EZ-pleeze Report

EZ-Pleeze is a major producer of beef products, mainly in the United States. Its items mostly consist of beef and chicken. The corporation has activities outside of the United States, especially in Mexico. The company is now a public entity that was established in 2008. In the last five years, the firm has faced a difficult economic climate. Revenues are declining year over year, demonstrating this. The corporation also intends to hire a new CEO beginning in 2016, as the outgoing CEO will step down at the end of 2015.

Current state of the strategic plan

The current strategic plan is a result of deliberate efforts by the management to improve the revenue base of EZ-Pleeze. One major element of the strategic plan has been diversification of the chicken and beef products the company produces. The business has been able to expand its product line by developing new chicken and beef products. This has been after conducting thorough market research as a way of identifying consumer preferences.

Market research conducted by the company shows that consumers are highly conscious of what they eat. They prefer to eat high-quality products that are healthy and tasty. The majority of consumers would rather pay more for high-quality products, than pay less for low-quality products. This has helped to shape the company’s policy in promoting innovativeness in developing healthy and tasty chicken and beef products.

To enforce this strategy, the company has further invested heavily in technology. The primary goal of this has been to enable it to implement a value-based products strategy. The investment in technology has necessitated the company to increase the prices of its products to break-even. Technology has helped the company to improve the quality of its products which has given it a competitive edge in the processed foods market.

Another business strategy has been the competitive pricing of its products in comparison with its competitors. Beef and chicken products have a high price elasticity which means they are highly sensitive to price change. Lower prices translate into higher demand for the company’s products as compared to its competitors.

EZ-Pleeze has also heavily invested in marketing and advertising. This strategy has also significantly increased the operational expenses for the company. Marketing and advertising are important in increasing product awareness. The cost involved has however outweighed the level of revenue. To avoid bankruptcy, the company has been forced to lay off a significant amount of workforce to reduce operating expenses.

Besides, the company has been able to add more market segments as a way of driving up its sales. This market segment is the fast food restaurants in the USA. The company supplies beef and chicken products to more than half of the major fast food chains in the USA. The company is further aiming at going international for this market segment.

Purpose of the strategic plan

The strategic plan is important for any company as it focuses on the long-term growth of the enterprise. The strategic plan helps in setting the overall goals and objectives of the business. It goes further to elaborate on how the company intends to achieve those goals and objectives. For a company to grow, it needs a clear roadmap to help everybody in the entire organization work harmoniously towards a common goal. For EZ-Pleeze, the policies adopted by the management are informed by the strategic plan, and they are all targeted towards growing the company (Kondalkar, 2009).

Apart from providing a growth roadmap, the strategic plan is useful for risk management. The strategic plan acknowledges the risks inherent to a company. This helps a company to plan and cushion itself from such risks when they occur. A business that lacks sufficient risk management may even collapse when it encounters such risks (Dlabay & Kleindl, 2016). A good strategic plan foresees the likelihood of certain risks occurring at different stages and puts in place measures to protect the company.

SWOT GRAPH

STRENGTHS

The company is relatively big being ranked position 5 in the USA which means that it enjoys a big presence and significant market.

The company has an effective research and development department that helps it develop new innovative and high-quality products.

The company has a reputation of taking care of employee issues by providing them with various benefits that enable the company retains the best talents.

The company has an efficient communication system with its customers, which enables them to understand consumer preferences. This helps the company to improve their products continually.

The company already supplies more than half of USA fast food restaurants with chicken and beef products, which shows it has in its hands a significant market share.

WEAKNESSES

The company is currently experiencing a trend of dwindling profit margins. This is because of reduced revenues and increased operational costs.

High operational expenses mean that most of the money is used for marketing and technology. This has left the company in a weak position to benefit from strategic growth through mergers, acquisitions, and partnerships.

The company has a limited international presence. Its operations are only limited to USA and Mexico. The company, therefore, does not benefit from the wider international markets.

Limited finances have resulted to limited product diversification beyond chicken and beef products. This has resulted to contracting revenue streams as compared to competitors.

