strength of threats that could have an adverse effect on profit. The combined strength of these
forces decides the overall profitability of an organisation. Appendix three shows a detailed analysis
of the five forces used to asses Fresch. The points that it highlighted are:
a. The threat of new and existing rivals is the collective highest threats as there are few
barriers to entry.
b. Fresch are creating a barrier to entry by having exceptionally high standards and exclusive
offerings that are hard to replicate.
c. Rivals have previously targeted Fresch’s existing customers.
d. The threat of substitutes is a medium threat as there is no financial penalty for switching. A
loyalty scheme is likely to further reduce the threat.
e. Both the suppliers and customers have limited bargaining power. There are lots of suppliers
and Fresch have cast there net wide so they are not held to ransom by the customers.
8. Internal Analysis
The next stage of the deep SWOT analysis is to examine the micro-environment effecting Fresch, this
will facilitate an examination the strengths and weaknesses that are characterised by Fresch. This
involves using Resource Audit, the Value Chain and the Boston Matrix to critically assess Fresch.
8.1 Resource Audit
A Resource Audit is an examination of a company’s assets, it is important to note that the company
does not need to own its assets, just access to them. A Resource Audit should examine the Physical
Resources, Human Resources, Financial Resources and Intangible Resources (goodwill, brand name,
contacts, culture and company promise). When conducting a resource audit it is vital that you look
beyond the threshold competencies for core competencies as it is these that will set the business
apart from others. Appendix four shows the completed Resource Audit. The core competencies that
it highlighted are listed below:
a. Fresch have robust business processes in place, this gives them the edge on efficiency.
b. Fresh have developed systemised processes. Food is accounted for as individual items not
packets and this prevents wastage.
c. Fresch have large amounts of intellectual knowledge that has created databases of recipes.
d. The rent received from the tenants pays the mortgage on the new premises (the tenants
occupy one floor and will stay when Fresch move).
e. Their Unique Selling Point (USP) is producing original fresh food using fresh local ingredients
prepared on the day. Within a year Fresh will not use any pre-brought products.
8.2 Value Chain
The value chain is an analytical management tool. It allows managers to calculate the strategic value
of an organisations separate activities enabling a manager to make changes that will create a
competitive advantage. The value chain is an in-depth analytical tool that can be likened to the
British cycling team’s philosophy of the "aggregation of marginal gains" (The Guardian online, 2014),
where every area is examined in detail with a view to finding areas of improvement. The theory,
proven by the team’s success, is that small gains can deliver a competitive advantage over the
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opposition. In the case of the value chain the same philosophy is equally applicable and when used
correctly, the value chain model, allows the manager to “consider which activities benefit customers
and which are more troublesome” (Boddy, 2011, p.239). A detailed analysis of Fresch’s value chain is
at appendix five; pertinent points it raised are:
a. Marketing and Sales and admin are carried out by the same person, this means that
Marketing and Sales can be ignored.
b. Social media is something that could be used in the future.
c. IT is good but could be improved. Fresch would like to invest in bespoke software that is
compatible with their website and can inform customers where their order is, it would also
be used to automatically order from suppliers.
Figure 2 Porter's Value Chain (1985)
The arrows shown on appendix five indicate activities that are linked. Because the primary and
secondary activities are all interdependent the process of identifying links is the method used to
make savings or improvements that will add value for the customer.
8.3 Boston Matrix
The Boston Matrix is a simple, visual tool designed by management consultants at the Boston
Consulting Group in the early 1970s. Initial intended uses were to help manager’s at large firms
decide which business they should invest in and which of their own they should dispose of. It is used
in the context of Fresch to examine the likely financial performance of their products and business
portfolio. Appendix six shows Fresch’s Boston box, key point are:
a. Hot bacon and sausage baps have the highest profit margin.
b. Andover is not profitable for Fresch to operate in.
c. Fresch currently have faith in all of their produce.
d. Presentation and packaging is another USP that set them apart from their rivals.
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9. Growth Model
The Churchill and Lewis (1983) growth model is an ideal assess tool that focuses on the challenges
that face small businesses in particular. It is unique because stage 3 is repeated. The model implies
that when success is achieved the owner(s) either actively pursue growth or opt to stay the same,
this could be for a number of reasons; the owner may be happy earning a decent income from the
business. It might be that the owner fears further growth would lead to less control as growth
always requires a financial input; if the owner cannot raise the capital they will have to sell a share of
their project which until this stage was perhaps inconceivable.
