Business Strategy Assignment
The "Krisco Services" is one of the “UK's” biggest independently held gas station operators. It is essentially a fuel retailer in the United Kingdom that works with a variety of shops to deliver the best possible assistance and solutions to its clients. It is always looking for new ways to improve its level of functioning, as well as the content and worth it gives to its customers. For its steadfast and concentrated approach, the firm is working hard to preserve its leading position in this market for the conceivable future. The main USP of the company is to provide the best fuel and that too at a reasonable rate.
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1. Overview of organization
“Krisco Services Group” is among the biggest privately held forecourt operators in the United Kingdom. It is basically a petrol retailer in the United Kingdom which aims to provide the best possible support and services to its customers by partnering with various retailers (Ksguk.com, 2022). “BP, ESSO, Texaco, Londis, Spar, Costa Coffee, National Lottery, and Paypoint” are among the companies with which it has strategic brand agreements (Krisco.co.id, 2022). The company’s mission is to provide the best possible fuel at the best value along with providing the customers with various support and services which would help the company to grow and compete with the market leaders.
The company knows that the best possible fuel is available in the United Kingdom but it's very expensive and not at all value for money for the customers. This problem statement creates a vision for the company. The main aim and vision of the company is to provide the best possible fuel and that too value for money (Krisco.co.id, 2022). Moreover, the customers seek to relish themselves at the petrol stations but they can’t in the United Kingdom. It’s so because there are a few petrol stations which provide relishment services to their customers and that too are way expensive. The company’s vision is to provide the customers with relishment services that are cheap and of very good quality.
“Krisco Services Group'' is continuously on the lookout for innovative ideas to enhance its level of operation, as well as the quality and value it provides to its clients. The company tries hard to maintain its leadership position in this industry for the foreseeable future because of its resolute and focused strategy.
The company provides the best fuel which is the best value for money for the customers. Moreover, it provides an attractive forecourt shop by partnering with various retailers like “BP, ESSO, Texaco, Londis, Spar, Costa Coffee, National Lottery, and Paypoint”. Nonetheless, it provides “Nectar points at BP” which is the “UK's popular loyalty programme” thereby benefiting the customers a lot (Krisco.co.id, 2022). Lastly, it provides “Costa Express” for pure Coffee lovers thereby relishing the customers at the petrol station which is the most famous one along with the instore shop which includes lottery, cash machine, chilled food, fruits and veggies and seasonal products.
2. External and internal analysis
Political factors- Tax regulations, budgetary strategies, trading tariffs, as well as other socio-political concerns imposed by the state during the budget quarter can have a substantial influence on the business environment. One of most major benefits is the ease with which one may operate business in the United Kingdom. As a result, socio-political circumstances are beneficial to the firm, and it will be permitted to develop and contend with industry giants (Pan et al. 2019).
Economic factors- Inflation, interest fluctuations, currency exchange prices, and economic development patterns are all examples of economic variables. The UK economy is a well-developed social sector economy that is liberal and very market-oriented. Due to these reasons, the company can grow very well and provide its services to the customers at ease.
Societal influences- These aspects evaluate the social climate of the sector and analyse impacts such as culture trends, demographics, and demographic figures, among others. Because the UK is a place where individuals have high expectations, the corporation will be equipped to meet those expectations in this trade (Madsen, and Grønseth, 2022).
Technical influences These considerations are related to technical advances that could have a favourable or detrimental influence on commerce and commercial activity. This word refers to mechanization, research and development, and an industry's technological grasp. Because the United Kingdom is technically advanced, the corporation will be capable of supplying its solutions to clients without delay.
Figure 1: PESTLE factors
(Source: Self developed)
Legislative influences- Some rules, as well as unique practices that corporations preserve for themselves, have an influence on a country's commercial atmosphere. The United Kingdom has strong and stable corporate rules that benefit both the government and the enterprises. As a result, the corporation would have no regulatory concerns functioning in the United Kingdom.
