Consumer Motivations In Innovative Formats -Myassignmenthelp.Com

Question: Discuss About The Consumer Motivations In Innovative Formats? Answer: Introduction The following report is based on the strategic management of Red Rooster a fast food chain restaurant located in Australia. The fast food industry in Australia often faces a significant change in consumer preference, which leads to influx of new business providing high quality fast food alternatives. However, as the demand of fast food items in the sector is high, the existing organizations adapt to the new trend. The fast food industry has been selected for the assessment in the current report because the fast food sector has increasingly become competitive and started contributing a large amount to the GDP. Thereby, it is necessary to conduct a research on the sector to learn about the forces that drive the growth. Here, Red Rooster has been selected because the chosen organization is one of the rapidly growing organizations throwing unexpected challenges to its competitors. Thus, conducting on report on Red Rooster would help to learn the current innovative marketing strategies. The fast food restaurant chain Red Rooster was established in 1972 and within a short period of operation, Red Rooster became one of the leading fast food brands with its increasing range of products such as roasts, half roast, wraps, burgers, fish items, deserts and beverage (Red Rooster 2018). By 2012, Red Rooster opened up 360 stores across Australia and New Zealand. The firm has large workforce, which enables them to provide a superior quality of service across the nation (Red Rooster 2018). Moreover, online selling opened by Red Rooster helped to penetrate in the wide market where its outlets were not available. The presence and extending operation of Red Rooster contributed to the revenue growth of the fast food industry. As put forward by De Vogli, Kouvonen and Gimeno (2011), the revenue is expected to maximize at an annualized 3.7% by 2017-2018 to $19.8 billion. However, the presence of some large brands such KFC, McDonalds and rapidly increasing street food vendors could prevent the growth of Red Rooster. The existing forces that drive the growth of the firm have been presented with the strategic tool Porters five forces. Porters five forces analysis framework is applied to analyze the industry, particularly, the external business environment. The application of this strategic tool helps to identify the possible challenges that Red Rooster could face in the existing business environment. Porters five forces Bargaining power of suppliers is low in the fast food sector of Australia. This is due to the increasing number of suppliers of some major ingredients such as chicken, fish, and potato. Due to the bulk orders, many suppliers agree to the terms and conditions of Red Rooster. As the sector hinders product differentiation, the number of suppliers is increasing with low bargaining power. As put forward by Red Rooster (2018), in 2007 Red Rooster terminated the contract of one supplier due to their crude slaughtering of the hens and the firm made a long-term contract with another suppliers. Bargaining power of the consumers- (Medium) The bargaining power of customers remain moderate; although consumers have several options with respect to fast food items but due to the cultural effect and economy, people in Australia tend to live a trendy lifestyle (Mak, Lumber and Eves 2012). Thus, they prefer high quality products and services which street vendors are not able to provide. Even though, customers shift to another competitor but the quality of products remain same. Competitive rivalry-(High) Although, Red Rooster is one of the rapidly growing organizations in the fast food sector, it is facing a tough competition from the major players such as KFC, McDonalds, Pizza Hut, etc. As put forward by, Chib (2012) McDonalds is pushing its head on the top position in the international market. Although, there is a product differentiation in some particular products, most of the items are common such as chicken, drinks, salads, mayonnaise, etc. Consequently, each competitor on frequent basis comes up with schemes to attract customers. For example, the major competitor launched membership card for the young customers that not only provide them with discounts at KFC but also to a number of other fast food outlets (Kfc.com.au 2018). Barriers to entry-(Low) The threats of new businesses in the fast food sector are low because the fast food sector requires a high amount of investment, product development as well as marketing. As put forward by Chib (2012), some existing brands such as Red Rooster, KFC and McDonalds have developed a sustainable brand image; thereby, they have developed a loyal customer base. Similarly, the customers have also made their habit of visiting the same restaurants where their needs are effectively fulfilled. In addition to this, the trade tax for the new business in Australia is reaching a benchmark of 30% of overall revenue (Findlay and Warren 2013). Threats of substitute products-(High)-Threats of substitute products are high as there are many small and medium size restaurants and street vendors providing a strong substitute for Red Rooster (Pearson et al. 2011). These small food vendors provide some side dishes such as rice, mashed potatoes and instant pizza that Red Rooster does not offer. As the consequence, Red Rooster seeks to retain its customers by providing intangible services such as Wi-Fi service in the outlets and launching the morning breakfast menu for the consumers (Red Rooster 2018). Porters Value chain Analysis As put forward by Fearne, Garcia Martinez and Dent (2012), a value chain is considered as the chain of activities that an organization conducts to offer valuable products and services for the sector. Value chain of Red Rooster Inbound logistics-Red Rooster purchases raw chicken and other raw product items such as potato, tomato and other required vegetables from its existing suppliers, thereby, by maximizing capital as well as labor, their production could maximize. In this context, Ming, Ismail and Rasiah (2011) that Red Rooster tend to adopt a backward vertical integration by replacing many of its suppliers in order to minimize cost and ensure that the products are of top quality. This strategy is possible because industry has high availability of suppliers. The suppliers of other ingredients such as vegetables are supplied by large grocery and Coca- Cola supplies soft drinks. Operation In order to reduce the time of operation and produce the more items within a same time period, Red Rooster changed the design of its kitchen. For example, A significantly large grill where one kitchen staff could make several roasted chicken items A developed fryer where one individual can make a huge bulk of French fries Multiple numbers of counters where customers can do place and receive the order separately. This helps to avoid crowding near the counter Outbound logistic Red Rooster builds the commitment of providing the highest quality food and service at a significant value in a clear and enhancing environment (Red Rooster 2018). Thus, the firm works with the employees, suppliers to provide a balanced array of food choices as well as provide nutrition information required for consumers to make reasonable buying decision. Support Activities Infrastructure of Red Rooster is sophisticated and modern , as the firm is using IT services such as Wi-Fi but they have a strong focus on the green activities Red Rooster tends to maintain an eco-friendly workplace where the outlet reflects its sustainability goals Key findings and recommendation- The above-mentioned discussion helps to observe that Red Rooster is operating in a competitive environment where competitors have a large market share. Moreover, the aggressive marketing strategies of KFC and McDonalds often place push Red Rooster in danger. Even though, Red Rooster is going with the same pace of operation like its competitors in the sector but with respect to strength and competencies, the competitors are a step ahead than Red Rooster. The operation indicates that Red Rooster is running the operation on short-term goals but increasing consumer awareness of the significance of healthy eating could transform the sector, which could again be a significant challenge for Red Rooster. This is a challenge because if product-manufacturing process to has to be changed due to consumer awareness regarding healthy eating, the firm has to focus on RD, which would be a matter of large investment. On the other side, Red Rooster is not able to attract new customers or lure competitors customers due to lack of promotional activities. Therefore, following suggestions have been provided to avoid the above-presented issues. Digital media adoption- In order to gain consumer attention or to remain in the limelight, Red Rooster needs to publicize its brand to a large platform. Hence, social media is one such option that provides the facility of reaching wide audience in a most time-efficient and cost-efficient manner. 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