Stage 1
Existence
Stage 2
Survival
Stage 3
Success-
Disengage
Stage 3
Success-
Growth
Stage 4
Take - off
Stage 5
Maturity
Management
Style
Direct
supervision
Supervised
supervision
Functional Functional Divisional
Line and
staff
Extent of
Formal
Systems
Minimum to
non-existent
Minimal Basic Developing Maturing Extensive
Major
Strategy
Existence Survival
Maintaining
a profitable
status quo
Get
resources for
growth
Growth
Return on
investment
Figure 3 Churchill and Lewis's Lifecycle Growth Model (1983)
Fresch are at stage three although they are edging into stage four. The management style is clearly
functional; all three owner managers have clearly defined management roles. They realise there is a
need for an additional member of staff to cover the day to day admin in order to further clarify their
roles and are actively recruiting for this purpose. Fresch have very well developed systems in place,
Tim believes that the company saves up to £25k a year because they have such systemised
processes in place; systems that prevent food wastage and save staff up to an hour a day each. Their
major strategy is the preparation for growth; they have purchased new premises so they now have
the start of a property portfolio. They will have an increased capacity to produce more buffets and
concurrently serve more customers. The biggest resource required for growth is finance so it is
particularly encouraging that the new premises have a commercial tenant that will stay and whose
rent covers the mortgage. Fresch is financially secure and able to raise capital so when they have
fulfilled their potential within their current catchment they will be ideally placed replicate their
success in Surrey.
10. SWOT Analysis
I have compiled the deep SWOT analysis using the results of the investigation into the micro-
environment and the macro-environment relating to Fresh. The detailed SWOT analysis can be
found at appendix seven. Analysis of the micro-environment has identified the inclusions in the
strengths and weaknesses. Areas that Fresch do well and should keep doing and the areas of their
practice they should seize to do as it weakens their position. Study of the macro-environment has
identified the opportunities that Fresch should pursue to become stronger from and the threats that
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they should be aware of and prepared to combat when necessary. Below is a condensed version of
the SWOT analysis at appendix seven.
Strengths
Own premises.
Minimal debt.
Better IT than rivals.
Robust systems.
Kitchen is well equipped.
10 years of experience.
A Large database of recipes and menus.
Clearly identified job.
Excellent branding.
Good customer relationships.
Fresh local produce prepare on the day of the buffet.
Good website that takes orders.
Weaknesses
Admin and sales and marketing are done by one
person.
Sales and marketing is often neglected and can be
stagnant for long periods.
IT systems do not link to the website.
Social media has not been harnessed at all.
They have outgrown their exiting premises.
Andover does not yield much profitbut is a large part
of their catchment.
Opportunities
Reinvest in branding.
Reinforce and improve the robust processes that are
already in place.
Invest in bespoke IT that links to the website.
Stop using pre-brought food in within 6.
Support the Department of Health’s Public Health
Responsibility Deal.
Get ahead of the curve; the date for nutrition
declaration becoming mandatory is likely to be 13 Dec
2016.
Use LinkedIn to communicate business to business.
Threats
Interest rates are due to rise.
Rivals will win trade through exploiting social media.
Wealth competitors can replicate Fresch’s USP’s.
Competitors targeting existing clients of Fresch.
Fresch’s catchment is saturated with corporate
caterers.
There are new start ups every week
Figure 4 Condensed SWOT Analyses on Fresch.
11. Growth Strategy
11.1 Strategic Choices
Bowman’s strategy clock (figure three) provides a visual representation of where a business is
positioned amongst its rivals. Once a business recognises its position decisions can then be made to
achieve a sustainable advantage over its competitors.
Figure 5 Bowman's Strategy Clock (1996)
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Fresch currently occupy the market in position four. Their USP’s give the customer perceived added
value, they feel as though they are paying for something special and that it is worth it. There is a
price premium attached to this perceived value but the budget buffet represents excellent value for
money and demonstrates that greater market share can be achieved without the added expense.
In the pursuit of growth Fresch would be wise to maintain their position at four especially in their
current catchment. If they were to move into Surrey then focused differentiation could yield greater
market share as businesses in Surrey, being closer to London, will pay a higher premium and expect
upmarket segmentation i.e. high quality fresh food and exceptional branding, both of which Fresch
excel at.
11.2 Suggested Strategy
When deciding to grow, businesses must decide whether to grow through existing products or new
markets. The Ansoff growth matrix is strategic marketing planning tool that businesses can use to
assist them in determining whether growth will be best achieved through existing products or
through market growth.
Figure four shows the Ansoffs Growth Matrix as it pertains to Fresch.
Products
Existing New
Markets
Existing
A. Market Penetration
Move premises.
Improve existing processes
Completely stop using pre-prepared
food.
Label all ingredients before it
becomes mandatory in 2016.
B. Product Development
Champion the Public Responsibility
Deal.
Invest in bespoke IT systems.
New
C. Market Development
Extend north into Surrey.
Further market segmentation to
appeal to more wealthy clients.
D. Diversification
Look outside corporate catering,
wedding parties etc.
Figure 6 Ansoff's Product/Market Growth Matrix (1957) in relation to Fresch
The application of Ansoff’s matrix on Fresch has revealed two interrelated strategies that I would
recommend.
Firstly, a short to medium term approach would be to fully exploit the existing market place; this
would be achieved by moving premises and strengthening Fresch’s core competencies and unique
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selling points. This would include investing in the bespoke IT systems and then improving Fresch’s
already robust processes.
Secondly, a long term approach to growth would be to set up an extension of Fresch in Surrey.
Fresch have excellent core competencies in their processes and systems, they also have a unique
selling point in their production high quality food produced using only fresh local ingredients.