Environmental influences encompass any aspects that have an effect on or are impacted by the surrounding atmosphere. Because the economic atmosphere in the United Kingdom is so favourable, the corporation will have no trouble expanding in the United Kingdom.
"SWOT" analysis is a strategic management technique that provides tools for analysing a scenario. Identifying significant advantages, flaws, possibilities, and dangers leads to fact-based inquiry, fresh perspectives, and new thoughts.
Strengths- It includes a strong image, a loyal customer group, a strong financial account, and cutting-edge technology, among others. The company’s strength is that it provides the best possible fuel at the best possible price to its customers in the UK. Moreover, at the same time, customers profit greatly from “Nectar points at BP”, which is the “UK's” most “popular loyalty programme”. Finally, it offers "Costa Express" to pure coffee enthusiasts, delighting consumers at the most well-known gas station, as well as the in-store shop, which contains a lottery, cashpoint, refrigerated food, fruits and vegetables, and seasonal items. This is what makes the company stand out from others.
Weaknesses obstruct a company's ability to achieve its greatest capacity. Weaknesses include a lousy reputation, elevated turnover, excessive levels of borrowing, an ineffective supply system, and limited capital. The main weakness of this company is that the world is shifting to electronic vehicles which run on batteries with the help of charging. This doesn't require any petrol for running.
Opportunities- Possibilities are external aspects that have the capacity to give a firm a strategic advantage. In the case of “Krisco Services Group”, the UK is well favourable for new businesses and entrepreneurs and hence, there is a possibility that the company would be able to make new stations in the UK which would result in more sales and revenue generation for the company.
Threats- Hazards are events that possess the potential to trigger a firm's demise. In the case of “Krisco Services Group”, the rising fuel prices in the global market would pose a threat for the company as it provides the best fuel at a very reasonable price and if the global price of fuel increases, then the main USP of the company would get destroyed.
Role of strategy in achieving relevant strategic decisions
In the face of these obstacles, a corporation's approach is a precise framework for attaining its goals. An organization's philosophy dictates how this will achieve protracted success. Selecting a strategy is an important decision for a company because it demands a significant financial commitment and is difficult and costly to change when executed. Strategy aids in the long-term planning of an organization. It gives an organization with some consistency, acts as a shared point of reference, fosters inner and exterior coherence, and leads organizational activity by assisting it in focusing on its distinctive assets and traits and exploiting them in a significant way (Sullivan et al. 2018). Hence, the company should strategize in a way so that it can stand out from the crowd, compete with the bigger rivals and earn revenues. The company needs to find ways to reduce internal costs which are unnecessary and at the same time, not compromising on the quality of the services and products.
Stakeholder analysis using power model
The approach of stakeholder assessment is used to discover the key persons who must be persuaded. With respect to “Krisco Services Group”, the customers are the stakeholders of utmost importance. The company needs to make the greatest efforts to satisfy them, communicate with them regularly and must provide them with the best support and services (Raum, 2018). Customers are in the high power and high interest grid in the Power/ Interest model. Moreover, the company needs to make sure that the Finance, HR and other departments are adequately informed as they are in the low power and high interest grid in the model (Fuertes et al. 2020). The company needs to make enough efforts to keep functional managers satisfied as they are in the high power and low interest grid in the model. Lastly, the company needs to keep in touch with the experts and must make sure that no issues are there as experts lie in the low power and low interest grid in the model (Xu et al. 2021).
3. Critical analysis of formulating strategies
RBV strategy for competitive advantage
The "resource-based view (RBV)" is a managerial framework for assessing which critical resources a firm may use to create a long-term comparative advantage. The "resource-based" competition advantage theory says that technologies gain a lengthy commercial advantage by accumulating and using assets in difficult-to-copy and replace ways (Assensoh-Kodua, 2019). It asserts that elements besides the technology itself impact the efficacy of a discovery. The company already enjoys competitive advantage by providing fuels at low cost and services which are not easily given by the rivals (Novaseli? et al. 2018). The area where the company can improve its competitive edge is by increasing differentiation like adding new support and services to be given to the people and increasing its stores in the whole of the UK by spending money on infrastructure and man-power, so that they can generate more sales and earn more revenue and compete easily with the rivals.