OPPORTUNITIES

The introduction of new food products such as pork and mutton can help to boost the company revenue as observed by other competitors.

Diversifying into the health foods market to target the health conscious consumers in the market.

Strategic business partnerships will help to boost the company’s financial muscle, managerial expertise, and acquire a bigger slice of the market.

The excess animal fats from beef and chicken products may be used as a source of renewable energy which may create a new revenue stream.

The company may enter into new international markets such as China and India which have high population growth, thus growth in demand.

THREATS

Competition rivalry from competitors such as Yellow Down Foods and Beefchix that have better revenue margins and wider scope of operations.

The food industry is highly regulated to ensure high-quality standards, environmental and labor laws. All these increase non-compliance risks which may be very costly to the company.

There has been rising cost of production due to a high cost of raw materials and high overheads used in producing the company's products.

The industry is highly sensitive to livestock diseases. When such occurs, they may result in production breakdown.

Strategic Implementation and Evaluation Tasks and Timelines Template

Strategic Recommendation

Implementation Start Date

Evaluation Due date

Resources Needed

Product diversification into new products such as pork and mutton.

January 2016

June 2016

$ 5,000,000

Venturing into new international markets such as China and India.

March 2016

June 2016

$ 10,000,000

Strategic business partnerships with competitors.

March 2016

June 2016

$ 2,000,000

Strategic capital restructuring through mergers and acquisitions.

January 2017

June 2017

$ 25,000,000

Product diversification into pork and mutton products will require additional expansion of production capacity. This will entail additional plant and machinery, raw materials, compliance cost. All these will add up to an approximated figure of $ 5,000,000.

Venturing into new international markets will involve the cost of setting up new operations in foreign countries. There will be a further cost involved for conducting of market research. The approximated cost is $ 10,000,000.

Strategic partnerships will be negotiated with the company’s competitors to create a synergistic effect (Kondalkar, 2009). This will help in creating a wider market share, and better risk management. The cost is approximated at $2,000,000 which will cater for legal fees, negotiation fees, and restructuring cost.

Strategic capital restructuring will involve acquisitions of smaller food processors in the market. This will help to create more distribution networks and boost production capacity. The estimated cost of $ 25 million will cater for acquiring of controlling stake in such companies.

Executive Summary

EZ-Pleeze is currently operating in a tough business environment which means that the management has to constantly come up with more innovative ways for the company to continue being profitable and operating as a going concern.

The management in such an environment needs to come up with a strategic plan that reflects the current business reality that the company faces (Jones, 2013). A strategic plan is essential as it provides a roadmap that charts the way forward towards the growth of the company. Also, the strategic plan identifies the risks inherent to the company and enables it prepares beforehand. A company is bound to encounter challenges, some of which threaten its continued existence. A strategic plan helps the company avoid such disruptions.

Before drawing the strategic plan, the management must first conduct a thorough environmental scan of the company. This is done through the SWOT analysis that inculcates both external and internal environmental factors. The SWOT analysis identifies the strengths, weaknesses, opportunities, and threats that a company faces. These are important factors that are considered in strategic planning (Jones, 2013).

After doing a SWOT analysis of EZ-Pleeze, some strategic recommendations that the company can exploit have been identified. The first recommendation is product diversification which will help the company grow its revenue base. Furthermore, the company enters into new international markets to expand its market share.

Partnerships should be negotiated with some of the competitors to bring about unified strength regarding broader markets, more distribution networks and greater management expertise (Dlabay & Kleindl, 2016). Beyond these partnerships, the company should focus on medium-term capital restructuring through mergers and acquisitions to increase its production capacity and market presence.

References

Dlabay, L., Burrow, J. & Kleindl, B. (2016). Principles of Business. Boston: Cengage Learning

Jones, G., & Hill, C. (2013). Theory of strategic management. Australia: United Kingdom.

Kondalkar, V. (2009). Organization development. New Delhi: New Age International (P) Ltd., Publishers.