Tim has agreed that he wants to grow and would consider the possibility of moving outside their
current catchment. In order to do this they would need to have premises with a kitchen as they must
deliver within a 30 minute radius in the interest of keeping the food fresh.
Diversification is not an option for Fresch. Corporate catering allows Tim and his business partners to
avoid catering at weekends. Their product is also designed specifically for the business world and
due to their systemised approach to catering the menus do not readily transfer to the weddings and
parties market.
11.3 Feasibility
Fresch are an established business, the Resource Audit at appendix four identified that they are
financially secure with savings and have an excellent credit rating with their bank. The Resource
Audit combined with the Value Chain analysis also highlighted their excellent processes and their
unique selling points. These are their production of original fresh food using fresh local ingredients
prepared on the day and their excellent high quality branding.
The short term strategy is cost effective and cheap to achieve. They have already purchased the
premises, due to the sitting tenant these premises are self funding. Improving the business
processes and systems is something that Tim is passionate about and is cost effective. Bespoke IT
systems would be an expensive investment but within the financial reach of Fresch. It would also lay
the foundations for the long term strategy of penetrating the market outside their current
catchment.
The second, long term strategy to extend into Surrey is an expensive strategy. By fully implementing
the short term strategy first they will be in an excellent position to replicate their systemised high
quality brand. Fresch have not shared the finer details of their balance sheet, however I believe that
the financial investment to achieve this strategy is within their reach. If it is not yet within their reach
then it will be shortly as they have grown on average 28 percent per year since the business started.
11.4 Acceptability
The Goodwin family will receive a return on their investments regarding these strategy suggestions.
By improving what they do well in the short term and then replicating their business model in a
wealthier catchment in the longer term they are
In order to mitigate some of the risk encountered by replicating the business model in Surrey it is
vital that in-depth research is undertaken in order to produce the best business plan and select the
best business premises. The demographics of North Hampshire and Surrey are very similar they are
linked by the A3 and the M3. The business that exist in Surrey are less manufacturing and more
information, communication technology and sales and marketing; exactly the type of business that
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Fresch prefer to do business with as they have historically had bigger budgets. The fact that they
have established and grown Fresch in Basingstoke to the strong position that it is in today leads me
to believe that the risk associated with branching into Surrey, with a view to getting closer to
London, is worth taking and will offer the market growth that will see Fresch really take off.
Having spoke in-depth with Tim Goodwin it is clear that all three stakeholders have a history of
amicable decision making. This probably stems from their closeness as a family and prevents internal
conflict from arising. If these strategies are not received by all owner managers then they will not be
pursued.
11.5 Suitability
The short term growth strategy is currently in progress, the premises have been purchased and Tim
is continually improving processes that have contributed to the success of Fresch to date. My
suggestion of labelling ingredients before it becomes mandatory and championing the Public
Responsibility Deal are both cheap to implement and will help to penetrate the existing market
further. Investing in bespoke IT systems is a costly undertaking but Tim and the remaining owners
consider it a vital undertaking for the future of Fresch. It will strengthen their core competencies and
pave the way for their long term goal of exploiting new markets.
The deep SWOT analysis reported on here has clearly supports that the long term strategy of moving
into Surrey is suitable for Fresch.
12 Conclusion
This report has examined the potential for Fresch Buffet Caterers to grow. This has involved the
application of various analytical tools to critically analyse the micro-environment and macro-
environment that Fresch operate within. As a result of this analysis two growth strategies have been
suggested for Fresch to consider. I have faith that these strategies are suitable for Fresch and are
aligned with the entrepreneurial spirit espoused by the Goodwin family to date.
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References
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http://www.hse.gov.uk/legislation/forthcoming.htm. Last accessed 8th Aug 2014.
Burke et al (2008). Growing Your Business . Wiltshire: Routledge. P.151.
Burns, J (2011). Entrepreneurship and Small Business. 3rd ed. London: Palgrave Macmillan. pp.20, 21.
Boddy, D. (2011) Management: An Introduction, 5th
edn, London, Pearson Education, pp. 238,239
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Last accessed 09 Jul 2014
Johnson, G, Whittington, R and Scholes, K (2011). Exploring Strategy. 9th ed. Essex: Prentice Hall.
p.8.
Lambert, S. (2014). When will interest rates rise? Higher inflation but slow wage growth makes hike
this year a tough call Read more: http://www.thisismoney.co.uk/money/news/article-
1607881/When-UK-rates-rise.html#ixzz3. Available:
http://www.thisismoney.co.uk/money/news/article-1607881/When-UK-rates-rise.html. Last
accessed 8th Aug 2014.
NHS, The Health and Social Care Information Centre. (2013). Statistics on Obesity, Physical Activity
and Diet: England, 2013. Available: http://www.bhfactive.org.uk/userfiles/Documents/obes-phys-
acti-diet-eng-2013-rep.pdf. Last accessed 8th Aug 2014.
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http://www.bluewolfconsulting.co.uk/blog/how-does-social-media-affect-your-business. Last
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Appendix 1
Business Growth Questionnaire
This questionnaire is designed to be completed by the entrepreneur(s) behind Fresch Buffet Caterers
and will provide the foundation for a business growth analysis.