“Value chain analysis”
"Value chain analysis" is a process of evaluating each operation in a company's worth network to identify where it may be improved. The purpose of worth network assessment is to boost profitability by creating a product or service that is so exceptional that buyers are willing to pay extra for what it requires to manufacture. Low-cost providers and item or services specialization/differentiation are two popular competitive edge tactics (Garrido-Lopez et al. 2018). In the case of “Krisco Services Group”, the company can create differentiation by including some unique products in their in-stores which are most demanded by the customers which no other gas stations sell (Jones et al. 2019). By this, they can create a differentiation point and will be able to earn huge profits and make it stand out from others. At the same time, the company can look out for some opportunities where they can cut the costs but at the same time maintain the same quality of service and product (Ksguk.com, 2022).
“McKinsey's 7S model”
“Structure” refers to how a company is organized, specifically the command network and obligation linkages that help compensate for its organizational diagram. Managerial, executive, supervising, and entry-level personnel make up the corporate structure.
Strategy- The main strategy of the company is to provide the customers the best fuel at a lower cost along with providing them with various services via the in-stores.
Systems- The company is currently operating in Reading and it aims to spread across the UK for better growth. It is always looking for new ways to improve its level of functioning, and also the value and worth it gives to its customers (Ioannis, and Belias, 2020).
Skills- The company is skilled to produce the best quality fuel and that too at a reasonable price. Moreover, the company guarantees that employees are capable of providing impeccable service to consumers.
Style- The firm's leadership style is participatory. Managers interact with workers at all ranks and seek input in order to enhance policy and procedures, as well as detect and handle any disputes (Cox et al. 2019).
Staff- “Krisco Services Group” employs roughly “59” employees which is one of the biggest privately owned station operators in the UK (Ksguk.com, 2022).
“Shared values”- The objective, mission, and principles of a firm are its foundation, and they serve a significant function in bringing all of the pieces together in need to maintain a strong organizational structure. Service, Equality, Truthfulness and Society are the company's key principles.
Figure 2: McKinsey's 7S model
(Source: Self developed)
4. Evaluating competitive force by using Porter’s model
Competition in the industry- In the case of “Krisco Services”, the competition is very high. All the gas stations try hard to provide all sorts of facilities to their customers. But the main strong point of the company is that it provides the best fuel at a reasonable price along with all the basic and needy facilities to the customers via the in-stores.
Newcomers to an Industry's Possibility- There is a possibility of newcomers in this industry as the UK has flexible laws and environment for the new businesses.
Suppliers' Influence- In the UK, there are many suppliers of fuel due to which the corporation can reduce its input costs while increasing earnings.
Customer Influence- The company enjoys a lot of customer base since it provides best fuel at low cost with many facilities. It'll be easier for a company with a big amount of little, unaffiliated customers to increase rates and increase revenues. This is what is the case with the company.
Substitutes Pose a Threat- The world is shifting towards EV due to increased pollution but the company only sells petrol and diesel which may act as a threat in near future.
Ansoff matrix to improve competitive edge
Businesses utilize the "Ansoff Matrix", also referred as the "Product/Market Development Matrix", to review and control their growth strategies.
The goal of industrial infiltration is to increase revenues of present goods in a "pre-existing" marketplace.
Good development is the process of introducing new products to an existing marketplace.
Product Advancement: This strategy aims to penetrate into a fresh sector with current products.
"Diversification" is a marketing strategy that attempts to penetrate into a fresh marketplace by offering new products.
Since the company is a small company, hence, it should avoid diversification and industry development as these are way riskier for a small company. The company should focus on market penetration and product development. For increasing sales, it can give discounts and open new gas stations across the country and for product development, it can introduce new services and items which are to be available in the in-stores which are fascinating for the customers to buy and hence the company can earn huge profits.