Background
1. When was the business opened?
February 2004
2. Who started the business?
Tim Goodwin and Peta & John Goodwin
3. If more than one person what are the ownership percentages?
30% each. Brother Lee Goodwin was gifted the remaining 10% but he earns no money from the
business and is a silent owner.
4. What is your education/training/working/business background?
Education: I was educated to matric level in South Africa which is equivalent to A-levels, I did not
attend University.
Training: None
Working & Business: Prior to starting the business I worked as a function coordinator for 2 years,
helping with planning and management of the functions and events on the day.
5. What services do you offer?
We offer hand-made, fully prepared and presented buffets to cooperates and businesses for their
meetings and trainings sessions. We supply to business only, no private functions at all.
These next questions are the only financial questions I will ask. They are to ascertain that, according
to the Companies Act, your business is a Small/Medium Enterprise.
6. Does the business turnover less than £22.8m? Yes
7. Is the balance sheet less £11.4m? Yes
8. Do you have fewer than 250 employees? Yes
9. How did you choose the location?
Basingstoke has a high ratio of companies per capita in a very concentrated area; this was our main
deciding factor. It is also within 30 minutes drive of other large commercial centres.
10. Do you own or rent your premises?
We currently rent and have done for 10 years; however we have purchased a commercial property
and will be moving near the end of the year.
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11. Are the premises used for any other purpose?
No
Entrepreneurs Vision
12. What was your inspiration to open a business?
I had watched my parents (Peta & John Goodwin) running business whilst growing up in South
Africa. After a couple years of employment I had decided that what I had seen my parents do looked
better than what I was experiencing as an employee. I was also very passionate about food and
wanted to get more involved with it.
13. What is the vision (ideal best outcome)?
To expand to 5 or 6 other ‘manufacture and distribution centres’ similar to what currently exists in
Basingstoke.
14. What is your business vision (and if you have one your mission statement)?
Vision
We want to become known for making the best “fresh food” products in every single day, in any one
of our ever increasing number of shops. We want to be the business that is famous for its
innovation, dedication to quality and continual striving to be, and stay, the best corporate catering
company. Also to be a company that continually and intentionally is better than its customers expect
it to be. We need to be the perfect product for our customers and to try our utmost to stay that way.
To be a company that cares for its people, customers and suppliers more than they expect. To be
one of the few companies in the world whose people, customers and suppliers can say “it is truly a
pleasure to deal with them”.
Mission
To achieve our vision we must continually look at every aspect of our business and ask ourselves the
question: “How can we do what we are doing now in a way that is more efficient, simpler, more
profitable and that produces a better quality product for our customer?” We need to be renewing
the way we do business continually so that we are always ahead of the trends, if not setting them.
We need to be the perfect product for our customers by having regular and intentional
communication with them to determine their needs and act upon them.
15. When you opened did you have an objective? (A SMART realistic figure by a specific time)
An example would be Microsoft’s objective “a computer on every desk and in every home by
the start of the 21st
century”.
No
16. What were your first 12 month projections (in terms of goals, customers, employees,
services, sites etc)?
We wanted to be in profit by the end of the year and able to pay 2 liveable wages.
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17. Did you achieve them?
Almost, the wages were barely liveable. We did just start to turn a profit though.
18. How did you achieve them?
By working 15 to 16 hour days. By improving products and trying to gauge customer responses and
making changes, creating systems & marketing.
19. What are your 5 year projections?
To have a second outlet set up in premises we own achieving a similar profit to our current unit.
20. Do you think you will achieve them?
Yes
21. What are you doing to make sure you achieve them?
Applying what we have learned over the past 10 years, working 12 hour days and investing in
marketing. Making sure we stay ahead of the trend with our product and offering. Creating barriers
to entry for new start-ups and potential competitors in our industry.
Attitude to Growth
22. How many people were employed at the start?
2
23. How many employees are there now?
11
24. What skills do you think you bring to the business?
Knowledge and skills pertaining to food. The ability to create recipes and menu’s from scratch that
suit our market, budget and delivery limitations. Managerial and process making skills.
25. Why have you been successful to date?
By being customer focussed, reluctant to compromise on quality for profit and great customer
service.
26. What would you like to improve or grow within your existing business?
I would like to improve our business systems further and make greater use of technology.
27. How has the economic climate affected your business since it opened?
The economy has had an effect on the average spend per head from our customers but we have still
managed to grow through the recession by gaining a greater slice of the pie. We created a budget
buffet that has helped us to grow.
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28. Are you thinking about growth?
Yes, it is really coming into focus for us at the moment.
29. Does the economic climate encourage or discourage your thoughts on growth?
Encourage at present.
30. Could you open another outlet if you wanted to?
Yes
31. What does the future hold for Fresch?
More of the same. With more focus on marketing than there has been to date.
PESTEL
Are you externally threatened by any of the following factors?
32. Political
No
33. Economic
No
34. Social
No
35. Technological
No
36. Environmental
No
37. Legal
No
Porter’s 5 Forces
Power of suppliers
38. How many suppliers do you have?
Well over 20.