1. Porter’s strategy model
As per "Porter's Generic Strategies model", businesses possess three basic strategic options for gaining a competitiveness advantage. They are cost dominance, originality, and concentration. Businesses that achieve Expenditure Management might gain marketplace share by lowering rates whilst also maintaining profits or maintaining median expenses while increasing sales. It's all done by reducing costs to a degree below that of the organization's competitors. Differentiation-based businesses acquire marketplace domination by offering consumers unique traits that customers appreciate. Focused strategies require obtaining Price Leading strategy in specialized sectors in a manner that broader-based firms lack. With respect to “Krisco Services Group”, the company should focus on differentiation strategy where the company by providing unique services can win the hearts of the customers.
Bowman’s strategy clock
The primary purpose is to educate companies about their sector's standing in contrast to their competitors. It is merely a marketing approach that aids companies in establishing their market positioning. As per "Bowman", pricing benefit is a strategic improvement since it acts as a differentiating characteristic for the company and concentrates on the tactics and general positioning of the goods in the marketplace. The "Bowman's Strategy Clock" focuses on the "two dimensional" aspects of a company's product or service offered in the industry (Lim et al. 2018). One is concerned with prices, whereas the second is concerned with the product's, system's, and overall firm's recognized value. The company's administration may choose a position on the "Bowman's Strategy Clock" that gives it the greatest strategic advantage in the industry over its competitors, culminating in the company's growth, overall advancement, and attainment of its company's objectives. In the case of "Krisco Services Group," the firm currently employs a low-cost approach, selling the finest gasoline at a cheap cost. The goods are typically sold at a low rate, leading to low revenue margins on single goods, but the massive quantity of production can still bring in considerable revenues for the company. Reduced marketplace rivals that are mainly focused with price savings via the employment of reduced, fast manufacturing techniques predicated on efficiencies of magnitude occupy this position on the "strategy clock" (Ramdani et al. 2018). Corporations that apply the "Bowman's Technique Clock plan" usually produce large quantities of their products, which are highly valued in the intended industry. The enterprises in this area compete on a variety of levels, including probable pricing rivalry.
2. Recommended most appropriate growth platforms and strategies
Advancement is an important part of an organization's sustainability since it defines how profitable it can be. Utilizing specialized approaches can support groups in reaching goals and objectives that help firms grow and succeed. These forms of growth plans help firms design and integrate processes that result in global expansion and greater income. A firm's development strategy is a detailed strategy that lays out the measures it wants to take to increase its operations, increase revenues, and widen its global reach. A developmental strategy evaluates a firm's financial, commercial, and industry circumstances in an attempt to establish specific objectives that will assist the organization expand over a period. In effort to meet the enterprise's goals, a development strategy may need coordination among numerous departments and entities. With respect to “Krisco Services Group”, since the firm is tiny, diversification and industry expansion should be avoided, as they are far more dangerous for a small business. The company already enjoys the strategy of market penetration as the company sells the best fuel at a reasonable price due to which it has placed itself a spot in this sector and is able to gain a large customer base and at the same time is able to compete with the bigger rivals in the industry. Moreover, the company can also use product expansion strategy by increasing the product line by including new products and services in the in-stores which are fascinating for the customers to buy.
The company, “Krisco Services”, being an SME has made a significant spot in the gas station market in the UK. It’s unique selling point is that it provides the best fuel at a reasonable rate and that too providing many facilities and services to the customers which the customers mainly want and demand in the gas station industry. The firm is always on the hunt for new ways to improve its degree of functioning, as well as the content and worth it offers to its customers. Because of its steadfast and concentrated approach, the firm is working hard to preserve its leading status in this market for the coming years.
With respect to “Krisco Services Group”, the company is doing a commendable job by providing the best possible fuel and that too at a reasonable rate along with providing many class leading services and facilities to the customers due to which customers are very much interested in visiting the gas stations of this company. The recommendations for the company would be to establish its gas stations across the UK. Moreover, at the same time, the company should make strategies so as to curb unnecessary costs and must hunt for ways to include new enticing services and facilities for the customers which would increase the sales of the company a lot.
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