39. Who supplies what?
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Too long to list but we have over a 500 ingredients that come in on a regular bases.
40. Do you have the power to negotiate with your suppliers?
Yes and we do often.
41. Are there other suppliers if you wanted to change?
Yes, many.
42. Do you train your caterers/chefs yourself?
Yes
43. Are you able to attract fully trained caterers/chefs that already have a good reputation?
Probably if we wanted to, however with a lot of food and catering knowledge in the management
team we haven’t yet felt the need.
Threat of New Entrants
44. There are lots of empty premises in and around Basingstoke, are you concerned by the
threat new caterers opening?
Yes and no, new caterers open all the time. Everybody thinks that they cook well and therefore can
make a buffet no problem. There is also a lot of food available ready to cook from suppliers. That
coupled with the fact that you can start a business from your kitchen at home means we are
inundated with newbies. We plan to address this in the future by creating industry standards that
make it more costly and require greater skill and knowledge to compete.
Power of Buyer (customer)
45. Can customers negotiate with you on price?
Yes
46. Would you ever change your prices based on customer feedback?
Yes, but never at the expense of profit.
47. How do you retain your customers?
By building strong business relationships, never letting the customer down and maintaining
standards.
48. Do you have a loyalty scheme?
No, although that will change in the near future.
Threat of Substitutes
49. Do you think customers would use other caterers if you were fully booked?
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Yes, but we are never fully booked.
50. Do you offer any service that your customers cannot get anywhere else?
No, not services, But we do offer products that they can not get anywhere else.
51. What makes you different from your rivals/what is your unique selling point?
We make all of our food from scratch, using good ingredients and our own recipes. This is very
unusual in our industry.
Competitive Rivalry
52. There are other caterers in Basingstoke; does this concern you in anyway?
Yes, to some extent, however we are confident in our product and service. We do keep a keen eye
on what our competitors are doing to make sure we are still ahead on quality and offering.
53. Do you actively engage in rivalry?
Yes, although not very aggressively. We don’t follow our competitors for example and target those
customers directly. This has happened to us though.
54. Do your rivals try and undercut you, or you them?
We don’t normally negotiate on price as we are fairly competitive on price already. We don’t go
down the undercutting route as we feel this will ruin the profitability of the industry.
55. Do you and your rivals market against each other (e.g. offering to beat each others price)?
No.
Resource Audit
Physical resources
56. Do you have equipment that sets you apart from your rivals?
Technology, although not as much as it should. I think our business systems are robust and staff that
come and work for us are always surprised how ‘systemized’ we are. This gives us an edge on
efficiency.
Human resources
57. Do you and your staff have intellectual knowledge that makes you better than other
caterers? For example a special cooking technique or food preparation skill that are hard to
replicate.
Yes, we have a large database of recipes that we have built up and good food knowledge in the
management.
Financial resources
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58. Do you have or could you get finance for expansion, growth or another project?
Yes, we have a good amount of cash and our bank manager is keen to give us money if we need it.
Intangible (goodwill, brand name, contacts, culture, company promise) resources
59. Do any of these give you a competitive advantage?
Absolutely, I would allocate 90% of the value of our business to these.
60. If so how do you maintain them?
We keep our brand messages constant, visit our customers regularly and maintain a contacts
database. Customer service is carefully monitored to ensure consistency.
Porters Value Chain
Primary Activities:
Inbound logistics – involve relationships with suppliers and include all the activities required to
receive, store, and disseminate inputs.
61. How often do you receive supplies?
6 times a day.
62. Do you collect or deliver?
They deliver 90% of the time.
63. How much can you store on site?
Enough for 1 week’s worth of business.
Operations – are all the activities required to transform inputs into outputs (Products and services).
64. What services do you offer?
None
Outbound logistics – include all the activities required to collect, store, and distribute the output.
65. Do you sell anything other than a buffet service?
No we are focussed on corporate catering and do not operate outside of this niche.
Marketing and sales – activities inform buyers about products and services that induce buyers to
purchase them and facilitate their purchase.
66. How do you market your services?
Direct face to face marketing, knocking on doors and meeting potential customers. Online through
websites.
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67. What makes you better than your rivals?
Product quality and our branding.
68. Is this portrayed in the marketing?
Yes, part of our marketing process is offering a free sample for potential customers to try before
they commit to setting up an account.
Service – includes all the activities required to keep the product or service working effectively for the
buyer after it is sold and delivered.
69. Do you offer any form of follow up service (e.g. A clean up service)?
We collect the platters the following day, which is about it.
Secondary activities:
Infrastructure – serves the company’s needs and ties its various parts together. It consists of
functions or departments such as accounting, legal, finance, planning, public affairs, government
relations, quality assurance and general management.
70. Do you and your employees have defined competencies?
Yes, every member of staff and the managers have core responsibilities with a little overlap.
Procurement – is the acquisition of inputs, or resources, for the firm.
71. Is this something you do you or designate to an employee?
I do all of it along with Peta.
Human Resources Management – consists of all activities involved in recruiting, hiring, training,
developing, compensating and (if necessary) dismissing or laying off personnel.
72. Is this done internally or externally and by whom?
Internally by all three the owners/managers.
Technological development – pertains to the equipment, hardware, software, procedures and
technical knowledge brought to bear in a firm’s transformation of inputs into outputs.
73. Is any of your equipment including your IT technologically advanced?
No, not as advanced as it should be, although the answer is probably yes when compared to our
direct competitors.
74. How do you keep up with advancements?
Stay abreast with the time and invest. The cost of new technologies that we know would set us apart
is often a barrier for us as we have to be certain it will turn a profit.
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75. Is this the same for the practical aspects of catering?
Yes
Boston Matrix
76. What is your “cash cow”? The product service that makes the most money.
Our pricing model is such that every product we sell has the correct margins built in to allow for
profitability but hot bacon & sausage baps probably have the best margin.
77. What is your “star”? A product/service that is strong compared with the competition. It may
need investment to sustain growth but you think it’s worth it.
We don’t really have one. I think packaging and the way we present our product could be it though.
It does require huge investment though.
78. What is your “question mark”? The product/service that may make money but you are not
yet certain of.
None at the moment.
79. Do you have a “dog”? The millstone around your neck, this is a product/service that has a
low market share in a low-growth market but generates enough cash to break-even.
No, not a product but our equivalent would be and area, Andover. The companies in Andover are
mainly manufacturers and as a result operate on lower profit margins then the tech and service
based companies. They therefore have less budget and are not as ‘flash’ . They are not really
interested in quality only price. We have learned that Andover is not worth the effort.
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Appendix 2
PESTEL Analysis
Factor Effect
Political
Foods bearing a nutrition declaration on a voluntary basis must
comply with the requirements of the food information for
consumers (FIC) Regulation from 13 Dec 2014 (gov.uk online, 2014).
POSITIVE: Time spent on researching ingredients. Getting it right
now will prepare Fresch for it becoming mandatory 2016.
Application date for nutrition declaration becoming mandatory 13
Dec 2016 (gov.uk online, 2014).
NEUTRAL: If Fresch are prepared it will not have an effect.
Economic
The UK is experiencing Economic recovery. POSITIVE: More businesses are starting up or expanding.
Businesses are increasingly interacting to seek trade; this provides
Fresch with new business possibilities.
Interest rates are due to rise in 2016 (This is Money online, 2014). NEUTRAL: Rates will be higher if Fresch wanted to borrow in the
future. However the mortgage on the new property is fixed. The
rent charged for the top floor covers the repayments.
Banks have a “subdued appetite for lending” to SME’s (BBC News
online, 29 May 2014).
NEUTRAL: Fresch could face difficulty in raising capital from the
banks but they have .
Wages are not keeping pace with inflation resulting in consumers
having lower disposable incomes. (This is Money online, 2014).
POSITIVE: This means Fresch are not under immediate pressure to
raise the wages that they pay. Corporate customers are not
purchasing buffets based on their wages therefore they continue
to pay the going rates.
Social
Social Networking Facebook has approximately 526 million
customers logged in each day. Twitter averages 460,000 new
accounts each day (Bluewolf online, 2014). Fresch do not yet
engage in social media.
POSITIVE: Customers could learn about Fresch via social media.
Fresch would be able to communicate with customers via these
platforms. As yet There is not any real evidence to suggest it would
assist in business to business sales. LinkedIn may be a better
avenue to pursue.
NEUTRAL: It acts as a quality control as news of poor service
spreads very quickly.
The Department of Health have set up the Public Health
Responsibility Deal, one of its aims of the is to tap into the potential
for businesses and other organisations to improve public health and
tackle health inequalities through their influence over food, alcohol,
physical activity and health in the workplace (The NHS Information
Centre, 2013)
POSITIVE: This represents an opportunity to pioneer this popular
social trend in the corporate food industry. It is in keeping with
Fresch’s passion for fresh food.
Technological
Advances in software make it increasingly likely that catering firms
will use IT to account and order produce, accept bookings, pay staff
and carryout financial analysis.
POSITIVE: This type of software allows companies to lower the
wage bill at the same time as increasing accuracy.
POSITIVE: Tim is currently preparing to launch a mobile app to
allow customers to order and pay via a smart phone.
The proposed move at the end of the year provides Fresch with the
opportunity to modernise it food preparation equipment.
POSITIVE: Investing in new technologies prevents Fresch from
losing out to companies do.
POSITIVE: It is a chance to get the workflow perfect so that it is
systemised and matches Tim’s ideology of a very processed
business.
NEGATIVE: This could result in a need to retrain staff on new
equipment.
Environmental
The Health and Safety at Work etc Act 1974 and The Food
Standards Act 1999 are the main legislations that effect Fresch’s
environment (www.hse.gov.uk/legislation/forthcoming, 2014.)
POSITIVE: These are established acts that Fresch are well versed at
complying with them.
From 2015, waste collection authorities must collect waste paper,
metal, plastic and glass separately (gov.uk online, 2014).
NEUTRAL: This is an easy legislation to comply with.
Legal
Employment Law NEUTRAL: Fresch already comply.
Data Protection Law NEUTRAL: Fresch already comply.
Marketing and Advertising Law NEUTRAL: Fresch already comply.
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Appendix 3
Porters 5 Forces
1. Threats of new entrants
HIGH: There are few barriers to entry; everyone thinks that they can cook. Food hygiene qualifications are easy
and cheap to come by and lots of companies sell pre-prepared food that requires little skill in its presentation.
LOW: Fresch have a detailed portfolio of exclusive recipe’s that are hard to replicate. This is there is their
unique selling point.
LOW: Fresch continually raise their own standards with the intention of creating barriers to entry for new
entrants. Tim states this is not out of spite, it is to make better for the customer. These barriers include highe
levels of presentation and packaging; the platters are imported from America, time and money has been
invested in packaging. These are all something new entrants would have to replicate if they wish to compete.
MEDIUM: New entrants do not have economy of scale. To collate raw ingredients, process and them and
deliver the final product requires experience and a regular supply and regular orders. Fresch are established
and have the benefit of economy of scale, these keeps their prices consistently reasonable.
2. Threats of substitutes
MEDIUM: There are lots of alternatives in Basingstoke and there are no cost penalties for switching. Fresch
have mitigated this threat by being unique (fresh ingredients, original recipes) and offering value for money.
This threat will be further mitigated by the further by the soon to be introduced loyalty scheme.
MEDIUM: By ensuring barriers to entry benefit the customer Fresch are raising their standards, this will
impress the customer and help to incite brand loyalty.
3. Power of suppliers
LOW: Fresch have over 20 suppliers that supply over 500 ingredients. Fresch are adept at negotiating with
their suppliers and are not afraid to switch. There is no financial penalty attached to switching suppliers.
4. Power of customers
LOW: Customers have limited power. Fresch will negotiate on their prices but never at the expense of profit.
Negotiation on prices is rarely engaged in.
MEDIUM: There are lots of caterers to choose from, however Fresch work hard to retain customers by
building strong relationships and maintaining standards because they believe that this reduces the temptation
for customers to switch.
5. Competitive rivalry among existing competitors
HIGH: There are a high number of rivals in the area competing for the same customers.
HIGH: Fresch have experienced rivals targeting their existing customers. This is not a tactic that Fresch will
involve themselves in; this will give them kudos amongst customers but creates a slightly uneven playing field.
MEDIUM: Barriers to entry that Fresch are creating will raise the industry standards, this will prevent
customers from switching.
MEDIUM: Fresch are systemised and process driven, this is not replicated by their rivals.
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Appendix 4
Resource Audit
(T) indicates a threshold competency.
(C) indicates a core competency
Physical resources
The business is established in its premises. (T)
New premises have been purchased. The top floor is
already rented out. (T)
Tim considers Fresch to have a slight technological
advantage over their rivals but wants to further
increase this advantage. (T)
All equipment is industrial i.e. walk in fridges and
freezers, industrial ovens and cookers. (T)
Fresch have robust business processes and believe
that gives them an edge on efficiency. (C)
Tim has very systemised processes in place. He
accounts for food as individual items not packets. This
prevents wastage. (C)
Human resources
Fresch have large amounts of intellectual knowledge
that has created databases of recipes. (C)
All staff have a good knowledge of food and food
hygiene. (T)
The management have experience and knowledge of
business as well as food. (T)
Staff have overlapping core competencies so when
one person is absent it doesn’t cause a crisis. (T)
General Manager (John Goodwin) (T)
Admin Manager (Peta Goodwin) (T)
Marketing Manager ( Peta Goodwin) (T)
Development Manager (Tim Goodwin) (T)
Quality Control (Tim Goodwin) (T)
Head Chefs (T)
Pastry Chefs (T)
Buffet Preparation Chefs (T)
Kitchen porters (T)
Drivers (T)
Financial resources
Fresch Is solvent with a healthy balance sheet and an
excellent credit rating with their bank. (T)
The rent received from the tenants pays the
mortgage on the new premises.
Intangible resources
Tim would allocate 90% of the value of our business
to intangible resources.
The brand message is constant and unique, making it
hard to replicate. (C)
Customer relationships are maintained. (T)
A current contacts database is kept, allowing
customer service to be carefully monitored ensuring
consistency. (T)
Their Unique Selling Point (USP) is producing original
fresh food using fresh local ingredients prepared on
the day. Within a year Fresh will not use any pre-
brought products. (C)
Ten years of experience is invaluable in the running of
a successful business. (T)
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Appendix 5
Value Chain
Firm Infrastructure: Small Family owned and run business. Located in a trading estate in Basingstoke, currently rented premises but moving to
owned premises at end of 2014. 11 members of staff all have individual and overlapping core competencies. The new premises offer the chance to
upgrade equipment and work processes.
Human Resource Management: HR is a core function of the three owner managers. Peta Goodwin is primarily in charge of the admin but this
Fresch are currently recruiting someone to fill this role. Staff can contribute to the recipe development. General management is a function performed
by John Goodwin.
Technology Development: IT equipment is better than most competitors. Fresch have a functional website but not a social media page. IT is
an area Tim feels could be improved upon, bespoke software would benefit Fresch as this would be able to update customers of the location of their
order and order from suppliers directly at the point of a customer order. Fresch have up to date kitchen/catering equipment.
Procurement: Two of the owner/managers are responsible for the ordering of ingredient and the updating of existing
equipment.
Inbound Logistics
Fresch receive 90% of
their stock through
deliveries.
6 deliveries a day.
Over 20 suppliers.
1 weeks worth of
stock is kept onsite.
Operations
An established but
crowded kitchen.
Well trained staff.
Staff trained internally.
Staff competencies
overlap.
Product development is
the role of Tim Goodwin.
Outbound Logistics
4 vans and four drivers.
The food leaves the premises
wrapped and sealed so the
drivers do not need food
hygiene training.
The drivers are trained in
temperature control for the
vans.
Marketing and Sales
Face to face marketing is
preferred.
This function is carried out by
Peta Goodwin.
Customers can order direct
from the website.
Fresch’s superior product
serves as an excellent
marketing tool.
Free samples are offered to
potential customers.
Service
Food is prepared on the
day of the function.
Delivery is always punctual.
Drivers are trained in
customer service.
Platters collected the next
day.
Quality control is the role
of Tim Goodwin.
Margin
SecondaryActivitiesPrimaryActivities
Margin
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Appendix 6
The Boston Matrix
Star
Packaging and presentation provides a positive differentiation
against the competition.
The Budget Buffet has enjoyed high order levels since its
inception in 2008, as some businesses seek to elevate the
strains of the financial crisis.
Question Mark
New products become the question mark until sales confirm its
profitability. Fresch will not continue to sell something that is
not profitable.
Currently Fresch have no question marks in their repertoire.
Cash Cow
Hot bacon and sausage baps have the highest margin.
Dog
No product fit this criteria but Andover is an area offers poor
market growth and has limited profitability. Companies in
Andover are mainly manufacturers and operate on lower profit
margins than the technology and service based companies.
They have less budget and are not interested in quality only
price. Andover is not worth the effort for Fresch because it
undermines their key principle of quality first.
HighLow
MarketGrowth
Low High
Market Share
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Appendix 7
SWOT Analysis
Strengths
New premises are owned.
Only debt is a fixed rate mortgage, payments are covered by tenants. This cannot be
classed as a core competence but it is a huge advantage.
Technically they are better evolved than rivals.
Robust systems are already in place, this is a core competency.
Kitchen is well equipped.
10 years of experience.
A Large database of recipes and menus, this is a core competency.
Staff have clearly identified job roles and can cover each other’s role in case of staff
absence.
Excellent branding that is hard to replicate, this is a core competency.
Good customer relationships.
Fresh local produce is used to prepare food on the day of the buffet, this is a core
competency.
Fresh have a functional website that takes orders.
Weaknesses
The activities of admin and sales and marketing are done by one person (Peta Goodwin)
this means that sales and marketing is often neglected and this activity can be stagnant for
long periods.
Although the IT systems are better than their rivals, it is considered an area of weakness.
Their systems do not link to their website. Bespoke software would automatically replenish
stock and inform the customer where their order is.
Social media has not been harnessed at all.
They have outgrown their exiting premises. This is hampering the development of the
robust systems that are in place.
Andover is an area that does not yield much profit; this is a weakness because it is a large
part of their catchment.
SWOT Analysis
State what you are assessing here: Analysis of the Business Environment faced by Fresch
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Appendix 7
Opportunities
Reinvest in branding, this is one of their unique selling points and should be regularly
revitalised. It also creates a barrier to entry.
The move to the new premises is an opportunity to reinforce and improve the robust
processes that are already in place.
Invest in bespoke IT that links to the website. This will revolutionise Inbound Logistics,
Outbound Logistics and Service. It would also be an excellent Marketing and Sales Tool.
Push on with the goal of not using pre-brought food in within 12 months. Shorten it to 6
months as it is in keeping with the brand and is a unique selling point.
Actively support the Department of Health’s Public Health Responsibility Deal. Fresch are
perfectly suited to champion the drive to help improve public health and tackle health
inequalities through their influence over food. This ties in to their unique selling point of
fresh ingredients.
Get ahead of the curve; the date for nutrition declaration becoming mandatory is likely to
be 13 Dec 2016. This will be good marketing and show Fresch as a forward thinking
company.
Investigate LinkedIn as a business to business social media app that would suit Fresch.
Threats
Interest rates are due to rise. If Fresch wanted to raise extra capital next year they would
incur higher charges.
If Fresch do not exploit social media their rivals will, this could result in less trade.
Two of Fresch’s unique selling point i.e. excellent, unique branding, and fresh local
ingredients could be replicated by a wealthy competitor.
Competitors that target existing clients of Fresch could win potential trade from Fresch.
Fresch will not engage in this activity themselves.
Fresch’s catchment is saturated with corporate caterers, this means they have to work hard
at retaining existing customers and win new ones.
There are new start ups every week. In the short term these business could undercut
Fresch as they try and build their own client list.